Swiss franc mortgage plans could lose PKO BP PLN 3bln
PR dla Zagranicy
Jo Harper
10.08.2015 15:28
The Swiss franc mortgage conversion bill could cost Poland’s largest bank, PKO BP, up to PLN 3 billion (about USD 790 million), a banking source told Reuters.
The PKO BP headquarters in Warsaw. Photo: Wikimedia Commons
CEO Zbigniew Jagiello said on Monday that the bank aims to raise net profits in the third and fourth quarters of the year amid gloom in the banking industry. PKO BP is considering a small foreign currency debt issue at the end of the year. Its eurobonds are worth EUR 800 million and mature in October.
Net profit in the domestic banking sector was PLN 16.2 billion (approx. 4.6 billion) in 2014 and in the first quarter of this year was just over PLN 4 billion.
Domestic banks are facing historically low interest rates, reduced credit card fees and raised contributions to the Bank Guarantee Fund.
Furthermore, Polish banks will likely see much slower client count growth and lower earnings per client as the country’s economy is evolving from the stage of fast growth towards more mature growth, Ernst and Young said earlier this year.
About half a million Poles took out Swiss franc mortgages to benefit from lower interest rates, and later their loans became much more expensive after the franc appreciated earlier this year.
"We believe the estimated potential loss of PLN 9 billion to PLN 9.5 billion (USD 2.4 billion to USD 2.53 billion) for the sector should be manageable, especially as it would probably be incurred over several years," Fitch said.
Among lenders with the biggest Swiss franc loan books are PKO BP and Getin Noble, as well as the Polish banking businesses of Santander, Commerzbank, BCP, Raiffeisen and General Electric. Getin is the most exposed to Swiss franc loans, Fitch said. (jh)