Fitch warns of overheating risk as retail lending rises in Azerbaijan

The Azerbaijani banking sector's average metrics have improved since 2017, with lowered loan dollarisation and reduced legacy asset-quality risks, Report informs referring to Fitch Ratings.

"However, the rapid expansion of retail lending since 2021 could pose overheating risks, although the central bank takes proactive measures to mitigate credit risk in this segment," reads the message.

According to official statistics, as of July 1, 2025, the total loan portfolio of 22 banks operating in the country amounted to 28.472 billion manats ($16.748 billion), an increase of 11.96% over the year. Of these, 14.58% (or 4.152 billion manats, $2.442 billion) are foreign currency loans.