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Banks predict upsurge in business loans in 2011


Banks in Poland expect a further substantial improvement in profits in 2011 (though smaller than last year) and a faster increase in lending, led by a recovery in business loans, according to a survey by the Financial Supervisory Commission (KNF).

Thus, the sector’s total loan portfolio is projected to increase by 12.7% this year. The highest rise is expected in operating loans (up by 21.8%), followed by commercial and other real estate loans (up by 10.6%), home loans (up by 9.3%) and investment loans (up by 8.6%). Consumer loans are forecast to rise by 3.4%. The sector also predicts a fall in the ratio of irregular business loans, to 11.9% from 12.4%. At the same time, the quality of household loans is to remain unchanged.

Deposits are forecast to increase by 11%, again led by the business sector, where the rise is to be 14.6%, compared with 9.3% for households.

As a result, the net financial result of the banking sector is projected to increase by 25.6% in 2011. Sixty-nine percent of banks say their profits will improve this year while 31% expect them to fall.

The number of branches is expected to increase by 3.4% while employment in the sector is predicted to fall by 3.2%.

By way of comparison, in 2010 the financial result of Poland’s banking sector rose by 40.9%. The total value of loans rose by 8.9%, but this was due entirely to household loans (up by 14.2%), whereas business loans were down by 1.1%. Employment in the sector grew by 1.3% and the branch network expanded by 6.9%.

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