Fortis won't meet 2002 guidance

BRUSSELS/AMSTERDAM, July 23 (Reuters) -- Dutch-Belgian financial services group Fortis said on Tuesday it would not meet its full year earnings guidance if weak conditions on financial markets persist.

However, the group said it would meet the guidance of 12 percent growth in earnings per share if stock markets were to return to March levels.

The warning comes a day after Dutch insurer Aegon warned investors that its 2002 net profit would be 30 to 35 percent lower than it had previously predicted, sending its shares down nearly 18 percent.

Fortis' shares -- which on Monday plunged to their lowest level since February 1997 in the wake of the Aegon statement -- were indicated to open almost 12 percent down in Amsterdam.

"Although the half-yearly operational developments are in line with expectations and solvency continues to be strong, the profit guidance for the full year issued in the first quarter will not be met if the present conditions persist in the financial markets,'' Fortis said.

The financial group said the slump in equity markets, which have fallen to their lowest levels in several years, could have a heavy impact on its results. It said the market value of its equity portfolio has fallen below its purchase value for the first time in its 12 year history.

On July 19, it said unrealised capital losses due to the sharp market decline amounted to 0.9 billion euros ($908.3 million) after tax.

Fortis added that it was impossible to estimate by how much it would miss its targets for 2002 if present market conditions persist.

"It is impossible to say what the new guidance would be,'' a spokesman said. "There are fluctuations of 5-10 percent up or down on the market each day. This is so extreme, it is hard to say what is happening.''