Financial
Statements and
Management Report
for the year 2021
BBVA 2021
Contents
FINANCIAL STATEMENTS
Balance sheets ....................................................................................................................................................................
Income Statements ...........................................................................................................................................................
Statements of recognized income and expenses ........................................................................................................
Statements of changes in equity .....................................................................................................................................
Statements of cash flows .................................................................................................................................................
NOTES TO THE ACCOMPANYING FINANCIAL STATEMENTS
Information and other information .............................................................................................................................
2. Accounting policies and valuation criteria applied ..................................................................................................
3. Shareholder remuneration system ............................................................................................................................
4. Earnings per share .........................................................................................................................................................
5. Risk management ..........................................................................................................................................................
6. Fair value of financial instruments ..............................................................................................................................
7. Cash, cash balances at central banks and other demand deposits ....................................................................
8. Financial assets and liabilities held for trading .........................................................................................................
9. Non-trading financial assets mandatorily at fair value through profit or loss ....................................................
11. Financial assets at fair value through other comprehensive income ................................................................
12. Financial assets at amortized cost ...........................................................................................................................
14. Investments in joint ventures and associates ........................................................................................................
15. Tangible assets .............................................................................................................................................................
16. Intangible assets ..........................................................................................................................................................
17. Tax assets and liabilities .............................................................................................................................................
18. Other assets and liabilities .........................................................................................................................................
groups classified as held for sale ................................................................................................................................
20. Financial liabilities at amortized cost ......................................................................................................................
21. Provisions ......................................................................................................................................................................
22. Post-employment and other employee benefit commitments .........................................................................
23. Common stock .............................................................................................................................................................
24. Share premium ............................................................................................................................................................
25. Retained earnings, Revaluation reserves and Other ............................................................................................
26. Treasury shares ...........................................................................................................................................................
27. Accumulated other comprehensive income (loss) ...............................................................................................
28. Capital base and capital management ...................................................................................................................
29. Commitments and guarantees given .....................................................................................................................
30. Other contingent assets and liabilities ....................................................................................................................
31. Purchase and sale commitments and future payment obligations ...................................................................
32. Transactions on behalf of third parties ...................................................................................................................
33. Net interest income .....................................................................................................................................................
34. Dividend income ..........................................................................................................................................................
35. Fee and commission income .....................................................................................................................................
36. Fee and commission expense ...................................................................................................................................
38. Other operating income and expense .....................................................................................................................
39. Administration expense .............................................................................................................................................
40. Depreciation ................................................................................................................................................................
41. Provisions or (reversal) of provisions ......................................................................................................................
or loss or net gains by modification ...........................................................................................................................
44. Impairment or reversal of impairment on non-financial assets .........................................................................
discontinued operations ...............................................................................................................................................
46. Statements of cash flows ..........................................................................................................................................
47. Accountant fees and services ...................................................................................................................................
48. Related-party transactions ........................................................................................................................................
Management ...................................................................................................................................................................
50. Other information ........................................................................................................................................................
51. Subsequent events ......................................................................................................................................................
52. Explanation added for translation into English ......................................................................................................
APPENDICES
APPENDIX I.  BBVA Group Consolidated Financial Statements ...............................................................................
of December 31, 2021 ........................................................................................................................................................
bonds ....................................................................................................................................................................................
APPENDIX XI. Risks related to the developer and real-estate sector in Spain ......................................................
Circular 6/2012 ..................................................................................................................................................................
Appendix XIII Agency Network ........................................................................................................................................
Glossary ...............................................................................................................................................................................
MANAGEMENT REPORT
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Balance sheets as of December 31, 2021 and 2020
ASSETS (Millions of Euros)
Notes
2021
2020 (*)
CASH, CASH BALANCES AT CENTRAL BANKS AND OTHER DEMAND DEPOSITS
7
38,821
44,107
FINANCIAL ASSETS HELD FOR TRADING
8
105,391
85,298
Derivatives
28,389
36,545
Equity instruments
15,146
10,682
Debt securities
11,546
9,983
Loans and advances to central banks
3,467
53
Loans and advances to credit institutions
31,300
17,291
Loans and advances to customers
15,543
10,743
NON-TRADING FINANCIAL ASSETS MANDATORILY AT FAIR VALUE THROUGH PROFIT OR LOSS
9
437
409
Equity instruments
172
183
Debt securities
125
142
Loans and advances to customers
140
84
FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS
10
—
—
FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
11
28,205
37,528
Equity instruments
1,103
881
Debt securities
27,102
36,648
FINANCIAL ASSETS AT AMORTIZED COST
12
231,276
225,914
Debt securities
22,312
23,241
Loans and advances to central banks
254
7
Loans and advances to credit institutions
8,371
8,762
Loans and advances to customers
200,339
193,903
DERIVATIVES - HEDGE ACCOUNTING
13
841
1,011
FAIR VALUE CHANGES OF THE HEDGED ITEMS IN PORTFOLIO HEDGES OF INTEREST RATE RISK
13
5
51
INVESTMENTS IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES
14
17,504
18,380
Subsidiaries
17,226
17,547
Joint ventures
54
54
Associates
225
780
TANGIBLE ASSETS
15
3,482
3,915
Properties, plant and equipment
3,396
3,836
For own use
3,396
3,836
Other assets leased out under an operating lease
—
—
Investment properties
87
80
INTANGIBLE ASSETS
16
841
840
Goodwill
—
—
Other intangible assets
841
840
TAX ASSETS
17
12,294
12,764
Current tax assets
546
633
Deferred tax assets
11,748
12,131
OTHER ASSETS
18
2,296
2,837
Insurance contracts linked to pensions
22
1,882
2,074
Inventories
—
—
Other
414
763
NON-CURRENT ASSETS AND DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE
19
885
9,978
TOTAL ASSETS
442,279
443,032
(*)          Presented for comparison purposes only  (see Note 1.3).
The Notes and Appendices are an integral part of the balance sheets as of December 31, 2021.
P.1
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Balance sheets as of December 31, 2021 and 2020
LIABILITIES AND EQUITY (Millions of Euros)
Notes
2021
2020 (*)
FINANCIAL LIABILITIES HELD FOR TRADING
8
77,859
67,135
Derivatives
27,054
35,396
Short positions
13,148
9,625
Deposits from central banks
8,946
1,256
Deposits from credit institutions
14,821
13,901
Customer deposits
13,890
6,957
Debt certificates
—
—
Other financial liabilities
—
—
FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUE THROUGH PROFIT OR
LOSS
10
2,238
3,267
Deposits from central banks
—
—
Deposits from credit institutions
—
—
Customer deposits
2,238
3,267
Debt certificates
—
—
Other financial liabilities
—
—
Memorandum item: Subordinated liabilities
—
—
FINANCIAL LIABILITIES AT AMORTIZED COST
20
321,848
331,189
Deposits from central banks
40,839
37,903
Deposits from credit institutions
14,936
22,106
Customer deposits
216,452
217,360
Debt certificates
37,866
43,692
Other financial liabilities
11,756
10,127
Memorandum item: Subordinated liabilities
9,912
11,096
DERIVATIVES - HEDGE ACCOUNTING
13
2,126
1,510
FAIR VALUE CHANGES OF THE HEDGED ITEMS IN PORTFOLIO HEDGES OF
INTEREST RATE RISK
13
—
—
PROVISIONS
21
4,488
4,449
Pensions and other post-employment defined benefit obligations
3,027
3,544
Other long term employee benefits
600
18
Provisions for taxes and other legal contingencies
401
439
Commitments and guarantees given
310
270
Other provisions
150
177
TAX LIABILITIES
17
999
1,071
Current tax liabilities
187
173
Deferred tax liabilities
812
898
OTHER LIABILITIES
18
1,885
1,543
LIABILITIES INCLUDED IN DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE
—
—
TOTAL LIABILITIES
411,443
410,164
(*)          Presented for comparison purposes only (see Note 1.3).
The Notes and Appendices are an integral part of the balance sheet as of December 31, 2021.
P.2
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Balance sheets as of December 31, 2021 and 2020
LIABILITIES AND EQUITY (Continued) (Millions of Euros)
Notes
2021
2020 (*)
STOCKHOLDERS’ FUNDS
32,296
33,992
Capital
23
3,267
3,267
Paid up capital
3,267
3,267
Unpaid capital which has been called up
—
—
Share premium
24
23,599
23,992
Equity instruments issued other than capital
—
—
Equity component of compound financial instruments
—
—
Other equity instruments issued
—
—
Other equity
49
34
Retained earnings
25
6,436
8,859
Revaluation reserves
25
—
—
Other reserves
25
(1,026)
31
Less: treasury shares
26
(574)
(9)
Profit or loss attributable to owners of the parent
1,080
(2,182)
Less: interim dividends
3
(533)
—
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
27
(1,461)
(1,124)
Items that will not be reclassified to profit or loss
(1,177)
(1,376)
Actuarial gains (losses) on defined benefit pension plans
(52)
(61)
Non-current assets and disposal groups classified as held for sale
—
—
Fair value changes of equity instruments measured at fair value through other
comprehensive income
11
(1,127)
(1,294)
Hedge ineffectiveness of fair value hedges for equity instruments measured at fair value
through other comprehensive income
—
—
Fair value changes of equity instruments measured at fair value through other
comprehensive income (hedged item)
—
—
Fair value changes of equity instruments measured at fair value through other
comprehensive income (hedging instrument)
—
—
Fair value changes of financial liabilities at fair value through profit or loss attributable to
changes in their credit risk
2
(21)
Items that may be reclassified to profit or loss
(284)
252
Hedge of net investments in foreign operations (effective portion)
—
—
Foreign currency translation
—
—
Hedging derivatives. Cash flow hedges (effective portion)
(626)
(100)
Fair value changes of debt instruments measured at fair value through other
comprehensive income
11
342
352
Hedging instruments (non-designated items)
—
—
Non-current assets and disposal groups classified as held for sale
—
—
TOTAL EQUITY
30,836
32,867
TOTAL EQUITY AND TOTAL LIABILITIES
442,279
443,032
MEMORANDUM  ITEM - OFF BALANCE SHEET EXPOSURES (Millions of Euros)
Notes
2021
2020 (*)
Loan commitments given
29
89,353
80,959
Financial guarantees given
29
11,662
8,745
Other commitments given
29
24,181
25,711
(*)          Presented for comparison purposes only (see Note 1.3).
The Notes and Appendices are an integral part of the balance sheet as of December 31, 2021.
P.3
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Income statements for the years ended December 31, 2021 and 2020.
INCOME STATEMENTS (Millions of Euros)
Notes
2021
2020 (*)
Interest income
33
4,289
4,629
Financial assets at fair value through other comprehensive income
235
253
Financial assets at amortized cost
3,426
3,839
Other interest income
628
536
Interest  expense
33
(861)
(1,115)
NET INTEREST INCOME
3,428
3,514
Dividend income
34
1,808
1,360
Fee and commission income
35
2,515
2,125
Fee and commission expense
36
(463)
(358)
Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net
37
84
87
Financial assets at amortized cost
23
100
Other financial assets and liabilities
61
(13)
Gains or (losses) on financial assets and liabilities held for trading, net
37
295
353
Reclassification of financial assets from fair value through other comprehensive income
—
—
Reclassification of financial assets from amortized cost
—
—
Other profit or loss
295
353
Gains (losses) on non-trading financial assets mandatorily at fair value through profit or loss, net
37
114
28
Reclassification of financial assets from fair value through other comprehensive income
—
—
Reclassification of financial assets from amortized cost
—
—
Other profit or loss
114
28
Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net
37
45
(69)
Gains (losses) from hedge accounting, net
37
(36)
13
Exchange differences, net
37
56
(29)
Other operating income
38
170
142
Other operating expense
38
(546)
(529)
GROSS INCOME
7,470
6,637
Administrative expense
39
(3,693)
(3,553)
Personnel expense
(2,237)
(2,144)
Other administrative expense
(1,456)
(1,409)
Depreciation and amortization
40
(639)
(663)
Provisions or reversal of provisions
41
(950)
(475)
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by
modification
42
(475)
(1,232)
Financial assets measured at amortized cost
(482)
(1,228)
Financial assets at fair value through other comprehensive income
7
(4)
NET OPERATING INCOME
1,714
715
Impairment or reversal of impairment of investments in subsidiaries,  joint ventures and associates
43
(911)
(319)
Impairment or reversal of impairment on non-financial assets
44
(167)
(105)
Tangible assets
(164)
(105)
Intangible assets
(4)
—
Other assets
1
—
Gains (losses) on derecognition of non - financial assets and subsidiaries, net
3
1
Negative goodwill recognized in profit or loss
—
—
Gains (losses) from non-current assets and disposal groups classified as held for sale not qualifying as discontinued operations   
45
107
(43)
PROFIT (LOSS) BEFORE TAX FROM CONTINUING OPERATIONS
746
249
Tax expense or income related to profit or loss from continuing operations
17
58
(36)
PROFIT (LOSS) AFTER TAX FROM CONTINUING OPERATIONS
803
213
Profit (loss) after tax from discontinued operations
14
277
(2,396)
PROFIT (LOSS) FOR THE YEAR
1,080
(2,182)
(*)          Presented for comparison purposes only (see Note 1.3).
The Notes and Appendices are an integral part of the income statement for the year ended December 31, 2021.
P.4
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Statements of recognized income and expense for the years ended December 31, 2021 and 2020.
STATEMENTS OF RECOGNIZED INCOME AND EXPENSE (Millions of Euros)
2021
2020 (*)
PROFIT RECOGNIZED IN INCOME STATEMENT
1,080
(2,182)
OTHER RECOGNIZED INCOME (EXPENSE)
(349)
(643)
ITEMS NOT SUBJECT TO RECLASSIFICATION TO INCOME STATEMENT
186
(756)
Actuarial gains (losses) from defined benefit pension plans
(4)
14
Non-current assets and disposal groups classified as held for sale
—
—
Fair value changes of equity instruments measured at fair value through other comprehensive
income
167
(786)
Gains (losses) from hedge accounting of equity instruments at fair value through other
comprehensive income, net
—
—
Fair value changes of financial liabilities at fair value through profit or loss attributable to changes in
their credit risk
33
4
Other valuation adjustments
—
—
Income tax related to items not subject to reclassification to income statement
(10)
12
ITEMS SUBJECT TO RECLASSIFICATION TO INCOME STATEMENT
(535)
113
Hedge of net investments in foreign operations [effective portion]
—
—
Foreign currency translation
—
—
Translation gains (losses) taken to equity
—
—
Transferred to profit or loss
—
—
Other reclassifications
—
—
Cash flow hedges [effective portion]
(705)
92
Valuation gains (losses) taken to equity
(705)
92
Transferred to profit or loss
—
—
Transferred to initial carrying amount of hedged items
—
—
Other reclassifications
—
—
Hedging instruments [non-designated elements]
—
—
Valuation gains (losses) taken to equity
—
—
Transferred to profit or loss
—
—
Other reclassifications
—
—
Debt securities at fair value through other comprehensive income
(14)
24
Valuation gains (losses) taken to equity
49
86
Transferred to profit or loss
(63)
(61)
Other reclassifications
—
—
Non-current assets and disposal groups held for sale
—
—
Income tax relating to items subject to reclassification to income statements
184
(3)
TOTAL RECOGNIZED INCOME/EXPENSE
731
(2,825)
(*)        Presented for comparison purposes only (see Note 1.3).
The Notes and Appendices are an integral part of the statement of recognized income and expense for the year ended December 31,
2021.
P.5
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Statements of changes in equity for the years ended December 31, 2021 and 2020.
STATEMENT OF CHANGES IN EQUITY (Millions of Euros)
2021
Capital
(Note 23)
Share
Premium
(Note 24)
Equity
instruments
issued other
than capital
Other
Equity
Retained
earnings
(Note 25)
Revaluation
reserves
(Note 25)
Other
reserves
(Note 25)
(-) Treasury
shares
(Note 26)
Profit or
loss
attributable
to owners
of the
parent
Interim
dividends
(Note 3)
Accumulate
d other
comprehen
sive income
(Note 27)
Total
Balances as of January 1, 2021
3,267
23,992
—
34
8,859
—
31
(9)
(2,182)
—
(1,124)
32,867
Total income/expense recognized
—
—
—
—
—
—
—
—
1,080
—
(349)
731
Other changes in equity
—
(393)
—
15
(2,423)
—
(1,058)
(565)
2,182
(533)
13
(2,763)
Issuances of common shares
—
—
—
—
—
—
—
—
—
—
—
—
Issuances of preferred shares
—
—
—
—
—
—
—
—
—
—
—
—
Issuance of other equity instruments
—
—
—
—
—
—
—
—
—
—
—
—
Period or maturity of other issued equity instruments
—
—
—
—
—
—
—
—
—
—
—
—
Conversion of debt on equity
—
—
—
—
—
—
—
—
—
—
—
—
Common Stock reduction
—
—
—
—
—
—
—
—
—
—
—
—
Dividend distribution
—
(393)
—
—
—
—
—
—
—
(533)
—
(927)
Purchase of treasury shares
—
—
—
—
—
—
—
(925)
—
—
—
(925)
Sale or cancellation of treasury shares
—
—
—
—
—
—
(4)
360
—
—
—
356
Reclassification of financial liabilities to other equity
instruments
—
—
—
—
—
—
—
—
—
—
—
—
Reclassification of other equity instruments to financial
liabilities
—
—
—
—
—
—
—
—
—
—
—
—
Transfers between total equity entries
—
—
—
(2)
(2,064)
—
(129)
—
2,182
—
13
—
Increase/Reduction of equity due to business
combinations
—
—
—
—
—
—
—
—
—
—
—
—
Share based payments
—
—
—
—
—
—
—
—
—
—
—
—
Other increases or (-) decreases in equity
—
—
—
17
(359)
—
(925)
—
—
—
—
(1,267)
Balances as of December 31, 2021
3,267
23,599
—
49
6,436
—
(1,026)
(574)
1,080
(533)
(1,461)
30,836
The Notes and Appendices are an integral part of the statement of changes in equity for the year ended December 31, 2021.
P.6
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter, which adapts the EU-IFRS for banks (see notes 1 to 51). In the
event of a discrepancy, the original Spanish-language version prevails.
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Statements of changes in equity for the years ended December 31, 2021 and 2020 (continued)
STATEMENT OF CHANGES IN EQUITY (Millions of Euros)
2020 (*)
Capital
(Note 23)
Share
Premium
(Note 24)
Equity
instruments
issued other
than capital
Other
Equity
Retained
earnings
(Note 25)
Revaluation
reserves
(Note 25)
Other
reserves
(Note 25)
(-) Treasury
shares
(Note 26)
Profit or
loss
attributable
to owners
of the
parent
Interim
dividends
(Note 3)
Accumulate
d other
comprehen
sive income
(Note 27)
Total
Balances as of January 1, 2020
3,267
23,992
—
48
9,107
—
1
—
2,241
(1,086)
(381)
37,189
Total income/expense recognized
—
—
—
—
—
—
—
—
(2,182)
—
(643)
(2,825)
Other changes in equity
—
—
—
(14)
(248)
—
30
(9)
(2,241)
1,086
(101)
(1,497)
Issuances of common shares
—
—
—
—
—
—
—
—
—
—
—
—
Issuances of preferred shares
—
—
—
—
—
—
—
—
—
—
—
—
Issuance of other equity instruments
—
—
—
—
—
—
—
—
—
—
—
—
Settlement or maturity of other equity instruments issued
—
—
—
—
—
—
—
—
—
—
—
—
Conversion of debt on equity
—
—
—
—
—
—
—
—
—
—
—
—
Common Stock reduction
—
—
—
—
—
—
—
—
—
—
—
—
Dividend distribution
—
—
—
—
(1,067)
—
—
—
—
—
—
(1,067)
Purchase of treasury shares
—
—
—
—
—
—
—
(688)
—
—
—
(688)
Sale or cancellation of treasury shares
—
—
—
—
—
—
(5)
679
—
—
—
674
Reclassification of other equity instruments to financial
liabilities
—
—
—
—
—
—
—
—
—
—
—
—
Reclassification of financial liabilities to other equity
instruments
—
—
—
—
—
—
—
—
—
—
—
—
Transfers within total equity
—
—
—
(2)
1,206
—
51
—
(2,241)
1,086
(100)
—
Increase/Reduction of equity due to business
combinations
—
—
—
—
—
—
—
—
—
—
—
—
Share based payments
—
—
—
—
—
—
—
—
—
—
—
—
Other increases or (-) decreases in equity
—
—
—
(12)
(387)
—
(16)
—
—
—
—
(415)
Balances as of December 31, 2020
3,267
23,992
—
34
8,859
—
31
(9)
(2,182)
—
(1,124)
32,867
(*)          Presented for comparison purposes only (see Note 1.3).
The Notes and Appendices are an integral part of the statement of changes in equity for the year ended December 31, 2021.
P.7
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter, which adapts the EU-IFRS for banks (see notes 1 to 51). In the
event of a discrepancy, the original Spanish-language version prevails.
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Statements of cash flows for the years ended December 31, 2021 and 2020.
CASH FLOWS STATEMENTS (Millions of Euros)
Notes
2021
2020 (*)
A) CASH FLOWS FROM OPERATING ACTIVITIES (1+2+3+4+5)
46
(12,004)
25,890
1.Profit (loss) for the year
1,080
(2,182)
2.Adjustments to obtain the cash flow from operating activities:
1,313
3,320
Depreciation and amortization
639
663
Other adjustments
674
2,657
3.Net increase/decrease in operating assets
(15,123)
(16,070)
Financial assets held for trading
(20,093)
(3,723)
Non-trading financial assets mandatorily at fair value through profit or loss
(26)
447
Other financial assets designated at fair value through profit or loss
—
—
Financial assets at fair value through other comprehensive income
9,323
(12,623)
Financial assets at amortized cost
(5,494)
(683)
Other operating assets
1,167
512
4.Net increase/decrease in operating liabilities
928
40,224
Financial liabilities held for trading
10,724
(3,961)
Other financial liabilities designated at fair value through profit or loss
(1,029)
298
Financial liabilities at amortized cost
(9,209)
45,202
Other operating liabilities
443
(1,314)
5.Collection/Payments for income tax
(202)
598
B) CASH FLOWS FROM INVESTING ACTIVITIES (1+2)
46
10,049
(125)
1.Investment
(502)
(430)
Tangible assets
(56)
(96)
Intangible assets
(319)
(251)
Investments in subsidiaries, joint ventures and associates
(116)
(84)
Other business units
—
—
Non-current assets and disposal groups classified as held for sale and associated liabilities
(12)
—
Held-to-maturity investments
—
—
Other settlements related to investing activities
—
—
2.Divestments
10,551
306
Tangible assets
21
29
Intangible assets
—
—
Investments in subsidiaries, joint ventures and associates
77
70
Other business units
—
—
Non-current assets classified as held for sale and associated liabilities
10,453
206
Other collections related to investing activities
—
—
C) CASH FLOWS FROM FINANCING ACTIVITIES (1 + 2)
46
(3,028)
(662)
1. Payments
(3,540)
(3,686)
Dividends (shareholders remuneration)
(927)
(1,067)
Subordinated liabilities
(1,684)
(1,937)
Treasury stock amortization
—
—
Treasury stock acquisition
(929)
(682)
Other items relating to financing activities
—
—
2. Collections
512
3,024
Subordinated liabilities
—
2,334
Common stock increase
—
—
Treasury stock disposal
356
674
Other items relating to financing activities
156
17
D) EFFECT OF EXCHANGE RATE CHANGES
(303)
584
E) NET INCREASE/DECREASE IN CASH OR CASH EQUIVALENTS (A+B+C+D)
(5,286)
25,688
F) CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR
44,107
18,419
G) CASH AND CASH EQUIVALENTS AT END OF THE YEAR (E+F)
46
38,821
44,107
COMPONENTS OF CASH AND EQUIVALENTS AT END OF THE YEAR (Millions of Euros)
Notes
2021
2020 (*)
Cash
7
830
972
Balance of cash equivalent in central banks
7
36,566
40,485
Other financial assets
7
1,424
2,650
Less: Bank overdraft refundable on demand
0
—
TOTAL CASH AND CASH EQUIVALENTS AT END OF THE YEAR
38,821
44,107
(*)          Presented for comparison purposes only (see Note 1.3).
The Notes and Appendices are an integral part of the statement of cash flows for the year ended December 31, 2021.
P.8
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Notes to the accompanying Financial Statements for the year ended December 31, 2021.
1.Introduction, basis for the presentation of the Financial Statements, Internal
Control over Financial Reporting and other information
1.1.Introduction
Banco Bilbao Vizcaya Argentaria, S.A. (hereinafter “the Bank”, “BBVA" or “BBVA,S.A”) is a private-law entity subject to the laws and
regulations governing banking entities operating in Spain. It carries out its activity through branches and agencies across the country
and abroad.
The Bylaws and other public information are available for inspection at the Bank’s registered address (Plaza San Nicolás, 4 Bilbao)  as
noted on its website (www.bbva.com).
In addition to the activities it carries out directly, the Bank heads a group of subsidiaries, joint ventures and associates which perform
a wide range of activities and which together with the Bank constitute the Banco Bilbao Vizcaya Argentaria Group (hereinafter, “the
Group” or “the BBVA Group”). In addition to its own  separate financial statements, the Bank is required to prepare the Consolidated
Financial Statements.
The Bank’s Financial Statements for the year ended December 31, 2020 were approved by the shareholders at the Bank’s Annual
General Meeting (“AGM”) held on April 20, 2021.
The Bank’s Financial Statements for the year ended December 31, 2021 are pending approval by  their respective AGMs. However, the
Board of Directors of the Bank believes that said financial statements will be approved without  changes.
1.2.Basis for the presentation of the Financial Statements
The Bank's Financial Statements for 2021 are presented incompliance with Bank of Spain Circular 4/2017, dated November 27, and
as amended thereafter (in the following, “Circular “4/2017), and with any other legislation governing financial reporting which is
applicable and with the format and mark-up requirements established in the EU Delegated Regulation 2019/815 of the European
Commission. The aforementioned Circular 4/2017 constitutes the development and adaptation to the Spanish credit institutions
sector of the International Financial Reporting Standards adopted by the European Union (IFRS-EU) in accordance with the provisions
of Regulation 1606/2002 of the Parliament and Council regarding the application of these rules.
The Bank's Financial Statements for the year ended December 31, 2021  were prepared by the Bank’s directors (at the Board of
Directors meeting held on February 9, 2022) by applying the accounting policies and valuation criteria described in Note 2, so that
they present fairly the Bank's equity and financial position as of December 31, 2021, together with the results of its operations and
cash flows generated during the year ended on that date.
All effective accounting standards and valuation criteria with a significant effect in the Financial Statements were applied in their
preparation.
The amounts reflected in the accompanying Financial Statements are presented in millions of euros, unless it is more appropriate to
use smaller units. Some items that appear without a balance in these Financial Statements are due to how the units are expressed.
Also, in presenting amounts in millions of euros, the accounting balances have been rounded up or down. It is therefore possible that
the  totals appearing in some tables are not the exact arithmetical sum of their component figures.
The percentage changes in amounts have been calculated using figures expressed in thousands of euros.
1.3.Comparative information
The comparative information included in the accompanying financial statements for the year ended December 31, 2020 has been
subject of certain no significant modifications with the purpose of a better comparability with the 2021 year figures.
Sale of BBVA’s U.S. subsidiary
As mentioned in Note 14, in 2020, BBVA reached an agreement to sell its entire stake in BBVA USA Bancshares, Inc., which in turn 
owned all the capital stock of the bank, BBVA USA, as well as other companies of the BBVA Group in the United States with activities
related to this banking business. On June 1, 2021 and once the mandatory authorizations had been obtained, BBVA completed  this
sale.
As required by Standard 34 of Circular 4/2017 and IFRS 5 "Non-current assets held for sale and discontinued operations", the
balances of assets and liabilities corresponding to such companies for sale were reclassified in 2020 from their corresponding
accounting headings to the headings "Non-current assets and disposal groups classified as held for sale” and “Liabilities included in
disposal groups classified as held for sale” respectively,  in the  balance sheet as of December 31, 2020
P.9
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
The balances of the headings “dividend Income” and “Impairment or reversal of impairment of investments in subsidiaries, joint
ventures or associates”, net of their corresponding tax effects, corresponding to the companies for sale were reclassified under the
heading “Profit (loss) after tax from discontinued operations” of the accompanying profit and loss account.
(Reverse) Repurchase Agreements Recognition (o Record of acquisition and temporary assignment of assets)
Beginning in 2021, certain repurchase agreements and reverse repurchase agreements began to be presented on a net basis in the
consolidated balance sheet. In order to make the information as of December 31, 2020 and 2019 comparable with the information as
of December 31, 2021, the information as of December 31, 2020 and 2019 was adjusted by reducing Total assets and Total liabilities
by €2,379 and €2,266 million in 2020 and 2019, respectively.
1.4.Seasonal nature of income and expense
The nature of the most significant activities carried out by the Bank is mainly related to typical activities carried out by financial
institutions,  and are not significantly affected by seasonal factors within the same year.
1.5.Management and impacts of the COVID-19 pandemic
In 2020, the COVID-19 pandemic had adverse effects on BBVA results and capital base. During 2021, the pandemic has continued to
evolve with gradual improvements in the global economic conditions, mainly due to the vaccination progress against the coronavirus
and the significant economic stimuli adopted by authorities, which have supported the improvement in the 2021 results of the Group.
However, there are still uncertainties about the future final impact of the COVID-19 pandemic, mainly in consideration of the
increasing number of infections caused by new variants of the coronavirus. BBVA continuously monitors these changes and their
impacts on the business.
The main impacts of COVID-19 pandemic in the BBVA S.A. Financial Statements are detailed in the following Notes:
–Note 1.6 includes information on the consideration of the COVID-19 pandemic in the estimates made.
–Note 5.1 details the main risks associated with the pandemic as well as information on its evolution and its impact in the 
macroeconomic forecasts.
–Note 5.2 includes information related to the initiatives carried out by the Bank to help the most affected clients, jointly with
the corresponding government measures. Likewise, it contains, among others, information regarding the level of activity
and the amount corresponding to moratorium measures, both public and private, granted by the Bank. Additionally, the
measures applied to the treatment of forward looking information used in the calculation of expected losses are detailed.
–Note 5.5 presents information regarding the impact on liquidity and funding risk.
–Note 14 includes information concerning the impairment of the goodwill in the United States, recorded during the first
quarter of 2020, mainly due to the impact of COVID-19 in  updating the  macroeconomic scenario and the expected
evolution of interest rates.
–Note 42 includes information on the impact of the update of the macroeconomic scenario affected by the COVID-19
pandemic mainly during the year ended December 31, 2020.
1.6.Responsibility for the information and for the estimates made
The information contained in the Bank's Financial Statements is the responsibility of the Bank’s Directors.
Estimates were required to be made at times when preparing these Financial Statements in order to calculate the recorded or
disclosed amount of some assets, liabilities, income, expense and commitments. These estimates relate mainly to the following:
–Loss allowances on certain financial assets (see Notes 5,10,  11 and 12).
–The assumptions used to quantify certain provisions (see Note 21) and for the actuarial calculation of post-employment
benefit liabilities and commitments (see Note 22).
–The useful life and impairment losses of tangible and intangible assets (see Notes, 15, 16 and 19).
–The fair value of certain unlisted financial assets and liabilities in organized markets (see Notes 5, 6, 8, 9, 10,  and 11).
–The recoverability of deferred tax assets (see Note 17).
As mentioned above, in 2021 the pandemic has continued to evolve with gradual improvements in the global economic conditions,
although there is still uncertainty about the final future impact. (see Note 1.5). The increased uncertainty associated with  the
unprecedented nature of this pandemic  has entailed  greater complexity of developing reliable  estimates and applying judgment.
P.10
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Therefore, these estimates were made on the basis of the best available information on the matters analyzed, as of December 31,
2021. However, it is possible that events may take place in the future which could make it necessary to amend these estimations
(upward or downward). Any such changes  would be  recorded prospectively, recognizing the effects of the change in estimation in
the corresponding financial statements.
During 2021 there were no significant changes to the estimations made as of December 31, 2020, different from the ones indicated in
these Financial Statements.
1.7.Control of the BBVA ’s Financial Reporting
The description of  BBVA  Internal Control over Financial Reporting model is described in the management report accompanying the
consolidated Financial Statements for 2021.
1.8.Deposit guarantee fund and Resolution fund
The Bank is part of the “Fondo de Garantía de Depósitos” (Deposit Guarantee Fund). The expense incurred by the contributions made
to this Agency and other similar to those that are subject certain foreign branches in 2021 and 2020 amounted to €211 and €216
million, respectively. These amounts are registered under the heading "Other operating expenses" of the accompanying income
statements (see Note 38).
The contributions made to the single European resolution fund in the years 2021 and 2020 have amounted to €194 and €166 million
euros respectively (see Note 38).
1.9.Consolidated Financial Statements
The Consolidated Financial Statements of the BBVA Group for the year ended December 31, 2021 have been prepared by the Group's
Directors (at the Board of Directors meeting held on February 9, 2022) in compliance with IFRS-IASB (International Financial
Reporting Standards as issued by the International Accounting Standards Board), as well as in accordance with the International
Financial Reporting Standards adopted by the European Union (in the following “EU-IFRS”) and applicable at the close of 2021, taking
into account Bank of Spain Circular 4/2017, and with any other legislation governing financial reporting which are applicable and with
the format and markup requirements established in the EU Delegated Regulation 2019/815 of the European Commission
The management of the Group’s operations is carried out on a consolidated basis, independently of the individual allocation of the
corresponding equity changes and their related results. Consequently, the Bank's annual Financial Statements have to be considered
within the context of the Group, due to the fact that they do not reflect the financial and equity changes that result from the
application of the consolidation policies (full consolidation or proportionate consolidation methods) or the equity method.
These changes are reflected in the Consolidated Financial Statements of the BBVA Group for the year 2021, which the Bank's Board
of Directors has also prepared. Appendix I includes the Group's Consolidated Financial Statements. In accordance with the content of
these Consolidated Financial Statements prepared following the International Financial Reporting Standards adopted by the
European Union, the total amount of the BBVA Group’s assets and consolidated equity at the close of 2021 amounted to €662,885
million and €48,760 million, respectively, while the consolidated net profit attributed to the parent company of this period amounted
to €4,653 million.
2.Accounting policies and valuation criteria applied
The Glossary includes the definition of some of the financial and economic terms used in Note 2 and subsequent Notes.
The accounting standards and policies and valuation criteria used in preparing these financial statements are as follows:
2.1Investments in subsidiaries, joint ventures and associates
Subsidiaries are entities controlled by the Group (for definition of control, see Glossary).
Associates are entities in which the Group is able to exercise significant influence (for definition of significant influence, see Glossary).
Joint ventures are those entities for which there is a joint control arrangement with third parties other than the Group (for definitions
of joint arrangement, joint control and joint venture, refer to Glossary).
Valuation and impairment
Investments in the equity of group companies, joint ventures and associates are initially measured at cost, which is since the fair value
of the consideration given plus directly attributable transaction costs. Subsequently, these investments are valued at cost less, if
applicable, the accumulated amount of impairment adjustments.
At least at year-end, and whenever there is objective evidence that the carrying value may not be recoverable, the corresponding
impairment test is performed to quantify the possible valuation adjustment. This valuation adjustment is calculated as the difference
between the book value and the recoverable amount, the latter being understood as the higher of its fair value at that time, less costs
to sell, and the value in use of the investment. Impairment losses and, if applicable, their reversal, are recorded as an expense or
income, respectively, in the income statement. The reversal of an impairment will be limited to the carrying amount of the investment
that would be recognized at the date of reversal if the impairment had not been recorded.
P.11
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
2.2Financial instruments
Circular 4/2017 became effective as of January 1, 2018  and replace IAS 39 regarding the classification and measurement of financial
assets and liabilities, the, impairment of financial assets and hedge accounting, . However, the Bank has chosen to continue applying
IAS39 for accounting for hedges as permitted by the Circular itself.
2.2.1Classification and measurement of financial assets
Classification of financial assets
Circular 4/2017 contains three main categories for financial assets classification: measured at amortized cost, measured at fair value
with changes through other comprehensive income, and measured at fair value through profit or loss.
