Hypo Alpe Adria Bank Faces Trial in Montenegro

A group of Montenegrin borrowers, represented by the Center for Consumer Protection, has taken the Hypo Alpe Adra Bank to court in Podgorica after it refused to convert their increasingly expensive Swiss franc loans into euro - and change variable rates to fixed.

The problem began after the Swiss franc unexpectedly strengethened folllowing the 2008 global economic crisis, leading to a sharp rise in monthly payments on loans taken out in the Swiss currency.

After the preliminary hearing in May, the trial of the collective claims hundreds of clients is scheduled to start next week.

Around 3,000 Montenegrins took out loans pegged to the Swiss franc in 2007 and 2008, attracted by the then lower interest rates.

Consumer rights groups have demanded that the bank help the borrowers by converting loans into euro and lowering the interest rates, but the bank refused.

"We offered an extrajudicial agreement but the bank set conditions that are unacceptable for the clients," the representative of the Center for Consumer Protection, Ogla Nikcevic, said on Thursday.

The bank on Thursday repeated that it could not accept the proposal to convert the loans into euro, adding that the demand had no legal standing.

"Hypo Alpe Adria... are confident that the court will prove that we acted in accordance with the law," the bank said in a statement.

However, the borrowers are optimistic that the court will favour their side because courts in Croatia, Serbia and Bosnia have already reached similar verdicts in favour of the customers of Hypo Alpe Adria.

In June, Hungary adopted a law designed to force the bank to withdraw all allegedly "unfair" fees and interest rates.

Danilo Matic, one of the borrowers...