LUXEMBOURG (dpa-AFX) - In the dispute over loans in Swiss francs, the European Court of Justice (ECJ) has backed Polish bank customers. If a loan agreement for a mortgage is declared null and void due to unfair clauses, those affected may be able to demand compensation from the bank. This was decided by the ECJ on Thursday. The ruling could have major implications for the Polish banking sector and Germany's Commerzbank.

Loans in Swiss francs were popular in Poland and other Eastern European countries, especially from 2004. Banks offered them at a much cheaper interest rate than loans in the domestic currency, the zloty. The rude awakening for property owners came later: As a result of the economic crisis in 2008, the franc exchange rate rose. The Swiss currency experienced a further appreciation against the zloty in 2015, following its decoupling from the euro. For Polish borrowers, monthly installments increased dramatically - in many cases, the volume of the mortgage exceeds the value of the real estate.

The "Frankowicze," as the several hundred thousand well-organized affected people call themselves, argued that many clauses in their loan contracts had not been in order. Many of these contracts have already been declared null and void by courts. The ECJ now had to decide whether those affected could claim not only the installments paid, but also compensation.

The Luxembourg judges now affirmed this. In this way, traders in particular could be prevented from including unfair terms in contracts because they would then have to fear financial repercussions. Now the national court must decide on the specific case.

The ruling could also have implications for Commerzbank. It already had more than a billion euros in charges related to loans in Swiss francs at its Polish subsidiary mBank by the end of 2022. The problems at mBank made themselves felt again in the opening quarter of 2023 and could remain a burden for the full year: 173 million euros in additional provisions for legal risks in connection with Swiss franc loans were incurred in Poland in the first three months of the year. This also reduced Commerzbank's earnings.

Commerzbank CFO Bettina Orlopp said Wednesday it was too early to assess the exact impact of the ECJ ruling. "Our strategy to move forward with the settlement of disputes is the right one. And we will definitely push that to reach agreements and settlements with as many customers as possible." She said it was clear that this could have an impact on the second quarter. The manager expects the issue to stay with Commerzbank and its subsidiary mBank for a while: "Towards the end of this year, we should have a clear picture."

For Polish banks, this means that they will have to set aside large provisions for the legal risk of the Swiss franc loans. Poland's financial regulator estimated in the fall that the banking sector could face costs of 100 billion zlotys (22.5 billion euros) if the ECJ ruled against them. It did not rule out a banking crisis./rew/DP/mis