Introduction. After the collapse of communism, Central and Eastern European countries experienced fundamental macroeconomic reforms aimed at moving from centralized to market-centered economy, where privatization of state-owned credit institutions with foreign capital has had an important role. Since the early 1990s, banks with majority or part foreign capital, as well as branches of foreign banks, have penetrated the banking markets of the countries in transition into a market economy, becoming major players as a result of financial globalization. By imposing on the banking markets of countries in transition to a market economy, foreign-owned banks have come to hold up to 90 percent in some countries in the banking market.
Aim of the study. The paper analyzes the benefits and costs of the presence of banks with a majority or part foreign capital and branches of foreign banks in Central and Eastern European countries – Poland, Hungary, Croatia, Bulgaria and Romania, with the theoretical arguments of recent researches and empirical evidence quantified in official reports.
Keywords: foreign banks, bank assets, asset profitability, capital profitability.
JEL Classification: G20, F3