Company: BBVXF
Filing Date: 2025-02-21
Form Type: 20-F
Source: 0000842180-25-000010
Chunk: 112

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-02-21
Form: 20-F
Item: Item 4
Chunk 112
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 the sixth largest bank in terms of loans in Spain as of December 2022. Caixabank and Banco Santander are BBVA’s main competitors in the Spanish market. The aggregate market share in terms of loans of the five largest banks in Spain is approximately 75% according to the latest available data.
We face strong competition in all of our principal areas of operations. After the protracted period of low interest rates, which adversely impacted interest income, the sharp rise in official and market interest rates in 2022 and 2023 has resulted in a superior pricing environment for banks. However, Spanish banks have been generally cautious in increasing borrowing rates in order not to prompt any surge in default rates. Such an approach and the fact that Spain has a mature credit market contribute to the fierce competitive environment in the Spanish banking system. In particular, in recent years, competition has been acutely intense in the credit market for lending to SMEs, where new credit interest rates fell from a weighted average of 5.5% between January 2012 and May 2014 to around 2.1% in 2021. Although interest rates on new loans to SMEs increased to approximately 6.0% as of December 2023 due to the sharp rise in official interest rates, they subsequently declined to around 5.0% as of November 2024 (latest available data). 
Regarding the mortgage segment, the pandemic triggered changes in household preferences (larger houses, outside space, second houses) driving an increase in the demand for mortgages. As a result, after the long period of deleveraging that preceded the pandemic, the portfolio of mortgages in Spain grew by 1.1% in 2021, though the volume of mortgages declined by 0.1% and 3.2% in 2022 and 2023, respectively, in response to higher interest rates, and the recent increased competition in this segment. According to the latest available data, as of November 2024, the stock of mortgage loans in Spain increased by 0.4% compared to November 2023.
In the aftermath of the 2008 financial crisis, the necessity for a more balanced funding structure led to increased competition for deposits in Spain. While the low interest rate environment depressed remuneration on deposits, there has been an effective “zero lower bound” interest rate floor on deposit rates, which never entered negative territory, despite the Euribor being below 0% between 2016 and April 202