The main credit subsidiary of BNP Paribas was ordered, this Wednesday, February 26, to pay 187,500 euros, the maximum fine, and to enormous damages, for having concealed the risks induced by its loans in Swiss francs Helvet Immo, to the detriment of more than 4,600 borrowers.
BNP Paribas Personal Finance, known in France under the Cetelem brand, has been recognized “guilty of deceptive marketing practice” and of “Concealment” of this offense for the marketing, in 2008 and 2009, of high-risk loans, denominated in Swiss francs but repayable in euros.
Tens of millions of euros in damages
The amounts owed by the bank – with different damages depending on the borrowers – amount to tens of millions of euros. Two consumer associations, civil parties, each obtained more than one million euros for the harm to the collective interest of consumers.
The court also decided to provisionally enforce its decision with the “payment of damages awarded”: which will force the bank to actually pay these sums even if it decides to appeal.
The decision was greeted with thunderous applause in a crowded room. The borrowers, “ruined but so relieved” according to a young retiree, smiled or wiped a tear.
Concealing an “incredible” financial risk
At the end of November, after three weeks of a trying hearing, the ruined savers had demanded “a dissuasive sanction” against BNP Paribas Personal Finance, a 100% subsidiary of the leading French bank. They accused the bank of having concealed them “an incredible financial risk”, inherent in the Helvet Immo loan, and were fully heard by the courts.
The particularity of the loan, marketed in 2008 and 2009 by a subsidiary of the first French bank, is that it is denominated in Swiss francs but repayable in euros. Result: when after the financial crisis, the euro stalled against the Swiss currency, some 4,600 borrowers saw the amounts to be reimbursed. Many still owe more capital than the amount borrowed while paying for more than ten years. More than 2,300 borrowers took legal action at the trial.
The bank, which refutes any illegal practice, had pleaded for release. His lawyers did not comment on the decision or indicate whether they intended to appeal.