Payment holidays, aid fund have left Poland’s banks less resilient, mBank says

WARSAW (Reuters) -Regulatory changes introduced in Poland have left its banking sector less resilient to potential shocks than it used to be, mBank deputy head Marek Lusztyn told a news conference on Wednesday. Sharp interest rate rises imposed by the central bank to tackle inflation have hit many borrowers and prompted the government to introduce payment holidays and increase its special aid fund. “The biggest threat (to the Polish banking sector) is the ability to cope with unpredictable shocks, both internal and external, because simply resistance to future shocks is lower than it used to be,” Lusztyn said. Payment holidays for borrowers allow postponing eight instalments in 2022-23, which could cost the sector up to 20 billion zlotys ($4.34 billion) in 2022-23. mBank has estimated that 60-80% of its eligible bank clients would use the opportunity and that it would cost the lender 1-1.4 billion zlotys. “At the moment we see no reason to change this estimate,” Lusztyn said. ($1 = 4.6111 zlotys)

(Reporting by Anna Koper; editing by Louise Heavens and Jason Neely)