* May be "far in excess" of earlier $1.1 bln provision

* U.S. prosecutors considering criminal charges -source

* BNP will not buy back shares at current valuation -CFO

* Q1 net profit up 5.2 pct after Fortis unit buyout

(Adds U.S. source comments, results details)

By Lionel Laurent and Matthias Blamont

PARIS, April 30 (Reuters) - BNP Paribas BNPP.PA warned it might be hit with a U.S. fine "far in excess" of the $1.1 billion which France's biggest bank set aside last year to cover litigation costs linked to a potential breach of U.S. sanctions on countries including Iran.

The global banking industry faces mounting legal woes due to investigations into a string of alleged misdeeds, including fixing benchmark interest rates and manipulating foreign-exchange markets.

"There is uncertainty with respect to the amount and the nature of penalties the U.S. will impose," BNP Chief Financial Officer Lars Machenil told Reuters Insider television.

"It's not impossible that the fine is far in excess of the ($1.1 billion) provision."

U.S. federal prosecutors are considering criminal charges against BNP for doing business with countries subject to U.S. sanctions such as Iran, Sudan and Cuba, according to a person with knowledge of the matter.

Regulators may consider suspending the bank's ability to do dollar clearing in New York and are looking at possible penalties for individual employees, the person said.

BNP declined to comment.

Asked if the fine could reach $2 billion or $3 billion, BNP's Machenil said: "There is nothing more to say."

Past U.S. settlements have ensnared rivals such as Standard Chartered STAN.L which agreed in 2012 to pay $327 million to resolve allegations that it violated U.S. sanctions against Iran, Sudan, Burma and Libya.

JPMorgan Chase JPM.N agreed to pay $13 billion in 2013 over mortgage-related charges.

BNP reported a better-than-expected 5.2 percent rise in first-quarter net income on Wednesday.

The effects of its full takeover of Belgian subsidiary Fortis last year helped offset writedowns on assets exposed to the Ukraine crisis and rising loan losses in Italy.

The bank has a robust capital base relative to peers with a core Tier 1 ratio of 10.6 percent at end-March.

BNP has "excess capital" but will not use this to buy back shares at their current valuation, Machenil said.

"Today we are (trading) somewhere around book value...I don't think (buying back shares) is on the table," he said. "You're going to do share buybacks when your share price is substantially below book value."

UKRAINE CRISIS

Seen by investors as better-capitalised and more conservative as rivals like Deutsche Bank DBKGn.DE or Barclays

BARC.L , BNP is in the early stages of a new plan to cut costs and shift more resources to North America and Asia as European banks struggle with new regulation and economic uncertainty.

It expects this to deliver a double-digit percentage rise in overall earnings over the next three years, an increased dividend payout and an improved return on equity (ROE) of 10 percent by 2016, the bank has said.

BNP reported a 5.2-percent rise in first-quarter net income to 1.67 billion euros as it reaped the benefits of its full takeover of Fortis and a drop in expenses.

This helped offset a 0.6 percent drop in revenue and a sharp rise in loan-loss provisions stemming from the Ukraine crisis and a tough economic environment in Italy.

But the bank's underlying performance was below expectations, according to Citigroup analyst Kinner Lakhani, who said in a note to clients that the cautious outlook from management may lead to single-digit analyst forecast downgrades.

($1 = 0.7237 Euros)

(Reporting by Lionel Laurent and Matthias Blamont; Additional reporting by Supriya Kurane in Bangalore; editing by James Regan and Jason Neely)

((lionel.laurent@thomsonreuters.com)(+33 1 49 49 56 85)(Reuters Messaging: lionel.laurent.thomsonreuters.com@reuters.net))

Keywords: BNP PARIBAS RESULTS/