Good morning, everybody, and welcome to this conference call to discuss our financial results for the first quarter of 2022. Just as a reminder, both the results report and the presentation we will be following today are available to you on our website. I'm joined here today by our CEO, Mr. José Antonio Álvarez, and our CFO, Mr. José García Cantera. Following their presentations, we will open the floor for any and all questions you may have in the Q&A session. With this, I will hand over to Mr. Álvarez. José Antonio, the floor is yours.
Thank you, Begoña. Good morning to everyone. Thank you for joining us this morning. I'm going to start with the first quarter results, starting with the activity levels of the group in the quarter where we continue to have a good customer and commercial activity. We keep growing the customer base, 2 million more customers in the quarter, 7 million more since March 2021. This reflects our growing business and increased customer satisfaction. As you know, this is one of our goals, and we rank in the top three in NPS in eight markets now.
While the transactionality and the digital adoption keep growing at a good pace, 49, almost 50 million digital customers, 5 million more than in March 2021, and transactions in digital channels are growing at 50%, and the digital adoption is at a good pace. As a result of this, our volumes in the balance sheet being loans and deposits have grown, both quarter-on-quarter and year-on-year, and we translate this into a customer revenue growth that you're gonna see in our P&L. Going to the performance results and profitability, the Q1 attributable profit was EUR 2.5 billion, EUR 2.54 billion, 19% versus Q1 2021 in underlying profit, and 58% year-on-year when we compare with the attributable profit.
Remember that last year we incurred around EUR 500 million restructuring costs that we don't have this year. On the cost side, this is particularly important in this unexpected high inflationary environment, we were able to keep costs remain well below inflation and allow us to improve our efficiency ratio in line with our guidance of getting to a 45%. We improved our profitability ratios quarter on quarter, year on year. Our return on tangible equity went to 14.2% and EPS growing at 22% compared with Q1 2021. We continue to create value for shareholders. The tangible net asset value per share stood at 44.29, 4% up quarter on quarter, 13% up year on year, including the cash dividends.
When we go to the balance sheet and we look at the risk, particularly credit risk, the cost of credit remains relatively stable at 0.77%, below our guidance for the whole year. NPL ratio stays at 3.26%. Remember that in the quarter, we have like-for-like basis. Without this new definition of default, the NPL ratio fell like 10 basis points or something like that. The CET1 was above 12%, 12.5%. With good organic capital generation of 40 basis points from Q1 2022 earnings and minus 23 basis points from dividend accrual and the second share buyback that is going on and started mid-March. Going to our P&L.
Let me remark that the exchange rates play in a positive way, 4 or 5 percentage points. You have in the third, fourth column in the slide. In current euros and constant euros is current euros is 4 or 5 percentage point more, partially offset by hedging in the Corporate Center that our CEO will elaborate later on, that we have a negative impact due to the hedging of the expected profits. As I mentioned earlier, we earned a profit of more than EUR 2.5 billion, growing strongly year-over-year. In the quarter attributable underlying profit recorded the same amount, and we had no extraordinary charges. I will elaborate in the different lines on the P&L later on.
When we look at the regions, we see that, well, we are around 30% in each of the main regions, Europe, North America, and South America, and the Digital Consumer Bank around the 10%. Well, in addition to the revenues and profit also receive an uplift from costs, growing below average inflation. We will see later on control on loss provisions and lower minority interest following the acquisition mainly of the Santander Consumer USA minorities. The quarterly series reflects our sustained profit growth quarter after quarter, backed by what I mentioned, customer revenue growth. The quarterly comparison of NII is affected by the day count, as you know. Like-for-like basis, we are growing 1%-2% in constant euros, NII.
Quarter-on-quarter fee income continued to increase, positive performance in the majority of the countries, partially offset by seasonality in South America, mainly in Brazil. Costs decreased quarter-on-quarter, thanks to our cost discipline and partly due to bonus adjustment at the end of in the fourth quarter of 2021. In addition, our loan loss provision remained flat year-on-year and up quarter-on-quarter, driven by the provision release in the fourth quarter of circa EUR 750 million. Trends in euros were better, as I said, than in constant euros, as growth rates were higher, benefiting from the positive FX impact in the quarter. When we going deep into the revenue, revenues were north of EUR 12 billion. Net interest income and fee income accounted for 95% of total income.
Bottom line, NII grew 6% in constant euros due to greater volumes and higher interest rates. By country at constant exchange rate, significant rises were recorded in U.K. +15%, Poland +78%, Brazil 7%, Mexico 7%. On the other hand, Spain was affected by the changes of mix and lower ALCO portfolio, and Portugal by ALCO portfolio disposals that we executed in Q1 2021. Net fee income amounted to EUR 2.8 billion, +6% in constant euros, driven by improved activity, notably in high value-added products and services. You have the figures in the slide in very good levels of activity in cars, insurance premiums, POS turnover, mutual investment. Well, all the fees all across the board, significant increase in activity levels have translated into higher fees.
In costs, as I mentioned at the beginning, we are working in a high inflationary environment. We are focusing here in two main points. One is to make sure that our costs grow less than inflation, and this is the -3.3% in real terms that we achieve. That's particularly important. The second one is to keep improving our efficiency. That improved 1.2%, going to the 45%. As you know, this is one of our key targets. When we go by regions, we are delivering as expected according to our plans in Europe in a much more difficult environment. It's true that we are showing here with the different reporting in Europe, but we are not far away.
I think the CFO already guided you that the EUR 1 billion cost savings is gonna be more in the region of EUR 800 million affected by inflation. We are progressing very well in both in Spain, Portugal and U.K., and also in Poland in a high inflationary environment. We continue to deliver according to our plans affected somehow by inflation in non-personal expenses that are much more difficult to control. In North America, growing well below inflation. North American, U.S. and Mexico, -2.7%. That is a good achievement. You've seen the results of our other players in the same markets where cost control has been difficult to achieve. In South America, well, the figure seems pretty high. Argentina is there, but also in Brazil, where the inflation is running above 10%.
The agreement with the unions in Brazil that the sector signed September of last year was in the region of 10%-11% and translating to significant higher costs. In line a bit higher than inflation. I do expect industries to enter into two quarters of having the expenses growing less than they grew in the last two quarters on the back of our efficiency plans. The Digital Consumer Bank that is growing above inflation due to the some initiatives and change in perimeter last year. The cost of credit, well, the credit quality indicators remain stable. No significant impact from the war in Ukraine. We have no exposure to Ukraine or Russia. As you already know, our cost of credit 77 basis points.
If you look at the last three months, it's 83 basis points. As you can see later in the country review, that provisions normalize after releases in Q4. The NPL ratio 3.26%. 19 basis points come from the new definition of default. Otherwise, the NPL ratio on like-for-like basis will be 3.07. The loan reserves and the coverage remains relatively stable. In coming quarters, the implications of the impact of the current geopolitical situation on our business performance and credit quality are still relatively uncertain, and we don't know the extent of the duration of the conflict. However, I should say that our starting point is very solid. The great diversification enables us the resiliency to face the crisis. I mentioned that our exposure to the parties in the conflicts is negligible.
