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Economic Research CEE

Banking in CEE

CEE Banking Study 2016:


A more sustainable growth model is moving forward




  • Most CEE economies showed strong economic growth in 2015 and proved more resilient towards shifts in investors' sentiment with regards to emerging markets
  • Overall banking sector profitability is normalizing on a new post-crisis level, still double the one of Western Europe
  • Growing reliance on local deposits and strong capital adequacy ratios partially diminish past vulnerabilities

In 2015 the economic environment for banks operating in Central and Eastern Europe (CEE) has been rather positive. Despite some exceptions, most countries in the region showed strong economic growth and resilience against shifts in investors' sentiment towards emerging markets, which was in good part related to their deep integration with the euro area and solid macroeconomic fundamentals. Banking sectors in most countries have remained profitable, although the overall level is normalizing compared to the pre-crisis period. These are some of the key findings of the latest CEE Banking Study, which was conducted by UniCredit´s CEE Strategic Analysis department and which covers 13 different countries. Looking forward, economic recovery is expected to further support lending, especially in countries which have been lagging behind so far. Non-performing loan ratios, which are currently high in various countries, should decline.

Banking in CEE – Supporting sustainable growth and innovation





  • The economic environment in which banks operate in CEE(1) is expected to remain overall positive.
    Most countries are expected to continue to show solid economic growth in 2016 and 2017.
  • Corporate lending remains a central area of banks’ business in the region and we expect a moderate recovery going forward.
    Corporate lending has been weak in most CESEE countries in the past years, which appears to be related to lower investments and in part higher corporate savings. However, in 2015 we have seen improvements in some countries and, as the economic environment continues to improve, we expect a broader moderate recovery in corporate lending.
  • While lending remains the main source of corporate financing in CEE, there is scope for a greater role of debt securities.
    Over the past years, we already observed that the share of financing through debt securities has increased somewhat, although it remains low in most countries.
  • In the focus section, we look at exports and EU funds. They play an important role in various CEE economies and also provide opportunities for banks corporate business:
    - Exports
    represent a significant share of GDP in most CEE countries. Exports growth is expected to remain solid in most countries, providing opportunities for banks’ cross-border business and trade-related services.
    - EU Funds are an important source of financing in CEE-EU economies, with banks providing advisory services, co-financing, and financial intermediation.




“east crossroads europe” is a magazine which presents facts, reports, analyses, background information and interviews, providing an overview of global economic, political and cultural developments.

Set up in 2004 and supported by UniCredit, the “east” review is a bimonthly publication in English and Italian. Each issue is dedicated to a special topic. “east” was originally conceived as a publication focusing on the European Union and Europe, with special attention being given to Central and Eastern Europe and its relationship with Asia, particularly China and India.

However, with the rapid progress of globalisation, and also in response to the financial crisis in the past years, the scope of “east” has been broadened to include the western part of the world.

Real Estate Country Facts

Bulgaria and Romania – Not on the map for commercial property investors?

Economic conditions in both markets are excellent. Initial estimates suggest that real GDP growth was 3.7% in Romania and 3.0% in Bulgaria in 2015. Both countries are expected to record even faster growth this year and next, with private consumption one of the principal drivers of GDP expansion. This should boost retail turnover and in turn give shopping centres a lift. Bucharest’s office market is expanding rapidly and new space is also coming onto the market in Sofia. These new offices are generally classified as category A. Also new logistics properties offer in an environment of low vacancy rates and stable rents potential for investors.