Corporate Activities

Income statement
(Million euros)

Corporate Activities

January-Sep. 11 ∆% January-Sep. 10
Net interest income (460) n.s. 226
Net fees and commissions (165) 3.7 (159)
Net trading income 161 (73.5) 607
Other income/expenses 163 (11.1) 184
Gross income (300) n.s. 857
Operating costs (690) 15.5 (598)
Personnel expenses (387) 12.7 (344)
General and administrative expenses (105) 20.8 (87)
Depreciation and amortization (198) 18.5 (167)
Operating income (991) n.s. 260
Impairment on financial assets (net) (54) (94.1) (916)
Provisions (net) and other gains (losses) (692) 30.3 (531)
Income before tax (1,737) 46.3 (1,188)
Income tax 766 105.3 373
Net income (972) 19.2 (815)
Non-controlling interests 1 (78.6) 7
Net attributable profit (970) 20.1 (808)
Balance sheet
(Million euros)

Corporate Activities

30-09-11 ∆% 30-09-10
Cash and balances with central banks (2,141) n.s. 1,285
Financial assets 25,989 (2.0) 26,527
Loans and receivables (3,740) 150.4 (1,494)
Loans and advances to customers (3,460) n.s. (673)
Loans and advances to credit institutions and other (281) (65.8) (821)
Inter-area positions (56) (99.8) (27,947)
Tangible assets 3,107 3.7 2,995
Other assets 19,238 17.1 16,431
Total assets/liabilities and equity 42,397 138.2 17,797
Deposits from central banks and credit institutions 2,653 n.s. 389
Deposits from customers 32,227 n.s. 4,383
Debt certificates 75,865 (13.4) 87,632
Subordinated liabilities 3,327 (54.0) 7,232
Inter-area positions (74,523) (9.8) (82,645)
Financial liabilities held for trading (3,110) (22.7) (4,023)
Other liabilities (4,803) 135.8 (2,037)
Valuation adjustments (3,414) n.s. (128)
Shareholders' funds 38,995 36.3 28,611
Economic capital allocated (24,821) 14.8 (21,617)

This area includes all those activities not included in the business areas. These are basically the costs of the headquarters with strictly corporate functions, certain allocations to provisions such as early retirements and others also of a corporate nature. The area also includes the assets and liabilities derived from the management of structural liquidity, interest-rate and exchange-rate risks by the Assets and Liabilities Management unit, as well as their impact on earnings that are not recognized in the business areas via transfer pricing. Finally, it includes certain portfolios and assets, and their results, whose management is not linked to customer relations, such as Holdings in Industrial and Financial Companies and Real Estate Management.

Between January and September 2011, net interest income amounted to a negative €460m, as compared to the positive €226m for the same period in 2010. As commented in previous quarters, this variation is due to the finalization of the mortgage loan repricing after the 2009 fall in interest rates and the subsequent rise of the interest rate curve in the euro zone. The above, together with NTI below that of the last twelve months, due to the lack of earnings from portfolio sales and the loss of asset value caused by the turbid market situation, resulted in gross income of –€300m (+€857m in the same period in 2010). Operating expenses amounted to €690m, as a result of investments made at corporate level, mainly in technology, brand and infrastructures. As a result, the operating income was –€991m (+€260m 12 months ago).

Impairment losses on financial assets totalled €54m, as compared to the €916m the previous year, in which additional provisions were allocated to take advantage of the high level of NTI. Furthermore, the increase in provisions (net) and other gains/losses stood at –€692m, which is due primarily to greater provisions on real estate and foreclosed assets. As a result, the accumulated net attributable profit as of September 2011 was –€970m (–€808m in the same period of 2010).