Dutch-Belgian financial group Fortis said its profit halved in the fourth quarter after a €1.5 billion ($2.3 billion) subprime writedown.
Net profit, which also included gains from Fortis's 2007 acquisition of ABN Amro's Dutch business and divestment of a joint venture, fell by a worse-than-expected 48 per cent to €414 million from a year earlier.
Fortis said it was in talks on a deal that would boost its solvency, but Fortis Chief Executive Jean-Paul Votron gave no further details.
Including €2 billion from the yet-to-be-announced deal and other steps to shore up capital, Fortis said it would be able to boost its solvency by €3.2 billion.
Fortis shares, which fell 34 per cent in 2007 as it pursued ABN Amro and during the subprime crisis, stood at €14.79 earlier today, up 3.5 per cent. The DJ Stoxx European banking index was off 0.4 per cent.
Fortis is the latest among the world's biggest financial groups to report a loss from exposure to subprime-related debt, which has caused UBS and Credit Suisse in Europe to take billions of euros in writedowns.
Fortis said its portfolio of subprime collateralised debt obligations now stands at €2.9 billion.