Azerbaijan’s Central Bank sets new capital adequacy requirement for banks

Starting from March 2025, the Central Bank of Azerbaijan has implemented a 5% capital adequacy requirement for commercial banks, Chief Director Shahin Mahmudzade announced.

The total profit of the banking sector exceeded 1 billion manats despite a 30 million manat decline caused by narrowing interest margins and rising operating costs.

Last year, banks paid out around 600 million manats in dividends, with 466 million manats distributed in the final quarter.

Return on equity stood at 18.1%, while return on assets reached 8.1%.

Addressing stress scenarios, Mahmudzade said that in the worst case, bank capital could decline by up to 14.7%, mainly due to rising credit risks. An increase in the share of high-risk assets and a decline in collateral value could exert additional pressure.

Overall, the Central Bank said current indicators suggest that the banking sector remains resilient even under stress conditions.

N.Tebrizli