BNP Paribas SA, which is currently the largest bank in France, posted a surprising decrease in its profit for the fourth quarter after putting away 1.1 billion dollars connected with a review of payments to parties subject to economic sanctions in the U.S.
BNP Paribas SA made an official announcement today, saying that its net income decreased from 519 million Euro to 127 million Euro. This was reported to be the companys worst result since 2008s fourth-quarter loss, missing analysts average estimate of 1.02-billion-Euro.
In October 2013 the bank revealed that the talks with the Department of Justice and other regulators in the U.S. it had in the last few years have been examining “certain U.S. dollar payments involving countries, persons and entities” that might be subject to American sanctions. The parties involved in the process were not disclosed by the bank.
Lars Machenil, who is the Chief Financial Officer of BNP Paribas SA said in an interview for Bloomberg: “The final amount that will be booked could be very different from the one we have provisioned.” Mr. Machenil also said that the size of the charge was not a subject of discussions with U.S. authorities. The bank also refused to provide any details on the probe.
Currently, banks in Europe and in the U.S. have been dealing with mounting legal bills while both regulators and governments have established tight control on their behavior. The biggest bank in Germany – Deutsche Bank AG posted a surprising fourth-quarter loss. More than 23 billion dollars on legal settlements was spent byJPMorgan Chase & Co., which was the largest bank in the U.S. last year.
BNP Paribas SA announced in a presentation on its website that it forecasts a 2016 revenue, which is expected to be at least 10% bigger than the one from last year, excluding purchases. The banks full-year sales for 2013 were reported to be 38.8 billion Euro, or put in other words – a 0.6% decline from the one posted last year.
In November 2013 the bank announced that it agreed to buy the rest of its Belgian consumer-banking unit and also the Polish division of Rabobank Groep in its pursuit of new investments and purchases. Last year the banks Chief Executive Officer Jean-Laurent Bonnafe revealed some plans to expand in Asia, Germany and in online banking and asset-management.
Mr. Machenil said in an interview for Bloomberg: “We basically want to grow. BNP Paribas may also seek some bolt-on acquisitions, but it wouldn’t be large acquisitions.”
BNP Paribas SAs shares fell by 4.19% to 58.30 EUR by 14:34 GMT, the biggest daily drop since June 20. The stock has risen 27% in the past 12 months.
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