Polish Stocks Climb to 2016 High as Government Softens Bank Plan

  • Zachodni, MBank lead gains as Morawiecki offers olive branch
  • Compromise on foreign-currency mortgages is relief for banks

Polish stocks rose to the highest this year after the government softened its stance on swapping foreign-currency mortgages into zloty, easing concern that banks will face as much as $11 billion in costs.

The WIG20 Index jumped 2.9 percent at 3:06 p.m. in Warsaw, led by Bank Zachodni WBK SA and MBank SA. Prime Minister Mateusz Morawiecki told reporters that the government may revise the program to convert $42 billion of loans in Swiss francs and euros. The comment signaled he may be willing to compromise on proposals by the Law & Justice party to realize campaign pledges of more social spending that helped it win the national election in October.

“Morawiecki showed that the government may take a more rational and responsible approach, and won’t allow banks to be hurt too much,” said Andrzej Knigawka, an analyst at ING Securities SA in Warsaw.

Bank Zachodni, a unit of Banco Santander SA, and Commerzbank AG’s MBank gained at least 6 percent after Morawiecki said President Andrzej Duda “won’t push” an earlier proposal to re-denominate foreign-currency loans using non-market exchange rates.

A gauge of banks traded on the Warsaw bourse fell to the lowest level in more than three years last month on concern about the proposal’s cost which an estimate by the central bank put at 44 billion zloty ($11 billion).

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