Fortis Seeks to Calm Nerves After Delaying Business Unit Sale to China

Tom Burroughes

8 August 2008

Dutch-Belgian financial services group Fortis, which offers services including private banking for the wealthy, said Chinese authorities have delayed approval of the sale of half of its asset management arm to China's Ping An Insurance.

A Fortis spokeswoman was quoted by media services as saying it expected to get Chinese approval for the €2.15 billion ($3.33 billion) deal later this year.

However, Fortis sought to reassure investors on the delay. In a statement published on Fortis’ website, it said: “In response to today’s media reports about the approval process regarding the joint venture with Ping An, Fortis and Ping An confirm that this process is ongoing. The regulatory application is proceeding as normal. Target is to close the process in the second half of this year.”

Fortis angered investors in June with an €8 billion solvency plan - which included a €1.5-billion share issue and the scrapping of its interim dividend - as it was hit by the credit crisis and had bought operations of former Dutch rival ABN AMRO for €24 billion last year.

Fortis, of which Ping An holds 5 per cent, said this week its second-quarter profit halved to €830 million partly due to €362 million in write-downs.