Fortis aims to sell additional assets to bolster its solvency

Amsterdam: Fortis NV plans to sell additional assets to improve its solvency, the chief executive said on Friday in an attempt to reassure customers and investors.

Shares in the Dutch-Belgian bank and insurer fell 10 per cent in Amsterdam to 5.84 euros (Dh30.13) on Friday - slightly above year lows reached during panic selling Thursday. However, they have lost more than two-thirds of their value since January.

The current share price "does not reflect the value of our company" said CEO Herman Verwilst at a news conference in Brussels, Belgium. He said he was "flabbergasted" by the sell-off. Belgium's top politicians also tried to soothe markets. Fortis has dual headquarters in Brussels and in Utrecht, Netherlands.

Belgian Prime Minister Yves Leterme called on investors to remain calm and promised that customers would not lose their money in any case. Finance Minister Didier Reynders said the bank has "absolutely no solvency problems." The company had said in July it needed to raise 5 billion euros ($7.3 billion) in additional capital by 2010 to maintain solvency targets as it absorbs operations from ABN Amro that it bought for 24 billion euros ($35 billion) last year.

At current stock prices, the combined company is worth just 14 billion euros($20.5 billion). Analysts and other observers have questioned whether Fortis will be able to raise the 5 billion euros by selling assets or issuing debt in the current market.

The company said in a statement yesterday it is now considering "a wider range of activities to be divested" than before and expects to raise 5-10 billion euros ($7.3-$14.6 billion). It did not specify what activities it will sell, but it said there was "concrete interest" for all operations it is selling, in insurance and banking, in the Netherlands and abroad.