BCP should lose about 330 million euros in credit conversion in Poland – publico

                 

                         
                     

                 

 
                         

The BCP, which owns the majority stake in the Polish Bank Millennium, will be affected by costs related to the conversion of CHF loans in zlotys imposed in Poland, which could amount to 330 million euros.

                     

                         At the end of the first half, Bank Millennium had a total loan portfolio in Poland 46.9 billion zlotys (€ 11.3 billion), of which 28 800 million zlotys (6,9 billion euro) are related to mortgage credit.

Of these, 4.6 billion euros are loans denominated in Swiss francs (13% of this market fringe), a recurring practice in Poland over the recent years but that with the strong appreciation of the Swiss currency, is penalizing the costs borne by families who resorted to stall to buy the house.

In this situation, the Polish parliament has decided that these claims denominated in Swiss francs can be converted into the local currency, which means that banks have to calculate a difference between the value of current debt and the amount that the borrower would have to pay if abate the debt in zloty, while 90% of the difference will be deducted of the loan, ie, it is a cost to the bank.

Earlier it was predicted that the costs would be borne 50% by the customers.

On Tuesday, the central bank Poland revealed that, overall, the costs for banking related to this currency translation amounting to 21 billion zlotys, ie from about five billion euros, according to Advanced Bloomberg.

As Bank Millennium has a share of 13.2% on the Polish market, the cost of this measure should amount to 660 million euros. Given that the BCP controls 50.1% stake in Bank Millennium, the cost to the bank led by Nuno Amado will be around EUR 330 million.

“Assuming some basic calculations, and only in illustrative terms, Bank Millennium may suffer an impact close to 2.5 billion zlotys (600 million euros), “anticipated André Rodrigues analyst at Caixa Banco de Investimento, in a research note released on August 7, based the numbers of the end of the semester.

However, it should be noted that not all mortgages denominated in Swiss francs will be converted to the local currency, due to the specificities of the legislation adopted, and that, for example, the Polish Bank Association (ZBP, the Polish acronym) is already designing a plan to minimize the effects on its partners, which could bring down the costs to be borne by BCP.