December 12, 2014 / 10:53 AM / 5 years ago

Polish regulator seeks bankruptcy for credit union SKOK Wolomin

WARSAW, Dec 12 (Reuters) - Poland’s financial regulator KNF is seeking court approval for ailing credit union SKOK Wolomin to be declared bankrupt, a step that would allow depositors to get their money back through the country’s bank guarantee fund.

SKOK Wolomin has 2.3 billion zlotys ($684 million) of deposits covered by Poland’s Banking Guarantee Fund.

It is the latest Polish credit union to run into trouble in an industry which has come under fire for weak management and poor supervision in the past.

KNF is stepping up oversight, aiming to mirror its successes in the country’s wider banking industry, which is considered one of the healthiest in Europe.

Polish credit unions account for just 1.1 percent of banking sector assets, with SKOK Wolomin having around 3 billion zlotys of assets.

“There will be no panic, as it is clearly visible that the process of credit unions restructuring is well managed. Some credit unions are being taken over by banks, while others’ deposits will be paid by the (Banking Guarantee) Fund,” BESI analyst Kamil Stolarski said.

In the past few months, Bank Pekao SA received an approval to take over credit union SKOK Kopernik, while Alior Bank took over SKOK Swietego Jana z Ket.

Poland recently raised the annual contribution banks are required to make to the Fund by a total of 800 million zlotys for 2015, a sum equivalent to around 4 percent of their forecast net profit for the year.

$1 = 3.3614 zlotys Reporting by Marcin Goclowski; Editing by Mark Potter

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