WARSAW, Nov 4 (Reuters) - All proposals considered by Poland’s president to allow borrowers to convert their Swiss franc mortgages into zlotys at more favourable rates would spread out the cost for banks over several years, people involved in talks said.
This means the likely impact on Polish banks from a potential conversion, estimates of which have varied wildly, would not be immediate and would give banks time for adjustment.
A source taking part in the talks between representatives of the president’s chancellery and borrowers’ lobby said on condition of anonymity that the two proposals currently being considered would give banks several years to manage the costs.
“We are working on two solutions now,” Arkadiusz Szczesniak of the Swiss franc borrowers lobby “Stop Banks’ Lawlessness”, who has participated in meetings with presidential advisers, told Reuters.
He said the cost for banks from the first proposal, which does not envisage the consumer protection authority UOKiK getting involved in the process, would not exceed 2 billion zlotys ($520 million) per year.
This is much less than a one-off cost of about 60 billion zlotys estimated by some analysts and the head of the financial supervision authority. Last year, Polish banks earned 16 billion zlotys overall.
“We estimate that about 20 percent of people with Swiss franc loans would take advantage of this solution (and convert their loans),” Szczesniak said.
More than half a million Poles took out home loans in Swiss francs, mostly between 2007 and 2008, hoping to benefit from low interest rates.
Since then, the franc has risen by about 80 percent against the zloty, trapping owners in debt out of proportion to property values.
Poland’s bank shares have fallen by 20 percent since Duda won the presidential election in May on prospects of conversion and introduction of a new bank tax.
Another participant in the talks, invited by the president’s Chancellery, said on condition of anonymity that he thought spreading the cost of conversion for banks over time was necessary.
Bank representatives have also met Chancellery officials.
Last month, President Andrzej Duda, an ally of the election winner - the conservative Law and Justice (PiS) party - said he was working on a draft proposal that would offer a “compromise” to banks and the mortgage holders.
Swiss franc borrowers’ lobbies had expected the president to present the draft law by Friday.
But people taking part in the meetings said presidential advisors have still not received detailed data from the financial supervision authority KNF on the half a million loans.
This has held up cost estimates and means that the chancellery is more likely to come up with only general proposals, expected by early next week at the latest, not a draft bill.
The chancellery, its advisors and the borrowers’ lobby were still discussing issues including procedural details for converting the loans into zlotys, mainly focusing on whether UOKiK would be involved in the process, people involved in the talks said.
“There is agreement to treat these loans as if they were extended in zlotys from the very beginning,” the source said.
“There is still disagreement on whether to engage public institutions in the process or whether to leave it to banks and their clients,” the source added.
Szczesniak of the borrowers’ lobby criticised the alternative proposal which would involve the consumer authority, saying it would take many years to complete the procedure and would mean employing extra officials. ($1 = 3.8710 zlotys (Reporting by Marcin Goettig; Editing by Ruth Pitchford)