Company: BBVXF
Filing Date: 2025-09-05
Form Type: F-4/A
Source: 0001193125-25-196513
Chunk: 343

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-09-05
Form: F-4/A
Chunk 343
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| – | The refinanced amount of both the contract and the borrower has been reduced, through payments made by the customer                                                            
 whose cumulative amount since the refinancing date is at least the amount equivalent to the write-down, the unpaid amount at the time of refinancing or the new risk approved. |

In the case of refinanced/restructured loans classified as stage 2, in addition to the general classification criteria, certain specific criteria are applicable which, if met, lead to reclassification into one of the higher risk categories described previously (i.e. to stage 3, as a result of borrower arrears, when payments are, in general, over 90 days past due, or for reasons other than borrower arrears, when there are reasonable doubts as to their recoverability). 1.3.4.1.2 Credit loss allowances The Group applies the following parameters to determine its credit loss allowances:

| – | Exposure at Default (EAD): 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).

| – | Probability of Default (PD): 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 currently in use on an annual basis. The review process includes the definition of the sample used and the methodology to be applied when monitoring rating models (see Note 4.4.2.2 “Risk management models”).

| – | Loss Given Default (LGD): expected loss on transactions which are in default. This loss also takes into account                                                                                                                    
 outstanding debt, late-payment interest and expenses relating to the recovery process. Additionally, for each cash flow (amounts outstanding and amounts recovered), an adjustment is applied to consider the time value of money. |

| – | Effective Interest Rate (EIR): the rate that exactly discounts estimated future cash payments or receipts through the                                            
 expected life of the financial asset or financial liability to the gross carrying amount of a financial asset or to the amortised cost of