IFC Deepens Stake in Uzbekistan’s Banking Reform

Ipoteka Bank OTP Group's Acting Chairman of the Management Board, Adam Szentpeteri, described the equity conversion as an important step in the institution’s transformation journey.

The International Finance Corporation (IFC), the private sector investment arm of the World Bank Group, has strengthened its partnership with Ipoteka Bank OTP Group by converting an existing loan into an equity investment.

The move marks a major milestone in a partnership that began nearly a decade ago as part of Uzbekistan's efforts to modernize and privatize its banking sector. The conversion follows the successful completion of a series of transformation goals that were designed to improve the bank's governance, operations and readiness for private ownership.

IFC first became involved with Ipoteka Bank in 2016 at the invitation of the Uzbek Government. A formal advisory agreement followed in 2017, with IFC providing expertise to help the bank improve corporate governance, sharpen its business strategy and prepare for privatization.

Alongside that support, IFC provided a $35 million convertible loan that was structured to become an equity investment once the bank achieved agreed performance and transformation targets.

Banking Reforms Support Broader Economic Growth

The investment is part of IFC's wider efforts to support Uzbekistan's privatisation programme and encourage greater private-sector participation in a banking industry that has traditionally been dominated by state-owned institutions. Officials say a more competitive and market-driven financial sector can improve access to financing for businesses, attract investment and support long-term economic growth.

Ipoteka Bank OTP Group became part of Hungary-based OTP Group, one of the largest financial groups in Central and Eastern Europe, through the privatization process. The bank now plays a growing role in financing key sectors of the Uzbek economy, including energy, manufacturing, construction, transport and telecommunications. By supporting businesses in these industries, the bank contributes to economic development while helping attract international capital into Uzbekistan.

Long-Term Partnership Enters a New Chapter

Ipoteka Bank OTP Group's Acting Chairman of the Management Board, Adam Szentpeteri, described the equity conversion as an important step in the institution's transformation journey. He said the bank has strengthened its governance framework, modernized internal operations, improved customer service and expanded its role in supporting economic development. He noted that IFC has played multiple roles throughout the process, acting as an adviser, lender and now an equity partner.

IFC Regional Industry Director for the Financial Institutions Group, Momina Aijazuddin, said the investment reflects the progress made within Uzbekistan's banking sector over recent years. She noted that a stronger and more competitive banking system can expand access to finance for businesses across the country, creating opportunities for growth, investment and job creation. IFC expects the partnership to continue supporting Uzbekistan's efforts to build a more dynamic and resilient financial sector as economic reforms advance.