Page 30 - Caucasus Outlook 2025

5.3.2 Banks
The Azerbaijani banking sector demonstrated stable performance in 2024, with positive trends in credit growth, deposit stability and expanding payment infrastructure.
As of October 31, 2024, Azerbaijan’s banking sector comprised 22 active banks operating 481 branches, 88 sub-branches and 3,180 ATMs. The workforce increased by 1.5% month on month to 25,066 employees, representing a 6.4% rise since the start of the year.
The sector’s total assets amounted to AZN49.7bn ($29.2bn), while total liabilities stood at AZN43.3bn, leaving a balance capital of AZN6.4bn. The credit portfolio grew by 1.4% (AZN374.6mn) in October, reaching AZN27.1bn. Business loans accounted for 54% (AZN14.6bn), consumer loans 30.6% (AZN8.3bn) and mortgage loans 15.4% (AZN4.2bn). The share of non-performing loans declined by 0.2 percentage points y/y to 1.7%.
Deposits continued to dominate liabilities, comprising 79.5% (AZN34.4bn) of total obligations. Corporate deposits accounted for 59.4% (AZN20.4bn), while household deposits made up 40.6% (AZN14.0bn). Among household deposits, 66% (AZN9.2bn) were in local currency, with 34% (AZN4.8bn) held in foreign currency. The dollarisation rate for household deposits dropped by 1.7 percentage points y/y to 33.5%.
The banking sector generated AZN913.7mn in net profit and AZN1.4bn in operating profit during January-October 2024, a robust financial performance.
The broad money supply (M2) increased by 3.6% y/y, reaching AZN34.6bn in October. External liabilities rose to AZN2.6bn, reflecting growth in short-term deposits attracted from non-resident banks.
The number of payment cards in circulation reached 19.16mn by October, marking an 18.2% y/y increase. Debit cards drove this growth with a 20.5% rise, while credit cards grew by 3.5%. Cashless transactions expanded significantly, rising 1.5 times y/y to AZN7.5bn in October. Of this, electronic commerce accounted for AZN6.4bn, with the remainder processed through POS terminals and self-service machines.
The expansion of payment infrastructure supported this trend, with the number of ATMs increasing by 5.3% and POS terminals growing by 30.5% compared to October 2023.
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