Polish banks are more resilient to the economic crisis caused by the novel coronavirus than most other European countries’ banks and their stable outlook is safe, Moody’s Investors Service said.
The global credit-rating firm’s stable banking system outlook indicates that on balance banks’ ratings will predominantly remain unchanged, unless there is an extraordinary worsening of the macroeconomic situation.
“The Polish banking system is rather the exception across Europe and the world… Despite all the challenges Poland is comparably resilient in the eye of the storm,” Carola Schuler, director at Moody’s, told Reuters in an interview.
Schuler said the main reasons behind this view were Polish banks’ solid capital position, ability to absorb additional provisions and “satisfactory” asset quality.
“And our macro assumptions for the country as a whole are suggesting that the economic fallout is digestible also for the banks,” Schuler said.
Polish banks suffered a 30% to 70% fall in net profit in the first half of the year, said Moody’s, when interest rates were slashed to 0.1% from 1.5% as the economy went into a recession.
The country’s bank association has said for the whole of 2020, banking profit may fall to near zero and called on the government to remove some burden from lenders.
“If the macro assumptions that we have do not worsen, then we do not think that the stable outlook that we have of the Polish banking system is currently at risk,” said Moody’s executive Melina Skouridou in the same interview.
The banking system outlook represents Moody’s view of how the operating environment for banks, including macroeconomic, competitive and regulatory trends, will affect asset quality, capital, funding, liquidity and profitability.
