TASHKENT, UZBEKISTAN / ACCESS Newswire / October 31, 2025 / Tashkent, Uzbekistan banking sector is experiencing a period of major structural change, marking a steady shift from state dominance toward a more competitive, private-sector-driven model. According to an analysis published by Podrobno Uzbekistan News, state-owned banks accounted for 84% of total financial system assets in 2019, but by mid-2025 this share had declined to 67%. The transition underscores the government's long-term strategy to attract private capital, enhance competition, and modernize the nation's financial landscape.

Reform as Part of Structural Transformation

The reduction of state participation in banking is part of Uzbekistan's wider economic transformation. These reforms aim to increase the private sector's contribution to GDP, boost institutional efficiency, and encourage the development of modern financial services.

The government is pursuing several mechanisms to achieve this goal, including equity sales through IPOs, strategic partnerships with international investors, and targeted credit programs designed to strengthen banks' financial stability.

Diversified Banking Landscape

Uzbekistan's banking market is becoming increasingly diversified, with private institutions expanding their footprint alongside established state-owned banks. Among them:

• Ipak Yuli Bank obtained a 625-billion-soums (approximately USD 50 million) credit line from the Asian Development Bank, expanding its lending capacity for micro and small enterprises.

• Kapitalbank continues to scale its retail operations, holding roughly 12% of the consumer lending market and 20% of total deposits. Its integration with the Uzum digital ecosystem allows customers to access banking and marketplace services in one platform.

• Hamkorbank has reinforced its role in corporate and agricultural financing, partnering with global institutions such as IFAD, ADB, EBRD, and FMO to provide credit for farmers, dairy producers, and horticultural projects.

• Octobank is focusing on technological innovation through Visa Direct international transfers and online payment acquiring services that support the growth of Uzbekistan's e-commerce and fintech ecosystem.

Competition as a Catalyst for Quality

As private banks expand their market share, competition is driving improvements across the industry. Customers now benefit from broader service options-ranging from SME loans and agricultural finance to ecosystem-based digital banking.

This competition encourages innovation, operational efficiency, and transparency. The result is a more agile and customer-oriented banking environment, better equipped to handle challenges such as regulatory shifts and currency fluctuations.

Expert Insights and Future Outlook

According to Professor Nikolay Nenovsky, a Bulgarian economist and former member of the Board of the Bulgarian National Bank, Uzbekistan's financial transformation will continue through concurrent waves of privatization and digitalization. "Private banks will have increasing opportunities to attract investment, adopt new technologies, and reach underserved market segments," he noted. "For consumers, this means more convenient and affordable digital services; for the economy, a stronger and more diversified financial system."

About OctaBank.uz

OctaBank.uz is a modern financial institution in Uzbekistan dedicated to transforming everyday banking through invention, trust, and digital superiority. Built on a basis of transparency and customer authorization, OctaBank delivers safe, user-friendly digital banking solutions for persons and businesses alike.

The bank's mission is to streamline financial management by combining advanced technology with personalized service helping customers save, invest, and transact with self-confidence. From instant online payments and Visa Direct transfers to united fintech solutions that support e-commerce and small trades, OctaBank is redefining what it means to bank in a connected budget.

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Website: https://octobank.uz/

SOURCE: octobank