We have enough tools in our hands to make us confident that we will meet our expected year-end cost of risk of below 1%. Even in the new scenario. When it comes to capital, our capital ratio, we had a very good organic capital generation. Gross organic capital generation in the quarter was 40 basis points on the back of the good results I just presented to you. Twenty-three basis points went to the shareholder remuneration, 15 basis points for the share buyback, and 8 basis points for the accrual of our 40% payout policy. That's basically. The other impacts are relatively minor, regulatory models and markets and other relatively minor effects.
In coming quarters, we will maintain our clear focus on the implementation of disciplined capital allocation measures across the group and achievement of the targets we announced in Q4. In this regard, while risk-weighted assets are growing below loan growth, our front book is already delivering high risk-adjusted return. We generate a RORWA of 2.8% in Q1 2022. The percentage of risk-weighted assets that do not cover the cost of equity keeps falling, and this is a good sign of our future profitability. While you know, our policy to remunerate the shareholders, the dividends, the EUR 3.4 billion dividends is split in 50/50 in-cash dividend and share buybacks.
The second share buyback program with a maximum of EUR 865 million started on March 15 and is under execution as we speak. As a result, the total shareholder remuneration is EUR 3.4 billion, 6% yield. In 2022, you know our dividend policy that was stated by the board, and we reiterate in our AGM. When we look at the capital, at the profitability ratios, you can see in the slide both EPS, return on tangible equity, tangible net asset value per share going in the right direction on the back of excellent capacity of the bank to generate results on a recurring and sustainable basis.
Finally, before I hand to José, I would like to highlight Santander's strong commitments to ESG. You have in the slide our commitments and how are we progressing in the different commitments that we have, being in green finance, where we already originate EUR 69 billion since 2019 with our commitment is EUR 120 billion by 2025. We continue to see good demand and a significant investment going in this field, and we are participating on this. We are developing green products. At the same time, we are starting to develop an information system that allow us to track how our portfolio behaves in relation with CO2 emissions. This is an important tool that we need to implement in order to track all our progress here.
Well, in the asset management industry, we have also targets. You have the figures on the screen. Renewable energy, we are world leaders, and we are signing alliances in order to make progress in this field. The decarbonization targets, you have there our commitments, both in the mainly related with the power sector and, well, we are progressing in line with our targets. These goals are included in the executives' long-term incentive scorecard and that show how committed we are with this ESG target particularly. I was referring here on the screen to the E, but you know that we are also very active in the social, particularly in the social target, particularly in the microcredit space in Latin America. I hand over to José that continues the presentation with the results by regions and global businesses.
Thank you, José Antonio, and good morning, everyone. As you saw, I will start with a brief summary of the regions, and then I will move on to the countries to discuss in a bit more detail. We continue to leverage one of the strengths of our model, which is diversification and scale, improving the operating performance in all three regions and global businesses. In Europe, we are making significant progress in the transformation of our business and in developing a common operating model. We achieved double-digit growth in net operating income and profit, reaching a 13.5% return on tangible equity. In North America, we are refocusing our position in the U.S. while maintaining a disciplined capital allocation. We accelerated growth and volumes, generated a return on tangible equity of 24%.
South America, we are growing the number of customers and capturing new business opportunities, delivering almost 27% return on equity. In the digital consumer bank, new lending increased by 17%, and profits rose double digits with a return on tangible equity of almost 13%. Obviously, we achieved all of this while enhancing our global business and connectivity with the regions. In this way, SCIB, a corporate and investment bank, earn a return on tangible equity of 25%, and wealth management and insurance return on tangible equity was 55%. We continue to make progress in the development of PagoNxt. I will talk about that in a minute.
Maintaining high profitability in our card business with a return on tangible equity around 30%. Moving to Europe, the business transformation to develop a simpler and a common operating model is delivering good results with increased volumes, especially in individuals. Mortgages were up 6%, consumer lending was up 9%, mutual funds up 3%. We experienced significant improvements in customer satisfaction surveys at the same time. Profit reached EUR 1 billion in the quarter, increasing 30% year-on-year. Revenue grew strongly. NII was up 9%, supported by higher volumes and interest rate hikes in Poland and in the U.K. Fee income grew 7% backed by greater activity.
Our efficiency plans continue to bear fruit as the cost base shrank 2%, went down 7% in real terms, and the efficiency ratio improved to around 48%, driving net operating income up by 12%. Loan loss provisions dropped 14% as the cost of credit started to normalize across countries, most notably in Spain. Return on tangible equity reached, as I mentioned before, 13.5%, up three percentage points year-on-year. All in all, we remain on track to meet our targets for the year. Our performance in Europe stood out not only for its positive set of results, but also for the special initiatives implemented to support our Ukrainian customers and employees, as well as refugees and all those affected by the war.
In this regard, we provided financial measures to facilitate transfers and cash withdrawals, made donations, and collaborated with NGOs to help refugees, such as the two planes chartered from Warsaw to Portugal and Spain. Going into details, in Spain and in the U.K. In Spain, we increased the customer base by 200,000 customers in the first quarter, which obviously helped volumes, especially new mortgage lending, which doubled compared with the first quarter of 2021 and exceeded pre-pandemic levels in consumer credit. Profit grew 21% year-over-year, supported by the execution of our efficiency plans and the lower cost of credit. Revenue remained under pressure due to lower sales in 2021 and the change in mix. We had a much better performance in fee income.
The quarter-on-quarter comparison is benefited from obviously the deposit guarantee fund charges of the fourth quarter, but also supported by lower costs and loan loss provisions. In the U.K., we maintain very positive business dynamics. Gross mortgage lending rose to GBP 9.5 billion in the first quarter, near a record level. NII rose 15%, supported by increased volumes and higher interest rates, which drove double-digit growth in revenue. Fee income comparison is negatively affected by the transfer of the corporate investment bank activity from the bank to the London branch. We doubled our efforts to keep costs under control and thus improved efficiency by seven percentage points, which enabled net operating income to grow 3%. Loan loss provisions were higher following the normalization of the cost of credit.
We would expect cost of credit to be around 10 basis points. Quarter-on-quarter comparison was affected by the loan loss provision releases in the fourth quarter. Moving to North America, our strategy there is to accelerate profitable growth in the U.S. while creating a joint value proposition to improve customer experience, simplifying our business to generate efficiencies. The acquisition of Santander Consumer USA outstanding shares, along with Amherst Pierpont Securities and Creditas Records Latam Wealth Management Operations, will improve our strategic focus and competitive position. We had solid growth in individuals and commercial loans in Mexico, and increases in auto and CIB in the U.S. On a like-for-like basis, we need to exclude Bluestem portfolio disposal in the first half of 2021. Profit was 4% higher, benefiting from a better NII and the acquisition of minorities in SCUSA.
