Polish banking sector resilient, but risks are rising, says cbank

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WARSAW, Dec 9 (Reuters) – The Polish banking system remains resilient, but the balance of risks for the sector is worsening, the National Bank of Poland said on Friday in its Financial Stability Report.

The main risks for the sector are legal risks related to mortgage loans in foreign currencies, it said, adding that while costs related to this issue will remain high in the coming years, they should not pose a systemic risk.

“Worse macroeconomic prospects create unfavourable operating conditions for the Polish financial system,” the bank said, adding that lower activity is still not reflected in a rise of provisions for bad loans, but this should be expected in the near future.

Still, banks’ capital is sufficient to absorb even extreme losses in the worst macroeconomic scenarios and the liquidity of the sector remains stable, the central bank said.

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(Reporting by Pawel Florkiewicz; editing by Jason Neely)

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