Bank Millennium concluded 1,072 voluntary settlements with holders of Swiss franc loans in the fourth quarter and 3,672 settlements throughout 2023, the bank reported. Since 2020, when the bank started offering settlements, 21.4 thousand have been concluded.
“In the fourth quarter of 2023, the number of amicable settlements concluded with holders of foreign currency mortgage loans returned above the level of 1,000 quarterly. The number of settlements concluded so far amounted to 21.4 thousand (in 2023: 3.7 thousand), which corresponds to 35 % of the number of credit agreements active when the settlement process was fully launched. Additionally, the number of amicable settlements concluded in court continued to grow at a stable pace. In Q4 2023 alone, 185 such settlements were concluded (17% of the total), while in 2023 529 (14%) such settlements were concluded,” we read in the release.
The costs related to voluntary settlements amounted to PLN 89 million in the fourth quarter (before tax, included in the exchange result line and also in the modification result line), while in 2023 these costs amounted to PLN 326 million (2022: PLN 484 million). The relatively higher cost of settlements in recent quarters reflected, among other things, the growing number and share of settlements at the stage of court proceedings. In Q4, 185 such settlements were concluded compared to 156 in Q3 (2023: 529 compared to 281 in 2022), the material states.
As a result of negotiations, awarded judgments and other natural factors, in the fourth quarter of 2023 the number of active foreign currency mortgage loans decreased by 1,651 to 32,435, while during 2023 it decreased by almost 5,600 after a decrease by 9,600 throughout 2022, it was also reported.
“As of December 31, 2023, the bank had 20,914 loan agreements and an additional 1,780 loan agreements from the former Euro Bank that are the subject of ongoing individual court disputes (excluding claims brought by the bank against customers, so-called debt collection cases), regarding indexation clauses in foreign currency mortgage loans. A relatively small part of these lawsuits (11%) was brought by borrowers who, as of the date of filing the lawsuit, had fully repaid the foreign currency mortgage loan or converted it into a mortgage loan in PLN,” we read further in the announcement.
The bank also announced that total provisions for legal risk related to foreign currency mortgage loans in the fourth quarter amounted to PLN 702 million (before tax), including PLN 620 million related to the portfolio of foreign currency mortgages granted by the bank. Throughout 2023, these values amounted to PLN 3,065 million and PLN 2,828 million, respectively (2022: PLN 2,017 million and PLN 1,844 million, respectively).
In 2023, the value of the above-mentioned provisions for loans granted by the bank amounted to PLN 2,762 million compared to PLN 1,863 million in 2022. While in the first half of 2023, the increase in provisions for foreign currency mortgage loans resulted from negative changes in the legal environment, especially the CJEU judgment of June 15 2023, and as a consequence of methodological changes (e.g. elimination of the remuneration scenario for capital made available by the bank) and updated parameters in the bank’s reserve creation methodology, in the second half of the year they were primarily derived from changes in parameters, reflecting, inter alia, the actual and expected influx of court claims, indicated further.
At the end of December 2023, the balance of provisions for the portfolio of foreign currency mortgage loans granted by the Bank amounted to PLN 7,269 million (corresponding to 83% of the grossed portfolio of foreign currency loans) and provisions for the portfolio of foreign currency mortgage loans granted by the former Euro Bank amounted to PLN 603 million. The allocated, i.e. reducing the gross balance sheet value of each of these portfolios amounted to PLN 6,028 million and PLN 489 million, respectively, it was summarized.
