Company: BBVXF
Filing Date: 2025-02-21
Form Type: 20-F
Source: 0000842180-25-000010
Chunk: 132

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-02-21
Form: 20-F
Item: Item 5
Chunk 132
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 at Borsa Istanbul.
 Using the effective exchange rate of 16.14 Turkish lira per euro.
In addition, there is a risk of a sharp global growth slowdown. In a context marked by uncertainty and still elevated interest rates, labor markets and aggregate demand could weaken more significantly than expected. Moreover, despite increasing economic stimulus measures, growth in China could slow sharply, negatively impacting many regions, due to tensions in real estate markets, declining demand and economic sanctions imposed by the United States, among other factors.
Further, the collapse of Silicon Valley Bank and UBS’s agreement to acquire Credit Suisse in early 2023 led to increased volatility, especially in the stock and interest rate markets, and have given rise to global banking concerns, including with respect to the concentration and quality of bank deposits and the debt holdings of certain banks.
Moreover, in the current context, one of the main risks is that inflation remains higher than expected, due to new supply shocks, related for example to the previously mentioned geopolitical and political risks or climate factors, due to demand factors, caused by an excessively expansionary fiscal policy, the robustness of labor markets, or other factors, such as the lowering of interest rates by central banks. Significant inflationary pressures could lead to interest rates remaining higher than currently forecasted, which could negatively affect the macroeconomic environment and financial markets. In recent years, the Group’s results of operations have been particularly affected by the increases in interest rates adopted by central banks in an attempt to tame inflation, which have led to a rise in both interest revenue and expenses and a shift from deposits towards higher profitability investments (including mutual funds). The prevalence of interest rates at relatively high levels or any increase in interest rates in the future could adversely affect the Group by generating mark-to-market losses on securities portfolios, reducing the demand for credit, increasing funding costs and further increases in the default rate of its borrowers and other counterparties, adversely affecting the amount of deposits if remuneration thereof is not increased accordingly and otherwise affecting margins.
The Group’s results of operations have also been affected in recent years by the high inflation in all countries in which BBVA operates, especially Turkey and Argentina. In particular, the Turkish economy has been considered hyperinflationary since the first half of 2022. See “Presentation of Financial Information—Hyperinflationary Economies”. 
Further, the Group’s results of operations have been affected in recent years by institutional and regulatory developments. In Spain, political, regulatory and economic uncertainties have increased since the 2023 general