Bankers' optimism grows as fears subside over tax on savings interest

The Pengab banking climate index has risen for the first time in four months in January, on fading worries that a new tax on savings interest would hurt deposit rates. According to the Pentor polling institute the Pengab index, designed to give an overall picture of how bankers view the health of the financial sector, has risen by 11.4 points to 22.9 points this month. "Bankers were much more optimistic and less worried over the tax on savings interest, marking a significant rebound from previous months," Pentor head Eugeniusz Smilowski told a news conference. Last month, the index plunged to the lowest level in the survey's nine-year history amid bankers' concerns that the 20% tax on savings interest introduced in December could prompt people to move their cash into the non-taxed stocks. They were also concerned that many people, fearful that the government would tax their savings and not just interest earned on them, might withdraw funds from bank accounts. But this month's survey, conducted between January 7 and 10, showed that half of bank branches recorded an increase in hard currency and zloty current accounts. Uncertainty over the impact of the savings interest tax was one of the reasons cited by the National Bank of Poland (NBP) last month as having prompted it to keep interest rates steady. (Reuters)