THE ROLE OF INTERMEDIATION AND NON-INTEREST SERVICES IN BANK PERFORMANCE: A STATISTICAL-ECONOMETRIC FRAMEWORK FOR UZBEKISTAN

Abstract

This thesis examines how intermediation-related and non-interest services can be incorporated into statistical and econometric assessments of commercial bank performance in Uzbekistan. Official Central Bank data show that banking-sector non-interest income increased from UZS 55.1 trillion to UZS 73.1 trillion between the reporting dates of 1 January 2025 and 1 January 2026, an increase of about 32.6%, while the interest margin rose by about 11.1%. The approximate share of non-interest income in the sum of interest and non-interest income increased from 33.0% to 36.4%. These descriptive changes indicate stronger diversification of revenue sources, but they do not by themselves prove that diversification improves efficiency or stability. International literature provides mixed evidence: fee-based and non-interest activities can diversify revenue, but may also be volatile or associated with weaker risk-adjusted performance. The thesis therefore proposes a bank-level panel model in which ROA, ROE, cost-to-income ratio and Z-score are explained by the non-interest income share, diversification indices and controls for size, capital, asset quality and liquidity.