Description of the debate:
The net financial result of the banking sector in Poland in 2023 amounted to PLN 27.6 billion (data from the Central Statistical Office), an increase of 159.4% year-on-year. European banks have also experienced prosperity. According to Kearney’s ‘European Retail Banking Radar 2024’, the income of the banks surveyed (50 banks in 13 Western European markets and 38 banks in eight Eastern European markets) grew in 19 out of 21 markets, reaching €365 billion in 2023. This is 18% more than in 2022. The Polish banking system, like banks in the euro area, has benefited from the rise in interest rates.
The corporate banking segment in Poland also has significant growth potential. According to statistics from the European Central Bank, the volume of corporate loans (calculated in euro) has increased by more than 60% in Poland since 2010, compared to only a few per cent growth in the value of such exposures in other EU countries. And what lies ahead for the banking sector in 2024?
Recent years have undoubtedly been a very good period for the banking sector. However, high inflation has put strong pressure on costs, which have risen by more than 20% relative to 2021. The ongoing decline in inflation, if it continues, could result in the NBP lowering its reference rate. For banks, this would mean that in order to maintain comparably high profits, they will have to look for additional sources of revenue or efficiency. Can customers therefore expect price increases? How will this affect their relationship with the bank? And finally, how will this relationship be affected by the advancing use of Generative AI in banking. Can customers expect the entire relationship with their bank to become digitalised? Is this what they expect?
Key issues:
With the current dynamics of core inflation in Poland, will interest rates be kept at the same level or will they start to fall?
What measures should banks take to maintain comparably high profits as in 2023?
Will the pressure to maintain high levels of profits and efficiency affect price increases? How will this affect the customer-bank relationship?
Will a possible reduction in interest rates put upward pressure on fee and commission income?
How strongly will generative AI affect banking operations and can customers expect to digitise their entire relationship with the bank?
Should AI support revenue growth and efficiency, while maintaining physical contact with the bank?
How do banks approach the retail customer versus the corporate customer. What are the differences in approach?
