Banco Sabadell expects to pay out $527m (up to €490m) following a ruling from the Spanish government that obliges banks to reimburse customers sold mortgages with interest rate floors, the lender said on Monday. Additionally, Banco Sabadell announced it will provision against the possible impact of any claims on 2016 earnings. Following accusations that banks do not adequately inform customers on the mortgage floor clause, interest rate floors were ruled illegal. Last week, the government approved a law that gives lenders three months to settle with customers that had been sold the mortgages.
Banco Sabadell expects to pay out up to €490m ($527m) following a ruling from the Spanish government that obliges banks to reimburse customers sold mortgages with interest rate floors, the lender said on Monday. Additionally, Banco Sabadell announced it will provision against the possible impact of any claims on 2016 earnings. Following accusations that banks do not adequately inform customers on the mortgage floor clause, interest rate floors were ruled illegal. Last week, the government approved a law that gives lenders three months to settle with customers that had been sold the mortgages.