By Patryk Wasilewski
WARSAW--Poland's third largest bank by assets BRE Bank SA
(BRE.WA) expects its corporate deposit and loan portfolios to
continue growing in the second half of 2012 despite a significant
economic slowdown, the bank's management board member told Dow
Jones in an interview Monday.
Przemyslaw Gdanski, who oversees the bank's corporate banking
operations, said he is satisfied with the bank's existing market
share and wants to focus on revenue rather than volume of new loans
and deposits.
Poland's economy faces fast deceleration this year and will
continue to slow further to 2.2% in 2013, according to forecasts
from the finance ministry, after it defied the European crisis in
2011 with a 4.3% economic expansion.
"We are keeping good growth rates in terms of credits and
deposits and we expect it to stay positive in second half," Mr.
Gdanski said. "Our market share is stable."
BRE's corporate deposits grew an annual 1.6% in the second
quarter and loans were up 34%, while the segment generated 172
million zlotys ($53.8 million) in pre-tax profit.
The bank had over a 6% share in corporate deposits at the end of
June and 9% in corporate loans.
In its second-quarter earnings report the bank warned outlook
for the second half is mired with risk and challenges to
performance due to slower economic output and the financial
situation of Polish companies deteriorating.
However, Mr. Gdanski said he's confident the bank shouldn't show
any substantial writedowns due to clients' troubles, like the
issues that troubled several Polish lenders exposed to the
country's ailing construction sector.
Poland's construction sector has been suffering the most during
the recent slowdown, due to very high competition, razor-thin
margins as well as excessive financial leverage and rising
costs.
A mixture of these factors caused severe financial trouble at
several major builders; PBG SA (PBG.WA) sought bankruptcy
protection while Polimex Mostostal SA (PMX.SA) had to seek a deal
with banks to delay some loan and bond payments.
The construction sector's troubles ricocheted into profits for
several major banks like PKO BP (PKO.WA) or Pekao (PEO.WA) that
created provisions for potentially unpaid loans.
However, outside of the construction sector most companies are
much better fitted to tackle the crisis in comparison with
2008-2009, Mr. Gdanski said, partly thanks to undergoing
restructuring and partly because bigger cash reserves were built up
after liquidity troubles.
So far increased caution is seen among companies in terms of
their investment decisions, he added.
"There is a clear drop in demand for investment loans," Mr.
Gdanski said. "Energy sector is the only exception with its plan to
spend PLN100 billion over the next 10 years."
In the latter case financing such an extensive program on the
domestic market is very challenging, Mr. Gdanski said, and
utilities will have to tap the global market either through
eurobond issues or loans from international consortiums.
Write to Patryk Wasilewski at patryk.wasilewski@dowjones.com