(Adds BNP no comment, details about settlement announcement)
By Maya Nikolaeva
PARIS, June 27 BNP Paribas plans to
slash its dividend and raise funds by selling billions of euros
of bonds next week, as it nears a costly settlement with U.S.
authorities over sanctions violations, the Wall Street Journal
France's biggest listed bank declined comment.
U.S. authorities are probing whether BNP Paribas evaded U.S.
sanctions relating primarily to Sudan between 2002 and 2009, and
whether it stripped identifying information from wire transfers
so they could pass through the U.S. financial system without
raising red flags, sources have said.
The bank is expected to plead guilty to a federal criminal
charge and pay nearly $9 billion, as part of a larger settlement
with multiple enforcement authorities that could be announced as
early as next week, sources said earlier this week.
An announcement by U.S. authorities on the settlement is
expected on Monday, a source familiar with the matter said.
BNP is also likely to be suspended from converting foreign
currencies into dollars on behalf of clients in some businesses
for as long as a year, according to sources familiar with the
matter, an untested and severe penalty for the French bank
accused of persistently violating U.S. sanctions laws.
Analysts have predicted that the fine may hit the bank's
dividend plans and regulatory ratios.
Deutsche Bank analysts on Tuesday factored in a zero
dividend payout for 2014 in their forecasts for BNP, based on a
$9 billion fine. That would help the French bank maintain its
core equity Tier 1 ratio - a key measure of its financial
strength - at close to 10 percent.
BNP set a 1.5 euros per share payout to shareholders on its
2013 results and its dividend payout ratio stood at 40.8 percent
of net income.
The Wall Street Journal on Friday cited a person familiar
with the matter saying the bank expects to dramatically reduce
its dividend. BNP also plans to issue a multibillion-euro bond,
the paper added, without giving the exact size.
The settlement between BNP and the U.S. authorities is
expected to be announced on Monday, although both sides are
still ironing out final details, the person told the newspaper.
BNP Paribas said two months ago when it published
first-quarter results that its 23 billion euro ($31 billion)
medium- and long-term wholesale funding programme for 2014 was
already 80 percent complete.
Shares in BNP Paribas were 0.8 percent higher by 1345 GMT.
The stock has lost nearly 20 percent of its value since it first
announced a provision for the fine in mid-February.
($1 = 0.7359 Euros)
(Additional reporting by Leigh Thomas; Editing by James Regan
and David Holmes)