Fortis Private Banking Powers Ahead

12 March 2007

Profits in the commercial and private banking division of Benelux banking and insurance group Fortis rose by 46 per cent to €671 million ($880 million) in 2006. Total income grew by 20 per cent to €2.5 billion, of which 15 per cent came from rises in both net interest income (up 15 per cent) and net commissions and fees (up 20 per cent). But profit in the division fell by €39 million to €113 million in the last quarter of 2006, as stronger commissions were more than offset by higher impairments and total expenses. Funds under management ended the year at €191 billion, 16 per cent higher compared with December 2005. Net inflows were a record €17 billion for the year, €7 billion of which came from private banking and €10 billion from Fortis Investments. Growth at private banking was due chiefly to network expansion and effective cross-selling to commercial banking and trust customers and Fortis Investments' substantial net inflows were the result of its strong focus on the diversification of distribution channels, with major successes among external institutional customers in Italy, Spain, France and Germany, for example, the company said. Looking to the future, it aims to use a number of "growth levers" to hit a higher target, including positive effects from a restructured Merchant and Private Banking unit - MPB. This new organisation will optimise client service and streamline international expansion by formal coordination between business lines, resulting in integration synergies, Fortis said. Acceleration in MPB will come from increasing size and level of activity in selected countries, such as Turkey and France, seizing market opportunities in Poland and rolling out new capabilities in Asia. Private banking will also be extended to corporate clients.