Serbia’s banking sector recorded a marked expansion in lending, with total bank credit reaching RSD 4.82 trillion (€41 billion) as household borrowing grew significantly faster than corporate lending.
Data from the Association of Serbian Banks show that total loans increased 15.7% year on year and were 1.3% higher than in August. Household loans rose 19.1% to RSD 2.19 trillion, compared with approximately 13% growth in corporate lending. The figures indicate that households accounted for the stronger part of the expansion in bank credit.
Consumer and housing borrowing expand
Consumer lending posted the strongest increase among household loan categories, rising by around 34%. Cash loans increased approximately 19%, while mortgages and home-improvement loans also recorded growth of about 19%. The expansion in mortgage lending indicates continued demand for housing finance despite relatively high property prices in Belgrade and other major Serbian cities.
Growth in cash and consumer loans also points to increased household borrowing for discretionary spending. For banks, the expansion in household credit contributes to higher interest income and balance-sheet growth. Serbia’s banking market is described as highly profitable and well capitalised, while the simultaneous increase in lending and decline in problem loans indicates no immediate deterioration in asset quality.
Corporate credit grows more slowly
Corporate lending continued to expand but remained behind household credit growth, increasing by roughly 13%. The slower pace of business borrowing may indicate greater caution among companies toward investment or continued use of retained earnings, parent-company financing and international credit lines.
As a result, the current expansion of credit is less closely associated with productive investment than it would be if corporate borrowing were growing faster than household lending. The distinction is relevant to the broader economy because household credit can support consumption and housing activity, while sustained growth also depends on business investment in capacity, technology and exports.
Problem loans fall as lending increases
The banking sector’s asset-quality indicators continued to improve alongside the increase in credit. The share of problem loans declined to 1.8%, from 2.0% a year earlier. The ratio remains low by regional and historical standards and provides Serbian banks with scope to continue expanding lending. The data do not show an immediate deterioration in asset quality as credit growth accelerates.
A potential source of repayment pressure would arise if lending growth remained close to current levels for an extended period while household income growth slowed, particularly in unsecured lending. The September figures instead show higher loan demand, a lower problem-loan ratio and stronger household borrowing. Corporate investment remains the slower-growing component of bank credit, while household lending has become the main driver of the expansion.
