Sub-prime crisis losses could cost Fortis £750m

Published on Monday 28 January 2008 09:37

FORTIS, the Belgian bank that was part of the successful RBS-led consortium that bought ABN Amro last year, said today that losses stemming from the US sub-prime crisis could be around £750 million.

And that means that its profits for 2007 could come in at around 2.23 billion, rather than previous forecasts for 2.97bn.

Fortis has been under pressure to make a statement on its exposure after weekend reports suggested it may have to write off up to 1.5bn from its sub-prime portfolio.

The world's biggest banks have already said they are facing total combine losses from the sub-prime sector – which focuses on lending to people with poor credit histories of unreliable income – of more than 100bn.

Fortis, which landed ABN Amro's Dutch operations as its spoils in the 49.1bn takeover with RBS and Santander, said it could take the hit depending on the valuation models it chooses to assess the value of its sub-prime portfolio with.

"Since January 2008 a number of peers applied substantially higher coverage ratios," the bank said in the statement.