Good morning, welcome to this presentation of Bankinter's earnings for the first half of 2020. Let me start by saying a few words to wish all of you, your families, and your colleagues, a safe and early return to normality. I would like to point out that we ended the first half of the year with a solid commercial performance and provision in profit, considering these special circumstances and the impact on our businesses in all geographies, Spain, Portugal, Ireland, and Luxembourg. Having said that, I will review our business activities during this first half, will try to provide some guidance about potential risk in the future. Our main achievements were, we achieved resilient quarter-on-quarter performance supported by our customer activity, resulting in increasing pre-provisioning profit, even excluding EVO and Avantcard transaction executed 1st of June of 2019.
We achieved continued growth in the loan portfolio, in retail deposits, and in assets under management. Net interest and fee income, the main contributors to gross operating income, and a very strong cost control, has allowed pre-provision ing profit to grow by 10%. We achieved a strengthened solvency, NPL coverage, and liquidity ratios with limited recurrent NPLs. Our CET1 ratio reaches 11.8%, the same figure that we had before the EVO transaction one year ago, as well as higher capital ratio, that will reach 14.5% once consider the AT1 transaction executed the first week of July. Please note that in this quarter, we have recorded an extraordinary one-off provisioning related to macro scenario potential impact on credit risk that anticipates the full year effort following IFRS 9 indications about provisional recognition when macro scenario changes.
Now, offering full transparency in this complex exercise, and based on Central Bank's recent macroeconomic estimations, we register upfront this expected impact like we did in 2012. Therefore, we do not expect additional charges for this topic. I can anticipate that our guidance for cost will be between 60 and 70 basis points. In the higher range of what we anticipated last quarter, approximately 30 basis points coming from this extraordinary impact and 40 basis points from our current cost of risk. As usual, let's start with a brief comparison on first half key financial indicators. Group's total loan book grew by 7% to EUR 64 billion, thanks to the strong corporate and SME demand. Gross operating income reached EUR 863 million in the period. It grew by 8% with respect to the first half of last year, showing strong resilience in difficult times.
After a rigorous cost control, pre-provision ing profit shows a remarkable growth of 10% in one of the most difficult quarters ever. This is a new record high. Let me share with you that this figure is more than double the one that we obtained in 2010 when we faced the previous crisis. NPL ratio shows improvement in recurrent assets quality despite the lockdown at record low of 250. It dropped by 21 basis points from 271 a year ago.
The extraordinary provision recorded for the adjustment of IRB credit risk models to the new macro-scenario amounted to EUR 192 million in the period, EUR 177 million of them in this second quarter. After this non-recurrent provision, group's net profit stands at EUR 109 million, like 65% decrease from a year ago. Bear in mind that in June 2019, we recorded the extraordinary income from the bad will of the EVO transaction.
Our fully loaded CET1 capital ratio also improved 25 basis points to 11.8% despite the unprecedented sanitary and economic conditions. It stands comfortable above our guidance. Our return on equity reflects the exceptional situation. It stands at 7.6%. Without the extraordinary provision, it will be at 10.5%, well above the cost of capital and once more, an outlier in the sector. After ending the first half of 2020 in an unprecedented difficult environment, we should keep pre-provision profit ahead of last year by year. Thanks to our continued commercial activity that is driving force of this revenue growth, together with a deep exercise of cost control that will last at least for the rest of the year. Our guidance, once again, for the year in terms of cost of risk, stays below 70 basis points, in the high end of the 60-70 basis points range.
As already shared with you in the first quarter results, this is including recurrent cost of risk at normalized levels of 40 basis points. Moving on to our income statement, and as a reminder, the contribution of Línea Directa Aseguradora to the group's income statement, it's recorded as discontinued operations at the bottom of the count, in accordance with IFRS accounting standards.
Here are the group's comparative P&L accounts for the first half of 2020, with a new accounting for LDA and the like-for-like comparison on the right. In the first half of 2020, our income statement continued to reveal positive trends in core lines of revenues, net interest income, and fee income. Like in the first quarter, other operating income expenses without the LDA contribution, showed a small contribution of EUR 7 million versus EUR 14 million last year. Group's net interest income remains resilient despite a more negative environment in second quarter.
This is thanks to our solid growth in lending and positive asset mix. Growth in corporate loans higher than mortgage lending. It is up by over 10%, EUR 56 million more than 2019. The reduction of commercial activity during the lockdown did not help our fee income, was more than offset by the restoration of assets under management volume and the continued increased activity in our broker online and ordinary buy and sell market activities. Fee income finished the quarter growing at 5.5% with respect to the previous year and almost 4% in a like-for-like comparison. Other operating income and expenses decreased by EUR 7.5 million or 52% from a year ago, due to the main two factors: low trading income in the first quarter due to high market volatility and the increased contribution to the Single Resolution Fund in the quarter of around EUR 40 million.
Adding all of the above, total gross operating income reached EUR 863 million, set up by 7.6% from 2019. Group operating costs continued under extraordinary control, both in Spain and Portugal, reaching extraordinarily good efficiency levels. Costs from the EVO and Avantcard operations were not comparable year-on-year since they are EUR 45 million in additional operating expenses in the first half, versus only EUR 7 million last year. On a like-for-like basis, the groups per half cost clearly fell by over 4% with respect to the same period last year. This positive income and cost performance, despite the difficult environment, allowed pre-provision ing profit to increase by 9.8%. Like-for-like growth is up by 9% so far this year and by 7.8% from the same quarter a year ago. Loan loss and other provisions are up 54% from first half 2019. There are few major contributors to this increase.
