Company: BBVXF
Filing Date: 2025-02-27
Form Type: F-4/A
Source: 0001193125-25-037317
Chunk: 234

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-02-27
Form: F-4/A
Chunk 234
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 of stage 3 is in line with the definition used in the Group’s credit risk management activities.

| – | Write-off: |

The Group derecognises transactions from the consolidated balance sheet where their possibility of full or partial recovery is concluded to be remote following an individual assessment. The aspects that the Group considers to recognise transactions as write-offs include the amount of time elapsed since they were classified as stage 3 as a result of borrower arrears, the guarantees, the level of coverage, whether the borrower has filed for bankruptcy, and the portfolio to which the transactions in question relate. This also includes transactions which, despite not being in any of the previous situations, are undergoing a manifest and irreversible deterioration of their solvency. The remaining amounts of transactions with portions that have been derecognised (‘partial derecognition’), either because of the termination of the Group’s debt collection rights (‘definitive loss’) – for reasons such as debt remissions or debt reductions – or because they are considered irrecoverable even though debt collection rights have not been terminated (‘write-downs’), will be fully classified in the corresponding category on the basis of their credit risk. In the above situations, the Group derecognises write-offs along with their associated provisions from the consolidated balance sheet, notwithstanding any actions that may be taken to collect payment until no more rights to collect payment exist, whether due to time-barring, debt remission, or for any other reasons. Purchased or originated credit-impaired transactions The expected credit loss on purchased or originated credit-impaired assets will not form part of the loss allowance or the gross carrying amount on initial recognition. When a transaction is purchased or originated with credit impairment, the loss allowance will be equal to the cumulative changes in lifetime expected credit losses since initial recognition. Interest income on these assets will be calculated by applying the credit-adjusted effective interest rate to the amortised cost of the financial asset. A-27

Degree of alignment between the stage 3 accounting category and the prudential definition of default The prudential definition of default adopted by the Group bases materiality thresholds and the counting of days past due on regulatory technical standard EBA/RTS/2016/06 and all other conditions on guidelines EBA/GL/2016/07 (Guidelines on the application of the definition of default under Article 178 of Regulation (EU) No 575/2013). In general, all contracts impaired from an accounting standpoint are also considered impaired for prudential