Company: BBVXF
Filing Date: 2025-02-27
Form Type: F-4/A
Source: 0001193125-25-037317
Chunk: 233

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-02-27
Form: F-4/A
Chunk 233
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 assets is calculated based on the type of instrument and other circumstances that could affect it, after taking into account any effective guarantees received. For debt instruments measured at amortised cost, the Group recognises both allowances, when loan loss provisions are allocated to absorb impairment losses, as well as direct write-offs, when the probability of recovery is considered to be remote. For debt instruments at fair value through other comprehensive income, impairment losses are recognised in the consolidated income statement, with a balancing entry under the heading “Accumulated other comprehensive income” on the consolidated statement of equity. Impairment allowances for off-balancesheet exposures are recognised on the liabilities side of the consolidated balance sheet as a provision. For risks classified as stage 3 (see section “Definition of classification categories” in this note), accrued interest is recognised in the consolidated income statement by applying the effective interest rate to its amortised cost adjusted to account for any impairment allowances. To determine impairment losses, the Group monitors borrowers individually, at least all those who are significant borrowers, and collectively, for groups of financial assets with similar credit risk characteristics that reflect borrowers’ ability to satisfy their outstanding payments. The Group has policies, methods and procedures in place to estimate the losses that it may incur as a result of its credit risks, due to both insolvency attributable to counterparties and country risk. These policies, methods and procedures are applied when granting, assessing and arranging debt instruments and off-balancesheet exposures, when identifying their possible impairment and, where applicable, when calculating the amounts necessary to cover these expected losses. 1.3.4.1.1 Accounting classification on the basis of credit risk attributable to insolvency The Group has established criteria that allow borrowers showing a significant increase in credit risk, vulnerabilities or objective evidence of impairment to be identified and classified on the basis of their credit risk. The following sections describe the classification principles and methodology used by the Group. Definition of classification categories Credit exposures and off-balancesheet exposures are both classified, on the basis of their credit risk, into the following stages:

| – | Stage 1: standard exposures, i.e. transactions whose risk profile has not changed since they were granted and for          
 which there are no doubts as to the fulfilment of repayment commitments in accordance with the contractually agreed terms. |

A-26

| – | Stage 2: standard exposures under special monitoring, i.e. transactions which, although they do not meet the criteria                                                                                                                                    
 to be classified individually as stage 3 or write-offs, show a Significant Increase