⁽¹⁾ he difference between the phased-in and fully-loaded ratios arises from the temporary treatment of certain capital items, mainly of the impact of IFRS 9, to which the BBVA Group has adhered voluntarily (in accordance with article 473bis of the CRR and the subsequent amendments introduced by the Regulation (EU) 2020/873). As of December 31, 2023, there are no differences between phased-in and fully-loaded ratios due to the aforementioned temporary treatment.

⁽²⁾ Preliminary data.

Regarding shareholder remuneration, which includes cash payments and the remuneration resulting from the execution of the share buyback programs that the Group may execute, a cash gross distribution in the amount of €0.39 per share on April as final dividend of 2023 and the execution of a new Share Buyback Program of BBVA for an amount of €781m, subject to the corresponding regulatory authorizations and the communication with the program specific terms and conditions before its effective start, are expected to be submitted to the relevant governing bodies for consideration. Thus, the total distribution for the year 2023 will reach €4,010m, a 50% of the net attributable profit, which represents €0.68 per share, taking into account the payment in cash of €0.16 gross per share paid in October 2023 as interim dividend of the year.

During the year 2023, BBVA has executed two share buyback programs. The first program was announced on February 1, 2023 for a maximum amount of €422m and was part of the ordinary application of the shareholder remuneration policy of the year 2022. On April 21, 2023, BBVA announced the completion of this, having acquired 64,643,559 own shares between March 20 and April 20, 2023, representing approximately 1.07% of BBVA's share capital as of said date. The shares acquired in the execution of this first share buyback program were redeemed on June 2, 2023. The second program, which is considered extraordinary shareholder remuneration and thus is not included in the ordinary remuneration policy, was announced on July 28, 2023, for a maximum amount of €1,000m. On November 29, 2023, BBVA announced the completion of this, having acquired 127,532,625 own shares between October 2 and November 29, 2023, representing approximately 2.14% of BBVA's share capital as of said date. The shares acquired in the execution of this second share buyback program were redeemed on December 19, 2023. Thus, the total amount disbursed in both share buyback programs stands at €1,422m.

The most relevant aspects of the share buyback programs are summarized below:

^* As of the date of the program closure.

As a consequence of the share buyback program described above, and once the Group has carried out the aforementioned share capital reductions, BBVA's share capital as of December 31, 2023, stood at €2,860,590,786.20 divided into 5,837,940,380 shares, at €0.49 par value each.

Note: in the case of shares kept by investors through a custodian placed outside Spain, only the custodian will be considered as a shareholder, which is who appears registered in the accounting record of book entries, so the number of shareholders stated does not consider those indirect holders.

With regard to MREL⁴ (Minimum Requirement for own funds and Eligible Liabilities) requirements, as of December 31, 2023, the requirement of own funds and eligible liabilities equals to 21.46% of the total RWA of its resolution group (the "MREL in RWA"), being the subordination requirement of the Group´s total RWA (the "subordination requirement in RWA") 13.50% at the subconsolidated level^5,6 Given the own funds and eligible liabilities structure of the resolution group, as of December 31, 2023, the preliminary MREL in RWA ratio and the preliminary subordination requirement in RWA ratio stand at 26.36% and at 21.84%, respectively⁷, complying with both mentioned requirements.

In addition, BBVA must reach, as of December 31, 2023, an amount of own funds and eligible liabilities in terms of the total exposure considered for calculating the leverage ratio of 7.27% (the “MREL in LR”), of which 5.61% in terms of the total exposure considered for calculating the leverage ratio shall be met with subordinated instruments (the “subordination requirement in LR”). Given the own funds and eligible liabilities structure of the resolution group, as of December 31, 2023, the preliminary MREL in LR ratio and the preliminary subordination requirement in LR ratio stand at 11.10% and at 9.20%, respectively, complying with both requirements⁹.

Ratings

During the year 2023, BBVA’s rating has continued to demonstrate its strength and all agencies have maintained their rating in the A category. DBRS in March, Fitch in September and Moody's in October confirmed the rating of BBVA at A (high), A- and A3, respectively, all three with a stable outlook. Additionally, S&P has maintained BBVA's ratings unchanged during the year at A, with a stable outlook. The following table shows the credit ratings and outlook assigned by the agencies:

⁽¹⁾ Ratings assigned to long term senior preferred debt. Additionally, Moody’s and Fitch assign A2 and A- rating, respectively, to BBVA’s long term deposits.

³ This includes the update of the countercyclical capital buffer calculated on the basis of exposure at end September 2023.

⁴ BBVA must maintain this requirement from January 1, 2022 onwards.

⁵ In accordance with the resolution strategy MPE (“Multiple Point of Entry”) of the BBVA Group, established by the SRB, the resolution group is made up of Banco Bilbao Vizcaya Argentaria, S.A. and subsidiaries that belong to the same European resolution group. As of December 31, 2023, the total RWA of the resolution group amounted to €214,757m and the total exposure considered for the purpose of calculating the leverage ratio amounted to €509,996m.

⁶ The MREL in RWA and the subordination requirement in RWA do not include the applicable combined capital buffer requirement that, according to the current regulations and the supervising criteria, would be of 3.35%, taking into account the exposures as of September 2023 subject to the calculation of the countercyclical buffer.

⁷ Own resources and eligible liabilities to meet, both with MREL in RWA and subordination requirement in RWA and with the combined capital buffer requirement applicable.

⁸ BBVA published on September 29, 2023 that it had received a resolution from the Bank of Spain related to the revision of the identification of BBVA as Other Systemically Important Institution (hereinafter referred to as O-SII) and the corresponding capital buffer establishment. According to this resolution the O-SII capital buffer would increase by 25 basis points compared to the previous year applicable buffer, which stands at 100 basis points (1%) by January 1, 2024. This increase is due to the adaptation of the Bank of Spain’s methodology for the determination of the OSII capital buffers in line with the revision of the methodological framework established by the European Central Bank.

⁹ The Group’s leverage ratio is provisional at the date of release of this report.