BNP Paribas head quits after US fine
BNP Paribas chairman Baudouin Prot, shaper of the French bank’s strategy for more than a decade, has quit and the board will meet tomorrow to decide on his replacement, sources close to the situation say.
Two sources said Jean Lemierre, the bank’s key negotiator in the record-breaking $8.9bn fine it paid this year for violating US sanctions, was the most likely successor.
One of them said Mr Lemierre, a former executive of the European Bank for Reconstruction and Development, was the only person in the frame. The source said Mr Prot was not pushed out but “felt the need to take responsibility” for the ultimately costly and embarrassing sanctions-busting era, after having stayed on to maintain the bank’s stability.
The sanctions shook the bank to its core, threatening its debt rating and leading French President François Hollande to voice concerns that US authorities were taking “disproportionate” actions against the bank.
“It was a personal decision,” a third source said of 63-year-old Mr Prot’s move. “After more than 30 years with the bank, he wants to take a step back.”
Mr Prot’s mandate as chairman was renewed this year and had been due to run until 2017. He joined BNP in 1983 and became chairman in 2011, helping mastermind acquisitions such as Paribas in 1999, Italy’s BNL in 2006 and Belgium’s Fortis in 2009, deals that helped create France’s biggest listed bank.
Mr Prot is the second top official to leave since the sanctionsbusting affair came to light earlier this year. The bank announced the retirement of chief operating officer Georges Chodron de Courcel in mid-June. Its head of compliance, Jean Clamon, is also due to depart before the year-end.
Industry sources speculated that Mr Prot’s departure could be an opportunity for the bank to move more quickly into a new generation of leadership, citing potential for finance director Lars Machenil, for instance, to get an enhanced role.
Talk that Mr Prot would fall on his sword had circulated even before the mammoth fine for breaking US sanctions against countries including Sudan. The bank also pleaded guilty to two criminal charges and accepted a one-year ban on the part of its dollar-clearing business.
Question marks over Mr Prot’s future continued after it emerged that a US Treasury official met him and other bank officials as early as 2006 and warned the bank it risked a penalty.
The violations began in 2002 and continued until 2012, US regulators said when the fine was announced at the end of June. No individuals have been charged, but US authorities have said the investigation is continuing.
The fine was the biggest to date for such transgressions and the largest US fine against a European bank. It was one of a series of big fines handed out by US prosecutors to the banking industry.
Mr Lemierre, 64, is a former classmate of Mr Prot at the prestigious college Ecole Nationale d’Administration. He also took part in talks on private-sector write-downs of Greek debt in early 2012, co-chairing the creditors’ committee of the International
It was a personal decision. After more than 30 years with the bank, he wants to take a step back
Institute of Finance, and has worked for the European Bank for Reconstruction and Development, which supports development projects in emerging Europe and North Africa.
BNP Paribas separated the functions of chairman and CE a decade ago. The bank’s CE is Jean-Laurent Bonnafe.
Like any top bank executive, Mr Prot has strong political ties.
According to a person who knows him, guidance for his actions in the financial crisis in holding onto distressed Greek debt and the bank’s Italian bank holdings came directly from Paris and Berlin. Buying troubled bank Fortis — Belgium’s top financial institution — was another political act, the legacy of which is a 10% stake in BNP Paribas held by the Belgian government.
Mr Prot’s tendency to frown deeply and sweep back his unruly mop of grey hair marks him out among otherwise anonymouslooking dark-suited bankers, and in private he is known to point out how little he earns compared with an “Anglo-Saxon” banking set he is clearly suspicious of.
Once, hosting a briefing for journalists in London in a basement, Mr Prot insisted on working through a power cut by candlelight.