Growth continues in the Azerbaijani banking sector.

Growth dynamics in Azerbaijan’s banking sector continued in the early months of 2026. Official statistics show an increase in banks' loan portfolios and household deposits, with the sector demonstrating high profitability.

As of August 1, 2026, banks' loan portfolios increased by 6.8% since the beginning of the year, reaching 32.095 billion manats. Total loans extended to the economy grew by 12.9% year-on-year, totaling 34.155 billion manats.

Growth was also recorded in household deposits in banks. Individual deposits increased by 15.8% on an annual basis, rising to 17.897 billion manats.

Banks' profits continue to grow In the first half of 2026, all 21 operating banks in the country operated with a net profit.

The main share of the sector's total profit fell to three major banks: the International Bank of Azerbaijan (ABB) earned 250.6 million manats, Kapital Bank earned 221.8 million manats, and PASHA Bank earned 67.7 million manats in net profit.

The total assets of these three banks amounted to 38.1 billion manats.

The growth rate of lending in the banking sector exceeds the real growth rate of the economy. Specifically, in January-August, real economic growth in Azerbaijan was 1.2%, while the non-oil sector grew by 2.1%. In comparison, the annual growth of bank credit stood at approximately 13%.

According to macroeconomic indicators, the discount rate is 6.5%, and annual inflation is at 5.7%.

While the acceleration of lending can support increased economic activity in the banking sector, it also brings issues of loan portfolio quality and risk management to the forefront. In this regard, along with the sustainability of credit growth, monitoring borrowers' solvency and the dynamics of non-performing loans is of great importance.