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Central-East European banks will weather COVID-19 hit

Monday, July 6, 2020

Significance

Lockdowns to contain the spread of COVID-19 have slowed economic activity. Throughout Central, Eastern and South-eastern Europe (CESEE), there were major portfolio outflows in March; non-performing loan (NPL) ratios are expected to worsen in the coming months. Meanwhile, banks have stepped in, both to support household and commercial borrowers in distress, and to provide much-needed government debt finance.

Impacts

  • Banks in CEE will continue to play a crucial role in managing the economic impact of the pandemic.
  • Pan-European banking projects begun before the pandemic such as support for digitalisation, innovation and green investment will accelerate.
  • The crisis has reinforced the need for real-time data collection and analysis for bank operations and supervision.
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