BNP Paribas execs face shareholder grilling over U.S. fine

PARIS Wed May 14, 2014 10:53am EDT

PARIS May 14 (Reuters) - BNP Paribas faces investor questions about the huge fine it is being asked to pay in the United States at its annual shareholder meeting on Wednesday.

In his speech to shareholders, Chief Operating Officer Philippe Bordenave noted litigation provisions made last year for potential fines linked to potential breaches of U.S. sanctions on countries including Iran. He said management would return to the matter during the meeting, having already received written questions.

BNP Paribas is in talks with U.S. authorities to pay more than $3 billion to resolve probes into whether the French bank violated U.S. sanctions on Iran, Sudan and other countries, people familiar with the matter told Reuters on Tuesday.

The bank had already set aside around 2.7 billion euros ($3.73 billion) for litigation costs, including a specific $1.1 billion provision for sanctions breaching.

A big U.S. fine could have ramifications for BNP beyond the immediate financial hit, as the bank is targeting expansion in North America as a key plank of a new strategy to raise revenue and profits outside traditional European markets.

BNP still struck a confident tone for the future earlier this year, promising a double-digit percentage rise in net earnings per share over the next three years and an increase in the dividend payout to 45 percent of earnings by 2016 from 41 percent in 2013.

Shareholders are also due to vote today on other questions, including a non-binding advisory vote on the remuneration of CEO Jean-Laurent Bonnafe and other managers. The bonus for Bonnafe for 2013, submitted for shareholders approval, amounts to 1.6 million euros ($2.2 million).

($1 = 0.7296 Euros) (Reporting by Maya Nikolaeva; Editing by Andrew Callus)

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