Polish banks to be strongly affected by future rate decreases, says head of banking lobby
Future rate decreases will strongly affect banks, the sector contracted in 2024 despite strong performance, the head of the Polish banking lobby ZBP Tadeusz Bialek wrote on LinkedIn.
"2024 was a period of dynamic changes and new challenges for the banking sector in Poland. Despite good financial results, unfortunately, the past year confirmed that the banking sector is shrinking in real terms - both in terms of assets and loans to the non-financial sector," Bialek wrote.
"The financial performance of the banking sector in Poland is created predominantly by interest earnings. This makes future interest rate decreases likely to affect banks strongly," he added.
The head of the Polish banking lobby pointed out that the banking sector has been growing mainly in debt instruments for several years now.
"Loans to the non-financial sector are growing at almost 10 times slower rates (it is encouraging to see the declines from 2022 and 2023 halted)," he wrote.
"However, the real level of credit supply to the non-financial sector has been declining steadily. The annual credit supply to GDP will reach a historical low in 2024 (11.09 percent of GDP)," Bialek added.
According to the head of ZBP, the mortgage moratorium (credit holiday) under the state-subsidised mortgage programme did not lead to a significant increase in the level of overpayments and early repayments of loans, as in 2022 and 2023.
Bialek assessed that the quarterly supply of loans to businesses is steadily declining.
"In 2023-2024, we already have a real collapse in corporate lending," he wrote.
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