US Fines French Bank $9-Billion


LONDON (CNNMoney) -- French bank BNP Paribas is braced for a record fine of almost $9 billion for breaching U.S. sanctions, according to media reports.

The punishment for helping clients dodge sanctions on Iran, Sudan and Cuba will also include a temporary ban on BNP Paribas clearing payments in dollars, starting in January, the Financial Times reported Monday.

"I want to say it clearly here: we will receive a heavy penalty," BNP Chief Executive Officer Jean-Laurent Bonnafe was quoted as saying by Reuters in an internal email to staff.

BNP Paribas declined to comment.

U.S. authorities are expected to reveal details of the settlement later Monday, concluding a long-running criminal investigation.

The settlement between the bank and prosecutors had been expected for months. Shares in the bank edged about 0.5% higher in Paris, having fallen more than 12% so far this year in anticipation.

BNP Paribas had previously set aside $1.1 billion to cover the costs of any penalties arising from the U.S. investigation, but warned in late April that the fines could far exceed that amount.

The Wall Street Journal said the bank would have to slash its dividend and raise billions of euros by issuing bonds.

The fine dwarfs HSBC's $1.9 billion penalty in 2012 for similar offenses, and the $2.6 billion Credit Suisse paid in May to settle tax evasion claims.

The settlement comes at a sensitive time for European banks, which are under pressure to increase lending to get the economy moving, while shoring up their finances ahead of region-wide stress tests due later this year.

Earlier this month, Jean Claude Trichet, former president of the European Central Bank, told CNN that a penalty in the range of $10 billion could carry risks for the global banking system. He said this kind of fine was neither fair, just, nor proportionate.

Standard and Poor's has warned it could cut the bank's long term credit rating once it reviewed the size of the fine and the nature of any additional penalties.

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