Azerbaijan's Banking Assets Rise 6.8% to $35.8bn in H1

Azerbaijan's banking sector grew its balance sheet by 6.8 per cent in the first half of 2026, taking total assets to AZN 60.9 billion ($35.8 billion), according to the Central Bank of Azerbaijan's Financial Stability Report for the first half of 2026, published on 13 October 2026. Trend News Agency reported the figures the same day.

The increase equals AZN 3.9 billion ($2.3 billion) since the start of the year. Total liabilities rose 7.1 per cent, or AZN 3.5 billion ($2.06 billion), to AZN 53.3 billion ($31.3 billion). The central bank said the balance sheet grew mainly because of higher term deposits from individuals, which helped expand the loan portfolio.

Liabilities grew slightly faster than assets, a point for readers who follow capital buffers. The report's summary puts the sector's capital adequacy ratio at 17.7 per cent, well above the regulatory minimum, and its liquidity coverage ratio at 160 per cent, 1.6 times the requirement. Banks earned more than AZN 700 million in net profit in the half, a 2.5 per cent return on assets and 20.7 per cent on equity, the report says.

Sector depth passes 46 per cent

The ratio of banking assets to gross domestic product, which the central bank calls the sector depth ratio, rose 2.5 percentage points from the end of 2025 to 46.7 per cent. That is the highest level in the report's chart, which starts in 2020, and up from a low of 35.2 per cent in 2022. A higher ratio means banks hold a bigger share of the economy's activity on their books. It does not by itself say whether lending is healthy, so it should be read together with the asset quality figures in the same report.

What banks hold

Net loans make up 49.1 per cent of assets, liquid assets 25.3 per cent and other assets 25.6 per cent. On the funding side, corporate deposits account for 42 per cent of liabilities, individual deposits 33 per cent and other sources 25 per cent.

Deposits shift towards households

Corporate deposits rose 1.8 per cent, or AZN 0.4 billion ($235.3 million), to AZN 22.3 billion ($13.1 billion). Retail deposits grew faster, up 6.7 per cent, or AZN 1.1 billion ($647 million), to AZN 17.4 billion ($10.2 billion). As a result, individuals now hold 44 per cent of deposits, up one point, while companies hold 56 per cent, down one point.

For banks, a larger household share of funding is usually more stable than corporate money, which can move quickly. The report does not say whether the shift is lasting.

Concentration indices edge up

The Herfindahl-Hirschman Index, a standard measure of market concentration, rose in all three categories reported. The loan portfolio index increased 33 points to 1,213, the deposit index 83 points to 1,589 and the asset index 98 points to 1,458. Higher readings mean slightly more concentration. The central bank said there were no significant changes in concentration compared with the end of 2025, described concentration as low in the loan portfolio and moderate in assets and deposits, and said it monitors the level constantly.

Why it matters

For investors and corporate treasurers in Baku, the figures show a banking system that grew its balance sheet by 6.8 per cent in six months while its funding shifted slightly towards household deposits. The central bank held its key rate at 6.5 per cent on 23 September 2026, and the balance sheet data show the system expanding under that policy setting. Monthly data for 1 September, which CBJ reported, put assets at AZN 62.48 billion, so the growth continued into the third quarter.

The same report also covers asset quality and household debt, which CBJ covers in companion pieces published the same morning: nonperforming loans rose 25 per cent, and household debt reached 18.7 per cent of disposable income. The central bank has also capped loan guarantors' debt-to-income ratio at 70 per cent, part of amendments to its credit risk rules that take effect on 9 November 2026.

What to watch

The next Financial Stability Report will show whether household deposits keep gaining share of bank funding and whether the three concentration indices keep rising. The asset quality figures in the same report are the other half of the picture.

Figures were checked against the central bank's report, which is published in Azerbaijani. Conversions to US dollars are those given by Trend.

Further reading

• PASHA Bank's Loan Book Tops AZN 4bn as Capital Passes AZN 1bn
• ING Sees Azerbaijan Holding Its 6.5% Rate for Longer

Sources

• Financial Stability Report, first half of 2026 (in Azerbaijani), Central Bank of the Republic of Azerbaijan, 13 October 2026
• Azerbaijan's banking assets rise 6.8% to $35.8B in H1 2026, Trend, 13 October 2026
• Central Bank enhances prudential requirements for credit risk management, Central Bank of the Republic of Azerbaijan, 13 October 2026

Correction, 14 October 2026: an earlier version said the report summary did not say whether the central bank regarded the rise in concentration as a concern. The central bank said there were no significant changes in concentration compared with the end of 2025 (Central Bank of Azerbaijan Financial Stability Report, via Trend).