Polish banks braced for a slew of lawsuits on Thursday after the EU's top court ruled Poles holding crippling foreign-currency mortgages could renegotiate them, a potentially costly move for both banks and the Polish economy.

Estimates of the potential losses for lenders vary, with experts indicating the banks concerned could reach from one to six times of their 2018 earnings.

The Luxembourg-based Court of Justice of the European Union ruled on Thursday in favour of Polish mortgage holders, affirming their right to petition domestic courts to restructure loans containing abusive clauses.

"Some banks used illegal, abusive, terms that were prohibited," Polish Finance Minister Jerzy Kwiecinski told reporters in Warsaw, reacting to the CJEU's ruling.

"This means that the owners of this type of (Swiss) franc mortgages will be able to claim their rights in courts," Kwiecinski said, adding that the finance ministry was monitoring the situation in the banking sector.

Around 700,000 Polish households took out mortgages in Swiss francs more than a decade ago, attracted by low interest rates.

They were hit hard when the zloty depreciated sharply against the franc, nearly doubling the costs of their loans.

The CJEU ruling will serve as a precedent for further litigation in the Polish courts, a lengthy process which experts say will give banks time to build up buffers.

Swiss franc mortgage holder Barbara Husiew accused banks of "greed" and acting in "bad faith" at a special press conference in Warsaw on Thursday organised by fellow borrowers to watch a live broadcast of the CJEU ruling.

"Banksters, prepare to be whipped in courts rooms," she said, adding that a "tsunami (of litigation) will flood courts."

There are currently around 500,000 Swiss franc mortgages worth some 100 billion zloty. They account for around 20 percent of all housing loans in Poland.

Melina Skouridou, a senior analyst with global ratings agency Moody's, has described the performance of the Swiss franc mortgages as "relatively good", despite the fact the value of the currency has nearly doubled against the zloty.

bo-mas/spm

MOODY'S CORP.

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