The Polish Bank Guarantee Fund (BFG) decided today to start the forced restructuring of Getin Noble Bank (GNB), the country's tenth biggest bank, due to its poor financial situation and risk of bankruptcy.That followed yesterday's decision by the Financial Supervision Authority (KNF) to impose a fine of 20 million zloty (€ 4.12 million) on GNB's owner, Leszek Czarnecki, formerly Poland's richest man.The agency said he had failed to adequately address the bank's situation, showing a “reprehensible” attitude that “can no longer be tolerated”.🔸 #KNF imposed a fine on Leszek Czarnecki in the amount of PLN 20 million for failure to meet the investor's commitment in connection withwith taking up shares of Get Bank SA (currently Getin Noble Bank SA) 🔸 More: https://t.co/HWhxu7gTL9 pic.twitter.com/PyYdk0Mh53- KNF Office (@uknf) September 29, 2022GNB has around 300 branches and 2,800 employees.Last year, however, it recorded a loss of more than 1 billion zlotys and, in its interim report published on 29 April this year, the bank noted it had informed the KNF about the possibility of bankruptcyUnder BFG's decision, GNB has officially ceased to exist and its activities, including customer savings and loans, will be transferred as of Monday to a newly established bank co-owned by BFG and the Commercial Banks Protection System, created by the eight largest banks in Poland.“For customers, nothing will change,” BFG said in a statement.They will continue to be served as before, having access to all their savings, being able to use cards and ATMs, and seeing no changes to bank account numbers, login details, and passwords.The rise and fall of Poland's once richest manCzarnecki had ambitions to create one of the largest banks in Poland, but an aggressive lending policy led GNB into financial trouble when the loans started to go sour.When, in 2018, newspapers Gazeta Wyborcza and the Financial Times revealed that the then chairman of the KNF had allegedly requested payment from Czarnecki for preferential treatment of his struggling GNB, the public was made aware for the first time of the bank's difficult situation.The disclosure of the conversation, secretly recorded by Czarnecki, and the bank's problems caused customers to rush to withdraw cash, severely undermining confidence in GNB.Later, the bank was hit by a wave of foreign-currency mortgage customers heading to court to challenge disputed indexation clauses.According to reporting from @gazeta_wyborcza and @FT, bank owner Leszek Czarnecki has accused the head of Poland's financial regulator of soliciting a bribe in exchange for "support and protection".Their meeting was secretly recorded.https://t.co/l9QsmCF0C0- Notes from Poland 🇵🇱 (@notesfrompoland) November 13, 2018While many banks in Poland had to deal with the issue, GNB was already in a difficult situation to begin with: it did not meet Polish capital requirements;it did not have any significant provisions for foreign-currency mortgages;and its portfolio of mortgages of this type was then almost four times larger than its equity.In 2020, after the pandemic hit, interest rates were cut almost to zero, which brought down interest earnings, further exacerbating the bank's situation.An additional blow was the introduction of so-called “credit holidays” this year, the negative impact of which GNB recently estimated at 165 million zlotys.The losses recorded by GNB, coupled with insufficient recapitalization by the main shareholder, led to the draining of equity.Since the beginning of 2016, GNB has failed to meet Polish capital requirements, which are higher than those of the EU (which GNB has failed to meet since 2021), reports Business Insider Polska.Three banks - BNP Paribas, Getin Noble and Bank Pocztowy - have been charged with “violating the interests of consumers” when implementing the recently introduced “credit holidays” that allow mortgage repayments to be temporarily suspended https://t.co/rUIRi5eqqi- Notes from Poland 🇵🇱 (@notesfrompoland) September 6, 2022Leszek Czarnecki last recapitalised the bank in 2018 with less than 500 million zloty, not enough to significantly help the bank, whose capital gap was estimated to be at least 3.5 billion zlotys before the mandatory restructuring was launched (this amount did not include potential losses on foreign-currency mortgages).“Leszek Czarnecki is the dominant entity, holding directly and through subsidiaries the majority of shares in the bank's share capital,” said the KNF in the statement yesterday explaining its fine.“He is therefore familiar with the bank's financial situation, its capital needs.”“In spite of this, he has not fulfilled his investor commitment and is not taking measures that would lead the bank to comply with regulatory capital requirements,” it added."In the case of Getin Noble Bank SA, the capital ratios grossly deviate from the required values."“It is Leszek Czarnecki's responsibility in such a situation to ensure that the Bank's capital is replenished,” continued the statement."The passive attitude of Leszek Czarnecki is, in the commission's view, highly reprehensible and could no longer be tolerated."Polish banks record annual loss for first time in almost three decadesMain image credit: PAWEL KOZIOL / AGENCJA GAZETAAlicja Ptak is senior editor at Notes from Poland and a multimedia journalist.She previously worked for Reuters.New data from Łódź and Częstochowa show further declines in attendance at Catholic catechism classes in schools.A recipient of Poland's Teacher of the Year award calculated that she spends thousands of zloty a year from her own pocket.Energy & Climate, News, Politics, SocietyNearly 250 tonnes of dead fish have been removed from the Oder river since the end of July.Sep 26, 2022 |Business, Energy & Climate, Hot news, News, PoliticsThe Baltic Pipe, due to open this week, will be able to transport up to twice as much gas as planned from Norway to Poland this year.Sep 26, 2022 |Hot news, News, Politics, SocietyA separate nationalist protest against the “Ukrainisation of Poland” in Warsaw drew only a small crowd.Sep 26, 2022 |Hot news, News, Politics“Europe is becoming a Europe of real values,” says Prime Minister Mateusz MorawieckiWe are an independent, nonprofit media outlet, funded through the support of our readers.If you appreciate the work we do, please consider helping us to continue and expand it.Chocimska 7/8 30-057 Kraków, Poland NIP: 677 243 97 04 KRS: 0000758506Copyright © 2022 Notes From Poland |Design jurko studio |Code by 2sides.plSenior Research Fellow at the Global Europe Center, University of Kent.Weronika Strzyżyńska is currently studying journalism at Goldsmiths as a Scott Trust Bursary recipient.She has written on issues immigration and Brexit for New Statesman and ProspectAgnieszka Wądołowska is managing editor of Notes from Poland.She has previously worked for Gazeta.pl and Tokfm.pl and contributed to Gazeta Wyborcza, Wysokie Obcasy, Duży Format, Midrasz and Kultura Liberalna "Daniel Tilles is editor-in-chief of Notes from Poland and assistant professor of history at the Pedagogical University of Krakow.He has written on Polish affairs for a wide range of publications, including Foreign Policy, POLITICO Europe, The Independent and Dziennik Gazeta Prawna.Stanley Bill is the founder and editor-at-large of Notes from Poland.He is also Senior Lecturer in Polish Studies and Director of the Polish Studies Program at the University of Cambridge, where he works on Polish culture, politics and history.Stanley has spent more than ten years living in Poland, mostly based in Kraków and Bielsko-Biała.He founded Notes from Poland in 2014 as a blog dedicated to personal impressions, cultural analysis and political commentary.He is committed to the promotion of deeper knowledge and understanding of Poland.He is the Chair of the Board of the Notes from Poland Foundation.Professor of European Studies at Oxford UniversityProfessor at the Institute of History of the Jagiellonian UniversityExecutive Director of Taube Family FoundationAssociate Professor at the Institute of Political Studies of the Polish Academy of Science, member of the Polish parliaments