Increase of provisions for legal risk re CHF loans
Updated : 12:33
UNOFFICIAL TRANSLATION
18.02.2021 - Report 7/2021: Increase of provisions for the legal risk related to the foreign currency mortgage loan portfolio in CHF
Bank Polska Kasa Opieki Spółka Akcyjna (the "Bank") informs that on 18 February 2021 the Bank decided to increase provisions for the legal risk related to the foreign currency mortgage loan portfolio in CHF, by the amount of PLN 318 million. The increase of provisions will be incurred in the 4Q 2020 financial results of the Bank and the Capital Group of the Bank (the "Group")
Despite the increase of the abovementioned provisions, the Bank and the Group expect a positive net financial result for 4Q 2020.
The material increase of provisions compared with previous quarters reflects a negative trend in court decisions, expected increase in number of disputes in the future, as well as the modification of considered scenarios, among others, to include the possibility of reaching settlements with borrowers.
Simultaneously, the total scale of provisions for the legal risk related to the foreign currency mortgage loan portfolio in CHF created so far by the Group in the amount of PLN 436 million is similar to the preliminary estimate of the impact on net financial result of the hypothetical conversion of the active portfolio of the abovementioned loans (under the conditions outlined by the Chairman of the Polish Financial Supervision Authority).
Detailed information regarding assessment of the legal risk related to the foreign currency mortgage loan portfolio in CHF of the Bank and the Group will be presented in the 2020 annual report, which is expected to be published on 25 February 2021.
Legal basis: art. 17 section 1 MAR - confidential information
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