One is Portugal, due to the anticipated normalization of cost of risk from the finishing of the extraordinary recoveries of previously provisioned loans acquired from Barclays. Another one is the expected rise in cost of risk from the consumer finance business under a more difficult environment. Finally, provisions for other contingency litigation maintain a normal run and conservative rate. As I mentioned earlier, we have decided to adjust our credit risk IRB models to the current macroeconomic central scenario of Bank of Spain, also Bank of Portugal and Ireland for each country, thus recording a one-off provision of EUR 177 million in this quarter. After this year extraordinary item, and also taking into consideration last year one-off bad will arising from the EVO and Avantcard integration, pre-tax profits of the banking activity stands at EUR 62 million.
The pre-tax profits coming from LDA brings an additional EUR 79 million to the group in this first half, or 12% more than in the first half of 2019. This shows an improved performance of the insurance business, as we will see later on. After taxes, the group posted a net profit of EUR 109 million, a decrease of 65% from a year ago. Despite this difficult situation in the quarter, covering the full macroeconomic impact in one single quarter, it is important to highlight that the banking recurrent business, after closing the first half of the year, continues in line with our plans at the beginning of the year in all incomes, volumes, costs, and including the slight increase of recurrent cost of risk of the business. The necessary anticipation of the future economic scenarios had impacted from provisioning and dragged down net profits this quarter.
In our view, group's provision and profit growing at over 10% clearly indicates this recurrent growth in all activities, and we aim to keep this trend to the end of the year. Here is the quarterly P&L, which also shows a strong improvement from second quarter last year in all the income lines and a 4% increase in cost, taking into account the EVO and Avantcard costs from the additional five months over last year. All in all, pre-provision ing profit quarterly increased by 9.3% from last year second quarter. After provisioning and first quarter comparison are not relevant due to the impact of the Single Resolution Fund and the extraordinary macro scenario provision in this quarter. The group's loan book grew by 7.4% from a year ago, bringing in over EUR 4.4 billion in new loans in the last 12 months.
This is growth coming from the new business in Spain, Portugal, EVO, and Avantcard during this period, with no significant impact from the lockdown during the quarter, thanks to the government programs for restoring the economy, ICO liquidity lines of credit and mortgage, and consumer moratoriums for individuals. In net terms, this second quarter loan book grew by EUR 2.5 billion in all the geographies. In Spain, the majority came with a state guarantee in the form of ICO credit lines, and we will see later. Here, lending improved growth previous trend this quarter. It grew by almost 7%, well over the 2.3% of the sector as of May 20. Banking sector loan book has started to grow this quarter after many years of deleveraging.
Loan growth has been EUR 2.4 billion, with some large corporate new liquidity lines, and mainly the ICO guarantee lines provided for corporates and SMEs, split in thirds approximately between large companies, mid companies, and SMEs, with a total of EUR 3.9 billion signed as of June 20. In Portugal, lending is up by 19% from a year ago, with an additional EUR 215 million in the quarter, slightly short of our business plan for this year. Retail deposits continue to perform strongly in all geography at over 10% year-on-year or EUR 5.6 billion to EUR 61.5 billion. Net interest income continued to show resilience. It grew by more than 6% over the same quarter a year ago and stay almost flat from last quarter, reduced by 1% or EUR 4 million. Like for like, growth was 4.3% from last year.
Since the integration of EVO and Avantcard in June 2019, their contribution to our net interest income has been growing every quarter. They contributed with EUR 38 million to the group's net interest income this first half. In Portugal, net interest income also grew about 6% with respect to the same quarter in 2019. Net interest income quarterly evolution is driven mainly by the loan book growth and by our customer margins, shown in the chart on the right. The yield decreases in the quarter is mainly due to the important reduction on the US dollar LIBOR reference rate in our international business and the reduction in consumer finance yields, together with a desired reduction of the loan book in this business in Spain. After now almost a year with the cost of deposit at all-time lows, we believe our customer margin to remain resilient in the coming quarters.
Here, we also show the net interest margin of 1.48% with a drop of 7 basis points from a year ago. Thanks to margin and volume growth trends in deposit and loans, together with a stable contribution from the carry trade of our ALCO portfolio, after the completion of the first half of the year, we still see an increase in the group net interest income by mid-single digit by the end of the year. The composition of our ALCO portfolio changed very little in this quarter. Its size slightly increased to up to EUR 8.7 billion after the full integration of EVO. Its proportion between different portfolios has also improved. Today, 68% of the portfolio remains under amortized cost with no impact in capital ratio and 32% in fair value.
After a much better quarter in bond and equity markets, we can see the improvements since March of the unrealized gains on the portfolio. Now they amount approximately EUR 410 million, some EUR 200 million more than in March. Over the next few years, maturities of the portfolio are well spread out and not relevant in every year, as you can see in the right-hand side chart. Let's move on. Fee income performed extremely well in the second quarter, even under a reduction in activity levels due to the three months lockdown. Last quarter, fee income was only EUR 2 million below the EUR 123 million of fees posted in the first quarter and continued to show growth for the first half of close to 6% year-on-year. Fee income from our recurrent business continued to grow, except fees from working capital financing, including the other fee sections, down 32%.
