* BNP provisioned for $1.1 billion
* Sources say U.S. may seek fine of over $3 bln
* CEO says bank has improved its control processes (Adds details)
By Maya Nikolaeva and Matthias Blamont
PARIS, May 14 BNP Paribas, France's biggest bank, said on Wednesday there was a risk that a fine for violating U.S. sanctions could be significantly higher than the $1.1 billion euros it has provisioned for.
Chief Executive Laurent Bonnafe, speaking at a shareholders meeting, did not say how much BNP expects to have to pay, but people familiar with the matter told Reuters earlier this week that BNP is in talks with U.S. authorities to pay more than $3 billion to resolve probes into whether the bank violated U.S. sanctions on Iran, Sudan and other countries.
Bonnafe said the bank is doing what it can to ensure that such mistakes do not occur in the future.
"We have improved our control processes," he said.
He added that the bank will continue talks with U.S. authorities about the investigation and said he had met U.S. authorities in Washington and New York last week.
The bank has already set aside around 2.7 billion euros ($3.7 billion) for litigation costs, including a specific $1.1 billion provision for a breach of sanctions.
Bonnafe said he could not say when a settlement may come.
The Wall Street Journal, citing sources, said on Wednesday that BNP has alerted the French government that the fine may exceed $3 billion. A government spokesman could not immediately be reached for comment.
The probes are being conducted by the U.S. Justice Department, the U.S. Attorney's office in Manhattan, the U.S. Treasury Department, the Manhattan District Attorney's office, and the New York Department of Financial Services.
Prosecutors have pushed the bank to plead guilty to criminal charges as part of a resolution, sources have said.
Past U.S. settlements have hit rivals such as Standard Chartered, which agreed in 2012 to pay $327 million to resolve allegations that it violated U.S. sanctions against Iran, Sudan, Burma and Libya. The bank was separately fined $340 million by New York's banking regulator over Iranian sanctions.
A big U.S. fine could have ramifications for BNP beyond the immediate financial impact, as the bank is targeting expansion in North America as a key plank of a new strategy to raise revenue and profits outside its traditional European markets.
Earlier this year, BNP struck a confident tone on its outlook, 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.
BNP Paribas sees a return on equity of at least 10 percent in 2016, but that target does not take into account any potential U.S. fine.
($1 = 0.7296 Euros) (Editing by Geert De Clercq, David Holmes and David Evans)