How to navigate the rough seas of banking? A new Polish banking paradigm

Favorable winds seem to have returned to the banking industry, with the past 18 months being the best period for global banking since at least 2007. While winds are favorable, it is not all smooth sailing: banks increasingly have to change course to navigate emerging challenges, like the rise of digital innovation, new competitors, and an ever-evolving risk landscape. On both a global and Polish scale, banks are navigating rough waters to seize the opportunities of this time and respond to its challenges.

In 2022, the global banking sector delivered the highest return on equity (ROE) in more than a decade, averaging 12 percent. Yet globally as well as in Poland, the significant increase of return on equity was largely due to higher interest rates resulting from central banks’ efforts to counter inflation.

One dimension remains unchanged, however. Valuations of traditional banks are much below the average of the rest of the economy. This reflects the limited expectations capital markets have for the profitability of banks and the overall growth potential of the sector. The expected value creation of banks takes into account the dependence of this leveraged business on macroeconomic changes. Banks’ individual success will depend on how carefully they can navigate around those discontinuities.

Globally, balances and transactions are increasingly moving from traditional banks to non-traditional institutions and market segments that are capital-light and subject to other regulations. Specialized financial service providers perform better, globally, as demonstrated by their return on equity and valuation versus traditional banks (Exhibit 1). In Poland, the trend is not visible, except for payments, as in most cases it is banks that expand their offers to include savings and credit products.


Profits in the Polish banking sector at the end of 2022 totaled 13 billion PLN, demonstrating the capacity of banks in Poland to accumulate capital and further finance economic growth, despite the financial effect of reserves for CHF loans and credit holidays that totaled around 26 billion PLN. The current lending potential of Poland’s banking sector is estimated at around 420 billion PLN. The use of available tools alone would allow banks to achieve approximately 1 trillion PLN in lending potential (Exhibit 2).


Banks in Poland are facing challenges that require changes in their business and operating models. They include the increasing digitization of banking services and the use of generative artificial intelligence (Gen AI) in internal processes. The key element that distinguishes banks from the competition is the relationship with the customer, which, with high customer satisfaction, translates into loyalty to the institution. This relationship revolves around addressing a wide range of their needs, but also maintaining a balance in sharing benefits and risks between banks and customers.

A balanced distribution of benefits and risks will be particularly important from the banks' perspective in the face of increasing consumer protection. In recent years, banking sectors both in Poland and abroad have seen interventions to protect and strengthen the position of customers, which had a significant impact on banks’ capital position (Exhibit 3). Banks should consider that when taking strategic decisions about their future growth directions and shaping their business practice, in which care for customer interests and personalization of services will take into account a balanced distribution of benefits and risks.


Skillful navigation among the opportunities and challenges facing banks will determine their competitiveness. The following initiatives might be considered as key directions for the growth of banks in Poland:
  1. Supporting the strategic investment needs of the Polish economy
  2. Facilitating Poland’s energy transition
  3. Holistically satisfying customer needs
  4. Protecting and empowering consumers in relation to the banking sector
  5. Promoting core values of the sector in the eyes of the public