Company: BBVXF
Filing Date: 2025-09-09
Form Type: 424B3
Source: 0001193125-25-198517
Chunk: 519

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-09-09
Form: 424B3
Chunk 519
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 a transaction that has had to be restructured to enable payment obligations to be satisfied should be greater than the estimated loss on a transaction with no history of non-payment,unless sufficient additional effective guarantees are provided to justify otherwise. 1.3.4.1.2 Credit loss allowances The Group applies the following parameters to determine its credit loss allowances:

| – | EAD (Exposure at Default): the Institution defines exposure at default as the value to which it expects to be exposed 
 when a loan defaults.                                                                                                 |

The exposure metrics considered by the Group in order to cover this value are the currently drawn balances and the estimated amounts that it expects to disburse in the event its off-balancesheet exposures enter into default, by applying a Credit Conversion Factor (CCF).

| – | PD (Probability of Default): estimation of the probability that a borrower will default within a given period of 
 time.                                                                                                            |

The Group has tools in place to help in its credit risk management that predict the probability of default of each borrower and which cover practically all lending activity. In this context, the Group reviews the quality and stability of the scoring and rating tools that are currently in use on an annual basis. The tools used to assess debtors’ probability of default in the case of companies are the ratings and early warning tool (known as HAT) described below:

Credit ratings have a variety of uses in risk management. Most notably, they form part of the transaction approval process (system of discretions), risk monitoring and pricing policies.

| – | Early warnings tool, known as HAT (for companies): HAT gives a score that estimates the risk of a company defaulting                                                              
 in the near term, determined based on a variety of information (balances, non-payments, information from CIRBE (Spain’s central credit register), external credit bureaux, etc.). |

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| HAT aims to capture the short-term risk of a company. The scores that it gives are very sensitive to changes in a company’s status or behaviour and are therefore updated on a daily basis. |

| – | Credit scores: the tools designed to assess the probability of default of debtors who are natural persons are credit                                                                                                                                     
 scoring systems, which are in turn based on a quantitative model of historical statistical data, where the relevant predictive factors are identified. In geographical areas where credit scoring takes place, credit scores are divided into two types: |

| • |     | Reactive credit scores: these are used to assess applications for consumer loans,