Banking sector legislative overview | Banking today and tomorrow | October 2022
Monetary policy assumptions for 2023 according to the National Bank of Poland (NBP)
The Monetary Policy Council has maintained the National Bank of Poland’s current monetary policy strategy.
The Council’s main statutory objective continues to be to ensure price stability and favour the maintenance of sustainable economic growth and the stability of the financial system.
Monetary policy will be implemented in a floating exchange rate environment, with the NBP not ruling out foreign exchange interventions.
Central Statistical Office (GUS): September inflation readings are the worst since 1997
The latest readings are well above economists’ initial calculations. GUS’ flash inflation estimate for September was 17.2% against the 16.4 % expected by experts.
According to forecasts, inflation will continue to rise until the end of the year, with a peak of more than 20 per cent (YoY) in February next year.
A visible decline in inflation is expected in Q2 2023.
Source: Wirtualna Polska
The eurozone continues to bleed – ‘finally’ a double-digit inflation
According to Eurostat’s preliminary estimates, HICP (Harmonised Indices of Consumer Prices) inflation in the euro area accelerated to 10.0 per cent in September, vs:
- 1 % recorded in August,
- 9 % in July,
- 6 % in June
- 1 % in May.
This is a new ‘record’ in the more than 20-year history of the eurozone.
The growing inflation rate is due to the 40.8 % rise in energy prices (YoY).
Year-over-year increases include:
- Food, alcohol and cigarette prices – 11.8 % against 10.6 %.,
- Industrial goods (5.6 % against 5.0 %),
- Overall service price dynamics (4.3 % against 3.8 %).
The end of Leszek Czarnecki’s Getin Noble Bank – BFG: client’s money is safe
The state Bank Guarantee Fund (BFG) has begun forced restructuring of Getin Noble Bank S.A. – the cost of this process is PLN 10.3 billion of business transfers. The bank’s shares and bonds have already been redeemed and, as of 3 October, its business has been transferred to a bridge bank of the BFG and the Commercial Banks’ Protection System.
The target bank to which Getin Noble Bank S.A.’s business will be transferred will operate under the name VeloBank S.A.
The situation of GNB’s clients remains unchanged – they will be supported as before, with full access to bank applications, cards and ATMs.
Roadmap for the replacement of benchmark rates
The Steering Committee of the National Working Group on Benchmark Reform has approved the Roadmap for the process of replacing the WIBOR and WIBID benchmarks with the WIRON index.
Assumptions in the roadmap include:
- Ensuring that the index replacement process complies with the BMR Regulation,
- Creating a liquid market for cash and derivative financial instruments using the selected index,
- Operational and technical preparation of all market participants.
Actions planned to be implemented between 2022 and 2025:
- 2022 – selection of a target RFR-type benchmark and identification of National Working Group’s activities for its effective and secure implementation;
- 2023 – ensuring the phasing-in of the newly chosen index into financial contracts and instruments
- 2024 – building space to phase out products and instruments using WIBOR in favour of WIRON until they are completely supplanted;
- 2025 – widespread use of RFR.
Source: The Polish Bank Association (Związek Banków Polskich)
Credit holidays and huge rental demand put the brakes on housing price falls
The report by Expander and Rentier.io shows that 13 out of 17 cities surveyed have seen a drop in house prices over the past three months. This is mainly the result of interest rate rises. However, m2 prices in all surveyed cities are still higher than a year ago.
Experts agree – were it not for the statutory credit holidays and the huge rental demand, housing prices would have dropped dramatically.
What about housing prices after the credit holidays?
A greater “rash” of sales offers is possible. A lot depends on how much the rents will rise and how many apartments listed for rent will remain empty. The demand is huge, but the prices in many cases are already excessively high. It’s likely then that many apartments may be left without tenants and end up for sale.
Six Polish banks among global digital champions
The results of Digital Banking Maturity 2022 – the largest global benchmarking of digital retail banking channels – have already been released.
These digital champions are 30 banks that set the directions of digitalisation for the entire banking sector, with 6 banks coming from Poland. Mobile apps proved to be the key to success. As in the previous edition of the report, Polish banks scored above the global average in the area of digitalisation of retail banking services. One of the key advantages is the possibility of opening an account using a smartphone and a banking app – which is now offered by 80% of Polish banks, on average 13% higher than other global digital champions.
October will see the launch of mBank’s settlement scheme for Swiss franc borrowers
mBank stated that the cost of legal risk associated with Swiss franc mortgages for Q3 this year exceeded PLN 2.3B. With the credit holidays included, the mBank Group is expected to incur a net loss for 2022.
mBank also announced the launching of a special settlement scheme for all active Swiss franc mortgages this month, allowing borrowers to convert their credits and reduce the outstanding principal. The terms of redemption will be negotiated on a case-by-case basis. In addition, for credits after currency conversion, the bank will periodically offer a fixed interest rate in a more attractive variant than in the standard offer.
Swiss franc credits – Court of Justice of the European Union will rule on remuneration for banks
Remuneration for the use of capital is the latest key issue in disputes between Swiss franc borrowers and banks. This will be decided by the CJEU on 12 October.
Banking sector representatives argue that the return of capital is not enough and the borrowers should pay for being allowed to use this capital for free for years, which is why banks have started to file lawsuits. This stance is rejected by Swiss franc borrowers, arguing that the cancellation of their agreements is a sanction and the bank is not entitled to remuneration, since these agreements are considered abusive.
Source: Puls Biznesu
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