Polish banking sector compared to Europe

Banking assets in Poland have recorded a significant increase since the transformation. Since the end of 2008, they have enlarged annually by approx. 6% on average. Currently, the Polish banking sector ranks around the European median in terms of assets. According to data of the European Central Bank (ECB), in 2017 the Polish banking sector’s assets totaled EUR 427 billion⁸. Europe’s largest banking sector is in the United Kingdom (EUR 10 billion in assets in 2017) and the smallest one is in Estonia (EUR 25 billion in assets in 2017).

The Polish banking sector operates in accordance with the classic model of financial intermediation in which banks mainly provide loans to the non-financial sector using their customers’ deposits in the process. This is reflected in the high share of loans in the banking sector’s assets, which at the end of 2017 accounted for 68% of such assets and was higher than the average for the banking sectors of the European Union (65%) and Central and Eastern Europe (66%). The share of other types of assets in the banks’ balance sheets, in particular those making up the “held for trading” portfolio, was much lower in Poland, just like in other Central and Eastern European countries, than in more developed economies.

At the end of 2017, loans in the Polish banking sector totaled EUR 300 billion, which placed Poland in the middle of the pack.

Compared to other European Union states, Poland’s banking sector is relatively small in relation to the country’s GDP. Bank loans in the Polish banking system account for 65% of GDP while the European average is 126%. Denmark, Sweden and Holland have the highest ratios of loans to GDP.

The Polish banking market features a low, though rising percentage of corporate loans in the total amount of non-financial sector loans (approximately 30%). In turn, Poland is the fourth country in the European Union in terms of household loans stated as a percentage of all the loans in the banking sector.

Loans per capita (2017, EUR) in relation to the growth rate (2012-2017, EUR)

Source: Own calculations based on ECB and NBP data

Share of loans in GDP (2017, %) in relation to GDP per capita

Source: Own calculations based on ECB and NBP data

Consumer loans in Poland compared to EU countries

Source: NBP, stability report, December 2018

The research conducted by the National Bank of Poland⁹ indicates that households in Poland are significantly less indebted than in the euro area: the average household has total liabilities of 5.5% of gross assets while in the euro area the average debt is 26% of assets in total.

Mortgage loans account for the highest percentage of household loans (roughly 60%); in the European Union that percentage is higher (roughly 70%). However, mortgage loans in Poland represent a mere 19% of GDP, while the average in the European Union is 40% of GDP. In turn, Poland is one of the countries with the highest percentage of consumer loans among total loans; the value of extended consumer loans versus GDP at the end of June 2018 was 8.7% of GDP, or more than the average in the euro area (5.9%) and less only than in comparison with Bulgaria, Greece and Cyprus.

Banks are financed with client deposits in Poland to a greater extent than in other countries in the European Union. At the end of 2017, they accounted for 73% of the total balance sheet value of the banking sector.

On the other hand, financial assets (deposits, mutual funds, equities, bonds, life insurance and voluntary pension plans) stated as a percentage of households’ assets are markedly smaller in Poland than in the most economically developed countries in Europe. In 2016, they stood at 8.5% in Poland, while they were 17.8% of gross assets in the euro area. This disproportion is also very visible in absolute figures: EUR 3.5 thousand in Poland versus EUR 10.6 thousand in the euro area. On the other hand, financial assets, even though they are small, are a popular form in which Polish nationals accumulate financial means. 90.8% of all households hold them, with deposits being the most popular form of accumulating financial assets (84.9% of all households have deposits). Households much more rarely invest their savings in mutual funds (3.8% of households), though on average the amounts involved are higher (median of EUR 19.6 thousand). NBP’s research shows that the increase in financial assets (94% in two years) was the main driver of the growth in net assets.

⁸ European Central Bank, https://sdw.ecb.europa.eu/
⁹ BZGD research is conducted in the international research network called Household Finance and Consumption Network (HFCN). Central banks and statistical offices representing euro area countries, Poland and Hungary participate in this undertaking initiated in 2006 and coordinated by the European Central Bank. https://www.nbp.pl/home.aspx?f=/aktualnosci/wiadomosci_2018/ ZGDwP_20180109.html