The banking sector is uncompetitive, fragmented, poorly developed and suffers from poor corporate governance. Lending is low as a share of GDP and the banking sector plays only a marginal intermediation role in the economy. State influence over the sector is high. Lending is overwhelmingly focused in Baku, the capital, and is largely directed towards established medium and large enterprises.
The outlook for the banking sector in the near term is poor. Low oil prices will lead to a serious recession in 2016, resulting in a fall in demand for credit and a deterioration in asset quality. A large share of loans are in foreign currency and are now non-performing following the devaluation of the manat. Dollarisation of the economy is high, exposing the banking sector to ongoing exchange-rate risks.
Industry List: Asset management, Financial Services, Banking, Financial Services, Financial markets and instruments, Financial Services, Financial regulation, Financial Services, Financial Services, Financial Services, Insurance
Industry Codes (NAIC): 52
Industry Codes (SIC): 60
Financial services report
Financial markets and instruments
Monetary and currency policy: Monetary policy
Monetary and currency policy: Exchange rates
Azerbaijan at a glance