Polish companies are increasingly turning away from bank loans as a source of financing—particularly in proportion to the country’s growing GDP—resulting in a surplus of liquidity in the banking sector. Experts argue that deregulation could help shorten the path to bank financing, especially as Poland faces massive upcoming expenditures for the energy transition and defense modernization. While the banking sector is reporting excellent financial results, this has drawn the attention of politicians, and the lingering legal risk surrounding foreign currency (CHF) loans continues to deter foreign investors.
“The structure of Poland’s banking sector, shaped over many years, has been influenced by various economic factors. Recently, however, we’ve seen a decline in the sector’s share of GDP—fewer loans are flowing from banks into the Polish economy,” said Jurand Drop, Undersecretary of State at the Ministry of Finance, during the European Economic Congress.
“We want the banking sector to ‘re-Polonize’ itself, meaning an increase in lending activity for Polish enterprises. Over the long term, this builds productive capacity and benefits the economy.”
Record Profits and Rising Deposits
The net financial result of Poland’s banking sector reached PLN 42 billion in 2024, up from PLN 27.6 billion the previous year. According to the Central Statistical Office (GUS), total assets at year-end increased by 10.8%, reaching over PLN 3.3 trillion.
Loans to the non-financial sector grew by 4.1%, to nearly PLN 1.2 trillion, while deposits rose by 7.8%, reaching almost PLN 1.95 trillion—meaning deposits grew nearly twice as fast as credit. Most loans in the non-financial sector were directed to households (PLN 756.8 billion, or 63.4%).
“Capital is the lifeblood of the economy, and banks are its circulatory system. Their role is to provide working capital and, most importantly, investment capital to businesses,” Drop added. “We need to boost the investment rate in Poland, especially for small and medium-sized enterprises (SMEs), where we see the greatest potential for economic growth.”
In 2024, 62.5% of business loans went to SMEs. The majority of corporate lending consisted of operating loans (PLN 170.2 billion, up 4.3%) and investment loans (PLN 164.2 billion, up 4.8%).
High Liquidity, No Projects
“Panelists during the ‘Banking Sector’ session at the Congress emphasized the strong health of the banking sector,” said Jerzy Bombczyński, banking and finance attorney at Baker McKenzie. “The spotlight is on record profits, the sector’s excess liquidity, and its readiness to finance investments—but unfortunately, the investments aren’t there.”
Banks will soon need to help finance large-scale investments in energy transition and defense. According to Deloitte, Poland is set to spend PLN 1.9 trillion on defense between 2025 and 2035, a sharp increase from PLN 825 billion spent between 2014 and 2024. Full energy transition by 2040 is estimated to cost PLN 1.5–1.6 trillion, with PLN 600 billion needed in just the next six years.
Interest rate cuts expected before summer could help stimulate lending, by reducing credit costs and increasing accessibility for businesses. Deregulation—led by a government team under Rafał Brzoska—could also improve access to financing.
“Every sector needs deregulation. At the Ministry of Finance, we’re working on simplifying the law for cooperative banks, which hasn’t been updated in over two decades,” Drop explained.
“The government is actively working on proposals from the SprawdzaMY team. These include things like streamlining account closures upon a customer’s death. We’re receiving a lot of such feedback and plan to propose legislative changes.”
Banking Sector’s Own Deregulation Priorities
Banks themselves have emphasized the need for:
- Simplified lending processes for businesses
- Access to credit registers for financial firms (leasing, factoring, debt funds)
- Re-guarantees for infrastructure-related bank guarantees (to reduce risk for construction firms)
- Streamlined reporting obligations (avoiding duplication across institutions)
“Regulation and deregulation are tools, not goals. One key issue for the banking environment is the scale of legal risk that has burdened the sector,” said Bombczyński.
“I’m referring to the CHF loan crisis, which is unprecedented in the EU and has shaped the sector’s risk dynamics for years. Poland still faces the consequences of this massive legal uncertainty.”
During the panel, speakers repeatedly noted that Poland’s banking market remains unattractive to foreign investors. There hasn’t been a single major acquisition of banking assets by a foreign investor in years.
Source: CEO.com.pl
