Assessing the Financial Impact of Exchange Rate Movements on Profit Reporting: A Case Study of KDB Bank Uzbekistan

Authors

  • Sodikov Ulugbek Gulomjon Ugli Tashkent State University of Economics - Universitas Pendidikan Indonesia
  • Denny Andriana Universitas Pendidikan Indonesia
  • R. Nelly Nur Apandi Universitas Pendidikan Indonesia
  • Xoshimov Doniyor Tashkent State University of Economics

DOI:

https://doi.org/10.30993/jicab.v3i2.550

Keywords:

Foreign exchange fluctuations, bank profitability, financial performance, KDB Bank Uzbekistan, currency risk management, regression analysis

Abstract

This study investigates the impact of foreign exchange rate fluctuations on the financial performance of KDB Bank Uzbekistan from 2019 to the third quarter of 2024. Using a quantitative approach, the research analyzes net profit, foreign exchange gains and losses, and annual average USD/UZS and EUR/UZS exchange rates. Descriptive statistics reveal that depreciation of the Uzbek soum was accompanied by increased volatility in bank profitability. Correlation analysis shows a strong positive relationship between FX gains and net profit (r = 0.92), and a negative correlation with FX losses (r = –0.80). An OLS regression model explains 64.1% of the variance in profitability, highlighting the sensitivity of bank earnings to exchange rate changes, particularly against the US dollar. The findings emphasize the importance of foreign exchange risk management in Uzbekistan’s banking sector and offer practical insights for policymakers and financial institutions operating in volatile currency environments.

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Published

2025-09-10

Issue

Vol. 3 No. 2 (2025): JICAB

Section

Articles

License

Copyright (c) 2025 Assessing the Financial Impact of Exchange Rate Movements on Profit Reporting: A Case Study of KDB Bank Uzbekistan © 2025 by Sodikov Ulugbek Gulomjon Ugli, Denny Andriana, R. Nelly Nur Apandi, Xoshimov Doniyor is licensed under Creative Commons Attribution-NonCommercial 4.0 International

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This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Journal of Islamic Contemporary Accounting and Business © 2023 by Tazkia Islamic University College is licensed under CC BY-NC 4.0 

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