On the other hand, assets under management volumes recovered previous levels, and this is reflected in the 2% improvement from the first half last year. Fee income still accounts for 28% of our gross operating income. The largest contributor to fee income continues to be asset management fees at 24% of total fees, still up by 2% with respect to a year ago. We can confirm that commercial activity recovered after the end of March and our private and personal banking assets under management recovered level pre-COVID-19. The second largest contributor to fee income at 18% is payment and collections, including credit cards from corporates and individuals. Their performance has been impacted by the situation but continues to post a 1% increase on the back of our increasing online banking activity.
Some fees continue to show a strong positive impact from market conditions, such as brokerage, that ended the quarter growing by 35%. Another example is FX business with customers, with also up 30% from a year ago. Going forward, they should continue to improve while markets remain positive for the rest of the year. Life insurance sales, risk-related transactions, and fees from activities like structured finance are also improving from still small base. They are up 5%, 11%, and 51% respectively. We believe the effects of the economic slowdown will continue to be noticed in fee income in the second half of the year, although we don't know to what extent.
We will pursue to drive business volumes and value-added products to our customers, assuming the certain degree of recovery, we can maintain our guidance of fee income growth by low single-digit growth by the end of the year. In other operating income expenses, here you can see the various components broken down by their contribution without LDA insurance margin in both years. The EUR 6.9 million this year were reduced from the EUR 14.4 million last year, mainly due to lower trading income in the first quarter, a EUR 12.8 million reduction from a year ago, and also to the recurrent and increased yearly regulatory charges, a 34% increase in the contribution to the Single Resolution Fund in the second quarter. Gross operating income for the first half stood at EUR 863 million, an increase of 7.6% from a year ago.
Quarterly operating income of EUR 427 million grew over to 7% from the same quarter last year, and by 4% from the previous ones, all with a very small contribution from non-customer business. All in all, the group's operating income grew clearly above our mid-single-digit guidance for the year. Assuming some economic recovery in the next two quarters, we believe revenues will continue to grow at the same path throughout 2020. The chart on the right shows the contribution to operating income in the first half, with net interest income at 71% and fees on 28%, and other income only accounts for 1%. Group operating costs totaled EUR 205 million in the quarter. They are up 4.7% from previous quarter last year, 8% from first quarter 2020. Total operating costs for the first half are up from the previous year by less than 6%.
Like for like, or excluding EUR 28 million coming from EVO and EUR 17 million from Avantcard, recurrent costs would have been reduced by over 3% from last year. General and administrative expenses were under control, considering the ones from EVO and Avantcard, grew only 7% over last year and 2% respect to previous quarter. Again, keeping all operating expenses and investment programs under tight control, we expect to finish the year with a guidance of low single-digit cost growth. Thanks to all these efforts and the end of the EVO and Avantcard integration expenses, our recurrent banking efficiency will continue to improve. The group's cost to income dropped 520 basis points from December 2019, and 110 basis points from a year ago to 47.9%.
We aim to keep the long-term banking cost to income ratio within a range of 40%-45%, as we always try to improve efficiency in all our acquired businesses. For example, we continue to do so in Portugal, with now an efficiency ratio at 62%. In Spain, we are at a record low. We are efficiency ratio at 40.5%. We can see in this graph how resilient has been our group's pre-provisioning profit compared with the last year. All in all, and in these very difficult circumstances, we have been able to post a strong 9.8% increase in pre-provisioning profit. We think this shows a remarkable operating performance. Let's move on. Now let's look at the recurrent cost of risk.
It started its way up last quarter, mainly due to the increased provisioning in consumer finance in Spain, because as expected, other NPLs coming from mortgages, corporates, and even SMEs were not significantly affected by the new situation after March 14th. Somehow, this good behavior has been extended to the second quarter as well. However, the consumer finance cost of risk continues to grow for another quarter. The increase in cost of risk in our recurrent banking activity in Spain was again related to consumer finance loan book and the small SMEs loan book, since as of June 30th, there had been no relevant impact in the commercial banking loan book on mortgages and personal loans, as well as in the large and mid-corporate loan book.
We expect these trends to remain unchanged during the second half of the year, and although it is probably too early to anticipate what will be the impact of the liquidity lines guaranteed by the state for SMEs and corporates, in addition to the public and private moratorium in place, we expect all of this will help the current cost of risk to remain under control for the rest of the year. Despite this unprecedented global situation, we strongly believe in the quality of our loan book and our credit policies and procedures in our different businesses and in all geographies. Thus, we are able to maintain the guidance of 40 basis points for recurrent cost of risk at year-end.
On the other hand, provisions for litigations, some over our FX mortgages, portfolio slightly falling, and other miscellaneous legal provisions still growing, will remain flat or slightly up during this year. Regarding cost of risk, today with a much better view of the consequences from the economic shutdown in different sectors of the economy and a complete knowledge of the government stimulus measures and the new macroeconomic scenarios forecasted by central banks, Spain and Portugal shown in the left of your chart. The bank has adopted the Bank of Spain central scenario in all our internal rating-based models for credit risk management, which provided for the recording of an extraordinary provision of EUR 177 million, booked in full in this second quarter of the year.
