S&P Global Ratings Sees Azerbaijan’s Banks Remaining Resilient in 2026

S&P Global Ratings forecasts that Azerbaijan’s banking sector will maintain its resilience in 2026, Azernews reports.

The rating agency notes that banks in Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, and Uzbekistan are expected to preserve their stability in 2026, repeating the performance observed over the past two years.

S&P Global Ratings projects that average credit growth in the region will remain moderate—though still relatively high—at around 15–20 percent, while stable asset quality will continue to support banks’ profitability and capital levels.

“Favorable economic growth prospects in the region, strong demand for lending—particularly in the retail segment—reliable funding and liquidity indicators, as well as solid capital buffers underpinned by strong profitability, could lead to further positive rating actions in 2026,” the report notes.

S&P added that currently 19 percent of financial institutions in the region have positive outlooks, while 81 percent are assessed with stable outlooks.

According to the agency, key risks for the region’s financial institutions include rising geopolitical tensions, aggressive retail lending growth that could create imbalances, as well as emerging risks related to digitalization, artificial intelligence, climate change, and cybersecurity.