Poland currently has several hundred entities that can conduct banking activities. In organizational and legal terms, these entities can be divided into commercial banks and cooperative banks. What are commercial banks in Poland and how do they differ from cooperative banks?
Commercial bank, that is, what kind of bank?
We can call a commercial bank this financial institution, which, which will sound rather general, deals with the circulation of money between consumers (the population) and economic units. A commercial bank maintains accounts (accounts) for the needs of citizens and deals with accounting and money handling. A commercial bank is run as a separate enterprise, and earns money from, among other things, commission systems, fees on services rendered and interest on loans granted.
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The task/purpose of commercial banks is also to provide loans and credits, and the overriding goal – looking from the business side – is to generate profits for shareholders. Commercial banks in Poland must be run in the form of a joint-stock company, which distinguishes them from the Cooperative Savings and Settlement Banks, about which in a moment.
What do commercial banks do?
As we wrote above, commercial banks are tasked with providing accounting and monetary services to citizens, as well as granting loans and credits. These can be both cash loans (intended for consumer purposes) and targeted loans, i.e. car loans, housing loans, photovoltaic loans, student loans, etc.
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In addition to this, under the Banking Law, commercial banks can also purchase and sell real estate, incur obligations related to the issuance of securities, conduct consulting and advisory activities, and provide guarantees.
What are the types of banks in Poland?
In principle, banks can be divided according to various criteria, but most often we can meet with the division of banks by legal form. As we mentioned earlier, a commercial bank can be considered those institutions that operate in the form of a joint stock company. In addition to it, banking activities can also be carried out in other organizational and legal forms, which include cooperatives and state-owned banks.
Cooperatives are SKOKs, or Cooperative Savings and Settlement Funds, as we all know them. There are several hundred of them in Poland, and it would be impossible to list each of them in this post.
“The most important bank” in Poland is, of course, the National Bank of Poland colloquially known as the central bank. It deals with monetary policy. What does this mean? According to information published on the NBP website, the institution:
Organizes the monetary settlement system, conducts day-to-day interbank settlements and actively participates in the interbank money market. The National Bank of Poland is responsible for the stability and security of the entire banking system, acts as a bank of banks, in addition, supervises payment systems in Poland.
The National Bank of Poland, or more precisely the Monetary Policy Council, separated within its structures, is responsible with the current level of interest rates in Poland. Among other things, interest rates on loans, deposits and deposits also depend on them. The National Bank of Poland is not in charge of the accounts of citizens, nor of granting loans to the public.
Returning to the classification of banks in Poland, in addition to the organizational and legal structure, we can also divide banks according to the origin of the capital with which they are fed. Examples of banks with foreign capital include Citi Handlowy (USA), mBank (Germany), Bank Millennium (Portugal), BNP Paribas (France), Crédit Agricole (France), ING Bank Slaski (Netherlands), Santander Bank Polska (Spain).
In contrast, PKO BP, Bank Pocztowy (owned by PKO BP and Poczta Polska), Bank Pekao SA, with Polski Zakład Ubezpieczeń SA as the main shareholder, Bank Ochrony Środowiska, Getin Noble Bank, Alior Bank, and Plus Bank, although the majority stake belongs to a foreign company, with Zygmunt Solorz-Zak behind it.
Poland’s largest commercial banks
In terms of assets held, the largest commercial bank in Poland has invariably been PKO Bank Polski for many years, naturally. Its total assets in the second quarter of 2021 amounted to more than 360 billion zlotys. PKO BP is the absolute leader in this respect, as Pekao SA, which is in second place, has “only” 247 billion in assets.
Immediately before, i.e. in third place, was Santander Bank Polska, whose assets amounted to more than 233 billion zlotys in mid-2021. It is followed by ING Bank Slaski, BNP Paribas, Bank Millennium, Alior Bank, Citi Handlowy, Getin Noble Bank.
Commercial bank vs. cooperative bank. What is the difference?
The main difference between a commercial bank and a cooperative bank is the organizational and legal form. As we mentioned earlier, commercial banks operate in the form of joint stock companies. A cooperative bank is a “cooperative”. Both a company and an individual, including a customer of the bank, can become its member.
The purpose of cooperative banks, unlike commercial banks, is not only to multiply capital, but to achieve the goals of the cooperative and its members. According to the latest data, there were about 530 cooperative banks operating in Poland in 2021. They are characterized by the fact that they are usually located in smaller towns, and are powered by Polish capital. Cooperative banks operate on the basis of the Law on Cooperative Law.
