Poland’s biggest bank PKO dumps S&P

By bne IntelliNews January 20, 2016

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S&P has now withdrawn the bank’s rating, after downgrading it to BBB - an effect of the sovereign downgrade on January 15.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.

             

Related Articles

Blow for Russian stocks as Kremlin backs away from higher dividend payouts

Russian stocks are facing a serious setback after it emerged that the Kremlin may be backing out of a decree to force state-owned companies to pay dividends worth 50% of their earnings. The ... more

Ukraine central bank slams PwC over PrivatBank audit

The National Bank of Ukraine (NBU) has accused PricewaterhouseCoopers, PrivatBank's auditing firm, of providing an inadequate evaluation of collateral under loans provided by the çountry's ... more

Turkish central bank releases $500mn of liquidity via new deposit swaps market

The Turkish central bank on January 18 provided around $500mn of liquidity with a maturity of one-week to Turkish lenders at the first auction held under the scope of the newly launched FX ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss