Swiss franc (CHF) loans have fallen significantly in recent years following loan restructurings carried out by the banks according to a report from the Cyprus Central Bank.
The Central Bank reports that Swiss franc loans totalled €243 million at the end of September 2021, a fall of approximately €1.8 billion (88%) from €2 billion in December 2015.
Loans to non-financial corporations have fallen by 98%, while loans to households have fallen 81%.
The number of borrowers with the Bank of Cyprus, the Hellenic Bank and the Alpha Bank at the end of September stood at 1,339, a fall of 77.1% from 5,844 in December 2015.
The large fall in Swiss franc loans of the three banks is due to the ongoing servicing/repayment of existing loans and partly to the conversion/restructuring of the loans to euros.
According to the Central Bank’s report, during the third quarter of 2021, €467 million Swiss franc loans were written off or repaid.
The total borrowing in CHF for main residences fell €288 million in December 2015 to €85 million in September 2021, approximately €27 million of which relate to loans less than €250,000.
As of last September, the three banks had CHF loans amounting to €196 million, of which €123 million related to loans to households (€96 million mortgages).
Loan repayments amounted to €271 million with households having repaid € 162 million (of which €93 million related to secondary residences and € 49 million related to main residences.)
Non-performing CHF loans have fallen by 89% since the end of 2015, with loans to households falling by 82%.
Swiss franc loans in Europe
Many Britons allege they were mis-sold Swiss franc when they bought property on the island as holiday homes or permanent residences. Several organisations, legal firms and individuals have been helping them negotiate settlements with the banks with varying degrees of success.
The stress of the situation has led to three suicides to my knowledge and numerous marriage breakups. One of the organisations helping Brits is currently being prosecuted in the UK following investigations into numerous complaints brought by its clients.
In 2014, Hungary forced its banks to convert its foreign exchange mortgages into the local currency (the Hungarian Forint). In 2015, Croatia followed suit.
In 2019, a decision by the European Court of Justice enabled Polish borrowers to repay the balance of their debt in zloty, at the original exchange rate, rather than in Swiss francs.
I understand a number of Brits with CHF loans have also taken their complaints of alleged mis-selling to the European Court of Justice.