As a whole, the banking sector across the CEE region remains profitable. Interest margins have tightened recently, but are still much higher than in Western Europe. Lending growth has softened and banks have increasingly focused on attracting fundings from domestic sources, increasing competition for deposits. Western European banks, which hold more than two thirds of the CEE banking sector’s assets, have withdrawn significant amounts of parent funding, pressured by heightened capital requirements in their home countries, but are believed to remain committed to the region, which has a strong growth potential. The main weakness of the CEE banking sector is the high level of bad loans and the trend for further worsening of the asset quality in view of the weak economic environment.
Much more in the Intellinews report: CEE Banking Sector Report
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