Consequences of the decisions of the TSUE
The NBP report on financial system stability states that the risk of foreign currency mortgage loan portfolios has increased. This is due to the possibility of an increase in the number of contested contracts by some borrowers, among others due to the judgment of the Court of Justice of the European Union (TSUE). According to the authors of the report, national courts, within the limits set by the provisions of Polish law, are free to assess the abusiveness of credit agreements and assess its effects. However, it is difficult to determine the scale of potential costs for the banking system.
Impact on financial results
If it turns out that these costs will be high – they will obviously burden the financial results of those banks that have high exposure to foreign currency loans. This factor may further aggravate the problems in these banks resulting from low profitability and low capital levels. The long-term nature of the described issue may extend any materialization of the abovementioned risks over time, however, will most likely manifest itself in the coming quarters in the form of established reserves and write-offs.