Four Polish lenders holding 5.2% of the banking sector's assets would need 2.1 billion Polish zlotys of additional capital by the end of 2020 to meet minimum Tier 1 and 2 capital requirements under a shock scenario, the Polish central bank said in its latest financial stability report.
Narodowy Bank Polski also noted that 20 local banks, representing 27.7% of the banking sector's assets, would need 13.6 billion zlotys of additional capital by the end of 2020 to meet the combined capital buffer requirement, while the average total capital adequacy ratio for tested banks would fall to 15.4% from 18.1% under the shock scenario.
The central bank noted that the test results confirm the high resilience of the Polish banking system to economic shocks, but at the same time indicate the need to maintain high capital buffers for banks.
The adverse macroeconomic scenario applied by the central bank during the stress tests takes into account, among other things, a GDP ratio of 2.6% in 2018, 1.0% in 2019 and 1.4% in 2020; and inflation at 2.2% in 2018, 3.0% in 2019 and 2.0% in 2020.
The regulator also said June 11 that the profits of local lenders could be weakened by new regulatory requirements, such as the introduction of the IFRS 9 accounting standard and the obligation to adhere to minimum requirements for own funds and eligible liabilities, or MREL, although these regulations would strengthen banks' resilience in the longer term. The central bank recommended introducing legal solutions that would help banks raise long-term debt financing to meet their MREL requirements.
As of June 11, US$1 was equivalent to 3.61 Polish zlotys.
