Company: BBVXF
Filing Date: 2025-02-27
Form Type: F-4/A
Source: 0001193125-25-037317
Chunk: 655

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-02-27
Form: F-4/A
Chunk 655
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 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 an institution operates. |

| – | Business risk: this refers to the possibility of incurring losses as a result of adverse events that negatively                                     
 affect the capacity, strength and recurrence of the income statement, either because of its viability (short term) or sustainability (medium term). |

| – | Reputational risk: this is the current or future risk of losses being incurred as a result of failures related to                                                                                                                                    
 processes and operations, strategy or corporate governance and which generate a negative perception among customers, counterparties, shareholders, investors or regulators that could negatively affect the Group’s ability to maintain its business 
 relationships or establish new ones, and to continue to access funding sources.                                                                                                                                                                      |

| – | Environmental risk: the risk of incurring losses as a result of the impacts, both those existing at present and those                                                                                                                                   
 that may exist in the future, stemming from the environmental risk factors (associated with climate change and environmental degradation) and affecting counterparties or invested assets, as well as aspects affecting financial institutions as legal 
 entities. Environmental factors can produce negative impacts through different risk drivers, which can be categorised as either physical risks or transition risks.                                                                                     |

4.4.1.1 Solvency risk Banco Sabadell’s ratios are above the minimum capital requirements established by the European Central Bank. Therefore, the Group is not subject to any caps on the distribution of dividends, variable remuneration or coupon payments made to holders of AT1 capital instruments. Banco Sabadell is also compliant with MREL, which coincides with supervisory expectations and is in line with its funding plans. Details on the closing data as at 31 December 2022 for solvency risk and capital management are available in Note 5 to these annual financial statements. A-526

4.4.1.2 Business risk The economic environment in 2022 has been marked by the conflict between Russia and Ukraine, an energy crisis, continuously climbing rates of inflation, higher interest rates, as well as the slowdown of the main global economies, although in the last few months of the year annual inflation figures in Spain surprised to the downside, becoming more moderate during the month of December for the fifth consecutive month and reaching 5.