Polish banks on track to boost earnings – central bank report
July 17, 2014
Polish banks will likely enjoy a "stabilization or improvement" in earnings, including return on assets of 1.3% in the period to end-2016, NBP central bank researchers said in a semi-annual report on financial system stability.
"We can expect a stabilization or improvement in financial results of banks in light of the favorable macroeconomic forecasts," researchers wrote.
ROA in a baseline economic scenario should edge up a notch to 1.3% in the period to end-2016 from 1.2% in the 12M ending Q1 2014, the report shows. Net interest income as a percentage of assets should also edge up a notch to 2.4% for the period. Net provisioning will decline a notch to 0.5% of assets, the bank said.
Polish banks should enjoy continued growth in demand for housing loans and accelerating consumer loan growth, central bank researchers also said.
Demand for housing loans should grow at "rates close to" levels seen currently, authors write. A pending stabilization of housing prices should dovetail with rising household income to boost the market and overcome some rising regulatory barriers.
Consumer lending, in turn, could accelerate in the coming quarters, authors said.
"Responses from banks surveyed by the NBP and own estimates point to a possible lending growth in 2014 at some 10% rate," the report reads. "Individual banks signal increased interest in this credit segment and expect 2014 growth rates near 20%."
Prospects for corporate credit have improved along with economic growth forecasts as well, with lending growth expected to accelerate.
"Investment credit demand increase is supported by a relatively high capacity utilization (above the long-term average)," NBP experts said