Hypo Alpe Adria Bank (HAAB) has submitted an initiative to the Constitutional Court for the evaluation of the constitutionality of the Law on the conversion of loans in Swiss francs into euros, but, despite the initiative, it will continue to implement the law in accordance with the defined deadlines. In case of positive outcome in court until the deadline in which the bank should offer clients new contracts (45 days), will suspend the application of the law.
This was said by the chief executive officer of HAAB, Kristof Schoen, in an interview with "Vijesta".
- Do you expect the decision of the Constitutional Court to be in favor of HAAB?
That's a tough question. I did not even expect that the law would be adopted. We are not happy with the law, but we will respect it. If you look at how the Constitutional Court has decided in the past and how long it took for it to declare something, from our perspective the chances of a positive or negative decision being made, within the period in which we need to offer clients new contracts (45 days) are small . The initiative was our obligation to the owners of the bank and the decision is a consequence of the obligation to reduce the loss on that basis. However, that case is no longer in our hands. If the Constitutional Court decides on our initiative for the year, it will not have retroactive effect. The law may then disappear, but without effects on the damage the bank suffered. Every day in which we do not receive a response from the Constitutional Court, clients are in a positive situation to receive a conversion.
- Will the bank comply with the deadlines defined by law?
I think we will. This is a process we have been working on for a long time, although we submitted an initiative to the court. We started activities on the implementation of the law before it was officially published in the Official Gazette. We agreed with the Central Bank on the calculation methodology in order to have a clear understanding of what debt reduction is for each client. It is clear from the Law that clients will benefit greatly, because the average reduction in their remaining debt will be very significant compared to what they owed according to the old calculation.
It is a big loss for the bank and we are not happy about it. From a legal point of view, from our perspective it was not justified. Compared to, say, Croatia or Poland, where this is a big economic problem, in Montenegro, a small number of citizens took out that loan. But, in addition, we are fully committed to the application of the law. We have already contacted clients and announced the announcement through the media. It would be helpful for clients to come as soon as possible.
- Does the bank have an obligation to convert all loans?
The fact is that we can only convert those loans for which we receive the written consent of the client. We will make an offer, and whether the client will accept it or not is another matter. When we give the client an offer after the conversion, if he is not satisfied with the future interest rate, he can choose another bank where he might get a more favorable interest rate. Until the moment of conversion, everything will be charged to him at an interest rate of 8,2 percent, which is defined by law. Then he needs to accept the conversion offer and after that he can get a lower interest rate depending on his creditworthiness. If he rejects the conversion offer, he remains tied to the Swiss franc and can refinance the loan with a higher amount of debt that he has left. It is wise to accept the conversion, and then to take the best offer from the market for further repayment of the loan.
- What interest rates will HAAB offer after the conversion?
It is not easy to answer that question because now other banks come with very attractive offers. We will certainly keep in mind the client's credit rating and see what we can offer. We will try to give them a good offer so that they don't go to other banks. We have to be careful in that offer.
The lawsuit against the bank loses its meaning
- The lawyers who sued the bank on behalf of the clients assessed that the lawsuit is pointless if the conversion is carried out in accordance with the clients' requirements. Do you support that position?
I agree with that approach because I think most actions against the bank are no longer valid. This is because clients have the opportunity to significantly reduce the amount of debt. There is no justification to continue with the lawsuit, as it is clear that we offer conversion to all of our clients. Those who filed the lawsuit are partially clients of the bank, but among them there are also those who are clients of other legal entities. In the bank, we can only comment on the cases of those who are currently our clients.
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