Bulletin: Polish Banks Remain In Choppy Waters Amid Economic Resilience And Continuing Legal Risks

FRANKFURT (S&P Global Ratings) Feb. 21, 2023--S&P Global Ratings sees unchanged risks in its Banking Industry Country Risk Assessment for Poland. Although banks benefit from the economic resilience of the Polish economy, despite continued high core inflation and real wage declines, legal risks will continue to weigh on sector profitability. On Feb. 17, 2023, we affirmed our 'A-/A-2' foreign currency sovereign ratings on Poland, amid modest improvements in the external environment that suggest short-term macroeconomic risks for the country have eased (see "Poland 'A-/A-2' Foreign Currency Ratings Affirmed; Outlook Stable," published on RatingsDirect). We expect banking sector cost of risk to increase to about 80 basis points (bps)-90 bps this year, especially driven by weakening asset quality in consumer and

...February 21, 2023 FRANKFURT (S&P Global Ratings) Feb. 21, 2023--S&P Global Ratings sees unchanged risks in its Banking Industry Country Risk Assessment for Poland. Although banks benefit from the economic resilience of the Polish economy, despite continued high core inflation and real wage declines, legal risks will continue to weigh on sector profitability. On Feb. 17, 2023, we affirmed our 'A-/A-2' foreign currency sovereign ratings on Poland, amid modest improvements in the external environment that suggest short-term macroeconomic risks for the country have eased (see "Poland 'A-/A-2' Foreign Currency Ratings Affirmed; Outlook Stable," published on RatingsDirect). We expect banking sector cost of risk to increase to about 80 basis points (bps)-90 bps this year, especially driven by weakening asset quality in consumer and small and midsize enterprise loans. However, a resilient labor market should prevent any significant increase in credit losses from residential real estate and the...

Bulletin