Poland may water down FX loans conversion plan if costs too high
A Polish minister signalled on Wednesday the ruling Law and Justice (PiS) party may water down the president’s plan to convert Swiss franc mortgages into zlotys if it is too expensive for banks.
President Andrzej Duda has set out a plan to saddle lenders with the costs of converting Swiss franc loans into zlotys, which according to analysts could cost billions of euros.
The plan is aimed at helping more than half a million Poles with Swiss franc mortgages and follows in the steps of Hungary, which converted such loans in the past few years, imposing heavy losses on its banks.
Henryk Kowalczyk, a minister in the prime minister’s office, said that the ruling party’s support for the president’s bill will depend on its estimated cost for banks.
“We will see the impact. I would not like to prejudge before the impact is calculated, because if it is several tens of billions (of zlotys) then one would indeed have to consider,” said Kowalczyk, who coordinates the government’s work on new legislation.
“But if it would be a few billion (of zlotys), then this would be a completely different case. But if it would be a dozen or so billions (of zlotys) then one may have to consider whether or not to spread it over time,” he told private radio RMF FM.
One billion zlotys equates to around $245 million or 225 million euros.
Around 60 percent of Poland’s banking sector is owned by foreign groups such as Spain’s Santander, Italy’s Unicredit or Germany’s Commerzbank.
Shares at Poland’s lenders with the biggest exposure to forex loans, such as PKO BP, BZ WBK, mBank , Millennium, Getin, BPH have fallen this year by 13.5 percent on average.
The president, who is a close ally of the conservative, eurosceptic PiS, asked the regulator KNF to assess the cost of his plan. If it is to become law, it has to be passed by the PiS-controlled parliament.
Most of the Swiss franc mortgages were taken out in 2007 and 2008. The franc has risen by 80 percent against the zloty since then, particularly after the Swiss central bank scrapped a peg on its currency a year ago.
Polish central bank governor Marek Belka warned in December that a simultaneous introduction of a tax on bank’s assets and the conversion of Swiss franc mortgages would cause a “serious crisis” for some banks. ($1 = 0.9211 euros) ($1 = 4.1050 zlotys)
Source: Reuters – Poland may water down FX loans conversion plan if costs too high
