Fortis to expand structured products offering

Fortis Bank is to expand its range of structured products in response to the growing investor appetite for exotic and hybrid investments. Under the plan, scheduled for completion in 2010, the bank will increase its current, mainly credit-focused offering to include equity, interest rates, foreign exchange, commodities and energy.

The Benelux bank has already begun a wave of hires across asset classes, with some desks expected to double in size by the end of the year. An external consultant has been brought in to advise on the restructuring. And the designing of some products has already begun, a source confirmed.

Pierre Amrom, head of credit derivatives in the structured credit group at Fortis, said the move was designed more to keep clients than to compete with the bigger global banks. “We are not to be compared to Tier I investment banks,” he said. “We want to increase the amount and source of income that would come from structure products – traditional products are shrinking.”

“It’s much more a trend in the market where investors are looking much more at structured products,” added Amrom. "And so to satisfy your clients you must invest in the structured products arena.”

He said the expansion would draw on extra staff rather than take personnel from the merchant bank’s current operations.

Fortis currently has a market capitalisation of €39 billion and is ranked among the 20 largest financial institutions in Europe. Despite only accounting for 8% of employees, the merchant banking section of the bank has the highest proportion of company profits at 28%.