BNP Paribas Thursday announced an unexpected slump in fourth-quarter profit after it set aside a $1.1 billion provision against possible penalties for allegedly violating US laws that restrict financial transactions with countries under economic sanctions.

The Paris-based lender said that during an internal probe conducted by the bank over the past few years it had found "a significant volume of transactions that could be considered impermissible under US laws and regulations including, in particular, those of the Office of Foreign Assets Control."