Fortis first-half profit slides 41%

by Gill Montia

Story link: Fortis first-half profit slides 41%

Belgian bank, Fortis, recorded a 41% year-on-year fall in fist-half net profit, to €1,638 million.

However, net profit for the first half of 2007 was strong and the year-on-year decline stands at 21% if a €591 million loss in relation to the turmoil on the credit markets is excluded.

Fortis Banking made net profit of €1,185 million during the first six months of the year; putting aside the €409 million impact of credit market turmoil, the result if 24% down on the same period of 2007.

The group’s insurance business reported a 16% year-on-year drop in profit, to €642 million but the division saw a recovery during the second quarter, when profit increased to €423 million, compared with €219 million in the first three months of the year.

Fortis, together with Royal Bank of Scotland (RBS) and Santander, acquired Dutch bank, ABN Amro, last year.

As with RBS, the acquisition and the credit crisis has left Fortis needing to shore up its balance sheet.

The group has raised €8.3 billion in a rights issue and last month sold International Asset Management (IAM) a hedge fund manager and former subsidiary of ABN AMRO Asset Management.

Fortis says it will be auctioning further non-core Fortis and ABN Amro assets in the months ahead although it describes its capital position as sound, with a Tier one capital ratio of 7.4%.