DBRS Rates S.T. Oblign’s Fortis Bank & Entities R-1 (middle)

Dominion Bond Rating Service (“DBRS”) has today assigned an R-1 (middle) rating to the short-term obligations of Fortis Bank SA/NV (“Fortis Bank” or the “Bank”) and its related entities as indicated above. Specifically, the ratings apply to the obligations of FB Funding Company, a Canadian corporation established to issue up to Cdn$500 million in money market obligations. The obligations of FB Funding Corporation will be guaranteed by the Grand Cayman branch of Fortis Bank.

The rating reflects the strong market position of Fortis Bank in the Benelux financial services market as well as its financial strength and earnings profile. Moreover, the Bank benefits from its central position in the larger Fortis Group (the “Group”), which provides financial support and opportunities for enhanced operational synergies and improved diversification through its insurance operations. With limited organic growth prospects in the mature Benelux market, the Group is focused on meeting profit targets through improved revenue and cost synergies across the various operating divisions within its core market. To this end, a new management structure has been put in place, focused on maximizing operating efficiencies, while building on the Group‘s strengths in the Benelux. As part of this initiative, a 55% cost/income ratio in the Banking operations has been targeted, which would make Fortis Bank one of the more efficient banks in Europe.

The Group’s broader financial and growth targets are to be aided by initiatives in non-Benelux markets, hinging in part on the continued success of over 100 business centres in Europe to meet the cross-border financing needs of mid-sized businesses and the private banking needs of their owners. The recent €1 billion acquisition of Disbank in Turkey is an extension of this strategy. The Group is also leveraging its expertise in the bancassurance distribution channel through joint venture investments with banks in Europe and in Asia. Growth through foreign expansion and acquisitions increases the Bank’s business risk profile, though it remains focused on its areas of expertise and maximum potential. As a relatively unseasoned organization, Fortis is challenged to strengthen its brand and market presence in the European and global market for financial services.

Note:
FB Funding Company is unconditionally and irrevocably guaranteed by Fortis Bank SA/NV.