Presidential FX-mortgage bill credit negative - Moody's

Presidential draft bill on FX mortgage conversions would be credit negative, according to credit agency Moody’s, but should not affect lending rates. “The bill is credit negative for Polish banks because it would reduce their profitability, which is already challenged by a tax introduced last year and narrow margins amid low interest rates,” Moody's said. However, thanks to lower capital requirements banks' ability to lend should not be affected, the agency said. “Foreign-currency mortgages restructured into local currency would lead to 80 percent capital relief because of the 35 percent risk weighting on local-currency mortgages and write-offs,” Moody's 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.