Assets of Uzbek commercial banks grow 28.7% in 1Q 2008

The Board of the Central Bank of the Republic of Uzbekistan has held a meeing on the key results of the banking system's operation in the first quarter of 2008 and the priority tasks set before the banking system by the President of the Country on 8 February 2008 during the meeting of the Cabinet of Ministers, as well as the implementation of the urgent tasks set out during the meeting of the Cabinet of Ministers on 18 April this year, the Bank's press service informed. The Chairman of the Central Bank Fayzulla Mullajanov presided at the meeting. As noted during the meeting, in the first quarter the strict monetary-credit policy being implemented by the government and the Central Bank of the country was aimed at strengthening macroeconomic stability. At this time, the refinance rate is kept by the Central Bank without changes at the level of 14 per cent pa. This is done to prevent any further increases in inflation rate in the country, it was said. As a result of the measures taken, the monetary factors did not affect the level of prices for consumer goods, and inflation was kept within the limits of the parameters planned. In order to keep the prices for consumer goods from growing, in the first quarter alone the banks appropriated over 170 billion soums to saturate the consumer markets in the necessary products, as well as for the production of consumer goods and their sale. Moreover, in the reporting period particular attention was given to further increase in the level of capitalisation of the commercial banks, provision for their financial stability, and further intensification of the banks' participation in the investment processes and strengthening of competition between them. As a result, the total capital of commercial banks grew by 39% compared to the same period of the previous year to the level of more than 1.55 trillion soums. Commercial banks' assets grew by 28.7% compared to the first quarter of the previous year to some 9.67 trillion soums. As a result of the sustained financial stability of the commercial banks such as the National Bank of Uzbekistan for Foreign Economic Activity (NBU), Pakhta Bank, UzSanoatKurilishBank, Galla Bank, and Khamkor Bank were rated high by the leading international rating companies. At this time the commercial banks are contributing greatly to the economic growth of the country. There is a positive trend in the increase of the volume of loans issued to the real sector of the economy. The volume of the aggregate loan assets of commercial banks currently comprises 5.27 trillion soums. In the reporting period the volume of loans issued by the banks to support small businesses and private enterprises grew by 39.8% compared to the same period of 2007 and comprise 268.9 billion soums. Also, in the reporting period, pursuant to the Presidential Decree of 18 May 2007 "On additional measures to financially and morally support young families" the commercial banks of the country have extended soft loans, micro- and consumer loans for the total amount of 28.6 billion soums to young families. Commercial banks offer more than 200 different types of deposit plan. Their balance has grown by 49% compared to the same period of the previous year and currently comprises 1.13 trillion soums, which confirms the growing trust of the population in the banks. It is worth noting that the banks have implemented active measures to popularise the use of plastic cards. As a result the number of plastic cards in use has grown by 17.6% compared to the same period the previous year and reached the level of 3.9 million as of 1 April 2008. At the same time, the activity of individual commercial banks not fully using their internal capacity to raise the level of their capitalisation, the number of banking services offered and to strengthen the client's trust in them was negatively commented on. During the meeting the tasks that are to be implemented in the first half of this year were outlined. In particular, continued conduct of a strict monetary-credit policy for the purpose of preventing the prices for consumer goods from growing, ensuring that the monetary-credit figures are met within the stated target parameters, and increasing the trust of clients in the banking system were mentioned. Also the heads of commercial banks were commissioned to strengthen the financial stability and strength of banks, and ensure their active participation in the financing of investment projects in the priority sectors of the economy that make up a part of the structural reforms being implemented in the country