Polish banks offer to provide aid if zloty weakens further
(1 June 2015 – Europe) Polish banks are under pressure to follow Hungary and Slovenia in converting Swiss franc loans back into their own currencies, a move that could mean large losses for the country’s banks, but help over half a million households paying more on their mortgages.
Ten banks, including PKO Bank Polski SA, MBank SA and Getin Noble Bank SA agreed to provide aid if the zloty weakens against the Swiss currency, Krzysztof Pietraszkiewicz, the head of the Polish Banking Association, said on 27 May.
The plan may cost lenders 350 million to 600 million zloty (A$121 million to A$204 million), he said.
Currently 565,000 households have had to endure a jump in loan repayments after the zloty suffered a more than 45 percent loss against the franc since 2008.
Andrzej Duda, who won the presidential election on 24 May, proposed to convert the loans to zlotys at the rate they were taken out in, which would mean massive losses for the country’s banks.
Under the banks’ proposal, the plan would take effect if the zloty weakens to between 5 and 5.33 against the franc.
The assistance from the so-called “stabilisation” fund will be restricted to Swiss-franc borrowers earning less than the national average.
People seeking aid can’t have apartments bigger than 75 square meters and houses larger than 100 square meters.
Those conditions would limit use of the fund to 10 percent of all franc mortgages, or 20 percent of clients, according to Pietraszkiewicz.
Mortgage holders who opt for help will be obliged to convert their loans into zloty if the domestic currency gains to around 3 per Swiss franc, Pietraszkiewicz said.
Lenders are ready to discuss the mortgage loan issue with Duda, Pietraszkiewicz said.
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