The logo of the PKO BP is seen on the bank’s headquarters in Warsaw, Poland, May 6, 2016. REUTERS/Kacper Pempel
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GDANSK, Aug 18 (Reuters) – Poland’s biggest lender PKO BP (PKO.WA) said on Thursday it had reached settlements on 15,461 mortgage loans in Swiss francs after mortgage-holders applied for mediation following adverse exchange rate moves.
Thousands of Polish borrowers took out mortgages in Swiss francs more than a decade ago to benefit from low interest rates, but then faced ballooning repayments when the zloty weakened sharply against the Swiss currency. Many mortgage-holders took banks to court.
Of the settlements on PKO BP loans reached by the end of June, 15,151 were through mediation proceedings and 310 were concluded in court.
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In total, the bank said it had received nearly 27,600 applications for mediation by the end of the first half of the year. So far, 15,993 mediations have been successful and 5,780 had a negative outcome.
In the second quarter, the number of court proceedings rose by nearly 11% quarter-on-quarter to 1,850, and was down 9% year-on-year.
In the first half of this year, PKO BP increased the cost of legal risk associated with mortgage loans denominated in and indexed to Swiss francs by 1.18 billion zlotys ($254.42 million), due to the market environment.
Poland’s currency is expected to fall to a record low this year as the economy slows and a series of interest rate hikes have so far failed to curb inflation.
At 0922 GMT PKO BP shares were up 1.7%.
($1 = 4.6380 zlotys)
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Reporting by Adrianna Ebert; editing by Barbara Lewis
Our Standards: The Thomson Reuters Trust Principles.
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