The Role of Government Securities Investments in Balancing Profitability and Liquidity in Commercial Banks (Scientific Journal of Actuarial Finance and Accounting)

Summary

• In 2025 the saved funding cost from securities made up 51-74% of the final result on investments at the selected banks.p.1
• The share of government securities in bank system assets rose from 1.8% in 2020 to 7.7% in 2025, still below the 10% level.p.7
• Contingent income of the five banks rose from 316.8 billion UZS in 2020 to 4,214.1 billion UZS in 2025, or 13.3 times.p.5
• About 4.7 trillion UZS of additional investment would bring three banks to 10%, yielding about 659 billion UZS of contingent income a year.p.8
• In the baseline scenario the securities share of assets rises from 10.9% to 17.8% in 2030.p.9
• The study proposes that commercial banks keep government securities at no less than 10% of total assets.p.1

Key insights

1. Contingent income accounted for 51% of the final result at Sanoatqurilishbank, 54% at Aloqabank, 60% at Ipoteka Bank and 74% at Turonbank in 2025.p.6
2. At Turonbank, interest and tax effect is only 4.8% of investments, but 18.8% including contingent income.p.6
3. Hamkorbank had the highest government securities share in 2025 at 14.0%.p.7
4. Hamkorbank's securities investments grew from 214.3 billion UZS to 5,272.3 billion UZS, or 24.6 times.p.4
5. Ipoteka Bank had the largest contingent income in 2025 at 1,412.7 billion UZS.p.5
6. In the pessimistic scenario the 2030 share is 15.2%, and in the optimistic scenario 20.8%.p.9
7. Banks below 10% should get a transition period until 2028 with annual interim targets.p.10