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Fortis first quarter net profit of EUR 808 million driven by resilient operational performance

Autor: Bancherul.ro
2008-05-13 15:14
Despite challenging markets continued growth in income supported by strict cost management, said Fortis in a press release.

Sustained organic operational growth, especially in banking, and strict cost management result in a first quarter net profit of EUR 808 million, including EUR 380 million net of tax impact of the credit market turmoil.

Banking

- First quarter net profit of EUR 721 million, including EUR 231 million of after-tax impairments on structured credit portfolio
- Income growth of 17% year-on-year driven by higher income from treasury and financial markets as well as strong underlying growth in net interest income in all banking businesses
- Strict cost containment resulted in a 2% increase in expenses and an improvement of the efficiency ratio
- Credit loss ratio of 12 basis points, excluding impairments on the structured credit portfolio, reflecting continued strong credit quality of loan portfolio
- Asset Management and Private Banking saw a net inflow of EUR 2.6 billion in the first quarter
- Good underlying pro forma net profit of acquired ABN AMRO activities of EUR 319 million
- Well on track with the integration of ABN AMRO, Asset Management transferred as per 1 April 2008

Insurance

- First quarter net profit of EUR 219 million, including EUR 149 million of after tax impact of the credit market turmoil
- Life gross inflow up 5%, compared with a very strong first quarter 2007, to EUR 4.0 billion
- Non-Life gross written premiums advanced 3% to EUR 1.9 billion driven by strong growth in Belgium and the Netherlands
- Tight cost control in all countries resulted in a 2% increase in operating costs, fully related to the inclusion of Fortis Insurance Company Asia in Hong Kong
- Combined ratio of 96.6% in Non-Life due to improved efficiency and focus on profitable underwriting

Net profit doubled compared to the fourth quarter which was heavily impacted by the write-downs on the structured credit portfolio, only partly offset by the gain on the sale of CaiFor
- Further growth in revenues quarter-on-quarter while costs were significantly lower as a result of a strict management, especially visible in non-staff related expenses

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