mBank has not made a decision to offer agreements to clients with foreign currency loans as proposed by the Chairman of the Polish Financial Supervision Authority, nor has it taken any steps to obtain any corporate approvals on this matter, the bank said.
The group closely monitors the results of court rulings in Swiss franc mortgage and housing loans, including the impact of judgments by the Court of Justice of the European Union (CJEU) and the Supreme Court, and examines the proposal of the Chairman of the Polish Financial Supervision Authority, the report said.
It will be [the proposed settlements] subject to further analysis and discussion with supervisory authorities. The Bank did not take into account the proposal of the Chairman of the Polish Financial Supervision Authority in the amount of the impact of the legal risk related to the portfolio of indexed loans, according to the bank
mBank reported that the total costs of legal risk related to foreign currency loans for the three quarters of this year amounted to PLN 751.62 million compared to PLN 388.73 million a year earlier. In the third quarter of 2021 alone, these costs amounted to PLN 436.8 million and were higher than in the second quarter of this year by PLN 188.3 million, while in the third quarter of 2020 they amounted to PLN 186.85 million.
The bank announced that the increase in the impact of legal risk in the three quarters of 2021 was mainly due to the higher than expected inflow of new cases in the third quarter of 2021, the application of a management correction (in the amount of PLN 200 million) due to the continuing uncertainty as to the further development of jurisprudence in cases of Swiss francs and the creation of a provision for a class action regarding indexation clauses contained in mortgage and housing loan agreements in CHF.
mBank assumes that the phenomenon of the inflow of lawsuits will be significant until the end of 2025, and the vast majority of the forecasted cases will be brought by the end of 2022, and then their number will decrease due to the expected order in the legal environment.
For the purpose of calculating the impact of legal risk, mBank assumes that around 24% of foreign currency borrowers (19,800 borrowers with both active and repaid loans) have filed or will file a lawsuit against the bank, the bank announced.
Compared to the assumptions at the end of 2020, in the three quarters of 2021, the bank increased the assumed number of court cases by 28.5%. This was due to an increase in the lawsuit forecast that the bank estimates will be filed in the future and the greater-than-expected number of lawsuits filed at the bank.
mBank reported that at the end of September 2021 there were 12,150 individual court proceedings (7,508 proceedings at the end of last year) initiated against the bank by its clients in connection with CHF loan agreements, with a total value of claims amounting to PLN 3,010.1 million (PLN 1,454.2 million at the end of 2020). As part of individual lawsuits, 11,691 proceedings with a total value of claims amounting to PLN 3,000.3 million concerned indexation clauses and contained claims relating to the declaration of partial ineffectiveness or partial invalidity of loan agreements, i.e. in terms of indexation provisions, or a ruling that these agreements are invalid.
As part of a class action against the bank, in March 2018 the court determined the composition of the group for 1,731 people. On September 28, 2021, the court resumed the suspended proceedings and set a hearing for January 12, 2022. At the end of September 2021, the value of the dispute under this class action was PLN 377 million.
mBank is one of the leading universal commercial banks in Poland. The strategic shareholder of mBank is the German Commerzbank. The bank was listed on the WSE in 1992. The bank’s total assets amounted to PLN 180.14 billion at the end of 2020.
Soiurce: mBank and ISBnews
