Poland

How can international banks operate

Non-EEA headquartered banks can operate in Poland either:

through a branch (which is an organisational unit of the non-EEA bank which performs on its behalf and for its benefit all or some of the operations under the authorisation granted to that bank; it operates pursuant to the by-laws issued by the non-EEA bank; branches of non-EEA banks must be entered in the companies register in Poland) or
through representative offices.

Moreover, EEA banks may pursue business in Poland:

through a branch (which is an organisational unit of the EEA bank which performs on its behalf and for its benefit all or some of the operations under the authorisation granted to that bank; this kind of activity can be undertaken based on the European Union’s freedom of establishment and single European passport principles);
through representative offices; and
within the framework of their cross-border activity.

A branch of a non-EEA bank is an organisational unit of the non-EEA bank which performs on its behalf and for its benefit, all or some of the operations under the authorisation granted to that bank. It operates pursuant to the by-laws issued by the non-EEA bank. Branches of non-EEA banks must be entered in the companies register in Poland.

A branch of a non-EEA bank is additionally obliged to use the business name of that non-EEA bank in the language of the country of its registered office, together with a designation of such bank’s legal status translated into Polish. It must:

maintain separate accounts in the Polish language and in accordance with the law applicable to banks with a registered office in Poland;
act in accordance with the approved by-laws; and
store all documents concerning its activities at the registered office of the branch.

A branch of an EEA bank is an organisational unit of the EEA bank which performs on its behalf and for its benefit all or some of the operations under the authorisation granted to that bank. This kind of activity can be undertaken based on the European Union’s freedom of establishment and single European passport principles.

An EEA bank can also carry out business in Poland within the framework of its cross-border activity; i.e. perform all or some of the operations under the authorisation granted to it without setting up a branch or representative office.

The activities of representative offices of non-EEA and EEA banks must be limited to advertising and promotion.

Branches and representative offices of non-EEA banks operate under the supervision of the Polish Financial Supervision Authority (PFSA).

As for the activities of EEA banks, supervision is generally performed by their respective Home State regulators, although the PFSA takes supervisory responsibility for:

liquidity standards for payment in relation to the branch;
control of activities before the branch is created;
the implementation of control measures in the case of the ineffectiveness of the home state regulators’ activities; and
periodic reporting in respect of the economic situation of supervised branches.

Supervision of the activities of a branch or representative office of a non-EEA bank in Poland may be exercised on the terms laid down in an agreement between the PFSA and the relevant Home State supervisory authority. These terms include both the scope and the procedure of the examinations to be conducted by the PFSA.

What considerations does your regulator take into account when an international bank wishes to open a branch in your jurisdiction?

When a non-EEA bank wishes to open a branch in Poland it has to receive authorisation from the PFSA. Such authorisation may be granted upon an application by the non-EEA bank following consultations with the Minister competent for financial institutions.

The application must contain the following information:

the business name, registered office and activities of the international bank;
the types of banking operations for which authorisation is being sought;
the registered office of the branch;
the amount of funds which the branch has been endowed with; and
details of at least two persons whom are proposed to be appointed as the manager or deputy manager of the branch.

In addition, the non-EEA bank must undertake that it will satisfy all claims against the branch that may arise from its dealings with other parties. Draft by-laws of the branch must also be submitted.

As for an EEA bank, its branch may commence business in Poland no earlier than two months after the PFSA has received certain information from the relevant supervisory authority in the home Member State. This information includes:

the name of the branch in Poland and the address where documents concerning its activities will be available;
a programme of operations specifying, in particular, the operations which the branch intends to perform;
a description of the organisational structure of the branch;
the names of the persons whom are proposed to be appointed as the branch’s manager and deputy manager; and
the amount of the EEA bank’s own funds and capital solvency ratio.

Within two months of receiving the information, the PFSA may impose extended requirements if it feels that this is justified by particular public interest matters , including:

consumer protection;
safety of trading; and
compliance with law considerations.

An EEA bank may commence its cross-border activity in Poland when the PFSA receives notification from the relevant supervisory authority in the home Member State specifying the operations which the EEA bank intends to perform.

A non-EEA bank as well as an EEA bank can also operate through a representative office. The procedure is the same as described above in relation to branches but the scope of the application is different and includes the following information:

the business name and registered office of the bank or credit institution as well as the profile of the activity conducted by the bank or credit institution filing the motion;
the registered office of the representative office and the scope of its operations; and
information on the candidate intended to be the representative of the bank or credit institution.

Is resolution an important factor in your supervisor’s determination of a branch?

The procedure of resolution has not yet been implemented into Polish law, thus it is not considered by the PFSA in its determination of a branch. The respective project is at an initial stage in the Polish Council of Ministers. The project envisages, for instance, that the Bank Guarantee Fund would be the resolution authority in Poland.

What are the regulatory reporting requirements placed on branches?

Branches of both non-EEA banks and EEA banks are required to file periodic activity reports with the National Bank of Poland, which are necessary to compile the balance of payments and the international investment position.

In addition, branches of EEA banks are obliged to provide the National Bank of Poland with prudential reporting, i.e. details on:

financial information;
data on their own funds and the requirements concerning them;
financial leverage;
liquidity;
stable funding;
significant exposure;
financing plans; and
losses from loans secured by real estate.

Notwithstanding the above, the non-EEA and EEA banks conducting business in Poland (irrespective of form) are obliged to inform their clients about:

its economic-financial situation; and
any participation in a guarantee system and its operating principles, including the subjective and objective scope of protection granted by the system, indicating in particular:

the amount defining the maximum guaranteed amount,
the types of entities that can be recognised as entitled to receive monetary consideration.

Do you allow dual licenses whereby a banking group may hold a banking license through the branch and have a subsidiary also holding a banking license?

Conducting a banking business in Poland through a branch does not preclude simultaneously carrying out banking activities through a subsidiary. The possibility of conducting banking business concurrently through both a branch and subsidiary of a given bank is not specifically regulated by Polish law; therefore, it is acceptable to hold two licenses at the same time—one as a branch and one as a subsidiary bank—as it is not explicitly prohibited. Polish law does not also establish any limitations in relation to the chronological sequence of establishing of branch or subsidiary—each form can be established in a first place and it is conditioned by conducting banking business in other form mentioned above.

As described in answers to previous questions, there is a limited number of factors on the basis of which the PFSA rules whether to consent to the opening of a branch in Poland, and the participation in a banking group is not one of them, even if the group is already conducting banking operations in Poland through its subsidiary. Obtaining authorization for a branch is not more difficult than the procedures of establishing corporate subsidiary however in Poland the banks prefer establishing a corporate subsidiary than branches. The banks also rarely conduct their business activity through dual licenses solution in Poland.