Sanoat Qurilish Bank
Sanoat Qurilish Bank (SQB), one of the country’s largest state-owned lenders, has managed to achieve impressive growth over the last 12 months. It had assets of Som35.4 trillion ($3.7 billion) on February 1, according to the central bank, a rise of 15.4% from the previous year.
That is noticeably better than at National Bank of Uzbekistan and Asaka Bank, whose assets rose 7.2% and 11.6% respectively. The three banks together represent almost half of the overall assets in the banking system.
Led by chairman Sakhi Annaklichev, SQB, still sometimes known as Uzpromstroybank despite its rebranding in 2018, has 45 branches in the country, including its head office in Tashkent. Although the bank is a believer in the digital banking revolution, it still plans to keep adding branches, in part because it is well positioned to tap the country’s wealthiest client base. SQB Premium, a service aimed at high net-worth customers, opened in 2019.
It has also forged relationships with foreign banks, something that will prove crucial as Uzbekistan continues to integrate further into the global financial system. SQB has 40 credit lines worth $1.7 billion from foreign lenders.
The bank’s $300 million five-year Eurobond in November was also a big breakthrough for the country. The sovereign raised $500 million from its own debut deal earlier in the year, when no other Uzbek bank had ever sold an offshore bond.
SQB is mainly a corporate lender: 49% of its loans were to large corporations, another 40% to small and medium-sized enterprises and the rest to retail accounts, as of the end of 2019. But it is the latter two categories that have given SQB by far the largest growth – the percentage of its loans that went to SMEs doubled over the course of 2019.
This is a good sign for an economy that needs to move away, however slowly, from a reliance on lumbering state-owned enterprises to generate growth.
There are plenty of opportunities for plucky entrepreneurs in Uzbekistan, but without willing lenders like SQB, they will fall at the first hurdle.
Some observers worry about the dominance of the state in Uzbekistan’s financial system. With all state-owned banks combined controlling some 84% of banking assets in the country, and much of their lending going to state-owned enterprises, there is reason to worry.
But like it or not, those banks will play a role in Uzbekistan for years to come. SQB has proved that even the biggest institutions can embrace the rapid changes taking place in the market.