S&P upgraded the credit rating of state enterprise Navoiyuran to BB

Fitch Ratings has published the long-term issuer ratings for JSC Uzbekistan Mortgage Refinancing Company (UzMRC) in local and foreign currencies, assigning it a BB rating. The outlook for these ratings is positive, which aligns with the outlook for Uzbekistan's sovereign rating.

Basis for Rating Assessment

The UzMRC ratings and the Government Support Rating (GSR) at the bb level are directly linked to Uzbekistan's sovereign rating. This assessment is based on the high probability of direct financial support from the state if necessary. This conclusion is supported by several factors: the state ownership stake in the company is 90% (directly and indirectly); the government has repeatedly provided support through capital injections and state financing (accounting for about 60% of financing); the company's bonds have a quasi-sovereign status in the domestic market; moreover, UzMRC is the only mortgage refinancing institution in the country.

Analysis of State Readiness to Support

When assessing the state's propensity to provide support, Fitch also considers the relatively low cost of such support compared to the country's reserves and the reputational risks for the state in the event of an UzMRC default. The company contributes to the development of the mortgage lending market in Uzbekistan by refinancing housing mortgage loans issued by local banks. The business model implies limited credit and market risks. Nevertheless, the moderate absolute size of the company limits its standalone Credit Assessment (SCA) to level b.

Market Growth and Risk Management

The company began operations in late 2020 with technical and financial support from the Asian Development Bank (ADB, which has an AAA/stable rating). UzMRC's market share increased from 5.3% as of the end of 2023 to 8.3% as of the end of the first quarter of 2026. In 2025, the company refinanced 11% of all housing mortgage loans issued in Uzbekistan. Fitch forecasts that the company's assets will grow by approximately 30% annually during 2026–2027 amid stable growth in the domestic mortgage market.

Conservative underwriting management reduces risks: UzMRC refinances prime quality mortgage loans with a maximum loan-to-value ratio of 75% and a maximum debt-to-income ratio of 50% of verified income. Partner banks are obliged to replace troubled loans with active ones and maintain collateral at a level of at least 115% of the refinanced debt. According to the agency, this effectively reduces the concentration risk on partner banks inherent in the company's business model.

Financial Structure and Support

As of the end of 2025, about 80% of UzMRC's assets consisted of loans to commercial banks secured by detailed housing mortgage portfolios; the remainder was mainly in sovereign securities and deposits in major banks. Most positions correspond to a BB credit profile. The company has no non-performing loans because banks promptly replace overdue loans with active mortgages, which also reduces the risk of portfolio aging amid rapid growth. The company does not aim to maximize profit; the net interest margin in 2025 was about 4%, the cost of risk was 0.3% of the average portfolio, and the cost-to-income ratio was 15%. Pre-tax return on assets was 3.4%, which the agency deems sufficient profitability.

State Support and Access to Financing

From the end of 2021 to the end of 2025, the company's capital base increased 14fold, mainly due to state injections into equity. Presidential decrees provide for further capital expansion: doubling in 2026 and quadrupling by 2030 relative to the level at the end of 2025. Fitch expects that continued injections will ensure sustained rapid growth, while capitalization and leverage ratios will remain adequate, although they may show volatility. As of the end of 2025, the regulatory capital adequacy ratio was 190% (compared to 184% the previous year), and the debt-to-tangible capital ratio improved to 3.7x (from 4.2x).

The quasi-sovereign status of UzMRC bonds grants the company a privileged position in the domestic debt market: the securities have preferential risk weights (about 20% versus standard 100%), are tax-exempt, and are accepted by the Central Bank of Uzbekistan as collateral for REPO operations. Thanks to this, the company is one of the largest corporate issuers in the country, accounting for 27% of the volume of corporate bonds issued as of the end of the first quarter of 2026. An additional source of financing is loans from international financial institutions, a significant part of which is guaranteed by sovereign guarantees.

Factors Affecting the Rating

A negative rating change could occur if Uzbekistan's sovereign rating is downgraded; if there is a significant reduction in the share of refinanced mortgage loans, indicating a weakening of the company's political role; if there is a significant increase in external unsecured debt in foreign currency without state guarantees; or if underwriting standards or capitalization sharply deteriorate (specifically, if the debt-to-tangible capital ratio exceeds 7x). Conversely, a positive rating change is likely if Uzbekistan's sovereign rating is raised, as well as if the scale of business increases significantly while maintaining control over leverage and adequate regulatory capital buffers.

