Credit Agricole Said to Pay Up to $1 Billion in Sanctions Probe

  • U.S. settlement over Iran, Sudan controls seen in coming weeks
  • Accord said to involve deferred-prosecution agreement

Credit Agricole SA is poised to pay as much as $1 billion to U.S. regulators to settle allegations that it violated U.S. sanctions aimed at Iran and Sudan, according to a person briefed on the matter.

Negotiations between the French bank and U.S. regulators continue and the total amount isn’t final, the person said. The settlement would involve a deferred-prosecution agreement with the Justice Department and could come within weeks, according to the person, who asked not to be identified because the discussions are private.

Foreign banks have been increasingly eager to cooperate with U.S. prosecutors since last year when BNP Paribas SA agreed to plead guilty and pay almost $9 billion for violating bans on doing business involving Sudan, Iran and Cuba. Earlier this year, Commerzbank AG entered a deferred-prosecution agreement to resolve allegations that it violated U.S. sanctions laws against Iran. The bank paid $1.15 billion to settle that matter and an additional $300 million for violations related to money laundering.

“There seem to be no guilty plea and Credit Agricole’s penalty would be at a much lower level compared with BNP’s,” said Karim Bertoni, who helps manage more than $6 billion at Bellevue Asset Management in Switzerland. “It’s a one-off that actually provides visibility and the bank can move on.”

Credit Agricole fell 0.6 percent to 11.78 euros by 10:07 a.m. in Paris trading, giving the lender a market value of about 31 billion euros ($34.7 billion). The benchmark STOXX Europe 600 Banks Index fell 1.2 percent.

The Justice Department, the Federal Reserve and the U.S. Treasury’s Office of Foreign Assets Control are investigating Credit Agricole on the federal level. In New York, it’s being handled by the Department of Financial Services, which regulates banks, and the Manhattan District Attorney’s office, which has originated a number of sanctions violations cases against global banks.

Credit Agricole spokeswoman Anne-Sophie Gentil declined to comment. Spokesmen for the Justice Department, the Manhattan District Attorney and the DFS also declined to comment.

The bank said last month that it set aside 350 million euros for legal costs in the second quarter related to the U.S. investigation, adding that it will probably be resolved in coming months. That brought Credit Agricole’s total litigation provisions to 1.6 billion euros.

Other European lenders including Deutsche Bank AG and Societe Generale SA also remain under investigation for sanctions violations.

The settlement talks were reported earlier Wednesday by Reuters.

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