» AUCC INTRO
The American-Uzbekistan Chamber of Commerce (AUCC) seeks to promote trade and investment ties, cultural exchanges and bonds of friendship between the United States of America and the Republic of Uzbekistan. In performing these functions, the AUCC places primary emphasis on serving the needs and interests of its members.
Interview with AUCC Chairperson Carolyn Lamm Before 2012 Uzbekistan-US Annual Business Forum
Get Flash to see this player.
» AUCC events
» Contact us
Moody's confirms 'stable' outlook for Uzbekistan's banking system
www.en.trend.az of 8/22/2011 - The outlook on Uzbekistan's banking system remains stable, says Moody's Investors Service in a Banking System Outlook published today, reflecting the rating agency's expectations of continued favorable macroeconomic conditions given the high prices for the country's major export commodities (metals and agricultural products) and the government's substantial investment program.
The outlook expresses Moody's expectations for the fundamental credit conditions in this sector over the next 12-18 months.
Other factors supporting a stable outlook include the banks' robust recurring revenue generation, capital levels capable of absorbing losses on problem loans under Moody's base-case scenario, and the government's strong ongoing support to the banking sector.
"Over the outlook horizon, favorable macroeconomic conditions in Uzbekistan will support the overall operating environment for banks. The country's gross domestic product (GDP) has registered rapid growth for several consecutive years and Moody's expects that will increase again by 7% per year in 2011 and 2012, driven by both net exports and public investment," Moody’s Outlook says.
The central government, national economy and banking sector are highly integrated, with the state running approximately two thirds of the economy and directly controlling 70% of the banking system. As a result, benefits from strong growth will continue to flow to the banking system, in the form of growing deposits and increasing demand for new financing from borrowers.
"Moody's expects that the banks will continue to report sustainable operating profits in 2011 and 2012, supported by strong fees and commissions, which account for some 40% of the banks' total operating revenues, and by stable and ample net interest margins of 400-500 basis points (bps). Net profits could come under pressure if banks exercise a greater degree of prudence in their provisioning charges, although this is not Moody's central expectation."
The rating agency believes that the aggregate level of impaired loans of 12.4% as of year-end 2010, according to rated banks' reports based on International Financial Reporting Standards (IFRS)) is understated, as banks frequently restructure some "doubtful" exposures without reporting them as problem loans. Furthermore, the accumulated loan-loss reserve of just 5.5% of total gross loans does not fully address the potential level of real problem loans, in Moody's view. Ultimate credit losses may reach 10% of the aggregate gross loan book.
"Importantly, banks' overall capital level is sufficient to withstand Moody's base-case scenario, a factor that supports the stable outlook on the Uzbek banking sector. If the base-case scenario materializes, the sector's total aggregated Basel I Capital Adequacy Ratio (CAR) would remain above 13%."
In recent years, Uzbek banks' ratings have reflected stability in the local economic environment and profitable performance throughout a time of turbulence in many other banking systems. The stable system outlook for over the next 12-18 months is consistent with the stable outlooks on the standalone bank financial strength ratings (BFSRs) and debt and deposit ratings of the eight Uzbek banks that Moody's rates.
» 20th Anniversary Report
Building Powerful Opportunities and Relationships between
the US and the Republic of Uzbekistan
» Welcome to new member
OPPENHEIMER & CO. - Oppenheimer & Co. has more than a 100-year history as one of the premier Wall Street investment banks. It is public company listed on NYSE under “OPY”. Headquartered in New York, Oppenheimer has global offices in London, Hong Kong, Tel Aviv and Geneva.
New York Time 09:53:42
» Weather in Tashkent
17 ° C
16/33 ° C