The classification of financial instruments in the categories of amortized cost or fair value depends on the business model with which
the entity manages the assets and the contractual characteristics of the cash flows, commonly known as the "solely payments of
principal and interest" criterion (hereinafter, the SPPI).
The assessment of the business model should reflect the way the Bank manages groups of financial assets and does not depend on
the intention for an individual instrument.
In order to determine the business model, the following aspects are taken into account:
–The way in which the performance of the business model (and that of the assets which comprise such business model) is
evaluated and reported to the entity's key personnel;
–The risks and the way in which the risks that affect the performance of the business model are managed;
–The way in which business model managers are remunerated;
–The frequency, amount and timing of sales in previous years, the reasons for such sales and expectations regarding future
sales.
Regarding the SPPI test, the analysis of the cash flows aims to determine whether the contractual cash flows of the assets correspond
only to payments of principal and interest on the principal amount outstanding at the beginning of the transaction. Interest is
understood here as the consideration for the time value of money, and for the credit risk associated with the principal amount
outstanding  during a specific period, and for financing and structure costs, plus a profit margin.
The most significant judgments used by the Bank in evaluating compliance with the conditions of the SPPI test are the following:
–Modified time value: in the event that a financial asset includes a periodic interest rate adjustment but the frequency of this
adjustment does not coincide with the term of the reference interest rate (for example, the interest rate reset every six
months to a one-year rate), the Bank assesses, at the time of the initial recognition, this mismatch to determine whether the
contractual cash flows (undiscounted) differ significantly or not from the cash flows (undiscounted) of a benchmark
financial asset, for which there would be no change in the time value of money. The defined tolerance thresholds are 10% for
the differences in each period and 5% for the analysis accumulated throughout the financial asset life.
–Contractual clauses: The contractual clauses that can modify the calendar or the amount of the contractual cash flows are
analyzed to verify if the contractual cash flows that would be generated during the life of the instrument due to the exercise
of  those clauses are only payments of principal and interest on the principal amount outstanding. To do this, the
contractual cash flows that may be generated before and after the modification are analyzed.
The main criteria taken into account in the analysis are:
a.Early termination clauses: generally a contractual clause that permits the debtor to prepay a debt instrument
before maturity is consistent with SPPI when the prepayment amount substantially represents unpaid amounts of
principal and interest on the principal amount outstanding (which may include reasonable additional
compensation for the early termination of the contract)
b.Instruments with an interest rate linked to contingent events:
–An instrument whose interest rate is reset to a higher rate if the debtor misses a particular payment may
meet the SPPI criterion because of the relationship between missed payments and an increase in credit
risk.
–An instrument with contractual cash flows that are indexed to the debtor’s performance,  – e.g. net
income or is adjusted based on a certain index or stock market value would not meet the SPPI criterion
c.Perpetual instruments: to the extent that they can be considered instruments with continuous (multiple)
extension options, they meet the SPPI test if the contractual flows meet it. When the issuer can defer the payment
of interest, if such payment would affect their solvency, they would meet the SPPI test if the deferred interest
accrues additional interest, while if they do not, they would not meet the test.
P.12
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
–Non-recourse financial instruments: In the case of debt instruments that are repaid primarily with the cash flows of specific
assets or projects and the debtor has no legal responsibility, the underlying assets or cash flows are evaluated to determine
whether the contractual cash flows of the instrument are consistent with payments of principal and interest on the principal
amount outstanding.
a.If the contractual terms do not give rise to additional cash flows to payments of principal and interest on the
amount of principal outstanding or limitations to these payments, the SPPI test is met.
b.If the debt instrument effectively represents an investment in the underlying assets and its cash flows are
inconsistent with principal and interest (because they depend on the performance of a business), the SPPI test is
not met.
–Contractually linked instruments: a look-through analysis is carried out in the case of transactions that are set through the
issuance of multiple financial instruments forming tranches that create concentrations of credit risk in which there is an
order of priority that specifies how the flows of cash generated by the underlying set of financial instruments are allocated
to the different tranches. The debt tranches of the instrument will comply with the requirement that their cash flows
represent only payment of principal and interest on the outstanding principal if:
a.The contractual terms of the tranche being assessed for classification (without looking through to the underlying
pool of financial instruments) give rise to cash flows that are solely payments of principal and interest on the
principal amount outstanding
b.The underlying pool of financial instruments comprises instruments with cash flow that are solely payments of
principal and interest on the principal amount outstanding, and
c.The exposure to credit risk in the underlying pool of financial instruments inherent in the tranche is equal to or
lower than the exposure to credit risk of the underlying pool of financial instruments (for example, the credit rating
of the tranche being assessed for classification is equal to or higher than the credit rating that would apply to a
single tranche that funded the underlying pool of financial instruments)
In any event, the contractual conditions that, at the time of the initial recognition, have a minimal effect on cash flows or depend on
the occurrence of exceptional and highly unlikely events do not prevent compliance with the conditions of the SPPI test.
Based on the above characteristics, financial assets will be classified and valued as described below.
A debt instrument will be classified in the amortized cost portfolio if the two following conditions are fulfilled:
–The financial asset is managed within a business model whose purpose is to maintain the financial assets to maturity, to
receive contractual cash flows; and
–The contractual conditions of the financial asset give rise to cash flows that are only payments of principal and interest.
A debt instrument will be classified in the portfolio of financial assets at fair value with changes through other comprehensive income
if the two following conditions are fulfilled:
–The financial asset is managed with a business model whose purpose combines collection of the contractual cash flows and
sale of the assets, and
–The contractual characteristics of the instrument generate cash flows which only represent the return of the principal and
interest,
A debt instrument will be classified at fair value with changes in profit and loss provided that the entity's business model for their
management or the contractual characteristics of its cash flows do not require classification into one of the portfolios described
above.
In general, equity instruments will be measured at fair value through profit or loss. However BBVA may make an irrevocable election
at initial recognition to present subsequent changes in the fair value through “other comprehensive income”.
Financial assets will only be reclassified when BBVA decides to change the business model. In this case, all of the financial assets
assigned to this business model will be reclassified.  The change of the objective of the business model should occur before the date
of the reclassification.
Measurement of financial assets
All financial instruments are initially recognized at fair value, plus, those transaction costs which are directly attributable to the
acquisition or issue of the particular instrument, with the exception of those financial assets which are classified at fair value through
profit or loss.
All changes in the value of financial assets due to the interest accrual and similar items are recorded in the headings "Interest income
and other similar income" or "Interest expense", of the income statement of the year in which the accrual occurred (see Note 33),
except in the case of trading derivatives that are not  economic and accounting hedges.
The changes in fair value after the initial recognition, for reasons other than those mentioned in the preceding paragraph, are treated
as described below, according to the categories of financial assets.
P.13
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
“Financial assets held for trading”, “Non-trading financial assets mandatorily at fair value through profit  or loss” and “Financial assets
designated at fair value through profit or loss”
Financial assets are recorded under the heading “Financial assets held for trading” if the objective of the business model is to
generate gains by buying and selling these financial instruments or generate short-term results. The financial assets recorded in the
heading “Non-trading financial assets mandatorily at fair value through profit  or loss” are  derived from a business model which
objective is to obtain the contractual cash flows and / or to sell those instruments but its contractual cash flows do not comply with
the requirements of the SPPI test. Financial assets are classified in “Financial assets designated at fair value through profit or loss”
the Bank classifies financial assets only if it eliminates or significantly reduces a measurement or recognition inconsistency (an
‘accounting mismatch’) that would otherwise arise from measuring financial assets or financial liabilities or recognizing gains or
losses on them, on different bases.
The assets recognized under these headings of the balance sheet are measured upon acquisition at fair value and changes in the fair
value (gains or losses) are recognized as their net value under the headings “Gains (losses) on financial assets and liabilities held for
trading, net”, “Gains (losses) on non-trading financial assets mandatorily at fair value through profit or loss, net” and “Gains (losses)
on financial assets designated at fair value through profit or loss, net” in the accompanying income statement  (see Note 37).
Changes in fair value resulting from variations in foreign exchange rates are recognized under the heading “Exchange differences,
net”  in the profit or loss account  (Note 37).
”Financial assets at fair value through other comprehensive income”
–Debt instruments
Assets recognized under this heading in the balance sheets are measured at their fair value. This category of valuation implies the
recognition of the information in the income statement as if it were an instrument valued at amortized cost, while the instrument is
valued at fair value in the balance sheet. Thus, both  interest income on these instruments and the exchange differences and
impairment that arise in their case are recorded in the profit and loss account, while subsequent changes in its fair value (gains or
losses) are recognized temporarily, (by the amount net of tax effect) under the heading “Accumulated other comprehensive income
(loss)- Items that may be reclassified to profit or loss - Fair value changes of debt instruments measured at fair value through other
comprehensive income” in the balance sheets (see Note 27).
The amounts recognized under the headings “Accumulated other comprehensive income (loss)- Items that may be reclassified to
profit or loss - Fair value changes of  debt instruments measured at fair value through other comprehensive income” continue to form
part of the Bank's equity until the corresponding asset is derecognized from the balance sheet or until a loss allowance is recognized
on the corresponding financial instrument. If these assets are sold, these amounts are derecognized and included under the headings
“Gains (losses) on  derecognition of financial assets and liabilities not measured at fair value through profit or loss, net” (see Note 37).
The net loss allowances in “Financial assets at fair value through other comprehensive income” over the year are recognized under
the heading “ Impairment or reversal of impairment on financial assets, not measured at fair value through profit or loss net –gains by
modification- Financial assets at fair value through other comprehensive income” in the income statements for that year (see Note
42). Interest income on these instruments is recorded in the profit and loss account (see Note 33).Changes in foreign exchange rates
are recognized under the heading “Exchange differences, net" in the accompanying income statement (see Note 37).
–Equity instruments
At the time of initial recognition of specific investments in equity instruments, the BBVA Group may make the irrevocable decision to
present subsequent changes in fair value in other comprehensive income. Subsequent changes in this valuation will be recognized
Accumulated other comprehensive income - Items that will not be reclassified  to profit or loss- Fair value changes of equity
instruments measured at fair value  through other comprehensive income" (see Note 27). Dividends received from these investments
are recorded in the heading "Dividend income" in the income statement (see Note 34). These instruments are not subject to the
impairment model of IFRS 9.
“Financial assets at amortized cost”
The assets under this category are subsequently measured at amortized cost, after initial recognition, using the effective interest rate
method.
Net loss allowances of assets recorded under these headings arising in each period are recognized under the heading “Impairment or
reversal of impairment on financial assets not measured at fair value through profit or loss –or net gains by modification -Financial
assets measured at amortized cost” in the income statement for such year (see Note 42).
2.2.2Classification and measurement of financial liabilities
Classification of financial liabilities
Financial liabilities are classified in the following categories:
–Financial liabilities at amortized cost;
–Financial liabilities that are held for trading including derivatives are financial instruments which are recorded in this
category when the Bank’s objective is to generate gains by buying and selling these financial instruments;
P.14
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
–Financial liabilities that are designated at fair value through profit or loss on initial recognition under the Fair Value Option.
The Bank has the option to designate irrevocably, on the initial moment of recognition, a financial liability at fair value
through profit or loss provided that doing so results in the elimination or significant reduction of measurement or
recognition inconsistency, or if a group of financial liabilities, or a group of financial assets and financial liabilities, has to be
managed, and its performance evaluated, on a fair value basis in accordance with a documented risk management or
investment strategy.
Measurement of financial liabilities
Financial liabilities are initially  recorded at fair value,  less transaction costs  that are directly attributable to the issuance of 
instruments, except for financial instruments that are classified at fair value through profit or loss.
Variations in the value of financial liabilities due to the interest accrual and similar items are recorded in the headings “Interest and
other income” or “Interest expense”, of the income statement for the year in which the accrual occurred (see Note 33), except for
trading derivatives that are not economic and accounting hedges.
The changes in fair value after the initial recognition, for reasons other than those mentioned in the preceding paragraph, are treated
as described below, according to the categories of financial liabilities.
“Financial liabilities held for trading” and “Financial liabilities designated at fair value through profit or loss“
The subsequent changes in the fair value (gains or losses) of the liabilities recognized under these headings of the balance sheets are
recognized as their net value under the headings “Gains (losses) on financial assets and liabilities held for trading, net” and “Gains
(losses) on financial assets and liabilities designated at fair value through profit or loss, net” in the accompanying income statements
(see Note 37). The changes in the own credit risk of the liabilities designated under the fair value option is presented in “Accumulated
other comprehensive income (loss) – Items that will not be reclassified to profit or loss – Fair value changes of financial liabilities at
fair value through profit or loss attributable to changes in their credit risk” (see Note 27), unless this treatment brings about or
increases an asymmetry in the income statement. Changes in fair value resulting from variations in foreign exchange rates are
recognized under the heading “Exchange differences, net” in the accompanying income statements (see Note 37).
“Financial liabilities at amortized cost”
The liabilities under this category are subsequently measured at amortized cost, using the effective interest rate method.
Hybrid financial liabilities
When a financial liability contains an embedded derivative, BBVA analyzes whether the economic characteristics and risks of the
embedded derivative and the host instrument are closely related.
If the characteristics and risks of the host and the derivative are closely related, the instrument as a whole will be classified and
measured according to the general rules for financial liabilities. If, on the other hand, the economic characteristics and risks of the
embedded derivative are not closely related to the economic characteristics and risks of the host, its terms meet the definition of a
derivative and the hybrid contract is not measured at fair value with changes in fair value recognized in profit or loss, the embedded
derivative shall be separated from the host and accounted for as a derivative separately at fair value with changes in profit and loss
and the host instrument  classified and measured according to its nature.
2.2.3“Derivatives-Hedge Accounting” and “Fair value changes of the hedged items in portfolio hedges of
interest-rate risk”
BBVA uses financial derivatives as a tool for managing financial risks, mainly interest rates and exchange rates (see Note 5).
When these  transactions meet certain requirements, they are considered "hedging instruments".
Changes occurring subsequent to the designation of the hedging relationship in the measurement of financial instruments designated
as hedged items as well as financial instruments designated as hedge accounting instruments are recognized as follows:
–In fair value hedges, the changes in the fair value of the derivative and the hedged item attributable to the hedged risk are
recognized under the heading “Gains (losses) from hedge accounting, net” in the income statement (see Note 37), with a
corresponding offset under the headings where hedging items ("Hedging derivatives") and the hedged items are
recognized, as applicable, except for interest-rate risks hedges (which are almost all of the hedges used by the Bank) for
which the valuation changes are recognized under the headings “Interest and other income” or “Interest expense”, as
appropriate, in the accompanying income statement (see Note 33).
–In fair value hedges of interest rate risk of a portfolio of financial instruments (portfolio-hedges), the gains or losses that
arise in the measurement of the hedging instrument are recognized in the income statement with the corresponding offset 
on the headings “Derivatives –  Hedge accounting”, and the gains or losses that arise from the change in the fair value of the
hedged item (attributable to the hedged risk) are also recognized in the income statement (in both cases under the heading
“Gains (losses) from hedge accounting, net” (see Note 37), using, as a corresponding offset, the headings "Fair value
changes of the hedged items in portfolio hedges of interest rate risk" in the balance sheets, as applicable.
P.15
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
–In cash flow hedges, the gain or loss on the hedging instruments relating to the effective portion is recognized temporarily
under the heading  ”Accumulated other comprehensive income (loss) - Items that may be reclassified to profit or loss -
Hedging derivatives. Cash flow hedges” (effective portion) in the balance sheets, with a corresponding offset under the
heading “Hedging derivatives” of the Assets or Liabilities of the balance sheets as applicable. These differences are
recognized under the  heading “Interest and other income ” or “Interest expense” at the time when the gain or loss in the
hedged instrument affects profit or loss, when the forecast transaction is executed or at the maturity date of the hedged
item. Almost all of the cash flow  hedges carried out by the Bank are for interest rate risk and inflation of financial
instruments, so their differences are recognized under the heading "Interest and other income" or "Interest expense" in the
income statement ( (see Note 33).
–Differences in the measurement of the hedging items corresponding to the ineffective portions of cash flow hedges are
recognized directly in the heading “Gains (losses) from hedge accounting, net” in the income statement (see Note 37).
–In the hedges of net investments in foreign operations, the differences attributable to the effective portions of hedging items
are recognized temporarily under the heading "Accumulated other comprehensive income (loss) - Items that may be
reclassified to profit or loss – Hedging of net investments in foreign operations (effective portion)" in the balance sheets
with a corresponding offset entry under the heading “Hedging derivatives” of the Assets or Liabilities of the balance sheets
as applicable. These differences in valuation are recognized  in the income statement when the investment in a foreign
operation is disposed of or derecognized (see Note 37).
2.2.4Loss allowances on financial assets
The “expected losses” impairment model is applied to financial assets valued at amortized cost, debt instruments valued at fair value
with changes in  accumulated other comprehensive income,  financial guarantee contracts and other commitments. All financial
instruments valued at fair value through profit or loss are excluded from the impairment model.
The standard classifies financial instruments into three categories, which depend on the evolution of their credit risk from the
moment of initial recognition and which establish the calculation of the credit risk allowance.
Stage 1: without significant increase in credit risk
Financial assets which are not considered to have significantly increased in credit risk have loss allowances measured at an amount
equal to the expected credit loss that arises from all possible default events within 12 months following the presentation date of the
financial statements (12 month expected credit losses).
Stage 2: significant increases in credit  risk
When the credit risk of a financial asset has increased significantly since the initial recognition, the loss allowances of that financial
instrument is calculated as the expected credit loss during the entire life of the asset. That is, they are the expected credit losses that
result from all possible default events during the expected life of the financial instrument.
Stage 3:  Impaired
When there is objective evidence that the instrument is credit impaired, the financial asset is transferred to this category in which the
provision for losses of that financial instrument is calculated, as in Stage 2, as the expected credit loss during the entire life of the
asset.
When the recovery of any recognized amount is considered remote, such amount is written-off on the consolidated balance sheet,
without prejudice to any actions that may be taken in order to collect the amount until the rights extinguish in full either because it is
time-barred debt, the debt is forgiven, or other reasons.
The Bank has applied the following definitions:
–Credit impaired asset
An asset is credit- impaired (stage 3) if one or more events have occurred and they have a detrimental impact on the estimated future
cash flows of the asset.
Historically, the definition of credit impaired asset under IFRS 9 has been substantially aligned with the definition of default used by
the Bank for internal credit risk management, which is also the definition used for regulatory purposes. In 2021 the Bank updated its
definition of default to conform to that set forth in the European Banking Authority (hereinafter EBA) Guidelines, in compliance with
article 178 of Regulation (EU) No 575/2013 (CRR). The Group has consequently updated the definition of credit impaired asset (Stage
3), considering it a change in accounting estimates, re-establishing the consistency with the definition of default and guaranteeing the
integration of both definitions in credit risk management
The determination of an asset as impaired and its classification in Stage 3 is based exclusively on the risk of default, without
considering the effects of credit risk mitigating measures such as guarantees and collaterals. Specifically, the following financial
assets are classified in Stage 3.
1) Impaired assets for objective reasons or delinquency: when there are unpaid amounts of principal or interest for more than 90
days.
P.16
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
According to IFRS 9, the 90-days past due default is a presumption that can be rebutted in those cases where the entity considers,
based on reasonable and supportable information, that it is appropriate to use a longer term. As of December 31, 2021, the Group has
not used terms exceeding 90 days past due. Impaired assets for subjective reasons (other than delinquency): when circumstances
are identified that show, even in the absence of defaults, that it is not probable that the debtor will fully comply with its financial
obligations. For this purpose, the following indicators are considered, among others:
–Significant financial difficulties of the issuer or the borrower.
–Granting by the lender or lenders to the borrower, for economic or contractual reasons related to the
latter's financial difficulties, of concessions or advantages that they would not have otherwise granted.
–Breach of contractual clauses, such as events of default or default.
–Increasing probability that the borrower will go into bankruptcy or some other situation of financial
reorganization.
–Disappearance of an active market for the financial asset due to financial difficulties.
–Others that may affect the committed cash flows such as the loss of the debtor's license or that it has
committed fraud.
–Generalized delay in payments. In any case, this circumstance exists when, during a continuous period
of 90 days  prior to the reporting date, a material amount has remained unpaid.
–Sales of credit exposures of a client with a significant economic loss will imply that the rest of its
operations are considered impaired.
Relating to the granting of concessions due to financial difficulties, it is considered that there is an indicator of unlikeliness to pay, and
therefore the client must be considered impaired, when the refinancing or restructuring measures may result in a diminished financial
obligation caused by a forgiveness or material deferral of principal, interest or fees. Specifically, unless proven otherwise, transactions
that meet any of the following criteria will be reclassified to the category of impaired assets:
a.Irregular repayment schedule.
b.Contractual clauses that delay the repayment of the loan through regular payments. Among others, grace
periods of more than two years for the amortization of the principal will be considered clauses with these
characteristics.
c.Amounts of principal or interest written off from the balance sheet as its recovery is considered
remote.
In any case, a restructuring will be considered impaired when the reduction in the net present value of the financial obligation is
greater than 1% in accordance with the new management criteria introduced during 2021.
Credit risk management for wholesale counterparties is carried out at the customer (or group) level. For this reason, the classification
of any of a client's material exposures as impaired, whether due to more than 90 days of default or due to any of the subjective
criteria, implies the classification as impaired of all the client's exposures.
Regarding retail clients, which are managed at the individual loan level, the scoring systems review their score, among other factors,
in the event of breach in any of their operations or incurring generalized delays in payments, which also triggers the necessary
recovery actions. Among them are the refinancing measures that, where appropriate, may lead to all the client's operations being
considered impaired. Furthermore, given the granularity of the retail portfolios, the differential behavior of these clients in relation to
their products and collateral provided, as well as the time necessary to find the best solution, the Bank has established as an indicator
that when a transaction of  a retail  client is in default in excess of 90 days or shows a general delay in payments and this represents
more than 20% of the client's total balance, all  its transactions are considered impaired.
When operations by entities related to the client fall into Stage 3, including both entities of the same group and those with which there
is a relationship of economic or financial dependence, the transactions of the holder will also be classified as Stage 3 if after the
analysis it is concluded that there are reasonable doubts about the full payment of the loans.
The Stage 3 classification will be maintained for a cure period of 3 months from the disappearance of all indicators of impairment
during which the client must demonstrate good payment behavior and an improvement in their credit quality in order to corroborate
the disappearance of the causes that motivated the classification of the debt as impaired. In the case of refinancing and restructuring,
the cure period is one year (see Appendix XII for more details)
–Significant increase in credit risk
The objective of the impairment requirements is to recognize lifetime expected credit losses for financial instruments for which there
have been significant increases in credit risk since initial recognition considering all reasonable and supportable information, including
that which is forward-looking.
P.17
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
The model developed by the Bank for assessing the significant increase in credit risk has a two-prong approach that is applied globally
(for more detail on the methodology used, see Note 5.2.1):
a.Quantitative criterion: the Bank uses a quantitative analysis based on comparing the current expected probability of default
over the life of the transaction with the original adjusted expected probability of default, so that both values are comparable
in terms of expected default probability for their residual life (see Note 5.2.1).
b. Qualitative criterion: most indicators for detecting significant risk increase are included in the Bank's systems through rating and
scoring systems or macroeconomic scenarios, so the quantitative analysis covers the majority of circumstances. The Bank  uses
additional qualitative criteria to identify  significant  increase in credit risk and thus, to include circumstances that are not reflected in
the rating/score systems or macroeconomic scenarios used. Such qualitative criteria are the following:
–More than 30 days past due. According to Circular 4/2017, default of more than 30 days is a presumption that can be
rebutted in those cases in which the entity considers, based on reasonable and documented information, that such non-
payment does not represent a significant increase in risk. As of December 31, 2021, the Bank has not considered periods
higher than 30 days.
–Watch list: They are subject to special watch by the Risk units because they show negative signs in their credit quality,
even though there may be no objective evidence of impairment.
–Refinance or restructuring that does not show evidence of impairment, or that, having been previously identified, the
existence of significant increase in credit risk may is still  exist.
Although the standard introduces a series of operational simplifications, also known as practical solutions for analyzing the increase
in significant risk, the Bank does not use them as a general rule. However, for high-quality assets, mainly related to certain
government institutions and bodies, the standard allows for considering that their credit risk has not increased significantly because
they have a low credit risk at the presentation date. This possibility is limited to those financial instruments that are classified as
having high credit quality and high liquidity to comply with the liquidity coverage ratio (“LCR”). This does not prevent these assets
from being assigned the credit risk coverage that corresponds to their classification as Stage 1 based on their credit rating and
macroeconomic expectations.
Method for calculating Expected Credit Loss (ECL)
Method for calculating expected loss
In accordance with Circular 4/2017, the measurement of expected losses must reflect:
–a considered and unbiased amount, determined by evaluating a range of possible results;
–the time value of money, and
–Reasonable and supportable information that is available without undue cost or effort and that reflects current conditions
and forecasts of future economic conditions.
Expected losses are measured both individually and collectively.
The  individualized estimate of credit losses results from calculating the difference between the expected cash flows discounted at the
effective interest rate of the transaction and the carrying amount of the instrument (see Note 5.2.1):
For the collective measurement of expected losses the instruments are classified into groups of assets based on their risk
characteristics. Exposure within each group is segmented according to credit risk common characteristics, which indicate the
payment capacity of the borrower according to the contractual conditions. These risk characteristics have to be relevant in estimating
the future flows of each group. The characteristics of credit risk may consider, among others, the following factors (see Note 5.2.1):
–Type of instrument.
–Rating or scoring tools.
–Credit risk scoring or rating.
–Type of collateral.
–Amount of time at default for stage 3.
–Segment.
–Qualitative criteria which can have a significant increase in risk.
–Collateral value if it has an impact on the probability of a default event.
The estimated losses are derived from the following parameters:
–PD: estimate of the probability of default in each period.
P.18
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
–EAD: estimate of the exposure in case of default at each future period, taking into account the changes in exposure after the 
closing date of the financial statements.
–LGD: estimate of the loss in case of default, calculated as the difference between the contractual cash flows and receivables,
including guarantees. For these purposes, the probability of executing the guarantee, the moment until its ownership, and
subsequent realization are achieved, the expected cash flows and the acquisition and sale costs, are considered in the
estimation.
–CCF: cash conversion factor  is the estimate made on off-balance sheet contractual arrangements to determine the
exposure subject to credit risk  in the event of a default.
At BBVA, the calculated expected credit losses  are based on internal models developed for all portfolios within the scope of Circular
4/201, except for the cases that are subject to individual analysis..
The calculation and recognition of expected credit losses includes exposures with governments and credit institutions, for which,
despite having a reduced number of defaults in the information databases, internal models have been developed, considering, as
sources of information, the data provided by external rating agencies or other observed in the market, such as changes in bond yields,
prices of credit default swaps or any other public information on them
Use of present, past and future information
Circular 4/2017 requires incorporation of present, past and future information to detect any significant increase in risk and measure
expected loss losses, which must be carried out on a weighted probability basis.
The standard does not require identification of all possible scenarios for measuring expected loss. However, the probability of a loss
event occurring and the probability it will not occur  have to be considered, even though the possibility of a loss may be very low. To
achieve this, BBVA generally evaluates the linear relationship between its estimated loss parameters (PD, LGD and EAD) with the
historical and future forecasts of the macroeconomic scenarios
Additionally, when there is no linear relation between the different future economic scenarios and their associated expected losses,
more than one future economic scenario must be used for the measurement.
The approach taken by BBVA consists of using a methodology based on the use of three scenarios. The first is the most probable
scenario (base scenario) that is consistent with that used in the  Bank's internal management processes, and  two additional ones,
one more positive and the other more negative. The combined outcome of these three scenarios is calculated considering the weight
given to each of them. The main macroeconomic variables that are valued in each of the scenarios  are the Gross Domestic Product
(GDP), the real estate price index, interest rates, and the unemployment rate The main goal of the Bank's approach is seeking the
greatest predictive capacity with respect to the first two variables  (see Note 5.2.1).
2.2.5Transfers and derecognition of financial assets and liabilities
The accounting treatment of transfers of financial assets is determined by the form in which risks and benefits associated with the
financial assets involved are transferred to third parties. Financial assets are only derecognized from the balance sheet when the cash
flows that they generate are extinguished, or when their implicit risks and benefits have been substantially transferred to third parties,
when the control of financial asset is transferred even in case of no physical transfer or substantial retention of such assets. In the
latter case, the financial asset transferred is derecognized from the balance sheet, and any right or obligation retained or created as a
result of the transfer is simultaneously recognized.
Similarly, financial liabilities are derecognized from the balance sheet only if their obligations are extinguished or acquired (with a view
to subsequent cancellation or renewed placement).
The Bank is considered to have transferred substantially all the risks and benefits if such risks and benefits account for the majority of
the risks and benefits involved in ownership of the transferred financial assets. If substantially all the risks and/or benefits associated
with the transferred financial asset are retained:
–The transferred financial asset is not derecognized from the balance sheet and continues to be measured using the same
criteria as those used before the transfer.
–A financial liability is recognized at the amount equal to the amount received, which is subsequently measured at amortized
cost or fair value with changes in the income statement, whichever the case.
–Both the income generated on the transferred (but not derecognized) financial asset and the expense of the new financial
liability continue to be recognized.
In the specific case of securitizations, this liability is recognized under the heading “Financial liabilities at amortized cost – Customer
deposits” in the balance sheets (see Note 20). As these liabilities do not constitute a current obligation, when measuring such a
financial liability the Bank deducts those financial instruments owned by it which constitute financing for the entity to which the
financial assets have been transferred, to the extent that these instruments are deemed specifically to finance the transferred assets.
The criteria followed with respect to the most common transactions of this type made by the Bank are as follows:
–Purchase and sale commitments: Financial instruments sold with a repurchase agreement are not derecognized from the
balance sheets and the amount received from the sale is considered to be financing from third parties.
P.19
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
–Financial instruments acquired with an agreement to subsequently resell them are not recognized in the balance sheets and
the amount paid for the purchase is considered to be credit given to third parties.
–Securitization: The Bank has applied the most stringent criteria for determining whether or not it retains substantially all the
risk and rewards on such assets for all securitizations performed since January 1, 2004. As a result of this analysis, the Bank
has concluded that none of the securitizations undertaken since that date meet the prerequisites for derecognizing the
securitized assets from the balance sheets (see Note 12 and Appendix VI), as the Bank retains substantially all the expected
credit risks and possible changes in net cash flows, while retaining the subordinated loans and lines of credit extended to
these securitization funds.
Synthetic securitizations are transactions where risk is transferred through derivatives or financial guarantees and in which the
exposure of these securitizations remains in the balance sheet of the Bank. The Bank has established the synthetic securitizations
through received financial guarantees. As for the commissions paid, they are accrued during the term of the financial guarantee
2.3Financial guarantees
Financial guarantees are considered to be those contracts that require their issuer to make specific payments to reimburse the holder
of the financial guarantee for a loss incurred when a specific borrower breaches its payment obligations on the terms – whether
original or subsequently modified – of a debt instrument, irrespective of the legal form it may take. Financial guarantees may take the
form of a deposit, bank  guarantee, insurance contract or credit derivative, among others.
In their initial recognition, financial guarantees are recognized as liabilities in the balance sheet at fair value, which is generally the
present value of the fees, commissions and interest receivable from these contracts over the term thereof, and the Bank
simultaneously recognizes a corresponding asset in the balance sheet for the amount of the fees and commissions received at the
inception of the transactions and the amounts receivable at the present value of the fees, commissions and interest outstanding.
Financial guarantees, irrespective of the guarantor, instrumentation or other circumstances, are reviewed periodically so as to
determine the credit risk to which they are exposed and, if appropriate, to consider whether a provision is required for them. The
credit risk is determined by application of criteria similar to those established for quantifying loss allowances on debt instruments
measured at amortized cost (see Note 2.2.4).
The provisions recognized for financial guarantees are recognized under the heading “Provisions - Provisions for contingent risks and
commitments” on the liability side in the balance sheets (see Note 21). These provisions are recognized and reversed with a charge or
credit, respectively, to “Provisions or reversal of provision” in the income statements (see Note 41).
Income from financial guarantees is recorded under the heading “Fee and commission income” in the income statement and is
calculated by applying the rate established in the related contract to the nominal amount of the guarantee (see Note 35).
Synthetic securitizations made by the Bank to date meet the requirements of the accounting regulations for accounting as
guarantees. Consideration as a financial guarantee means recognition of the commission paid for it over the period.
2.4Non-current assets and disposal groups classified as held for sale and liabilities included in
disposal groups classified as held for sale
The heading “Non-current assets and disposal groups classified as held for sale” in the balance sheet includes the carrying amount of
individual items or items integrated in a group ("disposal group") or that form part of a significant business line or geographic area
that  is intended to be disposed of (“discontinued operation”) whose sale is highly probable to take place under the current conditions
within a period of one year from the date to which the financial statements refer. Additionally, assets that were expected to be
disposed of within a year but which disposal is delayed due to events and circumstances beyond the control of the Bank can be
classified as held for sale (see Note 19).
Symmetrically, the heading “Liabilities included in disposal groups classified as held for sale” in the balance sheet reflects the
balances payable arising from disposal groups and discontinued operations.
The heading "Non-current assets and disposal groups classified as held for sale" includes the assets received by the subsidiaries for
the satisfaction, in whole or in part, of the payment obligations of their debtors (foreclosed or received in payment of debt or
recoveries from financial leasing transactions, unless the Bank has decided to make continued use of those assets.
Non-current assets and disposal groups classified as held for sale are measured, at the acquisition date and at any later date deemed
necessary, at either their carrying amount or the fair value of the property (less costs to sell), whichever is lower. An impairment or
reversal of impairment for the difference is recognized if applicable. When the amount of the sale less estimated costs of sale is higher
than the carrying value, the gain is not recognized until the moment of disposal and derecognition from the balance sheet.
Non-current assets and disposal  groups classified as held for sale are not depreciated while included under the heading “Non-current
assets and disposal groups classified as held for sale”.
P.20
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
In the case of real estate assets foreclosed or received in payment of debts, they are initially recognized at the lower of: the restated
carrying amount of the financial asset and the fair value at the time of the foreclosure or receipt of the asset less estimated sales
costs. The carrying amount of the financial asset is updated at the time of the foreclosure, treating the real property received as a
secured collateral and taking into account the credit risk coverage that would correspond to it according to its classification prior to
the delivery. For these purposes, the collateral will be valued at its current fair value (less sale costs) at the time of foreclosure. This
carrying amount will be compared with the previous carrying amount and the difference will be recognized as a provision increase, if
applicable. On the other hand, the fair value of the foreclosed assets is based mainly on appraisals or valuations carried out by
independent experts on an annual basis or more frequently if there are indications of impairment by appraisal, evaluating the need to
apply a discount on the asset derived from the specific conditions of the asset or the market situation for these assets, and in any
case, deducting the company’s estimated sale costs.
Fair value of non-current assets held for sale from foreclosures or recoveries is based mainly in appraisals or valuations made by
independent experts on annual basis or more frequently, should there be indicators of impairment. The Bank applies the rule that
these appraisals may not be older than one year, and their age is reduced if there is an indication of deterioration in the assets. The
Bank mainly uses the services of the following valuation and appraisal companies. None of them is linked to the BBVA Group and all
are entered in the official Bank of Spain register: Global Valuation S.A.U.; Tinsa, S.A.; ., Gesval, Sociedad de Tasación;  , JLL
Valoraciones, S.A., Sociedad de Tasación Tasvalor; Eurovaloraciones,  S.A.
Gains and losses generated on the disposal of assets,  and liabilities classified as non-current held for sale, and liabilities included in
disposal groups classified as held for sale as well as impairment losses and, where pertinent, the related recoveries, are recognized in
”Gains (losses) from non-current assets and disposal groups classified as held for sale not qualifying as discontinued operations” in
the income statement (see Note 45). The remaining income and expense items associated with these assets and liabilities are
classified within the relevant income statement headings.
Income and expense for discontinued operations, whatever their nature, generated during the year, even if they have occurred before
their classification as discontinued operations, are presented net of the tax effect as a single amount under the heading “Profit (loss)
after tax from discontinued operations” in the income statement (see Note 1.3 and 14). This heading includes the earnings from their
sale or other disposal (net of tax effects).
