Page 15 - bne IntelliNews Poland Outlook 2025

4.2 Banks
Polish banks can expect more of the same in 2025. Last year proved exceptionally profitable, with the full-year net result projected to reach PLN36bn (€8.4bn), against just under PLN28bn in 2023 and nearly PLN11bn in 2022.
While profits are not expected to surpass 2024 levels in 2025, estimates suggest a still-strong net result of PLN29bn to PLN35bn, driven by high interest rates. Interest income is once again predicted to dominate banks' operating results. However, the dynamics of interest income will likely be lower in 2025 due to the high base effect and the anticipated decline in interest rates.
The consensus is that the National Bank of Poland will reduce its reference interest rate, currently at 5.75%, by 75-100 basis points by the end of the year. The rate cut cycle is expected to begin in mid-2025 at the earliest.
The decline in revenue from high interest rates may be partially offset by higher credit volumes, as lower rates could revive the currently weak demand for loans. The NBP estimates that credit growth dynamics will weaken to 1.73% in the first quarter, but in subsequent quarters, growth is anticipated to increase, at least reaching the levels observed in 2024.
The fastest-growing segment is expected to be consumer loans, projected to grow by 8%. Mortgage loans, after a weak second half of 2024, are also predicted to pick up, with growth dynamics anticipated to reach 5.8%. Corporate loans are expected to recover as well, leading to a 5.4% increase in volume.
After several years of decline, there are prospects for significant growth in investments. In 2024, investment outlays reached a modest 1.1%. In 2025 they are expected to rise to 8.6%-8.7%. A key factor will be the inflow of funds from the EU’s pandemic recovery fund, as well as
15 Poland Outlook 2025 www.intellinews.com