French bank BNP Paribas could pay out €600 million (RM3 billion) after reaching a deal to compensate clients judged to have been deceived over mortgages issued in Swiss francs.
The mortgages, issued in 2008 and 2009, were denominated in Swiss francs, and reimbursement was made in euros at current market rates.
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 association 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, which would put the total cost to BNP Paribas at between €400 and €600 million.
BNP Paribas did not want to comment on the financial aspects of the accord.
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.
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. — AFP