2.5Tangible assets
Property, plant and equipment for own use
This heading includes the assets under ownership or acquired  under lease terms, (right to use) intended for future or current use by
the Bank and that it expects to hold for more than one year. It also includes tangible assets received by the Bank in full or partial
settlement of financial assets representing receivables from third parties  which are expected to be held for continuing use.
For more information regarding the accounting treatment of right to use assets under lease terms, see Note 2.16 "Leases".
Property, plant and equipment for own use are presented in the balance sheets at acquisition cost, less any accumulated depreciation
and, where appropriate, any estimated impairment losses resulting from comparing the net carrying amount of each item with its
corresponding recoverable  amount. (see Note 15).
Depreciation is calculated using the straight-line method, during the useful life of the asset, on the basis of the acquisition cost of the
assets less their residual value; the land is considered to have an indefinite life and is therefore not depreciated.
The tangible asset depreciation charges are recognized in the accompanying income statements under the heading "Depreciation and
Amortization" (see Note 40) and are based on the application of the following depreciation rates (determined on the basis of the
average years of estimated useful life of the various assets):
Depreciation rates for tangible assets
Type of assets
Annual Percentage
Buildings for own use
1% - 4%
Furniture
8% - 10%
Fixtures
6% - 12%
Office supplies and hardware
8% - 25%
Lease use rights
The lesser of the lease term or the useful life of the underlying asset
At each reporting date, the Bank analyzes whether there are internal or external indicators that a tangible asset may be impaired.
When there is evidence of impairment, the entity then analyzes whether this impairment actually exists by comparing the asset’s net
carrying amount with its recoverable amount (defined as the higher between its recoverable amount less disposal costs and its value
in use). When the carrying amount exceeds the recoverable amount, the carrying amount is written down to the recoverable amount
and depreciation charges going forward are adjusted to reflect the asset’s remaining useful life.
Similarly, if there is any indication that the value of a previously impaired tangible asset  is now recoverable, the entities will estimate
the recoverable amounts of the asset and recognize it in the income statement, recording the reversal of the impairment loss
recognized in previous years and thus adjusting future depreciation charges. Under no circumstances may the reversal of an
impairment loss on an asset raise its carrying amount above that which it would have if no impairment losses had been recognized in
prior years.
P.21
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
In BBVA, most of the buildings held for own use are assigned to the different Cash-Generating-Units (CGU) to which they belong. The
corresponding impairment analyzes are performed for these CGUs to check whether sufficient cash flows are generated to support
the value of the assets comprised within.
Operating and maintenance expense relating to tangible assets held for own use are recognized as an expense in the year they are
incurred and recognized in the income statements under the heading " Administration costs - Other administrative expense -
Property, fixtures and materials " (see Note 39.2).
Other assets leased out under an operating lease
The criteria used to recognize the acquisition cost of assets leased out under operating leases, to calculate their depreciation and
their respective estimated useful lives and to recognize the impairment losses on them, are the same as those described in relation to
tangible assets for own use.
Investment properties
The heading “Tangible assets - Investment properties” in the balance sheets reflects the net values (purchase cost minus the
corresponding accumulated depreciation and, if appropriate, estimated impairment losses) of the land, buildings and other structures
that are held either to earn rental  income or for capital appreciation through sale and that are neither expected to be sold off in the
ordinary course of business nor are destined for own use (see Note 15).
The criteria used to recognize the acquisition cost of investment properties, calculate their depreciation and their respective
estimated useful lives and recognize the impairment losses on them, are the same as those described in relation to tangible assets
held for own use.
2.6Intangible assets
Intangible assets in the financial statements of the Bank have a finite useful life.
The useful life of intangible assets is, at most, equal to the period during which the entity is entitled to use the asset; If the right of use
is for a limited renewable period, the useful life includes the renewal period only when there is evidence that the renewal will be carried
out without a significant cost (see Note 16).
When the useful life of intangible assets cannot be estimated reliably, they are amortized over a ten year period.
Intangible assets are amortized according to the duration of this useful life, using methods similar to those used to depreciate tangible
assets. The defined useful life intangible asset is made up mainly of IT applications acquisition costs which have a useful life of 3 to 5
years. The depreciation charge for these assets is recognized in the accompanying income statements under the heading
"Depreciation and amortization" (see Note 40).
The Bank recognizes any loss allowance on the carrying amount of these assets with charge to the heading “Impairment or reversal of
impairment on non - financial assets- Intangible assets” in the accompanying income statements (see Note 44). The criteria used to
recognize the impairment losses on these assets and, where applicable, the recovery of loss allowances previously recognized, are
similar to those used for tangible Assets.
2.7Tax assets and liabilities
Expenses on corporate income tax applicable to the Bank are recognized in the income statement, except when they result from
transactions on which the profits or losses are recognized directly in equity, in which case the related tax effect is also recognized in
equity.
The total corporate income tax expense is calculated by aggregating the current tax arising from the application of the corresponding
tax rate as per the tax base for the year (after deducting the tax credits or discounts allowable for tax purposes) and the change in
deferred tax assets and liabilities recognized in the income statement.
Deferred tax assets and liabilities include temporary differences, defined as at the amounts to be payable or recoverable in future
years arising from the differences between the carrying amount of assets and liabilities and their tax bases (the “tax value”), and tax
loss and tax credit or discount carry forwards. These amounts are calculated by applying to each temporary difference the tax rates
that are expected to apply when the asset is realized or the liability settled (see Note 17).
The "Tax Assets" line item in the accompanying balance sheets includes the amount of all the assets of a tax nature, broken down
into: "Current” (amounts of tax recoverable in the next twelve months) and "Deferred" (which includes the amount of tax to be
recovered in future years, including those arising from tax losses or credits for deductions or rebates that can be compensated). The
"Tax Liabilities" line item in the accompanying balance sheets includes the amount of all the liabilities of a tax nature, except for
provisions for taxes, broken down into: "Current” (income tax payable on taxable profit for the year and other taxes payable in the
next twelve months) and "Deferred" (the amount of corporate tax payable in subsequent years).
Deferred tax liabilities attributable to taxable temporary differences associated with investments in subsidiaries, associates or joint
venture entities are recognized as such, except where the Bank can control the timing of the reversal of the temporary difference and
it is unlikely that it will reverse in the future. Deferred tax assets are recognized to the extent that it is  probable that the Bank will
generate enough taxable profits to make deferred tax assets effective and do not correspond to those from initial recognition (except
in the case of business combination), which also  does not affect the fiscal outcome.
P.22
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
In those circumstances in which it is unclear how a specific requirement of the tax law applies to a particular transaction or
circumstance, and the acceptability of the definitive tax treatment depends on the decisions taken by the relevant taxation authority
in future, the entity recognizes current and deferred tax liabilities and assets considering whether it is probable or not that a taxation
authority will accept an uncertain tax treatment. Thus, if the entity concludes that it is not probable that the taxation authority will
accept an uncertain tax treatment, the entity uses the amount expected to be paid to (recovered from) the taxation authorities.
The income and expense directly recognized in equity that do not increase or decrease taxable income are accounted for as
temporary differences.
2.8Provisions, contingent assets and contingent liabilities
The heading “Provisions” in the balance sheets includes amounts recognized to cover the Bank’s current obligations arising as a
result of past events. These are certain in terms of nature but uncertain in terms of amount and/or settlement date. The settlement of
these obligations  is deemed likely to entail an outflow of resources embodying economic benefits (see Note 21). The obligations may
arise in connection with legal or contractual provisions, valid expectations formed by the Bank relative to third parties in relation to the
assumption of certain responsibilities or through virtually certain developments of particular aspects of the regulations applicable to
the operation of the entities; and, specifically, future legislation to which the Bank will certainly be subject.
The provisions are recognized in the balance sheets when each and every one of the following requirements is met:
–They represent a current obligation that has arisen from a past event.
–At the date of the financial statements, there is more probability that the obligation will have to be met than that it will not.
–It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation.
–The amount of the obligation can be reasonably estimated.
Among other items, these provisions include the commitments made to employees (mentioned in section 2.9), as well as provisions
for tax and legal litigation.
Contingent assets are possible assets that arise from past events and whose existence is conditional on, and will be confirmed only
by, the occurrence or non-occurrence of events beyond the control of the Bank. Contingent assets are not recognized in the balance
sheet or in the income statement; however, they will be disclosed, should they exist, provided that it is probable that these assets will
give rise to an increase in resources embodying economic benefits (see Note 30).
Contingent liabilities are possible obligations of the Bank that arise from past events and whose existence is conditional on the
occurrence or non-occurrence of one or more future events beyond the control of the entity. They also include the existing obligations
of the entity when it is not probable that an outflow of resources embodying economic benefits will be required to settle them; or
when, in extremely rare cases, their amount cannot be measured with sufficient reliability.
Contingent liabilities are not recognized in the balance sheet or the income statement (excluding contingent liabilities from business
combinations) but are disclosed in the Notes to the Financial Statements, unless the possibility of an outflow of resources embodying
economic benefits is remote.
2.9Post-employment and other employee benefit commitments
Below we provide a description of the most significant accounting policies relating to post-employment and other employee benefit
commitments assumed by the Bank (see Note 22).
Short-term employee benefits
Benefits for current active employees which are accrued and settled during the year and for which a provision is not required in the
entity´s accounts. These include wages and salaries, social security charges and other personnel expense.
Costs are charged and recognized under the heading “Administration costs – Personnel expense – Other personnel expense” of the
income statement (see Note 39.1).
Post-employment benefits – Defined-contribution plans
The Bank sponsors defined-contribution plans for the majority of its active employees. The amount of these benefits is established as
a percentage of remuneration and/or as a fixed amount.
The contributions made to these plans in each year by the Bank are charged and recognized under the heading “Administration costs
– Personnel expense – Defined-contribution plan expense” of the income statement (see Note 39.1).
Post-employment benefits – Defined-benefit plans
The Bank maintains pension commitments with employees who have already retired or taken early retirement, certain closed groups
of active employees still accruing defined benefit pensions, and in-service death and disability benefits provided to most active
employees. These commitments are covered by insurance contracts, pension funds and internal provisions.
P.23
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
In addition, the Bank have offered certain employees the option to retire before their normal retirement age , recognizing the
necessary provisions to cover the costs of the associated benefit commitments, which include both the liability for the benefit
payments due as well as the contributions payable to external pension funds during the early retirement period.
Furthermore, the Bank provides welfare and medical benefits which extend beyond the date of retirement of the employees entitled to
the benefits.
All of these commitments are quantified based on actuarial valuations, with the amounts recorded under the heading “Provisions –
Provisions for pensions and similar obligations” and determined as the difference between the value of the defined-benefit
commitments and the fair value of plan assets at the date of the financial statements (see Note 21).
Current service cost is charged and recognized under the heading “Administration costs – Personnel expense – Defined-benefit plan
expense” of the income statement (see Note 39.1).
Interest credits/charges relating to these commitments are charged and recognized in net terms under the headings “Interest and
other income” or, where appropriated, “Interest expense” of the income statement. (see Note 33).
Past service costs arising from benefit plan changes as well as early retirements granted during the year are recognized under the
heading “Provisions or reversals of provisions” of the income statement (see Note 41).
Other long-term employee benefits
In addition to the above commitments, the Bank provides long-term service awards to their employees, consisting of  monetary
amounts or periods of vacation granted upon completion of a number of years of qualifying service. This heading also includes the
commitments related to the termination of employment contracts according to the collective layoff procedure carried out in BBVA,
S.A.
These commitments are quantified based on actuarial valuations and the amounts recorded under the heading “Provisions – Other
long-term employee benefits” of the balance sheet (see Note 21).
Valuation of commitments: actuarial assumptions and recognition of gains/losses
The present value of these commitments is determined based on individual member data. Active employee costs are determined
using the “projected unit credit” method, which treats each period of service as giving rise to an additional unit of benefit and values
each unit separately.
In establishing the actuarial assumptions we take into account that:
–They should be unbiased, i.e. neither unduly optimistic nor excessively conservative.
–Each assumption does not contradict the others and adequately reflects the existing relationship between economic
variables such as price inflation, expected wage increases, discount rates and the expected return on plan assets, etc.
Future wage and benefit levels should be based on market expectations, at the balance sheet date, for the period over which
the obligations are to be settled.
–The interest rate used to discount benefit commitments is determined by reference to market yields, at the balance sheet
date, on high quality bonds.
The Bank recognizes actuarial gains (losses) relating to early retirement benefits, long service awards and other similar items under
the heading “Provisions or reversal of provisions” of the income statement for the period in which they arise (see Note 41). Actuarial
gains/losses relating to pension and medical benefits are directly charged and recognized under the heading "Accumulated other
comprehensive income (loss) – Items that will not be reclassified to profit or loss – Actuarial gains  (losses) on defined benefit
pension plans" of equity in the balance sheet (see Note 27).
2.10Equity-settled share-based payment transactions
Equity –settled share-based payment transactions provided they constitute the delivery of such equity instruments  once completion
of a specific period of services,  has occurred are recognized as an expense for services being provided by employees,  with a
corresponding entry under the heading “Shareholders’ funds – Other equity instruments” in the balance sheet. These services are
measured at fair value for the employees services received, unless such fair value cannot be calculated reliably. In such case, they are
measured by reference to the fair value of the equity instruments granted, taking into account the date on which the commitments
were granted and the terms and other conditions included in the commitments.
When the initial compensation agreement includes what may be considered market conditions among its terms, any changes in these
conditions will not be reflected in the income statement, as these have already been accounted for in calculating the initial fair value of
the equity instruments. Non-market vesting conditions are not taken into account when estimating the initial fair value of equity
instruments, but they are taken into account when determining the number of equity instruments to be issued. This will be recognized
on the income statement with the corresponding increase in equity.
P.24
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
2.11Termination benefits
Termination benefits are recognized in the financial statements when the Bank agrees to terminate employment contracts with its
employees or from the time the costs for a restructuring that involves the payment of compensation for the termination of contracts
with its employees are recorded. This happens when there is a formal and detailed plan in which the fundamental modifications to be
made are identified, and whenever said plan has begun to be executed or its main characteristics, or objective facts about its
execution have been publicly announced..
2.12Treasury shares
The value of common stock -basically, shares and derivatives on the Bank's shares held by itself that comply with the requirements to
be recognized as equity instruments- is recognized as a decrease to net equity under the heading "Shareholders’ funds – Treasury
stock" in the balance sheets (see Note 26).
These financial assets are recognized at acquisition cost, and the gains or losses arising on their disposal are credited or debited, as
appropriate, to the heading “Shareholders’ funds – Retained earning ” in the balance sheet (see Note 25).
In the event of a  contractual obligation to acquire treasury shares, a financial liability is recorded as the present value of the amount
committed (under the heading "Financial liabilities at amortized cost - Other financial liabilities") and the corresponding recognition in
net equity ( under the heading “Equity - Other Reserves”) (see Notes 20.5 and 25).
2.13Foreign-currency transactions
The currency in which the Financial Statements of the BBVA Group are presented is the euro. As such, all balances and transactions
denominated in currencies other than the euro are deemed to be expressed in “foreign currency”.
Assets, liabilities and futures transactions
The assets and liabilities in foreign currencies, including those of branches abroad, and the unmatured hedging forward foreign
currency purchase and sale transactions, are converted to euros at the average exchange rates on the Spanish spot currency market
(or based on the price of the U.S. dollar on local markets for the currencies not listed on this market) at the end of each period, with
the exception of:
–Non-current investments in securities denominated in foreign currencies and financed in euros or in a currency other than
the investment currency, which are converted at historical exchange rates.
–Unmatured non-hedging forward foreign currency purchase and sale transactions, which are converted at the exchange
rates on the forward currency market at the end of each period as published by the Bank of Spain for this purpose.
The exchange differences produced when converting these balance in foreign-currency to the functional currency of the branches are 
generally recognized under the heading “Exchange differences, net" in the income statement. However the exchange differences  in
non-monetary items measured at fair value are recorded to equity under the heading “Accumulated other comprehensive income
(loss) - Items that will not reclassified to profit or loss - Fair value changes of equity instruments measured at fair value through other
comprehensive income”.  (See note 27).
The breakdown of the main balances in foreign currencies as of December 31, 2021 and 2020, with reference to the most significant
foreign currencies, is set forth in Appendix VIII.
Structural currency positions
As a general policy, the Bank’s investments in foreign subsidiaries and the endowment funds provided to branches abroad are
financed in the same currency as the investment in order to eliminate the future currency risk arising from these transactions.
However, the investments made in countries whose currencies do not have a market which permits the obtainment of unlimited,
lasting and stable long-term financing are financed in another currency.
2.14Recognition of income and expense
The most significant policies used by the Bank to recognize its income and expense are as follows.
–Interest income and expense and similar items
As a general rule, interest income and expense and similar items are recognized on the basis of their period of accrual using
the effective interest rate method.
They shall be recognized within the income statement according to the following criteria, independently from the financial
instruments’ portfolio which generates the income or expense:
a.The interest income past-due before the initial recognition and pending to be received will form part of the gross
carrying amount of the debt instrument.
P.25
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
b.The interest income accrued after the initial recognition will form part of the gross carrying amount of the debt
instrument until it will be received.
The financial fees and commissions that arise on the arrangement of loans and advances (basically origination and analysis
fees) are deferred and recognized in the income statement over the expected life of the loan. From that amount, the
transaction costs identified as directly attributable to the arrangement of the loans and advances are deducted. These fees
are part of the effective interest rate for the loans and advances.
Once a debt instrument has been impaired, interest income is recognized applying the effective interest rate used to
discount the estimated recoverable cash flows on the carrying amount of the asset.
–Income from dividends received:
Dividends shall be recognized within the income statement according to the following criteria, independently from the
financial instruments’ portfolio which generates this income:
a.When the right to receive payment has been declared before the initial recognition and when the payment is
pending to be received, the dividends will not form part of the gross carrying amount of the equity instrument and
will not be recognized as income. Those dividends are accounted for as financial assets separately from the net
equity instrument.
b.If the right to receive payment is received after the initial recognition, the dividends from the net equity
instruments will be recognized within the income statement. If the dividends correspond  to the profits of the
issuer before the date of initial recognition, they will not be recognized as income but as reduction of the gross
carrying amount of the equity instrument because it represents a partial recuperation of the investment. Amongst
other circumstances, the generation date can be considered to be prior to the date of initial recognition if the
amounts distributed by the issuer as from the initial recognition are higher than its profits during the same period.
–Commissions, fees and similar items
Income and expense relating to commissions and similar fees are recognized in the income statement using criteria that
vary according to the nature of such items. The most significant items in this connection are:
a.Those relating to financial assets and liabilities measured at fair value through profit or loss, which are recognized
when collected/paid.
b.Those arising from transactions or services that are provided over a period of time, which are recognized over the
life of these transactions or services.
c.Those relating to a singular transaction, which are recognized when this singular transaction act is carried out.
–Non-financial income and expense
These are recognized for accounting purposes on an accrual basis.
–Deferred collections and payments
These are recognized for accounting purposes at the amount resulting from discounting the expected cash flows at market
rates.
2.15Sales of assets and income from the provision of non-financial services
The heading “Other operating income” in the income statement includes the proceeds of the sales of assets and income from the
services provided by the Bank that are not financial institutions (see Note 38).
2.16Leases
The  lessee accounting model requires the lessee to record assets and liabilities for all lease contracts. A lessee is required to
recognize a right-of-use asset representing its right to use the underlying leased asset, which is recorded under the headings ‘‘
Tangible assets – Property plants and equipment’’ and‘‘ Tangible assets – Investment properties’’ of the balance sheet (see Note 15)
and a lease liability representing its obligation to make lease payments which is recorded under the heading ‘‘ Financial liabilities at
amortized cost – Other financial liabilities’’ in the balance sheet (see Note 20.5). The standard provides two exceptions for the
recognition of lease assets and liabilities, that can be applied in the case of short-term contracts and those in which the underlying 
assets have low value. BBVA elected to apply both exceptions.
At the initial date of the lease, the lease liability represents the present value of all lease unpaid payments. The liabilities registered
under this heading of the balance sheets are measured after their initial recognition at amortized cost, this being determined in
accordance with the “effective interest rate” method.
P.26
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
The right to use assets are initially recorded at cost. This cost  includes the initial measurement  of the lease liability, any payment
made on or before the initial date less any incentives received, all direct initial expenses incurred, as well as an estimate of the
expenses to be incurred by the lessee for dismantling or rehabilitation, such as expenses to the removal and dismantling of the
underlying asset. The right to use assets recorded under this heading of the balance sheets are measured after their initial recognition
at cost less:
– The accumulated depreciation and accumulated impairment
–Any remeasurement of the lease liability.
The interest expense on the lease liability is recorded in the income statements under the heading “Interest expense” (see note 33).
Variable payments not included in the initial measurement of the lease liability are recorded under the heading “Administration costs
– Other administrative expense” (see Note 39).
Amortization is calculated using the straight-line method over the lifetime of the lease contract, on the basis of the cost of the assets.
The tangible asset depreciation charges are recognized in the accompanying income statements under the heading "Depreciation and
Amortization" (see Note 40).
When electing one of the exceptions in order not to recognize the corresponding right to use and the liability in the balance sheets,
payments related to the corresponding lease are recognized in the income statements, over the contract period, lineally, or in the way
that best represents the structure of the lease operation, under the heading "Other operating expense” (see note 38).
Operating lease and sublease incomes are recognized in the income statements under the headings “Other operating income” (see
Note 38).
As a lessor, lease contracts are classified as finance leases from the inception of the transaction if they substantially transfer all the
risks and rewards incidental to ownership of the asset forming the subject-matter of the contract. Leases other than finance leases
are classified as operating leases.
When the entities act as the lessor of an asset under finance leases, the aggregate present values of the lease payments receivable
from the lessee plus the guaranteed residual value (normally the exercise price of the lessee’s purchase option on expiration of the
lease agreement) are recognized as financing provided to third parties and, therefore, are included under the heading “Loans and
advances” in the accompanying balance sheets (see Note 12).
When the entities act as lessors of an asset in operating leases, the acquisition cost of the leased assets is recognized under "Tangible
assets – Property, plant and equipment – Other assets leased out under an operating lease" in the balance sheets (see Note 15).
These assets are depreciated in line with the criteria adopted for items of tangible assets for own use, while the income arising from
the lease arrangements is recognized in the income statement on a straight-line basis within “Other operating income” and "Other
operating expense" (see Note 38)
If a fair value sale and leaseback results in a lease, the profit or loss generated from the  effectively transferred part) of the sale is
recognized in the income statement at the time of sale (only for the effectively transmitted part)
2.17Entities and branches located in countries with hyperinflationary economies
None of the functional currencies of the branches located abroad relate to hyperinflationary economies as defined by Circular 4/2017
and subsequent amendments. Accordingly, as of December 31, 2021 and 2020 it was not necessary to adjust the financial statements
of any branch to correct for the effect of inflation.
2.18Statements of recognized income and expense
The statements of recognized income and expense reflect the income and expenses generated each year. They distinguish between
income and expense recognized as results in the income statements and “Accumulated other comprehensive income” (see Note 27)
recognized directly in equity. “Accumulated other comprehensive income” include the changes that have taken place in the year in
the “Accumulated other comprehensive income” broken down by item.
The sum of the changes to the heading “Accumulated other comprehensive income” of the total equity and the net income of the year
forms the “Accumulated other comprehensive income”.
2.19Statements of changes in equity
The statements of changes in equity reflect all the movements generated in each year in each of the headings of the equity, including
those from transactions undertaken with shareholders when they act as such, and those due to changes in accounting criteria or
corrections of errors, if any.
The applicable regulations establish that certain categories of assets and liabilities are recognized at their fair value with a charge to
equity. These charges, known as “Accumulated other comprehensive income” (see Note 27), are included in the Bank’s total equity
net of tax effect, which has been recognized as deferred tax assets or liabilities, as appropriate.
P.27
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
2.20Statements of cash flows
The indirect method has been used for the preparation of the statement of cash flows. This method starts from the Bank’s net income
and adjusts its amount for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash
receipts or payments, and items of income or expense associated with cash flows classified as investment or finance. As well as cash,
short-term, highly liquid investments subject to a low risk of changes in value, such as cash and deposits in central banks, are
classified as cash and cash equivalents.
When preparing these financial statements the following definitions have been used:
–Cash flows: Inflows and outflows of cash and cash equivalents.
–Operating activities: The typical activities of credit institutions and other activities that cannot be classified as investment or
financing activities.
–Investing activities: The acquisition, sale or other disposal of long-term assets and other investments not included in cash
and cash equivalents or in operating activities.
–Financing activities: Activities that result in changes in the size and composition of the Bank's equity and of liabilities that do
not form part of operating activities.
2.21Recent pronouncements
During the year 2021, Circular 6/2021 has come into force, modifying Circular 4/2017 in order to respond to various aspects both
related to International Information Standards, and to align with the requirements of FINREP and the EBA between others.
During 2021, Circular 6/2021 has come into force, amending Circular 4/2017 with the aim of responding to various aspects both
related to the project to reform benchmark indices, and to align with the requirements of FINREP and of the EBA among others.
Regarding the benchmark reform project, the accounting treatment of the contracts affected by this reform is simplified (Ibor Reform
phase 2) in line with the changes already introduced in IFRS 9 and IFRS 7 by the IASB.
These modifications focus on accounting for financial instruments, once a new risk-free benchmark has been introduced (Risk Free
Rate in its English meaning, hereinafter “RFR”). in such a way as to ensure that the financial statements reflect in the best possible
way the economic effects of this reform.
The modifications introduce the practical simplification of accounting for the changes in the cash flows of financial instruments
directly caused by the Ibor reform by updating the effective interest rate of the instrument if they take place in a context of “economic
equivalence”. Additionally, it introduces a series of exemptions to the hedging requirements so as not to have to interrupt certain
hedging relationships. However, similar to the Phase 1 amendments (which entered into force in 2020) (See Note 13), the Phase 2
amendments do not provide for exceptions to the valuation requirements applicable to hedged items and hedging instruments. Thus,
once the new benchmark has been implemented, the hedged items and hedging instruments must be valued according to the new
index, and the possible ineffectiveness that may exist in the hedge will be recognized in the income statement.
The transition from Ibor to RFR is considered a complex initiative, which affects BBVA, S.A. in different lines of business, as well as in a
multitude of products, systems and processes. The main risks to which the Bank is exposed due to the transition are; (1) risk of
litigation related to the products and services offered by the Bank; (2) legal risks derived from changes in the documentation required
for existing operations; (3) financial and accounting risks, derived from market risk models and from the valuation, coverage,
cancellation and recognition of financial instruments associated with benchmark indices; (4) price risk, derived from how changes in
the indices could impact the pricing mechanisms of certain instruments; (5) operational risks, since the reform may require changes
to the Bank's computer systems, business reporting infrastructure, operational processes and controls, and (6) behavioral risks
derived from the potential impact of communications with clients during the transition period, which could lead to customer
complaints, regulatory penalties or reputational impact.
This transition project has taken into account the different approaches and transition periods to the new RFRs when evaluating the
various risks associated with the transition, as well as to define the lines of action in order to mitigate them. BBVA is aligned with the
Good Practices issued by the ECB that outline how banks can better structure their governance, identify related risks and create
contingent action plans and documentation in relation to the transition of reference rates. The Bank has defined a robust governance
structure with direct supervision from senior management. The coordination between the different work groups is carried out through
the Project Management Office (PMO) and the Global Working Groups that have a transversal vision in the areas of Legal, Risks,
Regulatory, Finance and Accounting and Engineering.
During the year 2021 BBVA, S.A. has worked on modifying its contracts referenced to EONIA and LIBOR exUSD CHF, GBP, JPY and
USD (for terms of one week and two months) to the corresponding RFRs. As of December 2021, the Bank continues to maintain
financial assets and liabilities whose contracts are referenced to Ibor rates, mainly to Euribor (whose disappearance, as we explain
below, is not foreseen today) and Libor USD, when used, among others, for loans, deposits and Debt issues as well as underlying
derivative financial instruments.
In the case of EONIA, in 2021 BBVA SA carried out a novation of most of the contracts expiring after 2021, migrated the balances
against clearing houses and renegotiated collateral contracts, substituting that index for the € STR. In the case of EURIBOR, the
European authorities have promoted modifications in its methodology so that it complies with the requirements of the European
Regulation of Reference Indices, so this index does not disappear.
P.28
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
The official discontinuation date for LIBORs exUSD (GBP, CHF, EUR, JPY), USD LIBOR 1-week and 2-month indices was December 31,
2021, and for EONIA was December 31, 2021. However, the Financial Conduct Authority (FCA) and the European Commission
establish a legal safeguard in the event that there are some operations that could not be migrated before said discontinuation date. In
the case of the FCA, said legal safeguard, called Synthetic LIBOR, would apply only to contracts referenced to LIBOR GBP and LIBOR
JPY in terms of 1, 3 and 6 months, and allows the index to continue to be applied for an additional period. Instead, the European
Commission, through what is known as the Statutory Fallback, provides a legal safeguard for EONIA contracts and for LIBOR CHF
(which will come into force on January 1, 2022), so that in the contracts subject to this measure, said indices are automatically
replaced and by legal imperative, by the substitute indices identified in the standard.
The entity has actively collaborated in the IBOR transition, both for its support and participation in the sectorial working groups and
for its commitment to remediate the contracts with its counterparties. In this sense, the entity has carried out a process of
communication and contact with the counterparties to modify the terms of the contractual relations in such a way that said
agreements have been modified using different mechanisms: through the inclusion of addenda to the contracts, by the adherence to
industry standard protocols, the transition of operations by clearing house, the cancellation of contracts and subscription of new
ones, or by the transition through other legislative mechanisms.
This process has been managed through the monitoring mechanisms and indicators that have been developed by the working groups
within the Group. The process will remain active for the management of the transition of the USD (for the rest of the affected terms in
June 2023), the transition of other currencies and those contracts that, in a very residual way, have been referenced to the proposed
synthetic solution by the FCA, as this is a temporary measure. Likewise, work continues to adapt all systems and processes in the
treatment of alternative RFR indices, such as SOFR and SONIA.
Below is the BBVA Group's exposure to financial assets and liabilities maturing after the transition dates of these IBORs to their
corresponding RFRs. At the end of the year, thanks to efforts in remediation contracts, the BBVA Group has robust transition
fallbacks or a synthetic or statutory solution for all operations with EONIA and LIBOR EUR, CHF, GBP, JPY and USD (for terms of one
week and two months) that have not yet transitioned to December 31, 2021.  The table shows the gross amounts in the case of loans
and advances to customers, asset and liability debt instruments, and deposits and, in the case of derivatives, their notional value is
shown:
Millions of Euros
Loans &
Advances
Debt Securities
Assets
Debt Securities
Issued
(Liabilities)
Deposits
Derivatives
(notional)
EONIA with maturity > December 31, 2021
—
—
—
—
6,672
LIBOR ex USD & LIBOR USD 1W/2M with
maturity > December 31, 2021
1,557
—
243
846
27,343
LIBOR USD with maturity > June 30, 2023
15,148
29
—
119
413,531
Total
16,704
29
243
964
447,546
It should be noted that all these exposures (with the exception of USD LIBOR for terms other than one week and two months) will
transition effectively, and with the mechanisms described above, as of January 1, 2022, depending on the next interest rate fixes.
In relation to the individual reserved statements, these are modified to align them with the new FINREP framework (Commission
Regulation 2021/451) that applies to the Consolidated Financial Statements. Specifically, it should be noted that the definition of
doubtful that will be used for these States will be the definition of NPL established in article 47bis a) of the CRR. This amendment
takes effect in 2022.
The Circular also introduces several modifications to Annex 9 of Circular 4/2017; On the one hand, the wording is aligned with the EBA
criteria in relation to the calculation of the year for the exit of the refinanced operations of stage 3, the criteria on granting and
monitoring of loans are eliminated, and the tables of the solutions are updated alternatives both for the collective estimation of the
coverage of the loss due to credit risk and for the discounts on the reference value of the assets awarded or received in payment of
debts (increase in percentages). The entry into force of these modifications is June 30, 2022.
Finally, the Circular updates the statistical data requirements of the Economic and Monetary Union (EMU) with entry into force in
2022.
3.Shareholder remuneration system
Cash Dividends in 2020
The Annual General Meeting of BBVA held on March 13, 2020, approved, under item 1 of the Agenda, the payment of a final dividend
for 2019, in addition to other dividends previously paid, in cash for an amount equal to €0.16 (€0.1296 net of withholding tax) per
BBVA share. The total amount paid to shareholders on April 9, 2020, after deducting treasury shares held by the Group's Companies,
amounted to €1,067 million and is recognized under the heading "Total equity- Retained earnings" of the consolidated balance sheet
as of December 31, 2020.
P.29
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
ECB recommendations for 2020
In accordance with recommendation ECB/2020/19 issued by the ECB on March 27, 2020 on dividend distributions during the
COVID-19 pandemic, the Board of Directors of BBVA resolved to modify for the financial year corresponding to 2020 the dividend
policy of the Group, announced on February 1, 2017, determining as new policy for 2020 not to pay any dividend amount
corresponding to 2020 until the uncertainties caused by COVID-19 disappear and, in any case, not before the end of such fiscal year.
On July 27, 2020, the ECB prolonged this recommendation until January 1, 2021 by adopting recommendation ECB/2020/35.
On December 15, 2020 the ECB issued recommendation ECB/2020/62, repealing recommendation ECB/2020/35 and
recommending that significant credit institutions exercise extreme prudence when deciding on or paying out dividends or performing
share buy-backs aimed at remunerating shareholders.
Shareholder remuneration during financial year 2021
BBVA notified on January 29, 2021, by means of Privileged Information, that it intended to resume its shareholder remuneration
policy in 2021, announced on February 1, 2017, via Relevant Event, contingent upon the repealing of recommendation ECB/2020/62
and the absence of further restrictions or limitations.
The Annual General Meeting held on April 20, 2021 approved, in the third item of its agenda, a cash distribution from the issue
premium account of €0.059 per share as shareholder remuneration in respect of the Group’s 2020 earnings for each of the Bank's
outstanding shares, all this in compliance with recommendation ECB/2020/62, which was paid on April 29, 2021. The total amount
was €393 million and was recognized under the heading “Total Equity – Share Premium” of the consolidated balance sheet as of
December 31, 2021 (see Note 24).
On July 23, 2021, the European Central Bank published the approval of recommendation ECB/2021/31 repealing recommendation
ECB/2020/62 from September 30, 2021, whereby the ECB indicated that it would assess capital, dividend distribution and share
buyback plans of each financial institution in the context of their ordinary supervisory process, eliminating the remaining restrictions
on dividend and share buyback related matters established in recommendation ECB/2020/62.
In keeping with the above, the Board of Directors, at its meeting held on September 30, 2021, approved the payment in cash of €0.08
(€0.0648 net of withholding tax) per BBVA share, as gross interim dividend against 2021 results. The total amount paid to
shareholders on October 12, 2021, after deducting treasury shares held by the Group's companies, amounted to €533 million and is
recognized under the heading "Shareholder’s funds - Total equity- Interim dividends" of the consolidated balance sheet as of
December 31, 2021.
The forecasted financial statement, drawn up in compliance with the applicable legal requirements, which evidenced the existence of
sufficient liquidity to distribute the abovementioned amount approved on September 29, 2021 was the following:
Available amount for interim dividend payments (Millions of Euros)
August 31,
2021
Profit of BBVA, S.A., after the provision for income tax
934
Maximum amount distributable
934
Amount of proposed interim dividend
533
BBVA cash balance available to the date
31,887
Other shareholder remuneration
On February 3, 2022, it was announced that a cash distribution in the amount of €0.23 gross per share as shareholder remuneration
in relation to the Group's result in the 2021 financial year was expected to be submitted to the relevant governing bodies of BBVA for
consideration (see Note 51).
Share buyback program
On October 26, 2021, BBVA obtained the pertinent authorization from the European Central Bank to buy back up to 10% of its share
capital for a maximum of €3.5 billion, in one or several tranches and over the course of a 12-month period (the “Authorization”).
