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2019/10/01 / Erste Group Research

Poland Special | Bracing for ECJ decision

ECJ to publish its ruling on CHF-denominated loans on October 3. Debtor-positive decision would pose considerable risk to Polish banks due to possible need to convert loans into PLN maintaining LIBOR.

The estimated costs of such conversions vary widely. The Polish Banking Association expects that such conversions would cost the whole sector at least PLN 60bn, almost five times more than last year’s net profit of the sector. Moody’s estimated the conversion costs at PLN 20bn, which is 1.5 times banks’ 2018 profit. However, Moody’s assumed that the WIBOR rate would be applied to such loans.

After the declaration of the date of the ECJ ruling on FX mortgages, the zloty experienced strong intra-day movement, as it depreciated by more than 1% vs. the EUR and has remained on an elevated level (above 4.38) since then. In the event of a borrower-positive decision, further short-lived depreciation above 4.40 vs. the EUR cannot be ruled out.

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General information

AuthorErste Group Research
Product nameCEE Economies Special Report
Topic in focusFX, Macro/ Fixed income
Economy in focusPoland
Currency in focusPolish Zloty
Sector in focus-


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