Thousands of Polish borrowers took out mortgages in Swiss francs more than a decade ago to benefit from low interest rates, but then faced ballooning repayments when the zloty weakened sharply against the Swiss currency.

Many mortgage-holders took banks to court. While some have reached settlements, the Polish regulator has said long-running legal action could cost the country's banks 100 billion zlotys ($22.65 billion).

KNF sent the recommendation on Friday to PKO BP, Santander Bank Polska, and INB Bank Slaski, the banks said, even though, the watchdog confirmed that they met requirements for 2022 dividend payouts.

The Polish unit of Netherlands-based ING Groep said its management recommended withholding dividend payment, and to present the annual general meeting of shareholders (AGM) a proposition to allocate 513.9 million zlotys to reserve capital intended for dividend payouts.

It said the aim was to maintain capital security until the bank can confirm the scale of potential risks.

Should no significant risk materialise, it said in a statement management would consider paying an advance on the 2023 dividend.

Even after the CJEU's verdict, which is expected this year, Poland's KNF advised against paying out dividends without prior consultation with it.

KNF said the banks should also consult it before carrying out operations beyond standard business if they could lower funds, including the potential pay out of dividends from previous years' retained earnings, or buybacks of their own shares.

($1 = 4.4203 zlotys)

(Reporting by Adrianna Ebert; Translation by Mateusz Rabiega; Editing by Barbara Lewis)