The Central Bank of the Republic of Azerbaijan released the results of its survey on banks’ lending activity and funding sources for the first quarter of 2025. The survey indicates that banks left credit standards unchanged for business and mortgage lending, while tightening standards for consumer loans; banks reported no change in demand for business and consumer credit and higher demand for mortgages. For the second quarter of 2025, respondents expect business and mortgage lending standards to remain unchanged and the tightening trend in consumer credit standards to continue. Banks anticipate unchanged demand for mortgage and consumer loans and increased demand for business lending. On funding, banks reported an increase in term deposits from individuals and legal entities and expect this positive динамика to continue, while heightened interbank competition has coincided with higher funding costs for both demand and term deposits, which banks also expect to persist next quarter. The central bank noted it continues to monitor changes in lending and funding conditions and set prudential policy accordingly.
Central Bank of the Republic of Azerbaijan 2025-05-21
Central Bank of the Republic of Azerbaijan publishes Q1 2025 bank lending and funding survey showing tighter consumer credit standards
The Central Bank of the Republic of Azerbaijan's Q1 2025 survey shows unchanged credit standards for business and mortgage lending, with tightened standards for consumer loans. Demand remained stable for business and consumer credit, while mortgage demand increased. Banks foresee continued tightening of consumer credit standards and increased business lending demand in Q2, alongside rising term deposits and funding costs due to interbank competition.