New requirements to be implemented into Poland’s banking sector will reduce lending activity by as much as 70 percent, Luigi Lovaglio, CEO of Pekao Bank, warns. Starting in 2016, Poland’s lenders will be contributing to a new credit restructuring fund (Fundusz Restrukturyzacji Kredytó), while contributions to the Polish Bank Guarantee Fund (BFG) are expected to increase. At the same time, the country’s Financial Supervisory KNF is calling to increase risk-free and risk-weighted assets from 12 percent to 13.25 percent, while a new bank tax is set to be introduced in the next several months.
“Giving a simplified version, banks in Poland are able to provide PLN 298bn in loans each year. As of next year, about 70 percent of the lending activity will be eaten up by the new capital requirements, pushing the amount way down to PLN 123bn,” said Lovaglio, pointing out that smaller players will suffer the most from the new requirements.
