BNP Paribas shares hit on reports of settlement payout

BNP exterior Image copyright Getty Images
Image caption BNP Paribas said it had already set aside $1.1bn to cover fines by US regulators over sanctions violations

Shares in French banking giant BNP Paribas have fallen sharply after US media reports said the bank might have to pay $10bn (£6bn; 7.3bn euros) over allegations it broke trade sanctions.

The US Justice Department is looking into claims the bank broke sanctions against Sudan, Iran, and Cuba.

In April, the bank said it had already set aside $1.1bn to cover the cost of the violations.

BNP shares fell more than 6% before recovering slightly.

In April, BNP wrote in a document: "A high degree of uncertainty exists as to the nature and amount of penalties that the US authorities could impose on the bank following completion of the ongoing process: there is the possibility that the amount of the fines could be far in excess of the amount of the provision."

If approved and if BNP admits to criminal wrongdoing, the settlement would be the largest criminal penalty in US history, surpassing oil giant BP's $4bn agreement with the US Department of Justice in 2012.

France's far-right Front National party waded into the negotiations, demanding that the French government shield the bank from such a large fine.

US regulators have recently stepped up their actions against banks that violate laws against money laundering and tax evasion, amongst other violations.

Earlier in May, Swiss bank Credit Suisse agreed to a $2.6bn penalty and admitted criminal wrongdoing in helping "tax cheats" avoid paying US taxes.

To date, the largest fine levied against a bank by US regulators for sanctions violations was the $1.9bn HSBC paid in 2012.

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