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S&P has now withdrawn the bank’s rating, after downgrading it to BBB - an effect of the sovereign downgrade on January 15.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

Kazakh central bank approves €1bn assistance package for four banks

Kazakhstan’s central bank announced on October 18 that it has approved an assistance package worth KZT410bn (€1.04bn) for ATF Bank, Eurasian Bank, Tsesna Bank and Bank ... more

Dutch investment group acquires Georgia's third largest bank from local venture

Liberty Bank, the third largest lender in Georgia, announced on October 13 that a Netherlands-based company, the European Financial Group, has purchased 74.64% of its equity. No further details ... more

Ukrainian central bank bans Russian banknotes, coins depicting occupied territories

The National Bank of Ukraine (NBU) has forbidden local banks and the country's financial institutions to perform any cash transactions using the new banknotes and coins issued by the Russian central ... more