Company: BBVXF
Filing Date: 2025-07-31
Form Type: 6-K
Source: 0000842180-25-000030
Chunk: 27

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-07-31
Form: 6-K
Chunk 27
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 event of a discrepancy, the Spanish -language version prevails.

| January - June 2025Report - p.29 |

For each currency, the final amount hedged depends, among other factors, on its expected future evolution, the costs and the relevance of the incomes related to the Group's results as a whole. Interest rate Interest rate risk management seeks to limit the impact that BBVA may suffer, both in terms of net interest income (short-term) and economic value (long-term), from adverse movements in the interest rate curves in the various currencies in which the Group operates. BBVA carries out this work through an internal procedure, pursuant to the guidelines established by the European Banking Authority (EBA), with the aim of analyzing the potential impact that could derive from a range of scenarios on the Group's different balance sheets. Risk measurement is based on assumptions intended to realistically mimic the behavior of the balance sheet. The assumptions regarding the behavior of accounts with no explicit maturity and prepayment estimates are specially relevant. These assumptions are reviewed and adapted, at least, once a year according to the evolution in observed behaviors. At the aggregate level, BBVA continues to maintain a limited risk profile in line with the target set in the changing interest rate cycle environment maintaining positive sensitivity to interest rate rises in net interest income. The first half of 2025 , has been influenced by the geopolitical events, especially the increase of US tariffs. The US and European yield curves diverged. While the sovereign curve fell in the United States due to the first deceleration signs, in Europe a rebound in the long trenches was observed due to the change of course in Germany's fiscal policy, while the short tranches fell supported by expectations of a lower ECB terminal rate. The peripheral curves are still supported. In Turkey, yield curves were more volatile as a result of the political situation. Meanwhile, in Mexico, the sovereign curve fell, (due to the United States) and in South America there were generalized growth profitability in Colombia and Argentina, and moderate falls in Peru. All in all, the Group's fixed- income portfolios had a heterogeneous performance during the quarter, with an improved valuations in Mexico, and Spain and slight deterioration in Turkey and South America. By geographical areas: – Spain has a balance sheet characterized by a lending portfolio with a high proportion of variable-rate loans (mortgages and corporate lending) and liabilities composed mainly by customer demand deposits. The ALCO portfolio acts as a management lever and hedge for the balance sheet, mitigating its sensitivity to interest rate fluctuations