Poland is Rethinking Its Banking System

Economy Jamie Simon
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Poland’s conservative government started to buy back shares in banks owned by foreign Investors, a move which some bankers and economists say it will affect banks that have thrived even during the global financial crisis, writes Reuters.

Last week, the state bank Alior Bank and PKO confirmed they are discussing the purchase and leasing divisions of Raiffeisen banking.

The Polish already bought the Polish division from GE Money this year and plans to buy the second largest bank Pekao from UniCredit. The state directly holds two other banks, controls majority stakes in two and a holding of 30% in the largest bank, PKO.

Polish people played a major role in the 80s in removing the communist system in Eastern Europe. Some now fear that banks partly owned by the government will increase funding for projects such as coal mines or large infrastructure projects that could create jobs, but not profits in a country long considered a model of democracy.

‘I am not a supporter of the nationalization transformation,” said Cezary Stypulkowski, CEO of the fourth largest bank in Poland, mBank MBK. He argues instead of installing a local management to ensure that local businesses have access to credits.

PiS came to power last year and was undertaken to introduce new taxes on banks and supermarkets to reduce the retirement age and increase state allowances for children. It also wants to help homeowners with loans in foreign currency through conversion of their loans in zlotys, a promise that has not yet been fully honored.