Banking
BNP Paribas Reports Record $5.79 Billion Quarterly Loss
PARIS — BNP Paribas reported Thursday a record quarterly loss after pleading guilty to violating U.S. sanctions against Sudan, Iran and other countries, and said it was taking steps to beef up internal compliance.
The French lender said that a provision of €5.75 billion ($7.7 billion) set aside to help cover a nearly $9 billion U.S. fine—the largest ever paid by a bank in a sanctions case—pushed the group deep into the red in the second quarter.
BNP Paribas, France’s largest listed bank by assets, reported a €4.32 billion net loss in the three months through June, compared with a €1.77 billion net profit a year ago.”The group has learned lessons from these past events and is implementing a major reinforcement of its internal control,” said Chief Executive Jean-Laurent Bonnafé in a statement.
Despite the substantial size of the penalties, which also include a one-year ban on certain dollar-clearing transactions, BNP Paribas said it still had enough cash set aside with central banks and capital to absorb any potential future losses.
Speaking at a news conference in Paris, Mr. Bonnafé said the bank had already paid the entire $8.97 billion fine to U.S. authorities, using its large liquidity pool—cash set aside with central banks and assets accepted as collateral by central banks.
BNP Paribas’s liquidity reserve stood at €244 billion on June 30, before paying the fines.
Strong second-quarter operating results, lifted by the corporate and investment-banking business, helped BNP Paribas maintain its core tier-one ratio—a key measure of a bank’s financial strength—above the 9% threshold set by regulators for 2019.
The bank’s core tier-one ratio, which compares top-quality capital such as equity and retained earnings with risk-weighted assets, stood at 10% on June 30, down from 10.6% at the end of March.
Excluding one-off items, second-quarter net profit rose 23% to €1.92 billion, buoyed by its corporate and investment bank. Corporate and investment-banking pretax profit rose 31% to €661 million in the second quarter, thanks to a strong fixed-income and equity-derivative business.
Second-quarter revenue, however, declined by 2.3% to €9.57 billion from €9.79 billion in the same quarter last year.
BNP Paribas’s massive loss this quarter highlights the unprecedented scope of the settlement reached in June between U.S. authorities and the French lender, which agreed to plead guilty to crimes for breaching U.S. sanctions.As part of that settlement, U.S. officials laid out in stark terms a sophisticated and long-running plan by the French bank to disguise billions of dollars in financial transactions with Iran, Cuba and Sudan.
BNP Paribas, in court documents, acknowledged using regional banks overseas to process more than $20 billion in financial transactions linked to companies and government agencies in Sudan—at a time when the nation was engaged in what the U.S. and others call genocide.
BNP Paribas said Thursday it would step up internal supervision to ensure that the bank complies globally with U.S. sanctions.
The bank has set aside this quarter an additional €200 million to cover new compliance measures. BNP Paribas had already booked a $1.1 billion provision in the fourth quarter last year to cover potential U.S. fines.
In addition to a new special unit in New York that will ensure that the bank complies with U.S. sanctions, the bank plans to set up two new committees to improve its global internal control systems.
BNP Paribas said it would create a supervisory committee chaired by Mr. Bonnafé, and a conduct committee in charge of monitoring and possibly redrafting the group’s policies in certain “sensitive” business sectors or countries.
Several executives have left the bank as part of the settlement, including the head of ethics and compliance for North America, the bank’s chief operating officer and its senior adviser to the bank’s executive committee.
BNP Paribas said Thursday that Jean Clamon, its head of compliance since 2008, would retire before the end of the year. Mr. Clamon, 63 years old, was a key negotiator in the discussions between BNP Paribas and U.S. authorities to settle the sanctions case.
Eric Martin, in charge of internal audit at BNP Paribas, will take over Mr. Clamon’s responsibilities.
BNP Paribas is the first French bank to report second-quarter results. Société Générale SA GLE.FR -2.54% and Crédit Agricole SA ACA.FR -4.26% publish their results on Aug. 1 and Aug. 5, respectively.
– WALLSTREET JOURNAL
Banking
Millions of customers still stranded worldwide 24 hours after GT Bank online operations suffered attacks
By Yemie ADEOYE
GT Bank, one of Nigeria’s leading banks, with operations across Africa and the United kingdom, and with an asset base of about US$3.11 trillion is under a cyber attack which has left millions of its customers across the world stranded in the last 24 hours.
The bank which was renowned for its seamless online operations at inception has suffered dwindling online efficiency in recent years and this current attack didn’t come as a surprise to many of its numerous customers. However, it is becoming worrisome that over 24 hours after its online operations went down, the bank has not been able to arrest the situation and restore its online services.
Several customers of the bank took to their X (formerly known as twitter) handles to express their frustrations at the bank, as several of the customers in the diaspora are unable to access their accounts and carry on with their transactions. A customer , Jeff55 who lamented on his X handle about the development, stated that it is a thing of shock that a bank of this size couldn’t afford to have the necessary tools and experts to ensure a full protection of its online operations in this age and time.
