Serbia's banks are making more money than ever, and one home-grown lender is using the profits to buy up rivals across the Balkans, even as street protests shake the government presiding over the boom.

Commercial banks in the Balkan country booked net profit of RSD166.5bn (€1.4bn) in 2025, a record, and lifted their return on equity to 17.3%, more than 10 percentage points above the level of four years earlier, according to an annual review by the business monthly Biznis i finansije. Sixteen of the country's 19 banks earned enough to rank among Serbia's 100 most profitable companies.

That makes Serbia one of the more lucrative places in Europe to run a bank. Lenders cleared a return on equity of 20% and a return on assets of 3% in 2024, against European averages of 10.5% and 0.75% on the European Banking Authority's numbers — a gap wide enough that the central bank has openly wondered aloud whether margins are too fat.

“The lowest capital return in the region is a problem,” is the sort of complaint heard in most of Central Europe; in Serbia the worry runs the other way. National Bank of Serbia (NBS) Governor Jorgovanka Tabakovic has said the bank is studying measures to curb sector margins, even as bankers insist the returns simply follow a decade of cleaned-up balance sheets and, in 2025, the strongest lending growth in years.

Credit bears that out. After crawling ahead 2% in 2023 when rates were high, lending rebounded 9.6% in 2024 and then jumped 17.7% in 2025, the fastest annual expansion in a decade, taking the loan book to around €36bn on total assets of €61bn. The momentum is fading, though: first-quarter 2026 profit fell 14% year on year as one-off gains dried up and wage costs climbed, a reminder that a market of Serbia's size has a ceiling.

A sector run from abroad

Like most of the former Yugoslavia, the majority of Serbian banks have foreign owners. Italy's Intesa Sanpaolo runs the market leader, Banca Intesa Beograd, which topped the sector with RSD31bn of profit in 2025 and holds around 15% of assets. Behind it sit Austria's Raiffeisen banka and Italy's UniCredit Bank Srbija, both earning returns on equity above 20%, followed by Hungarian-owned OTP banka Srbija — the biggest lender by loan volume with roughly 17% of the market — and Slovenia's NLB Komercijalna banka, which climbed to fourth by assets after the quarter's strongest balance-sheet growth.

Further down come Austria's Erste Bank, Turkey's Halkbank and the one big lender still in Serbian hands, state-owned Banka Poštanska štedionica. The eight largest banks control 87% of the market, a concentration that has only tightened as smaller and foreign-owned names have sold up. The Greeks have gone almost entirely, their exit completed when Eurobank sold Eurobank Direktna, leaving the National Bank of Greece's stake in Vojvodina Bank as the last Hellenic footprint.

AIK's regional bet

The buyer of that Greek business was AIK Banka. Part of the Serbian MK Group conglomerate, controlled by businessman Aleksandar Kostić, AIK has spent a decade turning Serbian profits into scale: it swallowed Alpha Bank in 2017, Sberbank's local arm in 2022 and then merged with Eurobank Direktna in a €280mn deal that made the combined AikBank the country's third-largest lender, with €6.4bn of assets, 150 branches and systemic status.

“This consolidation ensures our place as a key player in the region,” AikBank executive board chief Petar Jovanovic said as the merger closed. Agri Europe already owns Slovenia's Gorenjska Banka, and in 2025 it won approval to take 74.9% of Montenegro's Hipotekarna Banka, opening a third market. The lender is pushing digital hard too, running dinar-denominated factoring through a new online platform backed by the European Bank for Reconstruction and Development (EBRD).

AIK is not the only one shopping. Austria's Raiffeisen Bank International, which owns Serbia's second-biggest bank, has been closing in on control of Vienna-listed Addiko Bank — a lender with units in Serbia, Bosnia & Herzegovina and Montenegro — after a bruising bidding war, having lifted first-half group profit 25% to €708mn with bad loans at a record-low 1.6% of the book.

Dinar, euros and a political cloud

Underpinning the profits is a currency the central bank keeps on a tight leash. The NBS holds the dinar close to RSD117 to the euro and has parked its key policy rate at 5.75%, a stability bought with heavy intervention and a war chest of foreign reserves that touched a record before easing to €29.6bn in June. Yet the economy thinks in euros: savings, mortgages and company loans are overwhelmingly euro-denominated, a euroisation that Fitch Ratings flags as a structural weakness.

The agency in July kept Serbia one notch below investment grade at BB+, with a positive outlook, praising fiscal discipline and reserves but warning that political risk is the main block on an upgrade. Growth is running near 3.6%, and Belgrade hedges its bets between an EU accession path and deeper ties east, having just signed a €630mn currency-swap line with China while resisting Western pressure to fall in behind sanctions on Russia.

The bigger unknown is politics. President Aleksandar Vucic, battered by months of student-led protests over corruption, has promised early elections and said he will step down to run for prime minister; one recent opinion poll shows the protest movement's list ahead of his party. Fitch counts the vote's timing and the risk of renewed unrest among the chief threats to growth and to the reserves that hold the dinar steady.

Serbia's pattern — foreign owners, tight concentration, healthy capital — repeats across the former Yugoslavia and Albania. In Bosnia the market is split between the units of UniCredit, Intesa Sanpaolo and Raiffeisen, whose Sarajevo arm leads the Federation, alongside Slovenia's NLB. Montenegro is led by CKB Banka, part of Hungary's OTP group, with NLB, Erste and the AIK-bound Hipotekarna behind it. North Macedonia's biggest lenders are Komercijalna Banka Skopje, NBG-owned Stopanska Banka and Halkbank's local unit. Albania has National Commercial Bank BKT, Credins Bank, Raiffeisen and OTP Albania, with the sector's capital adequacy ratio near 20%.

For now Serbia has the region's most eye-catching numbers: record profits, double-digit returns, a credit boom and bad loans long since cleared away. The questions are whether those returns can hold as the NBS eyes margins and lending growth cools, whether AIK's buying spree redraws the Adriatic banking map, and whether a political reckoning that started on Serbia's streets reaches its balance sheets. The banks, busy bankrolling green loans and joining the EU's payments area, are betting it will not.