French financial services holding company BNP Paribas has settled a lawsuit involving its consumer credit unit’s misleading practices associated with Swiss franc mortgages.
BNP Paribas signed the settlement, ranging between €400m and €600m, with France-based consumer group CLCV, reported French daily Le Parisien.
The lawsuit is centred around Helvet Immo Swiss franc loan, which was marketed by the French lender’s Personal Finance unit (BNPPF), under the Cetelem brand.
The Helvet Immo Swiss franc loan was intended for tax-free rental investments, which can be repayable in euros.
Around 4,600 contracts of the loan were signed between 2008 and 2009, amounting to a total subscription of €770m.
The Helvet Immo Swiss franc loan led to higher repayments when the euro value fell against the Swiss currency in the aftermath of the 2008 financial crisis.
The French consumer group CLCV lodged a case against BNP Paribas, alleging that the bank failed to fully disclose the risks related to the Helvet Immo loan.
In November 2023, BNPPF was found guilty of hiding the risks of the Helvet Immo Swiss franc loan, paving the way for the current settlement between the bank and CLCV.
CLCV managing director François Carlier said: “This agreement sets a significant precedent. It sends a strong signal to financial institutions about the importance of transparency and the consequences of misleading practices.
“While BNP Paribas and CLCV have remained silent about the settlement, it has certainly sent ripples across the financial world, highlighting the power of consumer rights advocacy.”
In December 2023, BNP Paribas reached a deal with US-based investment banking company Goldman Sachs to provide custody and settlement services for assets in Austria.
The French lender also signed a new securitisation transaction with the European Investment Bank (EIB) to support French small businesses and mid-caps.
Bruno Campenon from BNP Paribas’ securities services division said: “We are delighted to receive this mandate, which confirms our commitment to the Austrian market and the depth of our local expertise.
“We are also very pleased to strengthen our partnership with Goldman Sachs, who have been a historical client of BNP Paribas’ Securities Services business for many years.”
Recently, French authorities have launched an investigation into BNP Paribas over aggravated money laundering allegations related to suspicious money transfers, reported Le Monde.
