MOSCOW (S&P Global Ratings) — S&P Global Ratings affirmed last week its “B+/B” long- and short-term issuer credit ratings on National Bank for Foreign Economic Activity of the Republic of Uzbekistan (NBU). The outlook remains stable.

S&P understand that over the next 18 months the National Bank for Foreign Economic Activity of the Republic of Uzbekistan (NBU) expects to expand relatively quickly, which will likely erode its capital buffer. However, S&P expect NBU to maintain its public policy role in supporting strategic sectors of the economy while continuing to benefit from ongoing state support and its relatively strong domestic competitive position with a stable funding base. S&P are therefore affirming its B+/B long- and short-term issuer credit ratings on NBU.

The stable outlook reflects S&P’s view of the balance between the continuous expected state support over the next 18 months and the challenges related to high economic and industry risk for banks operating in Uzbekistan.

The affirmation reflects S&P’s view that despite their expectation that the bank’s capital buffer will be eroded, NBU will continue to play a noticeable role in the domestic economy while benefiting from ongoing state support and a stable funding base. NBU is a government agency that allocates centralized resources to strategic sectors of the economy. As such, it is designed to grant long-term loans for capital investment purposes. We believe that its leading position and business stability are well entrenched and unlikely to diminish over the 12-18 month rating horizon.