National Bank of Poland could provide Swiss francs for conversion of loans suggests presidential aide

By bne IntelliNews May 17, 2016

The National Bank of Poland (NBP) could be instrumental in carrying out the planned conversion of Swiss franc-denominated mortgages by providing lenders with currency to pay off their foreign liabilities, a presidential aide told local media on May 17.

The office of the President Andrzej Duda has been at work to draft a law allowing conversion of over 500,000 mortgages denominated in the Swiss franc. After a spike in the value of the CHF in early 2015 saw repayments spike, discussion over how to alleviate the costs for banks of converting the loans has been ongoing. The president's office suggests it will have the bill ready next month.

After the president had to back down on his earlier idea for the conversion, which the financial market regulator KNF assessed would cost around PLN70bn (€16bn), his office has been working at a less costly solution. The new idea may be for the NBP to provided Polish lenders with Swiss francs so they can pay back their CHF liabilities abroad, a presidential aide told Dziennik Gazeta Prawna.

“From the technical side, [to carry out conversion] banks will have to buy francs to pay them back to those who are financing them or to terminate transactions which are hedging the exchange rate. With an operation on such a scale this could have an impact on the FX market. So francs could be provided by the central bank," Marek Dietl told the newspaper.

He added, however, that it is only an idea at the moment; it will take until June for the president’s office to table a new proposal.

“If the NBP were to acquire CHF in an amount sufficient for the conversion, even if the conversion did not happen, it would have a strengthening effect on the PLN. These comments mean that the president’s team of experts is serious about resolving the problem, which means that the impact on banks could be negative,” Erste writes in reaction to the new proposal.

The conversion is one of the ideas that has been mentioned a number of times by rating agencies or the International Monetary Fund as a factor potentially damaging to Poland’s investment climate and economic growth.

Related Articles

RBI doubles net profit y/y in Q1 as Russian business recovers

Raiffeisen Bank International (RBI), the second largest bank operating across Central and Eastern Europe by assets, reported that net profit almost doubled year-on-year to €220mn in the first ... more

World Bank forecasts a 0.4% y/y decline in Belarus's GDP for 2017

The Belarusian economy will decline by 0.4% year-on-year in 2017, followed by a modest growth of 0.7% in 2018 and 1.2% in 2019, the World Bank forecasts in its Belarus Economic Update published on ... more

EIB and Belarus sign Framework Cooperation Agreement

The European Investment Bank (EIB) and Belarus inked the Framework Agreement on Cooperation on May 15, which paves the way for the lender to invest up to €200mn in Belarusian projects, the Foreign ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss