Court EU orders to Spanish banks to return to customers more than 4,200 mln dlr disputed mortgages – swissinfo.ch

By Jesus Aguado

MADRID/BRUSSELS (Reuters) – Spanish banks will be required to return to customers more than 4,000 million euros (4.200 million dollars) in capital unduly charged by some controversial clauses of mortgages if they are declared null and void, said Wednesday a ruling of the European Court of Justice that reversed an opinion of the Supreme Court.

banks will have to compensate their customers for the money lost on mortgages prior to may 2013, when the Spanish Supreme Court declared invalid the so-called “clauses” floor-if it had not been explained with transparency.

The mortgages had an interest rate could not fall below the reference, which meant that the customers suffer losses due to the lower cost of borrowing when rates were cut below this level.

The actions of the entire Spanish banking sector fell in the block following news of the judgment. The entities most exposed to the “terms” soil-Banco Popular, Sabadell and Caixabank – would lose between 6.2 and 3.6 per cent. Outside of the index benchmark Ibex, Liberbank is collapsed by 10 percent.

A source from the Bank of Spain said the ruling Wednesday would have an additional impact “slightly above” of the 4,000 million euros on the local lenders.

“The case-law of the Spanish limit in time the effects of the declaration of nullity of the clauses ground contained in the contracts of mortgage loan in Spain is incompatible with the Law of the Union,” he said in a statement to the court.

The judgment of the european court, which was not expected by analysts, nor by the banks, does not admit appeal, according to a spokesman for the judiciary of the EU.

most of The banks have already withdrawn these clauses -introduced during the last financial crisis – or at least has made provisions of approximately 5,000 million euros (5,200 million dollars) to cover possible compensation with calculations based on the judgment of the Supreme Court.

The new court ruling would force the applying to banks with between 3,000 and 4,500 million euros, according to analysts.

Caixabank, the third bank in the country, has already said that it could face a impact of 1,250 million euros in the worst scenario, while Sabadell and Popular, they must pay 700 million euros each. The lender was nationalised Bankia could be affected at 200 million euros, while Liberbank would face supplies close to 259 million euros.

(1 us dollar = 0,9618 euros)

(Reporting by Jesus Aguado. Written by Emma Pinedo. Published in Spanish by Rodrigo de Miguel, Jose Elias Rodriguez and Marion Giraldo)