This article is published in association with European Investment Bank.
- Credit demand remained strong, driven by companies, and is expected to continue remain robust
- Banks are increasingly optimistic about credit supply in the coming months.
- Two thirds of cross-border banking groups plan to expand operations in the region.
Banks in Central Eastern South-Eastern Europe Banks (CESEE) report improving trends. Credit demand remain robust, particularly from companies, while banks anticipate a slight improvement in credit supply following a period of contraction.
Lending appetite from banks is expected to grow, especially for SMEs and consumer credit, although banks show more limited willingness to extend credit to large companies and for mortgages. Such growing confidence around credit supply could help narrow the supply–demand gap that has persisted in recent years, due to strong credit demand and more limited supply.
The CESEE Bank Lending Survey for the second half of 2025, conducted by the European Investment Bank (EIB) and presented today at the CEE Forum 2026 in Vienna, indicate that two-thirds of cross-border banking groups surveyed about future long-term plans intend to expand their operations.
“The latest survey confirms the resilience and strong potential of the banking sector in Central, Eastern and South-Eastern Europe, said Marek Mora, Vice President of the EIB. “Credit demand remains robust, supply conditions are showing signs of improvement, and credit quality has continued to progress over the last six months. These trends are highly encouraging for investment and economic development in the region. Two thirds of the banks present in the region are planning to increase their long-term exposure there. This is an excellent sign of the growth potential of CESEE. And the EIB, which complements the efforts of commercial banks, will continue to contribute by addressing market failures and the EU’s policy priorities. “
The market potential in the CESEE region is widely regarded as important, with most surveyed banks assessing it as high—particularly in countries like Czechia, Romania and Slovakia—or medium, mainly in the Western Balkans markets. Profitability in Central, Eastern and South-Eastern Europe also remains strong compared to overall group operations, with particularly robust performance in Bosnia and Herzegovina, Bulgaria, Czechia, Hungary, Kosovo, and North Macedonia.
Debora Revoltella, Chief Economist at the EIB, said: “These results highlight very positive credit trends for the banks operating in the CESEE area, which are benefiting from the strong performance of the global and European banking sectors. However, different factors – both domestic and international, particularly regulatory developments – continue to weigh on credit supply conditions in the region.”
Furthermore, access to funding in CESEE for both cross-border banking groups and their subsidiaries has remained strong over the past six months and is expected to improve further. This positive outlook is supported by rising retail and corporate deposits and continued access to funding from international financial institutions (IFIs), such as the EIB.
Credit quality has continued to improve over the past six months, with fewer non-performing loans reported. These gains have been particularly strong in the retail segment and the corporate sector. Despite these positive developments, banks remain cautious about the next six months, anticipating a possible deterioration in credit quality.
CESEE firms overview
Concurrently, CESEE firms expect an increase in investment, albeit moderate, with emphasis in capacity expansion and innovation, as outlined in the EIB Investment Survey released today. The trade shock is affecting CESEE firms (it is an obstacle to trade for 34% of CESEE firms), but less than in EU and US (48% and 77% respectively). The potential of digital adoption in CESEE is still untapped, with only 44% of firms in the region using multiple advanced technologies vs 50% across the EU and US. The study also shows that firms in the region are becoming increasingly aware of the risks caused by climate change. More than 90% of firms have taken steps to cut emissions. More information on the EIB Investment Survey-CESEE Overview are available here.
Background information
The European Investment Bank (ElB) is the long-term lending institution of the European Union, owned by its Member States. Built around eight core priorities, we finance investments that contribute to EU policy objectives by bolstering climate action and the environment, digitalisation and technological innovation, security and defence, cohesion, agriculture and bioeconomy, social infrastructure, the capital markets union, and a stronger Europe in a more peaceful and prosperous world.
The EIB Group, which also includes the European Investment Fund (EIF), signed nearly €89 billion in new financing for over 900 high-impact projects in 2024, boosting Europe’s competitiveness and security.
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The Eastern and South-Eastern Europe (CESEE) Bank Lending Survey is conducted twice per year by the European Investment Bank, covering 12 international banking groups and 65 local subsidiaries or independent local banks. Together, they make up more than 50% of banking assets in most CESEE countries.
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