* Impact 'enormous' but group financially solid, Bonnafe
* Bank to learn lessons, strengthen controls
* U.S. will remain a priority market
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PARIS, July 1 French bank BNP Paribas
can withstand the impact of the record fine imposed on it by
U.S. authorities without having to raise fresh capital, Chief
Executive Jean-Laurent Bonnafe told Les Echos newspaper in an
BNP Paribas pleaded guilty to two criminal charges and
agreed to pay almost $9 billion to resolve accusations that it
had violated U.S. sanctions against Sudan, Cuba and Iran, in a
severe punishment aimed at sending a clear message to other
financial institutions around the world.
"I'm not trying to minimise the financial impact, which is
enormous," the CEO was quoted by the newspaper as saying in the
interview, published on its website on Tuesday.
"The bank could have reinvested this money in the company or
distributed it to shareholders. I say it again, we are
financially solid ... a group like BNP Paribas can absorb a
shock like that without calling on the market."
Asked whether the position of his predecessor, Baudouin
Prot, now chairman of the bank, had been weakened by the
episode, Bonnafe said he would remain in the role "even if the
shock is as hard for him as for the rest of the group".
In an unprecedented move, regulators banned BNP for a year
from conducting certain U.S. dollar transactions, a critical
part of the bank's global business, in addition to the fine,
which was a record for violating U.S. sanctions.
BNP said it would take an exceptional charge of 5.8 billion
euros ($7.9 billion) in the second quarter of this year, but it
plans to keep its dividend payment at 1.5 euros per share this
year, as in 2013, and expects its core capital adequacy ratio to
have been around 10 percent as of the end of June, consistent
with long-term targets.
Bonnafe told Les Echos that BNP would further strengthen its
controls as a result of the lessons learned. The fine would not
impact BNP's ability to lend to large, medium and small
companies, or private individuals, he added.
BNP had considered its provision of $1.1 billion appropriate
to cover the possible punishment imposed following the four-year
U.S. investigation, but the size of the fine showed the
environment had changed, Bonnafe said.
"It is the era of zero tolerance for our industry," the CEO
said. "Banks need to get through this phase to visibly purge the
past, for public opinion as well as for the regulators."
Bonnafe added that universal banks had not become too big
for their leaders to manage, saying on the contrary that they
needed to have a minimum of geographic and business
diversification to cope.
The CEO also said the bank planned to respect the goals set
at the start of the year alongside its three-year growth plan,
and that the United States remained one of its three priority
markets, with Europe and Asia.
($1 = 0.7331 Euros)
(Reporting by James Regan; Editing by Alexandria Sage and Mark