Serbian banks recorded faster growth in gross lending than in deposits during the first seven months of 2026, with their loan portfolios expanding by 8.9% compared with a 4.4% increase in deposits between the end of 2025 and July. The figures, calculated from euro-denominated balance-sheet data in a presentation by the National Bank of Serbia (NBS), reflect changes in reported balances and are not adjusted for exchange-rate movements.
Lending Expands Faster Than Deposits
The gap between lending and deposit growth places banks’ funding costs and access to financing among the factors relevant to the sector’s continued expansion. However, the difference in growth rates does not in itself indicate a shortage of funding.
Banks can finance additional lending through existing liquidity, capital and other sources, meaning that credit expansion does not have to match deposit growth over every reporting period.
If the divergence persists, however, banks may face changes in the economics of extending new loans. Potential responses include competing more aggressively for customer savings, retaining a larger proportion of existing deposits or drawing on alternative funding sources.
Funding Costs and Lending Returns
Each funding option has implications for profitability. If banks have to offer higher rates to attract deposits, their funding expenses can increase, potentially reducing the returns generated by new lending unless higher loan rates, fees or improved operating efficiency offset the additional cost. The impact will vary across institutions according to their funding structures. Banks with substantial and stable deposit bases are in a different position from lenders that rely on large, concentrated deposits or balances that are repriced frequently.
Implications for Credit Availability
The pace of lending growth does not necessarily translate into uniformly cheaper financing for borrowers. Banks’ decisions to extend additional credit also depend on the cost and economic viability of securing the funds needed to support each new loan. The relationship between deposit mobilisation and lending will therefore remain relevant to the sector’s expansion, particularly if loan growth continues to exceed the increase in deposits. Banks will need to balance their lending objectives with the cost of funding and the returns generated by their expanding portfolios.
