According to PAP, Polish Financial Supervision Authority (PFSA) will lift debt-to-income ratio cap (set at 50% of income if a client’s wage is below the national average, or 65% of income if a client’s wage is above the national average) for consumer lending. PFSA is also expected to allow banks with stable capital and liquidity position (i.e. with CAR above 12%, tier 1 above 9%, meeting liquidity norms of PFSA and since 2014 supervision internal norms) to apply simplified rules when granting small scale cash loans (up to 6x average wage). Amendments to the recommendation should be set by the year end and enter into force by April 2013. According to Wojciech Kwasniak, deputy Head of PFSA banks controlling more than 90% Polish banking assets fulfill the regulator’s
criteria for simplified lending.
The amendments are clearly aimed at reducing the grey lending sector (i.e. institutions which are not regulated) and are step in the right direction in our opinion. However credit demand is also driven by the situation at the labor market, which is clearly deteriorating due macroeconomic slowdown. Therefore we do not expect those changes to have an immediate impact on the consumer lending market growth. Some of the solutions presented yesterday were already speculated by the market, therefore we expect market reaction to be muted.