(November 4, 2013) – ABP has concluded its long-running skirmish with international banks over US mortgage products, after finally settling with Credit Suisse and Morgan Stanley in the late hours of last week.
The Dutch pensions giant has already reached a settlement with JP Morgan, Goldman Sachs, and Deutsche Bank, all for undisclosed sums.
This final settlement with Credit Suisse and Morgan Stanley brings to a close its lengthy struggle over its mortgage investments, which it alleged the banks knew were worth less money and much riskier than the purchase price stated.
All of the banks have denied knowing the investments were worth less than advertised, and denied provided false and misleading information when selling them.
ABP has around €6.5 billion in domestic mortgage securities, although most of that is in legacy funds from the days when ABP itself provided mortgages.
The pension fund also successfully challenged drugs manufacturer Merck earlier this year, leading it to agree a $215 million payment to five investors in order to resolve a five-year-old battle.
That case centred on the delayed results of a clinical test, which investors claimed lowered the price of the company stock. Merck has denied and continues to deny the claims made by the plaintiffs.
The Netherlands’ largest pension fund has endured a challenging 12 months, being one of many Dutch funds facing the possibility of having to cut pensions in payment in 2014 due to lower returns and rising liabilities.
Its coverage ratio is now around 103%, much improved from the 97% recorded in June, but below the industry requirement of 107%.
Chairman Henk Brouwer warned on local radio station BNR last month that the “danger of cuts” had still not been removed.
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