Upon receiving the authorization and making use of the delegation conferred by the BBVA Annual General Meeting held on March 16,
2018, at its meeting of October 28, 2021, BBVA Board of Directors resolved to carry out a framework share buyback program in
compliance with Regulation (EU) no. 596/2014 of the European Parliament and the Council of April 16, 2014 on market abuse and
Delegate Regulation (EU) no. 2016/1052 of the Commission, of March 8, 2016, to be executed in various tranches up to a maximum of
€3.5 billion, with the aim of reducing BBVA's share capital (the “Framework Program”), notwithstanding the possibility of terminating
or cancelling the Framework Program at an earlier date where advisable due to the concurrence of a series of specific circumstances,
as well as to carry out a first share buyback program within the Framework Program (the "First Tranche"), which was notified as
Privileged Information on October 29, 2021.
P.30
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
On November 19, BBVA notified by means of Privileged Information that the First Tranche would be executed externally through J.P.
Morgan AG as manager, for a maximum amount of €1,500 million, for the purchase of a maximum number of shares of 637,770,016
representing, approximately, 9.6% of BBVA's share capital as of the date of the agreement, and that the first program would begin on
November 22, 2021, and that it would conclude not earlier than November 22, 2021 or later than April 5, 2022, and, in any case,
whenever, within said timeframe the maximum monetary amount is reached, or the maximum number of shares is purchased.
Between November 22 and December 31, 2021, J.P. Morgan AG, as manager of the First Tranche, acquired 112,254,236 BBVA shares 
(see Note 26). Between January 1 and February 3, 2022, J.P. Morgan AG has acquired 65,272,189 BBVA shares.
On February 3, 2022, BBVA announced that its Board of Directors agreed, within the Framework Program, to carry out a second
buyback program (the “Second Tranche”) aimed at reducing BBVA’s share capital, for a maximum amount of €2,000 million and a
maximum number of shares to be acquired equal to the result of subtracting from 637,770,016 own shares (9.6% of BBVA’s share
capital at that date) the number of own shares finally acquired in execution of the First Tranche. The implementation of the Second
Tranche, which will also be executed externally through a lead-manager, will begin after the end of the implementation of the First
Tranche and shall end no later than October 15, 2022. (see Note 51)
Amendment of Shareholder Remuneration Policy
On November 18, 2021, BBVA announced that the Board of Directors of BBVA agreed to modify the Group’s shareholder distribution
policy, which was communicated as relevant information on February 1, 2017, with registration number 247679 establishing a new
policy consisting in an annual distribution of between 40% and 50% of the consolidated ordinary profit of each year (excluding
extraordinary amounts and items included in the consolidated profit and loss account), compared to the previous policy of
distributing between 35% and 40%.
This policy will be implemented through the distribution of an interim dividend for the year (expected to be paid in October of each
year) and a final dividend (to be paid once the year has ended and the allocation of the year-end profit has been approved, expected to
take place in April of each year), with the possibility of combining cash distributions with share buybacks (the execution of the share
buyback program will be deemed an extraordinary shareholder remuneration and will, therefore, not be included within the scope of
the policy), all subject to the relevant authorizations and approvals applicable at any given time.
Proposal on allocation of earnings for 2021
Below is included a breakdown of the distribution of the Bank´s earnings for financial year 2021, which the Board of Directors will
submit to the Annual General Meeting for approval.
Allocation of earnings (Millions of Euros)
2021
Profit (loss) for year
1,080
Distribution
Interim dividends
533
Reserves / Accumulated gains
547
P.31
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
4.Earnings per share
Basic and diluted earnings per share are calculated in accordance with the criteria established by IAS 33. For more information see
Glossary of terms.
The calculation of earnings per share of BBVA is as follows:
Basic and Diluted Earnings per Share
2021
2020
Numerator for basic and diluted earnings per share (millions of euros)
Profit attributable to parent company
4,653
1,305
Adjustment: Additional Tier 1 securities (*)
(359)
(387)
Profit adjusted (millions of euros) (A)
4,293
917
Profit (loss) from continued operations (net of remuneration of Additional Tier 1 capital
instruments)
4,014
2,646
Profit (loss) from discontinued operations (net of non-controlling interest) (B)
280
(1,729)
Denominator for basic earnings per share (number of shares outstanding)
—
—
Weighted average number of shares outstanding (**)
6,668
6,668
Average treasury shares
(12)
(13)
Share buyback program (***)
(255)
—
Adjusted number of shares - Basic earnings per share (C)
6,401
6,655
Adjusted number of shares - diluted earnings per share  (D)
6,401
6,655
Earnings (losses) per share (****)
0.67
0.14
Basic earnings (losses) per share from continuing operations (Euros per share)A-B/C
0.63
0.40
Diluted earnings (losses) per share from continuing operations (Euros per share)A-B/D
0.63
0.40
Basic earnings (losses) per share from discontinued operations (Euros per share)B/C
0.04
(0.26)
Diluted earnings (losses) per share from discontinued operations (Euros per share)B/D
0.04
(0.26)
(*) Remuneration in the year related to contingent convertible securities, recognized in equity (see Note 20.4).
(**) Weighted average number of shares outstanding (millions of euros), excluding weighted average of treasury shares during the year.
(***) Consists of 112 million shares acquired between November 22 and December 31, 2021, by J.P. Morgan AG, as manager of the first tranche of the shares buyback program
approved by the Board of Directors in October 2021 (€1,500 million); and the estimated number of shares pending to be acquired under such tranche as of December 31, 2021
(see Note 3)
(****) In 2021 and 2020 the weighted average number of shares outstanding was 6,668 million. The adjustment of additional Tier 1 securities amounted to €359 and €387 million
in 2021 and  2020, respectively.
As of December 31, 2021 and 2020 there were no other financial instruments or share option commitments to employees that could
potentially affect the calculation of the diluted earnings per share for the years presented. For this reason, basic and diluted
earnings  . coincide for the years ending on those dates.
5.Risk management
5.1Risk factors
BBVA has processes in place for identifying risks and analyzing scenarios in order to enable to manage risks in a dynamic and
proactive way.
The risk identification processes are forward looking to seek the identification of emerging risks and take into account the concerns of
both the business areas, which are close to the reality of the different geographical areas, and the corporate areas and senior
management.
Risks are identified and measured consistently using the methodologies deemed appropriate in each case. Their measurement
includes the design and application of scenario analyzes and stress testing and considers the controls to which the risks are
subjected.
As part of this process, a forward projection of the Risk Appetite Framework (RAF) variables in stress scenarios is conducted in order
to identify possible deviations from the established thresholds. If any such deviations are detected, appropriate measures are taken to
keep the variables within the target risk profile.
P.32
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
In this context, there are a number of emerging risks that could affect the evolution of the Bank's business. These risks are included in
the following blocks:
–Risks associated with the (COVID-19) pandemic
The COVID-19 (coronavirus) pandemic has adversely affected the world economy, and economic activity and conditions in the
countries in which the Group operates. Despite the gradual improvement experienced in 2021 driven by the increase in the rate of
vaccination, new waves of contagion continue to be a source of concern and the emergence of new strains remains a risk. Among
other challenges, these countries are still dealing with high unemployment levels, weak activity, supply disruptions and increasing
inflationary pressures, while public debt has increased significantly due to the support and spending measures implemented by the
government authorities. Furthermore, there has been an increase in loan losses from both companies and individuals, which has so
far been slowed down by the impact of government support measures, including bank payment deferrals, credit with public guarantee
and direct aid measures. Likewise, volatility in the financial markets has affected exchange rates - mainly in emerging economies- and
the value of assets and investments, which has adversely affected the Group's results in the past, and could do so again. There are still
uncertainties about the final future impact of the COVID-19 pandemic, mainly if there is an increase in infections caused by the new
variants of the coronavirus.
Furthermore, the Group has been and may be affected during the following quarters or years by the measures or recommendations
adopted by regulatory authorities in the banking sector, such as variations in reference interest rates, the modification of prudential
requirements, the temporary suspension of dividend payments, the modification of the deferral of monthly installments for certain
loans and the granting of guarantees or public guarantees to new credit operations for companies and self-employed persons, the
adoption of further similar measures or the termination of those already approved, as well as any changes in financial assets purchase
programs by the ECB.
Since the outbreak of the pandemic, the Group has experienced a decline in its activity. For example, the granting of new loans to
individuals has generally decreased. In addition, the Group faces various risks, such as an increased risk of volatility in the value of its
assets (including financial instruments valued at fair value, which may suffer significant fluctuations) and of the securities held for
liquidity reasons, a possible increase in the NPL ratio and risk-weighted assets, as well as a negative impact on the Group's cost of
financing and on its access to financing (especially in an environment where credit ratings are affected). Following the generalized
lifting of mobility restrictions and the increasing resumption of normal operations, greater emphasis is being placed on the particular
circumstances of each customer, in addition to its respective industry or sector.
Furthermore, the pandemic could continue to adversely affect the business and transactions of third parties that provide critical
services to the Group and, in particular, the higher demand and/or the lower availability of certain resources could, in some cases,
make it more difficult for the Group to maintain the required service levels. In addition, the widespread use of remote work has
increased the risks related to cybersecurity, as the use of non-corporate networks has increased.
In summary, while the COVID-19 pandemic had adverse effects on the Group's results and capital base during 2020, these were
mitigated throughout 2021, with improvements in the global economic background leading to a strong improvement in 2021 results.
–Macroeconomic and geopolitical risks
In 2021 the global economy has grown significantly, recovering in part from the crisis caused by the pandemic, which caused a sharp
fall in global GDP in 2020. The significant upturn in global growth has been due to progress in the vaccination against COVID-19 and
important economic stimuli adopted by public authorities.
Activity indicators show, however, that the economic recovery process has lost momentum in recent months. The recent slowdown in
economic growth is taking place in an environment marked by a sharp increase in infections caused by new variants of the COVID-19,
although the increasing immunization of the world population has helped to generally prevent the adoption of mobility restrictions,
which would have had a greater impact on the economy.
The effects of reduced production due to the pandemic and its persistence, coupled with fiscal stimuli and strong demand for goods,
once restrictions have been lifted, contribute to maintaining the problems in global supply chains observed since the beginning of
2021 which, in addition to negatively affecting economic activity, generate significant upward pressure on prices.
Against this backdrop, annual inflation in December 2021 stood at 7.0% in the United States and 5.0% in the Eurozone. In both
geographical areas, long-term inflation expectations from markets and surveys have been adjusted upwards, although in the case of
the Eurozone they remain generally below the European Central Bank’s 2% target.
High inflation rates and their increased persistence have put pressure on central banks to withdraw monetary stimuli earlier than they
had originally anticipated. The United States Federal Reserve, in particular, has begun the rollback in its bond-buying program and has
suggested that monetary policy interest rates will adjust upwards earlier and faster than expected by financial markets and financial
analysts, and also that a downsizing of its balance sheet may soon begin. In the Eurozone, the ECB will complete the pandemic
emergency purchase program (PEPP) in March 2022. Although the asset purchase program (APP) is maintained, asset purchases
will be moderated over the course of 2022. However, unlike the Federal Reserve, the ECB has continued to maintain that it rules out
an increase in benchmark interest rates in 2022.
P.33
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
According to BBVA Research, the global economic recovery process is expected to continue in the coming months, albeit at a slightly
slower pace than expected in autumn of 2021, due to the persistence of the pandemic, but also due to a higher-than-estimated impact
of supply chain problems and inflationary pressures. All this against a background of reduced fiscal and monetary stimulus. GDP
growth would therefore moderate, from an estimated 5.6% in 2021 to about 4.2% in 2022 in the United States, from 5.1% in 2021 to
3.7% in 2022 in the Eurozone and from 8.0% in 2021 to 5.2% in 2022 in China. The likely rise in monetary policy interest rates in the
United States, which could reach 1.25% by the end of 2022, as well as a progressive control of the pandemic and a moderation of
supply chain problems, would allow inflation to be moderated throughout the year; although inflation is expected to remain high,
particularly in the United States. Risks arising from this economic scenario expected by BBVA Research are significant and are biased
downwards in the case of activity, and include more persistent inflation, financial turbulence caused by a more aggressive withdrawal
of monetary stimuli, the emergence of new variants of the coronavirus that bypass current vaccines, a more intense slowdown in the
Chinese economy, as well as social and geopolitical tensions. Likewise, the countries in which the Group operates face various
idiosyncratic risks, beyond those related to the global environment.
–Regulatory and reputational risks
Financial institutions are exposed to a complex and ever-changing regulatory environment defined by governments and regulators.
This can affect their ability to grow and the capacity of certain businesses to develop, and result in stricter liquidity and capital
requirements with lower profitability ratios. The Group constantly monitors changes in the regulatory framework that allow for
anticipation and adaptation to them in a timely manner, adopt industry practices and more efficient and rigorous criteria in its
implementation.
The financial sector is under ever closer scrutiny by regulators, governments and society itself. In the course of activities, situations
which might cause relevant reputational damage to the entity could raise and might affect the regular course of business. The
attitudes and behaviors of the Group and its members are governed by the principles of integrity, honesty, long-term vision and
industry practices through, inter alia, the internal control model, the Code of Conduct, the Corporate Principles in tax matters and
Responsible Business Strategy of the Group.
–Business, operational and legal risks
New technologies and forms of customer relationships: Developments in the digital world and in information technologies pose
significant challenges for financial institutions, entailing threats (new competitors, disintermediation, etc.) but also opportunities (new
framework of relations with customers, greater ability to adapt to their needs, new products and distribution channels, etc.). Digital
transformation is a priority for the Group as it aims to lead digital banking of the future as one of its objectives.
Technological risks and security breaches: The Group is exposed to new threats such as cyber-attacks, theft of internal and customer
databases, fraud in payment systems, etc. that require major investments in security from both the technological and human point of
view. The Group gives great importance to the active operational and technological risk management and control.
Regarding legal risks, the financial sector faces an environment of increasing regulatory and litigious pressure, and thus, the various
Group entities are usually party to individual or collective judicial proceedings (including class actions) resulting from their activity and
operations, as well as arbitration proceedings. The Group is also party to other government procedures and investigations, such as
those carried out by the antitrust authorities in certain countries which, among other things, have in the past and could in the future
result in sanctions, as well as lead to claims by customers and others. In addition, the regulatory framework, in the jurisdictions in
which the Group operates, is evolving towards a supervisory approach more focused on the opening of sanctioning proceedings while
some regulators are focusing their attention on consumer protection and behavioral risk.
In Spain and in other jurisdictions where the Group operates, legal and regulatory actions and proceedings against financial
institutions, prompted in part by certain judgments in favor of consumers handed down by national and supranational courts (with
regards to matters such as credit cards and mortgage loans), have increased significantly in recent years and this trend could
continue in the future. The legal and regulatory actions and proceedings faced by other financial institutions in relation to these and
other matters, especially if such actions or proceedings result in favorable resolutions for the consumer, could also adversely affect
the Group.
All of the above may result in a significant increase in operating and compliance costs or even a reduction of revenues, and it is
possible that an adverse outcome in any proceedings (depending on the amount thereof, the penalties imposed or the procedural or
management costs for the Group) could damage the Group's reputation, generate a knock-on effect or otherwise adversely affect the
Group.
It is difficult to predict the outcome of legal and regulatory actions and proceedings, both those to which the Group is currently
exposed and those that may arise in the future, including actions and proceedings relating to former Group subsidiaries or in respect
of which the Group may have indemnification obligations. Any of such outcomes could be significantly adverse to the Group. In
addition, a decision in any matter, whether against the Group or against another credit entity facing similar claims as those faced by
the Group, could give rise to other claims against the Group. In addition, these actions and proceedings attract resources from the
Group and may occupy a great deal of attention on part of the Group's management and employees.
As of December 31, 2021, the Group had €623 million in provisions for the proceedings it is facing (included in the line "Provisions for
litigation and pending tax cases" in the consolidated balance sheet) (see Note 24), of which €533 million correspond to legal
contingencies and €90 million to tax related matters. However, the uncertainty arising from these proceedings (including those for
which no provisions have been made, either because it is not possible to estimate them or for other reasons) makes it impossible to
guarantee that the possible losses arising from these proceedings will not exceed, where applicable, the amounts that the Group
currently has provisioned and, therefore, could affect the Group's consolidated results in a given period.
P.34
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
As a result of the above, legal and regulatory actions and proceedings currently faced by the Group or to which it may become subject
in the future or otherwise affected by, individually or in the aggregate, if resolved in whole or in part adversely to the Group's interests,
could have a material adverse effect on the Group’s business, financial condition and results of operations.
Spanish judicial authorities are investigating the activities of Centro Exclusivo de Negocios y Transacciones, S.L. (Cenyt). Such
investigation includes the provision of services by Cenyt to the Bank. On 29th July, 2019, the Bank was named as an investigated
party (investigado) in a criminal judicial investigation (Preliminary Proceeding No. 96/2017 – Piece No. 9, Central Investigating Court
No. 6 of the National High Court) for alleged facts which could be constitutive of bribery, revelation of secrets and corruption. On
February 3, 2020, the Bank was notified by the Central Investigating Court No. 6 of the National High Court of the order lifting the
secrecy of the proceedings. Certain current and former officers and employees of the Group, as well as former directors have also
been named as investigated parties in connection with this investigation. The Bank has been and continues to be proactively
collaborating with the Spanish judicial authorities, including sharing with the courts the relevant information obtained in the internal
investigation hired by the entity in 2019 to contribute to the clarification of the facts. As of the date of the approval of the Consolidated
Financial Statements, no formal accusation against the Bank has been made.
This criminal judicial proceeding is at the pre-trial phase. Therefore, it is not possible at this time to predict the scope or duration of 
such proceeding or any related proceeding or its or their possible outcomes or implications for the Group, including any fines,
damages or harm to the Group’s reputation caused thereby.
5.2Credit risk
Credit risk is the potential loss assumed by the Bank as a result of the failure by the Bank´s counterparties to meet their contractual
obligations.
The general principles governing credit risk management in the BBVA are:
–Risks taken should comply with the general risk policy established by the Board of Directors of BBVA.
–Risks taken should be in line with the level of equity and generation of recurring revenue of the BBVA prioritizing risk
diversification and avoiding relevant concentrations.
–Risks taken should be identified, measured and assessed and there should be management and monitoring procedures, in
addition to sound mitigation and control mechanisms.
–Risks should be managed in a prudent and integrated manner during their life cycle and their treatment should be based on
the type of risk. In addition, portfolios should be actively managed on the basis of a common metric (economic capital).
–The main criterion when granting credit risks is the capability of the borrower or obligor to fulfill on a timely basis all financial
obligations with its business income or source of income without depending upon guarantors, bondsmen or pledged assets.
–Improve the financial health of our clients, help them in their decision making and in the daily management of their finances
based on personalized advice.
–Help our clients in the transition towards a sustainable future, with a focus on climate change and inclusive and sustainable
social development.
Credit risk management in the Group has an integrated structure for all its functions, allowing decisions to be taken objectively and
independently throughout the life cycle of the risk.
At Bank level: frameworks for action and standard rules of conduct are defined for handling risk, specifically, the channels,
procedures, structure and supervision.
The risk function has a decision-making process supported by a structure of committees with a solid governance scheme, which
describes their purposes and functioning for a proper performance of their tasks.
This governance scheme has been key in the management of the COVID-19 crisis in the Bank, in which it has been possible to ensure
the maintenance of the flow of funds required for the operation of the economy while rigorously analyzing and monitoring the credit
quality of exposures.
COVID-19 support measures
Since the beginning of the pandemic, the Bank has offered COVID-19 support measures to its customers (individuals, SMEs and
wholesale) in all the geographic areas where it operates, consisting of both deferrals on existing loans and new public-guaranteed
lending. These measures were extended to individual customers and, in the case of legal entities, to different sectors, with Leisure and
Real Estate being the sectors that have used them most. The deadline for applying for these measures has expired.
Deferrals were both legislative (covered by Royal Decree Laws 8/2020 and 11/2020) and non-legislative (based on  the sector
agreement promoted by the Spanish Banking Association), aimed at mitigating the effects of COVID-19  and deferring the payment of
principal and/or interest, while maintaining the original contracts.
Deferrals have been covered mainly by Royal Decree Laws (hereinafter "RDL") 8/2020 and 11/2020, as well as by the sector
agreement promoted by the Spanish Banking Association (hereinafter "AEB") to which BBVA adhered.
P.35
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Legislative deferrals consisted of a three-month deferral of principal and interest payments and were aimed, by type of client, at
individuals, sole proprietors or the self-employed and, by type of product, at mortgages, personal loans or consumer loans.
In addition, once the legal deferral expired, customers could adhere to the sector agreement for the remaining term up to the limit
established in that agreement.
Deferrals granted under the AEB sectorial agreement had a duration of up to 12 months of principal deferral in the case of mortgage
loans and up to 6 months in personal loans.
Under RDL 26/2020, the possibility of deferring the principal and/or interests was offered for companies in the transport sector for
up to 6 months and for companies in the tourism sector for up to 12 months.
With regard to new financing with public guarantee, BBVA’s involvement in the following is noteworthy:
–The Official Credit Institute (hereinafter, ICO) published several aid programs aimed at the self-employed, small and
medium-sized enterprises (hereinafter "SMEs") and companies, through which a guarantee of between 60% and 80% (in
SMEs always 80%) was granted for a term of up to 5 years for new financing granted (RDL Mar/2020).
–The amount and duration of the guarantee depended on the size of the company and the type of aid to which it applied, and
could be extended for up to a maximum term of 3 additional years and the grace period could be extended for up to 12
additional months with respect to the terms and grace periods initially agreed (RDL Nov/2020).
–Likewise, facilities were provided in term extensions (up to a maximum term of 10 years), conversion of financing operations
into Participative Loans as well as debt forgiveness in part of the financing (RDL 5/2021 and Code of Good Practices).
–The ICO has also subsidized for individuals the amount of the rent for up to 6 months in loans of up to 6 years.
–Almost all of the ICO loans with the expired grace period have resumed payment on a regular basis or canceled their debt.
–ICO loan extensions represented around 25% of all ICO financing.
The outstanding balance of existing loans for which a payment deferral was granted (split by those existing at year-end and those that
were completed by year-end) under EBA standards and for which financing was granted with public guarantees given at Bank level, 
as well as the number of customers of both measures, as of December 31, 2021 and 2020 are as follows:
Amount of payment deferral and financing with public guarantees (Millions of Euros)
Payment deferral
Financing with public
guarantees
public guarantees
Existing
Completed
Total
Number of
customers
Total
Number of
customers
Total payment
deferral and
guarantees
(%) credit
investment
December 2021
147 
5,607 
5,754 
79,566 
13,168 
153,708 
18,922 
8.8%
December 2020
4,120 
1,694 
5,814 
81,334 
11,811 
133,334 
17,625 
8.5%
The outstanding balance of existing loans for which a payment deferral was granted (split by those existing at year-end and those that
were completed by year-end) under EBA standards and for which financing was granted with public guarantees given at Bank level,
broken down by segment, as of December 31, 2021 and 2020 are as follows:
Amount of payment deferral and financing with public guarantees by concept (Millions of Euros)
Payment deferral
Financing with
public guarantees
Existing
Completed
Total
2021
2020
2021
2020
2021
2020
2021
2020
BBVA, S.A.
147
4,120
5,607
1,694
5,754
5,814
13,168
11,811
Households
107
3,617
5,109
1,629
5,215
5,246
1,150
972
Of which: mortgages
96
3,290
4,385
1,056
4,481
4,347
—
—
SMEs
40
361
347
29
387
390
8,524
6,957
Non-financial corporations
—
138
138
22
138
160
3,477
3,870
Other
—
4
14
13
14
18
16
12
P.36
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Amount of payment deferral by stages  (Millions of Euros)
Stage 1
Stage 2
Stage 3
Total
2021
2020
2021
2020
2021
2020
2021
2020
BBVA, S.A.
3,064
3,155
1,719
2,014
971
645
5,754
5,814
Households
2,837
2,782
1,457
1,850
921
614
5,215
5,246
Of which: mortgages
2,453
2,288
1,242
1,538
786
520
4,481
4,347
SMEs
158
269
198
98
32
23
387
390
Non-financial corporations
67
100
53
53
18
8
138
160
Other
2
5
11
13
—
—
14
18
Deferrals involved the temporary suspension, in whole or in part, of contractual obligations and their deferral for a specific period of
time. Considering that the payment deferrals granted in connection with COVID -19 provide temporary relief to the debtors and that
the economic value of the affected loans was not significantly impacted, no contractual modifications were considered and, therefore,
the modified loans are accounted for as a continuation of the original loans.
During 2020, the loss of temporary value of the deferrals that did not trigger the right to collect interest was included under the
heading "Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by
modification” of the consolidated income statement, amounting to €15 million. During 2021, the amount recognized is was significant.
Regarding the classification of exposures according to their credit risk, the Bank has continued to apply NIIF 9 rigorously when
granting the payment deferrals and has reinforced the procedures for monitoring credit risk both throughout the life of the
transactions and at their maturity. This means that the payment deferrals granting does not imply in itself an automatic trigger for a
significant increase in risk and that the transactions subject to the payment deferrals are initially classified in the stage in which they
had previously been classified, unless, based on their risk profile, they should be classified in a worse stage. On the other hand, as
evidence of payment has ceased to exist or has been reduced, the Bank has introduced additional indicators or segmentations to
identify the significant increase in risk or impairment that may have occurred in some transactions or a set of them and, where
appropriate, they have been classified in Stage 2 or Stage 3.
Furthermore, the indications provided by the European Banking Authority (EBA) have been taken into account to not consider as
"forbearance" the payment deferrals that meet a series of requirements. All this without prejudice to maintaining its consideration as
a forbearance if it was previously qualified as such or classifying the exposure in the corresponding stage previously stated.
On the other hand, the treatment planned for the payment deferrals that expire and may require additional support will be in
accordance with the updated evaluation of the customer's credit quality and the characteristics of the solution granted. If applicable,
they will be treated as Refinancing or Restructuring.
Regarding public support for lending, it does not affect the evaluation of the significant increase in risk since risk is valued based on
the credit quality of the relevant instrument. However, in estimating the expected loss, the existence of the guarantor implies a
possible reduction in the level of provisions necessary since, for the hedged part, the loss that would be incurred in the foreclosure of
the guarantee is taken into account.
The public guarantees granted in the BBVA have been considered as an integral part of the terms and conditions of the loans granted
under the consideration that the guarantees are granted at the same time that the financing is granted to the client and in a way
inseparable from it.
The quantitative information on refinancing and restructuring operations is presented in Appendix XII: "Quantitative information on
refinancing and restructuring operations and other requirement under Bank of Spain Circular 6/2012".
5.2.1Measurement of Expected Credit Loss
Bank of Spain Circular 4/2017 requires determining the Expected Credit Loss (hereinafter "ECL") of a financial instrument in a way
that reflects an unbiased estimation removing any conservatism or optimism, including the time value of money and a forward looking
perspective (including the economic forecast) all this based on the information that is available at a certain point in time and that is
reasonable and bearable with respect to future economic conditions.
Therefore the recognition and measurement of ECL is highly complex and involves the use of significant analysis and estimation
including formulation and incorporation of forward-looking economic conditions into the ECL model.
The modeling of the ECL calculation is subject to a governance system that is common to the BBVA. Within this common framework,
the necessary adaptations have been made to capture the particularities of BBVA S.A. The methodology, assumptions and
observations are reviewed annually, and after a validation and approval process, the outcome of this review is incorporated into the
ECL calculations.
Risk parameters by homogeneous groups
Expected losses can be estimated both individually and collectively. Regarding the collective estimate, the instruments are distributed
in homogeneous groups (segments) that share similar risk characteristics. Following the guidelines established by the Group for the
development of models under the applied norm, the Bank performed the grouping based on the information available, its
representativeness or relevance and compliance with the necessary statistical requirements.
P.37
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Depending on the portfolio or the parameter being estimated, one risk driver or another will apply and different segments will reflect
differences in PDs and LGDs. Thus, in each segment, changes in the level of credit risk will respond to the impact of changing
conditions on the common range of credit risk drivers. The effect on the Bank’s credit risk in response to changes in forward-looking
information will be considered as well. Macroeconomic modeling for each segment is carried out using some of the shared risk
characteristics.
These segments share credit risk characteristics such that changes in credit risk in a part of the portfolio are not concealed by the
performance of other parts of the portfolio. In that sense, the methodology developed for ECL estimation indicates the risk drivers
that have to be taken into account for PD segmentation purposes, depending on whether the estimation is for retail or wholesale
portfolios.
As an example of the variables that can be taken into consideration to determine the final models, the following stand out:
–PD - Retail: Contractual residual maturity, credit risk scoring, type of product, days past due, forbearance, time on books,
time to maturity, nationality of the debtor, sale channel, original term, indicator of credit card activity, percentage of initial
drawn balance in credit cards.
–PD - Wholesale: Credit Risk Rating, type of product, watch-list level, forbearance (client), time to maturity, industry sector,
updated balance (y/n), written off, grace period.
–LGD – retail: credit Risk Scoring, segment, type of product, secured / unsecured, type of collateral, sales channel,
nationality, business area, debtor’s commercial segment, forbearance (account) EAD (this risk driver could be correlated
with the time on books or the LTV so, before including it, an assessment should be done in order to avoid a double counting
effect), time on default of the account (for defaulted exposures), geographical location.
–LGD - wholesale: credit Risk Rating, geographical location, segment, type of product, secured / Unsecured, type of
collateral, business area, forbearance (client), debtor’s commercial segment time on default of the deal (for defaulted
exposures).
–CCF: wholesale/retail, percentage of initial drawn balance, debtor’s commercial segment, days past due, forbearance,
credit limit activity, time on books.
In BBVA, the expected losses calculated are based on the internal models developed for all the portfolios, unless clients are subject to
individualized estimates.
Low Default Portfolios, which include portfolios with high credit quality such as exposures to other credit institutions, sovereign debt
or corporates and small client's portfolios with high exposures such as specialized lending or fixed income, are characterized by a low
number of defaults, so the Group's historical bases do not contain sufficiently representative information to build impairment models
based on them. However, there are external sources of information that, based on broader observations, are capable of providing the
necessary inputs to develop models of expected losses. Therefore, based on the rating assigned to these exposures and taking into
account the inputs obtained from these sources, the calculations of expected losses are developed internally, including their
projection based on the macroeconomic perspectives.
Individual estimation of Expected Credit Losses
The Bank periodically and individually reviews the situation and credit rating of its customers, regardless of their classification, taking
into consideration the information deemed necessary to do so. It also has procedures in place within the risk management framework
to identify the factors that may lead to increased risk and, consequently, to a greater need for provisions.
The monitoring model established by the Bank consists of continuously monitoring the risks to which it is exposed, which guarantees
their proper classification in the different categories of the Standard. The original analysis of the exposures is reviewed through the
procedures for updating the rating tools (rating and scoring), which periodically review the financial situation of clients, influencing the
classification by stages of exposures.
Within this credit risk management framework, the Bank has procedures that seek to guarantee the review, at least annually, of all its
wholesale counterparties through the so-called financial programs, which include the current and proposed positioning of the Bank
with the customer in terms of credit risk. This review is based on a detailed analysis of the client's up-to-date financial situation, which
is complemented by other information available in relation to individual perspectives on business performance, industry trends,
macroeconomic prospects or other public data. As a result of this analysis, the preliminary rating of the client is obtained, which, after
undergoing the internal procedure, can be revised down if deemed appropriate (for example, general economic environment or
evolution of the sector). These factors in addition to the information that the client can provide are used to review the ratings even
before the scheduled financial plan reviews are conducted if circumstances warrant.
Additionally, the Bank has established procedures to identify wholesale customers in the internal Watch List category, which is
defined as that risk in which, derived from an individualized credit analysis, an increase in credit risk is observed, either due to
economic or financial difficulties or because they have suffered, or are expected to suffer, adverse situations in their environment,
without meeting the criteria for classification as impaired risk. Under this procedure, all a customer's Watch List exposures are
considered stage 2 regardless of when they originated, if as a result of the analysis the customer is considered to have significantly
increased risk.
P.38
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Finally, the Bank has so-called Workout Committee, which analyze not only the situation and evolution of significant clients in Watch
List and impaired situations, but also those significant clients in which, although not on Watch List, may present some stage 2 rated
exposure for a quantitative reason (PD comparison from origination). This analysis is carried out in order to decide if, derived from
this situation, all the client's exposures should be considered in the Watch List category, which would imply the migration of all the
client's operations to stage 2 regardless of the date on which they originated.
With this, the Bank ensures an individualized review of the credit quality of its wholesale counterparties, identifying the situations in
which a change in the risk profile of these clients may have occurred and proceeding, where appropriate, to estimate individualized
credit losses. Along with this review, the Group individually estimates the expected losses of those clients whose total exposure
exceeds certain thresholds, including those that part of their operations may be classified in stage 1 and part in stage 2. In setting
thresholds, each geography determines the minimum amount of a client's exposure whose expected losses must be estimated
individually taking into account the following:
–For clients with exposures in stage 3. The analysis of clients with total risk above this threshold implies analyzing at least
40% of the total risk of the wholesale portfolio in stage 3. Although the calibration of the threshold is done on the wholesale
portfolio, clients of other portfolios must be analyzed if they exceed the threshold, staying in Stage 3.
–For all other situations. The analysis of clients with total risk above this threshold implies analyzing at least 20% of the total
risk of the Watch List wholesale portfolio. Although the threshold calibration is carried out on the exposure classified as
Watch List, wholesale clients or clients belonging to other portfolios that have exposures classified in stage 2 and whose
total exposure exceeds the mentioned threshold must be analyzed individually, considering both the exposures classified in
stage 1 as in stage 2.
Regarding the methodology for the individual estimation of expected losses, it should be mentioned, firstly, that these are measured
as the difference between the asset’s carrying amount and the estimated future cash flows discounted at the financial asset’s
effective interest rate.
The estimated recoverable amount should correspond to the amount calculated under the following method:
–The present value of estimated future cash flows discounted at the financial asset’s original effective interest rate; and
–The estimation of the recoverable amount of a collateralized exposure reflects the cash flows that may result from the
settlement of the collateral, as well as prospective information the analyst may implicitly include in the analysis.
The estimated future cash flows depend on the type of approach applied, which can be:
–Going concern scenario: when the entity has updated and reliable information about the solvency and ability of payment of
the holders or guarantors. The operating cash flows of the debtor, or the guarantor, continue and can be used to repay the
financial debt to all creditors. In addition, collateral may be exercised to the extent it does not influence operating cash
flows. The following aspects should be taken into account:
a.Future operating cash flows should be based on the financial statements of the debtor.
b.When the projections made on these financial statements assume a growth rate, a constant or decreasing growth
rate must be used over a maximum growth period of 3 to 5 years, and subsequently constant cash flows.
c.The growth rate should be based on the analysis of the evolution of the debtor's financial statements or on a
sound and applicable business restructuring plan, taking into account the resulting changes in the structure of the
company (for example, due to divestments or the interruption of unprofitable lines of business).
d.(Re)-investments that are needed to preserve cash flows should be considered, as well as any foreseeable future
cash-flow changes (e.g. if a patent or a long-term loan expires).
e.When the recoverability of the exposure relies on the realization of the disposal of some assets by the debtor, the
selling price should reflect the estimated future cash flows that may result from the sale of the assets less the
estimated costs associated with the disposal.
–Gone concern scenario: when the entity does not have updated and reliable information, it should consider that the
estimation of loan receivable flows is highly uncertain. Estimation should be carried out through the estimation of
recoverable amounts from the effective real guarantees received. It will not be admissible as effective guarantees, those
whose effectiveness depends substantially on the creditworthiness of the debtor or economic group in which it takes part.
Under a gone concern scenario, the collateral is exercised and the operating cash flows of the debtor cease. This could be
the case if:
a.The exposure has been past due for a long period. There is a rebuttable presumption that the allowance should be
estimated under a gone concern criterion when arrears are greater than 18 months.
b.Future operating cash flows of the debtor are estimated to be low or negative.
c.Exposure is significantly collateralized, and this collateral is central to cash-flow generation.
P.39
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
d.There is a significant degree of uncertainty surrounding the estimation of the future cash flows. This would be the
case if the earnings before interest, taxes, depreciation and amortization (EBITDA) of the two previous years had
been negative, or if the business plans of the previous years had been flawed (due to material discrepancies in the
backtesting).
e.Insufficient information is available to perform a going concern analysis.
