Swiss Upending Polish Mortgages Unnerves Bank Bondholders - Bloomberg

Swiss Upending Polish Mortgages Unnerves Bank Bondholders - Bloomberg:



"Among the victims of last week’s shock surge in the Swiss franc are bond investors in Polish banks, which hold $35 billion in mortgages denominated in the currency.



Yields on Eurobonds for lenders including PKO Bank Polski SA and MBank SA jumped to five- and nine-month highs after the Swiss National Bank unexpectedly ditched its currency cap. The move sent the zloty tumbling against the franc on concern more Poles will fall behind on repaying franc-denominated home loans. 




JPMorgan Chase & Co. said the nation’s banks may need to make additional provisions for non-performing mortgages in the currency, whose value is equivalent to 6.7 percent of gross domestic product, data compiled by Bloomberg show. While the zloty plunged 20 percent against the franc following the SNB action, Polish lenders have adequate capital to withstand a drop of more than twice that, the financial markets regulator said last week, citing results of October stress tests."



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