November 1, 2014 / 12:33 PM / 4 years ago

BNP CEO: French banks should pay only two thirds of bailout contribution

BNP Paribas Chief Executive Jean-Laurent Bonnafe attends a news conference to present the company's 2014 First-Half results in Paris, July 31, 2014. REUTERS/Christian Hartmann

PARIS (Reuters) - French banks should pay only 10 billion euros ($12.5 billion) of the 16 billion they are being asked to contribute to a proposed EU bailout fund, BNP Paribas chief executive Jean-Laurent Bonnafé said in an interview in Le Figaro on Saturday.

The size of contributions to the 55-billion-euro fund should be decided “as a function of their risk profile”, he was quoted as saying, noting that European Central Bank stress tests showed France had “one of the most solid” banking sectors in Europe.

“Following this criterion, our financing contribution to the fund should be around 10 billion euros, whereas we would currently be asked for 16 billion,” the chief executive said. “This gap is exorbitant.”

BNP, France’s largest bank, this week said it returned to net profit in the third quarter, rebounding from an $8.9 billion U.S. settlement in June for violating sanctions against Sudan, Cuba and Iran over a 10-year period up to 2012.

Under the terms of the settlement, BNP must also clear all dollar transactions in New York and use correspondent banks throughout 2015 for oil- and gas-related business.

BNP will “work with five international banks” on dollar clearing, Bonnafé told Le Figaro, without specifying which ones. “All that will be operational by the end of the year.”

Reporting by Laurence Frost; Editing by Louise Ireland

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