NEWS AND EVENTS
November 30, 2015
Tashkent International Banking Forum presents reforming results of Uzbekistan\' s banking system over 5 years
Speaking at the IV Tashkent International Banking Forum Deputy Chairman of the Central Bank of the Republic of Uzbekistan Ahadbek Khaydarov elaborated on the results of the program for further reforming and strengthening of the banking system in 2011-2015, approved by the Head of State on November 26, 2010.
It must be stated that in accordance with this Program reforms in the banking sector were aimed at:
- increasing the resource base, stability and liquidity of banks, in accordance with international requirements and standards;
- ensuring further growth and improving the quality of banks\' assets and the system of risk assessment;
- financial and credit support of small business and private entrepreneurship;
- strengthening investment activity of banks;
- further improvement of the legal framework of the banking activity.
As the Deputy Chairman of the Central Bank of the Republic of Uzbekistan noted, implementation of the Program caused significant qualitative changes in the activities of the banks and high rate of development of the banking sector in Uzbekistan. Thus, over the last 5 years (2011-2015):
- total capital of the banking system of Uzbekistan increased by 2.4 times (or annually 28.1% on average against 22.4% annually over 2000-2010);
- total assets of banks increased by 3.1 times (or annually 29.6% on average against 21.8% a year over 2000-2010);
- loan portfolio of banks of Uzbekistan increased by 3.7 times (or annually 33% on average against 19% a year over 2000-2010);
- bank deposits grew 3.6 times.
Ahadbek Khaydarov also noted qualitative changes observed in the structure of the resource base and loan portfolio of banks.
In particular, the share of domestic sources in the loan portfolio of banks of Uzbekistan increased up to 86% compared to 46% in 2000.
In addition, the share of long-term domestic deposits and contributions substantially increased in the structure of the resource base of banks. The volume of long-term deposits over the last 5 years has increased by 4.1 times, and their share in total deposits reached 78% against 68% in 2010 and 52% in 2000.
Strengthening stability of the banking system is directly reflected in the key indicators of financial stability of banks.
In particular, the capital adequacy ratio of banks constitutes 24% on average, while the normative requirement of the Central Bank is established at10% and the standard rate of the Basel Committee - at the level of 8%.
Another important indicator of the stability and liquidity is the ratio of current assets to current liabilities – which is 64.5% on average and that is more than twice higher than the international requirements (30%).
There has been a high level of accessibility and coverage of population by banking services and permanent increase in competition on the banking market. Thus, as of October 1, 2015 the number of banking institutions for 100 thousand adults of the population has reached 49.8 units. The number of bank accounts of individuals amounted to 1102 units per 1000 adult population.
Ahadbek Khaydarov also stressed that one of the criteria for evaluating the efficiency of the banking system is a timely response to the needs of the real economy in credit resources. At the same time investment credits allocated for modernization, technical and technological re-equipment of production, volumes of which over the past 5 years grew by 3 times in Uzbekistan are particularly important when lending to the economy.
Deputy Chairman of the Central Bank of the Republic of Uzbekistan also focused on the fact that one of the main factors of sustainable social and economic development of the country is small business. In particular, small businesses currently produce more than 53% of Uzbekistan\'s GDP; its share in total export of the country is 27%, and total employment - 77.5%.
Active bank lending to this sector plays an important role in achieving the above performance. Only over the last 5 years (2011-2015) the volume of lending to small businesses increased by 4.4 times. At the same time, the share of credits allocated to small businesses in the total volume of lending reached 28% against 16.9% in 2000.
According to Ahadbek Khaydarov, consistent and targeted reforms in the banking system of Uzbekistan will be continued in the coming years.