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Banks (Finance)

Moody's Upgrades Asia Alliance Bank's Ratings Following Improvements in Asset Quality and Profitability

Strategic Insights

— 1 min read

Moody's Ratings has upgraded Asia Alliance Bank's (AAB) long-term local and foreign currency bank deposit ratings to B1 from B2, citing improvements in asset quality, profitability, and capital adequacy over the past year. The bank's Baseline Credit Assessment (BCA) and Adjusted BCA were also upgraded to b1 from b2, while its Counterparty Risk Ratings (CRRs) and Counterparty Risk Assessment (CR Assessment) were upgraded to Ba3 from B1. The upgrade reflects AAB's low reliance on market funding, strong liquidity, and improved performance under its evolved business model.

Key Takeaways:

  • Moody's upgraded AAB's long-term local and foreign currency bank deposit ratings to B1 from B2 due to improvements in asset quality, profitability, and capital adequacy.
  • AAB's non-performing loans (NPLs) declined to 0.6% of gross loans at the end of June 2025, down from 2% at year-end 2024.
  • Problem loans (PLs) stood at 4.1% of gross loans at end-2024, while doubtful Stage 2 loans significantly decreased to 14.7% from 76% at end-2023.
  • AAB's coverage of problem loans by loan loss reserves remained high at 134% in 2024.
  • The bank reported a net profit of UZS375 billion in 2024, up from UZS337 billion in 2023, resulting in a strong return on tangible assets of 5.0%.
  • AAB's capital adequacy has improved, with the tangible common equity (TCE) ratio rising to 14.4% of risk-weighted assets at the end of 2024, up from 12.4% at the end of 2023.

Statistics:

  • AAB's non-performing loans (NPLs) declined to 0.6% of gross loans at the end of June 2025.
  • Problem loans (PLs) stood at 4.1% of gross loans at end-2024.
  • Doubtful Stage 2 loans decreased to 14.7% from 76% at end-2023.
  • AAB's coverage of problem loans by loan loss reserves remained high at 134% in 2024.
  • The bank's tangible common equity (TCE) ratio improved to 14.4% of risk-weighted assets at the end of 2024, up from 12.4% at the end of 2023.
  • AAB's return on tangible assets was 5.0% in 2024, up from 4.2% in 2023.

Sources:

  • Moody's Ratings, "Moody's Upgrades Asia Alliance Bank's (AAB) Long-Term Deposit Ratings" (2025).
  • Banks, Moody's Rating Methodologies (November 2024), available at https://ratings.moodys.com/rmc-documents/432741.
  • Rating Methodologies, Moody's (https://ratings.moodys.com).

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