Moody's lowers Poland banks view to negative

The outlook on Poland's banking system has been changed to negative from stable, reflecting the expectation that the operating environment for its banks will deteriorate, Moody's Investors Service said in a new report.

The negative outlook expresses expectations for the fundamental credit conditions in this sector over the next 12 to 18 months, Moody's said.

Weaker economic growth will trigger asset-quality deterioration and increase funding competition, limiting the banks' ability to expand their lending, the agency said, and negatively impact revenues.

In this environment, Moody's said it anticipates that banks will accumulate liquidity and pursue defensive strategies, thus reversing the positive momentum gained in first half 2011.

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