Significant increase in credit risk
As indicated in Note 2.1, the criteria for identifying the significant increase in risk are applied consistently, distinguishing between
quantitative reasons or by comparison of probabilities of default and qualitative reasons (more than 30 days of default, watch list
consideration or non-impaired refinancing).
To manage credit risk, the Bank uses all relevant information that is available and that may affect the credit quality of the exposures.
This information may come mainly from the internal processes of admission, analysis and monitoring of operations, from the strategy
defined by the Bank regarding the price of operations or distribution by geographies, products or sectors of activity, from the
observance of the macroeconomic environment, from market data such as interest rate curves, or prices of the different financial
instruments, or from external sources of credit rating.
This set of information is the basis for determining the rating and scoring (see Note 5.2.4 for more information on rating and scoring
systems) corresponding to each of the exposures and which are assigned a probability of default (PD) that, as already mentioned, is
subject to an annual review process that assesses its representativeness (backtesting) and is updated with new observations.
Furthermore, the projection of these PDs over time has been modeled based on macroeconomic expectations, which allows obtaining
the probabilities of default throughout the life of the operations.
Based on this methodology, and in accordance with the provisions of the standard and the EBA guidelines on credit risk management
practices, BBVA has established absolute and relative thresholds for identifying whether the expected changes in the probabilities of
default have increased significantly compared to the initial moment, adapted to the particularities of each one of them in terms of
origination levels, product characteristics, distribution by sectors or portfolios, and macroeconomic situation. To establish the
aforementioned thresholds, a series of general principles are considered, such as:
–Uniformity: Based on the rating and scoring systems that, in a homogeneous manner, are implemented in the Group's units.
–Stability: The thresholds must be established to identify the significant increase in risk produced in exposures since their
initial recognition and not only to identify those situations in which it is already foreseeable that they will reach the level of
impairment. For this reason, it is to be expected that of the total exposures there will always be a representative group for
which said increased risk is identified.
–Anticipation: The thresholds must consider the identification of the increased risk in advance with respect to the recognition
of the exposures as impaired or even before a real default occurs. The calibration of the thresholds should minimize the
cases in which the instruments are classified in stage 3 without having previously been recognized as stage 2.
–Indicators or metrics: It is expected that the classification of the exposures in stage 2 will have sufficient permanence to be
able to develop an anticipatory management plan with respect to them before, where applicable, they end up migrating to
stage 3.
–Symmetry: standard provides for a symmetric treatment both to identify the significant increase in risk and to identify that
it has disappeared, so the thresholds also work to improve the credit classification of exposures. In this sense, it is expected
that the cases in which the exhibitions that improve from stage 3 are directly classified into stage 1 will be minimal.
–The identification of the significant increase in risk from the comparison of the probabilities of default should be the main
reason why exposures in stage 2 are recognized.
Specifically, a contract will be transferred to stage 2 when the following two conditions are met by comparing the current PD values
and the origination PD values:
(current PD) / (Origination PD) - 1*100 >Relative Threshold (%) and
Current PD – Origination PD > Absolute threshold (bps)
These absolute and relative thresholds are consistently established for each portfolio, taking into account their particularities and
based on the principles described. The thresholds are included within the annual review process and, generally speaking, are in the
range of 30% to 200% for the relative threshold and from 50 to 150 basis points for the absolute threshold.
The establishment of absolute and relative thresholds, as well as their different levels, comply with the provisions of the standard
when it indicates that a certain change, in absolute terms, in the risk of a default will be more significant for a financial instrument with
a lower initial risk of default compared to a financial instrument with higher initial risk of default.
For existing contracts before the implementation of IFRS 9, given the limitations in the information available on them, the thresholds
are calibrated based on the PDs obtained from the prudential or economic models for calculating capital.
P.40
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Risk Parameters Adjusted by Macroeconomic Scenarios
Expected Credit Loss (ECL) must include forward looking information, in accordance with Circular 4/2017 which states that the
comprehensive credit risk information must incorporate not only historical information but also all relevant credit information, also
including forward-looking macroeconomic information. BBVA uses the typical credit risk parameters PD, LGD and EAD in order to
calculate the ECL for the credit portfolios.
BBVA methodological approach in order to incorporate the forward looking information aims to determine the relation between
macroeconomic variables and risk parameters following three main steps:
–Step 1: Analysis and transformation of time series data.
–Step 2: For each dependent variable find conditional forecasting models that are economically consistent.
–Step 3: Select the best conditional forecasting model from the set of candidates defined in Step 2, based on their
forecasting capacity.
How economic scenarios are reflected in calculation of ECL
The forward looking component is added to the calculation of the ECL through the introduction of macroeconomic scenarios as an
input. Inputs highly depend on the particular combination of region and portfolio, so inputs are adapted to available data regarding
each of them.
Based on economic theory and analysis, the main indicators most directly relevant for explaining and forecasting the selected risk
parameters (PD, LGD and EAD) are:
–The net income of families, corporates or public administrations.
–The outstanding payment amounts on the principal and interest on the financial instruments.
–The value of the collateral assets pledged to the loan.
The Bank approximates these variables by using a proxy indicator from the set included in the macroeconomic scenarios provided by
the BBVA Research department.
Only a single specific indicator for each of the three categories can be used and only one of the following core macroeconomic
indicators should be chosen as first option:
–The real GDP growth for the purpose of conditional forecasting can be seen as the only “factor” required for capturing the
influence of all potentially relevant macro-financial scenarios on internal PDs and LGD.
–The most representative short term interest rate (typically the policy rate or the most liquid sovereign yield or interbank
rate) or exchange rates expressed in real terms.
–A comprehensive and representative index of the price of real estate properties expressed in real terms in the case of
mortgage loans and a representative and real term index of the price of the relevant commodity for corporate loan
portfolios concentrated in exporters or producers of such commodity.
Real GDP growth is given priority over any other indicator not only because it is the most comprehensive indicator of income and
economic activity but also because it is the central variable in the generation of macroeconomic scenarios.
Multiple scenario approach
Bank of Spain Circular 4/2017 requires calculating an unbiased probability weighted measurement of ECL by evaluating a range of
possible outcomes, including forecasts of future economic conditions.
The BBVA Research teams within the BBVA Group produce forecasts of the macroeconomic variables under the baseline scenario,
which are used in the rest of the related processes of the Bank, such as budgeting, ICAAP and risk appetite framework, stress testing,
etc.
Additionally, the BBVA Research teams produce alternative scenarios to the baseline scenario so as to meet the requirements under
the Circular 4/2017.
Alternative macroeconomic scenarios
–For each of the macro-financial variables, BBVA Research produces three scenarios.
–BBVA Research tracks, analyzes and forecasts the economic environment to provide a consistent forward looking
assessment about the most likely scenario and risks that impact BBVA’s footprint. To build economic scenarios, BBVA
Research combines official data, econometric techniques and expert judgment.
–Each of these scenarios corresponds to the expected value of a different area of the probabilistic distribution of the possible
projections of the economic variables.
P.41
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
–The non-linearity overlay is defined as the ratio between the probability-weighted ECL under the alternative scenarios and
the baseline scenario, where the scenario’s probability depends on the distance of the alternative scenarios from the base
one.
–The Bank establishes equally weighted scenarios, being the probability 34% for the baseline scenario, 33% for the
unfavorable alternative scenario and 33% for the favorable alternative scenario.
The approach in the BBVA consists on using the scenario that is the most likely scenario, which is the baseline scenario, consistent
with the rest of internal processes (ICAAP, Budgeting, etc.) and then applying an overlay adjustment that is calculated by taking into
account the weighted average of the ECL determined by each of the scenarios. This effect is calculated taking into account the
average weight of the expected loss determined for each scenario.
It is important to note that in general, it is expected that the effect of the overlay is to increase the ECL. It is possible to obtain an
overlay that does not have that effect, whenever the relationship between macro scenarios and losses is linear.
On the other hand, BBVA also takes into account the range of possible scenarios when defining its significant increase in credit risk.
Thus, the PDs used in the quantitative process to identify the significant increase in credit risk will be those that result from making a
weighted average of the PDs calculated under the three scenarios.
Macroeconomic scenarios
The COVID-19 pandemic generated uncertainty over macroeconomic outlooks, having a direct impact on the credit risk of entities,
particularly, on the expected credit losses under Circular 4/2017. The situation remains unclear, including the remaining duration of
the pandemic. At the outset of the pandemic, the expectation was that this situation would provoke a severe recession followed by an
economic recovery, but which would not achieve the pre-crisis GDP levels in the short-term, supported by the measures issued by
governments and monetary authorities.
This situation prompted the accounting authorities and the banking supervisors to adopt measures in order to mitigate the impacts
that the crisis would have on the calculation of expected credit losses as well as on solvency, urging:
–the entities to evaluate all the available information, weighing more the long-term forecasts against the short-term
economic factors
–the governments to adopt measures to avoid the effects of impairment,
–the entities to develop managerial measures as the design of specific products adapted to the situation which could occur
during this crisis.
Almost all accounting and prudential authorities issued recommendations or measures within the COVID-19 crisis framework
regarding the estimation of the expected losses in a coordinated manner.
The common denominator of all of these recommendations was that, given the difficulty of establishing reliable macroeconomic
forecasts, the transitory nature of the economic shock and the need to incorporate the effect of the mitigating measures issued by the
governments, a review of the automatic application of the models in order to increase the weight of the long-term macroeconomic
forecasts in the calculation of the expected losses was needed. As a result thereof, the expected outcome over the lifetime of the
transactions had more weight than the short-term macroeconomic impact.
In this respect, BBVA took into account those recommendations in the calculation of the expected credit losses, considering that the
economic situation caused by the COVID-19 pandemic is transitory and is expected to be followed by a recovery, even if there is
uncertainty over the level and the time period of such recovery. As a consequence, different scenarios have been taken into
consideration in the calculation of expected losses, resulting in the model management believes suits best the current economic
situation and the combined recommendations issued by the authorities.
In 2021, once the most critical phase of the pandemic has been overcome, the forward looking information incorporated in the
calculation of expected losses is in line with the macroeconomic perspectives published by BBVA Research as was usual until the
beginning of the pandemic. However, certain management adjustments are maintained as described in the section "Additional
adjustments to expected loss measurement" to cover exposures that are estimated even with a greater degree of uncertainty.
BBVA Research forecasts a maximum of five years for the macroeconomic variables. The following estimates for the next five years of
the Gross Domestic Product (GDP) growth, of the unemployment rate and of the House Price Index (HPI), for the most relevant
countries where it represents a significant factor, are determined by BBVA Research and have been used at the time of the calculation
of the ECL as of December 31, 2021:
P.42
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Main BBVA, S.A. variables.
Date
GDP
negative
scenario
GDP base
scenario
GDP
positive
scenario
HPI negative
scenario
HPI base
scenario
HPI positive
scenario
Unemployment
negative
scenario
Unemployment
base scenario
Unemployment
positive
scenario
2021
4.95%
5.23%
5.52%
(0.82)%
(0.20)%
0.33%
15.41%
14.93%
14.42%
2022
4.88%
5.49%
6.14%
1.31%
2.91%
4.70%
15.41%
13.98%
12.50%
2023
4.68%
4.89%
5.13%
1.09%
2.04%
3.06%
13.25%
11.68%
10.05%
2024
2.54%
2.59%
2.61%
0.99%
1.50%
1.87%
11.65%
10.08%
8.48%
2025
2.18%
2.22%
2.22%
0.35%
1.10%
1.56%
10.62%
9.05%
7.49%
2026
2.15%
2.19%
2.19%
(0.01)%
0.74%
1.19%
9.61%
8.15%
6.71%
The estimate for the next five years of the following rates, used in the measurement of the expected loss as of December 31, 2020,
consistent with the latest estimates made public at that date, was:
Main BBVA, S.A. variables.
Date
GDP
negative
scenario
GDP base
scenario
GDP positive
scenario
HPI negative
scenario
HPI base
scenario
HPI positive
scenario
Unemployme
nt negative
scenario
Unemployme
nt base
scenario
Unemployme
nt positive
scenario
2020
(11.76)%
(11.48)%
(11.20)%
(2.60)%
(1.98)%
(1.44)%
17.44%
16.95%
16.44%
2021
5.37%
5.99%
6.63%
(6.69)%
(5.08)%
(3.28)%
18.94%
17.51%
16.03%
2022
5.82%
6.04%
6.27%
2.49%
3.48%
4.56%
15.92%
14.35%
12.72%
2023
2.88%
2.93%
2.95%
4.94%
5.44%
5.79%
13.99%
12.41%
10.82%
2024
2.03%
2.07%
2.07%
2.45%
3.20%
3.66%
12.70%
11.14%
9.58%
2025
1.97%
2.01%
2.01%
2.36%
3.12%
3.57%
11.45%
9.99%
8.55%
Sensitivity to macroeconomic scenarios
A sensitivity exercise has been carried out on the expected losses due to variations in the key hypotheses as they are the ones that
introduce the greatest uncertainty in estimating such losses. As a first step, GDP and the House Price Index have been identified as
the most relevant variables. These variables have been subjected to shocks of +/- 100 bps in their entire window with impact of the
macro models. Independent sensitivities have been assessed, under the assumption of assigning a 100% probability to each
determined scenario with these independent shocks.
Variation in expected loss is determined both by re-staging (that is: in worse scenarios due to the recognition of lifetime credit losses
for additional operations that are transferred to stage 2 from stage 1 where 12 months of losses are valued: or vice versa in
improvement scenarios) as well as variations in the collective risk parameters (PD and LGD) of each financial instrument due to the
changes defined in the macroeconomic forecasts of the scenario.
Expected loss variation as of December 31, 2021
GDP
Total Portfolio
Mortgages
Companies
-100pb
3.33%
4.03%
4.16%
+100pb
(3.06)%
(3.35)%
(3.97)%
Housing price
-100pb
5.17%
0.78%
+100pb
(5.11)%
(0.77)%
Expected loss variation as of December 31, 2020
GDP
Total Portfolio
Mortgages
Companies
-100pb
3.72%
4.39%
3.96%
+100pb
(3.32)%
(3.57)%
(3.53)%
Housing price
-100pb
5.41%
0.79%
+100pb
(5.35)%
(0.77)%
Additional adjustments to expected loss measurement
In addition to what is described on individualized and collective estimates of expected losses and macroeconomic estimates, the
Group may supplement the expected losses if it deems it necessary to account for the effects that may not be included, either by
considering risk drivers or by the incorporation of sectorial particularities or that may affect a set of operations or borrowers. These
adjustments should be temporary, until the reasons that motivated them disappear or materialize.
P.43
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
For this reason, the expected losses have been supplemented with additional amounts that have been considered necessary to collect
the particular characteristics of borrowers, sectors or portfolios and that may not be identified in the general process. In order to
incorporate those effects that are not included in the impairment models, management adjustments to the expected losses exist. As
of December 31, 2021 and 2020 there were €226 and €223 million in Spain.
5.2.2Credit risk exposure
BBVA’s maximum credit risk exposure (see definition below) by headings in the balance sheets as of December 31, 2021 and 2020 is
provided below. It does not consider the loss allowances, and the availability of collateral or other credit enhancements to guarantee
compliance with payment obligations. The details are broken down by financial instruments and counterparties:
Maximum credit risk exposure (Millions of Euros)
Notes
December
2021
Stage 1
Stage 2
Stage 3
Financial assets held for trading
77,002
Equity instruments
8
15,146
Debt securities
8
11,546
Government
9,265
Credit institutions
493
Other sectors
1,788
Loans and advances
8
50,310
Non-trading financial assets mandatorily at fair value
through profit or loss
437
Equity instruments
9
172
Debt securities
9
125
Government
—
Credit institutions
48
Other sectors
77
Loans and advances to customers
9
140
Financial assets designated at fair value through profit
or loss
10
—
Derivatives (trading and hedging)  (*)
34,288
Financial assets at fair value through other
comprehensive income
28,209
Equity instruments
11.2
1,103
Debt securities
27,107
27,107
—
—
Government
21,316
21,316
—
—
Credit institutions
1,295
1,295
—
—
Other sectors
4,496
4,496
—
—
Financial assets at amortized cost
236,539
207,009
21,391
8,139
Debt securities
22,320
22,308
10
3
Loans and advances to central banks
254
254
—
—
Loans and advances to credit institutions
8,372
8,370
2
—
Loans and advances to customers
205,593
176,078
21,378
8,137
Total financial assets risk
376,475
Total loan commitments and financial guarantees
125,197
116,942
7,582
672
Loan commitments given
29
89,353
84,611
4,633
109
Financial guarantees given
29
11,662
10,615
877
170
Other commitments given
29
24,181
21,716
2,072
393
Total maximum credit exposure
501,672
(*)  Without considering derivatives whose counterparty are BBVA Group companies.
P.44
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Maximum credit risk exposure (Millions of Euros)
Notes
December
2020
Stage 1
Stage 2
Stage 3
Financial assets held for trading
48,752
Equity instruments
8
10,682
Debt securities
8
9,983
Government
8,062
Credit institutions
560
Other sectors
1,361
Loans and advances
8
28,088
Non-trading financial assets mandatorily at fair value
through profit or loss
409
Equity instruments
9
183
Debt securities
9
142
Government
—
Credit institutions
49
Other sectors
93
Loans and advances to customers
9
84
Financial assets designated at fair value through profit
or loss
10
—
Derivatives (trading and hedging)  (*)
15,761
Financial assets at fair value through other
comprehensive income
37,539
—
—
—
Equity instruments
11.2
881
Debt securities
36,659
36,659
—
—
Government
30,053
30,053
—
—
Credit institutions
1,595
1,595
—
—
Other sectors
5,010
5,010
—
—
Financial assets at amortized cost
231,590
207,006
16,390
8,193
Debt securities
23,253
23,247
5
1
Loans and advances to central banks
7
7
—
—
Loans and advances to credit institutions
8,763
8,762
—
—
Loans and advances to customers
199,568
174,990
16,385
8,193
Total financial assets risk
334,052
Total loan commitments and financial guarantees
115,415
110,379
4,474
562
Loan commitments given
29
80,959
78,602
2,257
100
Financial guarantees given
29
8,745
8,006
582
156
Other commitments given
29
25,711
23,770
1,636
305
Total maximum credit exposure
449,467
(*)  Without considering derivatives whose counterparty are BBVA Group companies.
The maximum credit exposure presented in the table above is determined by type of financial asset as explained below:
–In the case of financial instruments recognized in the balance sheets, exposure to credit risk is considered equal to its
carrying amount (not including loss allowances) with the only exception of trading and hedging derivatives.
–The maximum credit risk exposure on financial commitments and guarantees granted is the maximum that BBVA would be
liable for if these guarantees were called in, or the higher amount pending to be disposed from the customer in the case of
commitments.
–The calculation of risk exposure for derivatives is based on the sum of two factors: the derivatives fair value and their
potential risk (or "add-on").
P.45
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
The breakdown by counterparty of the maximum credit risk exposure, the accumulated allowances recorded, as well as the carrying
amount by stages of loans and advances to customers as of December 31, 2021 and 2020 is shown below:
December 2021 (Millions of Euros)
Gross exposure
Accumulated allowances
Net amount
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Public administrations
13,008
12,693
252
62
(34)
(11)
(4)
(19)
12,974
12,682
248
43
Other financial corporations
9,568
9,476
77
15
(14)
(3)
(4)
(7)
9,554
9,472
73
8
Non-financial corporations
85,430
69,071
12,872
3,487
(2,801)
(384)
(627)
(1,790)
82,629
68,687
12,245
1,697
Households
97,587
84,838
8,177
4,573
(2,405)
(280)
(300)
(1,826)
95,182
84,558
7,877
2,747
Loans and advances to
customers (*)
205,593
176,078
21,378
8,137
(5,254)
(679)
(934)
(3,641)
200,339
175,400
20,444
4,495
Of which: individual
(823)
—
(203)
(620)
Of which: collective
(4,431)
(679)
(732)
(3,021)
(*) The amount of the accumulated impairment includes the provisions recorded for credit risk over the remaining expected lifetime of purchased financial instruments. Those
provisions were determined at the moment of the Purchase Price Allocation and were originated mainly in the acquisition of Catalunya Banc, S.A. (as of December 31, 2021, the
remained balance was €266 million). These valuation adjustments are recognized in the income statement during the residual life of the operations or are applied to the value
corrections when the losses materialize.
December 2020 (Millions of Euros)
Gross exposure
Accumulated allowances
Net amount
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Total
Stage 1
Stage 2
Stage 3
Public administrations
13,336
13,102
158
76
(41)
(10)
(7)
(25)
13,295
13,093
151
51
Other financial corporations
9,103
9,021
77
5
(16)
(5)
(6)
(5)
9,087
9,016
71
0
Non-financial corporations
79,943
67,810
8,455
3,678
(2,889)
(359)
(405)
(2,124)
77,054
67,451
8,049
1,554
Households
97,185
85,057
7,695
4,434
(2,719)
(335)
(444)
(1,941)
94,466
84,722
7,251
2,493
Loans and advances to
customers (*)
199,568
174,990
16,385
8,193
(5,665)
(708)
(862)
(4,094)
193,903
174,282
15,523
4,099
Of which: individual
(1,044)
—
(139)
(905)
Of which: collective
(4,620)
(708)
(723)
(3,189)
(*) The amount of the accumulated impairment includes the provisions recorded for credit risk over the remaining expected lifetime of purchased financial instruments. Those
provisions were determined at the moment of the Purchase Price Allocation and were originated mainly in the acquisition of Catalunya Banc S.A. (as of December 31, 2020 the
remained balance was €363 million). These valuation adjustments are recognized in the income statement during the residual life of the operations or are applied to the value
corrections when the losses materialize.
The breakdown by counterparty and product of loans and advances, net of loss allowances, as well as the gross carrying amount by
type of product, classified in different headings of the assets, as of December 31, 2021 and 2020 is shown below:
December 2021 (Millions of Euros)
Central
banks
General
governments
Credit
institutions
Other
financial
corporations
Non-
financial
corporations
Households
Total
Gross
carrying
amount
On demand and short notice
—
—
—
176
34
32
242
331
Credit card debt
—
—
—
1
119
2,358
2,478
2,624
Commercial debtors
783
16
468
14,543
24
15,834
16,024
Finance leases
—
88
—
12
4,738
201
5,039
5,207
Reverse repurchase loans
—
—
150
2
—
—
152
152
Other term loans
1
11,903
2,447
5,873
61,103
92,393
173,720
178,380
Advances that are not loans
252
340
5,759
3,022
2,092
175
11,640
11,640
LOANS AND ADVANCES
254
13,114
8,371
9,554
82,629
95,182
209,104
214,359
By secured loans
Of which: mortgage loans
collateralized by immovable
property
279
—
179
9,141
74,524
84,123
85,835
Of which: other collateralized
loans
—
—
152
26
1,230
485
1,893
2,159
By purpose of the loan
Of which: credit for consumption
13,467
13,467
14,290
Of which: lending for house
purchase
74,729
74,729
75,651
By subordination
Of which: project finance loans
3,676
3,676
3,744
P.46
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
December 2020 (Millions of Euros)
Central
banks
General
governments
Credit
institutions
Other
financial
corporations
Non-
financial
corporations
Households
Total
Gross
carrying
amount
On demand and short notice
—
2
—
371
41
33
447
541
Credit card debt
—
—
—
—
92
2,083
2,175
2,319
Commercial debtors
894
—
303
11,406
23
12,626
12,819
Finance leases
—
86
—
3
4,427
216
4,731
4,886
Reverse repurchase loans
—
—
203
—
—
—
203
203
Other term loans
3
12,140
2,169
5,858
60,289
92,007
172,466
177,545
Advances that are not loans
4
258
6,390
2,553
799
105
10,108
10,109
Loans and advances
7
13,379
8,762
9,087
77,054
94,466
202,756
208,421
By secured loans
Of which: mortgage loans
collateralized by immovable
property
318
—
156
9,571
75,181
85,227
87,252
Of which: other collateralized
loans
—
—
25
1,576
535
2,136
2,245
By purpose of the loan
—
—
—
—
—
—
—
—
Of which: credit for consumption
12,149
12,149
12,987
Of which: lending for house
purchase
75,166
75,166
76,386
By subordination
—
—
—
—
—
—
—
—
Of which: project finance loans
4,353
4,353
4,394
5.2.3Mitigation of credit risk, collateralized credit risk and other credit enhancements
In certain cases, maximum credit risk exposure is reduced by collateral, credit enhancements and other actions which mitigate the
Bank’s exposure. The BBVA applies a credit risk hedging and mitigation policy deriving from a banking approach focused on
relationship banking. The existence of guarantees could be a necessary but not sufficient instrument for accepting risks, as the
assumption of risks by the Bank requires prior evaluation of the debtor’s capacity for repayment, or that the debtor can generate
sufficient resources to allow the amortization of the risk incurred under the agreed terms.
The policy of accepting risks is therefore organized into three different levels in BBVA:
–Analysis of the financial risk of the transaction, based on the debtor’s capacity for repayment or generation of funds.
–The constitution of guarantees that are adequate, or at any rate generally accepted, for the risk assumed, in any of the
generally accepted forms: monetary, secured, personal or hedge guarantees; and finally
–Assessment of the repayment risk (asset liquidity) of the guarantees received.
This is carried out through a prudent risk policy that consists of the analysis of the financial risk, based on the capacity for
reimbursement or generation of resources of the borrower, the analysis of the guarantee, assessing, among others, the efficiency, the
robustness and the risk, the adequacy of the guarantee with the operation and other aspects such as the location, currency,
concentration or the existence of limitations. Additionally, the necessary tasks for the constitution of guarantees must be carried out -
in any of the generally accepted forms (collaterals, personal guarantees and financial hedge instruments) - appropriate to the risk
assumed.
The procedures for the management and valuation of collateral are set out in the corporate general policies (retail and wholesale),
which establish the basic principles for credit risk management, including the management of collaterals assigned in transactions with
customers. The criteria for the systematic, standardized and effective treatment of collateral in credit transaction procedures in
Bank’s wholesale and retail banking are included in the Specific Collateral Rules.
The methods used to value the collateral are in line with the best market practices and imply the use of appraisal of real-estate
collateral, the market price in market securities, the trading price of shares in mutual funds, etc. All the collaterals received must be
correctly assigned and entered in the corresponding register. They must also have the approval of the BBVA’s legal units.
The valuation of the collateral is taken into account in the calculation of the expected losses. The Bank has developed internal models
to estimate the realization value of the collaterals received, the time that elapses until then, the costs for their acquisition,
maintenance and subsequent sale, from real observations based on its own experience. This modeling is part of the LGD estimation
processes that are applied to the different segments, and is included within the annual review and validation procedures.
The following is a description of the main types of collateral for each financial instrument class:
–Debt instruments held for trading: The guarantees or credit enhancements obtained directly from the issuer or
counterparty are implicit in the clauses of the instrument (mainly guarantees of the issuer).
P.47
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
–Derivatives and hedging derivatives: In derivatives, credit risk is minimized through contractual netting agreements, where
positive- and negative-value derivatives with the same counterparty are offset for their net balance. There may likewise be
other kinds of guarantees and collaterals, depending on counterparty solvency and the nature of the transaction (mainly
collaterals).
–The summary of the offsetting effect (via netting and collateral) for derivatives and securities operations as of December 31,
2021  is presented in Note 5.4.2
–Other financial assets designated at fair value through profit or loss and financial assets at fair value through other
comprehensive income: The guarantees or credit enhancements obtained directly from the issuer or counterparty are
inherent to the structure of the instrument (mainly personal guarantees).
As of December 31, 2021 and 2020 BBVA had no credit risk exposure of impaired financial assets at fair value through other
comprehensive income (see Note 5.2.2).
–Financial assets at amortized cost:
a.Loans and advances to credit institutions: These usually have the counterparty’s personal guarantee or pledged
securities in the case of repos.
b.Loans and advances to customers: Most of these loans and advances are backed by personal guarantees
extended by the customer. There may also be collateral to secure loans and advances to customers (such as
mortgages, cash collaterals, pledged securities and other collateral), or to obtain other credit enhancements
(bonds or insurances).
c.Debt securities: The guarantees or credit enhancements obtained directly from the issuer or counterparty are
inherent to the structure of the instrument.
–Financial guarantees, other contingent risks and drawable by third parties: these have the counterparty’s personal
guarantee or other types of collaterals.
The disclosure of impaired loans and advances at amortized cost covered by collateral (see Note 5.2.5), by type of collateral, as of
December 31, 2021 and 2020, is the following:
Impaired loans and advances at amortized cost covered by collateral (Millions of Euros)
Maximum exposure to
credit risk
Of which secured by collateral
Residential
properties
Commercial
properties
Cash
Others
Financial
December 2021
8,137
1,933
787
2
4
7
December 2020
8,193
2,077
655
2
4
17
The maximum credit risk exposure of impaired financial guarantees and other commitments as of December 31, 2021 and 2020
amounts to €672 and €562 million of euros (see Note 5.2.2).
5.2.4Credit quality of financial assets that are neither past due nor impaired
The BBVA has tools that enable it to rank the credit quality of its transactions and customers based on an assessment and its
correspondence with the probability of default (“PD”) scales. To analyze the performance of PD, the Bank has a series of tracking
tools and historical databases that collect the pertinent internally generated information. These tools can be grouped together into
scoring and rating models.
Scoring
Scoring is a decision-making model that contributes to both the arrangement and management of retail loans: consumer loans,
mortgages, credit cards for individuals, etc. Scoring is the tool used to decide to originate a loan, what amount should be originated
and what strategies can help establish the price, because it is an algorithm that sorts transactions by their credit quality. This
algorithm enables the BBVA Group to assign a score to each transaction requested by a customer, on the basis of a series of objective
characteristics that have statistically been shown to distinguish between the quality and risk of this type of transactions. The
advantage of scoring lies in its simplicity and homogeneity: all that is needed is a series of objective data for each customer, and this
data is analyzed automatically using an algorithm.
There are three types of scoring, based on the information used and on its purpose:
–Reactive scoring: measures the risk of a transaction requested by an individual using variables relating to the requested
transaction and to the customer’s socio-economic data available at the time of the request. The new transaction is
approved or rejected depending on the score.
–Behavioral scoring: scores transactions for a given product in an outstanding risk portfolio of the entity, enabling the credit
rating to be tracked and the customer’s needs to be anticipated. It uses transaction and customer variables available
internally. Specifically, variables that refer to the behavior of both the product and the customer.
P.48
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
–Proactive scoring: gives a score at customer level using variables related to the individual’s general behavior with the entity,
and to his/her payment behavior in all the contracted products. The purpose is to track the customer’s credit quality and it
is used to pre-approve new transactions.
Rating
Rating tools, as opposed to scoring tools, do not assess transactions but focus on the rating of customers instead: companies,
corporations, SMEs, general governments, etc. A rating tool is an instrument that, based on a detailed financial study, helps
determine a customer’s ability to meet his/her financial obligations. The final rating is usually a combination of various factors: on one
hand, quantitative factors, and on the other hand, qualitative factors. It is a middle road between an individual analysis and a
statistical analysis.
The main difference between ratings and scorings is that the latter are used to assess retail products, while ratings use a wholesale
banking customer approach. Moreover, scorings only include objective variables, while ratings add qualitative information. And
although both are based on statistical studies, adding a business view, rating tools give more weight to the business criterion
compared to scoring tools.
For portfolios where the number of defaults is low (sovereign risk, corporates, financial entities, etc.) the internal information is
supplemented by “benchmarking” of the external rating agencies (Moody’s, Standard & Poor’s and Fitch). To this end, each year the
PDs compiled by the rating agencies at each level of risk rating are compared, and the measurements compiled by the various
agencies are mapped against those of the BBVA master rating scale.
The probability of default of transactions or customers is calibrated with a long-term view, since its purpose is to measure the risk
quality beyond its time of estimation, seeking to capture information representative of the behavior of the portfolios during a
complete economic cycle (a long-term average probability of default). This probability is mapped to the master scale developed by
the BBVA in order to facilitate a homogeneous classification of its different risk portfolios.
The table below shows the abridged scale used to classify the bank’s outstanding risk as of December 31, 2021:
Internal rating
Probability of default
(basis points)
Reduced List (22 groups)
Average
Minimum from >=
Maximum
AAA
1
—
2
AA+
2
2
3
AA
3
3
4
AA-
4
4
5
A+
5
5
6
A
8
6
9
A-
10
9
11
BBB+
14
11
17
BBB
20
17
24
BBB-
31
24
39
BB+
51
39
67
BB
88
67
116
BB-
150
116
194
B+
255
194
335
B
441
335
581
B-
785
581
1,061
CCC+
1,191
1,061
1,336
CCC
1,500
1,336
1,684
CCC-
1,890
1,684
2,121
CC+
2,381
2,121
2,673
CC
3,000
2,673
3,367
CC-
3,780
3,367
4,243
These different levels and their probability of default were calculated by using as a reference the rating scales and default rates
provided by the external agencies Standard & Poor’s and Moody’s. These calculations establish the levels of probability of default for
the BBVA Group’s Master Rating Scale. Although this scale is common to the entire Group, the calibrations (mapping scores to PD
sections/Master Rating Scale levels) are carried out at tool level for each country in which the Group has tools available.
P.49
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
The table below outlines the distribution of exposure, including derivatives, by internal ratings, to corporates, financial entities and
institutions (excluding sovereign risk), of the main BBVA Group entities as of December 31, 2021 and 2020:
Credit Risk Distribution by Internal Rating
2021
2020
Amount
(Millions of Euros)
%
Amount
(Millions of Euros)
%
AAA/AA
36,843
11.65%
32,252
11.51%
A
111,465
35.25%
98,743
35.23%
BBB+
54,557
17.25%
39,325
14.03%
BBB
35,243
11.14%
34,816
12.42%
BBB-
35,117
11.10%
32,994
11.77%
BB+
12,299
3.89%
15,216
5.43%
BB
9,184
2.90%
7,931
2.83%
BB-
6,879
2.18%
7,569
2.70%
B+
5,127
1.62%
4,149
1.48%
B
4,356
1.38%
3,013
1.07%
B-
2,819
0.89%
2,033
0.73%
CCC/CC
2,359
0.75%
2,237
0.80%
Total
316,246
100%
280,276
100%
5.2.5Impaired loan risks
The breakdown of loans and advances within financial assets at amortized cost, by impaired amount, accumulated impairment, gross
carrying amount and by counterparties, as of December 31, 2021 and 2020 is as follows:
December 2021 (Millions of Euros)
Gross
carrying
amount
Impaired
loans and
advances
Accumulated
impairment
Impaired
loans and
advances as a
% of the total
Central banks
254
—
—
—%
General governments
13,008
62
(34)
0.5%
Credit institutions
8,371
—
—
—%
Other financial corporations
9,568
15
(14)
0.2%
Non-financial corporations
85,430
3,487
(2,801)
4.1%
Agriculture, forestry and fishing
1,638
73
(55)
4.5%
Mining and quarrying
1,806
10
(10)
0.6%
Manufacturing
18,987
553
(405)
2.9%
Electricity, gas, steam and air conditioning supply
8,019
35
(46)
0.4%
Water supply
730
17
(16)
2.4%
Construction
6,419
607
(416)
9.5%
Wholesale and retail trade
13,388
692
(525)
5.2%
Transport and storage
5,218
186
(123)
3.6%
Accommodation and food service activities
4,380
336
(205)
7.7%
Information and communications
5,145
105
(44)
2.0%
Financial and insurance activities
5,825
148
(141)
2.5%
Real estate activities
5,427
335
(208)
6.2%
Professional, scientific and technical activities
3,146
140
(108)
4.4%
Administrative and support service activities
1,776
107
(70)
6.0%
Public administration and defense, compulsory social security
171
3
(8)
1.8%
Education
258
16
(11)
6.3%
Human health services and social work activities
912
39
(26)
4.3%
Arts, entertainment and recreation
729
66
(49)
9.0%
Other services
1,456
19
(334)
1.3%
Households
97,587
4,573
(2,405)
4.7%
LOANS AND ADVANCES
214,218
8,137
(5,254)
3.8%
P.50
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
December 2020 (Millions of Euros)
Gross
carrying
amount
Impaired
loans and
advances
Accumulated
impairment
Impaired
loans and
advances as a
% of the total
Central banks
7
—
—
—%
General governments
13,336
76
(41)
0.6%
Credit institutions
8,762
—
—
—%
Other financial corporations
9,103
5
(16)
0.1%
Non-financial corporations
79,943
3,678
(2,889)
4.6%
Agriculture, forestry and fishing
1,409
71
(41)
5.0%
Mining and quarrying
1,956
8
(15)
0.4%
Manufacturing
17,807
636
(445)
3.6%
Electricity, gas, steam and air conditioning supply
6,909
45
(42)
0.7%
Water supply
842
17
(14)
2.0%
Construction
7,021
767
(563)
10.9%
Wholesale and retail trade
11,589
804
(536)
6.9%
Transport and storage
4,753
182
(88)
3.8%
Accommodation and food service activities
4,868
278
(156)
5.7%
Information and communications
4,401
61
(45)
1.4%
Financial and insurance activities
5,075
112
(106)
2.2%
Real estate activities
5,892
359
(221)
6.1%
Professional, scientific and technical activities
2,271
132
(83)
5.8%
Administrative and support service activities
2,245
81
(90)
3.6%
Public administration and defense, compulsory social security
73
3
(3)
4.3%
Education
235
11
(8)
4.7%
Human health services and social work activities
903
57
(43)
6.4%
Arts, entertainment and recreation
766
43
(28)
5.6%
Other services
927
11
(362)
1.2%
Households
97,185
4,434
(2,719)
4.6%
LOANS AND ADVANCES
208,336
8,193
(5,665)
3.9%
The changes during the years 2021 and 2020 of impaired financial assets and contingent risks are as follow:
Changes in impaired financial assets and contingent risks (Millions of Euros)
2021
2020
Balance at the beginning
8,654
9,053
Additions
3,120
2,508
Decreases (*)
(2,290)
(2,190)
Net additions
830
318
Amounts written-off
(828)
(666)
Exchange differences and other
44
(51)
Balance at the end
8,700
8,654
Recoveries on entries (%)
73%
87%
(*)  Reflects the total amount of impaired loans derecognized from the balance sheet throughout the year as a result of mortgage foreclosures and real estate assets received in
lieu of payment as well as monetary recoveries (see Note 19).
