Increase in the number of Polish overdue housing loans may give rise to a systemic problem

The Credit Information Bureau (BIK) sees an increase in the number of overdue housing loans caused by borrowers withholding repayment and believes this poses a threat of systemic risk in the banking sector, assessed CEO Mariusz Cholewa.

"People are stopping repaying loans and this could generate a systemic problem for the entire banking sector," Cholewa said during the Banking Forum.

He reported that the withholding of loan repayments is affecting the best repaid housing loans so far. In his opinion, the phenomenon may be due to borrowers withholding repayments while waiting for likely favorable legal settlements.

He added that the phenomenon is gaining momentum - in the past two months, the BIK has seen a significant increase in loans overdue by more than 90 days. Cholewa's presentation showed that the share of such loans in the portfolio had reached 1.6%.

He stressed that it is difficult to assess the quality of the portfolio today as bad (also in other market segments), but he found the aforementioned phenomenon observed in the portfolio of home loans worrying.

Source: BIK and ISBnews