This, together with the EUR 15 million that were booked in the first quarter, makes total cost of risk at the high end of our guidance of 70 basis points for the full year. Today we are anticipating some 28-30 basis points that, together with the expected 40 basis point of recurrent cost of risk, will bring total cost of risk close to 7 basis points of total exposure within our initial guidance given in the first quarter. Pre-tax profits for the banking activity is as shown in the chart. We expect improvement in the coming quarters once excluding extraordinary impacts. All the above has impacted our group's return on equity, that now stands at 7.6% after this strong provision in the first half. Excluding the impact of the extraordinary group's provisions, return on equity will reach 10.5%, still above our cost of capital and differential from peers.
We are fully committed to bring group's return on equity back to double-digit levels based on the growth of recurrent business and normalization of NPL provision. I will now go over our management of credit risk, liquidity, and solvency. Last quarter, non-performing loans changed their long-standing downward trend and started to show some increase, although at a very low rate.
Total NPLs rose by less than EUR 14 million from last quarter, mainly because NPLs grew in Consumer Finance. Still, year-over-year, total NPLs are down by almost 1% or EUR 15 million less to EUR 1.764 billion. Total group NPLs grew in the semester by EUR 83 million, or less than 5%. Of this growth, EUR 27 million came from SMEs, EUR 17 million from mid-corporates, and EUR 5 million from Portugal and EUR 1 million from EVO. Finally, Consumer Finance NPLs grew by EUR 68 million, or 82% of the total as expected.
All of the rest, mortgages, large corporates, affluent banking, et cetera, came with negative growth in the period. The group's NPL ratio now stands at 2.5% from 2.51% at year-end and 2.71% a year ago. It also drops 8 basis points from last year due to the increase in loan book and almost flat NPL net entries in the period after the sale of EUR 50 million NPLs in May. In Spain, at 2.54%, it is almost at half of the sector average at 4.8% as of April, now after the COVID-19 impact. In Portugal, the NPL ratio remains stable at 2.38%. As shown in the chart, as of June 20, the group's NPL ratio was 2.37% for households, including consumer finance at 7.6%, and stays at 2.74% for corporates, including small SMEs at 7.7%. Let me share this chart with you.
Here we bring a breakdown of the bank total credit portfolio as of June 2020 and the current NPLs and NPLs ratio by business segment. We compare this with January 2018, when IFRS 9 started to be implemented and right after the transparency stress test of the EBA. 41% of the loan book is in residential mortgage and personal loans to the bank's individual customers with NPL's ratio of 2.37%. It was 2.71% back in 2018, of which customer finance now represents 4% of total, up from 3% in 2018, and with similar NPL ratio of around 7.6%. Corporate banking loan book represent 46% of loan books similar to what it was in 2018, but with much better NPL's ratio today at 2.74%. Of this book, large corporates represent 25% of total with NPL's ratio of 0.64%.
Medium corporates, that we call large SMEs, 11% of total, an NPL ratio of 3.55%. Finally, small SMEs with 8% of total book, an NPL ratio of 7.7%, better than the 9.1% back in 2018. Portugal increased the book to 10% of total portfolio and improved NPL ratio to 2.38% from 7% back in 2018. Finally, EVO Banco represents only 2% of the total loan book with NPL ratio of 1.35%. We think that this chart, this table, this distribution shows our strength in the quality of the loan book and also the small changes over the years.
Our overweight in affluent mortgage lending and in large corporate lending continues as in 2018, when Bankinter showed the lowest capital depletion in Spain in the ECB EBA 2018 stress test. Just a reminder, we had 114 capital depletion versus an average of 395 basis points from the EBA 48 participant banks. Total NPL provisions increased consequently after the extra provisioning to a comfortable level at EUR 1,034 million. EUR 198 million increase from last year. This had a relevant impact on our provisions coverage, which now stands at 59%, 10 points over the previous quarter. Coverage for foreclosed assets went slightly up at 46%, maintained clearly above the average discount on sold assets. The group foreclosed assets portfolio is 18% smaller than a year ago. It decreased by EUR 54 million. This small portfolio now amounts for EUR 259 million. Let's talk about solvency.
Our fully loaded CET1 ratio stood at 11.75% at the end of the first half, increased by 28 basis points from last quarter and 25 basis points from a year ago. After the EVO and Avantcard transaction that deducted 23 basis points, was bringing our ratio to pre-transaction levels as we committed. Since December 2019, our retained earnings bring an increase of 32 basis points, underpinned by the cancellation of the first two quarters dividend. This increase helps to offset some of the negative impacts in the period, such as the value adjustments from our ALCO portfolio, now at half of the impact of the first quarter, or other miscellaneous impacts, such as the increase in insurance equity or intangibles accounting.
The impact of risk-weighted assets growth of 23 basis points, EUR 800 million approximately from the new ICO financing, has been more than offset by the reduction of the IRB shortfall of 27 basis points after the extra provision in the quarter. The other positive impact in the quarter comes from the new regulatory changes, the CRR quick fix, which are mainly or mostly related to the SME supporting factor that add 23 basis points. Total capital ratio and levered ratio remain mostly stable at 14.1% and 4.6% respectively. Taking into consideration our last week EUR 350,000,081 issuance to replace the existing one of EUR 200 million. Capital ratio will improve to 14.5%, a very comfortable level above minimum regulatory requirement. As of June, we have EUR 1.4 billion in capital in excess of the new 7.675% minimum SREP requirement.
