Credit outlook for Polish banks not good

Credit outlook for the Polish banking system looks negative as the country's bank fundamentals will be affected by the ongoing financial turmoil, according to a new report released from ratings agency Moody's.

The ratings agency has stated that Poland's banking system will be tested as the financial crisis has spread into Central and Eastern Europe prompting banks to react by adopting more defensive liquidity strategies, which will lead to contraction in growth.

According to the report, the agency predicts that the "future direction of fundamental credit conditions in the industry over the next 12 to 18 months."