CESEE Banks See Strong Growth Despite Cautious Lending Outlook

The survey shows that international banking groups remain committed to the CESEE market, with three-quarters of cross-border banks planning to expand their operations.

Banks across Central, Eastern and South-Eastern Europe (CESEE) continue to see strong opportunities for growth, with demand for loans from businesses and households remaining resilient despite signs of a more cautious lending environment, according to a new survey by the European Investment Bank (EIB).

The CESEE Bank Lending Survey for the first half of 2026 found that credit demand is being driven largely by consumer lending and housing loans, reflecting steady household spending and continued investment across much of the region. While banks expect loan demand to remain healthy, the survey indicates that the supply of credit may soften slightly as lenders become more selective about financing large corporate borrowers. The findings suggest that financial institutions remain confident in the region's long-term prospects even as they adjust lending strategies to manage evolving market conditions.

International banks continue expanding across the region

The survey shows that international banking groups remain committed to the CESEE market, with three-quarters of cross-border banks planning to expand their operations. None of the banks surveyed expect to reduce their presence in the region, highlighting continued confidence in future business opportunities. Bank profitability also remains strong compared with operations in other markets. The survey identified particularly solid financial performance in Bosnia and Herzegovina, Bulgaria, Czechia, Hungary, Kosovo, North Macedonia and Serbia.

EIB Vice-President Marek Mora said the results reflect the region's significant investment potential and underline its growing importance to Europe's wider economic development. He added that the positive trends provide encouraging signs for future investment and long-term growth. Banks surveyed also rated market potential as especially strong in Czechia, Romania and Slovakia, while expressing moderate expectations for growth across the Western Balkans.

Funding remains stable despite cautious outlook

Access to funding for banks operating in the region has remained stable over the past six months, supported by rising household and corporate deposits, wholesale debt issuance and continued financing from international financial institutions such as the European Investment Bank.

The survey also found that credit quality has improved, with fewer non-performing loans reported across the banking sector. Even so, many banks expect credit quality to weaken slightly over the next six months in both retail and corporate lending portfolios. The report notes that similar concerns have been expressed in previous years without leading to significant deterioration.

Matteo Ferrazzi, Principal Advisor in the EIB's Economics Department, said the survey reflects the strong performance of both European and global banking sectors, which continues to support positive credit conditions across Central, Eastern and South-Eastern Europe.