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Banks in CESEE expect stronger loan demand – EIB

Jun 25, 2024, 12:04:19 PMArticle by Annie Tsoneva
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June 25 (SeeNews) - Banks in the Central, Eastern and Southeastern Europe (CESEE) expect strong demand for all types of loans, especially mortgages, a survey by the European Investment Bank (EIB) published on Tuesday showed.

Banks in CESEE expect stronger loan demand – EIB
Source: Zagrebacka Banka

“Banks in the region cited an improving market outlook and better funding conditions as factors contributing to the easing of credit standards, signalling the increased willingness of banks to extend credit to their clients,” EIB said in a press release on the findings of its CESEE Bank Lending Survey.

The survey covers Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Czechia, Hungary, Kosovo, North Macedonia, Poland, Romania, Serbia and Slovakia. It involved twelve international groups and 70 local subsidiaries and independent domestic players, representing half of local banking assets.

"The tightening of credit supply in early 2022 caused by the conflict in Ukraine, inflation and higher interest rates is expected to end soon with strong improvements in all segments, particularly for mortgages and consumer loans," the authors commented.

According to the EIB, stronger capital ratios will provide banks with greater flexibility to support credit growth. Additionally, banks say their profitability in the CESEE region compared to overall group operations has improved, with subsidiaries there being on average more profitable than their parent banks.

"As the banking sector strengthens, we expect to see continued progress in the economic convergence of the region and increased investment, job creation and better living standards across Central, Eastern and South-Eastern Europe,” EIB Vice-President Kyriacos Kakouris was quoted as saying.

After declining in 2023, non-performing loan ratios are projected to continue decreasing in various CESEE countries in 2024, the survey also showed.

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