In the quarter, we virtually doubled the profit recorded before the COVID-19 pandemic. In the U.S., we continue to make progress towards simplifying our business model across our four core businesses, consumer, commercial, CIB, and wealth management. Loans grew 8%, backed by CIB, auto, and wealth management. During the period, auto originations decreased, impacted by the semiconductor shortage, pushing the Manheim Value Index to an all-time high in early 2022. Customer funds continued to exhibit strong performance while the overall cost of funds increased. Moving to the P&L, on a like-for-like basis, profits dropped 5%, basically due to higher loan loss provisions driven by normalization in the cost of credit. We also had a more normalized leasing activity due to an increase in the share of leased vehicles repurchased at the dealership.
In this quarter, in the first quarter of 2022, 24% were purchased relative to 35% in the first quarter of 2021. NII was pressured by the run-off in Paycheck Protection Program related balances. All in all, we recorded a very high level of profit, more than doubling the quarter average profit in 2019. In Mexico, we had an excellent quarter reflecting our successful customer attraction strategy. We delivered a 32% year-on-year increase in profit and great returns, great profitability due to the increase in revenue supported by NII, both due to higher volumes and the rise in interest rates and higher net fee income.
We also had lower loan loss provisions due to positive performance in our portfolio. In South America, we continue to focus on attracting new customers and leveraging business opportunities, strengthening connectivity and synergies across the region. We recorded overall growth in loans with good dynamics in individual lending in most countries. Deposits rose 6% driven by both demand and time deposits. In terms of results, we grew profits 8% year-on-year with double-digit customer revenue growth. Costs were heavily affected by inflation, especially in Brazil and Argentina. Although total costs were virtually flat in real terms, higher provisions mainly driven by growth in individuals. Also in Brazil, we had lower taxes. Moving to Brazil, we maintained positive trends in customer acquisition.
Customers increased 12% year-on-year, and digital customers grew 18% year-on-year as we launched several initiatives for our multichannel strategy. In volumes, mortgages rose double digits, car turnover was up 22%, and we maintain our leadership in auto. This great customer activity enable us to absorb the rising costs and higher provisions due to the growth we had in individuals. Cost of risk stood at 3.94%. In Chile, we continue to expand Santander Life, Superdigital and Getnet. We were very active in launching new strategic initiatives, and as a result, we had very strong customer acquisition with 11% growth year-on-year. We maintain our top position in NPS, and we grew the balance sheet both in loans and deposits.
In the P&L, very positive performance year on year, up 28% with revenues up 10%, cost growing below inflation and a lower cost of credit. In the Digital Consumer Bank, also solid quarter, which reinforced our position. We are gaining market share very quickly in Europe, and we also signed new strategic alliances with Stellantis or Piaggio. We launched new leasing businesses in all our markets in 2021, which experienced 48% growth in new contracts year on year. We launched the subscriptions. We signed an agreement with Wabi in subscriptions and with Zinia, our buy now, pay later solution in Germany, which has generated over 2.5 million new contracts in just 14 months.
Moreover, new business activity is now above pre-COVID levels, having increased 17% year on year, up 13% in new cars and 29% in used cars. We are increasing market share, as I mentioned, in both markets, new and used cars. Openbank continued to grow strongly, both in balance sheet terms and number of customers. Obviously this greater activity was reflected in fee income and leasing revenue growth. Costs were up due to investment in global transformation platforms and some inorganic transactions. Excluding these, costs increased 2% more or less, minus 2% in real terms. We also had very positive trends in credit quality with a further 25 basis points reduction in the cost of credit. Overall, again, very excellent results, very good results in the quarter by the Digital Consumer Bank, which increased 11%.
Turning to our global businesses in Corporate and Investment Bank, our goal is to become one of the leading investment banks in Europe, consolidating our leadership in Latin America and continue to accelerate growth in the U.S. Additionally, as leaders within the sustainable sphere, we completed in April 2022 our plan to acquire 80% of WayCarbon, a leading Brazil-based ESG consultancy firm. In terms of financial performance, Q1 was the best quarter in CIB history, with record revenue, attributable profit, and return on risk-weighted assets. Revenue was up 5% year-on-year, a very good quarter relative to already a very good 2021, which led to a 10% increase in profit. It is worth noting that only 20% of our revenue come from market-related activities. 80% comes from customers.
In wealth management, despite market volatility, our businesses grew thanks to our globally diversified value-added proposition and sales through digital channels. We were named as one of the top three global private banks by Euromoney, and activity levels remained strong with net new money around EUR 3 billion in the quarter. Investment flows and asset valuations were less impacted than in previous crises due to our global and high value-oriented asset mix. Contribution to the group rose 10%. In insurance, we had sustainable growth based on non-life business, in addition to strong growth in digital sales, which were up 50% year-on-year. In summary, higher revenue and total contribution to the group's profit in wealth management and insurance achieved a 7% growth, 14% up on a like-for-like basis. Turning to PagoNxt. In the first quarter, we had several achievements.
In merchant acquiring, Getnet continued to deliver very high growth, increasing total payments volume by 40%, backed by Brazil, one of our main growth drivers. Spain, thanks to our customer acquisition strategy and increased merchant activity, and also in Mexico. In international trade, our One Trade platform currently connects our customers in eight countries, and we continue to expand its capabilities to provide international instant payments between Spain and Brazil. We plan to launch real-time payments in other international corridors in the coming quarters. In summary, revenue doubled year on year in the quarter. Obviously, quarter on quarter is affected by seasonality. In cards, I would like to highlight our efforts to improve our global card services. We are working to globally manage 95 million cards throughout the group. In the first quarter of 2022, we continued to grow strongly.
Turnover and the number of transactions increased well above 20%. This performance was also reflected in the quarter revenue, which reached almost EUR 1 billion, 30% higher year-on-year. We had positive performance in both credit, debit cards, and across regions. It is worth mentioning that revenue in the fourth quarter is seasonally higher. Obviously, in the fourth quarter we had Black Friday and Christmas. Still you see a very good comparison quarter-on-quarter, which shows how strong the first quarter of 2022 was. Looking forward, we expect to continue to grow the number of accounts, turnover, and revenue. Now let me finish with the corporate center.
We reported an attributable loss of EUR 460 million, which is relatively high affected by the negative FX hedging results, which obviously were more than offset by the positive performance of exchange rates in the country's results. The quarter was also impacted by the higher liquidity buffer, and we also recorded a negative tax impact due to the higher results of those businesses operating in Spain. On the other hand, we recorded no material changes in costs, and we had a significant decrease in loan loss provisions and other provisions. Now let me turn it back to the CEO for his final remarks.
Thank you, José. Just to finish this presentation and, before we go to the questions, let me share with you the outlook for the coming quarters, taking into account the situation in which we are developing our business. As a result of the geopolitical situation, we are facing an environment in which the consensus is shifting towards an environment of lower growth than otherwise will be the case as a result of this war. As I mentioned before, in a high inflationary environment that is triggering the reaction of the central banks increasing interest rates in some countries and some others, the market is expecting those to be increased. Taking into account all of this, I should say a couple of things.
