BNP sets aside $1.1 billion for possible U.S. sanctions fine

Thu Feb 13, 2014 4:18pm EST
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By Lionel Laurent and Matthias Blamont

PARIS (Reuters) - BNP Paribas (BNPP.PA: Quote), France's biggest listed bank, has set aside $1.1 billion for a possible fine for breaching U.S. sanctions on countries including Iran, the latest bank to take a hit to profit from a legal investigation.

As well as facing tougher regulations in the wake of the financial crisis, banks across the world are under investigation for a string of alleged misdeeds, including fixing benchmark interest rates and manipulating foreign exchange markets.

This month, Credit Suisse CSGN.VX set aside 514 million Swiss francs ($570 million) to cover U.S. investigations, while in January Deutsche Bank (DBKGn.DE: Quote) blamed legal costs for a surprise quarterly loss.

BNP said on Thursday it had set aside the funds after talks with the U.S. authorities, though it said there had been no discussion on the size of any potential penalty.

"We've been doing a retrospective review for several years and we've basically now presented our findings to the U.S. authorities," BNP Chief Financial Officer Lars Machenil told Reuters Insider TV.

Standard Chartered (STAN.L: Quote) agreed in 2012 to pay $327 million to resolve allegations that it violated U.S. sanctions against Iran, Sudan, Burma and Libya.

The sanctioned countries at issue in the BNP investigation also include Iran, Sudan and Cuba, according to a person familiar with the matter.

Representatives of the U.S. Treasury Department's Office of Foreign Assets Control, the Manhattan District Attorney, the U.S. Attorney for the Southern District of New York, the Justice Department, the Federal Reserve and the New York Department of Financial Services, which the person said are all involved in the probe, either declined comment or did not immediately respond to a request for comment.   Continued...

BNP Paribas bank Chief Executive Officer Jean-Laurent Bonnafe speaks during the bank's 2013 annual results presentation in Paris, February 13, 2014. REUTERS/Gonzalo Fuentes