Inside the Western Balkans’ €9 Billion Banking Market

The banking sector in the Western Balkans recorded a positive year, with higher revenues, double-digit loan growth and a declining non-performing loan ratio. Meanwhile, profit growth slowed significantly, reflecting lower interest rates and mounting cost pressures.

Ersuin Shehu

The banking sector in the Western Balkans is enjoying a period of sustained growth. According to data compiled by Monitor, total banking sector revenue across the six Western Balkan countries reached €8.9 billion in 2025, an increase of 5.5% compared with the previous year.

The post-pandemic period has generally been characterised by steady growth and recovery in the region’s banking sector, supported by the positive performance of the real economy. Bank revenues have continued to rise despite the broader downward trend in interest rates over the past year.

The sector’s strong performance is also reflected in its financial results. Of the 84 banks operating across the region, 78 ended the year in profit.

Overall, the Western Balkan banking sector generated a combined pre-tax profit of €3.2 billion. Profits increased by 4.4%, a slower pace than revenue growth.

Market Breakdown: Serbia Leads in Size, Montenegro Relative to GDP

In absolute terms, the size of each banking market largely reflects the size of its domestic economy. Serbia therefore dominates the regional banking sector, generating €4.33 billion in revenue in 2025, equivalent to 48.7% of total banking sector revenue across the Western Balkans.

Albania ranks second, with banking sector revenue of €1.31 billion, accounting for approximately 14.7% of the regional total. It is closely followed by Bosnia and Herzegovina, including Republika Srpska, with €1.29 billion, or around 14.5% of the market.

North Macedonia follows with €890 million, representing 10% of regional banking sector revenue, while Kosovo accounts for €565 million, or 6.3%. Montenegro has the smallest banking market in absolute terms, with revenue of €511 million, equivalent to 5.7% of the regional total.

However, the ranking changes significantly when banking sector revenue is measured relative to the size of each economy.

The figures show that Montenegro leads the region, with banking sector revenue equivalent to more than 6.1% of GDP. It is followed by North Macedonia at 5.4% and Kosovo at approximately 5.2%. Serbia and Albania, which have the largest banking markets in absolute terms, rank lower when revenue is measured relative to GDP, both at around 4.8%. Bosnia and Herzegovina ranks last, with banking sector revenue equivalent to 4.3% of GDP.

Profit Margins: Bosnia Leads, Albania Ranks Last

The size of Serbia’s banking market also makes it the dominant contributor to regional profits. Of the €3.2 billion in total pre-tax profits generated by the Western Balkan banking sector, nearly half came from Serbia.

Bosnia and Herzegovina ranks second, accounting for 14.5% of the region’s total pre-tax profits, followed by Albania at 13.5%, North Macedonia at just over 10%, Kosovo at 6.2%, and Montenegro at 5.4%.

However, a more meaningful comparison of profitability across the region’s banking sectors is provided by the pre-tax profit margin, calculated as pre-tax profit as a percentage of total operating income.

By this measure, Bosnia and Herzegovina has the most profitable banking sector in the Western Balkans, with an average pre-tax profit margin of 38% in 2025. Within the country, the banking sector in Republika Srpska recorded a slightly higher margin of 38.4%, compared with 37.5% in the Federation of Bosnia and Herzegovina.

Serbia follows with a pre-tax profit margin of 36.9%, ahead of North Macedonia at 36.6% and Kosovo at 35.2%.

Albania ranks last in the region, with a banking sector pre-tax profit margin of 32.8%, down significantly from 35.6% a year earlier. Although total operating income grew faster than the regional average, Albania’s banking sector appears to be facing increasing operating cost pressures, particularly from personnel and technology-related expenses.

Montenegro and Kosovo Lead in Lending Relative to GDP, Albania Ranks Last

Growth in banking sector operating income and profits across the Western Balkans has been driven largely by the rapid expansion of lending. Comparative data show that lending recorded double-digit growth in all six countries in the region.

