BNP Paribas on Thursday posted a net quarterly loss of 4.3 billion euros ($5.75 billion), as a record fine for violating US economic sanctions sent it into the red for the first time since 2008.
The French banking giant recorded an exceptional expenditure of 5.95 billion euros for the second quarter, linked to the penalty imposed for moving billions of dollars through the US financial system on behalf of Cuba, Iran, Myanmar and Sudan, all under economic sanctions.
BNP Paribas agreed in June to a total settlement of 6.6 billion euros to avoid the case going to trial. It had already set aside 798 million euros to cover costs in the sanctions dispute.
Excluding the cost of the fine, BNP Paribas’s statement said it had generated net quarterly profits of 1.9 billion euros, up 23.2 per cent on the same period last year, with a strong performance by its corporate and investment banking branch.
BNP Paribas said 200 million euros, out of the total allocated to the US case, would be used to ensure a similar situation could not arise again, notably by setting up a division tasked with enforcing its compliance with US laws.
The bank last posted a quarterly loss at the end of 2008, as its corporate and investment division was caught up in the fallout from the collapse of Lehman Brothers.
Copyright (2014) AFP. All rights reserved.
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