Polish banks have to raise PLN 30 bln to meet funding requirements by end-2026 - Fitch
Polish lenders face a market funding gap of about PLN 30 billion (EUR 7.04 bln) to meet long-term funding requirements (WFD) by end-2026, due to the countercyclical capital buffer (CCyB) increasing to 2 percent from end-September 2026, Fitch rating agency assessed in a statement.
According to Fitch, debt issuance since mid-2024 has strengthened structural funding, but interim buffer increases have already reduced WFD ratios, widening the funding gap.
The rating agency added that lenders may look to partly offset this by lengthening their debt maturities or issuing green instruments.
Fitch estimates that the nine largest banks' median pro forma WFD ratio declined by about 3 percentage points following the introduction of the 1 percent CCyB from September 25, 2025, translating into about PLN 10 billion (EUR 2.3 bln) of extra funding needs.
According to the agency, this shows how the increases in capital buffers reduce banks’ available own funds, which are currently about 40 percent of the sector’s weighted resources used to meet WFD.
Fitch pointed out that Polish banks have issued over PLN 30 billion (EUR 7.04 bln) of external debt since mid-2024 across senior unsecured, subordinated, hybrid and covered bonds, complemented by internal minimum requirement for own funds and eligible liabilities (MREL) issuance by banks under single-point-of-entry resolution strategies.
According to Fitch experts, unsecured senior debt, including loans from the parent company, has become the main source of WFD's resources.
Covered bonds, eligible deposits and funding from securitization instruments account for only about 15 percent of weighted WFD resources. The resolution authority’s updated guidance on meeting the recapitalization component of MREL with debt rather than equity may result in continued high use of MREL instruments to meet WFD, rather than a gradual shift towards covered bonds.
Debt maturity profiles have been gradually lengthening, but are still relatively short considering the more favourable WFD multipliers for longer-term debt. This reflects still-high borrowing costs for longer-term debt relative to banks’ average funding costs, which are driven by a high proportion of low-cost deposits.
"We expect issuance tenors to extend more significantly following the conclusion of Poland’s interest rate cutting cycle, allowing banks to lock in longer-term funding at lower rates. Banks are likely to start communicating their funding strategies more comprehensively to support issuance, especially as existing debt matures," the agency stated.
The gradual rise in mortgage lending will further increase structural funding needs, although mortgage lending is still fairly subdued. Fitch expects customer loans to grow by an average of 5 percent in 2025 and 2026 across Fitch-rated Polish banks, with a strong contribution from household lending.
The negative outlook on Poland's 'A-' sovereign rating has not significantly affected banks' issuance capacity.
However, banks' high sovereign exposures and the need to tap foreign markets due to domestic market limitations could become more pertinent if sovereign risks escalate. Funding costs already incorporate a risk premium, but this could increase under stressed market conditions.
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