Company: BBVXF
Filing Date: 2025-09-05
Form Type: F-4/A
Source: 0001193125-25-196513
Chunk: 119

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-09-05
Form: F-4/A
Chunk 119
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 outlook. Meanwhile, the Chinese authorities adopted monetary easing measures to support the economic recovery.

The information in this subsection has been extracted from pages 59 and 60 of Banco Sabadell’s annual report as of and for the year ended December 31, 2023.

Monetary Policy - 2023

During 2023, the central banks of developed countries continued their cycle of interest rate hikes, although the pace was somewhat less intense
than in 2022. It was only towards the end of the year that they considered that rates had reached sufficiently restrictive levels to keep inflation under control, at which point they indicated that the rate hike cycle might have reached its end.

In the Eurozone, the ECB implemented an unprecedented tightening of its monetary policy. Thus, it continued with the rate hike cycle that
had begun in 2022 and ended the year with the deposit facility rate standing at a record high of 4.00%. In addition, the size of its balance sheet continued to shrink, due to the maturity of TLTRO III funding transactions and the beginning of the
process to reduce its holdings of assets bought under its asset purchase program. Additionally, it announced that it would stop reinvesting a portion of maturing securities purchased under the pandemic emergency purchase program in the second half
of 2024. Meanwhile, the ECB stopped remunerating banking institutions’ mandatory reserves.

In the United States, the Federal
Reserve (Fed) continued to pursue its rate hike cycle, with official interest rates reaching a range of 5.25%-5.50% mid-year. At its last meeting of the year, the Fed
signaled that the rate hike cycle had come to an end and that it would even begin discussions about future rate cuts, which provided additional support for the performance of various financial assets. In terms of balance sheet policy, its balance
sheet reduction was interrupted following the financial instability triggered by the collapse of Silicon Valley Bank, as a result of which the Fed established new extraordinary funding facilities for the banking system. Nevertheless, once the event
was resolved, the Fed continued its balance sheet reduction by electing not to reinvest maturing debt.

In the United Kingdom, the Bank of
England (BoE) raised the base rate to 5.25%, after inflationary pressures intensified at the beginning of the year. In addition, it continued with the balance sheet reduction

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program, unwinding practically all of its corporate bond holdings (around £18 billion) and £93 billion of