After closing the first half of the year, and despite the new, more complex environment, we reiterate our guidance of CET1 ratio above 11.5% for 2020. The continued increases in customer deposits in all business have helped to narrow our funding gap in Spain to an all-time low, from over EUR 10 billion five years ago to only EUR 1 billion now, and only coming from Portugal, with still having higher growth in lending than in deposits. As a result, loan-to-deposit ratio reached record levels of 101% from 102.5% a year ago, owing to consistent growth in retail deposits in the last few years. Our wholesale funding maturities are well-balanced with only EUR 800 million due to this year and zero next year, excluding the EUR 2,200 million AT1 due in May 2021, and recently that has been refinanced.
We're very comfortable position for the coming years with an increase of EUR 16.9 billion in liquid assets and the capacity to issue over EUR 2.6 billion in cover bonds. On the first week of July, we have closed the issuance of EUR 350 million perpetual AT1 bonds with a six-year call and a coupon of 6.25% quarterly. Let's review the performance of our business lines and their respective contribution to the group's P&L. The corporate and SME loan book in Spain and Portugal grew by over 18% from last year or EUR 4.4 billion. It increased by 17% in Spain, while the sector had started to grow at 8% year-on-year since last May. All this growth started in the quarter boosted by the government guarantee ICO lines in place, the entire sector has made a wide use of them.
As of June 20, we have signed EUR 3.9 billion of government lines with our customers, mainly with large SMEs, small SMEs, and lastly, large corporates. We will review our production in a separate slide. International trade and supply chains finance continues to lead loan book growth. It grew by 12% from last year to EUR 5.96 million. It has become the most important source of income from our large corporate segment, where today accounts for over 30% of total income. International business operation income grew by 9% from a year ago to EUR 90 million. More importantly, over 50% of its revenues came from fees rather than interest. Transactional business turnover with corporate customers, including commercial credit, tax and Social Security payments, et cetera, went down in the first half due to the lower activity.
Still, it generate EUR 40 million in fee income in the period, 3% up from a year ago. We expect the fees generated by this business to grow more by the end of the year. Investment banking brought additional revenues to corporate operating income. In the first half, it generated EUR 35 million in operating income, an 11% increase from the same period last year. In these times of uncertainty in how the credit quality will perform in the coming quarters, it seems very relevant to have a deeper look at our corporate loan book in Spain and Portugal. Almost 50% of the group's total loan book is granted to non-financial enterprises. This amounts to EUR 28.3 billion at the end of June 2020. From this total lending, EUR 11.1 billion are granted to large corporates, those with yearly turnover over EUR 50 million and more than 250 employees.
We have 7.3 billion loans granted to medium-sized enterprises, those with a turnover of EUR 5 million-EUR 50 million. We can call them SMEs type A. These two largest loan books represent over 65% of the total loan book. Only 16%, or 4.6 billion of the bank's total corporate loan book, are loans to small enterprises with a turnover between EUR 2 million and EUR 5 million, or SMEs type B. The rest is split between 2.3 billion of property and housing-related financing, not including developers, 1.7 billion in international trade in finance with our corporate customer and 1.4 billion lending to public sector corporates. Bankinter has always enjoyed a high quality loan book relative to peers in our country, and today we continue to feel very comfortable with the asset mix of our loan book.
It has shown no significant changes over the last 10 years, preserving the strong asset quality standard for each segment of corporates and always obtaining yields according to our risk-reward models, despite greater competition during all these years in the market. In the following slide, we show Bankinter Spain participation in the government guarantee ICO lines for corporates and SMEs as of June 20. Total loans granted and disbursed as of June adds to EUR 3.9 billion. All these loans have been granted mainly in medium and small corporates and the rest to large corporates. Thus, the average state guarantee of the total book is over 77%.
A total of 6 billion guarantees have been assigned to Bankinter by ICO, and represent our market share of close to 6% of the total facility, with an increase to 7.1% on the last tranche of loan to be signed until the end of September. Our moratoriums for mortgage and consumer finance to individuals amounts are still small, EUR 922 million and EUR 55 million respectively, and represent only 4% and 3% of our portfolios. In private and personal banking, customer wealth has recovered from the very difficult behavior and the negative market effect of last quarter. It now shows increases of EUR 2 billion in net new patrimony, split EUR 1 billion in private banking and EUR 1 billion in personal banking. Total wealth from customers in both segments amounted to EUR 60.7% billion, up from EUR 61.2 billion a year ago, or 2.5%.
The recovered commercial activity measured by new money in the quarter ended with EUR 4.2 billion, split EUR 3 billion in private banking and EUR 1.2 in personal banking. Activity in our commercial banking during the first half has been maintained somehow strong in our two main retail products. Salary account balances continue to grow. They're up 20% from a year ago, totaling EUR 11.4 billion. New mortgage origination, although logically below last year by 13%, is flat from two years ago, showing a very strong resilience in this business where Bankinter holds larger market share in the front book than in the back book. On the new origination, 55% of mortgages were fixed rate, and its loan-to-value ratio is at 60%. Our market share in new mortgages is now 6.2% in the 12 months ending in April 20.
