Voluntarily committing to change how they calculate the interest on loans taken in Swiss francs, banks BPH and Pekao SA will reduce loan installments by factoring in negative interest.

Poland’s Office of Competition and Consumer Protection (UOKiK) initiated proceedings in mid-2015, questioning the banks’ failure to factor in a negative interest rate on credit taken in Swiss francs, and therefore to adjust mortgage rates down.

Both banks have now committed to change their practices and compensate consumers for their losses. This will mean factoring in the negative interest rate and returning clients the difference between the rate they actually used and the rate they should have used after calculating for the negative LIBOR. They will also inform their clients of the measures they are taking.

UOKiK was spurred to action when the franc strengthened against Poland’s currency, the zloty, causing CHF-based mortgage loan rates to also rise. At the same time, the LIBOR index value fell below zero, which should have brought loan installments down. In some cases, a negative LIBOR has caused credit interest rates to fall below zero.

It came to UOKiK’s attention that not all banks were factoring in the negative interest rate. However, their loan agreements stated that the interest rate would be the sum of the base rate LIBOR and the loan’s margin. In response, UOKiK initiated eight proceedings, one of which remains ongoing. In addition to the BPH and Pekao proceedings, the other five involved ING Bank Ślaski, mBank, Getin Noble Bank, Credit Agricole Bank Polska and BNP Paribas Bank Polska.

Additional information for the media:

Press Office, UOKiK
Pl. Powstańców Warszawy 1, 00-950 Warsaw
Phone.: +48 22 827 28 92, +48 22 55 60 314, +48 22 55 60 430
E-mail: [SCODE]Yml1cm9wcmFzb3dlQHVva2lrLmdvdi5wbA==[ECODE]

Twitter: @UOKiKgovPL