The US Justice Department is pressurizing BNP Paribas SA to pay more than $10bn to settle a criminal probe into allegations that the French bank evaded US sanctions against Iran and other countries for years.
The amount sought by the government is expected to be the largest penalty levied on a single bank after the $13bn deal struck by J.P. Morgan Chase & Co to resolve a civil probe into its handling of mortgage securities, reports The Wall Street Journal.
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BNP is also being asked to plead guilty to criminal charges as part of a resolution.
Sources also report that BNP Paribas CEO Jean-Laurent Bonnafe met with the New York Department of Financial Services along with his legal team in early May to plea for leniency.
The regulators are asking some stiff penalties to be included in the settlement in return for not revoking the bank’s license. These could include temporarily suspending dollar clearing through New York and terminating more than a dozen employees.
North America is a key part of BNP’s new strategy to increase profits outside Europe, and the bank is keen to retain it. But BNP, which had set aside $3.68bn for litigation-related costs, is expected to be hit hard with the $10bn settlement figure, with the bank’s common equity tier 1 capital ratio to fall around 9.5%, said sources familiar with the matter.
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By GlobalDataA final resolution of the matter is likely to be weeks away from now, but industry experts are already of the view that the final settlement could be less than $10bn.
