The US is seeking more than US$10 billion from French bank BNP Paribas SA to settle criminal charges that it violated sanctions on Iran, Sudan and Cuba, the Wall Street Journal reported on Thursday.
Citing people familiar with the negotiations between the bank and the US Department of Justice, the newspaper said the two sides are still locked in talks and that BNP wants to pay less than US$8 billion.
Both numbers are far higher than earlier reports of less than US$4 billion, and would far outpace the US$1.9 billion British bank HSBC Holdings PLC was fined in 2012 for routinely handling money transfers for countries under US sanction and for Mexican drug traffickers.
The Journal said a final resolution of the BNP case, which related to the bank’s activity in 2002 to 2009, is “likely weeks away.”
A person familiar with the talks could not comment on the Journal’s number, but said the fine could be above US$5 billion.
The source said the amount is linked to other key issues under negotiation, including whether the bank pleads guilty to felony charges and whether it keeps its US banking license.
According to the Journal, the two sides are also discussing whether BNP, as part of its punishment, will be temporarily denied the right to transfer money into and out of the US, a central part of any foreign bank’s business in the US.
The report said US Department of Justice prosecutors continue to press the bank to plead guilty to the charges, which theoretically could risk its US banking license, but in a separate case last week involving a bank helping thousands of Americans avoid taxes, Switzerland’s Credit Suisse AG pleaded guilty to one felony charge and was fined US$2.6 billion and it was allowed to keep its banking license.
That was the first time in 20 years a major bank had been convicted on US criminal charges.
Officials at BNP, the largest publicly traded French bank, could not be immediately contacted to comment on the Journal report.
Last year it set aside 789 million euros (US$1.1 billion) to resolve the US sanctions case, but in its first-quarter earnings report late last month, BNP noted “a possibility that the amount of the fines could be far in excess of the amount of the provision.”
Earlier this month, a person familiar with the negotiations said US prosecutors were insisting that it plead guilty to charges it did business with sanctioned parties in Iran, Sudan and elsewhere; pay a large fine; and fire 12 employees involved in the transactions.
However, BNP chief executive Jean-Laurent Bonnafe had expressed grave concerns to regulators and prosecutors about lodging a guilty plea, in part because it could endanger the bank’s US license, according to the source.
BNP would likely be able to absorb such a large settlement without being destabilized.
At the end of the first quarter, the bank had 90 billion euros in shareholder equity, a 264 billion euro liquidity reserve and a strong 10.6 percent capital ratio, but the fine could impact its shareholders.
Net income for the quarter was 1.7 billion euros, on 9.9 billion euros of revenue.
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