Company: BBVXF
Filing Date: 2025-09-09
Form Type: 424B3
Source: 0001193125-25-198517
Chunk: 683

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-09-09
Form: 424B3
Chunk 683
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 transaction is purchased or originated with credit impairment, the loss allowance will be equal to the cumulative changes in lifetime expected credit losses since initial recognition. Interest income on these assets will be calculated by applying the credit-adjusted effective interest rate to the amortised cost of the financial asset. Extent of alignment between the stage 3 accounting category and the prudential definition of default The prudential definition of default adopted by the Group bases materiality thresholds and the counting of days past due on regulatory technical standard EBA/RTS/2016/06 and all other conditions on guidelines EBA/GL/2016/07. In general, contracts that are considered impaired from an accounting standpoint are also considered impaired for prudential purposes. The exception to this are contracts that are impaired by reason of the accounting definition of default but whose past-dueamounts are equal to or below a materiality threshold (exposures of 100 euros for the retail segment and of 500 euros for the non-retailsegment, and where 1% of the total exposures are past-duefor both cases). Notwithstanding the foregoing, the prudential definition is generally more conservative than the accounting definition. The key differing aspects are set out hereafter:

| – | Under the prudential definition, the number of days in default are counted from the moment the first past-due amount goes above the materiality threshold. The counting cannot be restarted or reduced until the borrower has paid all past-due amounts or until the past-due amounts fall back below the materiality thresholds. Under the accounting definition, a FIFO criterion can be applied to past-due amounts when there have been partial 
 repayments, enabling the number of days past due to be reduced for that reason.                                                                                                                                                                                                                                                                                                                                                                     |

| – | In terms of unlikely-to-pay amounts                                                                                                                                               
 in default (for reasons other than borrower arrears), there are explicit criteria defined at the prudential level, which are additional to those applied at the accounting level. |

Transaction classification criteria The Group applies various criteria to classify borrowers and transactions into different categories based on their credit risk. These categories include:

| – | Automatic criteria; |

| – | Criteria based on indicators (triggers); and |

| – | Specific criteria for refinancing transactions. |

The automatic factors and specific classification criteria for refinancing make up what the Institution refers to as the classification and cure algorithm and are applied to the entire portfolio. A-573

Furthermore, to enable an early identification of any significant increase