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Finance

Polish banks seek state risk-sharing to fund defence build-up

Published by Global Banking & Finance Review

Posted on October 15, 2026

2 min read

· Last updated: October 15, 2026

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Polish Banks Request State Risk-Sharing in Defence Industry Financing

By Marta Maciag

Polish Banks Seek Support for Defence Industry Financing

SOPOT, Oct 15 (Reuters) - The Polish Bank Association, which represents most of the country’s lenders, is in talks with public institutions to share the risk of financing defence projects, its vice president Agnieszka Wachnicka said on Thursday.

European SAFE Loans and Defence Spending

Poland has secured €43.7 billion ($49.0 billion) in European SAFE loans targeting the domestic defence industry. It is expected to spend around €53 billion on defence in 2026, the fourth-highest in the European Union behind France, Italy and Germany, NATO data shows.

Challenges in Defence Financing

  • Rapid Obsolescence of Military Technology

    Military technology can become outdated faster than the loans financing it, Wachnicka told Reuters, citing drones as an example

  • Regulatory Limits on Bank Exposure

    Regulatory limits on banks' exposure to single sectors and regions can also prevent them from taking on more defence projects, Wachnicka said

  • SAFE Loans: A Partial Solution

    "SAFE is a big help here ... but it is still not enough," she added

Bank Handlowy's Role and Dual-Use Technology

  • Bank Handlowy's Guarantee Lines

    Bank Handlowy, Citigroup’s Polish unit, has granted significant guarantee lines to defence firms, CEO Elzbieta Czetwertynska said

  • Importance of Dual-Use Technology

    Czetwertynska said dual-use technology is becoming more important, as private companies look for ways to make large defence investments pay off if demand falls

($1 = 0.8924 euros)

(Writing by Rafal Nowak, editing by Milla Nissi-Prussak)

Key Takeaways

  • Poland is among the EU’s largest defence spenders—expected to allocate roughly €53 billion in 2026, ranking fourth in the bloc behind France, Italy, and Germany (approx. 4.7 % of GDP)
  • SAFE loans from the EU (€43.7 billion) provide critical support, but banks face challenges: rapid obsolescence of military tech and regulatory exposure limits
  • Bank Handlowy is extending significant guarantee lines; dual‑use tech is emerging as a tool to make defence investments more sustainable in volatile demand environments

Frequently Asked Questions

Why are Polish banks seeking state risk-sharing for defence funding?
Polish banks want to share risk with public institutions due to regulatory limits on sector exposure and the fast-changing nature of military technology.
How much has Poland secured in SAFE loans for defence?
Poland secured €43.7 billion in European SAFE loans to support its domestic defence industry.
What is Poland’s expected defence spending in 2026?
Poland is expected to spend around €53 billion on defence in 2026, the fourth-highest in the European Union.
What challenges do Polish banks face in defence sector financing?
Banks face regulatory limits on sector exposure and concerns that military technology may become outdated before loans mature.
How are private companies mitigating risk in defence investments?
Private companies are focusing on dual-use technology to ensure investments pay off even if defence demand falls.

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