Aug. 4 (Bloomberg) -- Fortis, the Belgian financial-services firm that ousted its chief executive officer last month, said second-quarter profit fell 49 percent on credit-related writedowns and that the difficult economic environment ``will remain.''

Net income was 830 million euros ($1.29 billion), or 38 cents a share, down from 1.62 billion euros a year earlier, the Brussels and Amsterdam-based company said today in a statement. Fortis said it may record a loss of as much as 900 million euros on the sale of commercial banking units to Deutsche Bank AG.

Fortis wrote down 342 million euros on structured investments, almost equaling writedowns in the first quarter. The company also took charges related to buying part of ABN Amro Holding NV last year for 24.2 billion euros. The takeover strained the company's capital and forced former CEO Jean-Paul Votron to cut the first-half dividend in June.

``I can't get very excited about the quality of profit,'' Corne van Zeijl, who oversees 765 million euros at SNS Asset Management in the Dutch town of Den Bosch and owns Fortis shares. ``Earnings from operations aren't extremely good.''

Fortis fell 15 cents, or 1.6 percent, to 9.15 euros as of 10:51 a.m. in Brussels. The shares have lost more than 65 percent since Votron announced plans in April 2007 to buy the consumer bank and asset-management unit of Amsterdam-based ABN Amro just as the U.S. subprime-mortgage market started to collapse.

`More Difficult'

``The environment has become more difficult and will probably remain that way,'' CEO Herman Verwilst, who replaced Votron last month, said in an interview. ``That refers to the more pessimistic outlook on the economy in general, the impact of the credit turmoil continuing for the sector and also to the acceleration of inflation in Europe.''

The company's net income beat the 692 million-euro median estimate of 12 analysts surveyed by Bloomberg.

Fortis said banking profit fell 36 percent to 465 million euros from 721 million euros in the previous quarter on lower capital gains and higher impairments on its loan portfolio. Insurance earnings increased 93 percent to 423 million euros, as the impact of the credit market turmoil narrowed, Fortis said.

``The main positive surprise is the absence of significant impairments in the investment portfolio of insurance,'' Ivan Lathouders, an analyst at Bank Degroof in Brussels who rates Fortis a ``buy,'' wrote in a note to investors.

Winning Back Shareholders

Chairman Maurice Lippens and Verwilst, 60, agreed last week to meet with investors in Belgium and the Netherlands. Investor groups including VEB have asked for an extraordinary meeting. Verwilst has said winning back shareholders' and customers' trust is his first priority.

Votron angered investors by cutting the dividend and selling stock and assets to raise 8.3 billion euros to bolster capital. That followed a share sale in October 2007 to raise 13.4 billion euros to help pay for the ABN Amro units.

Fortis doesn't have plans beyond the measures announced in June to raise capital, Verwilst told reporters. The banking business's core tier 1 ratio, a measure of financial strength, was 7.4 percent at the end of June, Fortis said.

Banks and brokerages worldwide have reported $480 billion in losses and raised $355 billion in capital following the collapse of the U.S. subprime mortgage market.

To contact the reporter on this story: Martijn van der Starre in Amsterdam at vanderstarre@bloomberg.net

Last Updated: August 4, 2008 04:55 EDT