Fortis has introduced a new target-based model to manage and communicate on its solvency position as from 2007 onwards.
Fortis’ core equity and total capital is composed as follows:
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|
|
2007 |
2006 |
2005 |
|
Bank |
|
|
|
|
Total risk bearing capital |
27,231 |
26,664 |
22,210 |
|
270,207 |
240,104 |
212,095 | |
|
|
|
|
|
|
9.5% |
7.1% |
7.4% | |
|
10.1% |
11.1% |
10.5% |
| Download XLS |
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|
|
|
General (incl. |
|
|
|
Banking |
Insurance |
eliminations) |
Total |
|
2007 |
|
|
|
|
|
Share capital and reserves |
32,235 |
3,399 |
(7,183) |
28,451 |
|
Net profit attributable to shareholders |
1,768 |
2,534 |
(308) |
3,994 |
|
Unrealised gains and losses |
(699) |
1,225 |
76 |
602 |
|
Shareholders' equity |
33,304 |
7,158 |
(7,415) |
33,047 |
|
Non-innovative hybrid capital instruments |
2,756 |
|
2,927 |
5,683 |
|
Minority interests |
429 |
676 |
42 |
1,147 |
|
Revaluation of real estate to fair value |
|
1,556 |
|
1,556 |
|
Revaluation of debt securities, net of tax and shadow accounting |
1,070 |
235 |
(17) |
1,288 |
|
Revaluation of equity securities, net of tax and shadow accounting |
(385) |
(137) |
(6) |
(528) |
|
(1,025) |
(490) |
|
(1,515) | |
|
Expected dividend |
|
|
(1,313) |
(1,313) |
|
Other |
(12,897) |
(405) |
|
(13,302) |
|
Core equity |
23,252 |
8,593 |
(5,782) |
26,063 |
|
Innovative capital instruments |
2,440 |
599 |
494 |
3,533 |
|
Extended core equity |
25,692 |
9,192 |
(5,288) |
29,596 |
|
Subordinated loans |
15,582 |
757 |
(3,600) |
12,739 |
|
Other prudential filters and deductions on total capital |
(14,043) |
(293) |
|
(14,336) |
|
Total capital |
27,231 |
9,656 |
(8,888) |
27,999 |
|
|
|
|
|
|
|
|
|
|
|
|
|
2006 |
|
|
|
|
|
Share capital and reserves |
12,593 |
4,021 |
(4,350) |
12,264 |
|
Net profit attributable to shareholders |
3,149 |
1,420 |
(218) |
4,351 |
|
Unrealised gains and losses |
924 |
2,922 |
183 |
4,029 |
|
Shareholders' equity |
16,666 |
8,363 |
(4,385) |
20,644 |
|
Non-innovative hybrid capital instruments |
|
|
1,108 |
1,108 |
|
Minority interests |
198 |
678 |
31 |
907 |
|
Revaluation of real estate to fair value |
|
1,465 |
|
1,465 |
|
Revaluation of debt securities, net of tax and shadow accounting |
(176) |
(477) |
(19) |
(672) |
|
Revaluation of equity securities, net of tax and shadow accounting |
(721) |
(234) |
(12) |
(967) |
|
Goodwill |
(749) |
(268) |
|
(1,017) |
|
Expected dividend |
(225) |
(520) |
(321) |
(1,066) |
|
Other |
(490) |
(392) |
12 |
(870) |
|
Core equity |
14,503 |
8,615 |
(3,586) |
19,532 |
|
Innovative capital instruments |
2,438 |
600 |
493 |
3,531 |
|
Extended core equity |
16,941 |
9,215 |
(3,093) |
23,063 |
|
Subordinated loans |
11,642 |
819 |
(1,726) |
10,735 |
|
Other prudential filters and deductions on total capital |
(1,919) |
(99) |
|
(2,018) |
|
Total capital |
26,664 |
9,935 |
(4,819) |
31,780 |
Participating interests - that are not fully consolidated - are deducted for 50% from Core equity and 50% from Total capital. The amounts deducted include the investment by Fortis in parts of ABN AMRO through RFS Holdings, as this participation is currently accounted for using the equity method.
Core equity target
The three components of the Fortis’ core equity target are:
-
a capital target for Fortis Bank equal to a 7% Tier 1 capital to risk-weighted commitments, including 1% hybrid capital. This implies a target of 6% core equity to risk-weighted commitments.
-
a capital target for Fortis Insurance equal at 225% of the regulatory minimum, which includes 50% of hybrid capital. This implies a core equity target of 175% of the regulatory minimum.
-
a Group leverage target (at General) set at 15% of the total of the core equity of Banking plus the core equity of Insurance, implying that 15% of Banking and Insurance combined target core equity could be financed by group debt.
The key capital indicators of Fortis can be shown as follows:
| Download XLS |
|
|
31 December 2007 |
31 December 2006 |
|
Fortis |
|
|
|
Core equity |
26,063 |
19,532 |
|
Core equity target |
19,892 |
17,733 |
|
Amount of core equity above target |
6,171 |
1,799 |
|
|
|
|
|
Total capital |
27,999 |
31,780 |
|
Minimum solvency requirements |
25,725 |
22,898 |
|
Amount of total capital above minimum solvency requirements |
2,274 |
8,882 |
