The most important aspect in the quarter with respect to exposure to the real estate sector in Spain, as mentioned earlier, is the increased impairment in the value of assets associated with this portfolio owed to the country’s worsening economic situation. As a result, additional funds have been set aside, resulting in an increase over the quarter of coverage of non-performing and substandard loans of 9 percentage points to 39%, and also increased coverage of foreclosures and asset purchases of 1.6 percentage points to 36%.

Detail of real estate developers lending

(Million euros)

	30-6-12	% Weighting
With collateral	12,633	91.1
Finished properties	6,838	49.3
Construction in progress	1,952	14.1
Land	3,843	27.7
Without collateral and other	1,241	8.9
Total	13,874	100.0

Coverage of real estate developers exposure

(Million euros at 30-06-12)

	Risk amount	Shortfall over collateral (1)	Provision	% Coverage over shortfall	% Coverage over risk
NPL	4,750	2,413	2,190	91	46
Substandar	1,729	880	306	35	18
Total	6,479	3,293	2,496	76	39

(1) Shortfall over updated collateral values and additional haircut established by the Bank of Spain regulation

Foreclosures and asset purchases

(Million euros at 30-06-12)

	Gross amount	Provision	% Coverage	Net amount
From real estate developers	5,752	2,044	36	3,708
From Dwellings	1,791	542	30	1,249
Other	1,216	570	47	646
Total	8,759	3,156	36	5,603

Coverage of NPLs and substandar real estate developer’s exposure

Coverage of foreclosures and asset purchases

(Percentage)