Analysis of Credit Risk Management Practices in Commercial Banks (Evidence from Private Banks of Uzbekistan)

This article analyses credit risk management practices in commercial banks using evidence from three large private banks of Uzbekistan — Kapitalbank, Hamkorbank and Ipak Yuli Bank. Drawing on the statistics of the Central Bank of the Republic of Uzbekistan (cbu.uz) and the banks’ IFRS financial statements for 2021-2025, the study examines the full risk management cycle: identification and scoring, measurement and recognition, mitigation through collateral, monitoring, and absorption through provisions and capital. A panel regression model based on 12 observations shows that the share of unsecured retail lending raises the non-performing loan ratio, while the coverage of credit decisions by automated scoring systems significantly reduces it (R² = 0.9435; F = 75.19). The author proposes a Credit Risk Management Effectiveness Index (CRMEI) combining process indicators with outcome indicators; all three banks moved above the benchmark level of 1.000 between 2021 and 2025. The study also documents a persistent gap between IFRS 9 Stage 3 exposures and regulatory non-performing loan figures, which is identified as the principal weakness of current risk recognition practice. Practical recommendations for strengthening credit risk management in private banks are developed on the basis of the findings.