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Tuesday, July 01, 2014 9:44 PM


For the "What Did You Expect Them to Say?" File


Following a record $9 Billion Fine yesterday (See French Bank BNP Paribas Pleads Guilty Criminal Conspiracy Charges; Anyone Headed to Prison?), BNP came out swinging today saying no problem.

Dividends, No Problem

DealBook reports "BNP Paribas Is Confident It Can Absorb the Blow of a Record Fine"

A day after their bank was handed a record penalty by the United States authorities for violating sanctions laws, officials at BNP Paribas struck a confident note on Tuesday about the bank’s future, insisting it would be able to continue meeting the needs of most customers and had “ample” capital to absorb an $8.9 billion fine.

The chief financial officer, Lars Machenil, said in a conference call with analysts that the penalties, which included a partial suspension of BNP’s ability to process payments in dollars, would not endanger its capital cushion. The bank also said it would be able to offer the same dividend this year as it did last year — 1.50 euros a share, or about $2.05. Without the penalties, the bank said it would have paid dividends of around €2 a share.
Well, what did you expect them to say?

If the fine caused a problem would they have admitted it? Of course, if $9 billion would have hurt BNP much, regulators would not have fined them as much.

Former ECB president Jean-Claude Trichet got into the act ahead of time stating a $10 billion fine would pose "risks for the global financial system".

Had Trichet stated that a $5 billion fine posed risks, would the fine have been $4 billion?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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