The total mortgage back book maintained growth and reached EUR 27 billion in Spain, growing by 3.2%, while the rest of the market continues to shrink by 1.2%. The loan-to-value of the total back book stands at 55%. Let's look at our standalone business in Portugal. Loan book grew by 10% to EUR 6.4 billion in retail funds at EUR 4.6 billion, reduced by 2% from a year ago. The income statement, operating income from the business grew by over 11% with only EUR 2 million of extraordinary firm recoveries in the period. Costs show again a 6% reduction in line with cost control plans ahead of a difficult second part of the year. All of the above brings pre-provision ing profit up by a very strong 60%, over EUR 9 million more.
After the EUR 5 million normalized loan loss provisions with a very small impact of extraordinary recoveries. Bear in mind here, I remind you that last year we had EUR 19 million positive cost of risk from this recovery and the EUR 3 million extraordinary provisions from the micro-scenario adjustment. Portugal profit before taxes at EUR 17 million was half of the last year.
Portugal shows an efficiency ratio of 62%. Bankinter Consumer Finance now includes our consumer finance business in Spain, Portugal, and Ireland under Avantcard. At the end of June 2020, total loan book was EUR 2.8 billion, including EUR 445 million from Avantcard and EUR 225 million for Portugal, and is slightly down from the year. Still up 8% from a year ago. New credit origination, mainly in personal loans, went down by 16%. The reduction in revolving cards outstanding bring the total under EUR 600 million or 17% less.
Total credit card business represents 44% or EUR 1.2 billion of total consumer credit. Cards and cards payable only at the end of the month account for less than 50% of the total. They are mainly granted to existing Bankinter customers with a much better risk profile than pure consumer finance customers. The new and stricter accounting standards in 2020 for NPLs, which transfers them to write-offs for sale after 12 months with full provision and the new extra provision for macro adjustment in IRB models increased cost of risk for the first half of the year. As of June, NPLs stood at 7.2%, provision coverage reached 107%, and cost of risk climbed to 4.9%. All this brought the risk-adjusted return of the business to 6.6%. Moving to EVO.
During the first half, EVO Banco performed slightly above its business plan, EUR 6.5 million more, despite the impact in the quarter on mortgage origination and credit card activity. EVO Banco's balance sheet has EUR 1.4 billion in net loans, up 7.4%. EUR 957 million correspond to home mortgages, growing at 15% in the period or EUR 125 million.
New mortgages granted from December were EUR 156 million. Personal loans and credit cards amounted to EUR 65 million, down EUR 13 million. As of liabilities, EVO has EUR 3.3 billion in retail deposits and EUR 252 million in off-balance sheet funds. Client acquisition has been over 36,000 new customers in the period, for a total of 508,000 customers as of June 2020, a 6% increase. As for management ratio, customer margin stood at 145%, NPL ratio 1.5%, with provision coverage at 62%. Finally, let's look at Línea Directa's contribution in the first half.
Línea Directa continued to perform strongly for another quarter, despite continued pressures on premiums. Total insured risk, the all number of policies, increased by 1.5%, keeping increased Línea Directa's market share in Spain. Issued premiums remained almost flat, grew only about 0.1%, which suggests a strong price competition and lagging demand during the lockdown in the quarter, particularly in motor insurance. Nonetheless, LDA growth in motor premiums continues to double the industry's average. In home insurance, it grew by 8.6%, which is almost five times the market growth. In health insurance, DKV Seguros sold more new policies. Total policies closed the quarter in 75,051%. Línea Directa's combined ratio improved by 100 basis point to 85.7 from last quarter.
Despite lagging premium growth, it improved in the quarter due to the reduction of 270 basis points in claim cost after being adjusted in view traffic slowed down during the lockdown to 64.5% from 67.2% from last quarter. The cost ratio increased to 21% because of acquisition cost and marketing of the quarter. Línea Directa's combined ratio of 85% is at its lowest for recent years and expect to maintain this low level by the year-end. Having one of the lowest combined ratio in the industry represents a strong competitive advantage that will allow Línea Directa to outgrow its competitors in the coming year. If we look now at income statement, net profit went up by 12%. This is due to the 3% claim cost reduction in addition to the 3% increase in net earned premiums.
These revenue trends from operation and some cost control resulted in a technical result of EUR 62 million in the first half, 23% more. These better earnings performance sustain a very high return on equity of 34%, and despite the absence of the dividend distribution, while increasing the company's solvency ratio to 238. Okay, let me finish with a brief recap of what we saw in the first half of 2020. We saw a consistent delivery of recovery income from a customer activity, despite the impact of the lockdown. In anticipation of a continued difficult environment, we made an effort management remain very efficient and support pre-provisioning profit going forward. An increase in cost of risk, apart from the recurrent one and the accounting effects in Portugal, to anticipate the potential impact of the new macro scenario.
Appropriate solvency levels with a stable asset quality, improved liquidity, strong capital ratio, and a solid buffer for regulatory requirements. EVO Banco and Avantcard continues its integration plan with a major impact on our P&L performance, quality of asset, and capital structure. Finally, here are some figures. Solid balance sheet growth, 7% up, 10% in lending and 10% in deposits. Growth of recurring core banking businesses. With a strong 8% growth operating income, fueled by 10% in net interest income and 6% in fee income. A combination of this strong volume growth and good cost control supports outstanding 10% increase in pre-provision profit. Cost to income improved to 47.9. Cost of risk increased up to the guidance, moving to the guidance of the 7 basis points for the whole year, and capital improves to 11.8% of the CET1 ratio.
