Uzbek Banks Show Robust Q1 2026 Profits Amid Growing Asset and Credit Portfolio Expansion

Uzbekistan's banking sector is demonstrating strong financial performance in the first quarter of 2026, with major players such as Octobank, Tengebank, Kapitalbank, Milliybank, and Hayotbank reporting notable increases in profits and assets. This robust growth signals a dynamic financial environment that could impact the broader tech startup and venture capital ecosystem in the country.

Financial Highlights Reflecting a Growing Banking Sector

Overall bank assets reached 15.52 trillion Uzbek soums, marking a substantial increase compared to the beginning of the year. Investment holdings constitute the largest portion of these assets, valued at 6.71 trillion soums, indicating a strategic focus on diversified asset allocation.

Revenue streams in the banking sector are showing diversification, with interest income totaling 238.3 billion soums and non-interest income reaching 1.2 trillion soums. The substantial non-interest income suggests growing activity in fee-based services and other banking operations beyond traditional lending interests.

Expenses include interest costs of 176.9 billion soums and non-interest expenses totaling 1.04 trillion soums. Operational expenses amounted to 111.6 billion soums, of which 73.8 billion soums were allocated to employee wages, reflecting increased investment in human capital.

Tax contributions to the state budget by these banks totaled 110 million soums in the reporting period.

Bank-Specific Performance and Implications for the Financial Ecosystem

"Tengebank's net profit surged to nearly 34 billion soums in Q1 2026, a significant jump from 920.9 million soums in the same period last year."

Tengebank reported a remarkable increase in net profit to approximately 34.0 billion soums, compared to just 920.9 million soums in Q1 2025. While interest income remained stable, higher provisions for potential credit and leasing losses led to a negative net interest result of -5.3 billion soums. However, commission income sharply increased from 12.8 billion to 57.0 billion soums, driving overall profitability.

By early March, Tengebank's credit portfolio expanded to 4.5 trillion soums, reflecting an 8.4% year-over-year growth, though the share of non-performing loans rose from 2.3% to 3.4%, indicating emerging credit risk challenges.

Milliybank achieved a net profit of 603.2 billion soums, a 28.9% increase compared to Q1 2025. Total interest income rose by 15% to 4.7 trillion soums, while interest expenses were 2.5 trillion soums. Operational costs and employee wages also grew, with operational expenses reaching 673.1 billion soums, 26% higher than the previous year.

Milliybank's tax payments during the period amounted to 22.5 billion soums.

Kapitalbank reported net profits of 324.8 billion soums with total assets reaching 58.23 trillion soums. Credit and leasing operations represented the largest asset segment at 36.6 trillion soums. Income from interest and non-interest sources stood at 1.85 trillion and 1.64 trillion soums, respectively. The bank's operational and interest expenses were also significant, reflecting ongoing growth and operational scaling.

Hayotbank posted a net profit of 14.6 billion soums with assets totaling 7.43 trillion soums. Credit and leasing made up the majority of assets at 5.63 trillion soums. Interest revenues were 332.5 billion soums, while non-interest income amounted to 87.2 billion soums. Operational and employee-related expenses were comparatively moderate, supporting efficient cost management.

Impact on Tech Startups, Venture Capital, and Innovation

The growth trajectory of Uzbekistan's banking sector has significant implications for the country's tech startups and venture capital ecosystem. Expanding credit portfolios and increased fee-based income demonstrate banks' willingness to diversify revenue streams and possibly engage more directly with fintech innovations. The rise in operational expenditures and employee investments suggests banks are adapting to new technologies and services, potentially opening avenues for partnerships and investments in financial technology startups.

Moreover, as banks face higher non-performing loan ratios, there is an incentive to leverage advanced risk management tools and data analytics, areas where startups could provide innovative solutions. The financial sector's overall health and appetite for diversification might also signal increased venture capital interest in fintech and related sectors, creating a more vibrant innovation ecosystem in Uzbekistan.

Investors and entrepreneurs should monitor these banking sector trends closely, as they may present opportunities for collaboration, funding, and market entry, especially in digital banking, credit risk assessment, and payment services.

Based on reporting by Deutsche Welle.