BNP Paribas to be 'punished heavily'

Written By Unknown on Minggu, 29 Juni 2014 | 19.15

29 June 2014 Last updated at 11:40

The boss of BNP Paribas has written to staff warning that the French banking giant will be fined heavily by US authorities.

"I want to be clear, we will be punished severely," Jean-Laurent Bonnafe said in the internal memo.

The bank could be fined $8.9bn (£5.2bn) for allegedly violating sanctions rules as early as Monday, reports suggest.

The Financial Times and New York Times also report that the bank will, unusually, admit guilt.

The bank is accused of breaking sanctions against Iran, Sudan and Cuba between 2002 and 2009.

'Future plans'

"This is good news for all staff and for our clients," Mr Bonnafe said.

"It will enable us to remove the current uncertainties that are weighing on our group. We will be able to put behind us these problems, which belong to the past.

"The difficulties that we are currently experiencing must not affect our future plans."

There have been months of speculation about the fine, which could force BNP to slash its dividends and issue billions of euros of bonds, reports say.

In April, BNP Paribas said it had set aside $1.1bn to cover the cost of US penalties, but warned that the "amount of the fines could be far in excess of the amount of the provision".

The bank's share price has fallen more than 15% since the beginning of April.

If the latest reports are correct, the fine could almost wipe out BNP's entire 2013 pre-tax income of about $11.2bn.

Political fallout

Earlier this month, one of the European Union's top officials intervened in the controversy.

Michel Barnier, the EU's internal markets commissioner, said any penalty on the giant French bank must be "fair and objective". Reports at the time suggested the fine would be in the region of $10bn.

France's President Francois Hollande has also raised the matter with US President Barack Obama.

As part of the deal with US authorities, BNP may be suspended from converting foreign currencies into dollars, reports suggest, which would hit its ability to operate in international wholesale banking markets.

Reports say US authorities are keen to make an announcement on the settlement on Monday afternoon.


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