Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Zagreb Court Rules Against Banks in Swiss-Franc Loan Case

A commercial court in Zagreb, the capital of Croatia, ruled against local units of eight foreign banks for misleading borrowers holding Swiss-franc loans.

Judge Radovan Dobronic said the banks, including Zagrebacka Banka d.d., a unit of UniCredit SpA, and Privredna Banka d.d., a unit of Intesa Sanpaolo SpA, were not clear enough in explaining to clients the risks of such loans. Zagrebacka, Privredna and Austria’s Hypo Alpe-Adria-Bank International AG will appeal the ruling, they said in e-mailed answers to Bloomberg questions. Bank stock trading was halted.

The banks “didn’t inform clients about all the parameters related to their decision,” Dobronic said. The banks “hurt the collective interests of borrowers of Swiss-franc loans” and “created an imbalance in the rights of contractual parties,” in violation of consumer-protection laws.

The guilty verdict, which comes four days after Croatia became the 28th member of the European Union, may affect the domestic banking practices and cost the institutions a combined 18 billion kuna ($3.1 billion), according to a calculation made by Zagreb-based Banka Magazine.

The bourse suspended trading of Zagrebacka, Privredna and Erste Bank, a unit of Austria’s Erste Group Bank AG, shortly before 10 a.m. in Zagreb, exchange spokeswoman Sanda Kuhtic said by phone. Trading will remain suspended until the bourse “hears from the banks on their plans.”

Informed Clientele

Zagrebacka declined to comment beyond confirming its intention to file an appeal. Hypo Bank spokesman Igor Vukasovic responded to Bloomberg in an e-mail about the bank’s appeal plans.

“All the clients were from the very beginning informed about a heightened risk related to fluctuations of Swiss franc’s exchange rate,” Privredna spokesman Drazen Dumancic said.

There are an estimated 75,000 loans in Swiss francs in Croatia, totaling 28 billion kuna, according to Banka Magazine. Croatians are paid wages in the local currency, kuna, which is managed against the euro.

A number of borrowers, represented by consumers’ association Potrosac, in December filed a lawsuit against the banks over contracts allowing banks to charge a variable interest rate on monthly loan payments.

The borrowers in May also filed a lawsuit against the central bank, alleging it was illegally favoring commercial banks in allowing the practice.

Contract Changes

If the court decision becomes final, banks would be obliged within 60 days to change contracts so that borrowers’ principal is calculated in kuna at the date of the contract signing, with a fixed interest rate.

“The unknown element is how high the fixed interest rate will be, and the banks and their clients will have to determine that through negotiations,” Ante Babic, an economist at Zagreb-based Center for International Development, said in an interview after the ruling. He added the ruling represents a “good step” towards increased consumer protection.

Phone calls to the banks’ representatives in Zagreb were not immediately answered.

The kuna weakened to 7.4912 against the euro at 1:57 p.m. in Zagreb, from 7.4705 yesterday, according to data compiled by Bloomberg.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.