(Updates with wording from bank's English version of letter)
By Matthias Blamont and Maya Nikolaeva
PARIS, June 28 BNP Paribas Chief Executive
Officer Jean-Laurent Bonnafe in a message to employees seen by
Reuters has warned that the French bank is facing heavy
penalties following a U.S. investigation into breaking sanctions
which should end "very soon".
BNP Paribas declined to comment but sources have
said the French 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.
An announcement by U.S. authorities on the settlement is
expected on Monday, a source familiar with the matter said on
"I want to say it clearly here: we will receive a heavy
penalty," Bonnafe said in an internal message sent on June 27
and seen by Reuters on Saturday.
"However, the difficulties that we are currently
experiencing must not affect our plans for the future."
U.S. authorities are examining 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.
"This is good news for all staff and for our clients,"
Bonnafe says in the letter.
"It will enable us to remove the current uncertainties that
are weighing on our group. We will be able to put behind us
these occurrences, which belong to the past."
BNP Paribas is likely to be suspended from converting
foreign currencies to dollars on behalf of clients in some
businesses for as long as a year, sources familiar with the
matter said this week.
TURNING THE PAGE
Bonnafe took over a bank in December 2011 that had emerged a
winner from the financial crisis and sought to raise revenues
outside its traditional European markets, while tougher
financial regulation made banking a less profitable business.
BNP has only said publicly that it is in discussions with
U.S. authorities about "certain U.S. dollar payments involving
countries, persons and entities that could have been subject to
It has set aside $1.1 billion for the fine but told
shareholders it could be far higher than that. Last month it
also said it had improved control processes to ensure such
mistakes did not occur again.
BNP plans to lower its dividend and raise funds by selling
billions of euros of bonds next week, the Wall Street Journal
reported on Friday.
Analysts have already bet on a cut in BNP's dividends and
some, such as Deutsche Bank, 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 at close to 10 percent.
"When the announcement is made, I will again be in contact
with all of you," Bonnafe said.
"It is my responsibility to explain to you what has
happened, the lessons that we have learned and, most
importantly, how we plan to go forward in the future".
BNP struck a confident tone on its outlook earlier in March,
promising a double-digit percentage net earnings per share rise
over the next three years and an increase in dividend payout to
45 percent of earnings by 2016 from 41 percent in 2013.
(Additional reporting by Jean-Baptiste Vey; Editing by Sybille
de La Hamaide, Jason Neely and Sophie Hares)