2007 Operational highlights

Commercial Banking saw remarkable double-digit growth in 2007, gaining market share in Europe. Around 2,150 employees serve over 90,000 customers through 126 Business Centres in 19 countries.

We continued to pursue focused expansion by starting to strengthen our presence in a selected number of countries (Turkey, Germany, Poland and the UK). We will achieve this over the period 2007-11 by increasing market penetration and share of wallet.

We also pursued ambitious plans in the Benelux countries, where we already have a sizeable market share. Our ‘enterprise and entrepreneur’ approach, whereby we offer entrepreneurs solutions to their personal and professional banking needs, allowed us to achieve successful cross-fertilisation with Private Banking.

Our Investment Banking activities turned in a strong performance in 2007. Private Equity posted excellent results and further grew its investment portfolio. It now manages diversified private equity investments and hedge funds worth in excess of EUR 2 billion. Noteworthy transactions include Arets Graphics (Belgium), Smithuis Bakeries (Netherlands) and Elogos (Spain).

Our real estate finance businesses for professionals, in Belgium, the Netherlands and the United Kingdom, have been successfully integrated into Investment Banking. The new entity will serve about 300 clients and is a leading provider of real estate finance in Benelux. Fortis also successfully acted as joint bookrunner for the offering of EUR 638 million in commercial mortgage-backed securities.

In its first year of operation, Principal Finance – which is investing in a portfolio of assets in the transportation sector and in private equity transactions in the ECT sector – built up its portfolio, franchise and organisation considerably. High-profile deals (Cronos, Blueship), profitable divestments (Textainer) and very strong running yields on its portfolio produced record results.

Acquisition & Leveraged Finance (ALF) had a record year in terms of lead roles in leveraged buyout (LBO) financing, revenues and fee income. This confirms and demonstrates the market’s recognition of Fortis as one of the leading mid-cap players in the European LBO market. Important transactions led by ALF included Dockwise (the UK/Netherlands), Joris Ide (Belgium), Marco Aldany (Spain), Targetti (Italy), Nedschroef (Netherlands) and Karavel (France).

Global Export & Project Finance further expanded its worldwide coverage by opening offices in Shanghai and Tokyo. With a presence in 15 countries, it became a global player. 2007 was another year of considerable growth in which we achieved a leadership position in several markets such as Europe (Public Private Partnerships/Infrastructure Finance), Turkey, Africa (mining) and Chile (power). Several highly visible deals were closed with some of Fortis’s major clients, such as AES, Suez, Cintra, Bouygues and Avea.

Corporate Finance & Capital Markets executed several larger transactions last year, a course it will continue to pursue in 2008.

Examples of successful deals are the acquisition of Dockwise by 3i, the sale of Sdu Uitgevers (a publisher) by the Dutch Ministry of Finance, the IPO of Nyrstar and the various transactions in connection with the ABN AMRO takeover.

At Fortis Intertrust, we have consolidated our worldwide leading position in trust and corporate services and expanded our service offering in corporate, administrative and escrow services. A repositioning and review of services segmentation should yield additional revenues and a well-balanced approach with risk control, innovation and cross-selling as value drivers.

2008 Focus

• Intensify and enhance cross-selling
• Pursue Commercial Banking’s sustained growth initiatives in selected countries
• Stimulate sustainable Commercial Banking growth through customer satisfaction and staff training
• Further roll out pan-European Acquisition & Leverage Finance network, now present in nine countries, and strongly grow the number of lead arranging mandates
• Reorganise and strengthen Principal Finance organisation, further building and diversifying its investment book
• Leverage on sectoral ECT know-how to build diversified investment book and to provide focused corporate finance services