Polish banking sector is enjoying a stable situation, with customer deposits seen as safe, despite the losses reported for 2018 by lenders Getin Noble Bank and Idea Bank, financial market watchdog KNF said in a report on the condition of the banking sector in 2018.
"Despite revealing high losses by both entities [Getin Noble Bank and Idea Bank], the situation of the banking sector remains stable, and the funds of deposit holders remain safe," KNF wrote. "At the same time, the KNF office is undertaking relevant supervisory actions in relation to those [entities]."
"At the same time, it needs to be said that the impact of Getin Noble and Idea Bank's results on the basic characteristics of the sector was limited and was manifested only in reduction of its net financial result," KNF added.
The audited unit and consolidated results of both banks published at the end of April differed from the non-audited figures submitted by the lenders to central bank NBP, the regulator also noted.
Other challenges in the banking sector as identified by KNF include: uncertainty connected with deceleration of the global economic growth, particularly in the euro zone (and especially Poland's main trading partner, Germany), along with uncertainty related to the economic policy of main economies and policy of central banks;
low interest rates regime, which can result in a range of negative phenomena, such as a possibility of underestimating interest rate risk or further shit of household and corporate assets towards investments with higher rates of return, which might generate imbalances or price bubbles on certain markets;
uncertainty connected with the planned changes in the pension system; significant involvement of the State Treasury in the banking sector; for some banks, the legislative risk connected with their FX mortgage portfolios as the new solutions aimed at changing conditions of FX loan agreements, if adopted, could generate high costs for banks;
regulatory challenges connected with MREL implementation, NPL management and adapting WIBOR to BMR regulations.