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S&P: Azerbaijani banks to maintain resilience in 2026

23 January 2026 11:01 (UTC +04:00)

Banks in Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, and Uzbekistan should remain resilient in 2026, in line with the previous two years, with profitability and capital levels supported by moderating (but still strong) average regional lending growth of 15%-20% and stable asset quality, APA-Economics reports, citing S&P Global Ratings.

The report, "Central Asia And The Caucasus Banking Outlook 2026: Resilient Performance Amid Elevated Geopolitical Risks," notes that favourable economic growth prospects across the region, high lending demand (especially in the retail segment), sound funding and liquidity metrics, and stable capital buffers underpinned by solid profitability should support credit quality in 2026.

"Currently, 19% of financial institutions’ ratings in the region have positive outlooks and 81% have stable outlooks," noted S&P Global Ratings analyst Annette Ess.

The agency considers that the key risks for financial institutions in the region include elevated geopolitical tensions, aggressive retail lending growth that could increase imbalances, and evolving risks related to digitalization, AI, climate change, and cyber threats. In addition, while regulation, supervision, and governance of regional banking sectors have evolved, they remain less transparent and predictable than in developed markets.