Croatia's top court limits banks' liability on Swiss franc loans, banking association says (updated)

Erste Bank AG

18/06/2026 17:35

Adds detail, reactions, background
June 18 (Reuters) - Croatia's Supreme Court has limited banks' liability on Swiss franc loans to refunding late payment fees in a ruling, the Croatian banking association (HUB) said on Thursday, adding that it would consider possible future legal steps.
The court ruled that the banks - including Italy’s UniCredit CRDI.MI and Intesa Sanpaolo ISP.MI, as well as Austria’s Erste Group Bank ERST.VI and Raiffeisen Bank International RBIV.VI - should pay back late payment fees to borrowers who voluntarily converted Swiss franc mortgages into euro-denominated instruments a decade ago.
    Many households and companies across Croatia and eastern Europe took out Swiss franc mortgages in the 2000s to benefit from low Swiss interest rates, only to be caught out by a surge in the franc, particularly after Switzerland scrapped its cap on the currency in January 2015.
    Franak, the association of Swiss-franc borrowers, which represents around 30,000 individuals and has hoped for additional compensation that was estimated at around 700 million euros ($803.53 million), said that refunding fees for borrowers' late payment of loan instalments account only for 20% of the expected additional compensation. 
Franak said it would appeal against the ruling at the Constitutional court, demanding the full reimbursement of borrowers' losses from the banks.
HUB said the Supreme Court ruling raises new questions given the Croatian government's decision in 2015 to enforce the conversion of all Swiss franc loans to euros at the rate that was in force when the loans were granted, with the banks bearing the cost of exchange rate fluctuations. The banks have already born some of those costs and would now have to refund late payment fees on top.
"The banks will analyse the ruling in detail and consider further legal possibilities at their disposal," HUB said in a statement.
    
($1 = 0.8712 euros)

 (Reporting by Daria Sito-Sucic; Editing by Susan Fenton)
 ((daria.sito-sucic@thomsonreuters.com; +38733 295 484; Reuters Messaging: daria.sito-sucic.thomsonreuters.com@reuters.net))