Recent months have demonstrated that banks have benefited from high interest rates, with a significant boom in new lending.
The high interest rates are a result of the Monetary Policy Council’s decision, and the banking sector has no influence on this. Interest rates influence lending rates, but it is important to remember that banks also need to allocate larger amounts on the deposit side. The banking sector is not solely a beneficiary of these interest rate levels, it also results in reduced credit availability while higher interest rates mean fewer borrowers.
Lending has also been impacted by the way the bank tax is designed. We have reached historic lows in corporate financing, and this is all down to the flawed design of the bank tax, constructed to apply to assets rather than, as in all Western European countries, to liabilities. Banks face higher tax rates with increased lending while, conversely, tax exemptions on government bonds have led banks to heavily invest in them. This is advantageous from the State Treasury's perspective, given the record borrowing needs. However, it has also made us the leading European country in terms of banking sector involvement in the public sector. This is not a positive development, as it leads to reduced lending.
You have been advocating an overhaul of the bank tax for several months. Is there any ongoing dialogue with the government?
Yes, but reversing something that has been in place for eight years is not an easy task. Our data since 2016 reveals a steady decline in the banking sector's involvement in lending to the economy, reaching a historic low. The corporate loan portfolio in relation to GDP is just 11.48%. This is a situation that needs to be addressed. While the government is aware of the issue, overhauling this construct will take time. I hope the tax redesign can be implemented while maintaining the neutrality of the state budget. We understand that, given the current debt levels, the State Treasury cannot afford to lose revenue. Redesigning the tax should benefit the economy by enhancing the banks’ lending capacity.
Does the Polish housing market need support, such as the #naStart loan currently under government discussion?
We aim to remain neutral in the discussion by limiting ourselves to providing expert knowledge, as banks merely operate the state’s subsidy system for the borrowers, who are the main beneficiaries of this type of programme. Every EU country has similar measures to support young families in purchasing their first home. Without external incentives like interest rate subsidies, some borrowers cannot afford to buy their first home when and where they would like.
Some lawyers believe that the banking sector faces a looming issue with loans linked to WIBOR, particularly those granted in zloty. We are awaiting the CJEU’s decision, but what is the Polish Bank Association's stance on this issue?
In our view, this is not a genuine problem but rather an issue artificially created by law firms seeking new opportunities. With the Swiss franc loan cases gradually winding down, law firms are actively seeking new areas to pursue. The first WIBOR-related lawsuits emerged two and a half years ago, but the number of cases remains relatively small. With over 2.3 million active loans, there are just over 1,000 court cases, which is just a drop in the ocean. Clients recognize that there is little to be gained and are not swayed by law firm offers driven more by profit than by genuine consumer interest.
