Bosnia Hypo Alpe unit offers help to Swiss franc borrowers

Dunav osiguranje ad Banja Luka

20/01/2015 18:18

* Thousands of borrowers seeking relief from surge in Swiss 
franc 
    * Hypo holds almost all loans denominated in francs in 
Bosnia 
 
    SARAJEVO, Jan 20 (Reuters) - The Bosnian unit of Austria's 
nationalised Hypo Alpe Adria Bank  HAABIA.UL  said on Tuesday it 
would offer more favourable repayment terms to its 6,100 
borrowers seeking relief from a surge in the value of the Swiss 
franc. 
    The bank accounts for nearly all loans denominated in Swiss 
francs in Bosnia, the value of which has jumped to some 400 
million marka ($237 million) since the Swiss National Bank 
scrapped its cap on the franc, compared with 340 million 
beforehand. 
    "We are discussing with regional banking agencies new 
measures we may take to address the concerns of our clients," 
Dragan Kovacevic, the Bosnian unit's chief executive officer, 
told reporters.  
    The bank has already offered to convert loans into euros or 
local currency but at higher interest rates, or to let borrowers 
repay using fixed exchange rates under additional conditions, 
and it has also offered to write off loan instalments, he said. 
    Nearly 10,000 Bosnians took out franc mortgages to 
capitalise on low Swiss interest rates in the early 2000s, only 
to lose out when the financial crisis hit and the value of the 
franc surged, driving up their debt-servicing costs. 
    A spokeswoman for the bank said many clients had rejected 
more favourable terms of payment offered in recent years and had 
sued the bank over what they believed was an illegal 
arrangement. 
    Their problems have now been compounded by the lifting of 
the franc cap. Kovacevic said many borrowers who accepted easier 
terms had already repaid their loans. 
    The total credit portfolio of Bosnian banks, majority 
foreign-owned, amounts to 16.7 billion marka, with a 
non-performing loan ratio of 15.6 percent. 
    Kovacevic said nearly half of all franc-indexed loans 
disbursed by Hypo Alpe Adria bank have gone sour. 
    Austria in December agreed to sell Hypo Alpe Adria's Balkans 
network to private equity firm Advent and European Bank for 
Reconstruction and Development (EBRD) for up to 200 million 
euros ($231 million), as it pushes ahead with winding down the 
lender.  ID:nL6N0U70G3  
($1 = 1.689 Bosnian marka) 
($1 = 0.8646 euros) 
 
 (Reporting by Maja Zuvela and Daria Sito-Sucic; Editing by Matt 
Robinson and Hugh Lawson) 
 ((maja.zuvela@thomsonreuters.com; +387 33 295 485; Reuters 
Messaging: maja.zuvela.thomsonreuters.com@reuters.net)) 
 
Keywords: BOSNIA SWISSFRANCS/BANKS