January 26, 2015 / 12:40 PM / 4 years ago

REFILE-Poland may help CHF loan holders at banks' expense -PM Kopacz

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* Polish PM is considering help for CHF mortgage holders

* Details to be presented later this week

* Poland faces presidential and general elections this year

By Marcin Goclowski

WARSAW, Jan 26 (Reuters) - Poland may help financially troubled holders of Swiss franc-denominated mortgages at the expense of the banks and will present specific proposals by the end of the week, Prime Minister Ewa Kopacz said on Monday.

Kopacz, who faces an election this year, did not spell out what form such help might take. She was speaking after hundreds of people staged protests in several Polish cities at the weekend demanding the government’s help in repaying Swiss franc-denominated mortgages following the currency’s sharp rise.

“If I have to choose between the interests of the banks and of the people who took out these loans, I will stand behind the people, but at the cost of the banks, not of the (state) budget,” she told public radio, without elaborating.

Home buyers across central and eastern Europe took out loans denominated in Swiss francs in the early 2000s, attracted by interest rates in the low single digits over paying double-digit rates on mortgages in their local currencies.

They had already faced rising repayments as the franc strengthened with the onset of the global financial crisis in 2008, but repayments have soared in the last two weeks after the Swiss central bank removed its cap on the franc. The currency jumped some 20 percent against the Polish zloty.

Analysts do not expect Poland to follow the example of Hungary, where the government forced banks to convert FX loans and to compensate clients for past loan losses that the government and the courts said had been unfair.

Poles hold about half a million mortgages denominated in Swiss francs and they are worth a total $36 billion, or eight percent of Poland’s gross domestic product (GDP).

On Monday Polish President Bronislaw Komorowski was due to meet central bank governor Marek Belka to discuss the issue. Komorowski also aims to meet Finance Minister Mateusz Szczurek.

Banks have said they will cut the interest rate such loans carry following the Swiss National Bank’s decision to cut rates. Banks have also said they will not drown borrowers by imposing additional collateral costs.

The banks with large portfolios of Swiss franc-denominated mortgages are Getin Noble Bank, PKO BP, General Electric’s Polish unit BPH, Santander’s BZ WBK, Commerzbank’s, and BCP’s Millennium, as well as Raiffeisen International Bank Polish unit Raiffeisen Polbank. (Reporting by Marcin Goclowski; additional reporting by Marton Dunai in BUDAPEST; Editing by Gareth Jones)

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