Fortis, the Belgo-Dutch bank, today revealed it is in talks to boost its capital after reporting a 48 per cent fall in fourth quarter profit on a €1.5 billion (£1.14 billion) write-down on US sub-prime mortgage related assets.

The lender, part of a three-bank consortium that acquired ABN Amro, said today it is in "exclusive" talks about a transaction "that will further strengthen our solvency substantially".

Gilbert Mittler, chief financial officer at Fortis, refused to comment on whether it was negotiating with a sovereign wealth fund to inject capital, but said the deal would have a "positive impact" on the bank.

Since last year, an increasing number of government-backed funds, predominantly based in the Middle and Far East, have injected capital into large investment banks in return for shares.

Mr Mittler confirmed today that the bank will not finance its part of its €24 billion share of the €71.1 billion acquisition of ABN Amro, that was also split between Royal Bank of Scotland and Santander, through a securitisation, branding such a move as "stupid" in the current market.

Fortis had expected to raise €2 billion through a securitisation to help finance the acquisition of ABN's Dutch retail banking units and its asset management division.

Instead, it will use the proceeds from a €19 billion capital raising exercise, which includes €13 billion from a rights issue last year, as well as funds secured through asset sell-offs.

Fortis reported today that fourth quarter profits had fallen from €797 million in 2006 to €414 million in the final three months of 2007. In the full-year, profits declined from €4.3 billion to €3.9 billion.

The bank said it has taken a "stringent" approach to valuing its collateralised debt obligations, complex financial instruments that contain US mortgage assets, that contributed to the €1.5 billion hit the bank took on its profits.

But Mr Mittler said it was not possible to say that the bank will not make any more write-offs on sub-prime mortgage assets in the future. "You can never say that," he said.

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