Serbia registered the strongest annual lending growth in 2025, at 15.4%, followed by Albania and Kosovo, both at 14.7%. Montenegro recorded growth of 14.2%, North Macedonia 13%, and Bosnia and Herzegovina 11.1%.

However, when measured by the ratio of outstanding loans to GDP, Kosovo and Montenegro have the highest levels of lending relative to the size of their economies. At the end of 2025, Kosovo’s loans-to-GDP ratio stood at 64.4%, followed by Montenegro at 61.1%. North Macedonia ranked third at 54%, ahead of Bosnia and Herzegovina at 49.7%.

Serbia and Albania lagged considerably behind the rest of the region, with loans-to-GDP ratios of 34.8% and 34%, respectively, placing Albania last in the Western Balkans.

Non-Performing Loans: Albania Still Has the Highest Ratio in the Region

The non-performing loan (NPL) ratio continued its downward trend across the Western Balkans in 2025, declining in all countries except Kosovo.

Despite a sustained improvement over the past 16 years, Albania still has the highest NPL ratio in the region. At the end of 2025, the share of non-performing loans in Albania’s total loan portfolio fell to 3.7%, from 4.2% a year earlier.

Montenegro recorded the second-highest NPL ratio, at 2.7%, down from 3.2% in 2024. Bosnia and Herzegovina also saw a significant improvement, with its NPL ratio declining to 2.3%, from 3.2% a year earlier.

Serbia’s NPL ratio fell to 2.1%, compared with 2.7% in 2024. Kosovo recorded the same ratio of 2.1%, although this represented an increase from 1.9% a year earlier.

Unlike other banking sectors in the region, Kosovo’s banking sector has never experienced a significant deterioration in asset quality. Nevertheless, 2025 saw a slight increase in its NPL ratio, partly reflecting slower growth in the outstanding loan portfolio.

North Macedonia recorded the lowest NPL ratio in the Western Balkans, at 2%, down significantly from 2.9% in 2024.

Albania

BKT Leads Albania’s €1.3 Billion Banking Market

According to banks’ financial statements, Albania’s banking sector generated total operating income of €1.3 billion in 2025, an increase of 8.7% compared with the previous year and above the regional average. However, growth measured in euros was partly supported by exchange rate movements, as the EUR/ALL exchange rate declined by 1.4% year-on-year at the end of 2025.

At the end of 2025, Albania had 11 active commercial banks. Two additional banks entered the market in 2026: Jet Bank and the Albanian branch of Türkiye’s Ziraat Bank.

Banka Kombëtare Tregtare (BKT) led the banking sector by total operating income, generating approximately €253 million, equivalent to a 19.4% market share. Credins Bank ranked second with €231.25 million (17.7%), followed by Raiffeisen Bank Albania with €213.1 million (16.3%), OTP Bank Albania with €121.2 million (9.3%), and the American Bank of Investments (ABI Bank) with €120.3 million (9.2%).

ABI Bank recorded the highest year-on-year growth in operating income, at 35.6%, although this increase was partly driven by its merger with the non-bank financial institution NOA.

Credins Bank reported the strongest organic growth in operating income, at 15.4%, followed by Tirana Bank at 11.9%, ProCredit Bank Albania at 10.9%, and Union Bank at 10.2%.

Profits Stagnate, OTP Albania Records the Highest Profit Margin

Albania’s banking sector reported a combined pre-tax profit of approximately €429 million in 2025, representing a marginal increase of just 0.3% compared with the previous year. Ten of the country’s 11 commercial banks ended the year in profit.

Banka Kombëtare Tregtare (BKT) also led the ranking by pre-tax profit, generating €97.7 million, followed by Raiffeisen Bank Albania with €92.4 million. The remaining banks trailed by a considerable margin, with OTP Bank Albania ranking third at €55.4 million, followed by ABI Bank at €48.2 million and Credins Bank at €41.7 million.

