By Matthias Blamont and Maya Nikolaeva
PARIS (Reuters) - BNP Paribas Chief Executive Officer Jean-Laurent Bonnafe in a message to employees seen by Reuters has warned that the French bank is facing heavy penalties following a U.S. investigation into breaking sanctions which should end "very soon".
BNP Paribas declined to comment but sources have said the French bank is expected to plead guilty to a federal criminal charge and pay nearly $9 billion as part of a larger settlement with multiple enforcement authorities.
An announcement by U.S. authorities on the settlement is expected on Monday, a source familiar with the matter said on Friday.
"I want to say it clearly here: we will receive a heavy penalty," Bonnafe said in an internal message sent on June 27 and seen by Reuters on Saturday.
"However, the difficulties that we are currently experiencing must not affect our plans for the future."
U.S. authorities are examining whether BNP Paribas evaded U.S. sanctions relating primarily to Sudan between 2002 and 2009 and whether it stripped identifying information from wire transfers so they could pass through the U.S. financial system without raising red flags, sources have said.
"This is good news for all staff and for our clients," Bonnafe says in the letter.
"It will enable us to remove the current uncertainties that are weighing on our group. We will be able to put behind us these occurrences, which belong to the past." BNP Paribas is likely to be suspended from converting foreign currencies to dollars on behalf of clients in some businesses for as long as a year, sources familiar with the matter said this week.
TURNING THE PAGE Bonnafe took over a bank in December 2011 that had emerged a winner from the financial crisis and sought to raise revenues outside its traditional European markets, while tougher financial regulation made banking a less profitable business.
BNP has only said publicly that it is in discussions with U.S. authorities about "certain U.S. dollar payments involving countries, persons and entities that could have been subject to economic sanctions". It has set aside $1.1 billion for the fine but told shareholders it could be far higher than that. Last month it also said it had improved control processes to ensure such mistakes did not occur again. BNP plans to lower its dividend and raise funds by selling billions of euros of bonds next week, the Wall Street Journal reported on Friday. Analysts have already bet on a cut in BNP's dividends and some, such as Deutsche Bank, factored in a zero dividend payout for 2014 in their forecasts for BNP, based on a $9 billion fine.
That would help the French bank maintain its core equity Tier 1 ratio at close to 10 percent.
"When the announcement is made, I will again be in contact with all of you," Bonnafe said.
"It is my responsibility to explain to you what has happened, the lessons that we have learned and, most importantly, how we plan to go forward in the future".
BNP struck a confident tone on its outlook earlier in March, promising a double-digit percentage net earnings per share rise over the next three years and an increase in dividend payout to 45 percent of earnings by 2016 from 41 percent in 2013.
(Additional reporting by Jean-Baptiste Vey; Editing by Sybille de La Hamaide, Jason Neely and Sophie Hares)