banking model

Serbian banks expand lending while profitability softens into 2026

Serbia’s banking sector entered 2026 with a divergence between expanding lending activity and softened sector-wide profitability compared with the strong earnings from the recent high-interest-rate cycle. Market participants point to a shift in how banks deploy capital and manage growth rather than treating the gap as a sign of weakness. The same pattern is highlighted in an analysis of ALTA Banka. The analysis argues that the link between balance-sheet growth and immediate profit generation is changing for rapidly growing institutions.…