Fortis’ fine mars profit return

City A.M. Reporter
BELGIUM-based insurance group Fortis returned to an annual profit, resumed its dividend and announced a name change yesterday as it sought a fresh start a year and a half after its dramatic break-up.

The financial services group, stripped down to become a pure insurer after a state-led bailout, said it would change its name to Ageas and cautioned that the market environment remained unpredictable and challenging.

“We can only say the year 2010 has had a good start in terms of business activities,” chief executive Bart De Smet said.

Fortis said net profit reached €1.19bn (£1.09bn) in 2009, helped by a €697m one-off gain on the sale of a 25 per cent stake in Belgian unit AG Insurance to France’s BNP Paribas.

This compares with a mammoth loss of €28bn in 2008 and was in line with an average analyst forecast for a net profit of €1.18bn.

Fortis’s insurance businesses recorded an overall profit of €456m, up from €6m in 2008, broadly in line with expectations.

Fortis said it would resume shareholder payouts with a dividend of €0.08 a share.

•However, the stronger than expected results were marred by Dutch market regulator AFM saying it had fined Fortis €576,000 for market manipulation and late release of information in June 2008 when Fortis said its solvency was strong.

Half of the fines were for market manipulation related to then chief executive officer Jean-Paul Votron’s statement in June 2008 that Fortis’ solvency was “on course” and “strong.”

Fortis said it had filed an appeal against the fine.