ABN chief tells Fortis it has overestimated profits

27 July 2007

Fortis, a partner in the consortium vying for ABN Amro, has been told by the chairman of the Dutch bank that it is overestimating profits to be made from the acquisition, it has been reported.

Rikjman Groenkik made the claim in a letter to Fred Goodwin, chairman of Royal Bank of Scotland, stating that Fortis' profits could be up to $314 million less than it has estimated.

The letter said that Fortis' profit forecast is based on information from 2005 and is consequently out of date.

Mr Groenik added: "I would like to suggest that we share more detailed management accounting information with you to enable you to refine your views on the current operating performance and profitability of our units."

News of the letter comes at a time when Fortis shareholders are being asked to prepare to vote on the deal for ABN Amro in ten days time.

It is thought that letter could now be used to stymie the deal by hedge funds which have acquired stakes in Fortis in anticipation of turning a quick profit.

Fortis requires the approval of 75 per cent of its shareholders for the deal to proceed.

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