World’s Best Banks 2026: Central & Eastern Europe

Why It Matters

The trends signal that size, digital innovation and cross‑border M&A will determine market leadership, influencing investors and corporate borrowers across the region.

Key Takeaways

• OTP Bank wins CEE best bank for fifth consecutive year
• Hungarian bank tax could cut sector revenue by about 8%
• Western European banks hold 25‑30% of CEE banking assets
• M&A activity expected to drive further consolidation in CEE
• Digital apps and AI adoption accelerating competition

Pulse Analysis

The Central and Eastern European banking landscape has shown surprising resilience in 2025, navigating geopolitical tensions, a sluggish euro‑zone rebound, and a low‑rate environment. Larger banks, many backed by Western European parent companies, leveraged scale to sustain profitability, while OTP Bank cemented its regional dominance with €118 bn ($138.6 bn) in assets and a 21.6% return on equity. This performance underscores the growing importance of diversified product suites and robust capital buffers in a market still grappling with war‑induced uncertainty.

A defining trend this year is the acceleration of consolidation. Fitch Ratings notes that state‑driven tax measures—most notably Hungary’s proposed levy that could erode 8% of 2024 operating revenue—are pushing banks toward mergers and acquisitions to achieve economies of scale. Western European institutions now command roughly a quarter of the region’s assets, and recent deals, such as Raiffeisen’s €591 million acquisition of Garanti BBVA Romania, illustrate how cross‑border M&A is reshaping market dynamics. Simultaneously, banks are investing heavily in digital platforms, AI‑driven services and mobile apps to retain customers and improve cost‑to‑income ratios.

Looking ahead to 2026, Fitch anticipates continued strong performance but flags heightened volatility from potential new government interventions and a tentative rebound in corporate credit demand. Banks that have embraced digital transformation and expanded regionally—like OTP’s push into Kazakhstan and SEB’s Baltic‑wide legal unification—are best positioned to capture growth opportunities while mitigating regulatory risks. For investors and corporate clients, the message is clear: scale, technology adoption, and strategic M&A will be the key differentiators in a CEE banking sector that remains both promising and unpredictable.