BNP Paribas wants in onBrits' home loans in France

4th August 2004, Comments 0 comments

PARIS, Aug 4 (AFP) - BNP Paribas signalled Wednesday it wants to step in a big way into the rich and booming business of providing loans to British buyers wanting a home in France among the vines and in the sun.

PARIS, Aug 4 (AFP) - BNP Paribas signalled Wednesday it wants to step in a big way into the rich and booming business of providing loans to British buyers wanting a home in France among the vines and in the sun.

BNP Paribas, the euro zone's biggest bank which already serves this market, said Wednesday that it was "in advanced discussions" with Abbey National to acquire Abbey National France which specialises in home loans to British ex-pats looking for a second, or even a main home, in France.

In the last 15 years the British have moved into the French property market in a big way, as have other Europeans from more northern climes such as the Dutch and Germans.

A few British banks have developed a strong niche market in the provision of bilingual services to help these buyers conclude a deal and navigate through the French administration. One of them is Abbey, a leading home-loan provider in the British market and currently the target of a friendly takeover from SCH bank of Spain.

Only last month the Organisation for Economic Cooperation and Development said that property sales in France to non-residents was a leading driver of foreign direct investment in France, which last year outstripped FDI in the United States, Britain and Germany.

BNP said on Wednesday: "This acquisition will strengthen the mortgage business of BNP Paribas and will expand its residential lending business to non-resident customers."

Abbey National France a provider of residential mortgages in France to non-resident Britons and has a bilingual British and French sales staff.

It has assets of approximately EUR 2.1 billion and employs 219 people across France, BNP Paribas said.

No financial terms of the transaction were disclosed in the statement.

For BNP Paribas, the acquisition of ANF would appeal directly to non-resident Britons.

For many British buyers, accustomed to far higher property prices in Britain, prices in France appear cheap, although foreign demand coupled with a strong domestic market, have pushed prices up in the last few years. British newspapers and television stations run regular features on how to buy and live in France.

The trend started about 15 years ago in Normandy in north-west France, then spread to the Bergerac region in the south, as foreigners sought a more permanent stay in the world's top tourist destination.

The move by BNP Paribas spotlights conflicting attitudes to the arrival of European neighbours.

Although some French appreciate the renewal of some depressed rural areas, others complain that foreigners have pushed up property prices beyond the reach of locals.

There is resentment, too, because the social fabric in some areas, particularly the south, has become a patchwork of foreign enclaves as foreigners tend to buy in clusters and stick together.

In London, Abbey National, which last week agreed to a takeover bid from Spanish bank Santander Central Hispano, said the sale would be in line with the group's strategy of focusing solely on providing personal financial services in Britain.

After a disastrous foray into wholesale banking led to severe losses, Abbey National decided to concentrate on its British personal financial services business and sell or exit all those businesses that are not consistent with this strategy.

The banks said the acquisition was expected to be finalised in the fourth quarter of 2004, subject to regulatory approvals.

© AFP

Subject: French news

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