The influence of political factors on commercial banks in Central European countries

► We analyse the link between politics and banking in post-transitional Central European countries. ► We find that state-owned banks report significantly smaller net interest income ratios during the years of parliamentary elections. ► We document that the lending growth of state-owned banks is not affected by the political cycle in Central European countries. ► We provide an assessment of the impact on banking that is produced by a set of political factors that has not been previously studied.