Polish banks accept most proposals on CHF loans

By bne IntelliNews January 29, 2015

Poland's commercial banks have agreed to all the proposals put forward by the Polish Banking Union (ZBP) to deal with the problems produced for borrowers by the hike in value of the Swiss franc, the head of the lobby group claimed on Janaury 29. That suggests a swift resolution with the government could be on the cards.

The banks have agreed to pass on the negative Libor rate to borrowers, to alter repayment schedules without demanding additional collateral, and allow customers to convert loans from CHF to PLN at market rates without any additional fees, Krzysztof Pietraszkiewicz announced. The goal is to keep monthly installments at last year's levels and the solutions are expected to take effect on February 1.

The ZBP made its proposals on Janaury 23, in a bid to stem any tougher action from the government. With elections due in the autumn, the ruling Civic Platform is under pressure to deliver populist policy. Prime Minister Ewa Kopacz had suggested on January 26 that forced conversion of the loans below market rates was being mulled.

However, that risked the stability of the banking sector, and other officials have pledged such an extreme move is not on the cards. Economy Minister Janusz Piechocinski made similar recommendations to those of the ZBP on January 28.

However, he also called for three-year payment vacations to be introduced for both CHF and PLN borrowers. That would put the banks under more pressure. They still need to finance the Swiss franc loans they have on their books from the time they agreed 500,000 or so CHF mortgages during the boom years. Thus far, the banks have only agreed to the ZBP's rescheduling suggestion.

The SNB shocked global markets on January 15 when it removed the cap on the Swiss franc to the euro. The central bank also slashed rates to -0.75% as it bid to outrun an expected inflow of speculative capital on the back of the launch of the European Central Bank's quantitative easing programme, which was announced on January 22.

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