Theoretical Foundations of Credit Risk Assessment In Commercial Banks

This study investigates the theoretical foundations and methodologies for credit risk assessment in commercial banks, with a focus on modern tools like credit scoring and data-driven approaches. Utilizing a mixed-methods approach, the research examines Kapitalbank's practices in Uzbekistan, incorporating both qualitative and quantitative analyses to evaluate creditworthiness. Key financial metrics such as liquidity, profitability ratios, and debt burden are assessed alongside advanced algorithms and alternative data sources to enhance credit scoring accuracy. Results reveal significant improvements in Kapitalbank's loan portfolio quality and risk management strategies, although challenges persist with a 7% share of problematic loans. The findings underscore the need for continuous adaptation of scoring models and staff training to sustain competitiveness and ensure financial stability amidst a dynamic economic environment.