Our starting point is extremely solid. You see the results, you see the trends and our activity in the business. You see our customer gathering. The starting point is very solid. We face this environment from a strong position. Our capacity to attract the customers and grow a more profitable business in a higher interest rate scenario is gonna provide a big significant uplift to our revenues. Naturally, in this inflationary environment, we need to be as always looking at managing the costs. We think that we can continue to deliver a cost growth well below inflation, as we showed you in the first quarter.
Third, our capacity to control the cost of risk and to keep it below the average across the cycle based on our customer knowledge and our anticipation in some markets as we are doing in some markets make me comfortable with the guidance we gave to you in the cost of risk. Our capital allocation strategy should continue to drive profitability improvement and maximize shareholder returns. This make us confident. We share with you in our AGM that we are on the right track to achieve our 2022 targets that we shared with you both in revenues, efficiency, return on tangible equity, and capital. We leave it here, and we remain at your disposal for the questions you may have. Thank you.
Thank you, Jose Antonio. Jose, we can now start the Q&A session, please.
Everyone, your question and answer session will now begin. If you wish to ask a question, please press star and one on your telephone. If you then decide to withdraw your question, you can press star two anytime. All questions will be answered in the order received, and you will be advised when to ask your question. All other lines will remain on listen only. Once again, if you have a question, please press star and one. Our first question is coming from Ignacio Cerezo from UBS. You are now live.
Yeah. Hi. Two things from me. The first one is on Brazil. I mean, it looks like the situation has kind of deteriorated versus the guidance you gave back in December. Probably most of the lines are probably below expectations then. If you can update how you're expecting basically 2022 to be shaping up on the main lines in Brazil. The second one is any information you can provide on the process of Banamex in Mexico, interest, timing, any information, actually incremental information versus the one you shared three months ago. Thank you very much.
Okay. Thank you, Ignacio, for your questions. Let me elaborate on Brazil. I should say first that our expectations are not materially different than the ones we had in the last quarter. Let me share with you where we are in Brazil. As you know, we tightened our credit standards back in September last year. As a result, we are growing our portfolio less, but we for the whole year, I feel comfortable growing the portfolio in line with the inflation, so more or less in line with inflation in the country, so around 10%, a bit less, a bit more. This is our expectation. The significant customer spread expansion in the business. The customer spread went up more than 100 basis points.
It's true that on the other side, it was more than offset by the ALCO positions that were on the back of increasing rates, almost 10 full percentage points. Naturally, the NII and the NIM coming from ALCO positions collapse, and this is what you see, the combination of this is what you see in the NII. On revenue-wise, on the net interest income, I feel that we can grow high single digits. No problems to get there. The same can be said, even more optimistic on fee income, that we can be for the whole year in double digits. The quarter show some seasonality here. The costs have been difficult to control costs.
As I mentioned, the agreement with the unions back in September increased the salaries 11%. What we are showing in the P&L is exactly this. Probably in the second, third quarter, this is gonna trend down, the costs growth. We'll see the agreement with the unions in September. I feel that we're gonna be able to manage to get around inflation for the whole year. Finally, you see, going through the P&L, you see in the quarter an increase in the cost of risk that we were anticipating. Well, we went from 3.75%, or a figure like that, to something above 4%. I remain confident that we're gonna manage to be in the range between 4% and 4.5% for the whole year. Yeah.
That's my view. This creates an environment in which we're gonna continue to deliver good results in Brazil, and growing probably nicely in the country and having a return on tangible equity north of 20% or around 20%, not particular deterioration in this regard. In this, I should say, more complex environment, although I should say also that the war in Ukraine, when I look at Brazil, it should be neutral to positive for Brazil. I'm not as pessimistic as you seem to be about the trends in Brazil. Yeah. On second question, Banamex. Very little I can add, yeah, to this. Yeah. Our chairman set the conditions, our requirements for participating. We wanna participate in the analysis of the deal.
You know, our conditions, but nothing I can add at this time because we haven't, we don't have additional information other than the one that is public information, and the process has not officially started, as far as I know.
Thank you, Nacho. Can we have the next question, please?
Our next question is coming from Sofie Peterzens. You are now live.
Thank you. Here is Sophie from JP Morgan. My first question would be if you could just kind of remind us of your auto partner agreements. How should we think about the Chrysler Fiat agreement that comes to an end next year? Could you just remind us what your new agreements in the U.S. are? You also have some new agreements in Europe, so could you just remind us what the potential impact from these agreements in Europe are? Related to that, if you could also talk about the U.S. cost of risk, because it remains very low, below 50 basis points.
How should we think about a normalized cost of risk level in the U.S., and when do you expect loan losses in the U.S. to normalize? Then my second question would go back to Brazil. In terms of asset quality, we're starting to see some signs of kind of higher cost of risk, but also higher NPL ratios in Brazil, and NPL was 5.7, and at the same time, coverage fell to 101%. How should we think about the asset quality outlook in Brazil? How concerned are you about the potential credit bubble given that rates have gone up so much? Thank you.
Thank you, Sofie, for your questions. The first one related with Stellantis, our agreement with Stellantis. As you know, first thing, I should say we have an excellent relationship with Stellantis, and we reached an agreement in Europe, very satisfactory agreement, I should say, for us. As a result of this agreement, we're gonna focus in the main markets of Stellantis in Europe, France, Italy, and Spain. As a result of the agreement, our portfolio with Stellantis in Europe is gonna grow, I don't remember exactly the number, a couple of billion, EUR 4 billion or EUR 5 billion. The total portfolio is 30 or 30-something. We're gonna add extra EUR 4 billion or EUR 5 billion as a result of this agreement that we reached within Europe.
When it comes to the U.S., as you know, Stellantis Chrysler bought a small finance company, and they plan to develop this company. Well, this company is fairly small. As a result of this, we're gonna continue to be the preferred provider for a while. How long it will last depends on how fast the other company evolves. Having said that, we feel that we're gonna continue to underwrite significant originations on Chrysler, Stellantis in the U.S., as long as with other originators. We reached an agreement with Mitsubishi. We become the provider of Mitsubishi. We have agreements with certain dealers, with certain originators in the online space.
I do feel comfortable in the that we're gonna continue to have the core, traditional core subprime business we underwrite in our own. In the near prime and prime space, I think that the origination level is gonna remain relatively stable, at least in the U.S., provided the car market evolves in a recovers the activity levels. I'm pleased with the developments in this front and agreements with Stellantis Chrysler. You mentioned the cost of risk in the U.S. and Europe. It's true that in Europe, on the back of very low unemployment levels, the cost of risk and good prices in the used car markets, the cost of risk is at one of the lowest levels. We are not seeing any particular development here.