Credins Bank recorded the strongest year-on-year growth in pre-tax profit, at 27.2%, followed by ABI Bank at 25.3% and Fibank at 15.1%.

OTP Bank Albania recorded the highest pre-tax profit margin, calculated as pre-tax profit relative to total operating income, at 45.7%. It was followed by Raiffeisen Bank Albania at 43.35% and ABI Bank at 40.07%.

Kosovo

Banking Sector Revenue Rises by Double Digits, Raiffeisen Leads the Market

Kosovo’s banking sector remained one of the most dynamic in the Western Balkans in 2025. Commercial banks reported total operating income of €565 million, an increase of 12.1% compared with the previous year. Ten commercial banks were operating in Kosovo during 2025.

Raiffeisen Bank Kosovo led the market by total operating income, generating €117.2 million, equivalent to a 20.8% market share. It was followed by NLB Banka Kosovo with €90.9 million (16.1%), BKT Kosovo with €81.3 million (14.4%), ProCredit Bank Kosovo with €78.8 million (13.9%), and TEB Bank Kosovo with €78.2 million (13.8%).

PriBank recorded the strongest year-on-year growth in operating income in 2025, at 66.9%, followed by Credins Bank Kosovo at 20% and Banka Ekonomike at 17.8%.

Modest Profit Growth, NLB Leads the Market

Kosovo’s banking sector reported a combined pre-tax profit of €198.8 million in 2025, representing a modest increase of 1% compared with the previous year. Eight of the ten commercial banks operating in the country ended the year in profit.

NLB Banka Kosovo recorded the highest pre-tax profit, at €45 million, an increase of 9.8% year-on-year. The Slovenian-owned bank was followed by BKT Kosovo, with a pre-tax profit of €36.1 million, Raiffeisen Bank Kosovo at €34.8 million, and TEB Bank Kosovo at €32 million.

NLB Banka Kosovo also recorded the highest pre-tax profit margin, calculated as pre-tax profit relative to total operating income, at 49.5%. It was followed by BKT Kosovo at 44.4%, TEB Bank Kosovo at 41%, ProCredit Bank Kosovo at 37.3%, and Banka për Biznes at 32.1%.

Serbia

The Region’s Largest Banking Market, Led by Banca Intesa

Serbia has by far the largest banking sector in the Western Balkans, generating total operating income of €4.33 billion in 2025. However, growth was slightly below the regional average, with operating income increasing by 3.9% compared with the previous year.

At the end of 2025, Serbia’s banking sector comprised 18 commercial banks.

Banca Intesa Beograd led the market by total operating income, generating €720 million, equivalent to a 16.6% market share. It was followed by OTP Banka Srbija with €631.5 million (14.6%), Raiffeisen Banka Beograd with €550.1 million (12.7%), UniCredit Bank Srbija with €481.5 million (11.1%), and NLB Komercijalna Banka with €420.3 million (9.7%).

Alta Banka recorded the strongest year-on-year growth in operating income in 2025, at 69.6%, followed by AikBank at 36.2% and Mirabank at 28.5%.

Strongest Profit Growth in the Region

Serbia’s banking sector reported a combined pre-tax profit of approximately €1.6 billion in 2025, an increase of 8.6% compared with the previous year, marking the strongest profit growth in the Western Balkans.

Of the 18 commercial banks operating in Serbia, 16 ended 2025 in profit.

Banca Intesa Beograd also led the ranking by pre-tax profit, generating €303 million, up 16.6% year-on-year. It was followed by Raiffeisen Banka Beograd with €286.1 million, UniCredit Bank Srbija with €277.2 million, OTP Banka Srbija with €227 million, and NLB Komercijalna Banka with €175.3 million.

