Fortis continues to do well after ABN transaction

January 30th, 2008 • Related • Filed Under

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/01/29/cnfortis129.xml

Fortis shares clocked up their biggest one-day gain for five years yesterday after the Dutch-Belgian bank tried to kill off speculation that it had been left financially crippled by its involvement in the £50bn takeover of ABN Amro.

The bank warned that full-year profits would fall some €200m (£149m) below expectations. But there would be no emergency rights issue, no dividend cut and no radical increase in bad debt provisions, the bank said. Even if “the most stringent” assumptions were made, Fortis said it would not breach its solvency or capital requirements.

The statement came in response to rumours about the bank’s financial strength. Fortis was part of the Royal Bank of Scotland-led consortium that bought ABN Amro last year, after a battle with Barclays. Some analysts have said Fortis overpaid for its share of the transaction. The bank is raising €24bn to pay for ABN’s domestic Dutch business.

Very cool and well done to Fortis. It’s interesting to see how the ABN Amro deal has been doing for the different banks involved. The mergers are set to continue, in the meantime delivery and revenue generation for the banks involved remains key.

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