The Polish economy is slowing down sharply. Falling banks of banks may suggest a dark scenario
Another warning warns that it’s time to fasten your seat belts, because the Polish welfare economy is saying goodbye to GDP growth of 5-8 percent. in individual quarters (on a year-to-year basis). WI, the possibility of creating opportunities as high as 8.3%, but for the whole year it may be only 3.5-4%. MBank’s economists point out that at the beginning of the year for the economy, any forecast assuming an increase in the whole year below 5%. it automatically assumes a recession later in the year.
We are announcing a speech in Poland, which we are implementing in the second half of the year, Business Insider recently also told Piotr Arak, president of the Polish Economic Institute. Marek Zuber, who warns that you cannot be deceived by the last disgrace of the Polish economy. It will introduce extraordinary shillings after a few quarters, it is on the verge of inheritance, which – in addition to supplementing interest rate increases in ours – may become part of the Chinese economy or problems with supply chains.
They introduce mBank’s corrections over the Polish economy, dark clouds are gathering in technology, a process that deals with chemicals and conceals. It may mean that in 2023 there will be no economic growth in Poland in 2023.
Interest rates are rising, bank quotes … are falling
In this context, there is what is happening to banks that are linked to a cultural phenomenon and what is happening to the situation in terms of improving gross domestic product (also, therefore, when there is a recession and GDP shrinks). At the same time, the profitability of the banks that do more, the interest, the interest, that is the rate at the source of their source. In the first months of this year, the sector is already experiencing a great increase in net profit: PLN 4.1 billion, twice more than the year before. It seems that the banks will be advancing against each other’s austerity: high interest rates and slowing economic growth.
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The WIG-banks index, grouping lenders listed on the Warsaw Stock Exchange, has fallen by 33 percent since its peak in early January this year. (WIG lost 22 percent during that time), to 6,395 points. Care level from July 2021. It is interesting because now the NBP reference rate is 4.5%, and in July 2021, I operate in 2022, it was down to only 0.1%, respectively. and 2.25 percent in enterprises also investors did not expect interest rate hikes to be high, yet the quotes would be higher than now.
He recommends that he somewhat “ignore” the great source of fetal growth and the source of services in the coming months. He did so that the increase in interest rates was not over yet, he designed that looking for a source for some time up to 7%. According to preliminary forecasts, the industry may generate a profit of PLN 25bn throughout the year. With these WIG-banks heights, the height of the markers to be taken into account, should be listed higher than now. Currently, the price / book value of the WIG-banks index is only 0.65, to the horizons as in the perspective of 2021, when the current profitability and prospects are not so good.
Economic uncertainty takes its toll
So why so much influence of banks’ listings on the WSE? According to Michał Konarski, a chemist at mBank’s Brokerage House, several factors contributed to this. – In fact, thanks to interest rate hikes, positioning at the level will be a very big but this year The market is concerned about the impact of higher rates on loan repayments. We have now passed the neutral level of interest rates for qualityWe are entering a place where some customers will immediately have problems with regulating, which will result in an increase in write-offs by banks – Konarski explains.
He adds one more factor: the larger the rate hikes, the banks have accumulated, which has led to a rise in interest rates to decrease and deposit prices will rise. It may increase, bearing further increases in hikes, with a large amount of capital, interest, as at high levels of rates, hit at the expense of costs.
Another issue is the impact of the rising cost of money on activation. The higher the rate, the higher your positioning, so your recession is rising. Moreover, we are acting on the sentiment towards banks. Further rate hikes are expected, the reference rate may rise to 7%. When asked how they will stay at the level and level of reactionPP: whether struggling with argumentation, including long-term reflections for a quarter, or obtained that you want to announce that it will indicate which will provide
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– In addition, there is economic uncertainty resulting from external factors, i.e. the war in Ukraine and the shifting of sanctions from Russia and the West. If the greatest effects on the economy are not enough, the first one may be to cut off Poland from the Russian and pro-inflationary impact of this event – providing counterattacks. To the city that there was the so-called depreciation of declines, which means a decline in heirs’ prices due to the factor of the factor which lasts a long time. In this case, foreign ones could point out that Polish banks, in the event of a front-line attack, could draw attention to the risk.
Poor inflows to mutual funds are not helping The last three months have been disastrous for the shareholders of the banks listed on the WSE. Exchange rates if they fell, as they were to come into contact with completely different rate hikes.
We also need all typical phenomena, i.e. stock exchange ones. weak inflows to Polish investment funds. Banks are one with liquid flowing, so when redemptions occur, they sell their shares to obtain liquidity. It is also a test of creditors’ quotations. – Get them pregnant. Offer orders to customers who will create orders for customers who will order but will cost orders to follow. There are parliamentary elections during the year, so the market may fear that there will be more countries, says Michał Konarski.
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Key interest rate on deposits and interest and cost cost rates
However, whether the market is right, the interpretation so pessimistic about banks? The increase in the interest rate due to the increases this year may reach even PLN 25 (in 2021, the interest rate of 4 percent PLN 6.5 billion), which would constitute an additional PLN 20 net. Even if loan repayments worsen, it is not likely to be repaired to overwhelm the corona growth. Even if credit write-offs this year by 100 percent. by 2021 (which is a rather low cost), this would mean that a PLN 7 billion quality transfer on this account would have a negative impact on the gross result (at around PLN 5.7 billion).
– Income increases thanks to banks will be sick, but investors also get very much also that financing costs. For the time being, however, the situation in this respect is very favorable for banks: the control of the bank’s interest rate is battery-operated, rather than banks for banks than banks for the banks of the year. Banks are raising deposit rates, but slowly, further than expected, the deposit rates are still marked far from WIBOR. Also slow current value, so financing costs are now deposits. The next further rate hikes, admittedly lower number of banks, will still take place, which are going to rise – Michał Konarski reserves.
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He adds that in the case of the same banks, they expect their construction only slightly (based on the basis point risk). – To make decisions influenced by interest rates. In this regard, the foot will be the key. Still remains still in use, but economists predict that the economy is cooling down. The question is about this height. As long as you stop in order not to fire, the cost of the risk is peril. Therefore, I believe that the results of the banking sector may be very good this year. The question is, what about the outflow, when you cause the GDP growth to be strong and unemployment at the interest tables may grow – sums up mBank’s BM.
2021 was a good year for banks, which rebounded the discount in 2020 and gained as much as 80 percent in 2021. (at the time of implementation for the WIG project, including only 20 percent). However, since the peak in early January 2022, WIG-banks has lost 33 percent, which is more than the WIG, which has slipped by 22 percent.