The credit rating of French bank BNP Paribas is under review amid the threat of significant penalties from U.S. authorities.
Standard & Poor’s Ratings Services (S&P) announced today that its “A+” credit rating for BNP Paribas has been placed on CreditWatch with negative implications due to an ongoing investigation into possible dealings with countries that are subject to U.S. sanctions.
S&P says that “the nature and the amount of potential penalties imposed by U.S. authorities on BNP Paribas is still unknown.”
Yet, the rating agency is concerned that the penalties “could result in adverse changes to BNP Paribas’ risk-adjusted capitalization, and disrupt some of its banking activities.” So, it has put the rating on notice due to the uncertainty of the outcome of the investigation, noting that a one-notch downgrade is a possibility. It could also leave the rating unchanged.
S&P says that it intends to resolve the CreditWatch placement after analyzing the outcome of the investigation and its implications for BNP Paribas’ creditworthiness, including both its capital position and possible future constraints on its business.