(Adds further details about talks from Journal and other
sources, analyst comment, background)
May 29 The U.S. Justice Department is pushing
BNP Paribas SA to pay more than $10 billion to resolve
a criminal probe into allegations that the French bank evaded
U.S. sanctions against Iran and other countries for years, the
Wall Street Journal reported on Thursday, citing people familiar
with the matter.
Sources told Reuters earlier this month that U.S.
authorities were seeking more than $5 billion from the French
The Journal said the final settlement amount could be less
than $10 billion. Still, the multibillion dollar figure would
put the fine among the largest penalties imposed on a bank and
is far higher than what BNP has provisioned for.
Overall, the bank has set aside around 2.7 billion euros
($3.68 billion) for litigation-related costs.
BNP Paribas and the Justice Department declined to comment.
The $10 billion settlement figure would represent a "hit" of
around 5 percent to the bank's tangible book value, Citigroup
analysts said in a research note.
It would also reduce BNP Paribas' common equity tier 1
capital ratio to around 9.5 percent, a hit of around 10 percent
on the bank's reported tier 1 capital ratio for the first
quarter of 2014, Citigroup analysts said.
A settlement of this magnitude would also result in a 5 euro
per share impact on the fair value of BNP Paribas stock,
Prosecutors have also pushed the bank to plead guilty to
criminal charges as part of a resolution, sources have
The Journal said limited fallout of a guilty plea earlier
this month by Credit Suisse Group AG has further
emboldened prosecutors. Credit Suisse pleaded guilty to a U.S.
criminal charge and agreed to pay more than $2.5 billion in
penalties for helping Americans evade taxes.
In early May, BNP Paribas Chief Executive Officer
Jean-Laurent Bonnafe and the bank's lawyers met with the New
York Department of Financial Services, one of the authorities
involved in the probe, and made a plea for leniency, one source
said earlier this month.
The source said the regulator, led by Benjamin Lawsky, would
not revoke the bank's license if other stiff penalties were
included in the settlement. Such penalties, however, could
include temporarily suspending dollar clearing through New York
and terminating more than a dozen employees.
The bank has expressed concerns about the prospect of such a
suspension, telling authorities that its inability to clear
dollar transactions could destabilize it, the Journal reported.
North America is a key part of BNP's new strategy to
increase profits outside Europe. It aims for the region to
account for 12 percent of its 2016 revenues, up from 10 percent
A final resolution of the BNP Paribas investigation is
likely weeks away, the Journal said on Thursday. (link.reuters.com/zab79v)
($1 = 0.7345 Euros)
(Reporting by Avik Das in Bangalore, Karen Freifeld in New York
and Aruna Viswanatha in Washington; Editing by Don Sebastian and