PARIS (Reuters) - BNP Paribas (BNPP.PA) Chairman Baudouin Prot, shaper of the French bank’s strategy for more than a decade, has quit and the board will meet on Friday to decide on his replacement, sources close to the situation said.
Two sources said Jean Lemierre, the bank’s key negotiator in the record-breaking $8.9 billion fine it paid this year for violating U.S. sanctions, was the most likely successor.
One of them said Lemierre, a former executive of the European Bank for Reconstruction and Development (EBRD), was the only person in the frame. The source said Prot was not pushed out but “felt the need to take responsibility” for the ultimately costly and embarrassing sanctions-busting era, having maintained the bank’s stability through the summer.
The sanctions issue shook the bank to its core, threatening its debt rating and leading French President Francois Hollande to voice concerns that U.S. authorities were taking “disproportionate” actions against the bank.
“It was a personal decision,” a third source said on Thursday of 63 year-old Prot’s move. “After more than 30 years with the bank, he wants to take a step back.”
Prot’s mandate as chairman was renewed this year and had been due to run until 2017. He joined BNP in 1983 and became chairman in 2011, helping mastermind acquisitions such as Paribas in 1999, Italy’s BNL in 2006 and Belgium’s Fortis in 2009, deals which created France’s biggest listed bank.
Prot is the second top official to leave since the sanctions-busting affair came to light earlier this year. The bank announced the retirement of Chief Operating Officer Georges Chodron de Courcel in mid-June. Its head of compliance, Jean Clamon, is also due to depart before the end of the year.
Industry sources speculated that Prot’s departure could be an opportunity for the bank to move more quickly into a new generation of leadership, citing potential for finance director Lars Machenil for instance to get an enhanced role.
Talk that Prot would fall on his sword had circulated even before the mammoth fine for breaking U.S. sanctions against countries including Sudan. The bank also pleaded guilty to two criminal charges and accepted a one-year ban on part of its dollar-clearing business that will start in January.
Question marks over Prot’s future continued after it emerged that a U.S. Treasury official met him and other bank officials as early as 2006 and warned the bank it risked a penalty.
The violations began in 2002 and continued until 2012, U.S. regulators said when the fine was announced at the end of June.
No individuals have been charged, but U.S. authorities have said the investigation is continuing.
The fine was the biggest to date for such transgressions and the largest ever U.S. fine against a European bank. It was one of a series of big fines handed out by U.S. prosecutors to the banking industry in recent months.
Lemierre, 64, is a former classmate of Prot at the prestigious college Ecole nationale d’administration (ENA).
He also he took part in talks on private-sector writedowns of Greek debt in early 2012, co-chairing the creditors’ committee of the International Institute of Finance, and has also worked for the EBRD, which supports development projects in emerging Europe and North Africa.
Lemierre could not be reached for comment.
BNP Paribas separated the functions of chairman and chief executive a decade ago. The bank’s chief executive is Jean-Laurent Bonnafe.
Like any top bank executive, Prot has strong political ties. According to one person who knows him, his actions in the financial crisis in holding onto distressed Greek debt and the bank’s Italian bank holdings came directly from Paris and Berlin.
Buying the troubled bank Fortis - Belgium’s top financial institution - was another political act, the legacy of which is a 10 percent stake in BNP Paribas held by the Belgian government.
Prot’s tendency to frown deeply and constantly sweep back his unruly mop of grey hair marks him out among otherwise anonymous looking dark-suited bankers, and in private he is known to like pointing out how little he earns compared with an “Anglo-Saxon” banking set he is clearly suspicious of.
Once, hosting a breakfast briefing for journalists in London in a basement hotel room, Prot insisted on working through a power cut, continuing his explanations of handouts and charts by candlelight.
Additional reporting by Steve Slater and Alex Smith; Writing by Andrew Callus; Editing by Mark John and David Holmes