BNP Paribas Shares Soar Despite $9bn US Sanctions Violation Payment

BNP Paribas shares rose by 3% in the market open despite the French bank stumping up nearly $9bn in payments to US authorities for pleading guilty to US sanction violations.

The BNP Paribas stock price is hovering around €49.5 mark as the European banking giant put its troubles behind it for now and agreed to pay a record $8.9bn (£5.3bn, €6.7bn) for concealing transactions worth billions of dollars with Sudan, Iran and Cuba - countries facing US economic sanctions - according to the US Justice Department.

"BNP Paribas banked on never being held to account for its criminal support of countries and entities engaged in acts of terrorism and other atrocities, but that is exactly what we did today," said one of the prosecutors, Manhattan US Attorney Preet Bharara.

BNP Paribas's chief executive officer Jean-Laurent Bonnafe said on a conference call on on 1 July: "We deeply regret the past misconduct that led to this settlement. The failures that have come to light in the course of this investigation run contrary to the principles on which BNP Paribas has always sought to operate."

The bank will pay a $140m fine and forfeit $8.8bn, which is deemed to be equivalent in amount to the unlawful transactions. The settlement dwarfs HSBC's $1.9bn payment to the US over claims of laundering money for Mexican drug cartels.

As part of the agreement BNP was also temporarily suspended from converting foreign currency into US dollars in New York. In addition, the bank is required to fire 13 employees including chief operating officer Georges Chodron de Courcel.

The case against BNP accused the bank of using a network of banks in the Middle East, Europe and Africa to mask dollar-based transfers connected to the rogue nations. In addition, the bank's employees removed records that would have revealed the identity of the countries.

The guilty plea means the bank admits to violating the International Emergency Economic Powers Act and the Trading with the Enemy Act.