Q3 banking sector results shows bank profits severely dented

In the third quarter the assets of the banking sector shrunk by almost zl. 4 billion, despite some signs of an economic recovery. Commercial banks reported that their Q3 net profit halved as compared to the second quarter. Rzeczpospolita reports that the net profit for the whole sector after the first nine months of 2002 was zl. 2.73 billion, 25.4% less than the respective period of 2001. Commercial banks (excluding co-operative banks) posted net profits 30% lower than a year before. Banks have also been hit by the reductions in interest rates by the Monetary Policy Council and the slowdown in deposit accounts, which by the end of September had grown by only 2.7% as compared to 2001. The banks are also lending less. Loans grew much slower than expected, increasing by 3.1% for the nine months. Despite the dismal figures, analysts remain optimistic, believing that 2003 shows promise and will be a year when banks will shed bad clients and screen new ones more thoroughly. (Rzeczpospolita, p. B4) J.K.