Bad Fortis investment cripples Ping An's earnings

Ping An Insurance posted its first annual pre-tax loss since listing in 2004 due to massive provisions for its doomed investment in European financial group Fortis, the South China Morning Post reported. Ping An’s loss for 2008 came to US$435.9 million, a significant swing from the US$3.2 billion profit recorded a year earlier. The damage was done in the second half of the year, the Shenzhen-based insurer having posted a US$1.4 billion profit in the first six months of 2008. Ping An has set aside an additional US$1 billion for its 5% stake in Fortis, whose shares fell 78% in the fourth quarter. Including the US$2.3 billion provision made last September, Ping An has now written off almost its entire investment in Fortis of US$3.5 bilion. Fortis was dismantled by the Belgian, Dutch and Luxembourg governments late last year after succumbing to the financial crisis.