Non-performing loans in Azerbaijani banks increase by over 16%

In January 2026, the non-performing loan (NPL) portfolio of Azerbaijan's banking sector amounted to 763 million manats (approximately $449 million), Report informs, citing the Central Bank of Azerbaijan (CBA).

As indicated in the CBA's semi-annual financial stability report, this figure is 16.4% or 107 million manats (almost $63 million) higher compared to January 1, 2025

During the year, consumer loans within the NPL portfolio increased by 58 million manats (just over $34.1 million), business loans by 54 million manats ($31.7 million), while mortgage loans decreased by 5 million manats (just under $3 million). As a result, the share of NPLs in the total loan portfolio rose by 0.1 percentage points to 2.5%.

"To fully cover potential credit risks, the banking sector has sufficient reserves. The amount of targeted reserves created to cover possible loan losses stands at 1.75 billion manats (nearly $1.03 billion), which is 230% higher than the NPL portfolio. In particular, targeted reserves for consumer loans amount to 1.27 billion manats (just over $747 million), nearly four times higher than the NPL volume in consumer loans. These facts indicate that the level of provisioning in the banking sector allows absorption of potential risks," the bank said.