The Serbian subsidiary of Bank of China recorded the highest pre-tax profit margin, calculated as pre-tax profit relative to total operating income, at 68% — the highest among banks across the Western Balkans. It was followed by Raiffeisen Banka Beograd at 52%, UniCredit Bank Srbija at 47.2%, and API Bank at 43.4%.

North Macedonia

Banking Sector Revenue Grows by 9%, Komercijalna Banka Leads the Market

North Macedonia’s banking sector generated total operating income of €890 million in 2025, an increase of 9% compared with the previous year.

At the end of 2025, the country’s banking sector comprised 13 commercial banks.

Domestically owned Komercijalna Banka led the market by total operating income, generating €182.3 million, equivalent to a 20.5% market share.

It was followed by Stopanska Banka, part of Greece’s NBG Group, with €161.42 million (18.1%), Turkish-owned Halkbank with €146.6 million (16.5%), Slovenian-owned NLB Banka with €145.9 million (16.4%), and Austrian-owned Sparkasse Bank with €103.3 million (11.6%).

Komercijalna Banka recorded the strongest year-on-year growth in operating income, at 26.9%, followed by Halkbank at 11.5% and Centralna Kooperativna Banka at 10.3%.

Banking Sector Profits Decline

North Macedonia’s banking sector reported a combined pre-tax profit of €325.5 million in 2025, a decline of 2% compared with the previous year.

Of the 13 commercial banks operating in the country, 12 ended the year in profit.

Komercijalna Banka also led the ranking by pre-tax profit, generating €92.7 million, an increase of 4% year-on-year.

It was followed by NLB Banka with €70 million, Stopanska Banka with €60.3 million, Halkbank with €41.9 million, and Sparkasse Bank with €34.3 million.

Komercijalna Banka also recorded the highest pre-tax profit margin, calculated as pre-tax profit relative to total operating income, at 50.8%. It was followed by NLB Banka at 47.9%, Stopanska Banka at 37.4%, Sparkasse Bank at 33.2%, and Halkbank at 28.6%.

Montenegro

Banking Sector Revenue Grows by 2.7%, CKB Leads the Market

Montenegro’s banking sector generated total operating income of €511 million in 2025, an increase of 2.7% compared with the previous year. The country’s banking sector comprises 11 active commercial banks.

Crnogorska Komercijalna Banka (CKB), part of the OTP Group, led the market by total operating income, generating €153.9 million, equivalent to a 30.1% market share.

It was followed by NLB Banka with €79 million (15.5%), Hipotekarna Banka, part of Serbia’s AikBank Group, with €73.8 million (14.5%), Erste Bank with €60.2 million (11.8%), and domestically owned Prva Banka with €31.7 million (6.2%).

Prva Banka recorded the strongest year-on-year growth in operating income in 2025, at 19%, followed by Lovćen Banka at 12.4% and Crnogorska Komercijalna Banka at 9.5%.

Banking Sector Profits Decline

Montenegro’s banking sector reported a combined pre-tax profit of €172.6 million in 2025, a decline of 7.8% compared with the previous year.

Nevertheless, all 11 commercial banks operating in the country ended 2025 in profit.

Crnogorska Komercijalna Banka (CKB), part of Hungary’s OTP Group, recorded the highest pre-tax profit at €65 million, although this represented an 8.5% decline year-on-year.

It was followed by NLB Banka with a pre-tax profit of €30.9 million, Hipotekarna Banka with €24.8 million, Erste Bank with €21.8 million, and Prva Banka with €8.4 million.

CKB also led the ranking by pre-tax profit margin, calculated as pre-tax profit relative to total operating income, at 42.2%. It was followed by NLB Banka at 39.1%, Universal Capital Bank at 36.4%, Erste Bank at 36.2%, and Hipotekarna Banka at 33.6%.

Bosnia and Herzegovina

Banking Sector Revenue Grows by 5.7%, UniCredit Bank Leads the Market

The banking sector in the Federation of Bosnia and Herzegovina (excluding Republika Srpska) generated total operating income of €892 million in 2025, an increase of 5.7% compared with the previous year. At the end of 2025, the sector comprised 13 active commercial banks.

