Performance analysis in banking: An examination on Azerbaijan banks

Thanks to the efficient and effective operation of commercial banks, the development of the banking sector in a country is possible. In this process, it can cause harm to customers, shareholders, deficiencies in the operation process, bankruptcy, etc. There are factors that can lead to undesirable results. The risks faced by commercial banks as a result of making wrong assessments during their activities are among the factors that cause such results. Therefore, the development of methods to be used in order to determine how effectively the banking system functions plays an extremely important role in the development of the banking sector. This study consists of six chapters. The first part deals with the development trends of the Azerbaijani economy in recent years, as well as analyzes the Azerbaijani banking industry in outline and gives information about the real economic growth of Azerbaijan between the years of 2022 4th Quarter Data. In the second part, how the banking system was established in Azerbaijan and its development process, the stages of the banking system in Azerbaijan, the functions, types and economic structure of banks in Azerbaijan are explained. In the third chapter, information about the financial system of the Republic of Azerbaijan is given. In this context, how the financial system in Azerbaijan was formed, the role and activities of banks on financial markets, the main indicators of the development of the securities market were examined. In the fourth chapter, income and expenses and interest margin of commercial banks operating in Azerbaijan are examined. In addition, the main income source of commercial banks and the elements of this source are also included in this section. In the fifth chapter, the current structure of the banking sector in Azerbaijan is analyzed and evaluated. In addition, this section includes the main income source of commercial banks, the results of the CAMELS analysis of the financial situation of commercial banks. Lastly, in the sixth section, it is stated how commercial banks can enhance their efficiency. Keywords: Azerbaijan; Banking System; Economy; Finance.