Rating agency Moody’s says the merger of Bank Respublika and AccessBank will create Azerbaijan’s fourth-largest bank by assets, combining the two lenders’ operations into a single entity.
According to Moody’s, the new entity emerging from the Bank Respublika-AccessBank merger will control roughly 7-8% of total assets in Azerbaijan’s banking sector. Both banks officially confirmed on November 3 that the strategic deal had closed: Bank Respublika acquired AccessBank’s entire share capital, while AccessBank’s former shareholders received newly issued preferred shares in Bank Respublika and joined its shareholder base.
The agency noted that although the sale-and-purchase transaction has formally concluded, Bank Respublika and AccessBank will initially continue operating as separate banks, with their later integration into a single bank subject to regulatory requirements.
Risks to loan portfolio quality
Moody’s analysts expect Bank Respublika’s asset quality to deteriorate in 2026-2027, mainly due to the integration of AccessBank’s loan portfolio into the new structure. As of the end of 2025, non-performing loans accounted for 7.4% of AccessBank’s portfolio. Differences in the two banks’ lending approaches present a further source of risk, the agency said.
By comparison, before the merger Bank Respublika’s own non-performing loan ratio stood at just 1.4% in mid-2026, with a loan-loss coverage ratio of 109%. Still, Moody’s believes there is scope for cost savings and synergies over the longer term, since both banks’ business models and core customer bases — particularly in the micro, small and medium-sized enterprise (SME) segment — overlap significantly.
Moody’s said the merger will turn Bank Respublika into the largest player in the micro and SME lending segment, giving it greater scale and stronger negotiating power.
Funding sources and rating outlook
The agency estimates that the combined entity’s funding base will rely more heavily on customer deposits than before. A slowdown in loan growth over the next 12-18 months is expected to keep the bank’s liquidity reserves at an adequate level.
Moody’s has kept a negative outlook on Bank Respublika’s long-term deposit ratings, indicating a low likelihood of an upgrade over the next 12-18 months. The agency said the outlook could be revised to stable if the bank successfully integrates AccessBank, achieves its targeted cost savings and profitability goals, and maintains stable capital adequacy and asset quality.
