Poland’s banking sector generated PLN 13.3 billion in net profit in the first four months of 2026, down 19.9% year on year. The decline came despite growing lending activity, improving loan quality and strong liquidity across the sector. Lower net interest income, driven by narrowing margins, and a sharp increase in income tax were the main factors weighing on banks’ earnings.
Poland’s banking sector generated PLN 13.3 billion in profit in the first four months of 2026 — almost one-fifth less than a year earlier. The decline came despite growing lending volumes and improving portfolio quality. Two factors explain the weaker result: a narrowing net interest margin and a markedly higher tax burden.
Data as at end-April 2026 • Source: UKNF, based on NBP supervisory reporting data dated 2 June 2026 • Prepared: 29 June 2026
Profit down by one-fifth despite strong lending conditions
The banking sector’s cumulative net result at the end of April 2026 amounted to PLN 13.3 billion, down PLN 3.3 billion (−19.9%) from the same period in 2025. Banks earned PLN 3.8 billion in April alone — 13.6% more than in March — indicating that underlying monthly profitability remains healthy and that the weaker cumulative result is largely a base-effect issue.
The decline is all the more notable because it occurred in conditions that are otherwise supportive for banks: the loan book expanded, asset quality improved and the deposit base grew. Nevertheless, this year’s earnings trajectory is clearly below the paths seen in the previous two years.
Banking sector net profit — cumulative basis (PLN million)
Cumulative profit since the start of the year. The 2026 line runs below the 2024–2025 trajectories.
Source: UKNF, based on NBP supervisory reporting data. Own calculations.
What drove the difference: two factors weigh on earnings
Breaking down the year-on-year change shows that the decline has a narrower set of causes than its scale might suggest. Two items account for almost all of the deterioration: erosion in net interest income and an increase in tax paid.
From PLN 16.6bn to PLN 13.3bn — decomposition of the year-on-year earnings change (PLN million)
Impact of individual income-statement items on the change in net profit between April 2025 and April 2026.
Source: UKNF, based on NBP supervisory reporting data. Own calculations.
Net interest margin is narrowing
Interest income fell by PLN 6.1 billion year on year to PLN 54.3 billion, directly reflecting interest-rate cuts, which repriced asset yields faster than funding costs. Raising funds also became less expensive: interest expense declined by PLN 4.9 billion. As a result, net interest income fell by PLN 1.2 billion to PLN 36.0 billion. A telling signal is the net interest margin (NIM), which declined over the year from 3.76% to 3.44% — a decrease of 0.32 percentage points.
Higher tax accounts for the other half
Income tax was the second equally material drag, rising by PLN 2.7 billion year on year. This item — rather than risk or operating costs — accounted for most of the remaining decline. Importantly, provisions and impairment charges moved in the opposite direction, improving the result by PLN 0.9 billion, confirming that weaker profit did not stem from the crystallisation of credit risk.
| Item | IV 2025 | IV 2026 | Change y/y |
|---|---|---|---|
| Net interest income | 37 215 | 36 049 | −1 166 |
| Net fee and commission income | 6 611 | 7 026 | +415 |
| Operating expenses and depreciation | −21 145 | −22 545 | −1 400 |
| Result on provisions and impairment charges | −3 570 | −2 695 | +875 |
| Tax | −5 203 | −7 876 | −2 672 |
| Other items | — | — | +648 |
| Net profit | 16 606 | 13 307 | −3 299 |
These changes have also affected return on equity. Sector ROE declined from 15.70% to 14.89%, while the cost-to-income ratio (C/I) rose from 43.4% to 44.7% — a natural outcome when the denominator, income, shrinks faster than the cost base. Return on assets (ROA), meanwhile, remained at 1.31%.
