Poland to announce law on Swiss franc mortgages

By bne IntelliNews July 8, 2015

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The Polish government plans to introduce a draft bill to parliament containing a "solution" to the troubles of Swiss-franc mortgage holders this week, the prime minister said late on July 7. The sudden move came the same day that the opposition offered details of its populist proposals for lenders, showing how the issue has moved centre stage ahead of the general election this autumn.

Poland's banking sector has been under pressure throughout the year. The Swiss franc's surge in early 2015 raised installments for the country's 550,000 or so forex borrowers dramatically. 

"We will solve the problem of CHF-borrowers," Prime Minister Ewa Kopacz told public TV channel TVP Info, according to PAP. "A draft bill will be submitted to the lower house speaker today or tomorrow." 

The PM offered few details of the sudden legislation. However, she did note that the proposals will not include a forced conversion of forex loans into local currency. "We also want to help Poles in a difficult situation who took mortgages in Polish zloty," Kopacz added.

The government has been resisting calls to enforce a painful solution on lenders, but has also failed to act to implement any systemic solution. That has extended the pressure, with the risk depressing banks' share prices and M&A in the sector. 

However, with support for the ruling centre-right Civic Platform party collapsing in recent months, it is playing catch up to the populist Law and Justice party (PiS). On July 7, PiS confirmed details of its plan to impose a tax on lenders if it wins power in elections due in October. It will levy a 0.39% charge on bank assets, Beata Szydlo, the group's candidate for prime minister told reporters. PiS hopes to raise PLN5bn per year from the new tax.

The party, which has held a solid lead in polls since its candidate Andrej Duda won the presidential election in May, has also confirmed it plans to force lenders to convert CHF-denominated mortgages to zloty at historical rates. The Polish Banks Association says that would cost the sector PLN30bn.

Coming on top of a sharp fall by the zloty against the Swiss franc - which as a safe haven is strengthening as the Greek crisis rumbles on - the details of the plan did little for Polish shares. Getin Noble Bank, which is saddled with one of the country's largest ratios of CHF loans , plummeted 9.5% to a record low of PLN1.14 on the Warsaw Stock Exchange.

The damage was not confined to Getin however. Poland's biggest bank, state-controlled PKO dropped 1.9%, to leave it 21.8% down over the last 12 months. Pekao, the local unit of UniCredit also suffered. The country's second largest lender lost 3.5% to help pull the WIG20 index down by 2.35%.

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