The Bank estimates that the update in the definition of credit impairment (default) (see Note 2.2.4) led to an increase of €350 million
in impaired financial assets. Regarding expected credit losses, the impact of this change is not likely to be significant, since most of
the affected operations were previously classified within stage 2 and, consequently, their credit risk coverage already corresponded
to the expected credit losses throughout the expected lifetime of the operation.
For the year ended December 31, 2021, the impairment charges recognized under the heading “Impairment or reversal of impairment
on financial assets not measured at fair value through profit or loss or net gains by modification" amounted to €475 million (€1,232
million for the year ended December 31, 2020) (see Note 42).
During 2021, three factors have contributed to lower impairment charges with respect to the previous year:
P.51
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
–a favorable demand recovery based on stimuli measures put in place by governments, savings during the pandemic and
vaccination, as well as an upward revision in the forecasted GDP growth, which, although positive, have lost momentum by
the end of the year due to short-term pressures, likely to be temporary, in the supply chain and in the rise in inflation rates,
–improved performance of the underlying business. In particular, limited additions to stage 3 have been supported by sound
recoveries throughout the year,
–and, to a lower extent, lower management adjustments, aligned with the improvement of the macroeconomic scenario.
The changes during the years 2021 and 2020 in financial assets derecognized from the accompanying balance sheet as their recovery
is considered unlikely ("write-offs"), is shown below:
Changes in impaired financial assets written-off from the balance sheet (Millions of Euros)
Notes
2021
2020
Balance at the beginning
17,297
17,042
Increase
1,351
1,000
Assets of remote collectability
828
666
Past-due and not collected income
523
334
Decrease
(1,704)
(737)
Re-financing or restructuring
—
(6)
Cash recovery
42
(253)
(238)
Foreclosed assets
(18)
(20)
Sales  (*)
(1,066)
—
Debt forgiveness
(243)
(416)
Time-barred debt and other causes
(124)
(57)
Net exchange differences
7
(8)
Balance at the end
16,951
17,297
(*) Includes principal and interest.
As indicated in Note 2.1.4, although they have been derecognized from the balance sheet, the BBVA continues to attempt to collect on
these written-off financial assets, until the rights to receive them are fully extinguished, either because it is a time-barred financial
asset, the financial asset is forgiven, or other reason.
5.2.6Loss allowances
Movements, measured over a 12-month period, in gross accounting balances and accumulated allowances for loan losses during 2021
and 2020  are recorded on the accompanying balance sheet as of December 31, 2021 and 2020, in order to cover the estimated loss
allowances in loans and advances and debt securities measured at amortized cost.
Changes in gross accounting balances of loans and advances at amortized cost. Year 2021 (Millions of Euros)
Stage 1
Stage 2
Stage 3
Total
Balance at the beginning
183,760
16,385
8,193
208,338
Transfers of financial assets:
(7,482)
6,296
1,186
—
Transfers from stage 1 to Stage 2
(9,980)
9,980
—
—
Transfers from stage 2 to Stage 1
3,203
(3,203)
—
—
Transfers to Stage 3
(723)
(1,315)
2,038
—
Transfers from Stage 3
18
834
(852)
—
Net annual origination of financial assets
7,655
(1,330)
(416)
5,909
Becoming write-offs
—
—
(828)
(828)
Changes in model / methodology
—
—
—
—
Foreign exchange
767
30
2
799
Modifications that do not result in derecognition
—
—
—
—
Other
—
—
—
—
Balance at the end
184,700
21,381
8,137
214,218
P.52
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Changes in allowances of  loans and advances at amortized cost. Year 2021 (Millions of Euros)
Stage 1
Stage 2
Stage 3
Total
Balance at the beginning
709
862
4,094
5,665
Transfers of financial assets:
(7)
102
318
413
Transfers from stage 1 to stage 2
(31)
231
—
200
Transfers from stage 2 to stage 1
30
(127)
—
(97)
Transfers to stage 3
(6)
(59)
521
456
Transfers from stage 3
—
57
(203)
(146)
Net annual origination of allowances
114
83
(126)
71
Becoming write-offs
—
—
(642)
(642)
Changes in model / methodology
—
—
—
—
Foreign exchange
—
—
—
—
Modifications that do not result in
derecognition
—
—
—
—
Other
(137)
(113)
(3)
(253)
Balance at the end
679
934
3,641
5,254
Changes in gross accounting balances of  loans and advances at amortized cost. Year 2020 (Millions of Euros)
Stage 1
stage 2
Stage 3
Total
Balance at the beginning
185,965
14,609
8,589
209,163
Transfers of financial assets:
(3,793)
2,800
993
—
Transfers from stage 1 to stage 2
(5,970)
5,970
—
—
Transfers from stage 2 to stage 1
2,665
(2,665)
—
—
Transfers to stage 3
(537)
(1,077)
1,614
—
Transfers from stage 3
49
572
(621)
—
Net annual origination of financial assets
2,358
(999)
(723)
636
Becoming write-offs
—
—
(666)
(666)
Changes in model / methodology
—
—
—
—
Foreign exchange
(770)
(25)
—
(795)
Modifications that do not result in derecognition
—
—
—
—
Other
—
—
—
—
Balance at the end
183,760
16,385
8,193
208,338
Changes in allowances of  loans and advances at amortized cost. Year 2020 (Millions of Euros)
Stage 1
Stage 2
Stage 3
Total
Balance at the beginning
668
681
3,942
5,291
Transfers of financial assets:
(6)
97
380
471
Transfers from stage 1 to stage 2
(16)
225
—
209
Transfers from stage 2 to stage 1
14
(110)
—
(96)
Transfers to stage 3
(4)
(52)
471
415
Transfers from stage 3
—
34
(91)
(57)
Net annual origination of allowances
93
211
410
714
Becoming write-offs
—
—
(572)
(572)
Changes in model / methodology
—
—
—
—
Foreign exchange
—
—
—
—
Modifications that do not result in
derecognition
—
—
—
—
Other
(46)
(127)
(66)
(239)
Balance at the end
709
862
4,094
5,665
P.53
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
5.3 Structural risk
The structural risks are defined, in general terms, as the possibility of suffering losses due to adverse movements in market risk
factors as a result of mismatches in the financial structure of an entity´s balance sheet.
In the BBVA, the following types of structural risks are defined, according to the nature and the following market factors: interest rate
risk, credit spread risk, exchange rate risk and equity risk.
The scope of structural risks in the Bank is limited to the banking book, excluding market risks in the trading book that are clearly
delimited and separated and make up the Market Risks.
The Assets and Liabilities Committee (ALCO) is the main responsible body for the management of structural risks regarding liquidity/
funding, interest rate, credit spread, currency, equity and solvency. Every month, with the participation of the CEO and
representatives from the areas of Finance, Risks and Business Areas; this committee monitors the structural risks and is presented
with proposals with regard to action plans related with its management for its approval. These management proposals are made by
the Finance area with a forward-looking focus, maintaining the alignment with the risk appetite framework, trying to guarantee the
recurrence of results and financial stability, as well as to preserve the solvency of the entity. All balance sheet management units have
a local ALCO, which is permanently attended by members of the corporate center, and there is a corporate ALCO where management
strategies are monitored and presented in the Group's subsidiaries.
The GRM area acts as an independent unit, ensuring adequate separation between the management and risk control functions, and is
responsible for ensuring that the structural risks in the Group are managed according to the strategy approved by the Board of
Directors.
Consequently, GRM deals with the identification, measurement, monitoring and control of those risks and their reporting to the
corresponding corporate bodies. Through the Global Risk Management Committee (GRMC), it performs the function of control and
risk assessment and is responsible for developing the strategies, policies, procedures and infrastructure necessary to identify,
evaluate, measure and manage the significant risks that the BBVA Group faces. To this end, GRM, through the corporate unit of
Structural Risks, proposes a scheme of limits that defines the risk appetite set for each of the relevant structural risk types, both at
Group level and by management units, which will be reviewed annually, reporting the situation periodically to the Group's corporate
bodies as well as to the GRMC.
Additionally, both the management system and the control and measurement system for structural risks are necessarily adjusted to
the Group's internal control model, complying with the evaluation and certification processes that comprise it. In this sense, the tasks
and controls necessary for its scope of action have been identified and documented, supporting a regulatory framework which
includes specific processes and measures for structural risks, from abroad geographical perspective.
Within the three lines of defense scheme in which BBVA's internal control model is based according to the most advanced standards
in terms of internal control, the first line of defense is maintained by the Finance area, which is responsible for managing the structural
risk.
As a second line of defense, GRM is in charge of identifying risks, and establishing policies and control models, periodically evaluating
their effectiveness.
In the second line of defense, there are also the Internal Risk Control units, which independently review the Structural Risk control,
and Internal Financial Control, which carries out a review of the design and effectiveness of the operational controls over structural
risk management.
The third line of defense is represented by the Internal Audit area, an independent unit within BBVA Group, which is responsible for
reviewing specific controls and processes.
5.3.1Structural interest rate risk and credit spread
The structural interest-rate risk (IRRBB) is related to the potential impact that variations in market interest rates have on an entity's
net interest income and equity. In order to properly measure IRRBB, BBVA takes into account all the main sources of this risk:
repricing risk, yield curve risk, option risk and basis risk.
The assessment of structural interest rate risk is carried out with an integral vision, combining two complementary points of view: the
effects of interest rate shifts in net interest income (short term) and their impact on the economic value of equity (long term). In
addition, the impact on the market value of the financial instruments of the banking book, as a result of changes in the market interest
rates (IRRBB) or the credit spreads (CSRBB), will be assessed as it may have an impact on the income statement and/or equity due
to their accounting treatment.
The exposure of a financial entity to adverse interest rates movements is a risk inherent to the development of the banking business,
which is also, in turn, an opportunity to create economic value. Therefore, interest rate risk must be effectively managed so that it is
limited in accordance with the entity’s equity and in line with the expected economic result.
P.54
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
In BBVA, the purpose of structural interest rate risk management is to maintain the stability of the net interest income in the event of
interest rate fluctuations. It contributes to a recurrent generation of earnings, limit the capital consumption due to structural interest
rate risk and monitor potential mark-to-market impacts on “held to collect and sell” (HtC&S) portfolios. Likewise, the spread risk
management in banking book portfolios is aimed at limiting the impact on the valuation of fixed income instruments, which are used
for balance sheet liquidity and interest rate risk management purposes in order to increase diversification, and at reducing the
concentration of each issuer, maintaining the spread risk at levels aligned with the total volume of the investment portfolio and the
equity of the Bank.
These functions falls to the Global ALM (Asset & Liability Management) unit, within the Finance area, who, through ALCO, aims to
guarantee the recurrence of results and preserve the solvency of the entity, always adhering to the risk profile defined by the
management bodies of the BBVA.
Structural interest rate risk management is decentralized, and is carried out independently in each entity included in the structural
balance sheet (banking book) of the BBVA, keeping the exposure to interest rates and credit spreads movements aligned with the
strategy and the target risk profile of the Bank, and in compliance with the regulatory requirements according to the EBA guidelines.
Nature of interest rate risk and credit spread risk
Repricing risk arises due to the difference between the repricing or maturity terms of the assets and liabilities, and represents the
most frequent interest rate risk faced by financial entities. However, other sources of risk such as changes in the slope and shape of
the yield curve, the reference to different indexes and the optionality risk embedded in certain banking transactions, are also taken
into account by the risk control system.
Furthermore, the credit spread risk (CSRBB) of fixed-income portfolios in the banking book arises from the potential impact on the
value of fixed-income portfolios and credit derivatives classified as HtC&S produced by a variation in the level of credit spreads
associated with those instruments/issuers and that are not explained by default risk or by movements in market interest rates.
BBVA's structural interest-rate risk management and control process includes a set of metrics and tools that enable the capture of
additional sources to properly monitor the risk profile of the Bank, backed-up by assumptions that aim to characterize the behavioral
of the balance sheet items with the maximum accuracy.
The IRRBB and CSRBB measurement is carried out on a monthly basis, and includes probabilistic measures based on simulation
methods of interest rate curves and credit spread shocks. The corporate methodology enables to capture additional sources of risk to
the interest rate parallel shifts, such as the changes in slope shape and the basis of yield curves. Additionally, sensitivity analysis to
multiple parallel shocks of different magnitude are also assessed on a regular basis. The process is ran separately for each currency
to which the Bank is exposed.
The risk measurement model is complemented by the assessment of ad-hoc scenarios, stress tests and reverse stress. As stress
testing has become more relevant during the recent years, the evaluation of market rates and behavioral assumptions extreme
scenarios has continued to be enhanced, while assessing, also, BBVA Research market scenarios, and the set of scenarios defined
according to EBA guidelines.
During 2021, the continuous improvement of internal systems and IRRBB management and control models has continued according
to the EBA guidelines. Among others, the developments to improve the data provisioning and the risk management tools are
highlighted, as well as the enhancement of the stress testing and models backtesting procedures.
Key assumptions of the model
In order to measure structural interest rate risk, the setting of assumptions on the evolution and behavior of certain balance sheet
items is particularly relevant, especially those related to products without an explicit or contractual maturity which characteristics are
not established in their contractual terms and must be therefore estimated.
The assumptions that characterize these balance sheet items must be understandable for the areas and bodies involved in risk
management and control and remain duly updated, justified and documented. The modeling of these assumptions must be
conceptually reasonable and consistent with the evidence based on historical experience, reviewed at least once a year and, if any, the
behavior of the customers induced by the business areas. These assumptions are regularly subject to a sensitivity analysis to assess
and understand the impact of the modelling on the risk metrics.
The approval and update of the IRRBB behavioral models is subject to the corporate governance under the scope of GRM analytics.
Thus, all the models must be duly inventoried and catalogued and comply with the requirements for their development, updating and
changes management set out in the internal procedures. They are also subject to the corresponding internal validations and follow-up
requirements established based on their relevance, as well as to backtesting procedures against experience to ratify the validity of the
assumptions applied.
In view of the heterogeneity of the financial markets, customers and products in the multiple jurisdictions, each one of the entities of
the Group is responsible for determining the behavior assumptions to be applied to the balance sheet items, always under the
guidelines and the applicability of the corporate models existing in the Bank.
The balance sheet behavioral assumptions stand out those established for the treatment of items without contractual maturity,
mainly for demand customer deposits, and those related to the expectations on the exercise of interest rate options, especially
relating to loans and deposits subject to prepayment risk.
P.55
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
For the modelling of demand deposits, a segmentation of the accounts in several categories is previously carried out depending on
the characteristics of the customer (retail / wholesale) and the product (type of account / transactionality / remuneration), in order
to outline the specific behavior of each segment.
In order to establish the remuneration of each segment, the relationship between the evolution of market interest rates and the
interest rates of managed accounts is analyzed, with the aim of determining the translation dynamic (percentages and lags) of
interest rates variations to the remuneration of the accounts. In this regard, consideration is given to the potential limitations in the
repricing of these accounts in scenarios of low or negative rates, with special attention to retail customers, through the establishment
of floors in the remuneration.
The behavior assigned to each category of accounts is determined by an analysis of the historical evolution of the balances and the
probability of cancellation of the accounts. For this, the volatile part of the balance assigned to a short-term maturity is isolated, thus
avoiding fluctuations in the level of risk caused by specific variations in the balances and promoting stability in the management of the
balance. Once the stable part is identified, a medium / long term maturity model is applied through a decay distribution based on the
average term of the accounts and the conditional cancellation probabilities throughout the life of the product.
The relationship of the evolution of the balance of deposits with the levels of market interest rates is incorporated, where appropriate,
in the behavioral modelling, especially in low interest rates environments, including its effect on the stability of the deposits as well as
the potential migration between the different types of deposits (on demand / time deposits) in the different interest rate scenarios.
Equally relevant is the treatment of early cancellation options embedded in credit loans, mortgage portfolios and customer deposits.
The evolution of market interest rates may condition, along with other variables, the incentive that customers have to prepay loans or
deposits, modifying the future behavior of the balance amounts with respect to the forecasted contractual maturity schedule.
The detailed analysis of the historical information related to prepayment data, both partial and total prepayment, combined with other
variables such as interest rates, allows estimating future amortizations and, where appropriate, their behavior linked to the evolution
of such variables through the relationship between the incentive of the customer to prepay and the early cancellation speed.
During 2021, central banks have begun to withdraw the expansionary policies implemented during the year 2020, to mitigate the
economic impact caused by the COVID-19 pandemic, with the aim of reducing the inflationary pressures that are occurring in most
countries of the world. In Europe, the end of the PEPP (Pandemic Emergency Purchase Programme) was announced for the month of
March 2022.
The BBVA continues to maintain a moderate risk profile, in accordance with the established objective, showing a favorable position to
a rise in interest rates on net interest income. Effective management of the balance sheet structural risk has mitigated the negative
impact of the low interest rates derived from the expansive monetary policies implemented by the different central banks to offset the
negative economic effects derived from the COVID-19, and is reflected in the strength and recurrence of the margin of interests:
In Europe, the downward trend in interest rates remains limited by current levels, preventing extremely adverse scenarios from
occurring. The balance sheet is characterized by a high proportion of variable-rate loans (basically mortgages and corporate lending)
and liabilities are composed mainly of customer on demand deposits. The ALCO portfolio acts as a management lever and hedging for
the balance sheet, mitigating its sensitivity to interest rate fluctuations. The balance sheet´s interest rate profile has remained stable
during the year, showing an interest net income sensitivity to 100 basis points increases by the interest rates slightly above 20%.
5.3.2Structural equity risk
Structural equity risk refers to the possibility of suffering losses in the value of positions in shares and other equity instruments held in
the banking book with long or medium term investment horizons due to fluctuations in the value of equity indexes or shares.
BBVA's exposure to structural equity risk arises largely from minority shareholdings held on industrial and financial companies, and in
new business (innovation). This exposure is modulated in some portfolios with positions held on derivative instruments on the same
underlying assets, in order to adjust the portfolio sensitivity to potential changes in equity prices.
The structural equity risk management is aimed at increasing the income-generating capacity of those shares held by the Group,
limiting the capital requirements for equity risk and narrowing the impact on the solvency level through a proactive management of
the portfolio using hedges. The function of managing the structural equity portfolios is a responsibility of Global ALM and other
Group's units specialized in this area. Their activity is subject to the risk management corporate policy on structural equity risk
management, complying with the defined management principles and Risk Appetite Framework.
The structural equity risk metrics, designed by GRM according to the corporate model, contribute to the effective monitoring of the
risk by estimating the sensitivity and the capital necessary to cover the possible unexpected losses due to changes in the value of the
shareholdings in the Group's investment portfolio, with a level of confidence that corresponds to the objective rating of the entity,
taking into account the liquidity of the positions and the statistical behavior of the assets to be considered
In order to analyze the risk profile in depth, stress tests and scenario analysis of sensitivity to different simulated scenarios are carried
out. They are based on both past crisis situations and forecasts made by BBVA Research. These analyses are carried out regularly to
assess the vulnerabilities of structural equity exposure not contemplated by the risk metrics and to serve as an additional tool when
making management decisions.
Backtesting is carried out on a regular basis on the risk measurement model used.
P.56
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Equity markets in Europe and have rallied significantly in 2021. The excellent performance of listed companies' corporate earnings
and the continuity of central banks' accommodative policies have been behind these revaluations. However, the Spanish stock market
has once again lagged behind the rest of the European stock markets.
Structural equity risk, measured in terms of economic capital, has raised during the last year due to the higher exposure taken. The
aggregate sensitivity of the BBVA Group’s consolidated equity to a 1% fall in the price of shares of the companies making up the
equity portfolio increased to -€27 million as of December 31, 2021, compared to -€20 million as of December 31, 2020. This
estimation takes into account the exposure in shares valued at market prices, or if not applicable, at fair value (excluding the positions
in the Treasury Area portfolios) and the net delta-equivalent positions in derivatives on the same underlyings.
5.4 Market risk
Market risk originates from the possibility of experiencing losses in the value of positions held as a result of movements in market
variables that affect the valuation of financial assets and liabilities. Market risk in the Bank's trading portfolios stems mainly from the
portfolios originated by Global Markets valued at fair value and held for the purpose of trading and generating short-term results.
Market risk in the field of banking book is clearly and distinctly addressed and can be broken down into structural risks relating to
interest rate, exchange rate and equity (see Note 5.3).
5.4.1 Market risk in trading portfolios
The main risks in the trading portfolios can be classified as follows:
–Interest-rate risk: This arises as a result of exposure to movements in the different interest-rate curves involved in trading.
Although the typical products that generate sensitivity to the movements in interest rates are money-market products
(deposits, interest-rate futures, call money swaps, etc.) and traditional interest-rate derivatives (swaps and interest-rate
options such as caps, floors, swaptions, etc.), practically all the financial products are exposed to interest-rate movements
due to the effect that such movements have on the valuation of the financial discount.
–Equity risk: This arises as a result of movements in share prices. This risk is generated in spot positions in shares or any
derivative products whose underlying asset is a share or an equity index. Dividend risk is a sub-risk of equity risk, arising as
an input for any equity option. Its variation may affect the valuation of positions and it is therefore a factor that generates
risk on the books.
–Exchange-rate risk: This is caused by movements in the exchange rates of the different currencies in which a position is
held. As in the case of equity risk, this risk is generated in spot currency positions, and in any derivative product whose
underlying asset is an exchange rate. In addition, the quanto effect (operations where the underlying asset and the
instrument itself are denominated in different currencies) means that in certain transactions in which the underlying asset is
not a currency, an exchange-rate risk is generated that has to be measured and monitored.
–Credit-spread risk: Credit spread is an indicator of an issuer's credit quality. Spread risk occurs due to variations in the
levels of spread of both corporate and government issues, and affects positions in bonds and credit derivatives.
–Volatility risk: This occurs as a result of changes in the levels of implied price volatility of the different market instruments on
which derivatives are traded. This risk, unlike the others, is exclusively a component of trading in derivatives and is defined
as a first-order convexity risk that is generated in all possible underlying assets in which there are products with options that
require a volatility input for their valuation.
The metrics developed to control and monitor market risk in the BBVA are aligned with market practices and are implemented
consistently across all the local market risk units.
Measurement procedures are established in terms of the possible impact of negative market conditions on the trading portfolio of the
Bank's Global Markets units, both under ordinary circumstances and in situations of heightened risk factors.
The standard metric used to measure market risk is Value at Risk (“VaR”), which indicates the maximum loss that may occur in the
portfolios at a given confidence level (99%) and time horizon (one day). This statistic value is widely used in the market and has the
advantage of summing up in a single metric the risks inherent to trading activity, taking into account how they are related and
providing a prediction of the loss that the trading book could sustain as a result of fluctuations in equity prices, interest rates, foreign
exchange rates and credit spreads. The market risk analysis considers various risks, such as credit spread risk, basis risk, as well as
volatility and correlation risk.
With respect to the risk measurement models used by the BBVA, the Bank of Spain has authorized the use of the internal market risk
model to determine bank capital requirements deriving from risk positions on the BBVA S.A.
The current management structure includes the monitoring of market-risk limits, consisting of a scheme of limits based on VaR,
economic capital (based on VaR measurements) and VaR sub-limits, as well as stop-loss limits for each of the Bank’s business units.
The model used estimates VaR in accordance with the historical simulation methodology, which involves estimating losses and gains
that would have taken place in the current portfolio if the changes in market conditions that took place over a specific period of time in
the past were repeated. Based on this information, it predicts the maximum expected loss of the current portfolio within a given
confidence level. This model has the advantage of reflecting precisely the historical distribution of the market variables and not
assuming any specific distribution of probability. The historical period used in this model is two years.
P.57
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
VaR figures are estimated with the following methodologies:
–VaR without smoothing, which awards equal weight to the daily information for the previous two years. This is currently the
official methodology for measuring market risks for the purpose of monitoring compliance with risk limits.
–VaR with smoothing, which gives a greater weight to more recent market information. This metric supplements the previous
one.
The use of VaR by historical simulation methodology as a risk metric has many advantages, but also certain limitations, among which
it is worth highlighting:
–The estimate of the maximum daily loss of the Global Markets portfolio positions (with a confidence level of 99%) depends
on the market movements of the last two years, not picking up the impact of large market events if they have not occurred
within that historical window
–The use of the 99% confidence level does not consider potential losses that can occur beyond this level. To mitigate this
limitation, different stress exercises are also performed, as described later.
At the same time, and following the guidelines established by the Spanish and European authorities, BBVA incorporates metrics in
addition to VaR with the aim of meeting the Bank of Spain's regulatory requirements with respect to the calculation of bank capital for
the trading book. Specifically, the measures incorporated in the Group since December 2011 (stipulated by Basel 2.5) are:
–VaR: In regulatory terms, the VaR charge incorporates the stressed VaR charge, and the sum of the two (VaR and stressed
VaR) is calculated. This quantifies the losses associated with the movements of the risk factors inherent to market
operations (including interest-rate risk, exchange-rate risk, equity risk and credit risk, among others). Both VaR and
stressed VaR are rescaled by a regulatory multiplier (between three and four) and by the square root of ten to calculate the
capital charge.
–Specific Risk - Incremental Risk Capital (“IRC”). Quantification of the risks of default and changes of the credit ratings of the
bond and derivative positions and debt funds with daily look-through or significant benchmark (correlation > 90%) in the
trading portfolio. The IRC charge is exclusively applied in entities in respect of which the internal market risk model is used
(i.e. BBVA, S.A. and BBVA Mexico). The IRC charge is determined based on the associated losses (calculated at 99.9%
confidence level over a one year horizon under the hypothesis of constant risk) due to a rating change and/or default of the
issuer with respect to an asset. In addition, the price risk is included in sovereign positions for the specified items.
–Specific Risk: Securitization, correlation portfolios and Investment funds without look-through. Capital charges for
securitizations and correlation portfolios are assessed based on the potential losses associated with the occurrence of a
credit event in the underlying exposures.  They are calculated by the standard model. The scope of the correlations
portfolios refers to the First To Default (FTD)-type market operation and/or tranches of market CDOs and only for positions
with an active market and hedging capacity. Capital charge for Funds include losses associated with volatility and credit risk
of the underling positions of the fund. All charges are calculated by the standard model.
Validity tests are performed regularly on the risk measurement models used by the Bank. They estimate the maximum loss that could
have been incurred in the assessed positions with a certain level of probability (backtesting), as well as measurements of the impact
of extreme market events on risk positions (stress testing). As an additional control measure, backtesting is conducted at a trading
desk level in order to enable more specific monitoring of the validity of the measurement models.
Market risk in 2021
P.58
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
The Bank’s market risk related to its trading portfolio remained in 2021 at low levels compared to other risks managed by BBVA,
particularly credit risk. This is due to the nature of the business. In 2021, the market risk of trading book increase versus the previous
year and, in terms of VaR, stood at €16 million at the close of the period.
The average VaR for 2021 stood at €13 million, in comparison with the €11 million registered in 2020, with a high for the year on April
7, 2021 at €21 million.
By type of market risk assumed by the Bank’s trading portfolio, the main risk factor in BBVA at the end of 2021 is linked to the interest
rates (this figure includes the spread risk) which represents a 40% of the total weight, decreasing its relative weight compared to the
year end 2020 (44%). The risk related to volatility and correlation accounts for 27% of the total weight at the end of 2021, with no
changes compared to the year end 2020 (27%).
Exchange-rate risk accounts for 20% which represents a decrease on the figure 12 months prior (27%), while equity risk has
increased from 2%, at the end of 2020 to 13% at the end of 2021.
Market risk by risk factor (Millions of euros)
2021
2020
Interest + credit spread
15
15
Exchange rate
7
9
Equity
5
1
Volatility
10
10
Diversification effect (*)
(23)
(22)
Total
16
13
Average VaR
13
11
Maximum VaR
21
18
Minimum VaR
8
7
(*)          The diversification effect is the difference between the sum of the average individual risk factors and the total VaR figure that includes the implied correlation between all
the variables and scenarios used in the measurement.
Validation of the internal market risk model
The internal market risk model is validated on a regular basis by backtesting in BBVA S.A. The aim of backtesting is to validate the
quality and precision of the internal market risk model used by BBVA Group to estimate the maximum daily loss of a portfolio, at a
99% level of confidence and a 250-day time horizon, by comparing the Group's results and the risk measurements generated by the
internal market risk model. These tests showed that the internal market risk model of BBVA, S.A. is adequate and precise.
Two types of backtesting have been carried out in 2021 and 2020:
–"Hypothetical" backtesting: the daily VaR is compared with the results obtained, not taking into account the intraday results
or the changes in the portfolio positions. This validates the appropriateness of the market risk metrics for the end-of-day
position.
–"Real" backtesting: the daily VaR is compared with the total results, including intraday transactions, but discounting the
possible minimum charges or fees involved. This type of backtesting includes the intraday risk in portfolios.
P.59
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
In addition, each of these two types of backtesting was carried out at a risk factor or business type level, thus making a deeper
comparison of the results with respect to risk measurements.
For the period between the year ended December 31, 2020 and the year ended December 31, 2021, the backtesting of the internal
VaR calculation model was carried out, comparing the daily results obtained to the risk level estimated by the internal VaR calculation
model. In that period, there were one negative exception in BBVA S.A.
At the end of the year the comparison showed the internal VaR calculation model was working correctly, within the "green" zone (0-4
exceptions), thus validating the internal VaR calculation model, as has been the case each year since the internal market risk model
was approved for the Bank. 
Stress testing
A number of stress tests are carried out on the BBVA's trading portfolios. First, global and local historical scenarios are used that
replicate the behavior of an extreme past event, such as for example the collapse of Lehman Brothers or the "Tequilazo" crisis. These
stress tests are complemented with simulated scenarios, where the aim is to generate scenarios that have a significant impact on the
different portfolios, but without being anchored to any specific historical scenario. Finally, for some portfolios or positions, fixed stress
tests are also carried out that have a significant impact on the market variables affecting these positions.
Historical scenarios
The historical benchmark stress scenario for the BBVA is Lehman Brothers, whose sudden collapse in September 2008 led to a
significant impact on the behavior of financial markets at a global level. The following are the most relevant effects of this historical
scenario:
–Credit shock: reflected mainly in the increase of credit spreads and downgrades in credit ratings.
–Increased volatility in most of the financial markets (giving rise to a great deal of variation in the prices of different assets
(currency, equity, debt).
–Liquidity shock in the financial systems, reflected by a major movement in interbank curves, particularly in the shortest
sections of the euro and dollar curves.
Simulated scenarios
Unlike the historical scenarios, which are fixed and therefore not suited to the composition of the risk portfolio at all times, the
scenario used for the exercises of economic stress is based on resampling methodology. This methodology is based on the use of
dynamic scenarios that are recalculated periodically depending on the main risks affecting the trading portfolios. On a data window
wide enough to collect different periods of stress (data are taken from January 1, 2008 until the date of the assessment), a simulation
is performed by resampling of historic observations, generating a distribution of losses and gains that serve to analyze the most
extreme of births in the selected historical window. The advantage of this methodology is that the period of stress is not
predetermined, but depends on the portfolio maintained at each time, and making a large number of simulations (10,000 simulations)
allows a greater richness of information for the analysis of expected shortfall than what is available in the scenarios included in the
calculation of VaR.
The main features of this approach are: a) the generated simulations respect the correlation structure of the data, b) there is flexibility
in the inclusion of new risk factors and c) it allows the introduction of a lot of variability in the simulations (desirable for considering
extreme events).
5.4.2 Financial instruments offset
Financial assets and liabilities may be netted in certain cases. In particular, they are presented for a net amount on the balance sheet
only when the Bank satisfy the provisions of Bank of Spain Circular 4/2017 and IAS 32-Paragraph 42, so they have both the legal right
to net recognized amounts, and the intention of settling the net amount or of realizing the asset and simultaneously paying the
liability.
In addition, the Bank has presented as gross amounts assets and liabilities on the balance sheet for which there are master netting
arrangements in place, but for which there is no intention of settling the net amount. The most common types of events that trigger
the netting of reciprocal obligations are bankruptcy of the entity, surpassing certain level of indebtedness threshold, failure to pay,
restructuring and dissolution of the entity.
In the current market context, derivatives are contracted under different framework contracts being the most widespread the ones
developed by the International Swaps and Derivatives Association (“ISDA”) and, for the Spanish market, the Framework Agreement
on Financial Transactions (“CMOF”). Almost all portfolio derivative transactions have been concluded under these framework
contracts, including in them the netting clauses mentioned in the preceding paragraph as "Master Netting Agreement", greatly
reducing the credit exposure on these instruments. Additionally, in contracts signed with counterparties, the collateral agreement
annexes called Credit Support Annex (“CSA”) are included, thereby minimizing exposure to a potential default of the counterparty.
Moreover, many of the transactions involving assets purchased or sold under a repurchase agreement are transacted through
clearing houses that articulate mechanisms to reduce counterparty risk, as well as through the signing of various master agreements
for bilateral transactions, the most widely used being the Global Master Repurchase Agreement (GMRA), published by the
International Capital Market Association (“ICMA”), to which the clauses related to the collateral exchange are usually added within the
text of the master agreement itself.
P.60
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
A summary of the effect of offsetting (via netting and collateral) for derivatives and securities operations is presented below as of
December 31, 2021 and 2020:
Effect of offsetting for derivatives and securities operation (Millions of Euros)
2021
2020
Gross amounts not
offset in the  balance
sheets (D)
Gross amounts not
offset in the balance
sheets (D)
Gross
amounts
recognized
(A)
Gross
amounts
offset in the
balance
sheets (B)
Net amount
presented
in the 
balance
sheets
(C=A-B)
Financial
instruments
Cash
collateral
received/
Pledged
Net amount
(E=C-D)
Gross
amounts
recognized
(A)
Gross
amounts
offset in the
balance
sheets (B)
Net amount
presented
in the
balance
sheets
(C=A-B)
Financial
instruments
Cash
collateral
received/
Pledged
Net amount
(E=C-D)
Trading and
hedging
derivatives
32,841
3,611
29,230
21,947
8,442
(1,159)
43,245
5,688
37,557
29,368
8,286
(97)
Reverse
repurchase,
securities
borrowing and
similar
agreements
49,939
—
49,939
50,045
—
(106)
27,681
—
27,681
27,927
161
(407)
Total assets
82,780
3,611
79,169
71,993
8,442
(1,265)
70,926
5,688
65,238
57,295
8,446
(503)
Trading and
hedging
derivatives
32,765
3,584
29,181
21,947
8,784
(1,551)
42,629
5,722
36,906
29,368
7,604
(65)
Repurchase,
securities lending
and similar
agreements
41,089
—
41,089
40,548
5
536
26,327
—
26,327
26,611
1,619
(1,903)
Total liabilities
73,854
3,584
70,270
62,495
8,789
(1,015)
68,955
5,722
63,233
55,979
9,223
(1,968)
The amount of recognized financial instruments within derivatives includes the effect in case of compensation with counterparties
with which the bank holds netting agreements, while, for repos, it reflects the market value of the collateral associated with the
transaction.
