Fortis warns of sub-prime losses

Belgian bank Fortis has warned that its losses connected to bad US sub-prime mortgage debt could be as much as 1bn euros ($1.47bn; £743m).

As a result, it said its 2007 profits are likely to fall to 3bn euros from the previous estimate of 4bn euros.

The bank's statement comes after much market speculation about the extent of its sub-prime losses.

Global banks may need to raise an extra $143bn to cover the continuing credit crisis, a report said last week.

The study by Barclays Capital said the banks would need the extra money if bond insurers, who insure the debt offerings at the centre of the US sub-prime crisis, have their credit ratings cut.

If the credit ratings are reduced, it is likely to lead to banks reporting bigger losses on their sub-prime debt, as the value of the outstanding debt would in turn be reduced still further.

Shares in Fortis fell more than 10% on Friday.

The bank said in its statement on Sunday that, despite its sub-prime exposure, its overall finances remained sound.

The world's largest banks have already admitted losing a total of more than $100bn from bad sub-prime debt.



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