Credit Holidays will Affect Banks for Some Time

As S&P analysts argue, Credit holidays will not permanently affect the profitability of Polish banks.

According to S&P Global, the introduction of credit holidays will have an impact on competitiveness and will make it difficult to manage the banking sector. It may also have a negative impact on the ability to attract investors. The gift the government granted borrowers, will cost banks around PLN 29 billion, analysts calculate.

The Important Changes in Credit Holidays:

“These costs will not only dilute the expected income impulse from the interest rate hike in 2022, but will push the profitability of the banking sector below the 2021 level and some banks to an annual loss,” reads the S&P Global report.

According to analysts, the costs, depending on how many borrowers are interested in vacation, maybe about 70 % of the estimated profit in 2022. Some banks will suffer more than others.

“In line with our expectations, the cumulative effects of these actions will consume some of the banks’ capital bases, which may force banks with weaker capitalization to launch a recovery plan, as did Bank Millennium,” the report reads.

Despite the threats, S&P Global analysts predict that the banking sector will remain profitable and the credit holidays will not have a long-term effect.

“We do not expect a systemic, lasting impact on the profitability of Polish banks as a result of the recent government move,” reads the report. “Nevertheless, this is another step out of a series of interventions by the government that we perceive as negative for the competitiveness and governance of the banking sector.”

Implications for Banking and Business

Developments in the Polish banking sector affect businesses operating in the country in several ways. Access to corporate banking services, credit availability, deposit rates, and payment infrastructure are all critical factors for companies — whether established Polish firms or foreign-owned entities entering the market.

For foreign entrepreneurs setting up operations in Poland, choosing the right banking partner is a strategic decision. Major Polish banks including mBank, ING Bank Śląski, Bank Millennium, PKO BP, and Santander Poland offer varying levels of service for international clients, including English-language online banking, multicurrency accounts, and dedicated relationship managers for corporate clients.

The Polish banking market is well-regulated by the KNF (Financial Supervision Authority) and participates in the EU deposit guarantee scheme (BFG — Bank Guarantee Fund), providing deposit protection up to EUR 100,000 per depositor per institution. This regulatory framework provides stability and confidence for businesses maintaining corporate funds in Polish banks.

If you are doing business in Poland or considering entering the Polish market, Zalewski Consulting can help. Learn more about our personal income tax advisory, or contact us for a free consultation.