Polish financial sector more stable but currency lending remains a risk – central bank

WARSAW, Dec. 7 (Reuters) – Swiss franc mortgages remain a risk factor for Polish banks, but overall industry stability has improved, the central bank said in a report on Tuesday.

Thousands of Poles took out Swiss franc mortgages over a decade ago to take advantage of low Swiss interest rates, to face higher costs when the value of the zloty collapsed.

“The legal risk of foreign currency mortgages remains the main risk to national financial stability, but the likelihood of court rulings in foreign currency mortgage lending cases, which can be the most costly for banks, has declined.” , the central bank said in its annual financial stability report. report.

Register now for FREE and unlimited access to reuters.com

Register

In September, Poland’s Supreme Court failed to resolve a deadlock over judicial appointments that blocked proceedings in a long-standing case over disputes over foreign currency loans.

The central bank said risks from the COVID-19 pandemic and low bank profitability have also diminished.

“The consequences of the pandemic have turned out to be less severe for the economy and the banking sector than initially expected,” he said.

However, he said a rapid increase in lending in the real estate market needed to be watched closely.

Register now for FREE and unlimited access to reuters.com

Register

Reporting by Pawel Florkiewicz and Alan Charlish; Editing by Kirsten Donovan

Our Standards: Thomson Reuters Trust Principles.

Comments are closed.