(Adds judge suggesting settlement, another bank appeals)
By Zoran Radosavljevic
ZAGREB, July 4 (Reuters) - A Croatian court ordered eight commercial banks on Thursday to recalculate loans indexed in Swiss francs in the national kuna currency at a fixed interest rate, saying they had overcharged loanholders.
Four of the banks said they would appeal against the verdict, which local media portrayed as a victory for consumers whose rights the country’s four-day-old membership of the European Union would enhance.
The other four banks, which are also expected to appeal, were not available for comment and the central bank, which regulates and monitors the banking system, declined to comment.
The lawsuit was filed by Potrosac, a consumer protection group, on behalf of 100,000 citizens who had in the past decade taken loans pegged to the franc, three-quarters of them housing loans.
The loans had been offered at a variable interest rate, at a time when the franc was relatively weak. But the Swiss currency rose sharply in value after the global financial crisis started in 2008, leading to higher monthly instalments for clients.
On top of that, the banks raised interest rates, citing higher costs of capital and money market rates. As a result, monthly instalments rose on average by around 50 percent.
“We don’t believe all the views in this case were equally taken into account and therefore we will appeal the first-instance verdict,” said Hypo Group Alpe Adria - one of the eight banks - in an emailed statement to Reuters.
UniCredit Bank Austria, where UniCredit places most of its central and east European business, also said it would appeal, as did Hungary’s OTP.
PBZ, majority owned by Intesa Sanpaolo, also said it would appeal, adding that the verdict was “factually and legally unfounded”.
Judge Radovan Dobronic said the banks had violated the interest of their clients by “changing the interest rates in an untransparent manner”.
“This was against the law on consumer protection ... Such behaviour of banks is forbidden in the future,” Dobronic said, adding the banks had failed to provide all details so that loan seekers could make an informed decision.
He called upon the banks to reach a settlement with the clients.
The other four lenders affected by the ruling were Austrian Erste, Raiffeisen Bank, Splitska Banka, a unit of Societe Generale, and Sberbanka.
If the ruling is confirmed, the banks will have to recalculate the sum owed on each loan in kuna and offer it to clients at a fixed interest rate.
The majority of loans in Croatia are now indexed to the euro while loans denominated in francs are no longer offered. (Additional reporting by Michael Shields in Vienna and Igor Ilic in Zagreb; Editing by Stephen Nisbet)