Economy May 27, 2026 07:51 AM

Croatia's Supreme Court Weighs Procedure in Long-Running Swiss Franc Loan Case

Closed-session decision on publication could fast-track a ruling that may expose banks to roughly €700 million in claims

By Derek Hwang

Croatia's Supreme Court will meet on Wednesday to decide whether its handling of a decade-long dispute over Swiss franc loans will be public or private. The association representing about 30,000 franc borrowers says up to €700 million is at stake. A private proceeding could allow the court to hand down a verdict immediately, a decision that could affect a number of European banks operating in Croatia.

Croatia's Supreme Court Weighs Procedure in Long-Running Swiss Franc Loan Case

Key Points

  • The Supreme Court will meet Wednesday to decide whether proceedings in the decade-long Swiss franc loan dispute are public or private - impacting timing of any ruling.
  • An association representing about 30,000 franc borrowers estimates potential claims at approximately 700 million euros.
  • A range of European banks operating in Croatia - including UniCredit, Intesa Sanpaolo, Erste Group and Raiffeisen Bank International - could be affected, with implications for the banking sector and financial markets.

Croatia's Supreme Court is scheduled to meet on Wednesday to determine the format of proceedings in a legal dispute that has been running for about ten years and concerns loans originally denominated in Swiss francs. The outcome of the hearing on whether the court will proceed publicly or in private could have financial implications for lenders active in Croatia estimated at roughly 700 million euros.

People familiar with the matter said the tribunal will hold a closed session to decide if the ruling will be made public. Those same sources indicated that, should the court opt for a private process, it could issue a verdict immediately following that closed deliberation.

The core legal question is whether borrowers who voluntarily converted Swiss franc mortgages and other loan products into euro-denominated obligations around a decade ago retain the right to seek additional compensation. The association representing Swiss franc borrowers, which counts approximately 30,000 members, places the potential financial exposure at about 700 million euros.

If the court issues a decision that opens the door to further compensation claims, the implications would extend to a range of European banks with operations in Croatia. Institutions named as potentially affected include Italy's UniCredit SpA and Intesa Sanpaolo SpA, as well as Austria's Erste Group Bank AG and Raiffeisen Bank International AG.

The high court had previously signalled that it would reach a conclusion on the procedural question in the near term. Any final rulings from the Supreme Court could still be challenged at the country's Constitutional Court, providing an additional legal avenue for appeal.

How the tribunal resolves the question of public versus private proceedings will therefore shape not only the timing of a decision but also the immediate legal and financial consequences for borrowers and banking firms operating in the Croatian market.

Risks

  • If the court proceeds in private and issues an immediate verdict, affected banks could face sudden legal and financial exposure - a risk to bank balance sheets and investor sentiment in the banking sector.
  • Any decision may be appealed to the Constitutional Court, extending legal uncertainty and delaying final financial resolution for borrowers and lenders.
  • Limited clarity on the scope of potential compensation for converted loans creates uncertainty for borrowers and loan portfolios, affecting credit risk assessments in the Croatian market.

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