The Polish financial sector

The Polish banking sector is an open system. Two of the 10 largest banks – namely: mBank SA and Alior Bank SA – entered the market fairly recently (2000 and 2008, respectively) without a legacy IT architecture dated tens of years back and instead with bunch of fresh ideas to conquer the market with. Currently the system consists of 30 commercial banks, 536 local cooperative banks (most of which are a part of two large associations: BPS and SGB) and 25 cooperative savings and credit unions (SKOK).

The TOP 5 banks by assets and number of clients, excluding unions and associations, are:

Two domestic institutions with state capital:
• PKO Bank Polski SA
• Bank Polska Kasa Opieki SA

Banks owned by large international groups:
• Santander Bank Polska SA
• ING Bank Śląski SA
• mBank SA

The market has seen strong push for consolidation for the past several years, resulting with 13 mergers during last 20 years.

Expert opinion

The domestic financial sector employs a total of over 154,000 people, operates a network of 6,200 branches and manages a balance sheet total that now exceeds PLN 2.2 trillion. In the last 10 years, this value has almost doubled. This means that, despite the increasing regulatory burdens, the sector has been growing at an average annual rate of approx. 7%.

By the end of June 2020, PLN 1.6 trillion of deposits were placed in banks, of which PLN 877 billion represented private funds. The value of loans and credits granted to this group of customers amounts to approximately PLN 665 billion. The largest part of this value, almost 70%, consists of mortgages. Despite the large number of entities operating in the sector, the competitive space in the innovation area is mainly shaped by the largest players. This is a result of the high concentration of financial results in a sector where about 85% of the net profit is generated by the 8 largest banks. With their resources and scale of operations, they invest in the continuous development of digital channels and seek potential competitive advantages and opportunities to improve their customers’ experience.

Author: Łukasz Sieradzan-Sobolewski, Strategy Department of PKO Bank Polsk