Fortis assets sale looks set to collapse!

LONDON, England - October 1, 2008 – Fortis, the troubled banking and insurance institution, which is the largest European victim of the financial turmoil, had been locked in talks to sell the asset division to China's Ping An Insurance but said "it expects not to be able to complete the asset management partnership". Ping An has a 4pc stake in Fortis.

Fortis blamed "severe market disruption and the ongoing uncertainty in the global capital markets" for the deal stalling and said it will keep full ownership of the business.

The development is the latest in a string of setbacks for Fortis, which earlier this week was rescued by Belgium, the Netherlands and Luxembourg. They pumped €11.2bn into the Belgian-Dutch bank after the shares tumbled as concerns mounted that it had overstretched itself last year when it bought part of the Dutch bank ABN Amro.

In a further blow, Fortis said in a separate statement yesterday that the Dutch central bank will not approve its sale of several ABN Amro assets to Deutsche Bank for €709m "until further notice".

It explained the deal had been put on hold due to "the exceptional circumstances on international financial markets, the uncertainty with regard to the future shareholder in ABN Amro Bank and the implications of this uncertainty for all parties involved."

Hopes that the bank will avoid booking a €900m loss on the sale of assets to Deutsche Bank offset concerns about Fortis' ability to sell its asset management arm, causing the shares to climb 15pc in Brussels.