47. Subsequent events

As indicated in detail in Note 46.3, on 16 February 2023, the Advocate General of the CJEU (the ‘Advocate’) issued an opinion relating to whether, where a loan agreement between a bank and a consumer is invalid from the outset because it contains unfair contractual terms, the parties can claim any other benefits in addition to the reimbursement of the money paid in the performance of that agreement (the bank – the principal of the credit, the consumer – installments, fees, commissions and insurance premiums) and statutory interest for delay from the time of the demand for payment.

In the Advocate’s above opinion, under Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (‘the Directive’):

• claims by a consumer for other consideration – are not incompatible with its provisions, it being for the national court to determine, in the light of national law, whether consumers are entitled to pursue such claims and, if so, to rule on their merits;
• claims by banks to demand additional performance from the consumer (so-called remuneration for the use of capital) – preclude a judicial interpretation of national law that would grant banks such claims.

The above opinion is non-binding and the CJEU judgment relating to the above area is not expected until mid-2023 at the earliest.

The Group has estimated the provision for legal risk relating to CHF foreign currency mortgage loans in accordance with the assumptions set out in Note 46.3, assuming a significant increase in the number of litigation cases in the future and the negative nature of the court decisions.

The Group assesses that the possible sharing of the Advocate’s position expressed in the opinion by the CJEU in its ruling may, in the future, affect the need to revise the assumptions related to the calculation of the provision and the Group’s estimates of the expected number of lawsuits and claims (remuneration) for the borrower, which are not possible to quantify at present.

The changes in the applicable transitional arrangements for IFRS 9, as set out in Article 473a of Regulation 575/2013, and unrealized gains and losses at fair value through other comprehensive income, as set out in Article 468 of Regulation 575/2013 came into force on 1 January 2023. The Group estimates that they will change the Group’s total capital ratio by approximately – 0.5 pp.