Page last updated at 13:32 GMT, Monday, 29 September 2008 14:32 UK

Euro bank Fortis admits mistakes

Fortis bank HQ
Fortis will have to sell its stake in Dutch bank ABN Amro

The new boss of the European bank Fortis which had to be rescued this weekend has said the bank had got its timing wrong.

Chief executive Filip Dierckx said some of the bank's decisions had been made "at the wrong moment".

The European banking and insurance giant was partly nationalised by the Netherlands, Belgium and Luxembourg.

Ministers from the three countries agreed to put 11.2bn euros ($16.1bn; 8.9bn) into Fortis to save the bank.

Analysts say the bank's biggest mistake was joining in - along with Britain's Royal Bank of Scotland and Spain's Santander - in the 70bn euro purchase of the Dutch bank ABN Amro last year.

Shares fall

We have taken up our responsibility, we did not abandon the savers

Yves Leterme
Belgian prime minister

Ever since, Fortis has been weighed down by the 24bn euros it paid for its share of ABN.

Before this bail-out Fortis said it needed to raise about 5bn euros as it absorbed ABN's Dutch retail banking arm.

It had said it could meet the shortfall by selling other assets, but has so far found it hard to find any buyers.

Fortis' new chief executive Filip Dierckx, who took over on Friday, has tacitly acknowledged the bank's mistakes.

"If you look at some of the decisions that were taken in the past, then you can say that probably they were done at the wrong moment," he said.

Too big

Fortis is one of the largest European financial institutions to be bailed out by governments as result of the current turmoil in the credit markets.

It was seen as too big a European bank to be allowed to go under. Its assets are greater than the size of Belgium's annual domestic economic output.

Belgian Prime Minister Yves Leterme said the bail-out showed Fortis would not be allowed to fail, after its share price plunged in recent days.

Mr Leterme said: "We have taken up our responsibility, we did not abandon the savers."

Insolvency fears saw the company's shares fall to their lowest level in more than a decade before the deal was announced.

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