Impairment losses on financial assets for the quarter totaled €1,854m, an amount higher than the figure registered in the previous quarter (€1,336m). This increase is due basically to the effect of the application of the European supervisors’ recommendations on the classification of refinanced loans, which has resulted in an additional provision of €600m in the quarter. In the first nine months of 2013, impairment losses on financial assets amount to €4,566m and continue to be focused mainly in Spain, as expected.
Impairment losses on financial assets
(Million euros)
As for provisions, €137m were registered in the quarter, with an accumulated total of €434m, a figure similar to the one posted 12 months earlier. This heading includes, among other items, early retirement costs, provisions for contingent liabilities, contributions to pension funds and other commitments to staff.
Other gains (losses) basically include the provisions made for real estate and foreclosed or acquired assets in Spain and the capital gains generated from the reinsurance operation completed in the first quarter of 2013 on the individual life and accident insurance portfolio in Spain. From January through September this heading totaled a negative €28m, compared with the negative €1,096m registered in the same period last year.
Lastly, the net profit from discontinued operations heading includes the ordinary earnings from the Group’s pensions business in Latin America, as well as the capital gains from the sale of Afore Bancomer in Mexico in early 2013 and the sale of the pension fund administrators in Colombia and Peru in the second quarter of 2013. The capital gains from the sale of Provida in Chile will be included in the fourth quarter.