Review of the Banking System of the Republic of Tajikistan on December 31, 2022

There are 64 credit financial institutions that are functioning in the Republic of Tajikistan as of December 31, 2022 including 14 traditional banks, 1 Islamic bank, 1 nonbank credit institution, 19 microcredit deposit organizations, 3 microcredit organizations and 26 microcredit funds.

Within the period starting from December 31, 2021 to December 31, 2022 were issued licenses to 1 nonbank credit institution (LLC NBCO “Vasl”), 2 microcredit deposit organizations (LLC MDO “Emin Sarmoya” and CJSC MDO “Shukr Moliya” and a license of 1 microfinance organization (MCF “Istiqlol”) were revoked.

At the same time, by the resolutions of the Board of the National Bank of Tajikistan were issued licenses to LLC MDO “Furuz” (№31 as of March 18, 2022), CJSC “Dushanbe City Bank” (№68 as of June 9, 2022) and LLC NBCO “Vasl” (№151 as of December 30, 2022) to conduct banking transactions. The licenses of LLC MCO “Furuz” and LLC MDO “Dushanbe City” were revoked due to their transformation.

It should be noted that there is а representative office of 1 foreign bank (Agricultural Bank of China Limited) that operates in the banking system of the country. In addition, outside the territory of the Republic of Tajikistan OJSC “Orienbank” has representative offices in the United Arab Emirates (Dubai), United Kingdom of Great Britain and Northern Ireland (London), Republic of Turkey (Istanbul), Republic of Korea (Seoul), Republic of Uzbekistan (Tashkent), People’s Republic of Chinа (Beijing) and SSB of RT “Amonatbank” has representative office in the Russian Federation (Moscow).

At the reporting date the number of structural units of credit financial institutions compared to December 31, 2021 increased by 7 units and stood at 1 862 units.

Table 1. Structure of the banking system of the Republic of Tajikistan

(unit)

As of December 31, 2022 total assets of the credit financial institutions made TJS 30 030,7 million and increased by TJS 7 616,0 million or 34,0% compared to December 31, 2021 mainly due to the accounts receivable from the National bank of Tajikistan, cash and the balance of the credit portfolio.

Total balance of the credit portfolio of the credit financial institutions at the end of the reporting period made TJS 13 577,6 million. The figure increased by TJS 1 607,2 million or 13,4% compared to December 31, 2021 driven by loans to small and medium enterprises.

The amount of nonperforming loans (overdue for more than 30 days) at the reporting period was TJS 1 630,9 million or 12,0% of the total credit portfolio of the banking system, which is 1,4 percentage points less than December 31, 2021.

Provisions for nonperforming loans as of December 31, 2022 made TJS 1 704,2 million or 104,5% of total nonperforming loans, which is 12,0 percentage points higher compared to the same period of 2021.

Table 2. Quality of credit portfolio of the credit financial institutions

(TJS million)

Total liabilities of the credit financial institutions on the reporting date made TJS 23 731,7 million and increased by TJS 6 392,6 million or 36,9%, compared to the same period of 2021, which was mainly driven by increasing the amount of deposits.

The Current Liquidity Ratio of the credit financial institutions on December 31, 2022 was 94,88% which exceeded the minimum requirements (30%) by 64,88 percentage points.

Total deposits of the credit financial institutions on the reporting date increased by TJS 5 348,5 million or 52,6% compared to the December 31, 2021 to stand at TJS 15 507,8 million.

The share of foreign currency deposits of the credit financial institutions on the reporting date constituted 44,3% which is 0,2 percentage points lower than the same indicator as of December 31, 2021.

Total balance sheet capital of the credit financial institutions increased by TJS 1 223,3 million or 24,1% compared to the end of December, 2021 mainly due to current year’s profit and the capital surpluses and stood at TJS 6 299,0 million.

The Capital Adequacy Ratio of the credit financial institutions on December 31, 2022 was 25,27%, which is 13,27 percentage points higher than the minimum requirements (12%).

Credit financial institutions at the end of December 2022 showed a profit of TJS 1 179,5 million which is TJS 1 071,2 million or 988,3% higher compared to the same period of 2021.

Return on assets (ROA) of the credit financial institutions for the reporting period increased from 0,5% to 3,9% and return on equity (ROE) increased from 2,1% to 18,7% compared to the end of December 2021.