By Reed Stevenson and Gilbert Kreijger

Fortis , which has replaced top management and pledged better communication with investors after surprising them with an emergency solvency plan, reported on Monday net profit of 830 million euros ($1.3 billion) for the quarter, compared with 1.6 billion a year earlier.

Shares in Fortis fell 2.5 percent in Brussels to 9.08 euros, while the DJ Stoxx Banking Index <.SX7P> was down 1.1 percent.

"We should be aware that the credit crisis is not behind us yet," Chief Executive Herman Verwilst said, adding that strengthening the financial group's capital base was the "top priority of senior management today."

Writedowns related to credit market turmoil totaled 362 million euros, Fortis said, adding that its structured credit portfolio stood at 41.7 billion euros at the end of June, down 1.6 billion from the end of the first quarter. Capital gains helped to shore up quarterly earnings.

Analysts polled by Reuters had, on average, expected a second-quarter net profit of 754 million euros.

Reflecting uncertainty over the degree of writedowns, analysts' forecasts ranged widely between 524 million and 1.06 billion.

Rabo Securities analyst Cor Kluis said profit, adjusted for capital gains and other charges, came in lower than expected, but the "rest of the bank earnings quality was good due to in line net interest income, commission income and expenses."

FULL TRANSPARENCY

Fortis's latest woes began in late June, when it announced a plan to sell shares and suspend its interim dividend to strengthen its finances. Chief Executive Jean-Paul Votron was replaced by his deputy, Verwilst, and Fortis began searching for a long-term successor.

Fortis said it had a core Tier 1 capital adequacy ratio of 7.4 percent at the end of the quarter.

Chief Financial Officer Lars Machenil said the ratio would remain above the bank's target level of 6 percent at the end of 2009 as it integrates businesses from ABN AMRO and raises capital for its part in the three-bank, 70-billion-euro buyout of ABN.

Last Friday Fortis announced a further shake-up of top management, with Machenil replacing former CFO Gilbert Mittler. The group also said it would hold shareholder meetings in the second half of August to communicate its plans and strategy.

"I consider it crucial to strengthen the communication with our stakeholders and will update the market in full transparency on progress made," Verwilst said.

Fortis shares have fallen 62 percent in the past year, compared with a 40 percent drop in the banking index. Fortis is trading at 5.4 times projected 2008 earnings, among the lowest in the sector. European banks are trading at an average price-earnings multiple of 8.2.

(Additional reporting by Darren Ennis in Brussels; Editing by David Holmes and Quentin Webb)