Banks reduced their exposure to Central, Eastern and South Eastern Europe (CESEE) countries by 0.3 percent of GDP in the Q4 2013, roughly by the same amount as in Q3.
The scale of funding reductions continued to vary significantly across countries in Q4.
Overall external funding conditions improved for the region in Q4 with a sharp rebound in portfolio inflows. Credit developments also improved at the margin mainly on account of household credit.
Credit growth in Turkey and CIS countries remains buoyant; however the rest of the region is yet to see clear signs of a revival in overall credit growth.
The latest survey from the European Investment Bank on bank lending shows that while cross-border banks remain committed to the region, they are being more selective in their country strategies.
Both credit demand and supply conditions are expected to improve in the next six months.
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