Bankinter has stepped on the brakes with provisions due to controversies multi-currency mortgages. The financial entity that heads Maria Dolores Dancausa closed the financial year 2020 with a reduction in the net provisions for these lawsuits after several years of increases derived from pending court decisions and the entity’s level of exposure to this product. This is recognized by the bank itself in the annual report sent to the National Securities Market Commission (CNMV) this Thursday.
In this sense, and despite the fact that Bankinter has been pointing since 2017 -first year in which the provisions for litigation over the marketing of this controversial product are explicitly collected- that the governing bodies and management of the entity “consider that the provision reflected at the end of the year” was the best estimate of the probable outflow of resources that the bank would have to face. On the other hand, year after year the amounts left in this ‘piggy bank’ have increased.
Specifically, in the report of 2017 Bankinter pointed out that the section on ‘remaining provisions’ included “mainly those derived from multi-currency loan contracts for which the entity has some lawsuits pending resolution by the courts.” This section barely had 3.6 million euros of provisions in 2015, an amount that increased to 15.8 just one year later and went to 85.5 million in the year 2017 itself.
One year later, at the close of 2018, the game was multiplied by more than two until reaching the 184 million euros. These figures once again suffered a significant increase during 2019, reaching 286 million at the end of the year. On the other hand, for the first time since there is data, the figure has dropped in 2020, dropping slightly to 284 millions.
In this way, Bankinter It points out in the aforementioned documentation that, to calculate this data, both the historical average of judgments against the entity by the Courts and the average loss estimated by procedure are taken into account. In addition, according to their calculations, in the unlikely event that all pending multi-currency loan claims were resolved in favor of the client, the bank would have to pay some 318.5 million euros, a figure that is also reduced compared to a year earlier.
Most of the rulings are in favor of the client
The multi-currency mortgages they have been the headache of many banks and clients in recent years. This product, whose fee was paid to entities in a currency different from that of the country in which it had been contracted and that of the income received by each client, has been in court for almost five years. In 2017, the TWO established a doctrine by which it considered that these loans can be classified as abusive if the entities have not correctly warned of the risks they may carry, mainly due to fluctuations.
This type of product was marketed, above all, during the crisis years, when currencies such as yen or Swiss francs were severely devalued. The doctrine of the CJEU, as happened with conflicts of other banking products, forced to analyze whether in each case the entities had complied with the information that was required of them. In most of them he agrees with the customer. Instead, at the end of 2020, the Supreme Court considered valid a multi-currency mortgage by understanding that the customer knew how this product worked. The bank is still pending in the Courts.
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