Moody's changes outlook for Polish banking to stable

Rating agency Moody's has changed the outlook for the Polish banking to stable from negative, the outlook the agency placed on the system last year. "Our previous negative outlook was primarily driven by our anticipation of reduced government support for large Polish banks' deposits and senior unsecured debt. Following the European Union's introduction of a banking resolution framework we lowered the support assumptions in our ratings; accordingly, this is no longer a source of downward rating pressure," a press release informed. "We expect that Poland's robust economic growth will continue to provide a benign operating environment for banks and support asset quality over the outlook horizon. We forecast Poland's real GDP will expand by 3.5 percent in 2015 and 3.4 percent in 2016, supported by growth in employment and real wages, and a significant number of EU-financed projects.  Problem loans will remain stable at about 7- 7.5 percent of total loans in  2015-16, unchanged from the end of 2014 and down from around 8 percentin 2012 and 2013," the statement said. "The banking system outlook is in line with the stable outlook on Poland’s sovereign A2 rating, which reflects the government’s financial strength and credible fiscal policy framework. The outlooks on the twelve rated commercial banks are stable," the report concluded.