BNP Paribas SA plans to cut its dividend and sell billions of euros of bonds next week as it faces a U.S. fine for alleged sanctions violations, the Wall Street Journal reported.
The largest French bank doesn’t plan to sell shares to boost its capital ratio following the penalty, which may amount to as much as $9 billion, the paper reported, citing an unidentified person familiar with the matter. While details are still being finalized, a settlement will probably be announced on June 30, according to the newspaper.
BNP rose 0.6 percent to 49.41 euros ($67.36) in Paris trading. The stock is down 13 percent this year.
The Paris-based lender paid a dividend of 1.50 euros a share for last year. The bank’s 2015 dividend future, a security that reflects the amount investors estimate will be paid on 2014 profit, fell 25 percent to 30 cents today on the Eurex Deutschland exchange in Frankfurt.
BNP spokeswoman Julia Boyce declined to comment.
Prosecutors from the Manhattan District Attorney’s office and the U.S. Attorney’s office for the Southern District of New York, along with the Superintendent of New York’s Department of Financial Services, Benjamin Lawsky, have all been negotiating a settlement with BNP.
At the center of the investigation are alleged sanctions violations involving Sudan, Iran and Cuba dating from 2002 to 2009, though some transactions continued until 2011, a person with knowledge of the matter has said.
The agreement with New York state’s top banking regulator would curtail some of BNP’s dollar-clearing operations for as long as a year, Bloomberg News reported yesterday, citing a person familiar with the matter.