July 12 (Bloomberg) -- Fortis, Belgium's biggest financial- services firm, ousted Chief Executive Officer Jean-Paul Votron after the 24 billion-euro ($38 billion) purchase of ABN Amro Holding NV depleted capital and forced him to cancel a dividend.

Deputy CEO Herman Verwilst, 60, will replace him, Fortis said in a statement. Fortis's 14-member board, including Votron and Chairman Maurice Lippens, met in Brussels yesterday to discuss investor opposition to the ``extraordinary measures'' that Votron announced on June 26 to raise capital.

Votron, 57, joins CEOs at Zurich-based UBS AG and New York- based Citigroup Inc. and Merrill Lynch & Co. who lost their jobs after underestimating the impact of asset writedowns. Votron, who became CEO in October 2004 and agreed last year to take part in the takeover of Amsterdam-based ABN Amro, said last month the company needed to raise 8.3 billion euros.

``Votron's departure doesn't answer our questions,'' Paul Coenen, lawyer for Dutch investor group VEB, said by telephone. ``It wasn't about the board's composition, but about transparency with regards to the sudden need for funding.''

Fortis fell 4.2 percent to 9.45 euros yesterday in Brussels, valuing the company at 22.2 billion euros. Fortis has lost more than half its market value since agreeing to buy part of ABN Amro in the world's biggest banking takeover just as the subprime mortgage market collapsed.

Votron and the board agreed he should depart, Fortis said. He will receive a contractual compensation equivalent to his current annual base salary, the company said.

`Asked for His Head'

``Investors asked for his head, and that's what they got,'' said Dirk Peeters, a Brussels-based analyst at KBC Securities. Votron's departure is a starting point for undoing the damage to the company's reputation, said Peeters, who has a ``buy'' rating on Fortis shares.

The board said it will start a search within and outside the company for a CEO who would succeed Verwilst.

Verwilst joined Fortis after the lender bought Belgium's Caisse General d'Epargne et de Retraite in 1993. He's been deputy CEO since 2000 and chairman of Fortis Bank's management committee since its creation in 1998.

``The board is convinced that Verwilst, given his longstanding experience in Fortis, is well equipped to lead the company in these challenging times and environment,'' the lender said.

Fortis, formed in the 1990 merger of the Dutch insurance company NV Amev, Belgian insurer AG Group and the Dutch bank VSB, said last month it will save 1.3 billion euros by scrapping the half-year dividend for the first time since it was introduced in 2004.

Raising Money

The company plans to get 2 billion euros from selling bonds, 2 billion euros from selling assets and 1.5 billion euros from selling and leasing back real estate, it said June 26. Fortis also raised 1.5 billion euros in the sale of new stock.

The bank raised 13.4 billion euros last October in a rights offering to help pay for the asset-management and Dutch consumer banking units of ABN Amro. The bank, which wrote down 6.7 billion euros of assets, said its so-called core Tier 1 capital ratio, a measure of financial strength, will exceed 6 percent next year.

Banks and securities firms have raised $324.6 billion in the past year after record writedowns and credit losses of almost $410.1 billion from the collapse of the subprime mortgage market, according to data compiled by Bloomberg.

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

Last Updated: July 11, 2008 18:30 EDT