France’s biggest bank, BNP Paribas, is reportedly facing a world-record US$5bn fine, to settle investigations into the lender’s dealings with US-sanctioned countries.
The bank’s dealings with countries such as Iran and Sudan are the subject of concern, according to Reuters, with the ever-increasing spotlight from the investigation not only inflating the amount sought by US authorities, but jeopardising its future rights to do certain types of business in the US.
The settlement could be announced as early as next month.
BNP had already set aside US$1.1bn to settle the case but it now seems that it will have to cough up a much bigger amount and run the risk of jeopardising BNP’s dividend and destabilising its capital ratio.
The bank had also said in its 2013 Group Results: “The Group’s financial statements also include this year a 1.1 billion US dollar provision (4), or 798 million euros, related to the retrospective review of US dollar payments involving parties subject to US economic sanctions.”
The bank had previously been in talks with US authorities over a fine of more than US$3bn to resolve the probes, but discussions are said to be continuing.
BNP declined to comment to GTR, but were directed to a previous statement about “Litigation related to US Dollar payments involving parties subject to U.S. Sanctions”, which states: “The discussions that took place during the first quarter of 2014 concerning U.S. dollar payments involving countries subject to U.S. sanctions demonstrate that a high degree of uncertainty exists as to the nature and amount of penalties that the U.S. authorities could impose on the Bank following completion of the ongoing process: there is the possibility that the amount of the fines could be far in excess of the amount of the provision.”