"There are two indicators in Azerbaijan that should be monitored years 2025-2026," Maksim Maliutin, Deputy Director for CIS+ and Middle East Banks at the international rating agency Fitch Ratings told APA-Economics.
He noted that first of all, this is oil price dynamics: "Azerbaijan economic growth remains heavily dependent on oil and gas exports, meaning that the performance of this sector could affect business opportunities of local banks."
He believes that the second indicator is the continued retail lending growth: "We see some room for further growth over the next two years. Due to still weak credit penetration, but rising indebtedness of local population, it could represent a credit risk for local banks in the medium term, translating into higher non-performing loans."
"However, we believe that the potential deterioration could be manageable for local banks and the Central Bank of Azerbaijan will keep monitoring the performance of the retail segment and implementing effective measures to prevent overheating," Maliutin said.
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