28-01-2008
Belgian bank issues sub-prime mortgage warning
News by Adfero for Simply Business - independent providers of public liability insurance, business finance, landlord insurance, buy-to-let mortgages & commercial mortgages.
A bank in Belgium has issued a warning over losses relating to the US sub-prime mortgage market.
According to reports by Fortis, the bank's losses could reach a total of one billion euros (£743 million), as a consequence of bad loans in the US. Sub-prime lending can also be referred to as either second chance lending, or near-prime lending.
The term B-paper is also common. "Fortis is reviewing the value of its sub prime CDO portfolio on an ongoing basis," said the bank, in a recent press statement. "Even under very stringent coverage assumptions, based on the most recent and presently available market information and data, Fortis 's capital and solvency requirements would still be met."
As a consequence of the exposure to bad debt, Fortis has confirmed an expectation that profits will slip below earlier estimates of four billion euros; instead, profits of three billion euros are thought to be more likely.
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