Important mortgage bank is to shut down
One of France’s oldest banks, Crédit Foncier, established in 1852 and an important player in home loans to British and American buyers, is to close.
Last year it made profit of just €33million on net income of €555m and owner Groupe BPCE, which has the high-street banks Caisses d’Epargne and Banques Populaires, is likely to redeploy many of the 2,200 staff.
It said existing customers would not see any change in service and some staff will remain to manage about €85billion in outstanding loans, mainly to homeowners.
Some of those loans are to UK and US borrowers as Crédit Foncier was sometimes seen by brokers as the best option for loans and mortgages for people who did not fit in to the lending models of other French banks.
“Crédit Foncier was sometimes able to help people with profiles where other banks were not able to,” broker John Busby, of French Private Finance, told Connexion. “We have done a lot of business with them, especially with non-residents, where Crédit Foncier was able to lend to 80% of property value.
“With them going it might be more difficult to buy in France, especially for Americans.
“I expect other banks will step in but they will probably want a closer relationship, such as clients having a savings account.”
Other brokers said they had used Crédit Foncier less recently as it had a reputation of being slow, and other banks had become more open to lending to people with unusual profiles.
Crédit Foncier was bought by Caisses d’Epargne in 1999 and the mutual bank, often called l’écureuil, (the squirrel), from its logo, started expanding until the 2007 finance crisis when it and Banques Populaires merged to form Groupe BPCE.
BPCE said its high-street banks would take up the slack left by Crédit Foncier and make a special effort to offer loans to first-time buyers.