Company: BBVXF
Filing Date: 2025-09-09
Form Type: 424B3
Source: 0001193125-25-198517
Chunk: 689

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-09-09
Form: 424B3
Chunk 689
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ability). The methodology used to estimate losses on these portfolios is generally similar to that used for other financial assets at amortised cost, but it is considered that, in principle, the estimated loss on 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 
 to 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 rating tools that are 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. A-577

The tools used to assess debtors’ probability of default are behavioural credit scores that monitor credit risk in the case of individuals, and early warning indicators and credit ratings in the case of companies:

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.). 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: in general, credit risks undertaken with individuals are rated using credit scoring