Bosnia Central Bank report highlights banking resilience and record profits

Real economic activity expanded by 2.1 per cent in 2025, a 36 basis point deceleration from the previous year, reflecting reduced personal consumption and slower investment. While nominal wage growth and falling unemployment buoyed domestic demand, elevated inflation weighed on household purchasing power. The Central Bank cautioned that persistent inflationary pressures could temper growth throughout 2026 before an expected economic rebound in 2027.

Despite broader macroeconomic headwinds, the banking sector demonstrated strong resilience, underpinned by robust capitalisation, high liquidity, and rising corporate and retail deposits. Total bank assets reached 47 billion Bosnian marks (approx. €24 billion), while the capital adequacy ratio stood at 20.1 percent, comfortably exceeding regulatory requirements. Commercial banks achieved a record net profit of 872.3 million Bosnian marks (approx. €446 million).

Lending activity surged, with total private sector credit expanding by 12.4 per cent. Non-financial corporate debt rose 15.3 per cent to 19.2 billion marks (approx. €9.8 billion), while total household debt grew 11.4 percent to reach 16.6 billion marks (approx. €8.5 billion). Demand for property drove newly issued housing loans to an all-time annual record of nearly 1 billion marks (approx. €511 million).

Asset quality continued to improve despite increased credit exposure. Non-performing loan ratios dropped to 2.9 percent for households, marking 13 consecutive years of improvement, and 2 percent for corporations. Meanwhile, household deposits rose to 19.7 billion marks (approx. €10.1 billion), demonstrating sustained public confidence. Central Bank stress tests confirmed that the sector maintains sufficient capital and liquidity buffers to withstand severe adverse shocks.