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Fortis plunges to $37bn loss

Brussels, March 31, 2009

Stricken financial group Fortis plunged to a mammoth 28.0 billion euro ($37 billion) loss in 2008 due to huge negatives from banking activities stripped out by the Belgian and Dutch states.

The group, pulled apart in a state-led bailout last year, said discontinued activities cost the company 27.4 billion euros, including 20.8 billion euros for Belgium-owned Fortis Bank and 8.6 billion euros for Fortis Bank Nederland.

Fortis said its rump insurance operations made a total net profit of 6 million euros, including a 639 million negative impact from their investment portfolios.

Fortis's general division made a 2008 net loss of 629 million euros due to net interest charges and a 295 million euro hit from currency transactions.

The group had already announced this month that it would be unable to pay a dividend.

Fortis was carved up by the Dutch, Belgian and Luxembourg governments in October after an 11.2 billion euro cash injection failed to calm investors.

The precise make-up of the company is still in doubt.

French bank BNP Paribas is poised to buy 75 percent of Fortis Bank, once the Belgian banking arm of listed Fortis Holding but now in state hands.

Fortis shareholders, who blocked the previous terms of the break-up deal last month, will vote on revised conditions at meetings on April 8-9.

Assuming they vote in favour, Fortis would essentially be an insurance company, with a main Belgian unit and international activities in Britain, Portugal, Hong Kong and elsewhere.

Fortis shares, previously regarded as a "safe" investment and held by many Belgians, are now little more than a penny stock. They closed on Monday at 1.3440 euros, compared with almost 30 euros in April 2007, just before it launched its ill-fated joint bid for Dutch rival ABN AMRO. - Reuters




Tags: banking | Fortis |

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