Condition of banks in Poland is worse than in Eurozone

Although interest rate hikes by the European Central Bank lead to worsened financing conditions in the Eurozone, the situation of banks in that region is improving from quarter to quarter. Profits, profitability, interest margin, and capital indicators are all increasing. According to the latest ECB report, the share of "bad" loans in their portfolios is also decreasing. In Poland, however, this last indicator remains higher than in Greece.

In terms of capital indicators, the Polish banking sector is not far from the average levels of the Eurozone, with the difference being that while capital in the Eurozone banks has been growing consistently, in Poland, it has been shrinking and is still lower than at the end of 2020. 

The biggest difference lies in the purpose of banks. In the Eurozone, they serve to finance businesses and households. At the end of the first quarter of this year, the loans to deposits ratio in Eurozone banks was nearly 105 percent, while in Polish banks, it was just under 77 percent.

(INTERIA)