Fitch Ratings on Jan. 31 upgraded certain ratings of Uzbek banks Joint-Stock Innovation Commercial Bank Ipak Yuli, Private Joint Stock Bank Trustbank and Pvt. stock-commercial bank Universal bank (PSCB).

Fitch upgraded the long-term foreign- and local-currency issuer default ratings of Ipak Yuli Bank and Trustbank to B from B- and that of Universal bank to B- from CCC. Meanwhile, the short-term foreign- and local-currency issuer default ratings of Universal bank were upgraded to B from C.

In addition, the rating agency upgraded the viability ratings of Ipak Yuli Bank and Trustbank to "b" from "b-" and that of Universal bank to "b-" from "ccc." The short-term foreign- and local-currency issuer default ratings of Ipak Yuli Bank and Trustbank were affirmed at B.

The upgrades of the issuer default ratings mainly reflect the banks' extended records of reasonable performance and asset quality, partly owing to Uzbekistan's stable economic environment. However, the ratings still factor in structural weaknesses in the economy, the country's tightly regulated foreign exchange market and the banks' modest and fairly concentrated franchises in the state-dominated banking sector.

Franchise limitations are more acute for Universal bank, given its "very small" scale, concentrated balance sheet and "somewhat" higher risk appetite, Fitch noted.

The outlook is stable for all three banks.