Provisions and others

Impairment losses on financial assets were stable in the Group at €1,085m at the close of the first quarter. The higher volume in Spain (due to the current economic situation) was offset by a lower amount in the United States and South America (due to the continued improvement in the loan book) and a stable evolution in Mexico. The indicators of credit quality, risk premium, NPA ratio and coverage ratio remain stable at the same levels as the last two years.

Provisions amounted to €131m, a year-on-year fall of 12.9% (down 28.2% over the quarter). They basically cover early retirement, other allocations to pension funds and transfers to provisions for contingent liabilities.

Finally, the heading other gains (losses) reported a negative €222m (–€71m in the first quarter of 2011). It includes the provisions made for real estate and foreclosed or acquired assets in Spain.

Impairment losses on financial assets

(Million euros)

(1) At constant exchange rates: +5.9%.