Company: BBVXF
Filing Date: 2025-02-21
Form Type: 20-F
Source: 0000842180-25-000010
Chunk: 133

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-02-21
Form: 20-F
Item: Item 5
Chunk 133
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 elections and there is a risk that policies could be adopted that have an adverse impact on the economy or our business. There is also a risk that political tensions in other European countries, such as those observed after the 2024 elections in France, could to some extent affect Spain.
In Mexico, despite the growth in economic activity in 2023 and 2024, there is high uncertainty regarding the impact of the recently approved constitutional reforms as well as regarding the policies that may be adopted by the new government, which has already caused significant financial volatility and contributed to the depreciation of the Mexican peso. There is also the risk that the above-mentioned new U.S. administration policies may be a source of volatility in the Mexican markets. 
In Turkey, the CBRT has strengthened its macroprudential policy toolkit. Among other measures, reserve requirements, which used to apply to the liability side of balance sheets only, started to apply to the asset side of balance sheets, including Turkish lira-denominated commercial cash loans (subject to certain exceptions). The regulatory and macroprudential policies affecting the banking sector, including measures adopted to increase the weight of Turkish lira-denominated assets and liabilities of the banking system, and economic conditions in Turkey, including changes in official interest rates (with Turkey’s real interest rate still being negative given the high inflation) have affected and may continue to affect the Group’s results, and there can be no assurance that adverse developments in the Turkish economy and institutional and regulatory environment will not have a material adverse effect on the Group’s business, financial condition and results of operations. For additional information on measures adopted by the CBRT, see “Item 4. Information on the Company―Business Overview—Supervision and Regulation—Principal Markets—Turkey”. 
While there have been increasing signs of normalization in economic policy in general, and monetary policy in particular, since the general elections held in May 2023, economic conditions in Turkey remain relatively unstable, characterized by pressures on the Turkish lira, high inflation, a significant trade deficit, low central bank foreign reserves and high external financing costs. The earthquakes of February 2023 deepened Turkey’s economic struggles. In addition to the vast human losses, the earthquakes and government’s response thereto added to mounting inflation and budget risks. Continuing unfavorable economic conditions in Turkey may result in a potential deterioration in the purchasing power and creditworthiness of our clients (both individual and corporate). There is also uncertainty about the impact of the recent developments in the Middle East on Turkey. In particular,