January 27, 2008 / 7:12 PM / 11 years ago

Fortis subprime profit hit may be 2.9 billion

BRUSSELS (Reuters) - Belgian-Dutch bank Fortis FOR.BR said on Sunday its 2007 net profit before divestments could be lowered to 3 billion euros from 4 billion due to its subprime exposure, depending on which market scenarios apply.

“If these scenarios were to be applied to the closing of the accounts of 2007 - which would be subject to approval by the Board of 6 March 2008 - the net profit of Fortis is to be around 3 billion euros,” it said in a statement.

The bank was under pressure to communicate on its subprime exposure after a newspaper report on Saturday said it would need to write off up to 2 billion euros ($2.9 billion) in its subprime portfolio.

Also, shares in Fortis fell more than 10 percent on Friday on market talk of profit warnings and possible exposure to U.S. subprime mortgages, traders said.

A source briefed on the situation told Reuters on Friday there would be higher-than-announced write-offs due to Fortis’s subprime exposure, declining to give precise figures.

Fortis also sought to reassure investors in its Sunday statement and said its capital and solvency position were sound and it planned to maintain its dividend at last year’s level.

It also said it was not considering issuing new shares.

Financial markets remain nervous after a week that started with plummeting stocks on fears of a U.S. recession and saw both a massive rate cut by the U.S. Federal Reserve and the biggest trading scandal in banking history after a junior trader at France’s Societe Generale (SOGN.PA) was accused of secretly amassing a $7 billion loss in bad bets.

Editing by Braden Reddall

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below