5.5Liquidity and Funding risk
Liquidity and funding risk is defined as the incapacity of a bank in meeting its payment commitments due to lack of funds or that, to
face those commitments, should have to make use of funding under burdensome terms.
5.5.1Liquidity and Funding Strategy and Planning
BBVA is a multinational financial institution whose business is focused mainly on retail and commercial banking activities. In addition
to the retail business model, which forms its core business, the Group engages in corporate and investment banking, through the
global CIB (Corporate & Investment Banking) division.
Liquidity and Funding Risk Management aims to maintain a solid balance sheet structure which allows a sustainable business model.
The Group’s liquidity and funding strategy is based on the following pillars:
–The principle of the funding self-sufficiency of its subsidiaries, meaning that each of the Liquidity Management Units (LMU)
must cover its funding needs independently on the markets where it operates. This avoids possible contagion due to a crisis
affecting one or more of the Group’s LMU.
–Stable customer deposits as the main source of funding in all the LMU, in accordance with the Group’s business model.
–Diversification of the sources of wholesale funding, in terms of maturity, market, instruments, counterparties and
currencies, with recurring access to the markets.
–Compliance with regulatory requirements, ensuring the availability of ample liquidity buffers, of high quality, as well as
sufficient instruments as required by regulations with the capacity to absorb losses.
–Compliance with the internal Liquidity Risk and Funding metrics, while adhering to the Risk Appetite level established for
each LMU at any time.
Liquidity and Funding Risk Management aims, in the short term, to prevent an entity from having difficulties in meeting its payment
commitments in due time and form or that, to meet them, it has to resort to obtaining funds in burdensome conditions that
deteriorate the image or reputation of the entity.
In the medium term, its objective is to ensure the suitability of the Group's financial structure and its evolution, within the framework
of the economic situation, the markets and regulatory changes.
P.61
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
This management of structural and liquidity funding is based on the principle of financial self-sufficiency of the entities that comprise
it. This approach helps prevent and limit liquidity risk by reducing the Group’s vulnerability during periods of high risk. This
decentralized management prevents possible contagion from a crisis affecting only one or a few Group entities, which must act
independently to meet their liquidity requirements in the markets where they operate.
Within this strategy, the BBVA Group is organized into eight LMUs composed of the parent company and the bank subsidiaries in
each geography, plus the branches that depend on them.
In addition, the policy for managing liquidity and funding risk is also based on the model’s robustness and on the planning and
integration of risk management into the budgeting process of each LMU, according to the financing risk appetite that it decides to
assume in its business.
Liquidity and funding planning is part of the strategic processes for the Group’s budgetary and business planning. This objective is to
allow a recurrent growth of the banking business with suitable maturities and costs within the established risk tolerance levels by
using a wide range of instruments which allow the diversification of the funding sources and the maintenance of a high volume of
available liquid assets.
5.5.2Governance and monitoring
The responsibility for liquidity and funding management in the development of normal business activity lies with the Finance area as a
first line of defense in managing the risks inherent to this activity, in accordance with the principles established by the European
Banking Authority (EBA) and in line with the most demanding standards, policies, procedures and controls in the framework
established by the governing bodies. Finance, through the Balance-Sheet Management area, plans and executes the funding of the
structural long-term gap and proposes to the Assets and Liabilities Committee (ALCO) the actions to be taken on this matter, in
accordance with the policies established by the Risk Committee in line with the metrics of the Risk Appetite Framework approved by
the Board of Directors.
Finance is also responsible for preparing the regulatory reporting of liquidity, coordinating the necessary processes to cover the
requirements at corporate and regulatory level, ensuring the integrity of the information provided.
GRM is responsible for ensuring that the liquidity and financing risk in the Bank is managed in accordance with the framework
established by governing bodies. It also deals with the identification, measurement, monitoring and control of such risks and their
communication to the relevant corporate bodies. In order to carry out this task properly, the risk function in the Bank has been
configured as a single, global function, independent of the management areas
Additionally, the Bank has, in its second line of defense, an Internal Risk Control unit, which performs an independent review of the
control of Liquidity and Funding Risk, and a Financial Internal Control Unit that reviews the design and effectiveness of the controls
operations on liquidity management and reporting.
As the third line of defense of the Group's internal control model, Internal Audit is in charge of reviewing specific controls and
processes in accordance with a work plan that is drawn up annually.
The Bank’s fundamental objectives regarding the liquidity and funding risk are determined through the Liquidity Coverage Ratio (LCR)
and through the Loan-to-Stable Customer Deposits (LtSCD) ratio.
The LCR ratio is a regulatory metric that aims to guarantee the resilience of entities in a scenario of liquidity tension within a time
horizon of 30 days. Within its risk appetite framework and system of limits and alerts, BBVA has established a required LCR
compliance level. The internal levels required are aimed at efficiently meeting the regulatory requirement, at a loose level above
100%.
The LtSCD ratio measures the relationship between net lending and stable customer funds. The aim is to preserve a stable funding
structure in the medium term, taking into account that maintaining an adequate volume of stable customer funds is key to achieving a
sound liquidity profile. In geographical areas with dual-currency balances, the indicator is also controlled by currency to manage the
mismatches that might occur.
Stable customer funds are considered to be the financing obtained and managed among their target customers. Those funds are
characterized by their low sensitivity to market changes and by their less volatile behavior at aggregated level per operation due to the
loyalty of the customer to the entity. The stable resources are calculated by applying to each identified customer segment a haircut
determined by the analysis of the stability if the balances by which different aspects are evaluated (concentration, stability, level of
loyalty). The main source of stable resources arises from wholesale funding and retail customer funds.
In order to establish the target (maximum) levels of LtSCD and provide an optimal funding structure reference in terms of risk
appetite, the Structural Risks of GRM identifies and assesses the economic and financial variables that condition the funding
structures.
Additionally, liquidity and funding risk management aims to achieve a proper diversification of the funding structure, avoiding
excessive dependence on short-term funding by establishing a maximum level for the short-term funds raised, including both
wholesale financing and the least stable proportion of customer funds In relation to long-term financing, the maturity profile does not
present significant concentrations, which makes it possible to adapt the schedule of the planned issuance plan to the best financial
conditions in the markets. Lastly, concentration risk is monitored with the aim of ensuring a correct diversification of both the
counterparty and type of instrument.
P.62
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
One of the fundamental metrics within the general management framework of the liquidity and funding risk is the maintenance of a
liquidity buffer consisting of high quality assets free of charges which can be sold or offered as collateral to obtain funding, either
under normal market conditions or in stress situations.
The Finance area is responsible for the collateral management and determining the liquidity buffer within BBVA. According to the
principle of auto-sufficiency of the Group's subsidiaries, each LMU is responsible for maintaining a buffer of liquid assets which
complies with the regulatory requirements applicable under each jurisdiction. In addition, the liquidity buffer must be aligned with the
liquidity and funding risk tolerance as well as the management limits set and approved for each case.
In this context, the short-term resistance of the liquidity risk profile is promoted, ensuring that the bank has sufficient collateral to
deal with the risk of the closing of wholesale markets. Basic capacity is the internal metric for the management and control of short-
term liquidity risk, which is defined as the relationship between the explicit assets available and the maturities of wholesale liabilities
and volatile resources, at different time periods up to one year, with special relevance at 30 and 90 days, with the objective of
preserving the survival period above 3 months with the available buffer, without considering the balance inflows.
As a fundamental element of the liquidity and financing risk monitoring scheme, stress tests are carried out. They enable to anticipate
deviations from the liquidity targets and the limits set in the appetite, and to establish tolerance ranges in the different management
areas. They also play a major role in the design of the Liquidity Contingency Plan and the definition of specific measures to be adopted
to rectify the risk profile if necessary.
For each scenario, it is checked whether BBVA has a sufficient stock of liquid assets to guarantee its capacity to meet the liquidity
commitments/outflows in the different periods analyzed. The analysis considers four scenarios: one central and three crisis-related
(systemic crisis; unexpected internal crisis with a considerable rating downgrade and/or affecting the ability to issue in wholesale
markets and the perception of business risk by the banking intermediaries and the entity’s clients; and a mixed scenario, as a
combination of the two aforementioned scenarios). Each scenario considers the following factors: existing market liquidity, customer
behavior and sources of funding, the impact of rating downgrades, market values of liquid assets and collateral, and the interaction
between liquidity requirements and the development of BBVA's credit quality.
The stress tests conducted on a regular basis by GRM reveal that BBVA maintains a sufficient buffer of liquid assets to deal with the
estimated liquidity outflows in a scenario resulting from the combination of a systemic crisis and an unexpected internal crisis, during
a period of longer than 3 months in general, including in the scenario of a significant downgrade of the Bank’s rating by up to three
notches.
Together with the results of the stress tests and the risk metrics, the early warning indicators play an important role within the
corporate model and the Liquidity Contingency Plan. They are mainly indicators of the funding structure, in relation to asset
encumbrance, counterparty concentration, flights of customer deposits, unexpected use of credit facilities, and of the market, which
help anticipate possible risks and capture market expectations.
Finance is the area responsible for the elaboration, monitoring, execution and update of the liquidity and funding plan and of the
market access strategy to guarantee and improve the stability and diversification of the wholesale funding sources.
In order to implement and establish management in an anticipated manner, limits are set on an annual basis for the main
management metrics that form part of the budgeting process for the liquidity and funding plan. This framework of limits contributes
to the planning of the joint future performance of:
–The loan book, considering the types of assets and their degree of liquidity, as well as their validity as collateral in
collateralized funding.
–Stable customer funds, based on the application of a methodology for establishing which segments and customer balances
are considered to be stable or volatile funds based on the principle of sustainability and recurrence of these funds.
–Projection of the credit gap, in order to require a degree of self-funding that is defined in terms of the difference between the
loan-book and stable customer funds.
–Incorporating the planning of securities portfolios into the banking book, which include both fixed-interest and equity
securities, and are classified as financial assets at fair value through other comprehensive income and at amortized cost,
and additionally on trading portfolios.
–The structural gap projection, as a result of assessing the funding needs generated both from the credit gap and by the
securities portfolio in the banking book, together with the rest of on-balance-sheet wholesale funding needs, excluding
trading portfolios. This gap therefore needs to be funded with customer funds that are not considered stable or on
wholesale markets.
As a result of these funding needs, BBVA plans the target wholesale funding structure according to the tolerance set.
Thus, once the structural gap has been identified and after resorting to wholesale markets, the amount and composition of wholesale
structural funding is established in subsequent years, in order to maintain a diversified funding mix and guarantee that there is not a
high reliance on short-term funding (short-term wholesale funding plus volatile customer funds).
In practice, the execution of the principles of planning and self-funding at the different LMU results in the BBVA’s main source of
funding being customer deposits, which consist mainly of demand deposits, savings deposits and time deposits.
P.63
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
As sources of funding, customer deposits are complemented by access to the interbank market and the domestic and international
capital markets in order to address additional liquidity requirements, implementing domestic and international programs for the
issuance of commercial paper and medium and long-term debt.
The process of analysis and assessment of the liquidity and funding situation and of the inherent risks is a process carried out on an
ongoing basis at BBVA, with the participation of all the Group areas involved in liquidity and funding risk management. This process is
carried out at both local and corporate level. It is incorporated into the decision- making process for liquidity and funding
management, with integration between the risk appetite strategy and establishment and the planning process, the funding plan and
the limits scheme.
The table below shows the liquidity available by instrument as of December 31, 2021 and 2020 for the most significant entities based
on prudential supervisor’s information (Commission Implementing Regulations (EU) 2017/2114 of November 9, 2017):
December  (Millions of Euros)
BBVA S.A.
2021
2020
Cash and withdrawable central bank reserves
35,258
39,330
Level 1 tradable assets
37,272
48,858
Level 2A tradable assets
5,234
5,119
Level 2B tradable assets
9,492
6,080
Other tradable assets (*)
27,870
20,174
Non tradable assets eligible for central banks
—
—
Cumulated counterbalancing capacity
115,127
119,560
(*)        The balance has been reexpressed including the available funding in the European Central Bank
The Net Stable Funding Ratio (NSFR), defined as the ratio between the amount of stable funding available and the amount of stable
funding required, and requires banks to maintain a stable funding profile in relation to the composition of their assets and off-balance-
sheet activities. This ratio should be at least 100% at all times.
The LCR, NSFR and LtSCD of BBVA at December 31, 2021, is 190%, 126% and 98%, respectively.
Below is a breakdown by contractual maturity of the balances of certain headings in the accompanying balance sheets, excluding any
valuation adjustments or loss allowances: 
P.64
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
December 2021. Contractual maturities (Millions of Euros)
Demand
Up to 1
month
1 to 3
months
3 to 6
months
6 to 9
months
9 to 12
months
1 to 2
years
2 to 3
years
3 to 5
years
Over 5
years
Total
ASSETS
Cash, cash balances at central
banks and other demand
deposits
33,076
3,539
—
—
—
—
—
—
—
—
36,615
Deposits in credit entities
—
405
189
655
272
131
151
151
—
209
2,162
Deposits in other financial
institutions
—
675
468
487
432
230
486
418
257
2,723
6,175
Reverse repo, securities
borrowing and margin lending
—
30,076
11,611
2,945
1,063
1,482
2,188
2,239
1,118
739
53,462
Loans and advances
—
10,383
10,615
11,653
5,832
7,692
23,450
18,503
29,433
68,655
186,215
Securities' portfolio settlement
—
413
570
1,809
520
3,153
12,712
5,847
9,072
40,484
74,580
December 2021. Contractual maturities (Millions of Euros)
Demand
Up to 1
month
1 to 3
months
3 to 6
months
6 to 9
months
9 to 12
months
1 to 2
years
2 to 3
years
3 to 5
years
Over 5
years
Total
LIABILITIES
Wholesale funding
—
2,790
609
2,586
1,706
274
7,482
3,350
8,900
13,953
41,652
Deposits in financial institutions
1,477
3,828
134
19
3
4
117
41
36
562
6,221
Deposits in other financial
institutions and international
agencies
7,983
1,927
1,678
105
116
181
692
701
1,306
3,957
18,646
Customer deposits
184,999
7,094
5,785
2,486
828
649
781
139
378
221
203,36
0
Security pledge funding
—
41,633
6,449
2,369
1,492
8,188
29,429
4,274
956
1,331
96,120
Derivatives, net
—
20
(9)
(272)
(43)
(621)
231
(91)
(84)
(127)
(997)
P.65
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter, which
adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
December 2020. Contractual maturities (Millions of Euros)
Demand
Up to 1
month
1 to 3
months
3 to 6
months
6 to 9
months
9 to 12
months
1 to 2
years
2 to 3
years
3 to 5
years
Over 5
years
Total
ASSETS
Cash, cash balances at central
banks and other demand
deposits
36,374
5,604
—
—
—
—
—
—
—
—
41,978
Deposits in credit entities
—
220
424
767
215
369
92
97
—
30
2,214
Deposits in other financial
institutions
—
1,590
364
469
327
192
562
279
296
2,566
6,646
Reverse repo, securities
borrowing and margin lending
—
15,945
4,578
1,351
364
368
3,320
1,849
891
1,089
29,753
Loans and advances
—
9,531
10,000
9,418
6,377
7,296
20,748
19,117
29,080
69,637
181,205
Securities' portfolio settlement
—
302
3,681
4,187
3,449
10,499
3,879
9,250
8,704
34,312
78,263
December 2020. Contractual maturities (Millions of euros)
Demand
Up to 1
month
1 to 3
months
3 to 6
months
6 to 9
months
9 to 12
months
1 to 2
years
2 to 3
years
3 to 5
years
Over 5
years
Total
LIABILITIES
Wholesale funding
—
4,263
1,213
2,012
792
1,270
6,685
5,837
8,755
17,157
47,984
Deposits in financial institutions
2,002
7,246
86
7
1
6
91
46
76
347
9,908
Deposits in other financial
institutions and international
agencies
11,573
3,311
2,481
255
133
213
474
355
1,038
3,419
23,253
Customer deposits
168,09
1
13,919
6,460
3,709
3,045
2,751
1,955
686
222
483
201,31
9
Security pledge funding
—
23,958
5,063
1,494
1,046
307
11,172
28,151
352
1,395
72,937
Derivatives, net
—
(66)
4
(871)
(10)
47
(28)
83
(72)
(173)
(1,088)
P.66
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter, which
adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
With regard to the financing structure, the loan portfolio is mostly financed by retail deposits. The “demand” maturity bucket mainly
contains the retail customer sight accounts whose behavior historically showed a high level of stability and little concentration.
According to a behavior analysis which is done every year in every entity, this type of account is considered to be stable and for
liquidity risk purposes receive a better treatment.
In the Eurozone, BBVA has continued to maintain a sound position with a large high-quality liquidity buffer. During 2021, commercial
activity has drawdown liquidity amounting to approximately €9 billion due to the increase in lending activity, especially in the last
quarter of the year, as well as the decrease in the volume of deposits, mainly wholesale. It should also be noted that in the second
quarter of 2021, the payment of the BBVA USA sale transaction was collected. In addition, in March 2021, BBVA S.A. took part in the
TLTRO III liquidity window program to take advantage of the improved conditions announced by the European Central Bank (ECB) in
December 2020, with an amount drawn of €3.5 billion that, together with the €34.9 billion available at the end of December 2020 ,
amount to €38.4 billion at the end of December 2021.
In March 2021, BBVA S.A. issued a senior preferred debt for an amount of €1 billion, with a maturity of 6 years and an option for early
redemption after five years. In September 2021, BBVA S.A. issued a floating rate senior preferred bond totaling €1 billion and
maturing in 2 years, the fifth issue made by BBVA linked to environmental, social and governance (ESG) criteria. Additionally, in
January 2022, BBVA S.A. issued a €1 billion senior non-preferred bond, with a maturity of 7 years and an option for early redemption
in the sixth year, with a coupon of 0.875%.
In this context, BBVA has maintained its objective of strengthening the funding structure based on growing their self-funding from
stable customer funds, while guaranteeing a sufficient buffer of fully available liquid assets, diversifying the various sources of funding
available, and optimizing the generation of collateral available for dealing with stress situations in the markets
5.5.3Asset encumbrance
As of December 31, 2021 and 2020, the encumbered (those provided as collateral for certain liabilities) and unencumbered assets are
broken down as follows:
Encumbered and unencumbered assets (Million of Euros)
Encumbered assets
Unencumbered assets
Book value
Fair value
Book value
Fair value
2021
2020
2021
2020
2021
2020
2021
2020
Equity instruments
307
2,134
307
2,134
16,113
9,611
16,113
9,611
Debt securities
20,047
14,283
17,814
11,044
41,039
55,731
43,272
58,970
Loans and advances and other
assets
75,022
75,843
—
—
289,751
299,610
—
—
The committed value of "Loans and Advances and other assets" corresponds mainly to loans linked to the issue of covered bonds,
territorial bonds or long-term securitized bonds (see Note 20) as well as those used as a guarantee to access certain funding
transactions with central banks. Debt securities and equity instruments correspond to underlying that are delivered in repos with
different types of counterparties, mainly clearing houses or credit institutions, and to a lesser extent central banks. Collateral
provided to guarantee derivative transactions is also included as committed assets.
As of December 31, 2021 and 2020, collateral pledges received mainly due to repurchase agreements and securities lending, and
those which could be committed in order to obtain funding are provided below:
Collateral received (Millions of Euros)
Fair value of encumbered
collateral received or own debt
securities issued
Fair value of collateral received or
own debt securities issued
available for encumbrance
Fair value of collateral received or
own debt securities issued not
available for encumbrance
2021
2020
2021
2020
2021
2020
Collateral received
39,724
27,529
13,620
6,614
1,555
899
Equity instruments
286
220
265
204
—
—
Debt securities
39,438
27,309
13,355
6,410
1,555
899
Loans and advances and other assets
—
—
—
—
—
—
Own debt securities issued other
than own covered bonds or ABSs
—
3
50
94
—
—
P.67
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
As of December 31, 2021 and 2020, financial liabilities issued related to encumbered assets in financial transactions as well as their
book value were as follows:
Sources of encumbrance (Millions of Euros)
Matching liabilities, contingent
liabilities or securities lent
Assets, collateral received and own
debt securities issued other than
covered bonds and ABSs encumbered
2021
2020
2021
2020
Book value of financial liabilities
118,530
101,084
132,188
115,704
Derivatives
13,686
12,853
13,576
12,949
Deposits
92,350
72,272
103,567
83,442
Outstanding subordinated debt
12,494
15,958
15,045
19,312
Other sources
206
158
2,912
4,088
6.Fair value of financial instruments
Framework and processes control
As part of the process established in the Bank for determining the fair value in order to ensure that financial assets and liabilities are
valued following the principles: Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants in the principal market or most advantageous market, at the measurement date.
BBVA has established, at a geographic level, a structure of Risk Operational Admission and Product Governance Committees
responsible for validating and approving new products or types of financial assets and liabilities before being contracted. Local
management responsible for valuation, which are independent from the business (see Management Report - Risk), are members of
these committees.
These areas are required to ensure, prior to the approval stage, the existence of not only technical and human resources, but also
adequate informational sources to measure the fair value of these financial assets and liabilities, in accordance with the rules
established by the valuation global area and using models that have been validated and approved by the responsible areas.
Fair value hierarchy
All financial instruments, both assets and liabilities are initially recognized at fair value, which at that point is equivalent to the
transaction price, unless there is evidence to the contrary in the market. Subsequently, depending on the type of financial instrument,
it may continue to be recognized at amortized cost or fair value through adjustments in the income statement or equity.
When possible, the fair value is determined as the market price of a financial instrument. However, for many of the financial assets
and liabilities of the Bank, especially in the case of derivatives, there is no market price available, so its fair value is estimated on the
basis of the price established in recent transactions involving similar instruments or, in the absence thereof, by using mathematical
measurement models that are sufficiently tried and trusted by the international financial community. The estimates of the fair value
derived from the use of such models take into consideration the specific features of the asset or liability to be measured and, in
particular, the various types of risk associated with such asset or liability. However, the limitations inherent in the measurement
models and possible inaccuracies in the assumptions and parameters required by these models may mean that the estimated fair
value of an asset or liability does not exactly match the price for which the asset or liability could be exchanged or settled on the date
of its measurement.
Additionally, for financial assets and liabilities that show significant uncertainty in inputs or model parameters used for valuation,
criteria is established to measure said uncertainty and activity limits are set based on these. Finally, these measurements are
compared, as much as possible, against other sources such as the measurements obtained by the business teams or those obtained
by other market participants.
The process for determining the fair value requires the classification of the financial assets and liabilities according to the
measurement processes used as set forth below:
–Level 1: Valuation using directly the quotation of the instrument, observable and readily and regularly available from
independent price sources and referenced to active markets that the entity can access at the measurement date. The
instruments classified within this level are fixed-income securities, equity instruments and certain derivatives.
–Level 2: Valuation of financial instruments with commonly accepted techniques that use inputs obtained from observable
data in markets.
–Level 3: Valuation of financial instruments with valuation techniques that use significant unobservable inputs in the market.
As of December 31, 2021, the affected instruments at fair value accounted for approximately 0.92% of financial assets and
0.12% of the Bank’s financial liabilities. Model selection and validation is undertaken by control areas outside the business
areas.
P.68
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
6.1.Fair value of financial instruments
The fair value of the Bank’s financial instruments in the accompanying balance sheets and its corresponding carrying amounts as of
December 31, 2021 and 2020 are presented below:
Fair Value and Carrying Amount (Millions of Euros)
Notes
2021
2020
Carrying
Amount
Fair Value
Carrying
Amount
Fair Value
ASSETS
Cash, cash balances at central banks and other
demand deposits
7
38,821
38,821
44,107
44,107
Financial assets held for trading
8
105,391
105,391
85,298
85,297
Non-trading financial assets mandatorily at fair
value through profit or loss
9
437
437
409
408
Financial assets designated at fair value through
profit or loss
10
—
—
—
—
Financial assets at fair value through other
comprehensive income
11
28,205
28,205
37,528
37,529
Financial assets at amortized cost
12
231,276
233,510
225,914
228,665
Derivatives – Hedge accounting
13
841
841
1,011
1,011
LIABILITIES
Financial liabilities held for trading
8
77,859
77,859
67,135
67,136
Financial liabilities designated at fair value through
profit or loss
10
2,238
2,238
3,267
3,267
Financial liabilities at amortized cost
20
321,848
323,368
331,189
332,618
Derivatives – Hedge accounting
13
2,126
2,126
1,510
1,510
Not all financial assets and liabilities are recorded at fair value, so below we provide the information on financial instruments recorded
at fair value and subsequently the information of those recorded at amortized cost (including their fair value), although this value is
not used when accounting for these instruments.
6.1.1.Fair value of financial instruments recognized at fair value, according to valuation criteria
Below are the different elements used in the valuation technique of financial instruments.
Active Market
In general, BBVA considers an active market as a market that allows the observation of bid and offer prices representative of the
levels to which the market participants are willing to negotiate an asset, with sufficient frequency and volume.
Furthermore, BBVA would consider as traded in an “Organized Market” quotations for assets or liabilities from Over The Counter
(OTC) markets when they are obtained from independent sources, observable on a daily basis and fulfil certain conditions.
P.69
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
The following table shows the financial instruments carried at fair value in the accompanying balance sheets, broken down by level
used to determine their fair value as of December 31, 2021 and 2020:
Fair Value of Financial Instruments by Levels (Millions of Euros)
2021
2020
Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
ASSETS
Financial assets held for trading
25,041
77,097
3,252
19,879
64,169
1,249
Equity instruments
15,118
—
28
10,645
—
37
Debt securities
8,874
2,554
118
7,214
2,744
25
Loans and advances
—
47,397
2,913
—
26,940
1,148
Derivatives
1,049
27,146
193
2,020
34,486
39
Non-trading financial assets mandatorily at
fair value through profit or loss
115
77
245
120
74
214
Equity instruments
115
1
57
120
10
53
Debt securities
—
77
49
—
65
77
Loans and advances
—
—
140
—
—
84
Financial assets designated at fair value
through profit or loss
—
—
—
—
—
—
Financial assets at fair value through other
comprehensive income
27,252
749
204
36,731
687
111
Equity instruments
1,077
—
26
864
—
17
Debt securities
26,175
749
178
35,867
687
94
Loans and advances
—
—
—
—
—
—
Derivatives – Hedge accounting
—
832
9
—
1,003
8
LIABILITIES
—
—
—
Financial liabilities held for trading
14,236
63,300
323
11,890
55,074
172
Trading derivatives
1,089
25,869
97
2,271
33,055
70
Short positions
13,147
1
—
9,618
7
—
Deposits
—
37,431
226
—
22,012
102
Financial liabilities designated at fair value
through profit or loss
—
2,074
164
—
3,026
241
Customer deposits
—
2,074
164
—
3,026
241
Debt certificates
—
—
—
—
—
—
Other financial liabilities
—
—
—
—
—
—
Derivatives – Hedge accounting
—
2,126
—
—
1,510
—
The following table sets forth the main valuation techniques, hypothesis and inputs used in the estimation of fair value of the financial
instruments classified under Levels 2 and 3, based on the type of financial asset and liability and the corresponding balances as of
December 31, 2021 and 2020:
P.70
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Fair Value of financial Instruments by Levels (Millions of Euros).
2021
2020
Level 2
Level 3
Level 2
Level 3
Valuation technique(s)
Observable inputs
Unobservable inputs
ASSETS
Financial assets held for trading
77,097
3,252
64,169
1,249
Equity instruments
—
28
—
37
Comparable pricing (Observable price in a similar market)
Net asset value
- Brokers quotes
- Market operations
- NAVs published
NAV provided by the administrator of the fund
Debt securities
2,554
118
2,744
25
Present-value method
(Discounted future cash flows)
Observed prices in non active markets
- Issuer´s credit risk
- Current market interest rates
- Non active markets prices
- Prepayment rates
- Issuer´s credit risk
- Recovery rates
Loans and advances
47,397
2,913
26,940
1,148
Present-value method
(Discounted future cash flows)
- Issuer´s credit risk
- Current market interest rates
- Interest rates for the financing of assets
- Exchange rates
- Prepayment rates
- Issuer´s credit risk
- Recovery rates
Derivatives
27,146
193
34,486
39
Interest rate
Interest rate products (Interest rate Swaps, call money Swaps y FRA):
Discounted cash flows
Caps/Floors: Black 76, Hull-White y  SABR
Bond Options: Black 76
Swaptions: Black 76, Hull-White y LGM
Other Interest rate options: Black 76, Hull-White, SABR y LGM
Constant maturity Swaps: SABR
-  Exchange rates
-  Market quoted future prices
-  Market interest rates
-  Underlying assets prices: shares, funds, commodities
-  Market observable volatilities 
-  Issuer credit spread levels
-  Quoted dividends
-  Market listed correlations
- Beta
- Implicit correlations between tenors
- Interest rates volatility
Equity
Future and Equity Forward: Discounted future cash flows
Equity Options: Local Volatility, Balck 76, Momentum adjustment and
Heston
- Volatility of volatility
- Implicit assets correlations
- Long term implicit correlations
- Implicit dividends and long term repos
Foreign exchange and gold
Future and Equity forward: Discounted future cash flows
Foreign exchange Options: Black 76, Local Volatility, moments
adjustment
- Volatility of volatility
- Implicit assets correlations
- Long term implicit correlations
Credit
Credit Derivatives: Default model and Gaussian copula
- Correlation default
- Credit spread
- Recovery rates
- Interest rate yield
- Default volatility
Commodities
Commodities: Momentum adjustment and discounted cash flows
Non-trading financial assets mandatorily at fair value
through profit or loss
77
245
74
214
Equity instruments
1
57
10
53
Comparable pricing (Observable price in a similar market)
Net asset value
- Brokers quotes
- Market operations
- NAVs published
- NAV provided by the administrator of the fund
Debt securities
77
49
65
77
Present-value method
(Discounted future cash flows)
- Issuer credit risk
- Current market interest rates
Prepayment rates
- Issuer credit risk
- Recovery rates
Loans and advances
—
140
—
84
Specific liquidation criteria regarding losses of the EPA proceedings
PD and LGD of the internal models, valuations and specific criteria of the
EPA proceedings
- Issuer credit risk
- Current market interest rates
- Interest rates for the financing of assets
- Exchange rates
- Property valuation
Financial assets at fair value through other comprehensive
income
749
204
687
111
Equity instruments
—
26
—
17
Comparable pricing (Observable price in a similar market)
Net asset value
- Brokers quotes
- Market operations
- NAVs published
- NAV provided by the administrator of the fund
Debt securities
749
178
687
94
Present-value method
(Discounted future cash flows)
Observed prices in non-active markets
- Issuer´s credit risk
- Current market interest rates
- Non active market prices
- Prepayment rates
- Issuer credit risk
- Recovery rates
Hedging derivatives
832
9
1,003
8
Interest rate
Interest rate products (Interest rate swaps, Call money swaps y FRA):
Discounted cash flows
Caps/Floors: Black 76, Hull-White y  SABR
Bond options: Black 76
Swaptions: Black 76, Hull-White y LGM
Other interest rate options: Black 76, Hull-White, SABR y LGM
Constant maturity swaps: SABR
-  Exchange rates
-  Market quoted future prices
-  Market interest rates
-  Underlying assets prices: shares, funds, commodities
-  Market observable volatilities 
-  Issuer credit spread levels
-  Quoted dividends
-  Market listed correlations
Equity
Future and Equity Forward: Discounted future cash flows
Equity Options: Local volatility, Black 76, Momentum adjustment and
Heston
Foreign exchange and gold
Future and Equity Forward: Discounted future cash flows
Foreign exchange Options: Black 76, Local volatility, moments adjustment
Credit
Credit Derivatives: Default model and Gaussian copula
Commodities
Commodities: Momentum adjustment and Discounted cash flows
P.71
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter, which adapts the EU-IFRS for banks (see notes 1 to 51). In the
event of a discrepancy, the original Spanish-language version prevails.
Fair Value of Financial Instruments by Levels (Millions of Euros).
2021
2020
Level 2
Level 3
Level 2
Level 3
Valuation technique(s)
Observable inputs
Unobservable inputs
LIABILITIES
Financial liabilities held for trading
63,300
323
55,074
172
Deposits
37,431
226
22,012
102
Present-value method
(Discounted future cash flows)
- Interest rate yield
- Funding interest rates
observed in the market or in
consensus services
- Exchange rates
- Funding interest rates
observed in the market or in
consensus services
Derivatives
25,869
97
33,055
70
Interest rate
Interest rate products (Interest rate Swaps, call
money Swaps y FRA): Discounted cash flows
Caps/Floors: Black 76, Hull-White y  SABR
Bond Options: Black 76
Swaptions: Black 76, Hull-White y LGM
Other Interest rate Options: Black 76, Hull-White,
SABR y LGM
Constant Maturity swaps: SABR
-  Exchange rates
-  Market quoted future prices
-  Market interest rates
-  Underlying assets prices: shares, funds,
commodities
-  Market observable volatilities 
-  Issuer credit spread levels
-  Quoted dividends
-  Market listed correlations
- Beta
- Correlation between tenors
- Interest rates volatility
Equity
Future and Equity Forward: Discounted future
cash flows
Equity options: Local volatility, momentum
adjustment and Heston
- Volatility of volatility
- Assets correlation
Foreign exchange and gold
Future and Equity Forward: Discounted future
cash flows
Foreign exchange options: Black 76, Local
volatility, moments adjustment
- Volatility of volatility
- Assets correlation
Credit
Credit Derivatives: Default model and Gaussian
copula
- Correlation default
- Credit spread
- Recovery rates
- Interest rate yield
- Default volatility
Commodities
Commodities: Momentum adjustment and
discounted cash flows
Short positions
1
—
7
—
Present-value method
(Discounted future cash flows)
- Correlation default
- Credit spread
- Recovery rates
- Interest rate yield
Financial liabilities designated at fair
value through profit or loss
2,074
164
3,026
241
Present-value method
(Discounted future cash flows)
- Prepayment rates
- Issuer´s credit risk
- Current market interest rates
- Prepayment rates
- Issuer credit risk
- Current market interest rates
Derivatives – Hedge accounting
2,126
—
1,510
—
P.72
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter, which adapts the EU-IFRS for banks (see notes 1 to 51). In the
event of a discrepancy, the original Spanish-language version prevails.
Interest rate
Interest rate products (Interest rate Swaps, Call
money swaps y FRA): Discounted cash flows
Caps/Floors: Black 76, Hull-White y  SABR
Bond options: Black 76
Swaptions: Black 76, Hull-White y LGM
Other Interest rate options: Black 76, Hull-White
y LGM
Constant Maturity swaps: SABR
-  Exchange rates
-  Market quoted future prices
-  Market interest rates
-  Underlying assets prices: shares, funds,
commodities
-  Market observable volatilities 
-  Issuer credit spread levels
-  Quoted dividends
-  Market listed correlations
- Beta
- Implicit correlations between tenors
- interest rates volatility
Equity
Future and Equity forward: Discounted future
cash flows
Equity options: Local Volatility, Black 76,
momentum adjustment and Heston
- Volatility of volatility
- Implicit assets correlations
- Long term implicit correlations
- Implicit dividends and long term repos
Foreign exchange and gold
Future and Equity Forward: Discounted future
cash flows
Foreign exchange Options: Black 76, local
volatility, moments adjustment
- Volatility of volatility
- Implicit assets correlations
- Long term implicit correlations
Credit
Credit Derivatives: Default model and Gaussian
copula
- Correlation default
- Credit spread
- Recovery rates
- Interest rate yield
- Default volatility
Commodities
Commodities: Momentum adjustment and
discounted cash flows
P.73
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter, which adapts the EU-IFRS for banks (see notes 1 to 51). In the
event of a discrepancy, the original Spanish-language version prevails.
