Fortis scraps Ping An deal and Deutsche blocked

By Reed Stevenson and George Chen

AMSTERDAM/SHANGHAI (Reuters) - Dutch-Belgian banking and insurance group Fortis (FOR.AS) has halted $4 billion (2.2 billion pounds) worth of asset sales to Deutsche Bank and China's Ping An just days after the company was partially nationalised.

Fortis (FOR.BR) scrapped a 2.15 billion euro (1.7 billion pound) deal to sell half its asset management arm to Ping An Insurance Co (601318.SS) (2318.HK), citing "severe market disruption and the ongoing uncertainty in the global capital markets."

Ping An spokesman Sheng Ruisheng said on Wednesday: "We accept the decision and totally understand the situation Fortis is now in."

Ping An, China's second-largest insurer, said earlier this week it would have to absorb larger-than-expected losses from its 5 percent stake in Fortis, prompting analysts to slash the firm's 2008 profit estimates.

Asked if Ping An was keen to make further overseas investments, Sheng said the company would keep a close eye on foreign markets during these times of high uncertainty and would strengthen its supervision.

The governments of Belgium, the Netherlands and Luxembourg rescued Fortis on Sunday with an 11.2 billion euro capital injection. Investors had lost confidence in the financial group as it tried to absorb ABN AMRO and raise money while the global credit crisis deepened and forced it to take write-downs.

Fortis also said the Dutch central bank was withholding approval for the group's sale of 709 million euros worth of ABN AMRO assets to Deutsche Bank (DBKGn.DE) pending further review.

In a statement, Fortis said the central bank made the decision because of "exceptional circumstances on international financial markets, the uncertainty with regard to the future shareholder in ABN AMRO and the implications of this uncertainty for all parties involved."