S&P: Joining ABB Group to strengthen Davr Bank's position through servicing of Azerbaijani, Turkish corporates in Uzbekistan

S&P Global Ratings has raised its long-term issuer credit rating on Uzbekistan's Davr-Bank to 'B+' from 'B' and affirmed its 'B' short-term rating on the bank. The outlook is stable, Report informs referring to S&P Global Ratings.

"We raised our ratings on Davr-Bank because we consider it a moderately strategic subsidiary of ABB. Davr-Bank accounts for 10%-12% of the ABB group's total assets. As we understand, the deal fits ABB's long-term strategy, which envisages international expansion and positioning itself as a regional player," the agency said.

Davr-Bank will be renamed ABB Davr-Bank. However, the level of operational integration between the two entities is yet to be determined, limiting our assessment.

"We believe ABB Group has higher creditworthiness than Davr-Bank stand-alone and therefore incorporate a notch of uplift into our rating on Davr-Bank.

We expect Davr-Bank to maintain its focus on retail and small and midsize enterprise (SME) lending over the next 12 months. While we anticipate the bank to develop its new growth strategy before the end of 2026, we expect these segments to remain its core pillars and to continue to fuel growth," S&P analysts noted.

"We also anticipate Davr-Bank to capitalize on new opportunities from being a part of ABB group, specifically through the servicing of Azerbaijani and Turkish corporates in Uzbekistan and the integration of ABB's international money transfer services. We project loan book growth of 20%-25% in 2026, then accelerating to 30%-35% in 2027 and 2028. We forecast the bank's net interest margin to remain robust at 10.0%-10.3%, bolstered by high interest rates and an expanded footprint in higher-margin segments.

We expect Davr-Bank will maintain adequate capital buffers. Under our base-case scenario, we do not anticipate any capital injections from shareholders over 2026-2028. We expect our risk-adjusted capital (RAC) ratio will remain at 10.0%-10.7% over the next 12-18 months, supported by solid earnings and 100% net income retention.

Still, the integration with the parent could result in changes in loan reclassification and higher provisioning needs. Furthermore, changes in ownership could lead to an adjustment to strategic plans, which might entail execution risks as well as shifts in dividend policy.

This, in turn, could affect capital buildup and bring the RAC ratio to below 10% over the next two-to-three years. This constrains our assessment of Davr-Bank's capital position at adequate, although we expect capitalization will remain a rating strength," the agency added.

On August 23, 2026, in Tashkent, the International Bank of Azerbaijan (ABB) signed an agreement to acquire a controlling stake (51%) in Davr Bank.

As previously announced by ABB Chairman of the Board Abbas Ibrahimov, the Azerbaijani bank's investment in acquiring shares of the Uzbek bank will exceed $100 million.

On September 10, in a series of six transactions on the Tashkent Republican Stock Exchange, ABB acquired 51 million ordinary shares at a uniform price of 32,281.28 soums ($2.74) per share. Consequently, ABB paid 1.65 trillion soums - approximately $140 million - for the shares of the Uzbek bank. Based on the transaction price, the total valuation of Davr Bank is estimated at approximately 3.23 trillion soums (around $280 million).

Davr Bank has been operating in Uzbekistan since September 2001.