WARSAW, May 15 (Reuters) - Polish presidential candidate Andrzej Duda said on Friday that the country’s banks should bear the cost of helping borrowers with Swiss franc mortgages, sparking another wave of uncertainty for lenders already hit by record-low interest rates.
Several hundred thousand Poles took out Swiss franc mortgages because they were expected to be cheaper than loans in the local currency, but those expectations were turned on their head when the Swiss central bank removal its cap on the franc’s value in January.
“This problem exists. This is a real problem for a big number of people in Poland. It is a tragic issue and it has to be resolved,” election frontrunner Duda told mortgage borrowers presenting him with a bill proposal aimed at easing their plight.
Duda added that the situation is one in which Polish state authorities should force banks to take responsibility at their own cost.
It was not immediately clear whether Duda is suggesting a conversion of loans into zlotys at a historical level, a proposal that has already been suggested by the KNF regulator but rejected by Poland’s central bank as being too expensive for lenders.
Polish lenders such as Bank Zachodni WBK, Bank Millennium, PKO BP, mBank and Bank BPH have offered a package of reliefs to mortgage holders, though many borrowers will still struggle to meet their higher repayments.
The Polish president has no direct say in the matter but does choose one of the KNF’s seven members as well as the head of the central bank, who’s term ends in 2016.
Duda won the first round of the presidential elections and a poll published on Thursday gave him a lead over incumbent Bronislaw Komorowski ahead of the second round on May 24.
Duda’s comments on the Swiss franc problem may force Komorowski to strike back and prompt the governing Civic Platform party to offer relief to borrowers at banks’ expense, analysts say.
Earlier the government has not been intending to offer any further measures to help FX loan holders, according to sources.
Andrzej Jakubiak, the head of the KNF, has estimated the cost of the regulator’s proposed solution at 1.2 billion zlotys ($337.59 million) a year.
With a 20-year maturity on some of the mortgages, that could eventually add up to about 25 billion zlotys. ($1 = 3.5546 zlotys) (Reporting by Marcin Goclowski; Editing by David Goodman)