Banks gear up for corporate-loan boom

According to a report prepared by the National Bank of Poland (NBP) based on surveys carried out among 24 banks, the demand for loans among corporate clients has been growing steadily for the last few quarters. Furthermore, banks surveyed expect a strong increase in the demand for long-term loans in the large enterprise sector. This contradicts a belief that it is the small and medium-sized enterprises which are more eager to finance their current operations and investments with loans, as large companies usually have dividends and financial resources that can be invested.

One bank focusing on services for large corporate clients (i.e. whose annual revenues exceed EUR 15 million) is NORD/LB. The bank's spokesperson Łukasz Piasta, disagrees with the idea that large corporations are not as keen as SMEs to borrow. "[Large firms] are eager to take loans. In the first three quarters of this year we have given more than 120 loans worth a total of zł.2.15 billion - this is almost a 70 percent increase in comparison to the previous year," he said.

What is true however, is that banks have a more favorable attitude towards larger corporate clients. "From the bank's perspective, the loan security factor is very important and it is often the case that large companies simply are more reliable and less risky than smaller enterprises," the president of the Polish Bank Association (ZBP) Krzysztof Pietraszkiewicz said. However, Pietraszkiewicz says, at the end of the day it all comes down to the loan capacity of the borrower and the business plan he presents.

Still, banks prefer secure investments, and that means large companies are more likely to obtain a loan. "We are very active in our loan policy but also very conservative when it comes to security requirements," Piasta said, underlining that the analysis of large companies' business plans is more complex than that for SMEs. "The company has to prepare a thorough business plan, provide us with its financial documents. Such analysis usually takes approximately 2 weeks. But it is absolutely necessary, as we give loans that are in millions -  often of euros or dollars," Piasta added.