Improved operating performance and significant recovery of net profit

 

       Net profit amounted to EUR 677 million, an increase of EUR 2.3 billion. In the third quarter of 2002 negative value adjustments on the equity portfolio resulted in a net loss of EUR 1.6 billion.

 

       Net operating profit excluding value adjustments on the equity portfolio increased by 16% to EUR 539 million as a result of increased interest margins, improved Non-life results and reduced costs.

 

 

 

       Net profit amounted to EUR 1.3 billion compared with a loss of EUR 87 million in 2002.

 

       Net operating profit excluding value adjustments on the equity portfolio increased by 6% to EUR 1,961 million.

 

       Premium income in insurance increased by 4% to EUR 13,448 million. In the Benelux premiums improved 15% to EUR 7,911 million.

 

       Total banking revenues net of interest expense fell 4% to EUR 6,008 million as a result of the deteriorating economic conditions since the third quarter of last year. However there are signs of improvement with an 8% increase in net interest income in the third quarter compared to the second quarter of this year.

 

       Operating costs (excluding insurance commissions and lease costs) continue to be well controlled

and fell by 4% in the first nine months of this year. These savings are on top of the 3% cost reduction

already realized in 2002. Total FTEs decreased by 3% to 63,931. In 2003, we remain on target to hold total

operating costs at the same level as 2002.

 

       The negative net value adjustment on the equity portfolio was EUR 585 million at the end of the third quarter (at 21 November approximately EUR 400 million), compared with EUR 2.1 billion for the same period last year.

 

       Fortis's already strong solvency improved. At 21 November the net core capital, excluding fourth quarter results, amounted to EUR 17.8 billion, EUR 8.0 billion (82%) above the legally required minimum and EUR 2.2 billion (14%) above Fortis's own floor.

 

 

 

 

 

1) After tax, excluding equity portfolio.

 

 

 

 

 

"In the third quarter our operating and net profit increased significantly. Our result benefited from an improvement in the quality of earnings in our banking activities, as a result of improved margins and reduced costs, and from continued good performance in insurance, on the back of the Non-Life activities. We are conscious though that we still have more to do in increasing our returns.

 

For the first nine months of 2003, Fortis delivered a solid performance compared to last year when our results were affected by a strong decline in stock market levels. We have been able to manage our costs and have further improved our solvency position.

 

We are seeing signs of a slow recovery in the economic environment. The year to date operating performance and the improving markets give me confidence that we can look forward to a satisfactory full year profit performance in 2003".

 

 

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