BNP Paribas hit by Sudan ruling, but bank calls it an isolated case

BNP Paribas’ shares tumbled following a U.S. court ruling that held the bank liable for human rights violations committed in Sudan around twenty years ago.

The verdict, issued by a federal court in Manhattan, could pave the way for compensation claims from thousands of Sudanese refugees in the United States. However, the French bank emphasized that the case involves only three plaintiffs.

According to BNP Paribas, there is no connection between the harm suffered by the individuals and the bank’s standard financial services, which complied with European and Swiss law. In an official statement, the bank stressed that any attempt to extend the ruling to other cases would be “clearly erroneous” and dismissed as unfounded the figures on potential plaintiffs released by law firm Hausfeld, which represented the claimants.

On Monday, the bank’s shares fell as much as 10.6%, closing down 7.7%. The following day, during a conference call with analysts, Chief Financial Officer Lars Machenil confirmed the intention to appeal the ruling and specified that the bank had not set aside any specific provisions for this case in Q3. Despite this, the stock continued to decline, recording a 2.27% drop in Paris.

The legal proceedings have been classified as “bellwether” by Hausfeld, meaning a test case that helps assess the validity and potential economic value of subsequent claims. BNP Paribas also reiterated its capital guidance and shareholder return policy, seeking to reassure the market on the maintenance of financial stability.