Decline in Household Loans Evident in NBP Data, With a Renewal in PLN Mortgages

According to recent data from the National Bank of Poland (NBP), the value of loans to households has experienced a noticeable decrease, largely attributed to a decline in mortgage values. The total value of household loans at the end of October this year amounted to PLN 774.6 billion, reflecting a 3% year-on-year decrease (nearly PLN 24 billion) and a 1.3% month-on-month decrease (PLN 10.5 billion) compared to September.

The primary contributor to the decline in household loans is the diminishing value of mortgages. The aggregate value of all mortgages for households, encompassing both PLN and foreign currency mortgages, stood at PLN 474 billion at the end of October. This represents a 5.6% reduction compared to the previous year and a nearly 2% decrease from September. The significant drop is predominantly attributed to foreign currency mortgages, especially Swiss franc mortgages, which have contracted by a substantial 25% over the past year, with a 13% decrease on a month-to-month basis.

Despite the challenges faced by foreign currency mortgages, there has been a resurgence in PLN mortgages. The PLN mortgage portfolio witnessed a 0.6% increase (PLN 2.2 billion) from September to reach PLN 396 billion. However, on an annual basis, the portfolio’s value decreased by 0.6%, influenced by a slump in new sales in the previous autumn and the early months of this year, coupled with increased mortgage overpayments. The revitalization of PLN mortgages can be attributed to the government’s Safe Credit 2% program launched in July, offering installment subsidies. The effects of the program became evident in September, accompanied by a slight reduction in interest rates and relaxed requirements by banks, including the allowance of the so-called interest rate buffer by the Polish Financial Supervision Authority.

On a positive note, the consumer loan portfolio experienced a 1.1% year-on-year growth (PLN 2.1 billion). However, on a monthly basis, it contracted by 0.7% (PLN 1.5 billion) to reach PLN 196.4 billion. Concurrently, the portfolio of current loans for entrepreneurs and individual farmers, both classified as households, exhibited a 4.9% year-on-year increase (PLN 2.3 billion) and a 3% month-on-month increase (PLN 1.4 billion), reaching PLN 48.9 billion.

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.