Belgian-Dutch bank Fortis is to issue new shares worth €1.5 billion to shore up its finances as part of a plan to boost its solvency by €8 billion.
As well as the share sale to institutional investors, the bank said it would scrap its interim dividend this year to save cash, issue new debt and sell off non-core assets and property.
'We believe that 2008 will be a difficult year for our industry and we do not expect an improvement in the economic environment soon,' chief executive Jean-Paul Votron said.
Fortis follows in the footsteps of a number of international banking groups which have raised new capital to repair balance sheets hit by the collapse of the US sub-prime mortgage market last year.
Last year, Fortis bought part of Dutch rival ABN Amro as part of a trio of banks in a €70 billion deal. Shortly after winning the takeover battle, the US housing crisis erupted. In Ireland, it is involved in Postbank, a joint venture with An Post.
