Dep FinMin says banking sector prepared for EU court FX loan ruling

Marcin Obara/PAP

A Thursday ruling by the Court of Justice of the European Union (CJEU) on foreign-currency-denominated mortgages, which favoured consumers, came as no surprise and the Polish banking sector was prepared for it, a deputy finance minister has said.

Thursday's CJEU ruling said that consumers can demand compensation from banks beyond the reimbursement of monthly instalments paid if a mortgage contract with unfair terms is declared invalid. The court added that "by contrast, it precludes the bank from relying on similar claims against consumers."

The ruling ends Polish banks' practice of demanding "use of capital" payment from FX borrowers who have won court cases against them. A large number of customers have been able to win such cases owing to the lenders' use of abusive clauses in their FX mortgage agreements with them.

Deputy Finance Minister Artur Sobon told the Wirtualna Polska website that the court's ruling was expected and that the Polish banking sector was resilient.

"Everyone expected that type of decision, it had been announced by the CJEU spokesperson, it is nothing surprising," Sobon said. "The sector itself is prepared, resilient, has sufficient financial liquidity, stability. We have a really stable situation in the sector.

"The ruling takes account of claims by Swiss-franc borrowers in the most far-reaching way, certainly to a greater degree than the interested parties initially expected," Sobon continued.

But he said the court's decision represented no direct threat to the Polish banking sector.

"The decision is something that banks must take into consideration but not all banks are in the same situation," he explained. "However, as for the sector itself, we had announcements yesterday from representatives of individual banks that indicated that the situation is unsurprising to them."

Sobon went on to urge banks and their clients to reach settlements in the matter.

Although Polish banks ceased to offer FX-denominated mortgages in 2012, the outstanding loans of around PLN 130 billion (EUR 28 billion) still pose a risk to the Polish banking sector as customers sue banks for damages in courts. Most FX loans were mostly denominated to the Swiss franc when the Polish national currency was strong, but later on the franc appreciated rapidly, leaving the customers with extensive debt to pay off. 

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