Frankfurt. — BNP Paribas SA Co-Chief Operating Officer Georges Chodron de Courcel became the first senior executive to step down as US regulators seek to fine the French bank as much as $10 billion for sanctions-breaking.
Benjamin Lawsky, New York’s top banking regulator, had pressed for the dismissal of Chodron de Courcel, who leaves on June 30, 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.
Chodron de Courcel, 64, is leaving at his own request in order to fulfil his duties as director at other publicly traded companies, Paris-based BNP said in a statement yesterday. He will retire from the firm at the end of September.
US 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.
BNP Paribas rose 0,9 percent to 51,79 euros at 10:47am in Paris trading, valuing the company at 64,5 billion euros ($87,3 billion). The shares have dropped 8,7 percent this year compared with a gain of 5,4 percent for the Bloomberg Europe Banks & Financial Services Index.
“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 US litigation.”
BNP Paribas isn’t alone among European banks facing potential fines for sanctions violations. Germany’s Deutsche Bank AG, France’s Societe Generale SA (GLE) and Credit Agricole SA (ACA) and UniCredit SpA (UCG) , Italy’s biggest bank, all have said they’re being probed by US officials.
Julia Boyce, a spokeswoman for BNP Paribas, declined to comment on any relationship between Chodron de Courcel’s departure and the US investigation.
The amount Lawsky is seeking from BNP Paribas is adding to US 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. US Treasury officials gave BNP permission to do limited business in Iran earlier this year, the Wall Street Journal reported, citing government records.
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. — Bloomberg.