PKO BP has terminated its contract with rating agency Standard and Poor’s, Poland’s biggest bank by assets announced on January 19.

The announcement from the state-controlled lender came days after S&P downgraded Poland’s sovereign rating from A- to BBB+. PKO insists its decision to end the contract has nothing to do with the downgrade of the sovereign, which in a novel twist was primarily a result of negative assessment of the Polish government’s recent moves to consolidate power via the constitutional court and state media.

PKO claimed in a statement that the move is part of an effort to reduce operational costs, which is important in “the environment of low interest rates and regulatory changes".

The government has pushed through a bank tax that will place a 0.44% levy on assets from next month. A presidential bill proposing a painful scheme to allow borrowers to convert Swiss franc mortgages is currently being analysed by financial marekts regulator KNF. The presidential office issued the draft and the parliament approved the bank tax on the same day that S&P made its scheduled review of the sovereign.

PKO also noted that its capital raising plans do not concern the US market, on which investors prefer entities to be rated by two of the major agencies. With the financing effort concentrating on the Polish and European markets, it is enough to be rated by one only, the bank says. PKO BP is rated A2/A3 by Moody’s, with a stable outlook.

S&P has now withdrawn the bank’s rating, after downgrading it to BBB - an effect of the sovereign downgrade on January 15. "At the time of the withdrawal, the outlook on PKO BP was stable, reflecting our view that the bank's capital and earnings capacity are sufficient to absorb the potential economic and industry risk pressures on the Polish banking industry," S&P wrote.