Commerzbank to book further provision for mBank after court ruling
Reuters
Published Jun 23, 2023 01:15PM ET
FRANKFURT (Reuters) - Germany's Commerzbank (ETR:CBKG) said on Friday that it would book another provision of 342 million euros ($372.27 million) following a court ruling on how banks treat Swiss franc loans in Poland.
The new figure means that Commerzbank, which has extensive operations in Poland through its mBank, has provisioned or made payouts of more than 2 billion euros to deal with the issue. It had already warned that further provisions were likely.
The bank said the figure would impact its second-quarter earnings but that it still expects a 2023 net profit "well above that of 2022".
The issue, which has affected banks across Poland, stems from more than a decade ago, when mortgage customers took out loans in Swiss francs to take advantage of low Swiss interest rates, only to face far higher costs when the value of the Polish zloty slumped.
Polish courts have been deciding how the loans can be treated, including what banks can charge in interest for the loans, creating uncertainty for banks and their bottom lines.
($1 = 0.9187 euros)
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Written By: Reuters
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