BNP Paribas Fortis, the Belgian arm of France's BNP Paribas, has agreed with the Belgian government to end state guarantees covering losses of up to €1.5 billion from an investment portfolio.

The initial size of the portfolio was €21.5 billion, but it has now been reduced to a level that makes the guarantees unnecessary, the company said in a statement late yetserday.

BNP Paribas Fortis has paid a total of €48.8 million to Belgium since the guarantees were put in place in May 2009.

BNP Paribas Fortis is 75 per cent owned by BNP Paribas and 25 per cent owned by the Belgian state, and was the Belgian banking arm of Fortis SA/NV before it was broken up in 2008.

What remains of Fortis lives on as Belgium-based insurer Ageas.

Reuters