Key insights
- Croatia's Supreme Court will decide on proceedings regarding Swiss franc loans, potentially impacting banks like UniCredit and Intesa Sanpaolo by up to 700 million euros. The ruling's impact on US equities is limited, but it highlights potential legal risks for European banks with international operations.
Investing.com -- Croatia’s Supreme Court is set to convene on Wednesday to determine the format of proceedings in a decade-long legal dispute over Swiss franc loans that could impact banks operating in the country by up to 700 million euros.
The tribunal will meet in a closed session to decide whether the ruling will be made public, according to people familiar with the matter. If the court chooses to keep proceedings private, a verdict could be delivered immediately, the people said.
The case centers on whether borrowers who voluntarily converted Swiss franc mortgages and other loans into euro-denominated instruments around a decade ago may seek additional compensation. The association of Swiss franc borrowers, which represents around 30,000 individuals, estimates approximately 700 million euros ($814 million) are at stake.
The ruling could affect European lenders including Italy’s UniCredit (BIT:UCG) SpA and Intesa Sanpaolo (BIT:ISP) SpA, as well as Austria’s Erste Group Bank AG and Raiffeisen Bank International AG, which operate in Croatia.
The court previously indicated it would make a decision on the proceedings soon.
Verdicts may be appealed at the country’s Constitutional Court.
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