Baku: Banks in Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, and Uzbekistan are expected to maintain resilience in 2026, continuing the trend of the previous two years. This is supported by profitability and capital levels, driven by moderating yet strong average regional lending growth of 15%-20%, and stable asset quality.
According to Azeri-Press news agency, SandP Global Ratings highlights these insights in their report titled “Central Asia And The Caucasus Banking Outlook 2026: Resilient Performance Amid Elevated Geopolitical Risks.” The report underscores that favorable economic growth prospects across the region, along with high lending demand-particularly in the retail sector-sound funding and liquidity metrics, as well as stable capital buffers backed by solid profitability, are expected to bolster credit quality in 2026.
SandP Global Ratings analyst Annette Ess noted that currently, 19% of financial institutions’ ratings in the region have positive outlooks, while 81% have stable outlooks. The agency identifies key risks for financial institutions in the region, including elevated geopolitical tensions, aggressive retail lending growth that may lead to imbalances, and evolving risks related to digitalization, AI, climate change, and cyber threats. Additionally, while the regulation, supervision, and governance of regional banking sectors have evolved, they are still less transparent and predictable compared to developed markets.