EU top court backs consumers in Polish FX mortgage case (updated)

ING Bank Slaski SA

15/06/2023 09:11

(Adds details on verdict throughout)
       WARSAW, June 15 (Reuters) - The European Union's top
court on Thursday backed Polish borrowers with Swiss
franc-denominated mortgages in a long-running case that the
country's regulator has warned could cost the country's banks
100 billion zlotys.
    Hundreds of thousands of Poles took out mortgages in foreign
currencies, mainly in Swiss francs, attracted by lower interest
rates. They are now paying far bigger installments than expected
after the Swiss franc soared against the zloty and following
interest rate hikes in Switzerland.
    The court ruling means that banks cannot charge for the cost
of capital on foreign currency loans which were deemed invalid
because they contained unfair terms, a verdict which had been
expected by analysts. 
    "EU law does not preclude, in the event of the annulment of
a mortgage loan agreement vitiated by unfair terms, the
consumers from seeking compensation from the bank going beyond
reimbursement of the monthly installments paid," the court said
in a statement.
    "By contrast, it precludes the bank from relying on similar
claims against consumers."
    While the cost to the Polish banking sector will be large,
analysts have said it will be able to absorb the blow.
    "The threat to the ability to finance the economy is
significant, but I would rule out the collapse of a bank or,
even more so, the sector," said Tadeusz Białek president of the
Polish Bank Association, in a comment sent to Reuters before the
verdict.
    The ruling was in line with an opinion from an adviser to
the court which was issued in February.
    Poland's WIG Banks index  .BNKI  was down 1.6% at 0753 GMT.

 (Reporting by Alan Charlish, Anna Wlodarczak-Semczuk, Pawel
Florkiewicz, Karol Badohal; Editing by Frank Jack Daniel)
 ((alan.charlish@thomsonreuters.com;))