Company: BBVXF
Filing Date: 2025-09-09
Form Type: 424B3
Source: 0001193125-25-198517
Chunk: 525

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-09-09
Form: 424B3
Chunk 525
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 significant borrowers classified as stage 3 and for certain borrowers classified as stage 2. Individual estimates are also made for transactions identified as having negligible risk classified as stage 3. The Group has developed a methodology to estimate these allowances, calculating the difference between the gross carrying amount of the transaction and the present value of the estimated cash flows it expects to receive, discounted using the effective interest rate. To this end, effective guarantees received are taken into account (see the section entitled “Guarantees” of this note). Three methods are established to calculate the recoverable amount of assets assessed individually:

| – | Discounted cash flow method (going concern): debtors who are estimated to be able to generate future cash flows                                                                                                                                   
 through their own business activity, thereby allowing them to fully or partially repay the debt owed through the company’s activity and economic/financial structure. This involves estimating the cash flows obtained by the borrower during the 
 course of their business activity.                                                                                                                                                                                                                |

| – | Collateral recovery method (gone concern): debtors who are not able to generate cash flows during the course of their                                                                    
 own business activities and who are forced to liquidate assets in order to fulfil their payment obligations. This involves estimating cash flows based on the enforcement of guarantees. |

| – | Combined method: debtors who are estimated to be able to generate future cash flows and also have non-core assets. These cash flows can be supplemented with potential sales of non-core assets, insofar as they are not required for the performance of their activity and, 
 consequently, for the generation of the aforesaid future cash flows.                                                                                                                                                                                                         |

Collective allowance estimates Exposures that are not assessed using individual allowance estimates are subject to collective allowance estimates. When calculating collective impairment losses, the Group, in accordance with IFRS 9, mainly takes the following aspects into account:

| – | The impairment estimation process takes all credit exposures into account. The Group recognises an impairment loss                                                                  
 equal to the best estimate available from internal models, taking into account all of the relevant information which it holds on the existing conditions at the end of the reported |

A-356

| period. For some types of risk, including sovereign risk and exposures with credit institutions and general governments of countries in the European Union and other advanced economies, the Group                                                   
 does not use internal models. These exposures are considered to have negligible risk given that, based on the information available as at the date of signing off the consolidated annual financial statements, and considering past experience