BAKU, Azerbaijan — The volume of overdue loans in Azerbaijan reached 721.8 million manats as of Sept. 1, rising 36% from a year earlier even as the banking sector increased its profit by nearly 23%.
Central Bank of Azerbaijan data reported by Report and APA showed a marked year-on-year deterioration in loan quality.
Overdue debt increased 37.6% from the start of the year and 36% over the previous 12 months. It declined 1.7% in August, however.
Problem loans accounted for 2.1% of the total loan portfolio, unchanged from a month earlier. The share stood at 1.6% at the end of 2025 and 1.7% a year earlier.
Profit and Assets Continue to Grow
Banks posted 949.7 million manats in net profit in January through August, up 22.65% from the same period of 2025.
Operating income rose 13.5% to 5.0535 billion manats, while operating expenses increased 9.2% to 3.5165 billion manats. Allocations to special reserves climbed 26% to 341.5 million manats, and income tax payments rose 30.8% to 245.8 million manats.
Total banking assets reached 62.4759 billion manats, an increase of 12.2% from a year earlier. Liabilities totaled 54.7227 billion manats, while balance-sheet capital stood at 7.7532 billion manats.
The figures show that banks continued to grow profit and capital while the share of overdue debt remained above its level at the end of last year. Further data will indicate whether August’s decline in problem loans marks a sustained change or a short-term fluctuation.