Company: BBVXF
Filing Date: 2025-09-05
Form Type: F-4/A
Source: 0001193125-25-196513
Chunk: 391

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-09-05
Form: F-4/A
Chunk 391
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 and internal control activities. |

4.4 Management and monitoring of the main material risks The most salient aspects concerning the management of the first-tier risks identified in Banco Sabadell Group’s risk taxonomy and concerning the actions taken in this regard in 2024 are set out below: 4.4.1 Strategic risk Strategic risk is associated with the risk of losses or negative impacts materialising as a result of strategic decisions or their subsequent implementation. It also includes the inability to adapt the Group’s business model to changes in the environment in which it operates. The Group develops a Strategic Plan which sets out the Bank’s strategy for a specified period of time. In 2021, Banco Sabadell defined a new Strategic Plan which sets out the key courses of action and transformation for each business line over the coming years, in order to seize the opportunity of consolidating its position as a major domestic bank. As part of the Strategic Plan, the Group carries out five-year financial projections, which are the result of the implementation of the strategies defined in the Plan. These projections are carried out on the basis of the most likely economic scenario for the key geographies (baseline scenario) and they are also included in the ICAAP as a baseline scenario. The economic scenario is described in terms of the key risk factors impacting the Group’s income statement and balance sheet. In addition, the Plan is regularly monitored in order to analyse the Group’s most recent performance and changes in the environment, as well as the risks taken. The projection exercises and their monitoring are integrated into management arrangements, as they set out the key aspects of the Group’s medium- and long-term strategy. The Plan is drawn up at the business unit level, on the basis of which the Group manages its activities, and annual results are also assessed in terms of compliance with the risk appetite. Strategic risk includes the management and control of four risks:

| – | Solvency risk: this is the risk of not having sufficient capital, in terms of either quality or quantity, to achieve                                                     
 strategic and business objectives, withstand operational losses or meet regulatory requirements and/or the expectations of the market in which the Institution operates. |

| – | Business risk: this refers to the possibility of incurring losses as a result of adverse events that negatively                                                      
 affect the Institution’s capacity to operate, either in the short term (viability) or in the medium term (sustainability), or to deliver healthy, recurrent profits. |

| – | Reputational risk: current or future risk of the