Earnings

The most relevant aspects of earnings in this area in the first quarter of 2012 are summarized below:

• Positive performance of net interest income due to the more favorable position of structural interest-rate risk and improved liquidity in the euro zone. Two contributing factors were the cuts in interest rates in recent months and lower wholesale finance costs, due basically to the ECB liquidity auctions.
• NTI below the levels posted in the first quarter of 2011 as a result of good performance of the markets in the first part of the previous year and capital gains on the sale of portfolios carried-out in the first quarter of 2011.
• As a consequence, gross income for the quarter was a negative €136m (€16m up in 2011).
• Operating expenses, which continue to reflect the Group’s investment effort in staff training, technology, brand and infrastructure amounted to €235m.
• As a result, operating income in the area was a negative €371m (–€189m in the first three months of 2011).
• Higher allocation to provisions for real estate and foreclosed assets.
• In short, net attributable profit of –€438m was generated, compared with –€327m in the first quarter of 2011.

Income statement

(Million euros)

	Corporate Activities
	1Q12	Δ%	1Q11
Net interest income	(78)	(24.0)	(103)
Net fees and commissions	(71)	59.8	(44)
Net trading income	28	(82.7)	163
Other income/expenses	(15)	n.m.	(0)
Gross income	(136)	n.m.	16
Operating costs	(235)	15.2	(204)
Personnel expenses	(137)	12.4	(122)
General and administrative expenses	(17)	(9.8)	(19)
Deprecation and amortization	(81)	27.8	(63)
Operating income	(371)	96.9	(189)
Impairment on financial assets (net)	1	n.m.	(42)
Provisions (net) and other gains (losses)	(287)	27.7	(225)
Income before tax	(657)	44.4	(455)
Income tax	220	70.7	129
Net income	(438)	34.1	(326)
Non-controlling interests	-	-	-
Net attributable profit	(438)	34.0	(327)

Balance sheet

(Million euros)

	Corporate Activities
	31-03-12	Δ%	31-03-11
Cash and balances with central banks	(352)	n.m.	900
Financial assets	33,321	11.2	29,973
Loans and receivables	(4,733)	0.1	(4,730)
Loans and advances to customers	(2,129)	5.7	(2,013)
Loans and advances to credit institutions and other	(2,604)	(4.2)	(2,717)
Inter-area positions	(373)	n.m.	(9,083)
Tangible assets	3,204	4.4	3,068
Other assets	18,775	5.1	17,857
Total assets/Liabilities and equity	49,842	31.2	37,984
Deposits from central banks and credit institutions	3,862	n.m.	(5,893)
Deposits from customers	23,210	4.5	22,203
Debt certificates	70,358	(13.8)	81,626
Subordinated liabilities	2,350	(62.5)	6,269
Inter-area positions	(50,496)	(27.1)	(69,313)
Financial liabilities held for trading	(4,039)	6.9	(3,776)
Other liabilities	(9,269)	82.0	(5,094)
Valuation adjustments	(2,577)	42.9	(1,803)
Shareholders’ funds	40,911	10.7	36,957
Economic capital allocated	(24,468)	5.5	(23,192)