Company: BBVXF
Filing Date: 2025-08-12
Form Type: DRS
Source: 0000950123-25-007520
Chunk: 637

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-08-12
Form: DRS
Chunk 637
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 defined depending on the type of asset, in order to maximise the potential of each asset during the sale. The main disposal mechanism is the sale of the asset, for which the Bank has developed different channels depending on the type of property and customer. The Group, which has had high concentrations of this type of risk in the past, has a first-tier RAS metric in place which establishes a maximum level of concentration of exposures associated with real estate development based on Tier 1 capital in Spain. This metric is monitored on a monthly basis and reported to the Technical Risk Committee, the Board Risk Committee and the Board of Directors. Lastly, it is worth highlighting that the Risk Control Division, together with the Business and Risk Management Divisions, regularly monitors the adequacy of new loans granted to real estate developers. The monitoring process includes a review of compliance with policies and asset allocation. The results of this monitoring exercise are escalated to the Technical Risk Committee for information. For further quantitative information, see Schedule IV “Other risk information – Credit Risk: Exposure to construction and real estate development sector” to these consolidated annual financial statements. 4.4.2.2. Risk management models Credit ratings Credit risks incurred with companies, real estate developers, specialised lending projects, financial institutions and countries are rated using a rating system based on predictive factors and an internal estimate of their probability of default (see section “Impairment of financial assets” in Note 1). The rating model is reviewed annually based on the analysis of performance patterns of actual defaulted loans. An estimated default rate is assigned to each internal credit rating level, which also allows a uniform comparison to be made against other segments and ratings issued by external credit rating agencies using a master ratings scale. The percentage distribution by credit rating of Banco Sabadell’s portfolio of companies as at 31 December 2023 and 2022 is detailed below:

| %                                                                               |     |       |     |       |     |        |     |        |     |        |     |        |     |       |     |       |     |       |     |       |
| Distribution, by credit rating, of Banco Sabadell’s portfolio of companies 2023 |     |       |     |       |     |        |     |        |     |        |     |        |     |       |     |       |     |       |     |       |
| 9                                                                               |     |     8 |     |     7 |     |      6 |     |      5 |