The Banking Sector of Azerbaijan

Banks are a part of our life part of financial institutions which make feasible our daily life and provide us services and financial transactions. As an integral part of financial markets it is crucial to understand the factors that impact to the profit of the banks. It needs to be noted that there are internal and external factors to impact the profit of the banks. In this dissertation mainly external factors (macroeconomic) researched through. In addition brief history and the impact of the decisions made by Central Bank of Azerbaijan to the banking sector (specially to commercial banks) was researched. It is worth to note that the dramatic reduction of oil price in the world market in the second quarter of the year 2014 had a serious impact on Azerbaijani economy. On this research the impact of the decreased oil income to the banking sector and above mentioned problems and their solution has discussed. Additionally the reasons why Azerbaijani banks faced crisis and the relief of it has studied and learned the relevant experience of world practice.