Polish foreign currency scheme may hurt banks: Moody�s

AFP, WARSAW: Poland’s controversial bid to convert foreign currency mortgages, mostly in Swiss Francs, into the local zloty currency, could “hurt” the Polish banking sector, a global ratings agency warned Monday.
Moody’s said the move by Poland’s new right-wing government would be “credit negative”, hurting the domestic banking sector’s “ability to lend and absorb future shocks”.
“It would result in one-off losses, net of annual profits, of 36 billion zloty (8.2 billion euro, $9.2 billion) at the time of implementation,” a Moody’s statement said. The agency cited a Polish central bank study published last week that estimated the conversion would cost Polish banks 44 billion zloty.
“The Polish banks we rate hold about 94 per cent of the 138 billion zloty outstanding Swiss franc-denominated mortgage loans in the banking system, which equalled about 13 per cent of total system gross loans as of September 2015,” Moody’s said.
The conversion plan was one of several campaign promises concerning the banking sector made by the right-wing Law and Justice (PiS) party that paved the way to its winning an unprecedented majority in October elections.
Last month, Moody’s also warned that a levy on banks—another PiS campaign promise—threatens not only the sector’s profitability but also the overall economic growth of this EU member.

 

Polish foreign currency scheme may hurt banks: Moody�s

AFP, WARSAW: Polands controversial bid to convert foreign currency mortgages, mostly in Swiss Francs, into the local zloty currency, could hurt the Polish banking sector, a global ratings agency warned Monday. Moodys said the move by Polands new right-wing government would be credit negative, hurting the domestic banking sectors ability to lend and absorb future shocks. It would result in one-off losses, net of annual profits, of 36 billion zloty (8.2 billion euro, $9.2 billion) at the time of implementation, a Moodys statement said. The agency cited a Polish central bank study published last week that estimated the conversion would cost Polish banks 44 billion zloty. The Polish banks we rate hold about 94 per cent of the 138 billion zloty outstanding Swiss franc-denominated mortgage loans in the banking system, which equalled about 13 per cent of total system gross loans as of September 2015, Moodys said. The conversion plan was one of several campaign promises concerning the banking sector made by the right-wing Law and Justice (PiS) party that paved the way to its winning an unprecedented majority in October elections. Last month, Moodys also warned that a levy on banksanother PiS campaign promisethreatens not only the sectors profitability but also the overall economic growth of this EU member.