FX-mortgage relief plan safe for banking sector – S&P

The presidential project for FX-mortgages relief is not threatening to the stability of Poland’s banking sector, Michał Selbka from S&P rating’s agency said, adding that the cost for the system will be less than PLN 3.2 billion per year listed in the draft bill.

The impact on credit risk could be a net positive, Selbka added. Supports for low-income and households and distressed borrowers could boost other bank products “provided that the underwriting standards don’t worsen in turn,” he explained.

President Andrzej Duda submitted his version of the bill aimed to help those with FX mortgages (mostly in Swiss Francs). It proposes to expand the current fund set up to support those with problems in paying off their mortgages and setting up a new one for restructuring FX mortgages. Establishing the new fund will cost lenders up to PLN 3.2 billion annually, according to the calculations.

The potential monthly support will be increased from PLN 1,500 to PLN 2,000, extending the support period from 18 to 36 months and repayment period from 8 to 12 years. Currently, the funds accumulated in the existing borrower support fund amount to PLN 600 million. Subsequent contributions will not exceed 1 percent of the overdue loan portfolio’s value quarterly.

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