Company: BBVXF
Filing Date: 2025-08-12
Form Type: DRS
Source: 0000950123-25-007520
Chunk: 836

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-08-12
Form: DRS
Chunk 836
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 that foreign currency, the inability to transfer it, or the non-enforceabilityof legal actions against borrowers for reasons of sovereignty, war, expropriation or nationalisation. Country risk not only affects debts undertaken with a state or entities guaranteed by it, but also all private debtors that belong to that state and who, for reasons outside their control and not at their volition, are generally unable to satisfy their debts. An exposure limit is set for each country which is applicable across the whole of Banco Sabadell Group. These limits are approved by the Board of Directors and the corresponding decision-making bodies, as per their conferred powers, and they are continuously monitored to ensure that any deterioration in the economic, political or social prospects of a country can be detected in good time. The main component of the procedure for the acceptance of country risk and financial institution risk is the structure of limits for different metrics. This structure is used to monitor the various risks and it is also used by Senior Management and the delegated bodies to establish the Group’s risk appetite. Different indicators and tools are used to manage country risk: credit ratings, credit default swaps, macroeconomic indicators, etc. Schedule V includes quantitative data relating to the breakdown of the concentration of risks by activity and on a global scale. Exposure to sovereign risk and exposure to the construction and real estate development sector Schedule V includes quantitative data relating to sovereign risk exposures and exposures to the construction and real estate development sector. 4.4.2.7. Counterparty credit risk This heading considers credit risk associated with activities in financial markets involving specific transactions that have an associated counterparty credit risk. Counterparty credit risk is a type of credit risk that refers to the risk of a counterparty defaulting before definitively settling cash flows of either a transaction with derivatives or a transaction with a repurchase commitment, with deferred settlements or collateral financing. The amount exposed to a potential default by the counterparty does not correspond to the notional amount of the contract, instead, it is uncertain and depends on market price fluctuations until the maturity or settlement of the financial contracts. Exposure to counterparty credit risk is mainly concentrated in customers, financial institutions and central counterparty clearing houses. The following tables show the breakdown of exposures by credit rating and by the geographical areas in which the Group operates, as at 31 December 2022 and 31 December 2021:

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