In sum, after closing the first half of 2020 and with a continued difficult scenario, we can now envision the following guidance. Net interest income growth in the range of mid-single digit. Some fee income growth of low single digit. Group's operating income in the low to mid-single digit range. Group's cost below gross operating income growth. Cost of risk increase in the range of 60 to 70 basis points. As I mentioned in my introduction, we at Bankinter are putting all our efforts and commitments to ensure that the Spanish economy recovers as soon or as quick as possible. We also maintain a high level of energy and optimism to obtain a positive outcome out of this crisis, and we have done in the past with a higher level of differentiation versus our competitors.
As I mentioned in the last presentation, I also want to thank all Bankinter staff, in special those at the forefront of the branch network, for their commitment and energy in this crucial moment. This is the main asset of the bank, rest assured that the level of dedication is extremely above expectation. Now, I'm happy to take some questions.
Thank you, Jacobo, for the effort. We had a few follow-ups. We have already probably explained some of these questions, but probably just you could elaborate a little bit more in some of these topics. Let's start with the cost of risk. We had a few questions there regarding the rationale of the front-loading of provisions that we had seen in the quarter.
Um-
The cost of risks.
Yes.
Of the quarter, yeah.
I think we explained.
Yes.
Quite clear. We have considered the central scenario of the Bank of Spain forecast impact, macroeconomic impact for the next years, the 2021 and 2022. We decided to make an upfront provision, a one-off provision, and anticipate the effort for the entire year. This amounts for EUR 177 in the quarter, and this is approximately 20 to 30 basis points for the entire year. We are not planning to add more provisions due to this concept. We have a recurrent cost of risk of 40 basis points. That was a similar figure that we had in our plan, and is exactly, the addition of both are within the range of guidance that we provided last quarter. Today, we want to clarify that guidance, and we come up with a 60 to 70 basis points guidance for the entire year. I hope this clarifies cost of risk.
Very good. Very clear. Any views for 2021 in terms of cost of risk?
I think it's still too early to have any view. Bear in mind that all these moratorium programs and ICO lines will still go on. We have a new trend that goes up to the 30th of September. I think this year is maybe still too early to see potential impact. What is clear is that Bankinter, as well as the regulators and governments, are putting all the efforts to mitigate as much the impact of this pandemic. What we are currently viewing is that the cost of risk, as I mentioned, is stable at the 40 basis points that we are currently considering. For the time being, as of today, we have no need to change that guidance because this is what the reality is telling us. In the future, I think it's still a little bit early.
Thank you. To finish off with the asset quality topic, what do you expect in terms of non-performing loans for the next few quarters?
I think non-performing loans will behave pretty similar to what we've seen in this previous quarter. As I mentioned, I think we have only a focus on the consumer finance business, which is the one that is probably suffering the most. Apart from that, we are in a good shape in everything related to our retail customers, anything related to the mortgage lending or the mortgage portfolio, the medium-size corporations, the large corporations. I think from the NPLs, we do not see or do not foresee any major change. Let me share with you that the delinquencies levels as of today are even below the 1st of January. We do not perceive any major changes in the coming quarters.
Thank you. Now we move into volumes. What do you expect in terms of loan book growth for the second half of this year? More specifically, you can comment on the corporate lending and consumer book.
In the corporate lending, as we mentioned, there are new tranches of ICO lines that will end up the program on the 30th of September. I would expect that in the corporate world, the third quarter, we will still see an additional increase. In fact, if we are able to meet all the expectations in terms of the tranches that we have been assigned or allocated, the total volumes might reach even EUR 8 billion for the total ICO lines. As you can imagine, those figures will maybe increase since the EUR 3.9 that we have registered in the first half. Volumes in consumer finance, as we're recording in the past quarters, in revolving cards, we're still expecting a reduction. The impact in consumer in the second quarter has been relevant, we see that in the credit card world, we expect a reduction or stabilization.
In personal loans, we might see an increase in the following quarter due to a recovery of consumption in Spain after the lockdown.
Okay. In terms of moratorium, what's our expect there going forward? What is the percentage that you should expect to see on our mortgage and consumer books on the moratorium?
As I mentioned, we have around 4% in our mortgage book in moratoriums, and 3% in our consumer finance. We do not expect an increase, as we see the demand today is not as it was in April. We do not expect any major change in moratoriums. In fact, some royal decree moratoriums will start to redeem soon. As far as we know, there is a minimum level of renewals or requests for new moratoriums. Private moratoriums will start renewing in next month or the end of July, beginning of August, because it was a four-month moratoria. Because of the type of client that we have here in Bankinter, honestly, we do not expect a renewal of moratoria. Currently, the demand is very low and renewals, we do expect really low levels.
Okay. Now we move into the P&L. Can you just comment on the outlook for the NII?
I think NII has behaved extraordinarily well in these first two quarters. We do expect to keep good levels of NII in the following quarters. I think, as we mentioned before, new production of mortgages will start recover again. Just bear in mind that the front book of the mortgages brings much better returns than the back book, and that's something that will fuel the net interest income. Of course, all this new corporate lending will bring more growth in terms of volume and with a stable margin. We'll expect an increase in net interest margin. Obviously, we have all these TLTRO3 programs, et cetera, that will add more strength to the net interest income in the second half of the year. I think those reasons will support the growth of the net interest income.
Also, the cost of deposits, even if there's not too much room, but they're still under a slowly but surely reduction, even with the wholesale issues that are with a lower cost than in the past.
