BNP Paribas makes $1.1bn provision

BNP Paribas has made $1.1 billion in provisions to cover the cost of likely breaches of US economic sanctions, the latest in a long line of banks to face a big legal bill for falling foul of a recent crackdown by regulators on misbehaviour.

The Paris-based group’s provision is one of the biggest taken by any lender so far.The French bank said yesterday that an internal investigation started in 2009 had discovered a large number of dollar payments involving “countries, persons and entities that could have been subject to economic sanctions under US law”.

This prompted the group to report a three-quarters fall in quarterly net profit to €127 million, its lowest since 2008 and well short of analysts’ estimates of €1 billion. BNP shares fell 4.1 per cent to €58.35. – Copyright The Financial Times Limited 2014