Poland's banking sector faces an overall net loss of about 2-3 billion zlotys ($582-873 million) due to higher financing costs and credit risk, the head of Poland's leading bank PKO BP PKOB.WA said on Tuesday.

The banking sector's results in Poland this year may be negative. That means we will not only eat up a 14 billion zloty profit from 2008, but also generate a 2-3 billion loss, CEO Jerzy Pruski told a parliamentary commission.

The results of Poland's banking sector in the fourth quarter of 2008 were disappointing as many banks had to make significant provisions for toxic foreign exchange options.

As sources of cash dry up amid the global crisis and the economy slows, the banks expect a tough year ahead as lending requirements become stricter and loans get more expensive.

(Reporting by Gabriela Baczynska and Maciej Onoszko, writing by Patryk Wasilewski; Editing by Andrew Callus)

Poland