FX mortgage bill neutral for banks’ ratings – Fitch

Presidential draft bill on FX mortgage conversion shouldn’t have much impact on Polish banks and is seen as rating’s neutral according to rating agency Fitch. “Losses at Polish banks under the latest plans to reduce exposure to foreign-currency mortgages should have little impact on ratings for most banks as the process will be spread over time and slowed if necessary to safeguard banking sector stability,” the agency said. 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.