The ratings on Belgium-based Fortis Bank SA/NV (Fortis Bank Belgium; FBB) and core subsidiary Fortis Banque Luxembourg S.A. (FBL) take into consideration FBB's ownership and support from the Belgium state. The ratings on FBB also reflect a somewhat impaired but still strong market position in Belgium, reduced geographic diversification following the sale of Dutch banking activities, sound asset quality, and a strong solvency position. Offsetting factors are mediocre profitability and liquidity that is under pressure from the turmoil of recent months. The positive CreditWatch implications on FBB and FBL continue to reflect the potential for an upgrade if their acquisition by BNP Paribas (AA+/Watch Neg/A-1+) takes place as initially negotiated in October 2008 and the limited risk of a downgrade
