WARSAW (Reuters) – Problems surrounding Swiss-franc mortgages taken out in Poland result mainly from the increase in value of the franc, not from clauses in the contracts, Polish financial regulator KNF said on Thursday in an opinion submitted to the Supreme Court.
Banks and mortgage holders were left in limbo in May when the Supreme Court delayed guidelines on how lower courts should treat cases about foreign currency loans, prolonging uncertainty about how a major risk facing the financial sector will be resolved.
Thousands of Poles took out loans in francs more than a decade ago to take advantage of lower interest rates, but faced far higher costs when the value of the Swiss currency shot up. Many have taken banks to court over clauses they say are abusive.
“(The problem) mainly results from changes in the zloty exchange rate … and mass assumption by clients (consciously or
unconsciously) of the currency risk over the horizon of several dozen years, and not from legal aspects concerning the structure of contracts,” the KNF said.
In December, the KNF proposed a plan for out-of-court settlements in which the loans would be treated as if they had been taken out in zlotys, but most banks are waiting for the Supreme Court decision before deciding how to proceed.
On Thursday the KNF reiterated its call for disputes between banks and mortgage holders to be settled in an “amicable” way.
It repeated that it estimated the cost of its settlement plan at 34.5 billion zlotys ($9.05 billion). In the worst-case scenario for banks, the KNF estimates the cost of court cases could be as much as 234 billion zlotys.
($1 = 3.8140 zlotys)
(Reporting by Alan Charlish and Pawel Florkiewicz; Editing by Emelia Sithole-Matarise)
