Prospects of Polish banking system remain stable - Fitch

The prospects of the Polish banking system remain stable and reflect the good financial condition of banks, their strong capital and liquidity based on the deposits of domestic clients, the Fitch Ratings agency wrote in a report on central European banks.

According to the agency, the expected economic slowdown in 2019 will have a modest impact on banks' credit actions and cause only a minor growth of impairments.

The agency noted that the sector is subject to considerable structural changes. On the rise is the sector's consolidation and domestic capital ownership. Fitch expects that this trend will continue and have a positive effect on the sector's profitability through lower costs and marginally weaker competition pressure.

The rating agency expects that banks' financial results will remain strong in 2019, however the quality of banks' assets may slightly worsen, but Fitch stressed in the report that such risk is limited due to banks' low exposure to unstable sectors.