Poland's banks have put forward a plan to tackle the country's Swiss franc mortgage problem that would cost them less than 5 percent of the solution proposed by President Andrzej Duda, the Puis Biznesu newspaper reported on Monday. More than half a million Poles have mortgages in foreign currencies, mainly the Swiss franc, taken out to capitalise on lower interest rates abroad.
But a surge in the value of the Swiss currency has left many struggling to make repayments, and created a headache for the country's politicians and banks who are under public pressure to address the problem. The ruling Law and Justice (PiS) party swept to power last year on a promise to convert the Swiss franc loans to zlotys at a historic exchange rate, with banks bearing the cost. Poland's financial regulator has estimated this could cost banks around 67 billion zlotys ($17 billion), a burden which the banks have said would be unacceptable.
According to Puls Biznesu, which quoted unidentified sources, the country's ZBP banking lobby and adviser EY have tabled an alternative plan under which loans would only be converted for the most indebted borrowers. The loans would be converted at market rates and if, after the switch into zlotys, instalments were above 70 percent of income, the lender would bear the costs above that level.
The newspaper said the plan, which included a number of other conditions, would lead to the conversion of about 5-10 percent of Swiss franc loans and would cost banks around 2.7 billion zlotys. The ZBP was not immediately available to comment. Presidential adviser Marek Dietl told Reuters last week that banks should voluntarily offer to convert Swiss franc loans at a rate they agree on with clients to avoid the president proposing a compulsory re-denomination.
The PiS and PiS-backed president have taken a hard line on the country's banks. The cabinet already made good on one of its election promises by imposing a bank asset tax to aid the state budget - a levy seen yielding almost 4 billion zlotys this year. Poland's banking sector is 60 percent owned by foreign lenders, with Santander, Commerzbank, BCP , BNP Paribas, and Raiffeisen running local units with Swiss franc mortgage portfolios.