October 7, 2019 / 7:16 AM / 8 days ago

ECJ FX mortgage ruling to cost Polish banks up to $7.6 billion: central banker

FILE PHOTO: Various Swiss Franc and Polish Zloty notes lay on a table in this picture illustration in Warsaw, Poland January 18, 2016. REUTERS/Kacper Pempel/File Photo

WARSAW (Reuters) - Polish banks will face costs of 20 billion to 30 billion zlotys ($5.1-$7.6 billion) due to the European Court of Justice’s (ECJ) ruling on Swiss-franc mortgages, Polish rate-setter Eugeniusz Gatnar told news agency PAP in comments published on Monday.

The European Union’s (EU) top court ruled on Thursday in favor of Polish consumers who took out mortgages in Swiss Francs, allowing them to ask Polish courts to convert the loans into the local zloty currency in a blow for lenders.

“The judgment of the ECJ will not have any major negative impact on the stability of the banking sector in Poland, because it does not introduce an obligatory mechanism for the conversion of Swiss franc loans,” Gatnar told the state-run news agency.

“In fact, the process of changing contracts will be voluntary, and some borrowers will not ask for it.”

Gatnar added that he believed the verdict could speed up consolidation in the sector.

Lenders have said the cost of the verdict could amount to 60 billion zlotys.

Reporting by Alan Charlish; Editing by Muralikumar Anantharaman

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