Cross-border banks bet big on CESEE's booming credit demand and profitability

A surge in SME lending and rising profits is luring global banks to CESEE. But why are they still cautious about mortgages and corporate loans?

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2026 March 24 . 1:03 PM

1 min read

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Cross-border banks bet big on CESEE's booming credit demand and profitability

Cross-border banking groups are set to expand their presence in Central, Eastern, and Southeastern Europe (CESEE). A new survey reveals that two-thirds of these institutions plan to increase long-term operations in the region. The move comes as credit demand stays strong and funding access remains solid.

The latest CESEE Bank Lending Survey highlights growing confidence among lenders. Over the past six months, credit quality has steadily improved. Banks now report higher profitability in the region compared to their wider operations.

Demand for loans remains robust, particularly from small and medium-sized enterprises (SMEs) and consumers. While banks show caution toward large corporate loans and mortgages, their overall lending appetite is expected to rise. Optimism about credit supply is also increasing, with funding conditions projected to improve further. Local firms anticipate a modest uptick in investment, focusing on expanding capacity and driving innovation. However, the survey did not identify any specific CESEE countries as standout markets with exceptionally high potential.

The survey results point to a positive outlook for banking in CESEE. With stronger credit quality, rising profitability, and plans for expansion, cross-border groups are positioning themselves for growth. Firms in the region are also preparing for gradual investment increases in the coming months.