Retail Banking in Uzbekistan:
People’s Bank Case
Sakhi Annaklichev
Deputy Chairman
People’s Bank of Uzbekistan
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Key Drivers of Retail Banking
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Constant innovation in banking sector
Rapid advances in information technology
Evolving macroeconomic environment
Financial markets reforms
Increased competition from non-banking
sector
• Transformation from the “seller’s market” to
the “buyer’s market”
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Retail Banking: Features
• Center Focus: Individual Customers
• 3 basic characteristics:
– multiple products (deposits, credit/debit cards,
investments and securities);
– multiple channels of distribution
(call centre, branch, Internet and kiosk); and
– multiple customer groups (consumer, small
business, and corporate).
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Profile of Retail Banking in Uzbekistan
• Retail banking in Uzbekistan shows consistent
growth
• During 2011 retail loans grew by 42,35% and retail
deposits by 32%
• Retail loans level reached 1,7 trln. Soums in 2011,
making up 17% of the total loan portfolio
• Retail deposits size increased to 2,87 trln. Soums
• Time deposits are gaining higher shares
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People’s Bank Competitive Position
• No. 5 by asset size
• No. 4 by owners’ equity
• No. 1 by retail deposits mobilized,
with total market share of 23,5%
• No.1 by retail client base
• No.1 by number of branches
23,54%
13,09%
3,53%
Deposits of
legal entities
5,26%
Loan Portfolio
6,07%
Total Assets
6,88%
Investment
Portfolio
6,91%
Equity Base
Net Profit
Deposits of
Individuals
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People’s Bank: At a Glance
• Founded as a savings institution in 1875 in Tashkent
• 1995 – Reorganized from the Savings Bank of
Uzbekistan into the State Commercial People’s Bank of
Uzbekistan
• Status: joint-stock holding company
• Shareholders: Ministry of Finance (51%) and the Central
Bank of Uzbekistan (49%)
• Agent of the Government in implementing social projects
and reforms (managing mandatory and cumulative
Pension funds systems, distributing the growth of
population welfares).
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People’s Bank Mission
The mission of the People’s Bank
determines the nature and meaning of the
Bank, underlining its role as of a financial
agent of the Government in the
implementation of social objectives, as well
as ensuring the growth of the welfare of the
people and the economy as a whole.
People’s Bank possessing the largest
network of branches in Uzbekistan.
is always closer to each of a client in every
city, district and village.
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Facts about the People’s Bank
Standard & Poor's Ratings Agency
affirmed 'B+' long-term and 'B' shortterm counterparty credit ratings with
Stable outlook.
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As of 1 January 2012:
Total Assets = 1,62 trln soums
Deposits = 1,27 trln soums
Loans = 755 bln soums
Authorized capital 200,0 bln soums; paid up capital: 180,0
bln soums.
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Facts about the People’s Bank
Today People’s Bank is a universal banking
organization providing all kinds of banking services
ranging from issuing loans and accepting deposits,
issuing letters of credit and servicing individual cross
border remittances.
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Corporate Structure
“Xalq
Insurance”
“Xalq Invest”
“Xalq Lizing”
Retail Banking
Regional
Branches (14)
Corporate
Banking
Accumulated
Pension System
Conductor of
Social Programs
District
Branches
(175)
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Distribution Channels of the Bank’s
Retailing
Retail Banking
Mobile service
points (72)
Minibanks (271)
FX offices (260)
Regional/District
Branches
(199)
Savings offices
(1963)
Money order
offices (191)
Specialized cash
collecting/dispensing
offices (1093)
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Bank’s Retail Operations
• Mortgage
• Auto
• Personal
• Education
• Others
• Debit Cards:
“UZCART”; VISA
• UzPaynet
• Internet-banking
• Mobile-banking
• Demand
• Time
• Savings
• Lottery deposits
Loans
Deposits
Retail
Payment
Systems
Insurance
(Xalq
Sugurta)
• Microinsurance
• Loan loss insurance
• Property insurance
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Main Figures
Deposit Growth
in bln. Soums
800.7
625.2
January 1, 2011
January 1, 2012
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Main Figures
Retail Loans Structure, on 1 Jan. 2012
01/01/2009
mortgage Loans
25.6%
28.6%
1.1%
2.1%
41.6%
35.3%
26.7%
31.7%
34.0%
37.1%
32.6%
3.6%
01/01/2010
01/01/2011
consumer loans educational loans micro credits
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Modern Retail Services
«Uyali pul» - a complete solution that ensures a
convenient and secure e-service retail bank
customers using the Internet and mobile phones. The
Bank offers a comprehensive solution that allows you
to almost completely satisfy all customer needs in a
remote service.
UZPAYNET - non-banking on-line payment system that
provides people through its more than 25,000 agent
points with services for making payments for utilities,
cell and land-line phones, Internet and IP-telephony,
and many other, in the real time mode 24/7
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International Activities
In 2000 the People’s Bank became a Member of the World
Savings Banks Institute the global representative of savings
and retail banking.
WSBI represents savings and socially committed retail banks
or associations thereof in 89 countries. WSBI works closely
with international financial institutions and represents its
members’ interests at an international level.
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International Activities
Since 2003 the Bank has been actively involved in micro-financing
project with German Savings Bank Foundation for International
Cooperation. The Bank has utilized credit line of the Foundation as the
result new jobs were created as a result of this project over 100
specialists of the People’s Bank were trained by the experts of financial
institutions in Germany.
As part of cooperation between the Foundation and the People’s Bank
several other projects are being currently implemented. Among them is
the micro-insurance project, which is aimed at providing insurance in
rural areas of the country.
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International Activities
Areas of cooperation:
Short-term training courses for People’s Bank personnel:
savings
IT technology
micro-loans
treasury
card business
risk management
Technical assistance in developing International money
transfer (remittances) from Korea – Uzbekistan – Korea
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Challenges
• Diminishing margins due to intense competition
from non-traditional retailers and other new
market players
• Tightened Regulation: change in risk attitude,
priority of safety and soundness, entrenching line
of defense of bank clients
• Policy issues: financial inclusion, consumer
protection, access to finance, responsible lending,
prevention of financial crime (AML)
• Retention of customers
• Concerns for safety with IT development
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Perspectives
• Rise in the middle class: ever increasing of the
purchasing power, liberal attitude to personal
debt
• Building a unified IT environment:
– “branchless” banking
– e-banking
– consolidation of various operations
• Deepening of product development and
differentiation
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THANK YOU!
www.xb.uz
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