BNP Paribas to settle with customers over risky Swiss franc mortgages

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BNP Paribas has agreed to pay as much as €600mn to settle a long-running dispute with French clients who alleged they have been misled into taking out dangerous mortgages in Swiss francs.

French shopper group CLCV mentioned on Tuesday that it had reached a cope with BNP on behalf of some 4,400 clients who have been hit when the Swiss forex began to strengthen in opposition to the euro on the onset of the eurozone’s debt disaster in 2010.

The settlement with the purchasers, who have been pursuing BNP for compensation via a civil case within the French courts, will value the financial institution between €400mn and €600mn, in accordance with an individual acquainted with the matter.

Whereas the French clients have been attracted by the decrease rates of interest on mortgages dominated in Swiss francs, they declare they weren’t sufficiently warned of the forex dangers that the loans carried.

Lots of these affected lived within the Alpine area close to the Swiss border and took out a mortgage product referred to as Helvet Immo, which was provided by a subsidiary of BNP Paribas, to accumulate small buy-to-let properties.

The strengthening of the Swiss franc left some with month-to-month funds that exceeded the unique measurement of the mortgages, which averaged about €130,000.

CLCV mentioned it was “glad to have reached a pleasant end result, within the curiosity of the customers involved and with out having to attend for (court docket) choices to be taken”.

BNP mentioned in an announcement that the settlement was obtainable to all affected clients, however declined to offer additional particulars.

The settlement comes after judges in a separate prison case centred on the identical loans had dominated in opposition to BNP in an appeals listening to in November, when the financial institution was discovered responsible of misleading industrial practices and ordered to pay some €200mn in damages.

BNP was not the one eurozone lender to supply Swiss franc mortgages. Polish customers have been among the many largest customers of such merchandise, sparking authorized motion that ended up on the European Courtroom of Justice with a choice in favour of the borrowers in 2019.

This story has been amended to make clear nature of Helvet Immo