I will focus more on the main KPI here is, to me, the unemployment rate. Yeah? As long as the unemployment rate remains as low as it is today, and the trends in the labor market is solid, I feel comfortable with the current cost of risk and even can stay here or even go lower, on the back of this. In the U.S., it's different. In the U.S., we are going back to more normalized level, you see in the trends. And this trend will continue to go on. Jose already refers to the special situation of the used car markets in the U.S.
That has changed a little bit the dynamics in the sense that when the leases expire, the lessors prefer to keep the car instead of giving it back to us and selling it to the market. This has changed a bit the dynamics in our P&L. The other income in the P&L gets reduced as a result of not making gains in disposal of the leases just because the lessors prefer to keep their cars and to dispose by themselves. The cost of risk is gonna get more normalized over time. Brazil, you elaborate. I already answered the previous one. This is not your question. I elaborate on the cost of risk. You mentioned higher NPL ratios, the coverage for outlook and the potential.
Well, I said that my best guess now, based on the information I get, is to have a cost of risk in the region of 4%-4.5%. Yeah? So probably two or three quarters more before we come back. But this is my best estimation here. Well, this is the result of, as you rightly pointed out, of a significant decrease in the disposable income combined with higher rates. Nothing that we were not expecting, and that advise us to reduce our speed in the consumer lending in the fourth quarter last year, and in the first quarter, we kept the same position. I hope I answered your questions. Thank you.
Thank you, and thank you, Sofie. Can we have the next question, please?
Our next question is coming from Ignacio Lopez from Santander .
Hi. You hear me?
Go ahead.
Yep. Hi. Just have two questions. On one side on lending growth outlook in Spain, I mean, performance in the quarter has been strong. If you could just update a bit us on the outlook for the Spanish NII and the rate sensitivity domestically. Also just have a question on the cost side. If you just could elaborate a bit on what were the changes in perimeter or the initiatives that you are pushing in the Digital Consumer Bank, what should we expect going forward? If I just may, one, I mean, it's very early probably, but if you could just give a bit of a sense of what should we expect of the impact in Poland from the measures announced yesterday by the Prime Minister, it would be very useful. Thank you.
Okay, Ignacio. The third question I got the information yesterday, probably is a bit early. Yeah, so I'm sorry, I can't elaborate more on this space. Probably in the coming days or weeks, once we know more, our IR department, we will be more than happy to share with you our views. Now it's a bit early. Naturally, the trends sound definitively not positive for the banking system, but difficult to say at this stage and to guide you with any impact. On the other side, you've seen results in the franchise that are stellar results. I do expect that these potential measures that come will not harm significantly this net income generation, but we'll see.
We come back to you on this. Lending growth in Spain and NII sensitivity. Well, lending growth, Spain, mortgage market has been quite strong in the last two quarters or in the last three quarters, and this has been one of the main drivers. The other driver is more in the CIB space, where, on the back of I was referring, renewable energy, I was referring also the energy sector, where we are quite active, and the lending growth that you see there comes from particularly these two spaces, mortgages and the other side, CIB. In the middle market, SMEs, we haven't seen a strong activity there. NII, José will elaborate, but it's north of EUR 1 billion sensitivity. José, would you want to elaborate on this?
The sensitivity we have to rates right now in the group is in continental Europe around EUR 1 billion to 100 basis points parallel shift in the interest rate curve. Approximately EUR 250 million in the U.K., and EUR 200 million in the U.S. In South America, after having raised rates earlier, we are approaching the point of neutrality already probably in the second half. It should be positive in next year.
Okay. Finally, your question, Nacho, if I got it right, was about the consumer bank. You mentioned the perimeter. Well, what we done last year, we bought a leasing company in Germany, along with Hyundai, a joint venture 50/50 we bought from the market. The other developments we have is we enter in the business in Greece with the main importer of cars in Greece, and we are developing this business. Also other minor mentioned by José in the presentation, the agreements with Piaggio, and others that while you can say this is business as usual, yes, somehow, at the same time means that we are changing the perimeter, is a way to grow the businesses.
Thank you, and thank you, Nacho. Can we have the next question, please?
Our next question is coming from Carlos Peixoto from CaixaBank BPI. You are now live.
Hi. Good morning. Carlos Peixoto from CaixaBank BPI. How are you? So, first question would actually be on the outlook for cost of risk in Spain. I believe that the fourth quarter you have guided roughly 50 basis points for the full year, where the first quarter is around 60 basis points in my math. I was wondering if you keep the guidance for the full year or, with the war in Ukraine and rising energy prices, you mean some changes on that front.
On the second question regarding capital, I was wondering if you could give us some color on the pending regulatory impacts that you see for 2022 and if there are any in 2023. On a related question, what would be the current minimum level that you would be willing to see common equity going down to, in the context of an acquisition, let's say, Banamex acquisition, obviously, to have some reference there. Thank you.
Okay. Thank you, Carlos. Outlook for cost of risk in Spain, we got you in the region of 50 basis points. Basically, if I remember well, we said we're gonna have the cost of risk of last year. That was 97 or close to 100 basis points. I remain comfortable with this guidance, yeah, even in the new scenario. I don't think that this scenario is gonna affect materially our expectation for the cost of risk in Spain. It's true that we're gonna have the expiration of the extensions in ICO loans now starting April, the same month, and we'll. I've been talking to you many times about some uncertainties surrounding this, and there's still some uncertainty how those customers gonna behave.
Having said that, the risk we have here is only 25% of the outstanding volumes, and it's not gonna change materially our outlook, the cost of risk for the whole year. In capital, I will leave José to elaborate on the regulatory impacts that will come. Let me elaborate on, you are asking for a minimum level. We don't have a minimum level state. As we have a target to be 12% or to be at 12%, and this is our target, but we don't have as much as a minimum level. You're asking for Banamex. I should state again, as we stated the last time, the question that I think was Ignacio made the question about Banamex.
I said what we say remains, what we said with that was that we do not plan to issue shares, potentially to buy Banamex, not in the parent company or in the subsidiary Mexico. This remains, yeah. The conditions we established, to potentially buy Banamex remains in place, including not issuing shares. José, do you want to elaborate on regulatory capital?
Yeah. In terms of regulatory charges and models this year, same estimation we mentioned in the previous quarter, 20-25 basis points this year, more or less. For 2023, we wouldn't expect any significant amount. Obviously, but it's still, you know, very far away. With what we know today, very little.
For the very first time, we don't expect.
Yeah, exactly.
Challenges in one year. Okay.
In 2023.
That's great.
Thank you, and thank you, Carlos. Can we have the next question, please?
Our next question is coming from Pamela Zuluaga from Credit Suisse Bank. You are now live.
