Finance and banking


Azerbaijan’s banking sector enjoys positive grading by major international rating agencies, e.g. Fitch, S&P and Moody’s.

The Central Bank of Azerbaijan is the principal authority that implements the state monetary policy, regulates the functioning of the banking system and carries out duties of a reserve bank.

Consolidation of medium-sized banks is a major trend in the development of the domestic banking system. The policy of consolidation has been supplemented by further privatization of the banking sector. As a result, 99% of banks in Azerbaijan are privately owned. 44 banks currently operate in Azerbaijan of which 43 are commercial banks. The International Bank of Azerbaijan is the only state-owned bank. The number of banks with foreign capital was 22 as of 1 January 2014.

Despite the recent global financial crisis, foreign investments in Azerbaijan’s banking sector increased by 28.5%. Foreign capital accounts for some 28% of total bank assets and for over 29% of total deposits (Table: Loans by sector)

Expansion of structural networks and improvement of customer access to financial services is another important policy area. As of end 2013, the number of bank branch offices throughout the country stands at 700. Some local banks have offices abroad.

Triggered by gradual development of the country’s banking system opportunities have emerged for other financial institutions to flourish. Overall, there are 103 non-bank credit institutions (credit unions, microfinance institutions etc.) that provide limited banking services.


Although a relatively new sector, insurance is one of the most dynamically developing sectors of Azerbaijan’s financial market. At present, there are 28 insurance companies in Azerbaijani market and 3 of them are the companies with foreign capital. They offer 48 types of insurance services in Azerbaijani market. The Ministry of Finance is vested with the responsibility to supervise the insurance market and issue licenses for both domestic and foreign insurance carriers.

Capital market

The Baku Stock Exchange (BSE) operates under the supervision of the State Committee for Securities. Its shareholders include banks and investment companies. The BSE is engaged in trade (e.g. stocks, government and corporate bonds, T-bills, notes), depository, clearing as well as information and consulting activities. The BSE trading floor has 30 broker workstations. Trading sessions are conducted online through the electronic trading system. In February 2014, BSE turnover exceeded USD 2.2 bn.