FORTIS (EBR:FORB) Update On Financial Position Following The Ruling By The Court Of Appeal Of Brussels

FORTIS (EBR:FORB) On 14 November 2008, Fortis published an Interim Management Statement reflecting the pro forma financial position of Fortis at the end of September after completion of all the transactions announced early October. On 12 December, the Court of Appeal of Brussels suspended the decisions taken by the Board of Directors of Fortis on 3, 5 and 6 October and hence the execution of some of these transactions. This necessitated a new update on the financial position of Fortis. This update is entirely dependent on whether or not the ruling will be successfully challenged.

As a result of the ruling of the Court of Appeal, three major changes will influence the pro forma financial position of Fortis compared to the statement of 14 November:

* The execution of the intended sale of Fortis Insurance Belgium to BNP Paribas was suspended and therefore Fortis will fully reconsolidate Fortis Insurance Belgium, at least temporarily * The envisaged structured credit portfolio entity, in which Fortis would hold a 66% interest, will not be accounted for by Fortis holding. This entity forms part of the agreement with BNP Paribas and the Belgian State and will therefore not be included for as long as that agreement is suspended * The transactions related to the CASHES will not be accounted for as long as the agreement with BNP Paribas and the Belgian State is suspended (a further explanation is included on page 8 under the General Account)

The scope of Fortis' activities following the ruling of the Court of Appeal therefore includes Fortis Insurance Belgium, Fortis Insurance International and the General Account. As a result, the pro forma unaudited financial position at the end of September has changed compared to the figures published on 14 November:

* The impact on the pro forma net cash position of Fortis is EUR 0.5 billion positive. On 14 November, Fortis reported a cash position of EUR 3.5 billion. Taking into account the contemplated EUR 1.9 billion cash pledge for the structured credit portfolio entity, the net cash position amounted to EUR 1.6 billion. Giving effect to the ruling, the pro forma net cash position at the end of September amounted to EUR 2.1 billion.

* The pro forma net equity has decreased from EUR 7.7 billion to EUR 6.7 billion due to the suspension of the gain on the sale of Fortis Insurance Belgium of EUR 3.6 billion, partly offset by the non-inclusion of the negative impact of the transactions related to the CASHES of EUR 2.6 billion.

* The pro forma third quarter net profit attributable to shareholders in this new scope amounted to EUR 152 million compared to a pro forma net loss of EUR 135 million in the scope of 14 November. The difference is explained by the fair value development in the positions related to the CASHES of EUR 558 million and the net result of Fortis Insurance Belgium. Fortis Insurance Belgium's net result amounted to a loss of EUR 281 million in the third quarter of 2008 due to write-downs and investment losses of EUR 339 million after tax, as a result of the deterioration in capital markets. The remainder of this press release provides an overview of the transactions that have been executed and the transactions that were suspended resulting in a new scope for Fortis. It also provides an unaudited update of the third quarter Interim Management Statement as published on 14 November reflecting the new scope.

This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.



LINK: http://hugin.info/134212/R/1278049/285047.pdf

FORTIS

http://www.fortis.be

ISIN: BE0003801181

Stock Identifier: XBRU.FORB

US: PINKSHEETS:FORSY