Regulation

BNP Paribas shares experienced a decline of up to 10% following a United States jury’s verdict that the French bank facilitated Sudan’s government in committing genocide by providing banking services that breached American sanctions. This has raised potential concerns about future legal claims against the bank.

The jury in Manhattan ordered BNP Paribas to pay $20.5 million to three Sudanese plaintiffs who reported human rights violations under former President Omar al-Bashir. The bank, headquartered in Paris, has announced plans to appeal the decision, stating that the result disregards crucial evidence that was not allowed in court.

Market reactions included a significant drop in the bank’s shares, which fell as much as 10% at one point, ultimately closing down 8.7%. This marks the most substantial daily decrease since March 2023. Legal representatives for the plaintiffs indicated that this ruling might enable over 20,000 Sudanese refugees in the United States to pursue damages worth billions from BNP Paribas.

BNP Paribas clarified that the verdict pertains specifically to the three plaintiffs and should not be generalized. The bank dismissed any extrapolation or speculation regarding potential settlements as incorrect.

Analysts anticipate continued pressure on BNP Paribas shares in the coming months, citing uncertainty surrounding financial implications, legal steps, and historical share price performance. In 2014, BNP Paribas had pleaded guilty and paid an $8.97 billion fine to resolve U.S. charges related to transactions conducted for sanctioned Sudanese, Iranian, and Cuban entities. During this period, the bank’s shares underperformed the sector by 10% from the initial litigation provision to the settlement.