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Fortis reports E295 million of currency losses

The loss reflects the recent devaluation of the US dollar and the pound sterling

Belgium-based Fortis, a provider of banking and insurance services, has reported E295 million of currency losses following the suspension
of transactions.

 

The company has said that in preparation of the contemplated closing of the transactions with the Belgian government and BNP Paribas announced in October 2008, the company has acquired US dollars and pounds sterling in December, 2008.

 

These currency transactions were entered into in order to enable Fortis to provide its portion of the funding of the envisaged structured credit portfolio entity, Royal Park Investments, in the currency of the assets of the portfolio.

 

Following the unexpected ruling by the Court of Appeal of Brussels, the closing of the transactions with the Belgian government and BNP Paribas, including the envisaged structured credit portfolio entity, was suspended.

 

Given the current uncertainty, Fortis decided to sell the US dollars and pounds sterling again, resulting in a net loss for Fortis of E295 million. This loss reflects the recent devaluation of the US dollar and the pound sterling.

 

The loss has reduced the pro forma net cash position on September 30, 2008 (as published on December 19) from E2.1 billion to E1.8 billion and pro forma shareholders’ equity from E6.7 billion to E 6.4 billion.