BRUSSELS, 11/08/06 - Belgian-Dutch banking and insurance group Fortis posted first-half net profit up 7 percent from a year earlier at 2.72 billion euros. The banking arm contributed 2.05 billion euros to group earnings, and insurance activities, 720 million.

The result before disinvestments climbed by 29 percent. In the second quarter, the growth was as much as 33 percent, to 1.39 billion euros, well above analysts' forecasts, figures released by the group yesterday revealed.

Earnings of the banking arm advanced by 36 percent. Fortis has invested substantially in expansion of these activities, mainly outside the Belgian and Dutch home markets. Partly as a result, revenues expanded by 22 percent to 5.63 billion euros. The company also benefited from the popularity of its interest-bearing products, such as bonds. Excluding acquisitions, revenues were up 16.5 percent.

Fortis is to revise its financial targets for the long term. It will give more details on this in March 2007. According to analysts, who assessed the results positively yesterday, Fortis will be able to raise its earnings targets.

At the insurance arm, profits before disinvestments rose by 5 percent in the first half. Life insurance saw its profits climb by 14 percent, mainly reflecting good performances in the Netherlands. Non-life reported a decline of 9 percent.

Fortis reported that 20 percent of total earnings is now generated outside the Benelux. The concern has targeted an increase in this proportion to at least 30 percent by 2009. It has already expanded strongly into Turkey and has started setting up credit shops, as they are known, in countries including Germany and Poland.