WARSAW, Oct 13 (Reuters) - Polish banks would face costs of 9.3 billion zlotys ($2.44 billion) if a proposal to make them return excessive currency conversion spreads charged to clients becomes law, financial regulator KNF said in a document published on Thursday.
The projected cost is more than twice as high as earlier estimates presented by Polish officials.
More than half a million Poles took out Swiss franc loans to benefit from low interest rates in Switzerland, but now face much bigger repayments because the Swiss currency has doubled in value against the zloty in the past few years.
In August, Poland softened an earlier plan to convert Swiss franc mortgages at historical rates and instead decided on a plan to return spreads to clients and to induce banks to offer a voluntary conversion of Swiss franc loans.
A draft law containing the proposals is expected to be debated by parliament at its session next week. Since the bill is backed by the ruling Law and Justice (PiS) party, it is expected to pass, although it is unclear when.
“The combined cost to banks as a result of implementing the planned bill has been estimated at 9.3 billion zlotys,” KNF said.
KNF also said in an opinion sent to parliament dated Oct. 7 and published on Thursday that the draft law, if implemented this year, would increase the number of banks sustaining a loss to nine from one previously.
“The aggregated net profit planned by banks at the end of 2016 if the bill came into law would fall from 11.3 billion zlotys to 3.7 billion,” it said.
The total value of Swiss franc mortgages in Poland amounts to about 8 percent of annual output. The loans were taken out mostly by people with above-average salaries, so the share of non-performing loans among the mortgages is about 3 percent.
Banks will significant Swiss-franc loans portfolio include Getin Noble Bank, BZ WBK - a unit of Santander , Bank Millennium - a unit of BCP, as well as mBank - a unit of Commerzbank. ($1 = 3.8193 zlotys) (Reporting by Marcin Goettig; Editing by Adrian Croft)