Tuesday, January 02, 2024

CRIMINAL CAPITALI$M

BNP Paribas faces €600 million hit over Swiss franc loans


Paris, (AFP) – French bank BNP Paribas could pay out 600 million euros after reaching a deal to compensate clients judged to have been deceived over mortgages issued in Swiss francs in 2008 and 2009.


Issued on: 02/01/2024 -
A BNP bank sign is seen in Paris. © AP - Jacques Brinon

By: 
RFI

Both BNP Paribas and the CLCV consumer organisation confirmed Tuesday that a deal had been reached to compensate the approximately 4,400 clients who had contracted the mortgages which carried low interest rates.

The mortgages, issued in 2008 and 2009, were denominated in Swiss francs, and reimbursement was made in euros at current market rates.

The Swiss franc is widely considered a safe haven investment, and during the global financial crisis it strongly appreciated against other currencies as investors sought refuge from the market carnage.

As a result, BNP Paribas customers with those mortgages faced sharply higher costs to reimburse their mortgages.

The deal between BNP Paribas and the CLCV was reached after an appeals court in late November ruled that the BNP Paribas subsidiary that issued the mortgages had not properly warned investors of the currency risks involved.

CLCV was separately pursuing legal action to get the abusive clauses of the mortgage contracts nullified.

The consumer organisation said in a statement that BNP Paribas would offer all the affected borrowers a settlement.


According to a source, most borrowers would receive between 120,000 and 150,000 euros, which would put the total cost to BNP Paribas at between 400 and 600 million euros.

The agreement also provides for the cancellation of all loan contracts.

CLCV welcomed the deal, which it said was in the interest of the consumers and would not force them to wait for all legal proceedings to be exhausted before receiving financial compensation.

Such a scandal could not happen today, since a French law has prohibited taking out a loan in a foreign currency since July 2013.

Lenders in a number of countries issued mortgages in Swiss francs in the run-up to the global financial crisis as interest rates in Switzerland were lower.

Polish borrowers won an important ruling from the EU's top court last year in their legal fight against local banks that had issued Swiss-franc mortgage loans.

No comments:

Post a Comment