Poland's BRE Bank mulls bonds to refinance FX mortgages

Thu Aug 1, 2013 8:24am EDT

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WARSAW, Aug 1 (Reuters) - BRE Bank, the Polish arm
of German lender Commerzbank, is considering a bond
issue worth up to 300 million Swiss francs ($323 million) to
refinance part of its mortgage portfolio, its chief executive
said on Thursday. 
    Unlike in Hungary, where the government is seeking to
convert the remaining foreign currency loans into local currency
to assist stretched home owners, Poland has not seen high
defaults on home loans. 
    But its banks have mostly stopped offering such mortgages
because of pressure from the country's financial watchdog and
because they became more difficult to finance. 
    "We're considering a debt issue in Swiss francs in the
autumn to refinance our credit portfolio," BRE CEO Cezary
Stypulkowski told a news conference. "The amount of 300 million
(Swiss francs) is the maximum the market can absorb." 
    BRE was one of the biggest Polish players offering mortgages
denominated in foreign currency before the global financial
crisis dragged down Poland's zloty currency and made refinancing
of loan portfolios much more difficult.
    BRE had in large part relied for foreign currency on its
German parent, which itself got into financial trouble due to
poor investments and had to tap the German government for aid.
    At the end of last year, foreign currency home loans, mainly
in Swiss francs, accounted for 55 percent of mortgage portfolio
of Polish banks, which had a total value of 319.5 billion zlotys
($99.75 billion).
    Foreign currency mortgages now account for only 1 percent of
new home loans, with only the affluent standing a chance of
getting one. 
($1 = 0.9292 Swiss francs) 

 (Reporting by Marcin Goclowski; editing by Chris Borowski and
Tom Pfeiffer)
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