CESEE Banks Navigate Cautious Lending Amid Sustained Regional Growth

While credit demand from households and businesses remains resilient across Central, Eastern and South-Eastern Europe, international lenders are recalibrating their strategies. A new European Investment Bank survey reveals that despite a shift toward more selective corporate financing, the region remains a primary target for cross-border banking expansion.

Editorial·June 25, 2026·reads: 574

CESEE Banks Navigate Cautious Lending Amid Sustained Regional Growth

The CESEE Bank Lending Survey for the first half of 2026 highlights a landscape where consumer and housing loans drive activity, reflecting steady regional investment. Although credit supply may soften as banks exercise caution with large corporate borrowers, financial institutions report robust profitability compared to other global markets. Three-quarters of cross-border banks plan to grow their operations, with none signaling an intent to retreat from the region.

Financial performance appears particularly strong in Bosnia and Herzegovina, Bulgaria, Czechia, Hungary, Kosovo, North Macedonia, and Serbia. EIB Vice-President Marek Mora noted that these trends underscore the region's mounting importance to European economic development. While banks anticipate a potential slight dip in credit quality over the next six months, the sector remains bolstered by stable funding streams, including rising household deposits and ongoing support from international financial institutions. Principal Advisor Matteo Ferrazzi attributed this stability to the sustained performance of banking sectors that continue to support favorable credit conditions across the continent.