Another customer Dimma stated that while Cybersecurity training may seem tedious, the recent #GTBank hack is a stark reminder that everyone is just a click away from a devastating attack.
Several media organisations had reported that hackers have stolen GT Bank website, and intercepted customers Data in massive phishing operation.
At the time of filing this report, Biztellers.com.ng checks on the banks website shows that it is still down and unaccessible, and neither GT Bank media and communications unit nor any of its agencies or surrogates have commented officially on the development.
Banking
Tinubu commends increased crude production to 1.61 mbpd
Says output surge buoyed by reforms he announced in May 2024 to address gaps in PIA
President Bola Ahmed Tinubu on Sunday declared a resurgence in the oil & gas industry, commending the increased crude production to 1.6 million barrels per day.
The president, who said this in a national broadcast, maintained that the resurgence was buoyed by the reforms he announced in May 2024 to address the gaps in the Petroleum Industry Act (PIA).
Nigeria’s crude oil output got a boost to 1.61 million barrels per day in July 2024 through the president’s directive and the industry leadership provided by the Nigerian National Petroleum Company Limited (NNPCL).
Acknowledging what he called a resurgence of the once-declining oil and gas industry in his Sunday-morning broadcast to the nation, President Tinubu said that oil investors are coming back to Nigeria.
He said; “Our once-declining oil and gas industry is experiencing a resurgence on the back of the reforms I announced in May 2024 to address the gaps in the Petroleum Industry Act. Last month, we increased our oil production to 1.61 million barrels per day, and our gas assets are receiving the attention they deserve. Investors are coming back, and we have already seen two Foreign Direct Investments signed of over half a billion dollars since then.
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“Fellow Nigerians, we are a country blessed with both oil and gas resources, but we met a country that had been dependent solely on oil-based petrol, neglecting its gas resources to power the economy.
We were also using our hard-earned foreign exchange to pay for and subsidise its use. To address this, we immediately launched our Compressed Natural Gas Initiative (CNG) to power our transportation economy and bring costs down.
This will save over two trillion Naira a month, being used to import PMS and AGO and free up our resources for more investment in healthcare and education.
“To this end, we will be distributing a million kits of extremely low or no cost to commercial vehicles that transport people and goods and who currently consume 80% of the imported PMS and AGO.
“We have started the distribution of conversion kits and the setting up of conversion centres across the country in conjunction with the private sector. We believe that this CNG initiative will reduce transportation costs by approximately 60 per cent and help to curb inflation.”
Banking
FBN Holdings On Course For AGM
Plans are in top gear for the 11th Annual General Meeting (AGM) of the FBN Holdings Plc.
The management made this disclosure in a notice it filed with the Nigerian Exchange Limited (NGX) on Thursday, where it averred that it has not been served with any court order against the proposed AGM.
According to notice, which was signed by the acting Company Secretary, Adewale Arogundade, FBN Holding said, “The attention of FBN Holdings Plc (the Company) has been drawn to recent media reports purporting that the Company has received a Court Order stopping it from holding the Annual General Meeting (AGM) scheduled for August 15, 2023.
“We confirm that this assertion is a false narrative as the Company has, as at the date hereof, not been served with any court order to stop the forthcoming AGM.
“Suffice to mention that the AGM is a statutory meeting of Shareholders that must be held in accordance with the law, further to which the Company will notify the regulators and the public as appropriate if there is any lawful order to restrain the Company from conducting same.
“We hereby assure our esteemed Shareholders that the AGM shall hold on August 15, 2023, as planned and we look forward to their attendance and active participation at the meeting.”
However, court orders published in national dailies showed that the Federal High Court in Lagos had issued an order against the financial institution, barring it from holding its 11th AGM.
The order was entered pursuant to a petition by Olusegun Onagoruwa, in suit No: FHC/L/CP/1271/2022. It was addressed to the bank and some other bank officials.
It read, “Take notice that unless you obey the directives in the judicial order contained in the order made on July 15, 2022, by the Federal High Court, Lagos, by refraining from proceeding with the 11th Annual General Meeting of FBN Holdings Limited proposed for August 15, 2023, from seeking approval to issue or raise share capital in any manner whatsoever, from appointing or confirming the appointment of new directors, or in any other manner taking any step towards implementing, actualising enforcing resolution of the 10th Annual General Meeting of FBN Holdings Plc held on June 20, 2022, or in any other manner overreaching, disobeying or undermining the said order of a court, you will be guilty of contempt of court and you will be liable to be committed to prison and to there imprisoned.”
Biztellers brought you a report that a segment of shareholders had staged a protest at the headquarters of the bank on Monday, calling for the AGM to be held, as well as soliciting regulatory interventions.
It is expected that at the AGM, FHN Holdings is poised to breathe life into plans to seek shareholders’ approval to raise N150bn fresh capital via a rights issue and elect new directors including billionaire, Femi Otedola and Samson Ariyibi among other resolutions.