Banking environment in Poland steady in 2016 – KNF

The situation of Polish banks during Q1 – Q3 remained stable, and there has been a strengthening of the capital base of banks, the Polish Financial Supervision Authority (KNF) – Poland’s official financial regulator, which supervises banks, capital markets and insurance institutions – said in a Polish press report on Saturday. “The situation of the banking sector remained stable, which was driven by sustained recovery of the economy and the environment and record low interest rates,” the release said. Specifically, the report stated that the total capital base increased from PLN 159.1 billion at the end of last year to PLN 172.7 billion at the end of September, an increase of 8.5 percent. However, the report was also cautionary – it noted that one commercial bank and thirty-five cooperative banks did not meet the recommendations of the Authority on minimum levels of capital ratios, and that a risk factor for the entire sector remained regarding the issue of foreign currency loans. An effective, legal solution to this challenge must be found, it stated.  Additionally, although there had been some growth in lending, KNF indicated that lending growth y/y was relatively low, with the total value of loans increasing by 3.3 percent, compared with an increase of over 4 percent, y/y, registered in 2015. Nevertheless, the report concluded by stating that “the situation in terms of current liquidity remains good," and “basic liquidity ratios remain relatively stable and remain at satisfactory levels.”