Uzbek Banks Show Robust Profit Growth and Asset Expansion in Q1 2026
Leading Uzbek banks report significant increases in profits, assets, and operational expenses during the first quarter of 2026, highlighting intensifying market competition.
In the first quarter of 2026, key players in Uzbekistan's banking sector — Octobank, Tengebank, Kapitalbank, Milliybank, and Hayotbank — have released their financial reports, revealing strong earnings growth, expanded asset bases, and rising operational costs amid a competitive banking environment.
Asset Growth and Revenue Diversification
Collectively, the banks' assets reached 15.52 trillion Uzbek soms, marking substantial growth compared to the beginning of the period. Investments accounted for the largest share within total assets, standing at 6.71 trillion soms, underscoring a strategic emphasis on investment portfolios.
Revenues demonstrated notable diversification: interest income amounted to 238.3 billion soms, while non-interest income surged to 1.2 trillion soms. This diversification suggests the banks are broadening their income sources beyond traditional interest-based earnings.
Expenses and Profitability Trends
On the expense side, interest expenses totaled 176.9 billion soms and non-interest expenses reached 1.04 trillion soms. Operational costs were 111.6 billion soms, with employee wages constituting 73.8 billion soms of that figure.
Corporate tax contributions during the quarter amounted to 110 million soms, reflecting the banks’ fiscal commitments.
Tengebank’s Exceptional Profit Surge
"Tengebank’s net profit skyrocketed to nearly 34 billion soms in Q1 2026, a dramatic increase from just 920.9 million soms in the same period last year," the report notes.
Tengebank’s net income showed explosive growth, recording 33.98 billion soms compared to 920.9 million soms in Q1 2025. For context, the bank concluded 2025 with a net profit of 54.9 billion soms, up from 36.2 billion soms in 2024.
Interestingly, interest income remained largely stable, but provisions for potential losses on loan and leasing operations increased, resulting in a negative net interest margin of -5.3 billion soms. However, commission income sharply rose from 12.8 billion to 57 billion soms, driving the bank's exceptional quarterly profitability.
As of early March, Tengebank’s loan portfolio amounted to 4.5 trillion soms, representing an 8.4% increase year-over-year. Concurrently, the share of non-performing loans grew from 2.3% to 3.4%, signaling some asset quality concerns amidst growth.
Milliybank and Kapitalbank Show Solid Performance
Milliybank reported a net profit of 603.2 billion soms for Q1 2026, marking a 28.9% increase over the same period last year when the bank earned 467.9 billion soms. Interest income rose 15% year-over-year to 4.7 trillion soms, while interest expenses stood at 2.5 trillion soms.
Operational expenses at Milliybank also increased by 26%, with total operational costs reaching 673.1 billion soms, including 372.2 billion soms allocated to employee compensation. The bank’s tax contributions amounted to 22.5 billion soms during the quarter.
Kapitalbank posted a net profit of 324.8 billion soms. Its total assets expanded to 58.23 trillion soms, with loans and leasing operations constituting the largest asset segment at 36.6 trillion soms. The bank’s interest income totaled 1.85 trillion soms, while non-interest income reached 1.64 trillion soms. Interest expenses were 1.07 trillion soms, and non-interest expenses were 648.6 billion soms. Operational costs amounted to 715.7 billion soms, including 269.8 billion soms for staff remuneration.
Hayotbank’s Steady Results
Hayotbank reported a net profit of 14.6 billion soms in Q1 2026. The bank’s assets grew to 7.43 trillion soms, principally driven by loans and leasing operations totaling 5.63 trillion soms. Interest income was recorded at 332.5 billion soms, alongside non-interest income of 87.2 billion soms. Interest expenses amounted to 253.5 billion soms, with non-interest expenses at 22.2 billion soms. Operational expenses stood at 66.8 billion soms, including 41.6 billion soms for employee compensation.
Industry Outlook and Boardroom Considerations
The financial disclosures underscore the increasingly competitive nature of Uzbekistan’s banking sector, with banks pursuing diversified revenue streams and expanding asset bases while managing rising operational costs and credit risks. For executives and board members, balancing growth ambitions with asset quality and cost efficiency will remain pivotal.
"The intensification of market competition combined with asset quality challenges suggests that Uzbek banks’ leadership must prioritize strategic risk management and operational agility," industry analysts observe.
As the sector continues to mature, strategic decisions on investment allocations, credit risk provisioning, and cost management will critically influence profitability trajectories and shareholder value.
Based on reporting by Deutsche Welle.
