WARSAW Dec 7 Polish financial market regulator
KNF has imposed more restrictions on dividend payouts by banks
with foreign exchange loan portfolios to help them boost their
capital and tackle potential legal risks related to converting
Swiss franc mortgages, KNF said late on Tuesday.
Banks including state-run PKO, a unit of Spain's
Banco Santander BZ WBK and a unit of Germany's
Commerzbank mBank gave Swiss franc loans to
more than half a million Poles, some of whom now have problems
with repayments because the Swiss currency has doubled in value
against the zloty over the last few years.
In August Poland offered banks inducements to help its home
owners struggling with Swiss franc mortgages to switch them into
It was seen as a softening of earlier proposals for a
compulsory conversion process, but is still considered as a risk
factor for the sector.
"The significant risk related to the potential legal
solution to FX mortgages will weigh on the banks' results if the
law is implemented," KNF said in a statement.
The regulator also pointed to increased, external risks to
Polish economy and the banking sector, including Britain's vote
to leave the European Union and Italy's 'no' vote in a
referendum on constitutional reform.
As part of KNF's dividend policy for banks, additional
criteria that fix the maximum dividend yield had been introduced
for lenders involved in FX mortgages, the regulator said.
It said it had taken into account whether a bank is in a
restructuring process, its leverage, capital buffers and the
results of risk assessments.
KNF will also look at the size of forex loans in a bank
portfolio and the size of forex loans signed in 2007 and 2008
when suggesting a dividend yield for a given bank. Most of the
risky loans were signed in 2007 and 2008.
Other banks with large portfolios of Swiss franc-denominated
mortgages include Portugal's BCP' Millennium, BPH
It was a top issue in last year's presidential election,
with the winning conservative Andrzej Duda promise to solve the
problem forming a key element of his campaign.
(Reporting by Agnieszka Barteczko; editing by Susan Thomas)