Company: BBVXF
Filing Date: 2025-02-21
Form Type: 20-F
Source: 0000842180-25-000010
Chunk: 197

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-02-21
Form: 20-F
Item: Item 5
Chunk 197
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 financing between either the parent company and the subsidiaries or between the different subsidiaries. This strategy aims to limit the spread of a liquidity crisis among the Group’s different areas, and supports that the cost of liquidity and financing is correctly reflected in the price formation process. As part of this strategy, the BBVA Group is organized into eight Liquidity Management Units (“LMUs”) composed of the parent company and the bank subsidiaries in each of Spain, Mexico, Turkey, South America (Argentina, Colombia, Peru, Uruguay) and Switzerland, plus the branches that depend on them.
Regarding liquidity and funding performance, the BBVA Group seeks to maintain an adequate and dynamic funding structure consistent with the existing Risk Appetite Framework, through liquidity and funding planning. In this regard, the Liquidity and Funding Management model evaluates liquid resources needed and the ability to maintain the liquidity profile over the planning horizon, including in the face of unexpected stress conditions. The Group’s funding structure is predominantly of a retail nature, as customer deposits represent the main source of funding.
Throughout 2024, BBVA has maintained its objective of preserving the strength of the funding structure of the different Group entities by focusing on strengthening self-funding from customer funds, maintaining a buffer of fully available liquid assets, diversifying sources of funding and generating and optimizing collateral available to deal with the withdrawal of central banks’ monetary stimulus and/or stress situations in the markets. Increases in interest rates have had an adverse impact on the demand for credit and funding costs. 
During 2024, 2023 and 2022, all LMUs held self-funding levels deemed by the Group to be sufficient, mainly satisfied by customer deposits. The Liquidity Coverage Ratio (LCR), a liquidity buffer, at both a consolidated and individual level, was 134% as of December 31, 2024 (in excess of the required 100%) and 149% as of December 31, 2023 (in excess of the required 100%). The net stable funding ratio (NSFR) of the BBVA Group was 127% as of December 31, 2024 (in excess of the required 100%) and 131% as of December 31, 2023 (in excess of the required 100%). The NSFR ratio is the result of the division between the amount of stable funding available and the amount of stable funding required, requiring banks to maintain a stable financing profile in relation to the composition of their assets and off-balance sheet activities. 
The Group has pension commitments with