Falls and outflows for ABN-buyer Fortis
BELGIUM - Fortis, part of the banking-trio that has bought ABN Amro, has reported a 10% drop in quarterly profits, naming insurance claims and credit market turmoil as the culprit.
Presenting its results for the first nine months of the year, the Belgian-Dutch bank said net profit was €797m in the third quarter, compared with €884m a year earlier.
Funds under management amounted to €206bn, up 8% on year-end 2006, but the firm posted a 1.6% decrease compared with the previous quarter, because of "a negative market effect of €900m and a net outflow of €1.7bn," said Fortis in its results.
Outflows were mainly caused by the exit of a trust customer, whose temporary position was withdrawn, but this was "anticipated", according to the bank.
Fortis added: "Excluding this factor, net inflow in the third quarter still came to €1bn, a good performance considering the adverse market conditions."
The bank is adamant net inflow remained strong in the first nine months, at €8.6bn, with asset management accounting for three-quarters of this result and private banking for the rest.
Commenting on the recent completion of the ABN Amro takeover by banking trio Fortis, Banco Santander and Royal Bank of Schotland, Fortis' chief executive Jean-Paul Votron said his bank will now proceed with the integration of the Dutch bank's retail and commercial banking operations and its wealth and asset management arm.
With the takeover, Fortis aims to strengthen its market position in the Benelux home market and to grow its commercial and private banking and asset management globally. Fortis said these businesses performed in line with ABN's trading update in September.
The bank plans to submit a detailed transition plan to the the Dutch central bank, DNB by mid-December.
If you have any comments you would like to add to this or any other story, contact Carolyn Bandel on +44 (0)20 7261 4622 or email firstname.lastname@example.org