Serbia’s banking sector is recording rapid credit growth while maintaining historically strong asset quality, as businesses and households increase borrowing ahead of a major investment and infrastructure cycle linked to the Expo programme.
Domestic lending to the non-monetary sector rose 16.6% year on year in June 2026, excluding exchange-rate effects. Household loans increased 20.0%, while corporate lending grew 11.7%. Over the same period, the gross non-performing loan ratio declined to a record-low 2.0%. The latest figures mark a significant expansion in bank balance sheets alongside continued improvement in credit quality. The strongest growth is coming from both households and companies, with investment lending accounting for a substantial portion of new corporate credit.
Corporate Lending Shifts Toward Investment
Corporate borrowing increased by RSD 67.5 billion in the second quarter. Liquidity and working-capital facilities accounted for RSD 39.9 billion, while investment loans increased by RSD 38.4 billion.
Investment lending was growing at an annual rate of 14.6% in June and accounted for 43.2% of total outstanding corporate loans. The figures show that a significant share of bank financing is being directed toward investment rather than solely meeting short-term corporate liquidity requirements. The expansion in investment credit comes as Serbia enters a major infrastructure and investment cycle associated with the Expo programme. Banks are therefore increasing exposure to longer-term corporate financing alongside continued working-capital lending.
Household Borrowing Continues to Rise
Household credit is expanding at an even faster pace. Cash loans increased 23.2% year on year, while housing loans grew 19.0%. New household lending reached RSD 311.2 billion in the second quarter, representing a 15% increase compared with the corresponding period of 2025. The pace of household borrowing is therefore contributing materially to overall banking-sector credit expansion, with both consumer and housing finance recording double-digit annual growth.
Non-Performing Loans Reach Record Low
Banks are entering the current expansion cycle with low levels of impaired lending. The household non-performing loan ratio stood at 2.6%, while the corporate NPL ratio was just 1.4%. Provisions also remain substantial relative to impaired assets, leaving banks with a strong starting position as new lending volumes increase.
At the same time, loan pricing continues to provide banks with lending income. The average interest rate on new dinar-denominated corporate loans was 7.1% in June, compared with 8.5% for households. For euro and euro-indexed borrowing, the average rate was 5.1% for corporate loans and 4.8% for household loans.
Foreign-Currency Savings Strengthen Funding Base
Resident household foreign-currency deposits also reached a new high. Foreign-currency savings held by resident households amounted to €16.1 billion, providing an additional source of funding for the banking system. The combination of strong deposit holdings, low NPL ratios and rising loan volumes gives banks a comparatively strong balance-sheet position as credit demand expands across the corporate and household sectors.
With existing portfolios showing low levels of impaired credit, the focus of banking-sector risk is increasingly moving toward loans originated during the current period of rapid expansion. Credit growth of 16% to 20% annually is creating a substantially larger volume of new exposure. The performance of those loans will become increasingly important as the investment cycle develops, interest rates normalise and extraordinary support for housing and household incomes fades.
