Friday, 01, March, 2024

President Shavkat Mirziyoyev discussed the processes of transformation and privatization in the banking system of Uzbekistan, the presidential press service said.

Reportedly, over the past three years, banks' capital has increased 1.8 times, and the annual volume of lending has doubled.

“But next year the capital should grow from the current 224 trillion to 275 trillion soums. If we had not provided over $4.5 billion for the capitalization of banks, we would not have achieved these results. Of course, it would be wrong to say that there have been no changes in the banking sector,” he said.

Four banks issued Eurobonds for the first time and drew $1 billion on the international capital market. A strategic foreign investor has been attracted to Ipoteka Bank - the Hungarian OTP Bank. 13 new private banks opened, and leading banks from Hungary, Kazakhstan and Georgia began operating in the country. The volume of online banking services increased 2.7 times.

“Why am I providing such assistance to state-owned banks, but your profitability is significantly lower compared to private and foreign banks. The most non-performing loans cost 16.5 trillion soums of money (3.7% of the total volume of loans). Why did I gather you (bank executives - ed.)? Every bank must absolutely change its worldview so that public money is valued and efficiency increases,” said the head of state.

While, competition in the banking sector, as well as the demand for its services, is growing every day, which requires accelerating transformation processes and identifying priority tasks for the future, the president noted at the meeting.

“Now we will also ask banks for projects. New Uzbekistan has a new banking system. There will be a new system,” Shavkat Mirziyoyev emphasized.

Shavkat Mirziyoyev said that by 2025 it is necessary to reduce the state's share in the banking sector from 70% to 40%.

He made proposals to prepare banks for privatization, launc a public offering (IPO) of their securities, and attract experienced foreign specialists to the field.

“The economy is developing so much that we would rather transfer the banks to strategic partners. The plans include four banks. We want to hold an IPO of the National Bank of Uzbekistan,” the president said.

He instructed to enhance cooperation with international rating companies and develop medium-term measures to improve the ratings of banks. According to him, it is necessary to “adapt the systems for training specialized personnel to the requirements of the time.”

At the meeting, bank leaders presented their plans for transformation and preparation for privatization, training of employees, and implementation of advanced IT solutions in the field.

Chairman of the Board of the NBU Alisher Mirsoatov said that in 2024 the bank had plans to provide loans of 23 trillion soums, attract deposits for 3.5 trillion soums, and also attract $750 million from abroad.

The chief of Uzpromstroybank, Aziz Akbarzhonov, following the meeting, said that the president gave strict instructions to collect problem loans.

In a month, banks must prepare a presentation on plans for 2024.

In August the president postponed to a later date the privatization and IPO of shares of the Business Development Bank (Qishloq Qurilish Bank), Asakabank, Aloqabank, Agrobank and others. The state share in Uzpromstroybank is scheduled to be reduced below 50% by the end of 2024, although it was initially planned to put the entire state share up for auction.

Latest in Finances