Publication Details
Abstract
Non-performing loans (NPLs) are a key indicator of credit portfolio quality and a direct source of pressure on bank profitability, liquidity, and capital. This study examines the factors associated with the emergence and recent dynamics of NPLs in Uzbekistan’s commercial banking sector and assesses the practical implications for credit risk management. The analysis is based on publicly available bank-level data of the Central Bank of the Republic of Uzbekistan for January 1, 2025 and January 1, 2026, using descriptive, comparative, grouping, and ratio analysis. As of January 1, 2025, the banking system recorded UZS 533.121 trillion in loans and UZS 21.185 trillion in NPLs, equivalent to 4.0% of the loan portfolio. By January 1, 2026, the aggregate loan portfolio had expanded to UZS 604.002 trillion, while NPLs declined to UZS 18.055 trillion and the system-wide NPL ratio fell to 3.0%. The improvement was not uniform across banks, indicating that portfolio growth, underwriting quality, borrower monitoring, and workout practices remain important bank-specific determinants. The findings support wider use of early-warning systems, borrower-level monitoring, portfolio segmentation, timely restructuring of viable exposures, and data-driven credit risk management.