Page 2 - Sample PRO weekly report Poland

Banking And Finance
Yields tighten as Poland sells PLN9bn in bonds
Poland sold nearly PLN9bn (€2.1bn) in local-currency bonds on April 25, with yields compressing, the finance ministry announced. Demand surged to nearly PLN11bn after sticking at around PLN8bn at the two previous auctions. The increased appetite appears to have been driven by reduced political risk in the EU given the result of the first round of the French election, as well as recent favourable economic data out of Poland and the likelihood of inflation levelling out after the surge in early 2017.
Notes maturing in April 2019 found buyers for nearly PLN1.4bn, achieving a yield of 1.976%, compared to 1.99% at the previous auction on April 6. The demand for the notes was over PLN1.7bn.
Papers maturing in April 2022 yielded 2.862% versus 2.872% seen at the previous sale. Investors bought PLN2.3bn worth of the papers with demand reaching PLN2.8bn. Just over PLN2.1bn of July 2027 papers sold at a yield of 3.425%, compared to 3.439% previously. The demand came in at almost PLN2.6bn.
The other two batches of papers – free-floaters maturing in November 2022 and January 2026 – sold for PLN2.1bn and PLN1bn, respectively. The November 2022 papers saw demand at nearly PLN2.5bn, the other series PLN1.4bn.
Poland’s Pengab banking sentiment indicator shed 4.4 points to drop to 25.9 in April, a report presented by the Association of Polish Banks (ZBP) and pollster Kantar TNS on April 25 showed.
The fall ends a three-month growth run that pushed the indicator to its highest level in nearly three years the previous month. The two main components, ranking the sector's view on the current business environment and the outlook for the next three months, declined 6.8 and 2.2 points respectively.
There are mixed views on the sector's current performance. Lenders are most optimistic about consumer loans, which points to the persistent strength of private consumption in Poland, which has driven economic growth in recent quarters.
The outlook on housing loans and working capital loans is also positive. On the other hand, lenders dropped their assessment on investment loans and irregular retail loans.
The three-month outlook for the market improved in three out of six segments but was not enough to pull the headline indicator up. The biggest gains occurred in the housing loans and investment loans segments, with the latter another hint that investment – a drag on growth through last year – is enjoying a rebound.
The outlook on consumer loans and irregular retail loans deteriorated, however, while there was no change in expectations for the irregular business loans segment.
The falling sentiment is a seasonal occurrence only, the authors of the report claim. Still, on top of the persistance of the low interest rate environment, regulatory uncertainties continue to overshadow the Polish sector.
A proposal for a bill to force lenders to refund spreads on CHF mortgages is in the works, with the authorities are also working to nudge lenders into adopting conversion measures.
Rising Polish banking confidence runs out of steam in April
Companies and Industries
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