New York, NY, United States (4E) – BNP Paribas SA said it will reduce its dividend and sell bonds worth billions of euros next week as part of its settlement of its U.S. investigation for its alleged violation of U.S. sanctions, according to a source with knowledge of the matter.
France’s largest bank is not planning to sell shares to increase its capital ratio after the penalty, which could as much as $9bn, the source said. A settlement may be announced as early as June 30 as details are being finalized.
The banks is also expected to be suspended for a year by New York’s financial regulator in its ability to engage in specific dollar-clearing activities, according to other sources with knowledge of the matter. The proposed suspension will be phased in over several months, the sources said.
The investigation focuses on BNP’s alleged violations of sanctions to Iran, Sudan and Cuba between 2002 and 2009, though some transactions occurred up until 2011, according to a source familiar with the matter.
Since 1998, BNP has paid out at least a dividend each year. Dividend payouts are likely to be suspended by the bank for two years, analysts said.