SocGen Expects Penalties from U.S. Sanctions to Be Around 1.1 Billion Euros
The Societe Generale in France anticipates that penalties that are related to the dispute with the United States over violations of international sanctions to be about 1.1 billion euros. It is also expected that this would be covered almost entirely by provisions. Through an update released on Monday, the bank said that it expects that the provision for disputes that has been allocated to the matter would cover the amount of the penalties almost entirely. The provisions of the bank set aside for the clearance of penalties from legal disputes sums up to 1.43 billion euros.
For over a year, the Societe Generale has been persistently pursued by a series of expensive legal disputes. The bank claims that it expects the issue to be put to rest within the coming weeks. A final case, that remains unsettled, pertains dollar transfers that were made for firms that are based in nations that have been subjected to economic sanctions by the United States. Over the course of 2017 and 2018, the bank has frequently adjusted the provisions reserved to cover any potential losses relating to the settlements. This is, however, the first time Societe Generale has provided an estimate of the amount it expects the settlement to reach.
The bank in June, agreed to pay 1.3 billion euros to authorities in France and the U.S. to put a halt to disputes over transactions between Societe Generale and Libya and also over the alleged rigging of a critical interest rate that is used globally in contracts worth trillions of dollars. Didier Valet, the Societe Generale bank’s deputy CEO, left in March as part of the course of settling the Libor case. Valet was in charge of activities in investment banking. The head of retail banking in the financial institution also quit at the time. This rattled investors and hit first quarter profits. The bank, however, saw its profits held afloat in the second quarter by growth abroad.
The Societe Generale, in recent years, has been caught up in a horde of lawsuits and probes. The number of such suits has escalated in in recent months. In mid-2017, the bank had already paid 963 million euros in the settlement of yet another dispute over a sovereign wealth fund with the Libyan Investment Authority. The French second-biggest bank said it has entered into a phase of more dynamic discussions with the U.S. authorities in the hope of reaching a solution to the matter in the few coming weeks.
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