A court in Slovenia has annulled a real-estate loan that had been executed in Swiss francs on grounds that the borrower hadn’t been informed of the high risks of such a currency deal, the Reuters news agency has reported.
The report quoted the borrower’s lawyer as saying that the decision could have implications elsewhere in Europe, in addition to putting as much as €524m of loans held by Slovenian banks at risk.
British property buyers in Cyprus were a particularly hard-hit group, with hundreds thought to have been caught in the unexpected appreciation of the Swiss franc.
Switzerland scrapped its cap on the currency in January 2015.
“This is a break-through decision. It is the first such decision in Slovenia and one of the first in the European Union,” the lawyer, Robert Preininger, told Reuters.
Reuters said Preininger declined to give any details about the loan or borrower, but said that the court had ruled that the borrower would need to repay their bank – the Slovenian unit of Austrian bank Sparkasse – only the amount of loan, without having to pay any interest. This would reduce the payment by at least 60% compared with what it would have been if the loan hadn’t been annulled, the report said.
According to Reuters, Sparkasse had yet to receive the decision and gave no further comment.