Next, we're going to take a look at each one of these points in more detail. The generation of results. The first aspect to point out are the results, where the group maintained its strong capacity to generate recurring results. Pre-provision profit was EUR 6.223 billion in the quarter and $12.5 billion in the first half, 6% over the first half of 2011 and 10% above that of the second half.In other words, we are keeping up the excellent track record of this item in which we are one of the leading banks in the world. In this slide, we can see the positive performance and we see that the performance is due to 2 drivers: First, the good dynamics of revenue, which were higher than in the first and second half of 2011; and second, cost containment. Costs are flat in the first half compared to the second half of 2011. The second thing to point out in this first half of the year is the significant efforts made in real estate provisioning in Spain. The group decided to allocate EUR 2.78 billion gross, EUR 1.923 billion net of taxes, 1/3 of this amount came from the capital gains obtained from the sale of the subsidiary in Colombia, EUR 619 million. And 2/3, in other words, EUR 1.923 billion, came from the quarter's ordinary profit, underscoring the group's priority in strengthening the balance sheet. In short, in the second quarter, we posted ordinary profit of EUR 1.404 billion, which, coupled with the capital gains, amounted to EUR 2.023 billion. Of this amount, EUR 1.923 billion were allocated to provisions, thus accounting attributable profit for the second quarter of 2012 was EUR 100 million. These profits do not include the capital gains generated in the recent agreement to reinsure the portfolios of insurance companies in Spain and Portugal as the operations was signed after the end of a quarter. They will be recorded in the second half of the year, and they will be assigned to real estate provisionings.
The third point is capital. The third in the quarter, we combined the effort in provisioning with the solid capital ratios. BIS II core capital ratio was 10.1%, and we exceeded the ratio of 9% required by the EBA for June, while our forecast lead us to think that we will be above the various possible requirement for the end of the year. And this capital strength is not just at group level, it is also seen in the various units and, most clearly, in those units operating in countries where their banks needed state aid.As we see in this slide and the next one, none of the group's units have a capital shortfall. Starting in the U.K., whose banking system has needed significant injections of capital, Santander U.K. not only needed no aid, but participated in the systems restructuring, acquiring banks with problems, which enabled it to improve its market position, and with a core capital of more than 12%. Similar comments can be made for Portugal, where the rest of competitors needed to raise funds, either from their shareholders via the issuing of contingent convertible securities, Cocos, or directly from the state to cover their capital shortfalls and meet the troika requirements. In the case of Santander Totta, right from the onset, the ratios were much higher than those required. And to date, the core capital ratio of 11.4% is clearly above the 10% required by the end of the year. Lastly, Spain where the financial system has entered the financial assistance program and is in the process of recapitalization. Santander parent bank has a core capital of 10.2% for the top-down analysis conducted by 2 independent consultancies, Santander would not need capital. This is particularly important for 3 reasons: First, because the adverse scenario for the next 3 years used for the analysis is much tougher than that in similar exercises in other countries, and moreover, it's on top of the strong adjustments in Spain's macroeconomic variables that have been already taken place; second, because even in this scenario, which is given a 1% probability, the group would have a capital ratio of around 9%; and third, because it ratifies and reinforces the IMF conclusions on Santander in its recent analysis of Spanish banks; lastly, and within the classification established for the financial assistance, Santander would be in Group 0 of the memorandum of understanding, the one for banks with no capital shortfall.
With regards to liquidity, the group remains a solid liquidity position, basically for 2 drivers. On the one hand, deleveraging in some markets, mainly Spain and Portugal, where we have reduced the commercial gap by EUR 12 billion in this first half of the year, partly from the fall in lending and partly from growth in deposits, mainly in the retail networks. On the other hand, we maintained a very conservative policy in issuance backed by our wide and diversified access to wholesale markets through 10 units with issuing capacity, which include the parent bank and the group's main subsidiaries. This enabled us to issue more than EUR 16 billion medium and long term via the U.K., Latin America and Spain, placing in the market EUR 9.4 billion in securitizations. And the situation is reflected in the loan-to-deposit ratio, which remains at below 120%, which, remember, was around 150% at the start of the crisis. And we have a medium and long-term financing ratio of 115%.Read the rest of this transcript for free on seekingalpha.com