Fortis Posts 19% Net Profit Gain to $2.46 Billion

March 23, 2001

Fortis, the Belgian-Dutch financial services group, released its 2000 results showing a healthy gain of 19 percent in net operating profit to €2.768 billion ($2.463 billion) compared to €2.136 billion ($1.9 billion) in 1999. The figures matched analysts’ forecasts.

All sectors showed good growth with banking activities registering a 27 percent gain and insurance premiums, mostly from life policies, up 15 percent. The results included the contribution from American Bankers Insurance, which Fortis acquired in October of 1999.

The announcement came as a relief to Europe’s financial community, after the disappointing results announced Wednesday by Zurich Financial, which failed to meet analysts’ targets after it posted a 5.5 percent decrease in net income. The bad news has sent the company’s shares down almost 20 percent, and battered the values of other European insurance stocks as well.

Fortis gave growth estimates for this year of around a 12 percent increase in “net operating profit per share” and hopes for a 15 percent return on equity. The change in target figures reflects the greater value that European companies are putting on “Transparency” or openness in their financial accounting, due in part to the expectations of American shareholders and U.S. regulatory requirements.

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