The seventh edition of Deloitte's study on M&A in banking in Central and Eastern Europe provides an analysis of the current state of the banking sector in the region. The study examines macroeconomic factors, banking market dynamics, transaction trends and offers an overview of developments within the fintech sector.

The Czech banking market once again confirms its good shape. Within the CEE region, it is the second largest market after Poland, confirming its position as a long-term highly profitable, growing and stable market. This is according to the seventh edition of the Deloitte Banking M&A Study,, which examines key trends in the 14 countries of the CEE region, focusing on crisis resolution, IPO activity and the wider dynamics influencing M&A development and activity.

Assets of the domestic banking sector are set to grow to €400 billion in 2023 and by mid-2024 even by €425 billion. The Czech banking sector has further improved its very good capital position, with capital adequacy ratios rising by 0.6 percentage points to 22.9%, surpassing the regional average of 21.5%.

Czech banks achieved record profits in 2023, the growth trend continues to hold and further increases in after-tax profits are expected for 2024. Profit growth was driven primarily by net interest income of Czech banks, which was joined by an increase in net fee and commission income during 2024. Return on equity is relatively high over the long term thanks to profitability, reaching 14.1% in 2023, and rising further to 15.7% in the first half of 2024.

"The Czech banking market has not lagged behind in the consolidation trend in recent years either - by the end of 2023, the 5 largest banking groups accounted for more than 70% of the sector's total assets. The Czech banking market has the potential for further M&A activity as investor’s interests remains strong and many are looking for potential opportunities. An interesting upcoming transaction is the integration of two state-owned banking institutions Česká exportní banka and Národní rozvojová banka.

In the last few years, the banking sector in the region has shown its exceptional resilience, achieving record high profitability and maintaining stability despite the effects of geopolitical and economic uncertainties. Consolidation remains a key theme, with larger institutions taking advantage of economies of scale to consolidate their positions in the markets. In addition, the sector is seeing an increased focus on crisis resolution frameworks, for example in the context of the European Single Resolution Board (SRB) activities, which aims to adjust banks' resolution plans to be more efficient and responsive when needed, thereby enhancing financial stability and ensuring preparedness for emerging risks," says Roman Lux, partner in the Financial Advisory practice at Deloitte.

The banking sector in Central and Eastern Europe (CEE) has entered 2025 with cautious optimism stemming from a stabilising macroeconomic environment. Falling inflation, moderately declining interest rates and resilient labour markets signal a gradual recovery in demand and continued opportunities for growth. The banking sector continues to demonstrate its adaptability and ability to thrive in an environment of constantly changing conditions and new challenges.

Technology transformation continues to be one of the defining elements of the sector, according to Deloitte expert Lux, as banks continue to invest in digitalisation to optimise operations, improve the customer experience and deepen relationships with clients. These advances are shaping increasingly integrated and competitive financial ecosystems.

The banking sector has remained highly resilient, profitability has been supported by a high interest rate as banks have maintained solid capitalisation levels and high quality loan portfolios. In a context of higher interest rates in the region, there was a reduced demand for credit. However, the total balance sheet grew by 11.7% year-on-year in 2023 and by 3.7% in the first half of 2024, reaching EUR 2 109 billion. The five largest banking groups in Central Eastern Europe include the traditional players Erste Group (represented in Czechia by Česká spořitelna), KBC (ČSOB), UniCredit, PKO and OTP.

The regional M&A market is maintaining its momentum. In 2023, 15 bank M&A deals were recorded, a total of 14 have already closed and one is still processing. "M&A activity weakened last year and with 9 deals successfully closed and 2 pending, 2024 can be considered a weaker year in terms of number of deals, which was caused by a period of higher interest rates in the economy where even smaller players were able to achieve higher profitability, and their need to engage in transactions was therefore not as strong," says Roman Lux of Deloitte, adding that the Czech Republic, along with Hungary and Serbia, has been among the most active markets for bank M&A transactions in recent years.

The position of the most active player in the field of acquisitions belongs to the Austrian group Erste with 6 deals closed in the last five years, followed by the Hungarian bank OTP, which has been very active in the region recently, and the Raiffeisen group.

"The consolidation of the banking sector is a key trend that will continue into the future. Large banking houses are interested in acquiring smaller players and there are still plenty of interesting opportunities for them on the market. The consolidation trend brings, among other things, greater stability, the ability to cope with external shocks and absorb shocks, which is also important from the perspective of banking regulators, efficiency and significant economies of scale," added Roman Lux of Deloitte.

The Deloitte CEE Banking M&A Study 2024 provides a comprehensive view of banking, M&A and banking sector trends in the CEE region. It is available to download here: