In 2026, although the profits of Azerbaijani banks will weaken to some extent, overall profitability will remain high, APA-Economics reports, citing the international rating agency Fitch Ratings.
According to the report, banks’ earnings are supported by wide interest margins. At the end of the 9 months of 2025, the margin stood at 6.5%. However, it is expected that this figure will decrease by approximately 50 basis points in 2026 due to the increase in the share of term deposits.
In addition, provisions for credit losses are also projected to increase. The agency states that in 2026, credit loss provisions will rise to 2% of average loans, whereas this figure was 1.2% in the 9 months of 2025.
According to Fitch’s assessment, the decline in interest margins and the increase in provisioning will affect banks’ operating profits. Nevertheless, it is noted that sector profitability will remain strong.
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