Banking & finance momentum: M&A heats up across CEE
Having demonstrated consistent resilience when faced by multiple geopolitical challenges, CEE’s banking and finance sector remains attractive to international buyers. Driven by high interest rates, a solid regional economy, robust capital positions, and a decline in non-performing loan ratios, the banking sector has achieved record profitability. But it remains quite fragmented, fuelling the drive for further consolidation, greater economies of scale and efficiency, and renewed M&A activity in the search for future growth.
The most notable feature of banking and finance deals in CEE last year was the surge in deal values. Larger deals and cross-border acquisitions from European banks outside CEE featured prominently. While deal volumes remained consistently strong at 89 in 2025, unchanged from 2024, it was the impact of larger, high-profile deals that led to a surge in the total deal value. Overall deal values increased by a remarkable 362% from EUR 1.9bn in 2024 to EUR 8.76bn last year.
In particular, two large transactions in Poland and Slovakia stood out last year. Both deals were announced in May 2025.
Vienna-based Erste Group Bank AG acquired a 49% stake in Santander Bank Polska for c. EUR 7bn, which included a 50% stake in Santander TFI (the asset management arm). This strengthened Erste Group’s position in the fast-growing Polish market. Horea Popescu, partner at CMS in Romania, says: “It was a significant banking deal. We had not seen one of this magnitude in the region for a while.”
For years, many Western banks withdrew from the region. Now we see that Western banking groups are still confident that traditional retail banking is profitable.
Velizar Velikov, Head of EMIS M&A Database
Velizar Velikov, Head of EMIS M&A Database, says, “For years, many Western banks withdrew from the region. Now we see that Western banking groups are still confident that traditional retail banking is profitable.” Eva Talmacsi, partner at CMS in the UK and CEE, points to the Erste deal as the continuation of a trend following the August 2024 acquisition and recapitalisation (for c. EUR 258m) of Polish VeloBank by a consortium led by Cerberus Capital Management.
Meanwhile, the Belgian KBC Group, which operates in Slovakia through its subsidiary ČSOB, acquired a 98.45% stake in 365.bank (previously Poštová banka) from J&T Finance Group. The deal value was EUR 761m. “Both transactions are by strategic investors, banking groups, but interest in banking is also apparent from financial investors,” says Velizar.
Talmacsi highlights digital transformation as, “another prominent deal driver in CEE alongside consumer behaviour: consumers are becoming very demanding, and they want more banking, insurance, and investment products.” She also notes that, “more CEE banks are interested in other targets both within CEE and beyond, in reliable Western European jurisdictions, where the regulator and the ecosystem are transparent. In terms of M&A, the dominant element is cross-border.”
More CEE banks are interested in other targets both within CEE and beyond, in reliable Western European jurisdictions, where the regulator and the ecosystem are transparent. In terms of M&A, the dominant element is cross-border.
Eva Talmacsi
Partner
Some major banks in the region are considering further investment, suggests Talmacsi. “Strategic expansion is a widespread trend,” she says. “Many banks based in CEE need to find new marketplaces to add to their existing portfolio.”
Pricing is also a factor, according to Saša Sodja, partner at CMS in Slovenia. “Because of inflation easing, rates looking more stable, and foreign exchange swings being calmer, sellers and buyers are finally meeting in the middle,” she says. “Finally, they can agree on the value, because valuation has been a big issue in dealmaking.”
Because of inflation easing, rates looking more stable, and foreign exchange swings being calmer, sellers and buyers are finally meeting in the middle.
Saša Sodja
Partner
Bad loan levels are lower, Sodja explains. “Most transactions are strategic, not rescue or distressed. There are some one-off sales, where a smaller lender might feel funding pressure. But there are more planned scale moves, rather than fire sales. There’s no region-wide distress wave like several years ago.”
“Banks are now cleaner, they have lower non-performing loan (NPL) levels, and capital is stronger, which makes due diligence simpler and integration less risky,” Sodja says. “They also want to have bigger local footprints, so they can spread the costs of regulatory, IT, and digital upgrades – the resilience work required due to EU legislation.”
A consensus exists that deal execution is often smoother with banks because investors know the processes and what approvals are required. “It makes everything more predictable in terms of time spent,” says Sodja. “International banking groups want to become stronger locally, while some are also exiting the market. That’s an opportunity for smaller banks. For different reasons, it all came together in 2025.”
The outlook for banking and finance deals in CEE remains strong. Robust demand and further consolidation are anticipated to drive both deal volumes and values in the year ahead as investors in the region anticipate more growth opportunities.