Moody's Ratings has made positive changes to the ratings of eleven Uzbek insurance companies. This decision was made after the credit rating of the Government of Uzbekistan issuer was raised from Ba3 to Ba2 on June 25, 2026, and the outlook was changed from positive to stable.

Company Rating Upgrades

The agency upgraded the Financial Strength Ratings (IFSR) for a number of organizations. For example, Uzbekinvest received an upgrade in local currency IFSR to Ba1 (from Ba2) and foreign currency to Ba2 (from Ba3), and its Basic Credit Rating (BCA) was also upgraded to ba1 (from ba2) with a change in outlook to stable. Uzagrosugurta received an IFSR upgrade to Ba2 (from Ba3) and a BCA upgrade to b1 (from b2), with the outlook also becoming stable.

Other companies also received improvements: Mosaic Insurance Group (MIG) upgraded its IFSR to Ba3 (from B1) with a positive outlook; Quantum Insurance received an IFSR upgrade to Ba3 (from B1) while maintaining a stable outlook; Euroasia Insurance improved its IFSR to B1 (from B2) while maintaining a positive outlook. Kafil and Alskom received an IFSR upgrade to B1 (from B2) while maintaining stable outlooks.

Additionally, Impex Insurance and Neo Insurance upgraded their IFSR to B2 (from B3) with positive outlooks. My Insurance maintained its B2 rating with a stable outlook, and Alfa Invest maintained its B2 rating, changing its outlook from negative to stable.

Reasons for Rating Changes

The rating agency's actions are based on three main factors. Firstly, it is the reassessment of the operating environment in the Uzbek insurance market, which has improved due to the refinement of institutional structures and economic prospects. Secondly, there has been an increase in the credit quality of the government and local commercial banks, which has positively affected the quality of insurers' assets. Thirdly, specific corporate indicators of individual companies were taken into account.

Improvements in the operating environment are supported by economic diversification, sustainable GDP growth, slowing inflation, and ongoing financial sector reforms. Higher interest rates continue to increase investment returns for insurers whose portfolios consist mainly of bank deposits. Nevertheless, the relatively low level of insurance penetration in Uzbekistan compared to global standards remains a limiting factor when assessing the entire market.

Key Company Performance Indicators

Regarding Uzbekinvest, its credit profile exceeds the sovereign rating ceiling due to a significant portfolio of high-quality foreign assets—mainly investment-grade debt securities denominated in US dollars and held through a British subsidiary. Furthermore, the company has a large share of international reinsurance business, which accounted for about 50% of total premiums in 2025. In 2025, the company's net profit reached 55 billion soums, compared to 45 billion soums the previous year.

For Uzagrosugurta, the rating upgrade includes a two-step increase above its standalone credit assessment, reflecting its 99.6% state ownership and systemic importance to the national agricultural sector. The company's net profit for 2025 grew to 14.1 billion soums compared to 4.6 billion soums in 2024.

The positive outlook for Mosaic Insurance Group (MIG) is based on expectations that international reinsurance segments will continue to grow over the next 12–18 months. Net profit grew to 37 billion soums in 2025 from 9 billion soums in 2024, and the solvency ratio reached 244% as of the first quarter of 2026.

Quantum Insurance's rating upgrade is secured by a conservative underwriting policy and a record net profit of 24 billion soums in 2025, while the combined ratio remained consistently below 100%. Euroasia Insurance demonstrated a return on equity of 20% in 2025 thanks to the inflow of international reinsurance business, recovering from a negative 1% in 2024.

Kafil, holding a 3% market share in Uzbekistan, recorded a net profit of 18.7 billion soums in 2025, supported by improved asset quality and strong capital adequacy in retail and commercial divisions. Alskom maintains strong distribution channels through corporate ties with state entities Uzbektelecom and Aloqabank. Net profit grew to 16.2 billion soums, largely driven by investment income, despite modest underwriting profitability.

Thanks to capital injections, Impex Insurance's investment portfolio doubled during 2025, providing a return on equity of 15%. Neo Insurance completed its main investment phase, achieving a profit of 9 billion soums in 2025 after a loss of 1 billion soums in 2024. Gross premiums increased to 130 billion soums from 75 billion soums, confirming the success of the digital retail insurer.

My Insurance's rating was confirmed at B2 because macroeconomic benefits were offset by rapid premium growth (90% in 2025), high exposure to credit insurance (over 80% of the portfolio), and low underwriting profitability. Alfa Invest maintained seventh place in gross premiums with consolidated net profit of 56 billion soums in 2025. The company's ratings are limited by a high group leverage ratio of 47%, resulting from commercial bank loans used to acquire hotel business lines.