Polish Banks Better Prepared For Tougher Future-Central Bank

WARSAW--Poland's banking sector is better prepared to cope with tougher challenges in 2013 and 2014 due to a consistent regulatory push to shore up lenders' capitals, the Polish central bank said Tuesday.

The outlook for next two years for the banking sector has significantly deteriorated due to deeper-than-expected recession in the euro zone and the slowing of the Polish economy, which means lower earnings, sales and higher costs of risk for banks in the coming years, Piotr Szpunar, head of financial system department at the central bank, said.

"Overall outlook for the sector's stability slightly deteriorated entirely due to international factors," Mr. Szpunar said, presenting the central bank's latest financial stability survey. "Domestically we are doing our part to prepare for risks lying ahead."

Because of restrictions on dividend payouts put in place by financial regulator KNF the banking sector significantly improved its resistance to potential shocks since the latest survey was conducted, Mr. Szpunar added.

Write to Patryk Wasilewski at [e-mail]