Fitch Ratings praises Azerbaijan’s banking reforms under Basel III

International rating agency Fitch Ratings has positively assessed the regulatory reforms introduced by the Central Bank of Azerbaijan (CBA) to align the country’s banks with Basel III standards.

AzerNEWS reports that, in its assessment dated August 11, 2026, Fitch said the measures would strengthen the resilience of Azerbaijan’s banking sector.

Fitch noted that the capital requirement framework for banks, included in the Central Bank’s “Financial Sector Development Strategy for 2024–2026,” brings regulatory approaches further into line with international standards. Banks are expected to comply with the new requirements starting in January 2027.

The agency considers the differentiated capital requirements for systemically important banks, including an additional 1%–4% capital buffer, to be a positive factor for the overall stability of the banking system.

The reforms also introduce Additional Tier 1 (AT1) capital instruments into the regulatory framework, strengthening banks’ ability to absorb potential losses. At the same time, requirements concerning capital quality are designed to bring Azerbaijan’s banking sector further into alignment with international standards.