Polish banks’ combined profit in 2012 will probably be near last year’s record as the country’s expanding economy spurs loan growth, Wojciech Kwasniak, head of the banking regulator, said.
Polish banks, led by state-controlled PKO Bank Polski SA (PKO) and UniCredit SpA (UCG)’s Bank Pekao SA (PEO), increased their total profit 37 percent to 15.7 billion zloty ($5 billion) last year on stronger demand for credits, the main source of income for the country’s financial institutions.
“The Polish banking industry faces a good and stable year,” Kwasniak said in an interview in his Warsaw office yesterday. “Banks are well-capitalized and will have a chance to continue steady growth after retaining all profits or a substantial part of last year’s profits.”
Total loans, driven by lending to companies, jumped 15 percent to 800.8 billion zloty in 2011, after an 8.9 percent increase in 2010, according to data on the regulator’s website. Poland, the European Union’s biggest eastern country, saw its economy grow 4.3 percent last year, compared with a 3.9 percent rate in 2010. The economy will probably expand 2.5 percent this year, the European Commission said on Feb. 23.
The industry’s total assets may climb about 5 percent this year after a 12 percent jump in 2011, said Kwasniak. Corporate credits surged 20 percent in 2011, while loans to individuals increased 12 percent, the watchdog’s data.
“We’re seeing a shift of the industry’s activity to providing more financing for companies than for individuals,” Kwasniak said.
Banks in Poland have a “comfortable situation in these market conditions” as they have a capital surplus, with their combined solvency ratio at 13 percent, or more than the required 8 percent, said Kwasniak.
While Poland’s economy was the only one in the EU to avoid recession since the global credit crisis struck in 2008, its banks are vulnerable in part because of their reliance on funding from cash-strapped western owners. Poland’s biggest banks are turning to the bond market for the first time in years to make up for the potential shortfall.
The regulator will try to protect banks from a “sudden decrease” in funding from foreign parents and encourage lenders to seek long-term financing, Kwasniak said. The watchdog will work on changes to current regulations to make access to such financing “easier,” Kwasniak said, without giving further details.
Frankfurt-based Commerzbank AG’s loans to its Polish unit, BRE Bank SA (BRE), stood at 27 billion zloty on Dec. 31, or 2.2 times the Warsaw-based subsidiary’s market value, BRE said in a statement on Feb. 8. Belgium’s KBC Group NV provided 12 billion zloty in financing to its Kredyt Bank SA (KRB) unit, or 3.7 times the Polish bank’s market value.
BRE may offer Eurobonds for the first time in eight years, Chief Financial Officer Karin Katerbau said on Feb. 10. Banco Santander SA (SAN)’s Bank Zachodni WBK SA (BZW) may sell its first Eurobonds this year, Wojciech Skalski, head of accounting at Poland’s sixth-largest lender, said on Feb. 13.
Warsaw’s WIG Banking Index (WIGBANK) has climbed 7.7 percent this year, rebounding from a 22 percent slump in 2011.
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