By AZE.US
No Azerbaijani bank currently faces an immediate threat of closure, but conditions in the sector are deteriorating and the number of banks is likely to decline through mergers and acquisitions, economist Akram Hasanov said.
Hasanov told Pravda.az that economic weakness, rising problem loans and the growing dominance of larger institutions are putting pressure on small and midsize banks.
“There are no banks at risk of closure today,” Hasanov said, while arguing that consolidation has already begun and will gradually reduce the number of lenders operating in Azerbaijan.
Economic Pressure and Problem Loans
Hasanov said higher prices and stagnant growth were weakening borrowers’ ability to repay loans, which in turn was hurting banks’ balance sheets.
He described the situation as an economic crisis and said an increase in troubled loans was a predictable consequence that was already weighing on banks.
According to Hasanov, large banks are continuing to expand while smaller and midsize lenders are losing ground. In those conditions, he said, owners may conclude that maintaining an independent banking operation is no longer economically viable.
Bank BTB and AccessBank Deals
Hasanov cited Bank BTB’s reorganization and the planned combination of AccessBank and Bank Respublika as signs of the trend.
The Central Bank of Azerbaijan approved Bank BTB’s conversion into a non-bank credit institution in March 2026. Its banking license was revoked on July 27 after the conversion into T-Kredit was completed. The Central Bank later revoked T-Kredit’s non-bank credit institution license on Sept. 29 at the company’s request.
In a separate transaction announced Sept. 11, Bank Respublika agreed to acquire 100% of AccessBank’s shares. The two banks said they would continue operating separately until the deal was completed and that the merger was planned for 2027.
Hasanov said the transactions illustrated a broader movement toward fewer and larger institutions.
Criticism of Large Banks
Hasanov also criticized Azerbaijan’s largest banks, arguing that scale had not necessarily produced better management or customer service.
He said some large lenders had become too confident in their market position and lacked incentives to improve, leaving them struggling to manage their customer bases and transaction volumes efficiently.
The economist also questioned banks’ exposure to infrastructure projects. He said some of the financed businesses appeared inefficient and that the prospects for recovering portions of the money remained uncertain.
“If there is a crisis in the economy, a crisis in the banking system was to be expected,” Hasanov said. “This process has already begun.”
At the same time, Hasanov repeated that no operating bank currently faced an immediate risk of closure.
Sources: Vesti Baku; Pravda.az; Central Bank of Azerbaijan; Bank Respublika; AccessBank.