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"BNP’s €178.2bn mortgage loans potentially impacted more than 500k households..."

The Impaakt Team

7 min Read Time | July 30th 2021

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Writer: Soumya K

“BNP’s €178.2bn mortgage loans potentially impacted ≈500k+ households in France, Belgium, Italy and the US.”

The homeownership rates of few European countries like Italy, Belgium & France in 2019 were 72.4%, 71.3%, and 64.1%1. Buying a house is cheaper than renting2. It builds long-term wealth, which can be transferred to their heirs, thus, giving financial security2,3. Psychologically, it gives a sense of stability and is emotionally satisfying3. However, buying a house could be expensive in most countries and may not be at par with an individual’s income4. This is why financial institutions offer mortgage loans to bridge the gap4. A mortgage is a loan that enables an individual to purchase or maintain a home5. 93.4% of the US’s new homes were purchased with a mortgage in 20196. Buying a house also offers tax advantages like deduction of interest paid on mortgages7, thus, helping in saving a significant amount of money for the owner3.

BNP Paribas, a French bank’s total mortgage loans in 2020 were €178.2bn across France, Belgium, Italy & the US8;p68-82. As per BNP Paribas Fortis, Belgium, in 2019, 55% of the mortgages (excluding refinancing) were taken to buy a new home with an average loan of €207,0009. Thus, the number of households impacted by the mortgages given by BNP could be nearly 500,000 households globally9.

Assuming the average loan size of other countries was the same as Fortis’ and 55% of the mortgages (excluding refinancing) were taken to buy a new home, through French Retail Banking’s €90.1bn mortgages, 250k households were impacted8;p68. Belgian Retail Banking’s €53.9bn mortgages8;p72 impacted 140k households. BNL Banca’s (Italy)8;p49 €25.5bn mortgages8;p70 impacted 70k households and BancWest’s (US)8;p70 impacted 23k households.

BNP’s total mortgage loans formed 9.39% of the total mortgage balances in France (€1,136.9bn), Belgium (€275.38bn), & Italy (€391.52bn)8;p49-72,10.

To a great extent in Belgium & France, and to a lesser extent in Italy & the US, BNP provided mortgages to buy a home, easing lives of individuals while providing financial stability.


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