The US rating agency Moody’s estimated that upfront costs to Polish banks of converting foreign-currency mortgages, mostly Swiss franc-denominated, into Polish złoty would be PLN 36bn. The agency expects this operation to reduce the capital base of Polish lenders by 27 percent. The agency warns this will hurt their lending activities as well as their ability to absorb potential financial shocks.
Moody’s said that the Polish banks it’s assigned the ‘hold’ rating to are responsible for 94 percent of all foreign-currency mortgages issued in the country. In all, there are PLN 138bn worth of foreign denominated mortgages outstanding in Poland, or 13 percent of all mortgages issued through September 2015.
