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Fortis to spend €200m revamping management

GLOBAL – Fortis will spend around €200m to shake-up around 3,000 management level staff, it said today.

The exceptional charge would be used to upgrade the quality of management, and is expected to be earned back within two years, said chief executive Jean-Paul Votron.

Fortis is currently in the process of training its top managers “from the west coast of the US to the east coast of Asia” to ensure they reach targets, said a Fortis spokesperson.

Votron explained, “Dedicated training programmes and a strict evaluation process have been set up to embed the performance culture and to create opportunities for talent.”

The training will be followed by an evaluation with stricter criteria than before in accordance with Fortis’ “high ambitions”.

“We need to ensure we have the right people in the right places,” said the spokesperson.

The evaluation will result in the loss of part of the management team, an estimated two-thirds of which will be replaced from internal talent as well as external recruitment.

The €200m will mostly be used to fund the training programme, while the remainder will go towards severance payments and recruitment costs, the spokesperson told IPE.

According to Fortis, it is too early to predict how many managers will choose to leave or be forced out. However, the spokesperson added that it would be a minority.

The Dutch-Belgian financial group also told IPE that a joint venture for its fund arm, Fortis Investment, might be on the cards.

Reports today stated that Fortis executive committee member Jozef De Mey said the group was seeking opportunities to expand Fortis Investments, including looking at joint venture partners.

The spokesperson stated that in accordance with the group’s growth and development strategy, this is one option it may consider, among others.

She declined to comment any further. “It is our policy to not to speculate on anything in the future. We deal in real time.”

Fortis’ third-quarter results revealed that funds under management at Fortis Investments rose 19% year to date, to €101.2bn.

“Net new money of €10.3bn, to which Fortis Investments contributed up to €9.5bn, and market gains of €6.4bn are the drivers behind this increase,” according to a Fortis press statement.

Overall, the group announced a 48% increase in net profit to €3bn before results on divestment. Meanwhile, its net profit surged 32% compared to the first nine months of last year to €3.5m.

“The strong results we are publishing today confirm that we are fully on track to deliver the targets set out in the strategic plan,” said Votron.

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