At the end of 2023, Donald Tusk’s government presented a project to extend the credit holidays until 2024. The Polish Financial Supervision Authority estimates their cost at PLN 2.5-3.5 billion. The Office of Competition and Consumer Protection UOKiK proposes to limit assistance to borrowers whose loan amount does not exceed a certain ceiling, e.g. PLN 1 million or lower. The Polish Bank Association argues that the solution is harmful to financial institutions.
At the end of December, the government sent a new version of the law on credit holidays for consultation. The Ministry of Finance estimates that by September 30, 2023, the total cost of credit holidays for banks has so far amounted to PLN 12.8 billion. credit holidays in their current form will apply until the end of April. The new government wants to in the first quarter, installment repayment was suspended in March, and in subsequent quarters, one month in each quarter.
Credit holidays. The Polish Financial Supervision Authority calculated the possible costs
The Polish Financial Supervision Authority estimates that the extension of credit holidays on the terms proposed by the government will cost approximately PLN 3.5 billion with full participation in the program, and assuming participation at the level of the credit holiday program for 2022-2023 – approximately PLN 2.5 billion. PLN billion
“The planned changes in regulations, in connection with the introduction of a new, although limited, loan holiday program and the possible need to increase the funds accumulated in the FWK, would result in the banking sector having to incur a significant cost in 2024. The effect of incurring such a cost would be a reduction in the capital surplus in the banking sector and, consequently, a reduction in the potential supply of bank credit to enterprises and households,” the Commission wrote.
The draft act proposes changes that will increase the maximum amount of support per loan from PLN 72,000. PLN up to 100 thousand PLN and an increase in the number of contracts that could potentially receive support.
“Assuming that the willingness to use aid remains unchanged, the number of loan agreements covered by the aid program will increase by approximately 9,000, and the cost of support will increase by almost PLN 1 billion. The number of agreements and the cost of support may increase significantly, even several times, depending on the distribution of the borrower’s monthly income after repayment of the loan installment and with a possible change in the borrowers’ tendency to use support,” writes the Polish Financial Supervision Authority.
The Office of Competition and Consumer Protection proposes introducing restrictions
The Office of Competition and Consumer Protection also commented on the extension of credit holidays. In his opinion “solutions regarding the extension of the so-called credit holidays and the extension of support for borrowers provided for in the Act on the support of borrowers who have taken out a housing loan and are in a difficult financial situation deserve support” – especially when taking into account the persistence of high interest rates.
The Office of Competition and Consumer Protection proposes introducing restrictions and directing assistance to borrowers whose loan amount does not exceed a certain ceiling, e.g. PLN 1 million or lower, both in relation to credit holidays and support from the Borrower Support Fund.
ZBP criticizes credit holidays
The narrative of the Polish Bank Association is still the same: the institution associating banks argues that loan holidays are ineffective, do not solve the borrowers’ problem, and also shift the burden onto the banks.
“Assuming that the same percentage of eligible persons as in the previous credit holidays will benefit from the credit holidays, the Polish Bank Association estimates their cost at PLN 2.55 billion (PLN 3.76 billion in the case of maximum participation),” the Polish Bank Association wrote in its opinion.
“It should be emphasized that this is the amount by which the banks’ equity will decrease, and thus the potential for creating lending will be limited by PLN 13-20 billion,” it added.