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Shares in BNP Paribas tumbled after a US court found the French bank liable for more than $20mn in damages to three Sudanese refugees over its role in providing banking services to the African country’s former ruler and enabling human rights abuses.
The bank’s shares fell more than 10 per cent in Paris on Monday to their lowest level since April. Lawyers for the three plaintiffs and analysts said that Friday’s ruling could open up BNP Paribas to far greater damages, putting it under pressure to settle with thousands of other Sudanese refugees who have joined a related class action.
BNP said that “any attempt to extrapolate is necessarily wrong, as is any speculation regarding a potential settlement”.
The French bank had already said it would appeal, calling the ruling “clearly wrong” and that it applied only to the three plaintiffs: “We are going to pursue all available avenues to contest this judgment.”
The three Sudanese plaintiffs, who now live in the US, had testified to torture, sexual violence and other abuses. They accused the French bank of helping former president Omar al-Bashir’s regime commit genocide between the late 1990s and 2000s by providing it with banking services.
Their lawyers had alleged that BNP played a direct role in an “organised campaign of destruction” by al-Bashir, allowing his regime to access US financial markets and buy weapons that were used against its citizens, while the financing violated US sanctions at the time.
On Friday, the court found BNP Paribas liable for damages worth $7.3mn, $6.7mn and $6.75mn, to each of the three respective plaintiffs. The case marked a rare jury trial for allegations of this type.
BNP had argued the case had no merit as was there was not enough evidence to support allegations such as conscious assistance of al-Bashir’s regime under Swiss law. The case concerned its division in Switzerland.
In 2014, the bank paid a $9bn penalty for breaking US sanctions, including in Sudan, following a guilty plea to criminal charges of processing blacklisted funds.
Analysts said BNP’s shares had underperformed those of peers at the time, and could continue to do so until its liabilities became clearer. Hausfeld, one of the law firms representing the three Sudanese plaintiffs, has said that more than 20,000 other refugees were members of the class of victims certified in the case.
“A combination of a lack of visibility on the potential financial impact and next legal steps, a reminder of 2014 share price performance as well as a capital path that leaves relatively little room for error, is likely to hang over the shares until more visibility is provided,” said Anke Reingen, an analyst at RBC Capital Markets.
Monday’s decline puts BNP shares on course for their worst performance in years, exceeding declines in March 2023 during the bailout of Credit Suisse and in March 2020 at the start of the pandemic.
Shares in other French banks were also under pressure after S&P on Friday downgraded France’s sovereign rating over its strained public finances.
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