Spanish Banking Association forecasts 2-3 bln euros repayment by Spanish banks due to mortgage floor clauses

Spanish banks will pay back clients between 2 billion euros and 3 billion euros (about 2.13 billion and 3.18 billion U.S. dollars) due to mortgage floor clauses, according to the Spanish Banking Association on Friday.

Jose Maria Roldan, president of the association made the forecast in an interview with a local radio station on Friday.

Roldan said the figure would make an impact on the results of the banks, but would not cause a problem for the entities' solvency.

The Bank of Spain had earlier predicted an impact of 4 billion euros on Spanish banks, but Roldan said that figure was in relation with the existing stock of years ago.

Furthermore, he explained that some banks had been working with some clients on this issue and had already reached some agreements.

The European Court of Justice ordered in last December Spanish lenders to pay back their clients all the money they made on mortgage floor clauses.

Mortgage floor clauses imposed a minimum interest rate on floating-rate mortgages establishing a limit on how far mortgage rates could fall.

This prevented Spanish mortgage clients from benefiting from the low interest rates in recent years. Endit