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Monday 21st of February 2011
January 29, 2008    

Fortis faces sub-prime losses

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by Kay Murchie
”Fortis

Belgian-Dutch bank Fortis has confessed it could face a write-down of €1 billion (£743 million) following its exposure to the sub-prime mortgage crisis in America.

The news follows rumours about the bank’s potential hit from sub-prime losses.

In addition, Fortis could lose an additional €1 billion in profits as a consequence of the sub-prime collapse, seeing them fall to €3 billion from an estimated €4 billion.

Shares in the bank dropped 10% amongst its warnings of profit losses and exposure to the sub-prime market, however, the bank was quick to reassure its investors, saying that its capital and solvency positions are stable and secure.

However, an analyst at Bank Degroof said a €1 billion loss ‘is not excessive‘ compared to other financial institutions which have suffered more dramatic losses.

Many experts believe that worldwide banks may have to find an extra $143 billion to fill the gap left in the aftermath of the subsequent and continuing credit crisis.

The sub-prime mortgage crisis has seen many casualties in the financial sector which have experienced significantly losses, in particularly Northern Rock.

Fortis is the 20th largest business in the world by revenue and its banking operations include network (retail), commercial, and merchant banking.

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