Forvis Mazars new study shows strong balance sheets and record-low NPLs defining CEE banking in 2025

Covering six core markets, Croatia, the Czech Republic, Hungary, Poland, Romania and Slovakia, the study provides a panoramic view of the sector’s evolution through data, regulatory insight and digital transformation trends.

Between 2021 and 2024, the total banking assets across these economies increased by 18%, reaching nearly €1.2bn. Net interest margins averaged 3.2% across the region and capital adequacy ratios remained consistently above 20%, well beyond EU thresholds.

Romania led the region with a capital adequacy ratio of 24.9%, while Croatia and Poland followed closely, confirming the solid capital buffers of CEE institutions.

“Romania’s banking sector is in 2025 in one of the strongest financial positions in Central and Eastern Europe, supported by a capital adequacy ratio of nearly 25% and a non-performing loan ratio of approximately 2.5%. At the same time, household credit penetration remains structurally low, at 15.2% of GDP, highlighting significant untapped growth potential. This strength is complemented by a 34% increase in household deposits between December 2021 and March 2025, underscoring high system liquidity. The strategic priority for Romanian banks is to channel this liquidity into sustainable lending and investment, while accelerating digitalisation and strengthening risk management and governance in line with evolving EU regulatory expectations.”, mentions Răzvan Butucaru, Partner, Financial Services & Advisory Leader, Forvis Mazars in Romania.

The report also underlines how the CEE region navigated one of its most turbulent inflationary cycles in decades. After prices surged to double-digit levels, between 10.7% and 15.3% in 2022, central banks were forced to tighten monetary policy sharply throughout 2023. A year later, coordinated actions brought inflation down to an average of 3.9%, marking a rapid return toward stability. This disinflation phase reshaped monetary strategies across the region and reinforced the sector’s ability to adapt under pressure.

Resilient performance in a volatile environment
Despite economic volatility, banks in CEE have remained among the most resilient in Europe. The report shows strong deposit growth, up 41% in Poland and 34% in Romania and significant improvements in efficiency and asset quality. Non-performing loans have fallen below 3% in nearly all markets, with Croatia cutting its ratio from 7.3% to 2.4% and Romania from 5% to 2.5%, confirming the sector’s solid financial health and effective risk management.

The report attributes these outcomes to strong prudential supervision, conservative capital buffers and an increasingly sophisticated regulatory culture across the region. Together, these factors have allowed banks to navigate post-pandemic inflationary shocks and global uncertainty while maintaining sustainable growth trajectories.

“The CEE banking sector has evolved from a story of convergence to one of leadership. With strong profitability, prudent supervision and a clear focus on digital and regulatory transformation, banks in our region are showing that strategic resilience is not just a concept but a measurable and competitive advantage.”, explains Małgorzata Pek, Partner and Financial Services Leader, Forvis Mazars in CEE.

Digital transformation
The report dedicates a significant section to the wave of digital transformation reshaping the CEE banking industry. The adoption of artificial intelligence, no-code platforms and hybrid cloud systems has become a cornerstone of operational strategy, with leading institutions investing heavily in automation and data-driven innovation.

We are entering an era where regulatory and supervisory pressures will shape banks’ competitiveness across regions.”, says Eric Cloutier, Group Head of Banking Regulations and Head of the Global Financial Services Regulatory Centre (RegCentre), Forvis Mazars. “Global fragmentation on AI, digital finance and third-party risk will have major implications for digital transformation. Banks that anticipate these shifts and adapt early will lead. This means building transparency, resilience and robust AI governance - staying aligned with Europe’s rules while strengthening technology and risk capabilities.”

Securitisation and capital efficiency

Beyond digital transformation, the study reveals how securitisation is evolving from a compliance requirement into a key driver of business expansion. Between 2020 and 2024, annual securitisation issuance in Europe rose by nearly 26%, reaching €244.9bn. CEE banks have increasingly participated in this growth through transactions in Poland, the Czech Republic, Slovakia and Bulgaria.

Climate and geopolitics outlook
Looking ahead, the report points to new supervisory priorities that will shape how banks plan and respond. In 2026, the European Central Bank will introduce a stress test focused on geopolitical risks, from trade tensions to sanctions and currency shocks, asking banks to design their own scenarios instead of following set templates. At the same time, climate risk is becoming a concrete part of regulation rather than a distant policy goal. ESG principles are now embedded in how capital, reporting and risk are managed. For CEE banks, many still linked to carbon-heavy industries, the next challenge is clear: building climate resilience while staying profitable and forward-looking.

According to the findings, banks in CEE have transitioned from stability seekers to strategic innovators. Their ability to turn regulatory pressure into growth and technology into resilience is setting new standards across Europe.

The report concludes that while geopolitical uncertainty and global regulatory divergence will continue to test Europe’s financial system, CEE banks are well positioned to lead through a combination of financial prudence, strategic agility and digital innovation.

About the report

CEE Strategic resilience in banking: outlook 2025 was jointly developed by Forvis Mazars and EMIS, combining independent market intelligence with practical insights from financial services professionals advising banks across the region. The report examines trends in profitability, capital adequacy, regulatory evolution, digitalisation, securitisation and ESG integration across six CEE markets.

Download the full report here.

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About Forvis Mazars

Forvis Mazars Group SC is an independent member of Forvis Mazars Global, a leading professional services network. Operating as an internationally integrated partnership in over 100 countries and territories, Forvis Mazars Group specialises in audit, tax and advisory services. The partnership draws on the expertise and cultural understanding of over 40,000 professionals across the globe to assist clients of all sizes at every stage in their development.

Visit forvismazars.com to learn more.

About Forvis Mazars in Romania

In Romania, Forvis Mazars has 30 years of experience in audit, tax, financial advisory, outsourcing, consulting, and sustainability. We empower over 370 people to deliver our promise to clients with confidence.

Visit forvismazars.com/ro to learn more.

About EMIS

EMIS is a leading curator of multi-sector, multi-country research for the world’s fastest growing markets, providing a unique combination of research from globally renowned information providers, local and niche specialist sources, with own proprietary analysis and powerful monitoring and productivity tools. EMIS delivers trustworthy intelligence for over 370 industry sectors and over 16m companies (including +190k M&A and ECM deals) across 197 markets. Everything you need in one place where actionable insights are facilitated by leading technology. EMIS is part of ISI Markets.