Company: BBVXF
Filing Date: 2025-02-27
Form Type: F-4/A
Source: 0001193125-25-037317
Chunk: 283

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-02-27
Form: F-4/A
Chunk 283
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V. Sound liquidity position:

| – | The short-term Liquidity Coverage Ratio (LCR) stood at 210% (compared with 228% at the end of 2023), with total 
 liquid assets of 65,257 million euros (61,783 million euros as at the end of 2023).                             |

4.2.2 Strengthened credit risk management and control environment 2024 was a year marked by lower interest rates once the inflationary pressures that characterised 2022 and 2023 as a result of the geopolitical situation were overcome. This, together with the strengthened risk management and control tools, led to a reduced impact on customers’ default rates and a significant reduction in inflows of non-performingloans. In the area of credit risk management, in 2024 the Bank continued to reinforce the control environment by reviewing and updating credit risk frameworks, as well as annually reviewing the Sector Guidance Strategy, in which the Institution sets its positioning (asset allocation) at the sub-sectorallevel, this aspect being particularly important given the current macroeconomic environment. In addition, credit risk management activities focused on healthily growing the loan book. For instance, it is worth noting the evolution seen in the retail consumer loan portfolio in recent years, on which, prior to the growth in terms of volumes, improvements to credit risk valuation models, procedures and workflows were made to ensure the quality of new lending items. As a result, the Institution has significantly grown the amount of new loans of this portfolio, also underpinned by an improvement in its risk profile, with granting focused on pre-approvals.This same process is being replicated with some adaptations, and it is expected to have positive impacts on the other segments, and the Bank can already see growth in this regard in 2024 in the retail mortgage book. As for business loans, the Institution also continued to strengthen the origination and monitoring processes. For smaller segments, the probability of default gains more relevance, and the risk granting and rollover process is more closely linked to provisions and the credit cost of risk of this segment. These actions are already yielding positive results in asset quality, but the Bank expects that these results will gradually and progressively lead to a continuous improvement of the loan book’s risk profile. The Credit Risk Control unit paid special attention to strengthening the framework of RAS metrics, risk frameworks were revised and the risk exposure to the sectors most severely impacted by the current environment was assessed, proactively managing the counterparties could potentially be hit