MADRID, Jan 23 (Reuters) - Spain’s Banco Sabadell said on Monday it expected a one-time hit of up to 490 million euros ($527 million) from a ruling that obliges banks to reimburse customers sold mortgages with interest rate floors which have since been ruled illegal. The bank added that it would fully provision against the possible impact of any claims on 2016 earnings. On Friday, the government approved a new law which gives lenders three months to reach a settlement with customers which had been sold the mortgages. Banks are accused of not adequately flagging the mortgage floor clause to customers. (Reporting by Jose Elias Rodriguez; Writing by Paul Day)
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 Last week earnings. Following accusations that banks do not adequately inform customers on the mortgage floor clause, interest rate floors were ruled illegal. 2016, the government approved a law that gives lenders three months to settle with customers that had been sold the mortgages.