Cumulative impairment losses on financial assets rose by 26.7% over the previous 12 months to €1,376m. This is the result of the increased provisions in Spain, in line with forecasts, due basically to the deterioration in the commercial loans portfolio.
Impairment losses on financial assets
(Million euros)
Provisions amounted to €167m (a negative €130m 12 months earlier). They basically cover early retirement costs and, to a lesser extent, transfers to provisions for contingent liabilities, allocations to pension funds and other commitments to staff.
The heading Other income/expenses amounted to a positive €343m. It includes the provisions made for real estate and foreclosed or acquired assets in Spain, and the capital gains generated from the 90% quota share reinsurance operation between BBVA Seguros and Scor Global Life of the individual life insurance portfolio in Spain. Under the agreement, BBVA receives approximately €630m before tax.
Finally, Net income from discontinued operations includes the revenue and expenses of the Group’s pension business in Latin America and the capital gains from the sale of Afore Bancomer in Mexico.