New Ratings
The rating agency Moody’s may reduce its rating for the following eight Polish banks: PKO BP, Pekao SA, BRE Bank, BRE Bank Hipoteczny, BZ WBK, BGŻ, Lukas Bank and EFL. The agency has already made a decision concerning ING Bank Śląski and the long-term debt outlook for this institution was downgraded from stable to negative. PKO BP, Pekao SA, BRE Bank, BRE Bank Hipoteczny, BZ WBK, BGŻ, Lukas Bank and EFL have all been placed on Moody’s blacklist. Two months ago Moody’s placed Bank Handlowy and Millennium on an observational list which resulted in the reduction of the ratings of their strategic investors. Getin Bank already has a negative rating. However, Bank BPH is on the other end of the scale because its rating may rise as a result of the fact that the bank may be merging with GE Money. This situation is a consequence of the financial crisis. According to analysts, the Polish economy has entered into an economic downturn; therefore, it is highly probable that many companies will declare insolvency, which means that bank losses will increase as a result of unpaid debt. In turn, increasing unemployment and a drop in prices of real estate will probably cause heavy losses in the wallets of retail customers. “It is expected that these losses will weaken the financial position of most Polish banks over the next two years,” writes Moody’s in its report. Where does the downgrade for PKO BP stem from? Moody’s explains that even though the bank has a dominant position on the retail market, the recent sudden increase of interest rates for mortgages given in foreign currencies remains a reason for concern.
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