Poland Vows Liquidity to Getin, Idea After Late-Night MeetingBy

Poland Vows Liquidity to Getin, Idea After Late-Night MeetingBy
Adrian Krajewski, Maciej Martewicz, and Konrad Krasuski
Central bank ready to step in with help for troubled banks
Government official sees signals of potential risk for clients

Poland’s central bank said after a late-night meeting on Sunday that it was ready to provide liquidity for two lenders at the center of a corruption scandal that led to the resignation of the country’s financial regulator and roiled Polish bank stocks.

The Financial Stability Committee (KSF), which the central bank is part of, is prepared to step in with “necessary actions to support banking-system stability,” it said in a statement released early Monday that discussed the situation at Getin Noble Bank SA and Idea Bank SA, two lenders with the weakest capital ratios in the Polish banking sector. “All institutions forming the committee confirmed that the banking system is stable,” it added.

The committee will hold a press conference at the central bank at 9:30 a.m. in Warsaw.

The scandal that sent the shares of Polish banks to their biggest retreat in two years last week was triggered by a newspaper report that the country’s banking watchdog allegedly sought a bribe from the owner of both lenders, Leszek Czarnecki. Investors were worried the financial industry may have to provide cash to rescue the lenders.

Polish authorities appear to be increasingly concerned that the majority of funding at Getin and Idea comes from short-term retail deposits. Getin said last week it has seen increased interest of its clients in the bank’s situation.
Stable System

“Some worrying information emerged about the possibility of financial problems and potential problems for clients of the banks which Mr. Czarnecki co-owns,” Michal Dworczyk, head of the prime minister’s chancellery, told Polsat News on Monday. He added the KSF’s Sunday evening meeting was a sign that things are working well in the country and that the financial system is stable.



The KSF is chaired by the country’s finance minister, central bank governor, chief financial regulator as well as the head of the Bank Guarantee Fund. Getin Noble had 46.8 billion zloty ($12.4 billion) of deposits as of end-June, while the smaller Idea -- 20.7 billion zloty. Both lenders increased interest on some of their savings products, already one of the highest in the industry, in the wake of the scandal. Poland guarantees retail deposits up to an equivalent of 100,000 euro.

The zloty was little changed Monday, trading at 4.3143 per euro at 9:11 a.m. in Warsaw. It fell 0.6 percent last week, the worst performance among currencies from Central and Eastern Europe, according to data compiled by Bloomberg.

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