Lending accelerates while portfolio quality improves
Beneath the weaker earnings result, the sector was operating at full speed on volumes. Gross receivables from the non-financial sector rose to PLN 1,325.4 billion, with the portfolio increasing by PLN 10.1 billion in April alone. Year on year, lending to households grew by 6.6% and lending to businesses by as much as 9.8%, signalling a return of corporate appetite for financing.
| Portfolio | Volume (PLN bn) | Change y/y |
|---|---|---|
| Residential mortgages (households) | 514,6 | +7,1% |
| Consumer loans | 230,6 | +8,6% |
| Working-capital loans | 198,6 | +11,0% |
| Investment loans | 187,2 | +13,4% |
Corporate investment lending grew the fastest (+13.4% y/y), clearly indicating that companies are not limiting themselves to financing day-to-day operations but are returning to development projects. Portfolio quality improved in parallel: the share of Stage 3 (credit-impaired) receivables in the non-financial sector fell from 5.0% to 4.5%. For household mortgages, it fell to just 1.2%, while for consumer loans it decreased from 6.5% to 5.6%.
Deposits grow while capital and liquidity buffers remain strong
Deposits from the non-financial sector rose by 9.4% year on year to PLN 2,174.9 billion. Household savings account for the largest share (PLN 1,539.0 billion, or 70.8% of the total). The loan-to-deposit ratio remained low at 59.0%, meaning that the sector is funding lending with a substantial surplus of stable deposits. The share of term deposits is also gradually increasing, to 31.1%, reflecting customers’ response to banks’ interest-rate offers.
Prudential fundamentals remained sound. The total capital ratio (TCR) of commercial and cooperative banks stood at 21.2%, while own funds rose to PLN 290.1 billion. Liquidity remains well above regulatory minimums: LCR reached 232% and NSFR 171%.
What this means for management teams
Lower sector profit does not signal a weakening of banks’ financial condition; it is a consequence of the interest-rate cycle and tax policy. For companies seeking financing, the environment is favourable: lending margins are under pressure, banks hold excess deposits and the supply-side appetite for investment lending is visibly recovering.
Market structure and methodological background
At the end of April 2026, the market comprised 30 commercial banks, 488 cooperative banks and 35 branches of credit institutions. The sector’s total assets amounted to PLN 3,384.9 billion, down 3.5% year on year. However, this decline and some concentration indicators (HHI fell to 789 and CR5 to 54.5%) are materially attributable to a methodological change. Since January 2026, Bank Gospodarstwa Krajowego has excluded receivables from and liabilities to pass-through funds from its reporting, while banks have reclassified these items from the financial sector to the general government sector. Year-on-year comparisons for these figures should therefore be interpreted with caution.
Outside the main picture, the Swiss-franc issue is also fading: the portfolio of CHF-denominated residential mortgages shrank to PLN 6.2 billion and 100,300 active contracts, continuing its long-term downward trend.
Key takeaways
- Sector net profit for January–April 2026 was PLN 13.3 billion, down 19.9% year on year, although current monthly profitability remains healthy (PLN 3.8 billion in April).
- The decline is almost entirely attributable to two items: compression in net interest income (NIM of 3.44% versus 3.76%) and a PLN 2.7 billion increase in tax.
- Risk costs worked in banks’ favour: the result on provisions and impairment charges improved by PLN 0.9 billion, while the NPL ratio fell to 4.5%.
- Lending is accelerating: corporate loans rose 9.8% year on year, including a 13.4% increase in investment loans — a sign of recovering business appetite for growth financing.
- Capital (TCR 21.2%) and liquidity (LCR 232%, NSFR 171%) positions remain strong, while the loan-to-deposit ratio stands at 59.0%.
Data source and methodology. Data: Polish Financial Supervision Authority (UKNF), Commercial Banking Department, Banking Sector Analysis Team — monthly report based on NBP supervisory reporting data as at the end of April 2026 (reporting date: 2 June 2026). Own calculations based on UKNF data. ROE/ROA/NIM are calculated as the ratio of values for 12 consecutive months to 13-month averages; C/I and R/I are calculated as 12-month rolling averages. Receivables are presented at gross value and measured at amortised cost and fair value through other comprehensive income (excluding debt instruments). Year-on-year changes in total assets and concentration indicators partly reflect the change in the classification of BGK items from January 2026 (NBP Management Board Resolution No. 45/2025).
