PLN 150 per person to bail out Swiss-franc mortgage holders?

The upper house of the Polish Parliament, the Senate, will start deliberations on the bill that was passed by the lower house in early August.

According to the proposed version of the bill, the state budget will lose PLN 5-6 billion (approx. EUR 1.25-1.5 billion), Xelion analyst Piotr Kuczyński, told the Polish press agency PAP.

"Banks will bear these costs, but huge costs will also be incurred by the budget. There will be no CIT, which is a tax on the profit that was lost by the banks. It is already PLN 4 billion. There will be no dividends from PKO BP, and with BGK there will be a tax on dividends. Not only that, reduced bank lending will hit the whole economy. The budget will lose PLN 5-6 billion, i.e. approx. PLN 150 (EUR 35,50) for every Pole," the analyst said.

According to Kuczyńskithe original bill was designed to help those most indebted and who had the most problems repaying. "The amendment that was introduced in August is a disaster. Its consequences will be enormous. This amendment dramatically increases the number of those who will be interested in currency conversion," he said.

The issue of compensation has been triggered by the dramatic appreciation in the value of the Swiss franc since January when the Swiss central bank lifted exchange rate controls on the domestic currency, impacting on the estimated 500,000 mortgage holders in Poland, as well as in other countries of the region.

Banks’ stocks have fallen on the Warsaw bourse after MPs approved a bill allowing homeowners to convert their Swiss franc mortgages into the Polish złoty, which could double the cost to lenders to USD 5 billion. The original proposal would have given home owners mortgage relief of around 50 percent, at a cost to the banks of around PLN 9.5 billion (or USD 2.75 million).

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/rk)