BNP Paribas chief executive officer Jean-Laurent Bonnafe in a message to employees seen by reporters has said that the French bank is facing heavy penalties following a US investigation into breaking sanctions which should end “very soon.”
BNP Paribas declined to comment, but sources have said the French bank is expected to plead guilty to a US federal criminal charge and pay nearly US$9 billion as part of a larger settlement with multiple enforcement authorities.
An announcement by US authorities on the settlement is expected today, a source familiar with the matter said on Friday.
“I want to say it clearly here: We will receive a heavy penalty,” Bonnafe said in an internal message sent on Friday and seen by reporters on Saturday.
“However, the difficulties that we are currently experiencing must not affect our plans for the future,” Bonnafe added.
US authorities are examining whether BNP Paribas evaded US sanctions relating primarily to Sudan between 2002 and 2009 and whether it stripped identifying information from wire transfers so they could pass through the US financial system without raising red flags, sources have said.
“This is good news for all staff and for our clients,” Bonnafe said in the letter. “It will enable us to remove the current uncertainties that are weighing on our group. We will be able to put behind us these occurrences, which belong to the past.”
BNP Paribas is likely to be suspended from converting foreign currencies to US dollars on behalf of clients in some businesses for as long as a year, sources familiar with the matter said last week.
The bank has only said publicly that it is in discussions with US authorities about “certain US dollar payments involving countries, persons and entities that could have been subject to economic sanctions.”
It has set aside US$1.1 billion for the fine, but told shareholders the total could be far higher than that. Last month, it also said it had improved control processes to ensure such mistakes did not occur again.
BNP plans to lower its dividend and raise funds by selling billions of euros of bonds this week, the Wall Street Journal reported on Friday.
That would help the French financial giant maintain its core equity Tier 1 ratio at close to 10 percent.
“When the announcement is made, I will again be in contact with all of you,” Bonnafe said. “It is my responsibility to explain to you what has happened, the lessons that we have learned and, most importantly, how we plan to go forward in the future.”
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