Swiss Franc Loans: Challenges and Solutions for Banks

Banks in Greece are facing the challenge of managing Swiss Franc loans totaling €2.5 billion. Banks are assessing the potential response of borrowers to loan restructurings, considering their financial situation and the stage of the loan.

The interest rate for Swiss Franc loans is now zero, plus a 1% spread, with the adjusted rate reaching 2.90% for the category without criteria. The new arrangement offers a fixed exchange rate and a haircut, albeit with a higher interest rate.

Banking circles report that the category of borrowers without income criteria is the most likely to participate in the arrangement, although they enjoy the smallest haircut (15%). If the loan is close to being paid off, the arrangement may not be attractive due to the risk of an increase in the exchange rate. Otherwise, the haircut may be preferable to start repaying the principal.