October 2 (SeeNews) - Austria's Addiko Bank said its third-quarter financials might be impacted by a recent ruling of the Croatian supreme court on the legal nullity of a foreign currency exchange clause concerning Swiss franc-indexed loans.
"After further assessment, the Issuer expects that loan contracts which were not converted into EUR under the Croatian Consumer Credit Act 2015 are potentially affected by the ruling and could become the subject of individual claims for restitution," Addiko said in a statement on Tuesday, adding it is prepared to avail itself of any legal recourse against individually filed claims.
"As of the date hereof the management expects a potential provision, in the high single digit million Euro range, to be reflected in the third quarter 2019 financials dependent on the further evolvement of the circumstances," the statement added.
Addiko first announced in mid-September it was analysing the outcomes of the court decision, saying that customers who have signed loan agreements with its Zagreb-based subsidiary may have a right to claim nullity of the respective Swiss franc clause with individually filed disputes.
The supreme court has rendered a ruling in collective consumer protection claims against eight commercial banks active in Croatia, rejecting their revisions and deciding that the Swiss franc clause used in loan agreements, linking payments in the local kuna currency to the Swiss franc, are null and void.
Apart from Addiko (former Hypo Alpe-Adria-Bank), the other seven lenders include Zagrebacka Banka, Privredna Banka, Erste Bank, Raiffesenbank Austria, OTP, Splitska Banka (former Societe General-Splitska Banka), and Sberbank (former Volksbank).
In July 2018, Croatia's high commercial court overturned an appeal filed by the eight lenders, and upheld a ruling of Zagreb's commercial court on the legal nullity of the foreign currency exchange clause in CHF-indexed loans. The Zagreb commercial court ruling dating back to 2013 was in favour of some 100,000 citizens, represented by the Croatian consumer protection association, which sued the eight banks regarding CHF-indexed loans and their unilateral decision to raise interest rates.
The loans were extended in 2004-2008 with their financing costs jumping following the sharp strengthening of the Swiss currency in the wake of the 2008 global financial crisis.
In addition, the lenders had decided to increase the charged interest rates, resulting in the monthly instalments on these loans rising by an average of 50%.
Addiko Bank d.d. (formerly known as Hypo Alpe-Adria-Bank d.d.) is among the biggest banks in SEE. You can download our SEE Top 100 ranking
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