Hello, good morning. This is Pamela. Thank you very much for taking my questions. I first wanna ask a follow-up. If you were to be interested in acquiring Citibanamex, again, quoting you, without the possibility of issuing capital, you would have to rely on organic capital generation. So could such an interest potentially change the payout targets that you have currently? Or would any shortfall in the required funding come from any potential divestitures? If I may, some questions, one around the cost of risk. The cost of risk for the quarter was still quite below the guidance for the year, even without allocating the COVID overlay, which I understand was the case. Have you had any updates so far to your IFRS models, or are you waiting to see how the macro continues developing?
Do you anticipate a pickup in provisions later in the year, or could another potential releasing provisions offer upside to the cost of risk guidance for this year? Around Spain, kind of in line with what Carlos was talking about, but more from the loan growth perspective. Do you see the mix? How do you see the mix evolving? Do you see the extension of the ICO guarantee kind of revitalizing the corporate segment this year? How is the high inflation amid rising energy prices in the country impacting the consumer book? Have you seen any weaknesses there so far? I'm sorry if I may, one last one. I was looking at the interest rate sensitivity that you were giving for Europe. It's now lower than what was disclosed at the end of 2021. Can you maybe give us some color on this change? Thank you very much.
Okay. Thank you, Pamela. Let me go with the questions. Your first question was in relation with Banamex. Again, if this may affect the buybacks and the dividend policy for this year, what is public is the intention of the board to continue with the payout of 40%, half in shares, half in buying back shares and half in cash. There is no intention to change this. That's the question. Organic capital generation, I'm fairly positive on this. You see the quarter. I do think that we now keep growing, but taking into account return on tangible equity and risk-weighted assets growth, that in the quarter was in the region of 3%, if I remember well.
Probably we're gonna keep growing. Risk-weighted assets there, our capital generation, taking into account the payout policy, is gonna be significant. Our capital accumulation is gonna be significant. That's what I can tell you at this stage. Cost of risk update. Well, I mentioned to you the main changes. The main drivers were Brazil, where I do elaborate, the cost of risk is gonna go up from 3.7% to 4%-4.5%. Spain, I also elaborated on the back of Carlos' question. We see certain normalization in the U.S. Other than that, I do not see major changes of the ones you are seeing in the presentation, the trends you are seeing in the presentation.
Those are the three main moving parts, and we remain confident that we're gonna be below our expected across the cycle. Yeah. Spain loan growth perspective. Well, you mentioned the corporate sector. I'm not optimistic on seeing plenty of strong demand coming from the corporate sector, not at this stage. The consumer book, I mentioned mortgages. I do expect mortgages to continue to be strong. The corporate sector, in general, we are seeing significant demand on the energy and energy-related sector and infrastructure, and on the back of the M&A activities. Yeah, those are the areas in which we are seeing significant activity there. Mortgages continue to be one of the sources of demand at this stage, not that much in the SME space. The final question.
Yeah. José.
Yeah. It is slightly lower because of Poland, where we had already significant increase in rates, and that's coming through the NII. I also gave a bit lower outlook for the U.K. because we have had already 50 basis points increase, and we expect to have another 25 at least basis points increase in May. Roughly, we are again highly geared. That lower sensitivity in these two countries is compensated by now again higher sensitivity in Brazil, in Mexico, that originally was negative, but as time goes by, obviously it's going to turn positive.
I should say that, well, in relation with interest rate sensitivity, when you come from negative in Europe, like we are in Europe, and you go into positive territory, very likely, going from -5% to +0.5%, you're gonna capture 100%, yeah? So on this space, you're gonna capture 100%. Elasticity will change. I don't know if it's gonna be in 0.5% or in 1% beyond that. So that makes sense as the rates goes up at the beginning, sensitivity to rate is extremely high, and it's close to 1. It depends on the jurisdiction, but it's very high. As you go by and the central banks keep increasing rates, so the market keeps increasing rates, elasticity changes. Reduce the elasticity is what José explained.
This is happening already in Poland, not yet in U.K., but may start relatively quickly in U.K. if the Bank of England keep increasing rates. It's far away in Europe, where we need, well, 100 basis points official rate at least to start to change the sensitivity that at the beginning is extremely high. This is how you should think on this, in at least in our balance sheet that is extremely asset sensitive, as you know, because of mortgages, because all the SME lending that tend to be short run and tend to be Euro-based for the CIB, in the CIB space and large corporate. Highly sensitivity to rates, with elasticity that keep changing along the increasing rates from the central banks.
Thank you, Pamela. Can we have the next question, please?
Our next question is coming from Alvaro Serrano from Morgan Stanley. You are now live.
Hi. Good morning. I've got two follow-up questions. One on Brazil and one on capital. José Antonio, I think on Brazil, if I understood you correctly, I think you said high single digit NII growth, you still remain confident. Given the -6% quarter-on-quarter, that seems to imply that there's gonna be sort of recovery, significant recovery, the next few quarters. Can you sort of maybe confirm that I've heard correctly and if that's correct, what would be driving that rebound? On capital, again, a follow-up on some of your comments. I mean, Q1, to me at least, should've been the most difficult quarter given what the curves have done, and you've actually pulled off a pretty decent sort of capital print.
If with slowing growth, you mentioned you're confident that you can it's gonna continue to still grow. If dynamics doesn't happen, and you end up, I don't know, 12.3%, 12.4%, whatever, the end of the year, you might come up. Do you think from your discussions in the board or from management thinking, what would you do with that capital? Is your preference would be to keep the extra buffer, to distribute it, maybe normalizing sort of payout faster or do you think you can grow into it or M&A? Just some thoughts there. Thank you.
Okay. Thank you, Álvaro. Let me elaborate in Brazil. Why I do see this trend. I mentioned to you the dynamics in the balance sheet. You have on one side a customer spread that went up from around 10% one year ago to 11.30% or 11.40% or something like that in the first quarter of this year. On the other side, you have the ALCO portfolio that last year was producing revenues of around BRL 3 billion and now is close to zero. If you take into account the two dynamics, one is customers, the other is the ALCO, is what allow me to give you the guidance I gave to you.
You put these dynamics forward, and you see how much the rates can increase from where we are and how much the customer spread can, the revenues coming from customers can increase based on the spreads. You get a dynamic that's in line with what I mentioned to you before. I hope it helps you to project the numbers with these ideas. Second, capital, well, you say pretty decent. It's more than pretty decent, yeah? This seems to me a bit downbeat, yeah. It's very good capital generation. This is on the back of good results and growth. We keep growing.
Well, probably we've been telling you that our ALCO portfolios were non-existent in some jurisdiction. What I've seen in many banks is the available-for-sale portfolio impacting strongly the capital. In our case, our position, well, in Europe is non-existent, and in other markets, at least I think is smaller than other banks based on the impact I see in the capital base. Going forward, we're gonna keep generating capital in line with the guidance we gave you. José already elaborate on the potential regulatory impacts that, well, for this year and expectation next year, not regulatory impacts. Discussion at the board, well, it's also transparent, yeah?
