CHAIRMAN OF XALQ BANK
Finance I Interview I Uzbekistan 2023
_BIOGRAPHY He was appointed to his current position in 2021. He also worked as Deputy Chairman of the Central Bank of Uzbekistan and CEO of Ipotekabank of Uzbekistan. He graduated as Bachelor in Finance and Lending at Tashkent Financial Institute and has a Masters in Public Policy-macroeconomics at the National Graduate Institute for Policy Studies in Japan.
“OUR VISION IS TO BE THE LEADING BANK FOR THE PEOPLE AND BUSINESSES OF UZBEKISTAN, SUPPORTING THEM TO ACHIEVE THEIR FINANCIAL ASPIRATIONS.”
CAN YOU TELL US YOUR KEY ACHIEVEMENTS AND PRIORITIES FOR 2022/23?
Currently, the Bank with its network of 270 branches and 3,000 ATMs is successfully providing financial products and services throughout the entire economy. This improved networking system allowed the bank to attract more than 40% of the population and SMEs as a customer from every corner of the country. Furthermore, the bank has been transferring pension payments to about 4 million pensioners, transferring social payments to more than 2 million people, and running an accumulated pension fund system for all working people in the country.
In addition, considering ecological and environmental issues Xalq Bank recently started to support the green transition in the country by offering green financial products and loans to its customers. Moreover, the Xalq Bank is initiating financial inclusion program in Uzbekistan in order to improve access to financial products and services throughout the country, particularly in remote areas and to encourage women and youth’s participation in business. In short, these allowed the bank considerably strengthen its position in the financial system and to become one of the leading banks in the country.
After becoming Chairman, with my management team we have focused to improve the financial condition of the bank by strengthening capital adequacy, liquidity, loan-to-asset ratio and other bank balance sheet items. At the same time, we are paying attention to upgrading the bank loan portfolio quality by decreasing the NPLs that accumulated over a long period. All these actions allowed us to strengthen the financial position of the bank by improving asset quality which in turn contributed to meeting the bank’s obligations to its shareholder and creditors.
Also, to enhance the staff performance and quality we are continuously strengthening the team with new, highly experienced people, including foreign specialists. For 2023, we are taking necessary measures to improve the quality of customer service by increasing remote services availability and optimizing our big branches into smaller, more numerous banking service centers, closer to our clients.
Last year, together with the specialists of the Asian Development Bank, we developed the bank's 3-year strategy. Currently, the bank is actively working on the implementation of the strategy with the support of ADB consultants. The main objective of this strategy is to increase the loyalty of our customers whilst offering a high level of service. Our vision is to be the leading bank for the people and businesses of Uzbekistan, supporting them to achieve their financial aspirations. For this goal, our strategy envis¬ages a segment-driven customer-focused approach, providing a high-quality service, offering suitable banking products, digitizing banking services, improving the risk management system, and implementing effective corporate governance.
WHAT ARE THE PLANS FOR INNOVATION AND IMPROVING THE CUSTOMER OFFER?
When we initially analyzed the quality of services, we found that the level of providing remote services to customers was relatively low. Most customers would have to physically come to the bank to use our services so there were long queues at the branches, and therefore, we decided to automate our operations and increase the size of our ATM network and mobile and internet banking services capabilities. Consequently, we have seen small businesses' use of our online services increase by 85%, and the number of online money transfers to individuals has increased by 80% in recent months. In order to expand the provision of online services to clients, we recently launched a new modern mobile and internet banking system, which will be the first to offer many government services.
HOW CAN UZBEKISTAN EXPLORE THE FULL POTENTIAL OF ITS BANKING SECTOR?
In the last five years our country's economy, particularly in the financial and banking sector, has undergone great liberalization. Comprehensive reforms such as currency conversion, tax system, price liberalization, ease of business registration and digitization of public services have been implemented. In only a few years, the quality of customer service has increased several times due to the state's support for the transformation of banks, the liberalization of the competitive environment and the entry of new foreign banks into the banking market. According to data analysis, only 40% of the country's adults have bank accounts and only 8% borrow from a formal financial institution. The growth potential of banks is still very high. The volume of bank assets has been growing by an average of 20-30% p.a.
WHAT WOULD BE YOUR MESSAGE TO INVESTORS INTERESTED IN UZBEKISTAN?
There are many benefits to investing in Uzbekistan. The large liberalizations have eased the costs of doing business. The legislative framework for the protection on the protection of the rights of investors and property rights has been strengthened. The large scale of privatization programs has been announced. Being one of the fastest growing economies in the world according to the World Bank, Uzbekistan is becoming part of the global economic. The country now offers more than 20 free economic zones, inviting investors into the pharmaceutical, agricultural, tourism and other industrial sectors.
The presence of unsatisfied demand in the country in almost all sectors, particularly in the banking market. The presence of very large natural resources, ancient history, a multinational country and a young, educated workforce. There is a first-mover advantage in that there is an opportunity for high returns by simultaneously servicing a large domestic market with largely unmet needs, setting up production here with low labour and energy costs, and then exporting products from a stable economy where the ease of doing business is improving monthly. Opening up Uzbekistan's borders is part of the government's push to become an international player, and can only increase confidence in those looking to invest in a fast-growing economy.