Company: BBVXF
Filing Date: 2025-04-29
Form Type: 6-K
Source: 0000842180-25-000020
Chunk: 23

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-04-29
Form: 6-K
Chunk 23
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 lending) and liabilities composed mainly by customer demand deposits. The ALCO portfolio acts as a management lever and hedge for the balance sheet, mitigating its sensitivity to interest rate fluctuations. The exposure of the net interest income to movements in interest rates remains limited.

The European Central Bank continued to carry out interest rate cuts due to the convergence of the inflation towards the target. Thus, the benchmark interest rate in the euro area stood at 2.65% at the end of March 2025, the rate on the deposit facility at 2.50% and the rate on the marginal lending facility at 2.90%. On April 17, 2025, the ECB carried out an additional 25 basis points cut in official policy rates.

– Mexico continues to show a balance between fixed and variable interest rates balances, which results in a limited sensitivity to interest rates fluctuations. Among the assets that are most sensitive to interest rate changes, the commercial portfolio stood out, while consumer and mortgage portfolios are mostly at a fixed rate. With regard to customer funds, the high proportion of non-interest bearing deposits, which are insensitive to interest rate movements, should be highlighted. The ALCO portfolio is invested primarily in fixed-rate sovereign bonds with limited durations. The monetary policy rate stood at 9.0% at the end of March 2025, 100 basis points below the end of 2024.

– In Turkey, the sensitivity of net interest income to rates remains limited in both local and foreign currencies, thanks to the bank's management, with a low loan-to-deposit repricing gap. At the end of March 2025, the Central Bank of the Republic of Turkey (CBRT) set the monetary policy rate at 42.5% (500 basis points below its level at the end of December 2024). However, in response to the political instability and its impact on the markets, in March it reduced liquidity in the system, raising the cost of funding towards the high end of the rate corridor (46.0%). Subsequent to the end of the quarter, the CBRT raised the monetary policy rate to 46%.

– In South America, the sensitivity of net interest income continues to be limited, since most of the countries in the area have a fixed/variable composition stable between assets and liabilities. In addition, in balance sheets with several currencies, the interest rate risk is managed for each of the currencies, showing a very low level of exposure. Regarding benchmark interest rates, in Peru it stood at 4.75%