Belgian-Dutch bank Fortis said on June 26 it would issue new shares worth 1.5 billion euros (2.4 billion dollars) to shore up its finances as part of a plan to boost its solvency by 8.0 billion euros.
As well as the share sale to institutional investors, the bank said it would scrap its interim dividend this year to save cash, would issue new debt and would divest non-core assets and real estate. "We believe that 2008 will be a difficult year for our industry and we do not expect an improvement in the economic environment soon," chief executive Jean-Paul Votron said.
Fortis follows in the footsteps of a number of international banking groups which have raised new capital to repair balance sheets that were battered by the collapse of the subprime home loan market last year. Last year, Fortis bought part of Dutch rival ABN Amro as part of a trio of banks in a 70-billion-euro deal.
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