In the forecasts for 2015, the most important factors that were to have a significant impact on the credit market were the increased requirements related to own contribution and the amendment to the Good Finance program. Unexpectedly, however, the Swiss National Bank (SNB) shook the Polish market already in January, and later a lot happened.
And what awaits us in 2016? Undoubtedly, it will also happen, the first signs of which are in the form of growing loan margins caused by the announcement of the introduction of a bank tax.
Unlocking the course is an increase in installments and balances
On January 15, 2015, the Swiss National Bank decided to stop defending the EUR / CHF rate at 1.20, which immediately translated into strengthening of the Swiss currency exchange rate. The Swiss franc also strengthened against the USD – for a while the CHF / USD exchange rate exceeded even 5 USDs, but eventually it was around 3.95 USDs, ranging from 3.80 to 4.10 throughout 2015.
Such a large increase in the exchange rate translated into an increase in the debt balance of all franc borrowers, and partly also to an increase in the loan installment. The increase in monthly fees was offset by a decrease in interest, because at the same time as the decision to free the Swiss franc, SNB decided to lower interest rates. The 3-month libor, so important for borrowers, was negative and fell to around -0.80%.
After a few months, when all the banks have already updated their schedules and included, also due to pressure from the Office of Competition and Consumer Protection, the negative Libor monthly installments almost returned to the level from before this “black Thursday” 2015. However, one should not forget about the problem of a much higher debt balance, which remains unsolved.
Act adopted, problem not solved
In 2015, the parliament adopted the law regarding the conversion of franc loans. Pursuant to the provisions of the loan, it would be converted into a USD loan at the exchange rate as of the date of launch, with settlement of differences in the amount of loan installments paid. First, the difference between the current franc loan debt and the debt that would be in the case of a USD loan contracted at the same time would be determined.
Part of this amount would be redeemable – 50% redemption was initially proposed. The borrower would also have to pay the difference between the installments of his loan and the corresponding USD loan, because in most cases the borrowers franc paid less than the borrower in USDs. In the course of parliamentary work, an amendment was adopted which, contrary to the government, significantly increased the amount that would be subject to write-off.
If the regulations entered into force in a new form, 90% of the balance difference between the franc loan and the corresponding USD loan would be written off. The too high risk of adopting these provisions meant that the ruling coalition decided to suspend the process of the bill, and thus the provisions went “to the trash” at the end of the parliamentary term.
Installment of the USD loan unchanged
Less cause for concern was borrowers who were in debt in our native currency. They welcomed the new year with the lowest installments of their loans in history due to the cycle of interest rate reductions carried out in previous months. The Monetary Policy Council lowered interest rates in March by 50 basis points, and the 3-month Wibor finally reached the level of 1.65-1.75%.
Therefore, installments fell by an additional approx. 4% during the year, and borrowers may consider the whole of 2015 successful. Never before in history, regardless of the date of the commitment, their payments have not been so low.
Euro – decrease in interest rate and exchange rate
In 2015, people in debt in euro could also be satisfied. The decisive Euribor fell from around 0.17% at the beginning of the year to -0.12% at the end of 2015. The USD also strengthened slightly against the European currency, which, combined with a lower interest rate, also translated into a decrease in the monthly installment of loans in euros.