The share price of the largest French bank BNP Paribas fell by 3% in the lower level of seven months due to concerns that the U.S. authorities will ask the bank to pay more than 5 billion dollars in violation of U.S. sanctions against Iran and Sudan, says a report in the Bloomberg agency. The amount requested by the U.S. authorities as part of the research they do for bank transactions with countries, including Iran and Sudan has escalated and now far exceeds 2.6 billion dollars that the Swiss bank Credit Suisse agreed to pay to settle against the prosecution in the U.S. for allegedly helping U.S. citizens to tax evasion, the newspaper notes.
Discussions are ongoing and the final amount may change. Last week, four sources familiar with the matter, said that the U.S. authorities are seeking at least 3.5 billion dollars to settle the case of BNP. If the fine exceeds 7 billion dollars, this would undermine the distribution of dividends by the BNP and could prevent the French bank to maintain its capital ratio of over 10%, according to a analyst of the Mediobanca bank.
As in the case of Credit Suisse, American prosecutors seek the admission of guilt by the BNP, which announced last month that it may take more than 1.1 billion dollars, which was formed as a reserve for the settlement of the case. The settlement, which will provide the biggest fine for violating sanctions against countries, may be announced by next month. According to another article in Bloomberg, the settlement of the proceedings against Credit Swiss to pay the fine 2.6 billion dollars paves the way for other Swiss banks to settle their differences with the U.S., after years of deadlock and uncertainty.
We estimate that in the coming months there will be a solution for the other banks, said the minister. The U.S. Department of Justice concluded in an agreement with Credit Suisse after years of research in more than ten Swiss banks, including the Julius Baer, which is the third largest fund manager in the country. Many of the companies are close to settlements, said a bank analyst in Zurich.
By Nicole P.