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MONEY

French bank doubles fees for non-residents

One of the largest banking groups in France has revealed that it is hiking the account fees that it charges for non-residents - doubling or even trebling the fee for some groups - in a blow to the many second-home owners in France who set up French accounts to deal with household bills and direct debits.

Published: 31 March 2022 11:18 CEST
French banking giant BNP Paribas is increasing fees for non-resident clients.
French banking giant BNP Paribas is increasing fees for non-resident clients. (Photo by HATIM KAGHAT / BELGA / AFP) / Belgium OUT

Semi-retired consultant Mike was in London when he received a message from his bank in France. 

“Account maintenance fees incurred by non resident clients will evolve,” began the message from BNP Paribas. 

BNP Paribas – the largest banking group in France and Europe – has confirmed that from June 2nd, the monthly account fee will double for people who are not full-time residents in France.

From June, Mike will have to pay €10 per month for the privilege of keeping his account open. 

“It seemed like needless complexity. No one has a positive reaction towards a bank – particularly when the costs are going up but the service has stayed the same,” he said.  

The planned price hikes have tempted Mike to look elsewhere.

“I would be interested in reading about some of the alternative offers,” he said.  

Fee increases 

Mike is far from the only person who will incur greater fees as a result of BNP’s policy change, which targets non-residents. 

People who are resident in a country that is a signatory to the Automatic Exchange of Information mechanism (including the UK and the US) will have to pay €10 per month, per account, from June 2nd.

BNP Paribas sent the following letter to non-resident clients (Source: Mike)

People whose official residence isn’t in an EU country or an AEOI country will have to pay €15 per month, per account.

Those who are resident in an EU country other than France will continue paying the same fees – €5 per month, per account. 

What does the bank have to say?

BNP Paribas say they are increasing fees to “be able to continue providing all of our non-resident clients the same level of service and accompaniment despite a more and more demanding international environment”. 

“BNP Paribas is one of the rare actors on the market that has decided to take international clients whatever their country of residence. Certain banks have made the choice to close the accounts of non-resident clients and those that do not often limit themselves to the EU zone,” said a representative of the bank. 

However, a number of other French banks that we spoke with also offer services to non-residents. 

READ MORE Which French bank is best if you are a non-resident

BNP told us that their account advisers speak more than 30 different languages and offer some options to non-resident clients, such as specially tailored lending insurance and health coverage, that other banks do not.

Clients can also benefit from video calls with their account adviser – even when there is a significant time difference. 

Member comments

  3. The claims that BNP functions in any language other than French are FALSE.
    We have had an account with BNP for over 20 years. There is absolutely NO service in English, period. Can’t comment on the other 29 languages they claim to speak …
    The extra fees are just a rip-off that won’t raise any opposition at home.

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ENERGY

EXPLAINED: Why are French energy prices capped?

As energy prices soar around Europe, France is the notable exception where most people have seen no significant rise in their gas or electricity bills - so what lies behind this policy? (Hint - it's not just that the French would riot if their bills exploded).

Published: 12 August 2022 09:50 CEST
EXPLAINED: Why are French energy prices capped?

On most international comparisons of rising energy prices, France is the outlier – but the government control of energy prices is not in fact a new policy and was in place well before the Russian invasion of Ukraine sent gas and electricity prices soaring.

At present prices for domestic gas are frozen at 2021 levels and electricity prices can only increase four percent per year. According to economy minister Bruno Le Maire, without these measures French bills would have risen by 60 percent for gas and 45 percent for electricity.

Both these measures – collectively known as the bouclier tarifaire (tariff shield) – are in place until at least the end of 2022, and could be extended into 2023.

The extension of the price shield was confirmed by parliament earlier in August – part of a €65 billion package of measures aimed at tackling the cost-of-living crisis – but had been in place for much longer.

Tariff shield

The reason that gas prices are frozen at 2021 levels is that the freeze came into effect on November 1st 2021 – well before Russia’s February 2022 invasion of Ukraine.

The measure was initially put in place to help people deal with the economic after-effects of the pandemic, but was extended in the spring of 2022, when electricity prices were also capped at four percent.

Price regulation

But although prolonged price freezes are unusual, the French government involvement in price-setting is completely normal and during non-freeze periods, a rate is set each month.

If you read French media (or The Local), you’ll notice regular articles on ‘what changes next month’ which include gas and electricity prices, usually expressed as a month-on-month percentage rise or fall. This refers to the maximum rate that utility companies are allowed to increase their charges per month.

The government-set rate refers to the basic price plan from EDF. Some people are on special deals or time-limited tariffs, so if their deal or payment plan ends and they go back onto the basic rate, they can see a rise above the government rate.

Around 85 percent of households in France get their electricity from EDF. 

READ MORE: Reader Question: Why did my French electricity bill increase by more than 4%

State-owned utilities

So, why is the government involved? Well, it’s the majority stakeholder in EDF, the country’s largest electricity supplier, and owns Gaz de France (Engie). 

At present EDF isn’t completely state owned – although there are plans to fully nationalise it – but it owns 84 percent.

The French state owns a lot of service and utility companies including the country’s rail provider SNCF, postal service La Poste and France Télévisions. One notable exception is the country’s autoroutes, which are run by private companies, although the government sets limits on toll charges. 

Nuclear 

France is less exposed to energy shocks than some other European countries because of its nuclear sector.

It is unusual among European nations in the size of its nuclear industry – around 70 percent of electricity comes from its own domestic nuclear power plants, although during the heatwave several plants have had to lower output as rivers have become too hot to effectively cool the reactors. There are also ongoing technical issues that have seen some of the older plants shut down or forced to lower output.

READ ALSO Why is France so obsessed with nuclear?

France is usually a net exporter of electricity, but at peak times it has to import electricity, usually via the high-priced international spot market.

It does, however, import its gas, mostly via pipeline – in 2020 its biggest supplier was Norway, followed by Russia.

The French government has launched a sobriété energetique (energy sobriety) plan to cut its total energy consumption by 10 percent this year, which it hopes will allow it to get through the winter without Russian gas. 

Riots

Even before the recent €65 billion aid package, the French government was taking a pro-active role in helping people deal with rising prices – from the price shield to fuel rebates for drivers, €100 grants for low-income households and financial aid for industries such as agriculture and logistics so they could avoid passing prices on the consumers.

Cynics say this happened for two reasons – because there were elections in April and June and because the French would riot if their utility bills suddenly doubled.

There’s a kernel of truth in both – cost of living became a major issue in the April presidential elections and one that far-right leader Marine Le Pen very much made her own from early in the campaign, leaving Emmanuel Macron slightly on the back foot, although in truth his government had already introduced several measures to ease the burden on ordinary voters.

It’s also true that the French have a robust approach to holding their government to account, and high living costs have previously inspired noisy and sometime violent protests – the ‘yellow vest’ movement of 2018 and 19 began as a protest over living costs.

But it’s also true that the French State is generally quite involved in people’s everyday lives – as evidenced by those monthly gas and electricity price rates – and taking a laissez-faire approach such as that seen in the UK would be unusual for any French government, even outside of election season.

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