FX mortgage bill more expensive than estimates. Could destabilize the sector - ZBP

The cost of the presidential draft bill on FX mortgage conversion will cost lenders several PLN billion, according to the president of market lobby Polish Banks Association (ZBP) Krzysztof Pietraszkiewicz. “We have conducted an in-depth analysis of the draft presented by the President and we believe that the implementation of the law in this shape would not be without widespread consequences for the entire banking sector, it is worth making a few modifications,” Pietraszkiewcz told the Polish Press Agency (PAP). The bill estimates costs for lenders at PLN 3.5 billion, but ZBP estimates they will be much higher “Without modifications, the draft would lead to destabilization of the banking sector and consequently the whole economy,” Pietraszkiewicz claimed. “After modifying certain provisions, we could achieve the goals set by the law, ie help the economically weak, and maintain the stability of the banking system and the ability to finance the economy,” he added. ZBP suggests a reduction of the DTI to 60 percent against the proposed 50 percent and setting a time-limit of 6 months from passing the law to the customer's request for conversion and several months for the bank to make the transaction. 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.