Kovačević: We understand the problems of people with "Swiss franc" loans

Loans with a currency clause in Swiss francs (CHF) are still a big problem in BiH and the region. The problems started in 2011 when the CHF, a stable currency, began to rise, and clients faced an increase in monthly installments and consequently problems with repayment. As Dragan Kovačević, interim director of "Hypo Bank", which largely issued such loans, told the Patria News Agency, the bank, on the other hand, had an impact through reputational risk, as well as financial losses - provisions, write-offs, and receivables, writes the Patria News Agency.

- Let me remind you. Loans with a currency clause in CHF were launched in 2006 as a product that had the lowest interest rate at the time and were considered the most favorable loans of that period. That's why they were attractive. The difference in interest rates between these and KM loans was over 2 percent. The repayment of these loans went smoothly without any problems until 2011, when the CHF exchange rate strengthened, and, of course, as a consequence, the monthly installments for loan repayment increased - Kovačević explained.

He further noted that the current situation has two dimensions: one part of the clients wants to solve the problem of increased installments due to the rise in the franc exchange rate by filing lawsuits, insisting on the illegality of these loans and the currency clause, while another part of the clients wants to solve the problem through discussions with the bank.

- Regarding court proceedings, the first lawsuits were filed in 2011, and by April 2014, 21 non-final judgments were issued, of which 17 were in favor of the client and 4 in favor of the bank regarding the currency clause. In March, a second-instance judgment was made, which confirms the bank's legal position. The second-instance court determined that the first-instance court acted on an inadmissible and irregular lawsuit and violated both procedural and substantive law, so the first-instance judgment in favor of the client was overturned, and the case was returned to the first-instance court for a new decision - says Kovačević.

The second dimension and solution to the problem, Kovačević adds, is simple for all who are willing to consider the entire situation.

- The main problem is the increase in monthly installments due to the rise in the CHF exchange rate. We fully understand the problems our clients are facing, and that is precisely why we are offering a solution through relief and sharing that burden between the bank and the clients. Relief includes reducing interest rates, converting loans to EUR or KM, thereby eliminating currency risk, along with writing off one or more installments, the number of which depends on each individual loan. So far, over 500 client requests have been processed, and many of them are already using the offered relief - Kovačević added.