Uzbek Banks See 1.8 Trillion UZS Rise in Non-Performing Loans in Q1 2026
Total loan portfolio increases significantly in Q1 2026 while non-performing loans rise primarily in state-owned banks.
In the first quarter of 2026, Uzbekistan's banking sector experienced rapid growth in its total loan portfolio, reaching over 623 trillion Uzbekistani soms, according to data from the Central Bank. However, this expansion was accompanied by a notable increase in non-performing loans (NPLs), which rose by 1.8 trillion soms to nearly 19.9 trillion soms during the same period.
Loan Portfolio Growth Driven by State Banks
The overall credit portfolio expanded by 19.3 trillion soms in Q1 2026, with state-owned banks contributing significantly to this growth. Loans in state banks increased by 11.1 trillion soms, with major contributions from Agrobank (+5.44 trillion soms), Milliybank (+2.63 trillion soms), Xalq Bank (+1.95 trillion soms), and Aloqabank (+1.89 trillion soms).
Conversely, some banks experienced a contraction in their loan portfolios, notably SQB and Asakabank.
Mixed Performance Among Non-State Banks
Among non-state banks, Hamkorbank, Hayot Bank, and Kapitalbank showed active loan growth, while TBC Bank and Orient Finans Bank recorded declines in lending activity.
Rising Non-Performing Loans Concentrated in State Banks
Non-performing loans increased predominantly in state banks by 1.46 trillion soms. The largest increments in problem loans were recorded by SQB, Aloqabank, and Asakabank.
Some banks, however, managed to reduce their NPL levels. For instance, Ipoteka Bank successfully closed 316 billion soms worth of problem loans. Meanwhile, Anor Bank and Garant Bank saw increases in their non-performing loan volumes.
“Despite the rise in non-performing loans, their share of the total loan portfolio decreased from 3.19% to 2.99% due to the rapid expansion of overall lending.”
Overall, the share of non-performing loans in the total credit portfolio decreased from 3.19% to 2.99% owing to the rapid growth in lending, indicating a potentially improving credit quality despite the absolute increase in problematic exposures.
These developments highlight the dynamic nature of Uzbekistan's banking sector, with state banks driving credit expansion but also facing challenges in asset quality management. Financial analysts and investors should monitor the evolving risk profile as the sector continues to grow.