The board said we established intention of paying 40% payout, half in shares, half in cash, and intention to go to the 50%. Okay? This is up to the board. Naturally, it's not only up to me. The first discussion I would expect, if you ask me, in the board is when we go from 40 to 50. While this is the first step I will expect the board to take. As I said, it's up to the board to discuss probably, I don't know, two quarters from now is when the discussion need to take place.
Thank you, and thank you, Alvaro. Can we have the next question, please?
Our next question is coming from Andrea Filtri from Mediobanca. You are now live.
Good morning. Back again on capital. Sorry, but it's a clarification. You are now targeting 12%, CET1, you maintain that. But, what would be the plan to maintain this, if Banamex came along? You don't wanna issue shares at the parent or at the subsidiary level. Is the 12% target a hard target, or could you compromise on it, in the case of Banamex?
Second question is just a kind of yes or no. Should we expect an IFRS 9 charge in Q2 given the poorer macroeconomic scenario? If you could elaborate, please, on your ALCO strategy, and if you have already included that evolution in your guidance, or if you have upside from that. Just finally, a very quick one. Brazil, what's happened to taxes this quarter? Is the NPL increase we have in the quarter just due to the new definition of default, or is it a genuine change? Thank you.
Okay, on capital, well, very little I can add. Our target is 12% and remains at 12%, and this is the target that the board established. Naturally, the moving parts here are the growth we're gonna achieve, that in the current scenario, activity levels in line with a less growth in the world, probably will be a bit. We expect to keep growing, probably less so than otherwise will be the case. What we plan to do with this is too speculative. You are asking the first question, if something happens, what happens afterwards? Difficult to elaborate on this. Well, we have the tools. The tools to match our capital. We can securitize, we can dispose assets, we can do many things. Okay?
We have the commitments that we have. That is the payout to shareholders, not to issue shares. Those are the commitments we have and an intention going forward when advisable to go for a higher payout ratio. This is our stance on capital, and I cannot elaborate more on this. Second question, IFRS 9 charge, we don't expect material charge there. Naturally, we need to apply the new macro scenario, but we do not expect any material charge that change our outlook for the cost of risk. In Brazil, taxes, plenty of moving parts there. The main one is the, what they call JCP. That is, when they pay dividends on their own funds or something like that. Juros sobre capital próprio. I don't know how, interest over own equity or something like that.
When this happens, they pay a dividend that is free of taxes, and this affects. If you review the last couple of years, you have this quarter-on-quarter, nothing special this year. Sometimes happens in one quarter, sometimes happens in a different quarter. In this particular quarter, you reduce what is called the JCP in Brazil. NPLs, naturally, new definition of default affects NPLs everywhere, including Brazil. I don't have in my mind, probably IR can give you how much is the impact of the new definition on default in Brazil in the NPLs and give you. I gave you for the group that was, if I remember well, 19 basis points are telling me that. Nineteen basis points in the NPLs. I don't know how much this was in Brazil, but we provide you with this number for Brazil.
Thank you, and thank you, Andrea. Can we have the next question, please?
Our next question is coming from Francisco Riquel from Alantra. You are now live.
Yes, hello. Most of my questions have been answered. Just wanted to ask on the U.K. business, the mortgage volumes are stronger than we thought, but I understand that the spreads for new lending are also very low. If you can update on the front book, back book dynamics and on NII guidance and in the U.K. and overall in the profitability of the new mortgage business? Thank you.
Okay. Thank you, Francisco, for your question. U.K., well, as you see, the NII has been evolving in a positive way in the last couple of quarters on the back of volumes, mortgage volumes. Good spreads. When rates start to go up, and the translation of this increase in the swap rates into the mortgage, the new origination in mortgages produce some attrition in the NIM of the new mortgages. Having said that, overall, we do expect the good news to continue on the NII. We expect to continue to grow NII in the U.K. Well, low mid-single digits, probably. We continue to expect to grow in this line. We are not positive.
On top of this, you have the changes in rates, naturally, okay. That while you have the sensitivity to rates, that is starting to show up, yeah. The first increase in rates was, if I remember well, in December. It takes two months, more or less, till this goes into the P&L. We saw another increase in rates that is gonna show up, so we will see. What probably is not yet well known is what is gonna happen on the liability side in the U.K., in an ecosystem where there are plenty of new players that may affect the traditional elasticity on the liability side, yeah. This is just to be transparent, 100% transparent with you. This is an unknown at this stage.
The market, some market participants fear that we're gonna have immediately very aggressive players, on the back of higher rates. We'll see if this happen, if it doesn't happen, this may change a bit the outlook for this. But in general, I feel constructive. We're gonna keep growing there with flat costs. Operationally, we're gonna have a very good trends in the U.K.
Thank you, and thank you Paco for your questions. Can we have the next question please?
Our next question is coming from Carlos Cobo Catena from Société Générale. You are now live.
Hi. Hi, thank you very much for the presentation. Yes, most of my question has been answered, but I have a couple of follow-ups on cost of risk. The cost of risk this quarter, it's around 80-85 basis points, I remember. That still remains below your 90 basis point guidance for the full year and also, you kind of revised that as slightly higher after the conflict in Ukraine. Shall we expect a gradual increase in the cost of risk driven by that higher loan losses expectations in Brazil? Is that the main driver or are there other moving parts that should converge to the 90-95 basis point guidance? That guidance is my own. You haven't really provided that specific target. The other one, have you used the provision overlay this quarter? How much is left? Thank you very much.
The cost of risk, we're gonna be approaching 100 basis points. We're gonna remain below. This is what we said. We're gonna be below expected across the cycle using expected across the cycle 1%. This is our guidance in the cost of risk. I elaborate the markets in which we expect changes. U.S. trending up, Brazil trending up. I already elaborate on this. Spain trending down. Those are the main moving parts that explain this expectation for the cost of risk. You see the provision overlay. We haven't used that much.
They are telling me that less than EUR 100 million here and there, so not material in this quarter. But remember that when we run the IFRS 9, we need to necessarily update where we're gonna head into based on expected losses using the new macro. But as I said before, we do not expect a deal in this exercise unless the macro scenario change.
Thank you, and thank you Carlos for your question. Can we have the next question, please?
Next question is coming from Daragh Quinn from KBW. You are now live.
Hi, good morning. Thank you for taking my questions. First question on the valuation adjustments or other comprehensive income which improved in the quarter, I think by about EUR 1.7 billion. So improving in equity, but then was just curious as to why that didn't translate into an improvement in capital, where there was a negative impact from market valuations.
Maybe you could just provide a little bit more color around the moving parts of FX, bond portfolios, et cetera, and how they impacted capital in the quarter. Then second question on Spanish revenues. First on fees, which, you know, delivered very good growth this quarter relative to maybe some of the seasonality we would normally expect in Q1 versus Q4. Just if you could provide a little bit of color on what you're doing that is growing the fee business and is that a sustainable level of growth for the remainder of the year? Thank you.
