Page 13 - Uzbek Outlook 2022

retailer Rozetka, has arrived on the Uzbek market. It launched website rozetka.uz in September. The
site offers household appliances, electronics, sports equipment, books, children's toys and more.
After just two months of commissioning, in November it announced an expansion of delivery points in
the Uzbek capital. Vladislav Chechetkin, co-founder of the online store, said that two delivery points
were already operating in Tashkent, and there were plans to open four more.

4.2 Banks

Uzbek banks experienced both positive and negative news in 2021.

Let's start with the bad. The biggest headache for domestic banks was their “neverending” lack of
liquidity and rather high NPL (non-performing loan) ratios. In August, the LDR (Loan-to-Risk Ratio)
for the entire Uzbek banking system hit a record 234%. For banks with a state share, it was even
higher at 301%, twice as high as seen in the US, three times higher than the global average and 3.3
times higher than the average for developing countries.

As of January 1, the share of NPLs stood at 2.1%, but by August 1 it had grown to 6.2%. The amount
of loans provided to the Uzbek population, meanwhile, over the past three years has increased
3.3-fold. The banks were not ready to account for NPLs in such volumes. But by November 1, the
NPL ratio declined to 5.7%. It is set to normalise in the coming months.

Turning to the good news. One of the most positive changes the banking sector has started to
witness is privatisation. A massive privatisation campaign is in it its infancy by now. It is expected to
yield results in the coming years.

The banking system of Uzbekistan is characterised by high concentrations: 84% of all bank assets
are still owned by state-owned banks, and 64% belong to five of the biggest state-owned banks
(National Bank, Asaka Bank, Uzpromstroybank, Ipoteka Bank and Agrobank).

The privatisation of Uzpromstroybank and Ipoteka is set to be completed by the end of 2022. Both
financial institutions were included in the most profitable bank top three rankings following the
release of the 3Q results. Further plans include the privatisation of Asaka Bank, Aloqa Bank, Qishloq
Qurilish Bank and Turonbank.

13 Uzbekistan Outlook 2022 www.intellinews.com