PROSPECTS FOR APPLYING THE Z-SCORE MODEL IN ASSESSING FINANCIAL STABILITY IN THE UZBEKISTAN BANKING SYSTEM

S. Gaybulloev

Муҳандислик ва Иқтисодиёт · 2025-yil

Annotatsiya

This paper investigates the prospects for applying the Z-Score model to the assessment of financial stabilityin the Uzbek banking sector. The study is based on monthly financial data spanning 2020 to 2024 for three institutions -Aloqabank, Asia Alliance Bank, and Mikrokreditbank which represent distinct ownership models and strategic orientationswithin the national banking system. The bank-adapted Z-Score formula, Z = (μROA + E/A) / σROA, is employed toquantify each institution's distance from insolvency, where μROA denotes mean annual return on assets, E/A is the yearendequity-to-assets ratio, and σROA captures the standard deviation of monthly ROA observations within each year.The results demonstrate that Asia Alliance Bank posted a sustained upward trajectory in financial stability, with Z-Scoresrising from 20.93 in 2021 to 53.36 in 2024, driven by robust profitability gains (ROA increasing from 0.54% to 4.91%) andsteadily improving cost efficiency (CIR declining from 49.43% to 35.45%). Aloqabank exhibited moderate but variablestability, peaking at 34.42 in 2021, declining to a trough of 14.82 in 2023 amid earnings volatility and a temporary breachof the regulatory capital adequacy minimum, before partially recovering to 22.19 in 2024. Mikrokreditbank recordedexceptionally high Z-Scores of 100.85, 133.83, and 351.63 in 2021–2023 respectively, reflecting an extremely low standarddeviation of ROA characteristic of government-directed specialized lending, but experienced a sharp deterioration to 7.86in 2024 when the institution posted negative mean ROA of −0.57%. The findings contribute to the empirical literature onbanking stability in transition economies and yield actionable implications for bank supervisors and management teams

Maqola ma’lumotlari
MualliflarS. Gaybulloev
JurnalМуҳандислик ва Иқтисодиёт
Nashr sanasi2025-12-01
Jild3
Son12
TilIngliz

Kalit so‘zlar

Z-Score, financial stability, bank risk, return on assets (ROA), return on equity (ROE), capital adequacy ratio (CAR), cost-to-income ratio (CIR).

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