UniCredit Bank d.d. Mostar, part of Italy’s UniCredit Group, led the market by total operating income, generating €219.2 million, equivalent to a 24.6% market share.

It was followed by Raiffeisen Bank d.d. Bosna i Hercegovina with €190 million (21.3%), domestically owned ASA Banka d.d. Sarajevo with €91.3 million (10.2%), Intesa Sanpaolo Banka d.d. Bosna i Hercegovina with €75.1 million (8.4%), and Sparkasse Bank d.d. Bosna i Hercegovina with €71.2 million (8%).

ASA Banka recorded the strongest year-on-year growth in total operating income, at 13.2%, followed by state-owned Union Banka d.d. Sarajevo at 10.6% and Intesa Sanpaolo Banka at 9.9%.

Banking Sector Profits Also Increase

Banks in the Federation of Bosnia and Herzegovina reported a combined pre-tax profit of approximately €335 million in 2025, an increase of 2.8% compared with the previous year. All 13 commercial banks ended the year in profit.

UniCredit Bank d.d. Mostar also led the ranking by pre-tax profit, generating €117.3 million, an increase of 12.8% year-on-year.

It was followed by Raiffeisen Bank d.d. Bosna i Hercegovina with €72.7 million, ASA Banka d.d. Sarajevo with €36.5 million, Sparkasse Bank d.d. Bosna i Hercegovina with €21.7 million, and Intesa Sanpaolo Banka d.d. Bosna i Hercegovina with €16.9 million.

UniCredit Bank also recorded the highest pre-tax profit margin, calculated as pre-tax profit relative to total operating income, at 53.5%. It was followed by ASA Banka at 40%, Raiffeisen Bank at 38.3%, NLB Banka at 34.5%, and ZiraatBank BH at 31.8%.

Republika Srpska, Bosnia and Herzegovina

Banking Sector Revenue Grows by 6.4%, Nova Banka Leads the Market

Due to Bosnia and Herzegovina’s administrative structure, Republika Srpska has a separate banking licensing framework. In 2025, its banking sector generated total operating income of €398 million, an increase of 6.4% compared with the previous year. At the end of 2025, the sector comprised eight active commercial banks.

Domestically owned Nova Banka led the market by total operating income, generating €119.3 million, equivalent to approximately 30% of the market.

It was followed by NLB Banka with €73.5 million (18.5%), domestically owned ATOS Bank, which is also controlled by Nova Banka, with €49.5 million (12.4%), UniCredit Bank Banja Luka with €47.1 million (11.8%), and Addiko Bank with €43.1 million (10.8%).

Serbian-owned Naša Banka recorded the strongest year-on-year growth in total operating income, at 15.4%, followed by Serbian state-owned Banka Poštanska Štedionica at 12.6% and Nova Banka at 7.6%.

Banking Sector Profits Rise by 7.5%

The banking sector in Republika Srpska, Bosnia and Herzegovina, reported a combined pre-tax profit of €147.5 million in 2025, an increase of 7.5% compared with the previous year. All eight commercial banks operating in the market ended the year in profit.

Nova Banka also led the ranking by pre-tax profit, generating €51.9 million, up 10.2% year-on-year.

It was followed by NLB Banka with €31.8 million, ATOS Bank with €19.4 million, UniCredit Bank Banja Luka with €18.3 million, and Addiko Bank with €15.1 million.

Nova Banka also recorded the highest pre-tax profit margin, calculated as pre-tax profit relative to total operating income, at 43.9%. It was followed by NLB Banka at 43.3%, ATOS Bank at 39.2%, UniCredit Bank Banja Luka at 39%, and Addiko Bank at 35%.

