Fitch Ratings has affirmed Poland's biggest bank PKO BP's Support Rating (SR) at '2'. It explained that this rating reflects Fitch's view of the high probability of support from the Polish sovereign. This is based on the bank's high domestic systemic importance, reflected in its substantial market shares of retail deposits and total customer loans (21% and 16%, respectively, at the end of Q1 of 2014).
Fitch's view on support is further underpinned by PKO BP's still significant state ownership (31.4% at that time), the sovereign's commitment to retain control of the bank and potential reputational damage should the bank default. PKO BP's moderate size (its total assets equalled less than 13% of Poland's GDP at the end of 2013) and the fact that most other Polish banks are foreign-owned limit the cost of potential support for the authorities in case of systemic stress.
Fitch stresses that PKO BP is by far the largest bank in Poland with a leading franchise in all major market segments. The bank's market position is expected to strengthen following its recent acquisition of Nordea's Polish assets (completed in April of 2014) comprising banking, life insurance and leasing operations. Nordea represented a significant 16% of PKO BP's consolidated balance sheet at the end of Q1 of 2014.
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