Okay. Now that you mention, how much is the total TLTRO intake, Jacobo?
Sorry, the total?
TLTRO.
The EUR 10 billion.
Thank you.
10 billion.
Guidance on fee income, please.
On fee income. Fee income, as you can expect, there are always a strong correlation with what's happening in the markets, but we are able to compensate with transactional activity. We expect markets to behave similar to what we've seen this quarter, at least to stay stable. That means that assets under management fees should remain stable, and will provide similar returns. Transactional activity will recover in these following quarters. We do expect, as I mentioned, a low to mid-single digit growth in fees. Brokerage activity was a good source of revenues in this quarter. We might see, again, a good quarter of this type of fees.
Okay. Would you highlight anything extraordinary in the quarter in fee income?
I would say that the behavior of the assets under management and the brokerage activity. I think it's been an impressive quarter in terms of commercial activity in order to recover the assets under management volumes that we had pre-COVID. We are currently in similar levels to pre-COVID. We have been maintaining the average fee of these investment funds, and coupled with an extraordinary boost of the activity in our broker online. I would highlight those topics. Both topics have an impact also in the FX space. I think, honestly, it has been an extraordinary quarter in term of fees, and I believe it will be sustainable in following quarters.
Thank you. To finish off with the impacts on the P&L litigation, we are getting questions on what's behind the growth in other provisions, and also if we are still provisioning for FX mortgages.
Okay. Just a quick reminder. The increase, if I'm not wrong, in the first half of the year compared with the past year, it's EUR 5 million up in the other provisions. The difference is mainly just very mundane. In other provisions, there's not only legal provision or tax provisions or litigation provision, we also have provisions related to credit risk of endorsements and these type of things. Therefore, there is a comparison effect from Portugal as well in this side. The increase comes from a comparison effect where Portugal did not provision last year, now it has to provision. Regarding the question of the FX mortgage, as we anticipate, the FX mortgage effect is slightly going down. We manage or we anticipate a slight reduction of 10% by the year, and this is exactly what we are facing.
From that perspective, there are no news.
Thank you. Capital. Can you just go through the movements in the quarter? More specifically, what is behind the regulatory changes?
Okay. The regulatory changes, as I mentioned, the CRR quick fix, is basically the SME support factor, the one that provides, I would say, almost 100% of this improvement. Okay. Things that I think which is relevant as well to share with you, first of all, as I mentioned, is the recovery of the unrealized gains of the ALCO portfolio. That has recovered around 25 basis points. I think it's relevant to mention the IRB deduction, which of course is related to the extra effort that we've done in this quarter to the wealth provisions of EUR 177 million. Therefore, the IRB deficit is much lower, and that has provided 27 additional points. Another mention is the insurance deduction of 17 basis points. This is due to the non-distribution of dividends from Línea Directa.
Therefore, the deduction of the participation of Línea Directa is higher, and this is due to the retention of dividends of Línea Directa in the same way as Bankinter.
Okay. Any idea of how much regulatory changes are left for coming quarters?
Yes. The main, which is left, is the one related to deduction of the software, which is currently under consultation. As of today, is it too early to provide you some guidance on this topic because the methodology is not closed yet. Once we get a better understanding of the final regulation, of course, we will share with you the potential impact, but it will be positive, but we don't know how much positive.
Can you confirm the guidance for CET1?
As you know, our guidance for CET1 is 11.5. We will expect to stay above this 11.5 for the coming quarters. However, I would like to remind that the minimum requirement of the CET1 is now at 7.675%, and that we have an excess versus this minimum requirement of EUR 1.4 billion in CET1.
Okay, to finish off there, any updates on our dividend policy?
No news. As you know, we are expecting any new recommendation from the ECB, and we hope that there will be some news in the coming weeks. Once we got the new recommendations from the ECB, therefore, we could provide you with more guidance about dividends.
Okay. Now moving on to Línea Directa. We have a few questions about if there is any updates on the spin-off, and obviously also on the business evolution, combined ratios, and so on.
Okay, regarding the spin-off, as you know, we are quite determined to execute this transaction. We will do the transaction once we have all the authorizations in place. As you can imagine, this pandemic and the lockdown has disturbed all the process, all the procedures. We are pushing the execution of this transaction as much as we can. This is a mandate from the annual general meeting and from the board of directors. We will execute this transaction in the terms that has been mandate. Regarding the business, I will highlight the combined ratio. The combined ratio is at minimum levels. It's quite differential from other businesses. I think the performance of the Línea Directa's business has been, once again, very good.
Bear in mind that Línea Directa has an unparalleled operating performance business with a strong diversified position in the Spanish non-life insurance and with a unique growth prospect. The growth that we've seen this quarter, I believe it will be similar in coming quarters. Return on equity, 34%, and solvency ratio of 238%, I think they are very great references in the industry. The quarter, as you can imagine, has been good for one things and bad for other things. It's been extremely good in terms of claims cost, and it has been not so good in terms of new production. However, we maintain excellent levels of return and excellent levels of provisioning. Once again, I think Línea Directa is a best-in-class company in the industry.
Thank you, Jacobo. That's it from us today. Thanks again for joining us, everyone. Obviously, the investor relations team is now available to deal with any future further questions. Goodbye.
Thank you very much, and keep safe. Bye-bye.
Thank you.