The revaluation is due to the FX, yeah? The changes in the... We go back to you and explain where the changes were, but the main driver here, as I mentioned at the beginning, the FX plays a significant role and this affects naturally the tangible net asset value per share because this affects the equity and this revaluation is due to the effects. As you know, the euro depreciated almost against every currency in which we work, and this has had the impact you mentioned, but you need more elaboration on specific details on it. Happy to do that through our IR department. Fees, you mentioned the seasonality, Q4, Q1. You mentioned also that Q1 was better than you were expecting.
Well, the fee income was better than expected due to transactionality levels that grew significantly and CIB business, yeah. You saw CIB business when Jose was presenting results. The corporate investment banking activity, our fee income is growing very nicely. Our business is gathering traction, has been gathering traction for a couple of years. Our fee business, our CIB business, did very well. I should mention the wealth management and asset management business that they are growing double digit, but the growth is less so than in CIB.
CIB quarter-on-quarter results went up 78%, and partially it was due to the good fee income generation and also this applies to wealth management and asset management that performed very well in the quarter, and this is on the back of the good fee income generation that we got.
With regards to the available for sale impact on capital in the quarter, it was 7, 8 basis points. The ALCO portfolio impact on capital was 7, 8 basis points.
Thank you, and thank you, Daragh, for your questions. Can we have the next question, please?
Our next question is coming from Britta Schmidt from Autonomous Research. You are now live.
Yeah, hi there. Thanks for taking my question. Just coming back to the rates theme with 12-month Euribor already having moved, what sort of impact do you expect in Spain for 2022, and when will we start seeing that? Maybe you can give us a rundown of what rate expectations you have incorporated in your planning for the U.K., Brazil, U.S., the 12-month Euribor and maybe Mexico as well. Thank you.
Okay. We do provide information on this. In Spain, the Euribor, let me speak in my memory, our mortgage book, that is the one. 12-month Euribor affects like EUR 80 billion of our portfolio in Spain, yeah? It takes two months, three months before, when the Euribor, we apply the Euribor of April to the renewal. Of April to the renewals in June, okay? This affects a portfolio of eighty.
It'll own the year.
One twelfth amount is a fair assumption, EUR 6 billion or something like that. This is the sensitivity. Exposures are more in Euribor three months, so you're not gonna see this effect until Euribor three months start to go up. This depends on when the renewal, but it's another EUR 70 billion-EUR 80 billion in companies more or less related with Euribor. This gives you a sense of the asset sensitivity in the Spanish book. You mentioned also other countries. We provide you with the data. We are geared toward high rates in Mexico, clearly, U.K., Europe, the Euro area, including Poland. It is a bit negative in Brazil, and we are seeing that already. Chile is much more difficult.
We have a trade-off between inflation and nominal rates that is a bit more complex, yeah. Depends on what happens with the monthly inflation, which is fairly volatile. In general, one tends to offset the other, but in specific quarters maybe go in a way and another way in another quarter, yeah. Do you have something to add, José?
No.
Okay.
Thank you, and thank you, Britta. Can we have the next question, please?
The next question is coming from Fernando Gil de Santivañes from Barclays. You are now live.
Hi. Thank you for taking my question. I have just one more question on the ALCO portfolio. I see that the size has gone up by EUR 9 billion this quarter. I was wondering if you can update your strategy on the European ALCO portfolio, when do you expect this to go up, and how far can you go up, and if this is included in your forecasted outlook that you have provided. Thank you.
We don't have a EUR portfolio at this stage. We have, I think, EUR 2 billion in Portugal.
Yes.
Yeah. It's very minor, yeah. Nothing in Spain. In our forecasting, we are not counting in any ALCO portfolio.
Again, Jose Antonio already referred to this. We didn't increase the ALCO portfolio size in any country in the quarter. The increase in euro terms is because of the exchange rate.
Thank you, and thank you, Fernando, for your question. Can we have the last question, please?
Our last question is coming from Benjie Creelan-Sandford from Jefferies. You are now live.
Yeah, good morning, everyone. Thanks for taking the question. Two quick questions on lending and revenue growth outlook. First of all, in Brazil, you know, it looks like you are continuing to grow below the system. I was just wondering whether you expect to kind of remain more restrictive versus the market through the rest of this year and whether you're aiming to change the mix of the book in Brazil going forward. The second was on the European consumer business. You know, you've obviously talked about the inorganic opportunities.
You've also talked about, you know, unemployment being a very important lead indicator for risk in the consumer business, but perhaps from a revenue and a loan growth outlook, leaving aside the inorganic opportunities, you know, given the inflationary pressure, et cetera, what are you seeing in terms of customer demand levels at this point in time? How do you expect that to trend through the rest of this year? Thank you.
Okay. Lending in Brazil, you elaborating in relation with our lending standards. We're gonna remain where we are as long as till the point we see a stabilization in the risk premium, yeah? If we are right, we expect the next two quarters to have a stabilization in the risk premium. If that were the case, we may become more confident to start to grow strongly against maybe the last part of the year. But this is. I'm sharing with you my expectation. We need to look at the data. We need to look at the vintages, how the vintage is coming, and how do they behave till we change our stance towards our lending, consumer lending in Brazil.
The other questions under the consumer finance in Europe, aside from inorganic opportunities, well, this is a business, as I mentioned before, that we're inorganic. I don't know how do you deem opportunities when we add a new OEM to our portfolio. You may deem as inorganic or organic. What I can tell you is very likely this continues to happen, yeah? We are gaining significant share, and we are a partner of choice for many OEMs that are willing to expand into Europe, and very likely we're gonna capture opportunities there. Aside from that you may think is organic or inorganic, that's something else, how do we see the customer demand? Well, as you know, there is a scarcity in new cars. The supply is weak.
We are seeing this in the stock finance. Our stock finance normally in Europe stays at EUR 5 billion with the car dealers. Now stays 1/3 of this or less. This tells you about the situation of the supply-demand dynamics in the industry. This is for new cars. So there is what restricts the volumes there. The origination is more supply than demand. When we go to used cars, the opposite is happening. Prices went up due to the strong demand there, and our origination has been pretty strong. If you look at the quarter, our origination in auto lending in Europe grew more than 10%. When the market for new cars decreased a bit. This tells you we are gaining share. That's for sure.
At the same time, we, our position in the used car market is pretty strong in the main markets, particularly in Germany, but not only in Germany, but particularly in Germany. Those are the dynamics that we are seeing. I do see the opportunity. Overall, the business is gonna grow, the volumes. The speed at which we grow depends on how many agreements we reach with OEMs, car dealers associations, importers, Chinese OEMs that are coming to Europe. This is plenty of moving parts there. But I remain on the back of our recognition of the leader in the market and the best operator in the market that is widely recognized.
I do expect us to keep going and to gain market share in this through a combination of traditional origination, new agreements, and all these things, yeah? That's my expectation. I hope I answered your question, yeah. Okay. Now, is the last question, Begoña? No? Okay.
Yes, that was the last question. Thank you.
Thank all of you. Thank you for being there. Bye.
Thank you.