Ljubljana, November 16, 2015/Independent Balkan News Agency
The first litigation involving Swiss franc loans started at the Maribor District Court on Monday, with NKBM bank being accused by three borrowers of not having sufficiently warned them about the risks of taking out a loan in a foreign currency.
Three family members took out a franc loan in 2008 and due to the change of the exchange rate following the decision of the Swiss central bank to end the franc’s peg to the euro at the beginning of this year, the loan principal surged.
The plaintiffs claim the bank should have warned them about the risks.
“The contracts included provisions that the borrowers are aware of exchange rate risks…but in my opinion and according to case law, this is insufficient”, said the plaintiffs’ lawyer Robert Preininger, adding that the loan was a kind of bet, with the borrowers betting that the exchange rate would remain stable, and the bank counting on profiting on the exchange rate difference.
As such, the key question is whether the banks had knowledge of the fact that the rate could change significantly, and in that case “they did not equally share this risk with the borrower”, he said.
The bank’s attorney did not wish to comment on the case, while the bank had previously said that the risks were evident from the bank’s promotional materials.
The next hearing in the case is scheduled for 14 January.
The Franc Association, an informal advocacy group of franc borrowers, says almost 100 individuals have so far decided to sue their banks.
Franc loans had long been popular in Slovenia because interest rates were much lower than for euro loans. But when the franc rate spiked in January, many borrowers show their installments surge.
Some countries, most notably Croatia and Hungary, took controversial measures to protect borrowers, while the Slovenian government on its part decided that no action was needed.
At the end of last year households had nearly EUR 800 mln in outstanding loans in francs.