BNP Paribas Unit to Compensate Customers Over Swiss Franc Mortgages
By Helena Smolak
BNP Paribas reached an out-of-court settlement with a French consumer group to compensate with an undisclosed sum customers who subscribed to Swiss-franc denominated mortgages during the 2008 financial crisis.
The agreement, confirmed Tuesday by consumer group CLCV and the French banking group's BNP Paribas Personal Finance consumer-credit unit, relates to a case in which French customers alleged they were misled about currency risk associated with the bank's Helvet Immo loans. Borrowers took a financial hit when the Swiss franc soared against the euro during the onset of the eurozone's debt crisis in 2010.
About 4,400 contracts were signed during the 2008-09 financial crisis for a loan in Swiss francs repayable in euros, the consumer group said.
"An agreement has been reached with the CLCV association to offer an amicable solution to customers who wish to do so," a spokeswoman for BNP Paribas Personal Finance said. BNP Paribas Personal Finance didn't comment on the amount of the settlement.
CLCV said it was satisfied to have reached a friendly outcome, without having to wait for final court decisions to be taken.
The settlement comes after eight years of litigation initiated by the CLCV against BNP Paribas Personal Finance, known for its Cetelem brand. It follows a court ruling in November, which saw the French lender held accountable for concealing interest and exchange-rate risks of its Helvet Immo loan in the event of an unfavorable EUR/CHF alignment, CLCV said.
BNP Paribas didn't comment on the ruling.
Write to Helena Smolak at helena.smolak@wsj.com
(END) Dow Jones Newswires
January 02, 2024 10:28 ET (15:28 GMT)
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