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BNP Paribas subsidiary fined maximum amount over Swiss franc loans

BNP Parisbas
Keystone / Thibault Camus

The consumer credit subsidiary of French bank BNP Paribas was sentenced on appeal in Paris on Tuesday in the Helvet Immo case to a maximum fine of 187,500 euros (CHF180,900) for misleading commercial practices. It also needs to pay considerable damages.

BNP Paribas Personal Finance (BNPPF), known through its Cetelem brand, was once again found guilty of concealing the risks of its Helvet Immo Swiss franc loan, of which 4,600 contracts were signed in 2008-2009.

At first instance, the bank was fined the same amount on 26 February 2020 and ordered to immediately pay around €130 million in damages to the 2,500 or so borrowers who had brought a civil action.

For its part, the Court of Appeal found BNPPF “fully liable for the losses suffered” but did not specify the sums awarded to each borrower, as there were too many of them. It also postponed until April consideration of the cases of several hundred borrowers.

At issue in this case was the marketing in 2008 and 2009 of the Helvet Immo loan, designed for tax-free rental investment. The loan was denominated in Swiss francs but repayable in euros. However, in the wake of the financial crisis, the euro fell sharply against the Swiss currency and the amounts to be repaid soared, sometimes by more than 30%.

“What you can remember today is that you have won”, said the court of appeal in the corridor.

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