Abstract:

The banking sector in Poland belongs to one of the most stable and modern sectors in Europe. Its strong foundations so far have been manifested in a practically negligible number of bankruptcies and a relatively good handling of the effects of the subprime crisis in 2008-2010. Due to the increase in deposit guarantee costs, the introduction of the tax on bank assets, the foreign currency housing loan portfolios, the strong reduction of interest rates as well as multidimensional stress due to COVID-19 pandemic, this sector faced the greatest challenges in its modern history.

The purpose of this article is to identify the main challenges facing the banking sector in Poland in connection with the COVID-19 pandemic and to indicate the directions of potential changes in the banking business model as a response to such challenges. Literature studies and the multidimensional scaling of proximity (PROXSCAL) model were used to evaluate the impact of the major factors onto banking development in Poland.

The study indicated that large and medium-sized banks react similarly to conditions affecting their financial results, a slightly greater differentiation is visible in the group of key largest banks, and the greatest disproportion concerns some medium and small banks with an aggressive sales model. The paper also indicates that banks start to implement the investment banking model (based on commissions and fees) and compensate decline in interest rates by strong reduction of interest on deposits.