Fortis, part of the group that bought ABN Amro Holding NV in the world’s biggest banking takeover, said first-quarter profit dropped more than analysts estimated on structured-credit writedowns, Bloomberg reports
Net income fell 31% to EUR808 million ($1.26 billion) for the first three months of the year from EUR1.17 billion a year earlier, the Amsterdam and Brussels-based bank said today in a statement. Fortis, which wrote down EUR1.8 billion of asset in the fourth quarter, had an additional EUR380 million of markdowns in the first quarter.
The cost of integrating the Dutch and private-banking units of ABN Amro, acquired last year for about EUR24 billion, reduced first-quarter profit by EUR85 million, Fortis say. The bank, whose structured credit assets totaled EUR43.3 billion at the end of the first quarter, said the markdowns reflected “increased volatility” in capital markets.
Fortis “may still be a lot more conservative than the rest of the market” with its writedowns, says Ivan Lathouders, an analyst at Bank DeGroof in Brussels, who estimated the company would write down EUR150 million and rates Fortis a “buy.”
Fortis fell 1% to EUR16.78 at 9:20 a.m. in Brussels trading, valuing the bank at EUR37 billion. The shares are down 38% from a year ago, underperforming the Bloomberg European Banks Index, down 31%. Among 24 analysts who cover Fortis, 13 say “buy,” six say “sell” and five say “hold,” according to Bloomberg data.