DOES FOREIGN OWNERSHIP IMPROVE THE CREDIT RISK MANAGEMENT?

This paper examines the main determinants of non-performing loans (NPL) in commercial banks of Uzbekistan using dynamic panel approach. The research includes the quarterly banking data for the period 2020 – 2023 and investigates whether foreign ownership improves the credit risk management while controlling for other bank-specific and macroeconomic factors. According to the findings, there is a negative association between being foreign-owned and NPL. The econometric results indicate that on average NPL rate is 0.12% lower in foreign banks compared to local ones, while holding other variables constant. These findings suggest implementing the best practices of foreign-owned banks in the field of credit risk management to the local commercial banks.