BRUSSELS, Belgium, March 10, 2005 (PRIMEZONE) -- Fortis:
-- Net operating profit up 42% to EUR 3,197 million
-- Net profit up 53% to EUR 3,358 million (EUR 2.59 per share)
-- Proposed dividend EUR 1.04 per share in cash, up 13% from EUR
0.92 for 2003 and introduction of interim dividends as from
the 2005 financial year
-- Net operating profit at Banking up 36%
-- Revenues increased by 4%
-- Sharply lower value adjustments to loans
-- Operating costs remained flat
-- Net operating profit at Insurance up 48%
-- Premiums up at Life and Non-Life (excluding Assurant and
Seguros Bilbao)
-- Increase in Embedded Value and in Value Added by New Business
at Life
-- Excellent performance by Non-life
-- Value of the equity portfolio exceeds historical cost for the
first time since the third quarter 2002
Fortis CEO Jean-Paul Votron comments:
Fortis delivered record-high operating results in 2004. Our net operating profit increased by 42%. Around 85% of our net operating profit was realised in our home markets, which are still experiencing low economic growth rates. In this environment, we managed to increase our revenues, while keeping our costs stable across the businesses. We can be proud of these results.
Our recently introduced strategy builds on the core strengths that have led to the full-year 2004 results and further leverages on the positive momentum in the various businesses. The combining of Commercial and Private Banking has institutionalised the co-operation that was already taking place and has created a true bank for both the enterprise and the entrepreneur. The investment plans of Commercial and Private Banking will reinforce each other: the roll-out of the business centre network across 25 European countries will accelerate our market penetration beyond the Benelux countries. In Merchant Banking we will continue to grow profitably in selected skills and niches by means of a focused client-centric approach. At Retail Banking, we have been able to improve revenues while at the same time lowering the cost base. In the highly competitive markets in which we operate, client satisfaction and sustained cost control will remain key differentiators for improving results.
The focus on profitability at Life Insurance in combination with volume growth has led to a substantial increase in value creation, as evidenced by the growing Value Added by New Business and margins. Sales through the banking channel have played an important role in achieving this. The recently begun collaboration with 'Bank van de Post' on the distribution of insurance products will reinforce our market leadership in bancassurance in Belgium.
A similar pattern was visible at Non-Life. Premium growth in combination with cost control and favourable claims experience has led to steep increases in results. In the Netherlands, our leading position in the growing disability market and our proven competitive advantage in underwriting have created a solid base for profitable growth.
At Insurance International, our European and Asian joint ventures delivered very healthy premium and profit growth. Our new joint venture in Portugal, Millenniumbcp Fortis Grupo Segurador, will also contribute to Fortis's growth outside its home market as from the first quarter of this year.
While our revenues have increased, costs were kept stable. This has resulted in an improvement of the cost/income ratio of our banking activities to 61.3%. We will continue to focus on the difference between cost and revenue performance in the coming period. The newly created COO function will ensure our continued cost focus through the integration of support and operational functions across Banking and Insurance. This will improve operating margins while creating an environment of controlled growth.
The improved underlying performance in combination with our solid solvency position will enable us to propose a 13% higher cash dividend of EUR 1.04 to the Annual General Meeting of Shareholders. In addition, we will aim to pay interim dividends as from the 2005 financial year. The increase in dividend and the introduction of an interim dividend reflect our continued focus on the creation of shareholder value.
As we will start reporting under IFRS this year, the volatility of our results will increase. We will therefore not give any guidance for full-year 2005.
Full-year 2004 (versus full-year 2003)
-- Net operating profit before realised capital gains increased by 25% from EUR 1,976 million to EUR 2,469 million, or by 42% excluding Assurant and Seguros Bilbao. Net operating profit increased by 42% from EUR 2,247 million to EUR 3,197 million. Value adjustments to the equity portfolio contributed EUR 372 million, compared with a loss of EUR 311 million in 2003. In the course of the fourth quarter, the value of the equity portfolio exceeded the historical cost price for the first time since the third quarter of 2002. Net realised capital gains were down by EUR 226 million, or 39%, to EUR 356 million. -- Net profit increased by 53% from EUR 2,197 million to EUR 3,358 million, benefiting from an increase of EUR 211 million in non-operating items, mainly in respect of gains realised on the sale of 65% of Assurant and of Seguros Bilbao. Earnings per share amounted to EUR 2.59 compared with EUR 1.70 in 2003. Return on equity came to 25.6% in 2004. -- The Banking business's net operating profit before realised capital gains increased by 49% to EUR 1,646 million. Net operating profit increased by 36% to EUR 1,970 million. Total revenues went up by 4%. Substantial increases in net interest income (+5%) and commissions (+10%) were partially offset by the lower trading result reported under other revenues. Sharply lower value adjustments to loans were important contributors to the strong improvement in results. Costs remained tightly controlled in 2004. -- The Insurance business's net operating profit went up by 48% from EUR 996 million to EUR 1,480 million. Excluding Assurant and Seguros Bilbao, net operating profit more than doubled from EUR 664 million to EUR 1,373 million. Value adjustments to the equity portfolio added EUR 441 million to net operating profit, whereas in 2003 they depressed it by EUR 310 million. Net realised capital gains came down by EUR 177 million. Excluding Assurant and Seguros Bilbao, net operating profit before realised capital gains increased by 19% as a result of the continued good performance at Life and an excellent performance at Non-life.
Annexes to the press release http://hugin.info/134212/R/984168/146595.pdf