Moody's: FX mortgage relief to trim banks profit by 16-38 percent

Ratings agency Moody's estimates that four banks, most affected by the planned FX mortgage relief law will see their pre-tax profits down between 16-38 percent. The lenders include Millennium, BGZ BNP Paribas, mBank, and PKO BP. Moody’s estimated the cost on the annualized H1 results. “The proposed fund would cost each bank up to 2 percent of their overall FX mortgage portfolio annually. Bank Millennium would take the hardest hit but could comfortably accommodate the cost,” according to Moody’s. Still, the agency sees the proposed plan as a “positive step,” and the banks will be “able to absorb the extra costs without compromising their credit growth and stability.” President’s Andrzej Duda plan aimed to help those with FX mortgages (mostly in Swiss Francs), 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.