Chodron de Courcel to Leave BNP Amid U.S. Sanctions ProbeNicholas Comfort and Fabio Benedetti-Valentini
BNP Paribas SA co-Chief Operating Officer Georges Chodron de Courcel became the first senior executive to step down as U.S. regulators seek to fine the French bank as much as $10 billion for breaching sanctions.
Benjamin Lawsky, New York’s top banking regulator, had pressed for the dismissal of Chodron de Courcel, 64, along with about 12 other BNP employees as part of a legal settlement, a person familiar with the matter said last week. They haven’t been accused of wrongdoing. He will leave his COO post June 30.
“It could appear as a first step to satisfy the U.S. authorities,” said Jerome Forneris, who helps manage $9 billion at Banque Martin Maurel in Marseille. “Clearly the U.S. is pushing for departures.”
Chodron de Courcel oversees the corporate and investment bank and is chairman of BNP’s Swiss unit, based in Geneva and home to a significant part of the bank’s commodity finance operations. That business, one source of the alleged violations, has fired, allowed to resign or relocated 30 people since 2012, people familiar with the matter said last month.
Dominique Remy, 60, who previously ran BNP’s commodities finance business, has left the bank, Brussels-based spokeswoman Hilde Junius said by phone today. Remy, who had been in charge of European corporate banking since 2012 from Brussels, also left as a director at BNP Paribas Fortis in the first half of May, Junius said.
Chodron de Courcel, who holds degrees in engineering and economics, is a relative of former French first lady Bernadette Chirac. He has been a chief operating officer at BNP since 2003 and is a director at companies including Alstom SA, the French builder of power plants, and Bouygues SA, a family-run construction and media conglomerate.
BNP Paribas rose 0.4 percent to 51.53 euros at 2:40 p.m. in Paris trading, valuing the company at 64.2 billion euros ($86.8 billion). The shares have dropped 9 percent this year, compared with a gain of 5.5 percent for the Bloomberg Europe Banks & Financial Services Index.
U.S. authorities are said to be seeking the record criminal penalty against BNP Paribas over alleged dealings in countries including Sudan and Iran. Lawsky, superintendent of New York’s Department of Financial Services, has said that individuals, not just companies, must be held accountable to deter future wrongdoing.
The BNP probe has added to commercial strains between the U.S. and France. President Francois Hollande raised the BNP issue with American President Barack Obama at a Paris dinner on the eve of D-day celebrations last week. French government officials have warned against disproportionate penalties that could harm France’s economy or shake Europe’s banking system.
“This affair is the latest example of the power the U.S. has over our banking and financial system,” said Philippe Marini, a senator from the UMP, former President Nicolas Sarkozy’s party. “The extra-territoriality of American law could paralyze our initiatives since our companies are afraid to take any risks.”
The U.S. investigation into BNP’s dealings with sanctioned nations may encourage companies to stop using dollars in international transactions, Bank of France Governor Christian Noyer said yesterday on BFM television. Noyer had said previously that BNP’s actions didn’t violate French or European rules.
Chodron de Courcel, the oldest of BNP’s three chief operating officers, is leaving at his own request to fulfill his duties as director at other publicly traded companies, Paris-based BNP said in a statement today. He will retire from the firm at the end of September after spending his entire 42-year career at the bank.
Chodron de Courcel “has been one of the key players in the expansion of BNP Paribas and its businesses,” the bank said in today’s statement. With Chairman Baudouin Prot, 63, and Chief Executive Officer Jean-Laurent Bonnafe, 52, he was among the executive team that helped former Chairman and CEO Michel Pebereau, 72, create the euro area’s largest bank by assets.
“If the bank takes action on staff, it could be that the regulator reduces the fine, but we still don’t know what the cost will be,” Stefan Bongardt, an analyst at Independent Research GmbH who recommends investors buy BNP shares, said by telephone from Frankfurt. “Other European bank CEOs will be watching BNP and asking what this means for the costs and other penalties from their outstanding U.S. litigation.”
Germany’s Deutsche Bank AG, France’s Societe Generale SA and Credit Agricole SA and UniCredit SpA, Italy’s biggest bank, all have said they’re being probed by U.S. officials over sanctions.
Julia Boyce, a spokeswoman for BNP Paribas, declined to comment on any relationship between Chodron de Courcel’s departure and the U.S. investigation.
The amount U.S. authorities are seeking from BNP Paribas is adding to U.S. operational risks and the unpredictability of fines, European banking executives interviewed by Bloomberg News said. Sharon Bowles, a European Union lawmaker who chairs the European Parliament’s economic and monetary affairs committee, said she’s worried the collateral damage will be the banking system’s stability.
Lawsky is also pressing BNP to dismiss Vivien Levy-Garboua, a senior consultant to the bank, as part of a settlement, a person familiar with the matter said yesterday. He also wants to suspend BNP’s dollar-clearing operations in New York, said a person who was not authorized to speak publicly and so asked not to be identified.