The Polish financial system will cope with the challenges it faces, but the effect of these measures will probably also be further consolidation, which may adversely affect competition in the sector, said the President of the National Bank of Poland (NBP) Adam Glapiński.
“The current challenges affect individual institutions to a varying degree, and eventually the Polish financial system will deal with them. Less burdened institutions will probably take advantage of the resulting advantages and this will affect the shape of changes on the map of our financial system, which is subject to dynamic changes in these years. Unfortunately, they will probably result in further consolidation, which may adversely affect competition in the sector. And although the competition does not seem distorted at the moment, further consolidation of the banking and insurance sector will probably continue in the future, “Glapiński said during the Banking Forum.
“Low rates of return on capital in small and medium-sized institutions will, of course, encourage mergers and acquisitions that allow the use of economies of scale. Of course, costs and entry barriers are not without significance here. Therefore, I have always held the position that reporting and regulatory burdens should be proportionate to the scale of operation of individual institutions. Of course, taking into account the need to ensure the security of their operation “- he added.
The President of the National Bank of Poland also indicated that loans in Swiss francs and policies with an insurance capital fund (UFK) “will cost us a lot”, especially those institutions that ignored the risks associated with these products, especially legal risks.
As previously reported by the Polish Financial Supervision Authority (KNF), the share of the five largest banks in the sector’s assets increased to 50.1% at the end of 2019 from 49.9% a year earlier.
Source: ISBnews