Top 10 Regional Banking Groups: Raiffeisen Leads

Raiffeisen was the largest banking group in the Western Balkans by total operating income in 2025. Its subsidiaries across the region generated combined operating income of €1.07 billion.

The Austrian banking group operates in four Western Balkan countries and holds a substantial market share in each, providing it with a broad revenue base. Raiffeisen ranks first by total operating income in Kosovo, second in the Federation of Bosnia and Herzegovina, and third in both Albania and Serbia.

It is followed by Hungary’s OTP Group, which has pursued a strategy of rapid regional expansion over the past decade, driven largely by acquisitions. In 2025, OTP’s subsidiaries in the Western Balkans generated combined operating income of €907 million. The group operates in Serbia, Montenegro and Albania, holding a significant market share in each country. OTP ranks first by total operating income in Montenegro, second in Serbia and fourth in Albania.

Close behind is Italy’s Intesa Sanpaolo Group, whose subsidiaries in Albania, Serbia and Bosnia and Herzegovina generated combined operating income of €902 million in 2025. The group’s strong regional position is largely driven by its presence in Serbia, where Banca Intesa is the largest bank by total operating income. Intesa Sanpaolo ranks fourth in Bosnia and Herzegovina and sixth in Albania.

Slovenia’s NLB Group ranks fourth among regional banking groups, with total operating income of €871 million across the Western Balkans. NLB has the broadest geographical presence, operating in five of the region’s six countries. Albania is the only exception, although the Slovenian group has publicly expressed its intention to expand into the Albanian market to complete its regional footprint. NLB holds a particularly strong position in Kosovo, Montenegro and Republika Srpska, Bosnia and Herzegovina, where it ranks second by total operating income.

UniCredit ranks fifth among regional banking groups, with combined operating income of approximately €748 million. The second-largest Italian banking group operating in the Western Balkans leads the banking sector in the Federation of Bosnia and Herzegovina, while ranking fourth in both Serbia and Republika Srpska.

It is followed by AikBank Group, which operates in Serbia through AikBank and in Montenegro through Hipotekarna Banka, generating combined operating income of €447 million. AikBank Group is owned by MK Group, whose ultimate beneficial owner is Serbian businessman Aleksandar Kostić.

Serbia’s state-owned Banka Poštanska Štedionica Beograd ranks seventh, with combined operating income of €372 million generated through its operations in Serbia and Republika Srpska.

Banka Kombëtare Tregtare (BKT) ranks eighth among regional banking groups, with combined operating income of €334 million from its operations in Albania and Kosovo. BKT is an Albanian bank with Turkish ownership, controlled by businessman Ahmet Çalık.

Austria’s Erste Bank Group ranks ninth, with combined operating income of €327 million generated through its banking operations in Serbia and Montenegro.

Germany’s ProCredit Group completes the ranking of the ten largest regional banking groups, with combined operating income of €259 million. ProCredit operates in four Western Balkan countries and has generally seen its market share decline over the past decade. Nevertheless, it remains one of the region’s leading banking groups, largely supported by operating income generated in Serbia and Kosovo.

Among the ten largest regional banking groups, Raiffeisen also leads in terms of pre-tax profit, generating approximately €486 million in 2025. Slovenia’s NLB Group ranks second with €369 million, followed by UniCredit with €363 million, Intesa Sanpaolo with €354 million, and OTP with €322 million.

Although their positions differ, the ten largest banking groups by total operating income are also the ten largest by pre-tax profit. North Macedonia’s Komercijalna Banka would enter the top ten by pre-tax profit, ranking tenth, if it were classified as a banking group. However, the bank operates exclusively in North Macedonia.

In terms of pre-tax profit margins, UniCredit leads the regional ranking for 2025 at 48.52%, followed by Raiffeisen at 45.39%, NLB at 42.38%, BKT at 40.04%, and Intesa Sanpaolo at 39.27%.

The average pre-tax profit margin among the ten largest banking groups in the Western Balkans stood at 38.75% in 2025.

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