Main valuation techniques
The main techniques used for the assessment of the majority of the financial instruments classified in Level 3, and its main
unobservable inputs, are described below:
–The net present value (net present value method): This technique uses the future cash flows of each financial instrument,
which are established in the different contracts, and discounted to their present value. This technique often includes many
observable inputs, but may also include unobservable inputs, as described below:
a.Credit Spread: This input represents the difference in yield of a debt security and the reference rate, reflecting the
additional return that a market participant would require to take the credit risk of that debt security. Therefore,
the credit spread of the debt security is part of the discount rate used to calculate the present value of the future
cash flows.
b.Recovery rate: This input represents the percentage of principal and interest recovered from a debt instrument
that has defaulted.
–Comparable prices (similar asset prices): This input represents the prices of comparable financial instruments and
benchmarks used to calculate a reference yield based on relative movements from the entry price or current market levels.
Further adjustments to account for differences that may exist between financial instrument being valued and the
comparable financial instrument may be added. It can also be assumed that the price of the financial instrument is
equivalent to the comparable instrument.
–Net asset value: This technique utilizes certain assumptions to use net asset value as representative of fair value, which is
equal to the total value of the assets and liabilities of a fund published by the managing entity.
–Gaussian copula: This model is used to integrate default probabilities of credit instruments referenced to more than one
underlying CDS. The joint density function used to value the instrument is constructed by using a Gaussian copula that
relates the marginal densities by a normal distribution, usually extracted from the correlation matrix of events approaching
default by CDS issuers.
–Black 76: variant of Black Scholes model, whose main application is the valuation of bond options, cap floors and swaptions
where the behavior of the Forward and not the Spot itself, is directly modeled.
–Black Scholes: The Black Scholes model postulates log-normal distribution for the prices of securities, so that the expected
return under the risk neutral measure is the risk free interest rate. Under this assumption, the price of vanilla options can be
obtained analytically, so that inverting the Black- Scholes formula, the implied volatility for process of the price can be
calculated.
–Heston: This model, typically applied to equity OTC options, assumes stochastic behavior of volatility. According to which,
the volatility follows a process that reverts to a long-term level and is correlated with the underlying equity instrument. As
opposed to local volatility models, in which the volatility evolves deterministically, the Heston model is more flexible,
allowing it to be similar to that observed in the short term today.
–Libor market model: This model assumes that the dynamics of the interest rate curve can be modeled based on the set of
forward contracts that compose the underlying interest rate. The correlation matrix is parameterized on the assumption
that the correlation between any two forward contracts decreases at a constant rate, beta, to the extent of the difference in
their respective due dates. The input “Credit default volatility” is a volatility input of the credit factor dynamic applied in
rate/credit hybrid operative. The multifactorial frame of this model makes it ideal for the valuation of instruments sensitive
to the slope or curve, including interest rate option.
–Local Volatility: In the local volatility models, the volatility, instead of being static, evolves deterministically over time
according to the level of moneyness (i.e. probability that the option has a positive value on its date of expiration) of the
underlying, capturing the existence of volatility smiles. The volatility smile of an option is the empirical relationship observed
between its implied volatility and its strike price. These models are appropriate for options whose value depends on the
historical evolution of the underlying which use Monte Carlo simulation technique for their valuation.
Unobservable inputs
P.74
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Quantitative information of unobservable inputs used to calculate Level 3 valuations is presented below as of  December 31, 2021 and
2020:
Unobservable inputs. December 2021
Financial instrument
Valuation technique(s)
Significant
unobservable inputs
Min
Average
Max
Units
Debt Securities
Present value method
Credit Spread
2.72
125.41
2,374.39
p.b.
Recovery Rate
0.00%
37.34%
40.00%
%
0.10%
96.63%
144.11%
%
Equity/Fund instruments
(*)
Net Asset Value
Comparable Pricing
Loans and advances
Present value method
Repo funding curve
(2.71)%
1.16%
4.99%
Abs Repo
rate
Credit Derivatives
Gaussian Copula
Correlation Default
34.56%
43.47%
52.78%
%
Black 76
Price Volatility
—
Vegas
Equity Derivatives
Option models on
equities, baskets of
equity, funds
Dividends (**)
Correlations
(88)%
60%
99%
%
Volatility
5.57
26.30
62.00
Vegas
FX Derivatives
Option models on FX
underlyings
Volatility
3.96
9.71
16.34
Vegas
IR Derivatives
Option models on IR
underlyings
Beta
0.25
2.00
18.00
%
Correlation Rate/Credit
(100)
100
%
Credit Default Volatility
—
—
—
Vegas
(*) Due to the diversity of valuation models of equity valuations, we would not include all the unobservable inputs or the quantitative ranges of them.
(**) The range of unobservable dividends is too wide range to be relevant.
Unobservable inputs. December 2020
Financial instrument
Valuation technique(s)
Significant
unobservable inputs
Min
Average
Max
Units
Debt Securities
Present value method
Credit Spread
4.32
47.01
564.22
p.b.
Recovery Rate
0.00%
37.06%
40.00%
%
0.10%
99.92%
143.87%
%
Equity/Fund instruments
(*)
Net Asset Value
Comparable Pricing
Loans and advances
Present value method
Repo funding curve
(1.18)%
(0.25)%
0.74%
Abs Repo
rate
Credit Derivatives
Gaussian Copula
Correlation Default
30.40%
44.87%
60.95%
%
Black 76
Price Volatility
—
Vegas
Equity Derivatives
Option models on
equities, baskets of
equity, funds
Dividends (**)
Correlations
(77)%
51%
98%
%
Volatility
6.52
29.90
141.77
Vegas
FX Derivatives
Option models on FX
underlyings
Volatility
4.11
10.00
16.14
Vegas
IR Derivatives
Option models on IR
underlyings
Beta
0.25
2.00
18.00
%
Correlation Rate/Credit
(100)
100
%
Credit Default Volatility
—
—
—
Vegas
(*) Due to the diversity of valuation models of equity valuations, we would not include all the unobservable inputs or the quantitative ranges of them.
(**) The range of unobservable dividends is too wide range to be relevant.
Adjustments to the valuation
P.75
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Under IFRS 13, the entity must estimate the value taking into account the assumptions and conditions that market participants would
have when setting the price of the asset or liability on the valuation date.
In order to comply with the fair value requirements, the entity applies adjustments to the fair valuation considering, default criteria,
inherent and from the counterparties, valuation risk from funding and valuation risks due to valuation uncertainty and related to the
prudent valuation criteria. All of the above are aligned with the regulatory requirements (EBA CRR 105.10) and considering model risk,
liquidity risk (Bid / Offer) and price uncertainty risk.
Adjustments to the valuation for risk of default
The fair value of liabilities should reflect the entity's default risk, which includes, among other components, its own credit risk. Taking
this into account, the Group makes valuation adjustments for credit risk in the estimates of the fair value of its assets and liabilities.
These adjustments are calculated by estimating Exposure At Default, Probability of Default and Loss Given Default, which are based
on the recovery levels for all derivative products on any instrument, deposits and repos at the legal entity level (all counterparties
under a same master agreement), in which BBVA has exposure.
Credit Valuation Adjustment (hereinafter “CVA”) and Debit Valuation Adjustments (hereinafter “DVA”) are included in the valuation of
derivatives, both assets and liabilities, to reflect the impact on the fair value of the counterparty credit risk and its own, respectively.
The Group incorporates in its valuation, for all exposures classified in any of the categories valued at fair value, both the counterparty
credit risk and its own. In the trading portfolio, and in the specific case of derivatives, credit risk is recognized through such
adjustments.
As a general rule, the calculation of CVA is the sum of the expected positive exposure in time t, the probability of default between t-1
and t, and the Loss Given Default of the counterparty. Consequently, the DVA is calculated as the sum of the expected negative
exposure in time t, the probability of default of BBVA between t-1 and t, and the Loss Given Default of BBVA. Both calculations are
performed throughout the entire period of potential exposure.
The calculation of the expected positive and negative exposure is done through a Montecarlo simulation of the market variables
involved in all trades’ valuation under the same legal netting set.
The information needed to calculate the probability of default and the loss given default of a counterparty comes from the credit
markets. The counterparty’s Credit Default Swaps are used if liquid quotes are available. If a market price is not available, BBVA has
implemented a mapping process based on the sector, rating and geography of the counterparty to assign probabilities of default and
loss given default calibrated directly to market.
An additional adjustment for Own Credit Adjustment (OCA) is applied to the instruments accounted for by applying the Fair Value
Option permitted by IFRS 9.
The amounts recognized in the balance sheet as of December 31, 2021 and 2020 related to the valuation adjustments to the credit
assessment of the derivative asset as “Credit Valuation Adjustments” (“CVA”) was €-103 million and €-110 million respectively, and
the valuation adjustments to the derivative liabilities as “Debit Valuation Adjustment” (DVA) was €57 million and €66 million
respectively. The impact recorded under “Gains (losses) on financial assets and liabilities held for trading, net” in the income
statement for the year ended December 31, 2021 and 2020 corresponding to the mentioned adjustments was a net impact of €-2
million and €-26 million respectively.
As a result of the value variations of the inherent credit risk, which is included in the deposits classified as liabilities designated at fair
value through profit and loss, the amount recognized in the heading “Accumulated other comprehensive income” has amounted to
€3 million and €-29 million as of December 31, 2021 and 2020, respectively.
Valuation adjustments for financing risk
The fair value of the positions recorded at fair value must reflect the entity's financing risk. Taking into account the above, the Group
makes adjustments for financing risk valuation (Funding Valuation Adjustment FVA) in the estimates of the fair value of its assets and
liabilities.
The adjustment to the valuation for financing risk incorporates the cost of financing implicit in the valuation of positions at fair value.
This adjustment reflects the cost of funding for non-collateralized or partially collateralized operations.
Additionally, as of December 31, 2021 and 2020, €-11 million and €-9 million related to the “Funding Valuation Adjustments” (“FVA”)
were recognized in the consolidated balance sheet, being the impact on results €-1 million and €-1 million, respectively.
Valuation adjustments for valuation uncertainty
The fair value of the positions recorded at fair value must reflect the valuation risk derived from the uncertainty in the valuation for
concepts of pure uncertainty of prices, liquidity risk and model risks. This adjustment is aligned with the regulatory requirements for
prudent valuation via valuation adjustments with an impact on CET1, and meets the requirements of EBA CRR 105.10 for this purpose.
The adjustment to the valuation for liquidity incorporates an adjustment for Bid / Offer spreads in the valuation of derivatives that do
not meet the necessary conditions to be considered a Market Maker operation.
P.76
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
The adjustment to the valuation for model risk captures the uncertainty in the price associated with the products valued with the use
of a valuation model ("Mark to Model") given the existence of more than one possible model applicable to the valuation of the product
or the calibration of its parameters from the observations of inputs in the market.
The adjustment to the valuation for price uncertainty includes the uncertainty associated with the dispersion in the values observed in
the market for the prices taken in the valuation of assets or as inputs in the valuation models. The impact recorded under “Gains
(losses) on financial assets and liabilities held for trading, net” in the consolidated income statement for the year ended December 31,
2021 corresponding to the mentioned adjustments was a net impact of €-30 million.
Financial assets and liabilities classified as Level 3
The changes in the balance of Level 3 financial assets and liabilities included in the accompanying balance sheets are as follows:
Financial assets Level 3. Changes in the year (Millions of Euros)
2021
2020
Assets
Liabilities
Assets
Liabilities
Balance at the beginning
1,583
412
1,699
616
Changes in fair value recognized in profit and loss (*)
175
(44)
486
458
Changes in fair value not recognized in profit and loss
(19)
—
(1)
—
Acquisitions, disposals and liquidations
2,418
185
(1,106)
(861)
Net transfers to Level 3
(446)
(66)
505
199
Exchange differences and others
—
—
—
—
Balance at the end
3,711
487
1,583
412
(*)      Profit or loss that is attributable to gains or losses relating to those financial assets and liabilities held as of December 31, 2020, 2020. Valuation adjustments are recorded
under the heading “Gains (losses) on financial assets and liabilities (net)”
.In 2021 there was an increase in the trading portfolio mainly due to the evolution of loans and advances and their corresponding
funding with deposits. In line with this increase in the activity, there is a higher volume of exposures classified as level 3 which mainly
corresponds to temporary acquisitions of assets, despite having improved throughout the year the observability of the inputs used to
value these assets in the market.
In 2020, a reduction was made in financial assets held for trading and financial liabilities held for trading classified as Level 2 in the fair
value hierarchy for an amount of €1,918 million and a reduction in financial assets held for trading and Financial liabilities held for
trading classified as Level 3 in the fair value hierarchy for an amount of €461 million euros (see Note 1.3).
For the years ended December 31, 2021, and 2020, the profit/loss on sales of financial instruments classified as Level 3 recognized in
the accompanying consolidated income statement was not material.
Transfers among levels
The Global Valuation Area, in collaboration with the Group, has established the rules for an appropriate financial instruments held for
trading classification according to the fair value hierarchy defined by international accounting standards.
On a monthly basis, any new assets added to the portfolio are classified, according to this criterion, by the subsidiaries. Then, there is
a quarterly review of the portfolio in order to analyze the need for a change in classification of any of these assets.
P.77
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
The financial instruments transferred among the different levels of measurement for the years are at the following amounts in the
accompanying balance sheets as of December 31, 2021 and 2020:
Transfer among levels (Millions of Euros)
2021
2020
From:
Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
To:
Level 2
Level 3
Level 1
Level 3
Level 1
Level 2
Level 2
Level 3
Level 1
Level 3
Level 1
Level 2
ASSETS
Financial assets held for
trading
888
—
11
142
6
592
1,447
—
28
523
—
22
Non-trading financial assets
mandatorily at fair value
through profit or loss
—
—
—
—
—
23
9
—
—
19
—
17
Financial assets at fair value
through other comprehensive
income
5
—
10
35
—
2
9
—
19
—
—
6
Derivatives – Hedge
accounting
—
—
—
—
—
—
—
—
—
8
—
—
Total
893
—
21
176
6
616
1,465
—
47
550
—
45
LIABILITIES
Financial liabilities held for
trading
563
—
—
55
—
94
6
—
—
177
—
6
Financial liabilities designated
at fair value through profit or
loss
—
—
—
38
—
65
—
—
—
56
—
27
Derivatives – Hedge
accounting
—
—
—
—
—
—
—
—
—
—
—
—
Total
563
—
—
94
—
159
6
—
—
233
—
34
The amount of financial instruments that were transferred among levels of valuation during the year ended December 31, 2021 is not
material relative to the total portfolios, and corresponds to the above changes in the classification among levels these financial
instruments modified some of their features, specifically:
–Transfers among Levels 1 and 2 represent mainly derivatives, debt securities and short positions, which are either no longer
listed on an active market (transfer from Level 1 to 2) or have just started to be listed (transfer from Level 2 to 1).
–Transfers from Level 2 to Level 3 are mainly due to transactions of financial assets held for trading, financial assets at fair
value through other comprehensive income, financial liabilities held for trading and financial liabilities designated at fair
value through profit or loss.
–Transfers from Level 3 to Level 2 generally affect derivatives, loans and advances and debt securities transactions, for
which inputs observable in the market have been obtained.
Sensitivity analysis
Sensitivity analysis is performed on financial instruments with significant unobservable inputs (financial instruments included in level
3), in order to obtain a reasonable range of possible alternative valuations. This analysis is carried out on a monthly basis, based on
the criteria defined by the Global Valuation Area taking into account the nature of the methods used for the assessment and the
reliability and availability of inputs and proxies used. In order to establish, with a sufficient degree of certainty, the valuation risk that is
incurred in such assets without applying diversification criteria between them.
As of December 31, 2021, the effect on profit for the year and total equity of changing the main unobservable inputs used for the
measurement of Level 3 financial instruments for other reasonably possible unobservable inputs, taking the highest (most favorable
input) or lowest (least favorable input) value of the range deemed probable, would be as follows:
P.78
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Financial instruments Level 3: sensitivity analysis (Millions of Euros)
Potential impact on income
statement
Potential impact on
other comprehensive income
Most favorable
hypothesis
Least favorable
hypothesis
Most favorable
hypothesis
Least favorable
hypothesis
ASSETS
Financial assets held for trading
33
(57)
—
—
Loans and advances
4
(4)
—
—
Debt securities
24
(24)
—
—
Equity instruments
1
(25)
—
—
Derivatives
5
(5)
—
—
Non-trading financial assets mandatorily at fair
value through profit or loss
35
(36)
—
—
Loans and advances
16
(5)
—
—
Debt securities
10
(10)
—
—
Equity instruments
9
(21)
—
—
Financial assets at fair value through other
comprehensive income
—
—
40
(43)
Total
68
(93)
40
(43)
LIABILITIES
Financial liabilities held for trading
3
(3)
—
—
Total
3
(3)
—
—
6.2.Fair value of financial instruments carried at cost by valuation criteria
The valuation technique used to calculate the fair value of financial assets and liabilities carried at cost are presented below:
Financial assets
–Cash, balances at central banks and other demand deposits / loans to central banks / short-term loans to credit
institutions/ Repurchase agreements: in general, their fair value approximates to their book value, due to the nature of the
counterparty and because they are mainly short-term balances in which the book value is the most reasonable estimation of
the value of the asset.
–Loans to credit institutions which are not short-term and loans to customers: In general, the fair value of these financial
assets is determined by the discount of expected future cash flows, using market interest rates at the time of valuation
adjusted by the credit spread and taking all kind of behavioral hypothesis if it is considered to be relevant (prepayment fees,
optionality, etc.).
–Debt securities: Fair value estimated based on the available market price or by using internal valuation methodologies.
Financial liabilities
–Deposits from central banks: for recurrent liquidity auctions and other monetary policy instruments of central banks /
short-term deposits, from credit institutions / repurchase agreements / short term customer deposits: their book value is
considered to be the best estimation of their fair value.
–Deposits of credit institutions which are not short-term and term customer deposits: these deposits are valued by
discounting future cash flows using the interest rate curve in effect at the time of the adjustment adjusted by the credit
spread and incorporating any behavioral assumptions if this proves relevant (early repayments, optionalities, etc.).
–Debt certificate (Issuances): The fair value estimation of these liabilities depends on the availability of market prices or by
using the present value method: discount of future cash flows, using market interest rates at valuation time and taking into
account the credit spread.
P.79
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
The following table presents the fair value of key financial instruments carried at amortized cost in the accompanying balance sheets
as of December 31, 2021 and 2020, broken down according to the method of valuation used for the estimation:
Fair value of financial instruments at amortized cost by Levels (Millions of Euros)
2021
2020
Level 1
Level 2
Level 3
Level 1
Level 2
Level 3
ASSETS
Cash, cash balances at central banks and other
demand deposits
38,821
—
—
44,107
—
—
Financial assets at amortized cost
17,615
8,774
207,120
18,088
9,962
200,615
LIABILITIES
Financial liabilities at amortized cost
78,594
244,488
286
76,011
256,348
259
The main valuation techniques and inputs used to estimate the fair value of financial instruments accounted for at cost and classified
in levels 2 and 3 is shown below. These are broken down by type of financial instrument and the balances correspond to those as of
December 31, 2021 and 2020:
Fair Value of financial Instruments at amortized cost by valuation technique (Millions of Euros)
2021
2020
Level 2
Level 3
Level 2
Level 3
Valuation technique(s)
Main observable inputs
used
ASSETS
Financial assets at amortized
cost
8,774
207,120
9,962
200,615
Present-value method
(Discounted future cash
flows)
Loans and advances to
central banks
—
—
—
—
- Credit spread
- Prepayment rates
- Interest rate yield
Loans and advances to credit
institutions
115
8,252
148
8,627
- Credit spread
- Prepayment rates
- Interest rate yield
Loans and advances to
customers
2,753
198,213
3,294
191,600
- Credit spread
- Prepayment rates
- Interest rate yield
Debt securities
5,907
655
6,520
389
- Credit spread
- Interest rate yield
LIABILITIES
Financial liabilities at
amortized cost
244,488
286
256,348
259
Deposits from central banks
—
—
—
—
Present-value method
(Discounted future cash
flows)
- Issuer´s credit risk
- Prepayment rates
- Interest rate yield
Deposits from credit
institutions
14,926
—
22,111
—
Deposits from customers
214,534
87
215,628
46
Debt certificates
3,273
199
8,482
213
Other financial liabilities
11,756
—
10,126
—
In 2020, the level of significance of the unobservable inputs used to determine the fair value hierarchy of loans and advances to
customers at amortized cost was refined, resulting in a greater exposure classified as Level 3. This revision was carried out in the
context of the availability of new information which was more adjusted to the changes that have occurred both in market conditions
and in the composition of credit investment. The effect on consolidated results and equity resulting from this review did not represent
any change.
P.80
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
7.Cash, cash balances at central banks and other demand deposits
The breakdown of the balance under the heading “Cash, cash balances at central banks and other demand deposits” in the
accompanying balance sheets is as follows
Cash, cash balances at central banks and other demand deposits (Millions of Euros)
Notes
2021
2020
Cash on hand
830
972
Cash balances at central banks
36,566
40,485
Other demand deposits
1,424
2,650
Total
6.1
38,821
44,107
8.Financial assets and liabilities held for trading
8.1Breakdown of the balance
The breakdown of the balance under these headings in the accompanying balance sheets is as follows:
Financial assets and liabilities held-for-trading (Millions of Euros)
Notes
2021
2020
ASSETS
Derivatives (*)
28,389
36,545
Equity instruments
5.2.2
15,146
10,682
Credit institutions
965
826
Other sectors
13,141
9,353
Shares in the net assets of mutual funds
1,040
503
Debt securities
5.2.2
11,546
9,983
Issued by central banks
—
19
Issued by public administrations
9,265
8,043
Issued by financial institutions
493
560
Other debt securities
1,788
1,361
Loans and advances (**)
5.2.2
50,310
28,088
Loans and advances to central banks
3,467
53
Reverse repurchase agreement
3,467
53
Loans and advances to credit institutions
31,300
17,291
Reverse repurchase agreement
31,286
17,284
Loans and advances to customers
15,543
10,743
Reverse repurchase agreement
15,262
10,368
Total assets
6.1
105,391
85,298
LIABILITIES
Derivatives (*)
27,054
35,396
Short positions
13,148
9,625
Deposits
37,657
22,114
Deposits from central banks
8,946
1,256
Repurchase agreement
8,946
1,256
Deposits from credit institutions
14,821
13,901
Repurchase agreement
14,260
13,544
Customer deposits
13,890
6,957
Repurchase agreement
13,740
6,790
Total liabilities
6.1
77,859
67,135
(*)  The variation is mainly due to the evolution of interest rate derivatives.
(**) The variation in 2021 corresponds mainly to the evolution of "Reverse repurchase agreement" of BBVA S.A., partially offset by the evolution of "Repurchase agreement". The
information for 2020 has been subject to certain non-significant modifications in order to improve comparability with the figures for financial year 2021 (see Note 1.3).
As of December 31, 2021 and 2020 “Short positions” include €12,348 and €9,085 million, respectively, held with general
governments.
P.81
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
8.2Derivatives
The derivatives portfolio arises from the Bank’s need to manage the risks it is exposed to in the normal course of business and also to
market products amongst the Bank’s customers. As of December 31, 2021 and 2020, trading derivatives were mainly contracted in
over-the-counter (OTC) markets, with counterparties, consisting primarily of foreign credit institutions and other financial
corporations, and are related to foreign-exchange, interest-rate and equity risk.
Below is a breakdown of the net positions by transaction type of the fair value and notional amounts of derivatives recognized in the
accompanying balance sheets, divided into organized and OTC markets:
Derivatives by type of risk / by product or by type of market (Millions of Euros)
2021
2020
Assets
Liabilities
Notional
amount - Total
Assets
Liabilities
Notional
amount - Total
Interest rate
14,595
12,304
3,680,441
23,145
20,767
3,089,483
OTC
14,595
12,304
3,664,808
23,145
20,767
3,075,587
Organized market
—
—
15,633
—
—
13,896
Equity instruments
2,780
3,435
72,025
2,532
3,657
69,796
OTC
758
1,245
48,469
526
1,389
41,629
Organized market
2,023
2,190
23,556
2,006
2,268
28,168
Foreign exchange and gold
10,777
11,061
564,167
10,723
10,803
474,669
OTC
10,777
11,061
564,167
10,723
10,803
474,669
Organized market
—
—
—
—
—
—
Credit
236
254
18,081
146
169
21,462
Credit default swap
236
254
18,081
146
169
21,462
Credit spread option
—
—
—
—
—
—
Total return swap
—
—
—
—
—
—
Other
—
—
—
—
—
—
Commodities
—
—
—
—
—
—
Other
—
—
—
—
—
—
DERIVATIVES
28,389
27,054
4,334,714
36,545
35,396
3,655,411
Of which: OTC - credit
institutions
18,686
19,969
937,429
21,163
23,020
856,212
Of which: OTC - other
financial corporations
4,893
2,270
3,247,925
9,185
7,427
2,652,216
Of which: OTC - other
2,788
2,626
110,172
4,192
2,681
104,919
9.Non-trading financial assets mandatorily at fair value through profit or loss
The breakdown of the balance under this heading in the accompanying balance sheets is as follows:
Non-trading financial assets mandatorily at fair value through profit or loss (Millions of Euros)
Notes
2021
2020
Equity instruments
5.2.2
172
183
Debt securities
5.2.2
125
142
Loans and advances to customers
5.2.2
140
84
Total
6.1
437
409
10.Financial assets and liabilities designated at fair value through profit or loss
As of December 31, 2021 and 2020 there was no balance in the heading “Financial assets designated at fair value through profit or
loss, has no balance (See Note 5.2.2).As of December 31, 2021 and 2020 the heading “Financial liabilities designated at fair value
through profit or loss” included customer deposits for an amount of € 2.238 and €3.267 million respectively.
The recognition of assets and liabilities in these headings is made to reduce inconsistencies (asymmetries) in the valuation of those
operations and those used to manage their risk.
P.82
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
11.Financial assets at fair value through other comprehensive income
11.1.Breakdown of the balance
The breakdown of the balance by the main financial instruments in the accompanying balance sheets is as follows:
Financial assets at fair value through other comprehensive income (Millions of Euros)
Notes
2021
2020
Equity instruments
5.2.2
1,103
881
Debt securities (*)
27,102
36,648
Total
6.1
28,205
37,528
Of which: loss allowances of debt securities
(5)
(11)
(*)        The variation is due to a reduction in the portfolio of financial assets issued by governments.
During financial years 2021 and 2020, there have been no significant reclassifications from the heading “Financial assets at fair value
through other comprehensive income” to other headings or from other headings to “Financial assets at fair value through other
comprehensive income”.
11.2.Equity instruments
The breakdown of the balance under the heading "Equity instruments" of the accompanying financial statements as of December 31,
2021 and 2020, is as follows:
Financial assets at fair value through other comprehensive income. Equity instruments (Millions of Euros)
2021
2020
Cost
Unrealized
gains
Unrealized
losses
Fair
value
Cost
Unrealized
gains
Unrealized
losses
Fair value
Listed equity instruments
Spanish companies shares
2,215
—
(1,138)
1,077
2,162
—
(1,299)
864
Foreign companies shares
—
—
—
—
—
—
—
—
Subtotal listed equity instruments
2,215
—
(1,138)
1,077
2,162
—
(1,299)
864
Unlisted equity instruments
Spanish companies shares
4
6
—
10
4
—
—
4
Credit institutions
—
—
—
—
—
—
—
—
Other entities
4
6
—
10
4
—
—
4
Foreign companies shares
9
7
—
16
7
6
—
13
The United States
—
—
—
—
—
—
—
—
Other countries
9
7
—
16
7
6
—
13
Subtotal unlisted equity instruments
13
13
—
26
11
6
—
17
Total
2,228
13
(1,138)
1,103
2,173
6
(1,299)
881
P.83
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
11.3.Debt securities
The breakdown of the balance under the heading “Debt securities” of the accompanying financial statements as of December 31,
2021 and 2020, broken down by issuers, is as follows:
Financial assets at fair value through other comprehensive income. Debt securities (Millions of Euros)
2021
2020
Amortized
cost
Unrealized
gains
Unrealized
losses
Fair
value
Amortized
cost
Unrealized
gains
Unrealized
losses
Fair
value
Domestic debt
securities
Government and other
government agency
8,396
302
—
8,698
20,626
346
(14)
20,958
Central banks
—
—
—
—
Credit institutions
422
4
—
426
668
10
—
678
Other issuers
206
4
(1)
209
469
13
—
482
Subtotal
9,024
310
(1)
9,333
21,764
368
(14)
22,118
Foreign debt
securities
Mexico
195
3
—
198
191
2
(1)
192
Government and other
government agency
21
—
—
21
21
—
—
21
Central banks
—
—
—
—
—
—
—
—
Credit institutions
—
—
—
—
—
—
—
—
Other issuers
174
3
—
177
170
2
(1)
171
The United States
2,433
36
(14)
2,455
2,957
43
(1)
2,999
Government and other
government agency
957
5
(14)
948
1,372
8
—
1,380
Central banks
—
—
—
—
—
—
—
—
Credit institutions
85
2
—
87
104
3
—
107
Other issuers
1,391
29
—
1,420
1,481
32
(1)
1,513
Other countries
14,961
167
(12)
15,116
11,038
305
(5)
11,338
Other foreign
governments and
government agency
11,435
116
(11)
11,540
7,367
244
(3)
7,607
Central banks
106
—
—
106
81
—
—
81
Credit institutions
772
10
—
782
802
8
—
810
Other issuers
2,648
41
(1)
2,688
2,789
53
(2)
2,840
Subtotal
17,589
206
(26)
17,769
14,186
350
(7)
14,530
Total
26,613
516
(27)
27,102
35,950
718
(21)
36,648
P.84
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
The credit ratings of the issuers of debt securities as of December 31, 2021 and 2020, are as follows:
Debt securities by rating
2021
2020
Fair value
(Millions of Euros)
%
Fair value
(Millions of Euros)
%
AAA
1,015
3.7%
1,472
4.0%
AA+
180
0.7%
224
0.6%
AA
376
1.4%
255
0.7%
AA-
148
0.6%
236
0.6%
A+
5,773
21.3%
5,531
15.1%
A
1,163
4.3%
1,714
4.7%
A-
9,506
35.1%
21,649
59.1%
BBB+
1,541
5.7%
1,535
4.2%
BBB
7,110
26.2%
719
2.0%
BBB-
151
0.6%
3,187
8.7%
BB+ or below
—
—%
4
—%
Unclassified
141
0.5%
122
0.3%
Total
27,102
100.0%
36,648
100.0%
11.4.Gains/losses
The changes in the gains/losses (net of taxes) in December 31, 2021 and 2020 of debt securities recognized under the equity heading
“Accumulated other comprehensive income (loss) – Items that may be reclassified to profit or loss – Fair value changes of debt
instruments measured at fair value through other comprehensive income” and equity instruments recognized under the equity
heading “Accumulated other comprehensive income (loss) – Items that will not be reclassified to profit or loss –Fair value changes of
equity instruments measured at fair value through other comprehensive income” in the accompanying balance sheets are as follows:
Other comprehensive income - Changes in the gains / losses (Millions of Euros)
Notes
Debt securities
Equity instruments
2021
2020
2021
2020
Balance at the beginning
352
335
(1,294)
(469)
Valuation gains and losses
49
85
167
(786)
Amounts transferred to income
(63)
(61)
—
—
Income tax and other
4
(7)
—
14
Other reclassifications
—
—
—
(53)
Balance at the end
27
342
352
(1,127)
(1,294)
In 2021 and 2020, equity instruments presented an increase of €167 million and a decrease of €786 million, respectively, in the
heading “Gains and losses from valuation - Accumulated other comprehensive income - Items that will not be reclassified to profit and
loss - Fair value changes of equity instruments measured at fair value through other comprehensive income”, mainly due to the
Telefónica quotation.
P.85
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
12.Financial assets at amortized cost
12.1.Breakdown of the balance
The breakdown of the balance under this heading in the accompanying balance sheets, according to the nature of the financial
instrument, is as follows:
Financial assets at amortized cost (Millions of Euros)
Notes
2021
2020
Debt securities
22,312
23,241
Government
21,110
17,574
Credit institutions
17
16
Other financial and non-financial corporations
1,185
5,651
Loans and advances to central banks
254
7
Loans and advances to credit institutions
8,371
8,762
Reverse repurchase agreements
150
203
Other loans and advances
8,221
8,559
Loans and advances to customers
5.2.2
200,339
193,903
Government
12,974
13,295
Other financial corporations
9,554
9,087
Non-financial corporations
82,629
77,055
Other
95,182
94,466
Total
6.1
231,276
225,914
Of which: impaired assets of loans and advances to customers
5.2
8,137
8,193
Of which: loss allowances of loans and advances
5.2
(5,254)
(5,665)
Of which: loss allowances of debt securities
(8)
(12)
During financial years 2021 and 2020, there have been no significant reclassifications from the heading “Financial assets at amortized
cost” to other headings or from other headings to “Financial assets at amortized cost”.
12.2.Debt securities
The breakdown of the balance under the heading “Debt securities” in the accompanying consolidated balance sheets, according to
the issuer of the debt securities, is as follows:
P.86
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Financial assets at amortized cost. Debt securities (Millions of Euros)
2021
2020
Amortized
cost
Unrealized
gains
Unrealized
losses
Fair
value
Amortized
cost
Unrealized
gains
Unrealized
losses
Fair
value
Domestic debt securities
Government and other government
agencies
17,681
1,326
(7)
19,000
13,644
1,210
—
14,854
Central banks
—
—
—
—
—
—
—
—
Credit institutions
—
—
—
—
—
—
—
—
Other issuers
337
10
(6)
341
4,838
59
(7)
4,890
Subtotal
18,018
1,336
(13)
19,341
18,482
1,269
(7)
19,744
Foreign debt securities
The United States
29
—
—
28
26
—
(1)
25
Government and other government
agencies
—
—
—
—
—
—
—
—
Central banks
—
—
—
—
—
—
—
—
Credit institutions
17
—
—
17
16
—
(1)
15
Other issuers
11
—
—
11
11
—
(1)
10
Other countries
4,265
289
(1)
4,554
4,732
489
(1)
5,220
Other foreign governments and
government agencies
3,429
257
(1)
3,686
3,931
455
(1)
4,385
Central banks
—
—
—
—
—
—
—
—
Credit institutions
—
—
—
—
—
—
—
—
Other issuers
836
32
—
868
802
34
—
835
Subtotal
4,294
289
(1)
4,582
4,759
489
(2)
5,246
Total
22,312
1,625
(15)
23,923
23,241
1,757
(9)
24,989
As of December 31, 2021 and 2020, the distribution according to the credit quality (ratings) of the issuers of debt securities classified
as financial assets at amortized cost, was as follows:
Debt securities by rating
2021
2020
Carrying amount
(Millions of Euros)
%
Carrying amount
(Millions of Euros)
%
AAA
—
—%
—
—%
AA+
16
0.1%
70
0.3%
AA
—
—%
—
—%
AA-
—
—%
—
—%
A+
—
—%
—
—%
A
569
2.6%
590
2.5%
A-
16,300
73.1%
16,717
71.9%
BBB+
1,008
4.5%
1,017
4.4%
BBB
3,685
16.5%
162
0.7%
BBB-
332
1.5%
4,387
18.9%
BB+ or below
277
1.2%
298
1.3%
Unclassified
126
0.6%
—
—%
Total
22,312
100.0%
23,241
100.0%
P.87
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
12.3.Loans and advances to customers
The breakdown of the balance under this heading in the accompanying balance sheets, according to their nature, is as follows:
Loans and advances to customers (Millions of Euros)
2021
2020
On demand and short notice
242
447
Credit card debt
2,478
2,175
Trade receivables
15,818
12,626
Finance leases
5,039
4,731
Reverse repurchase agreements
2
—
Other term loans
171,272
170,294
Advances that are not loans
5,488
3,630
Total
200,339
193,903
The heading “Financial assets at amortized cost –Loans and advances to customers” in the accompanying balance sheets also
includes certain secured loans that, as mentioned in Appendix X and pursuant to the Mortgage Market Act, are linked to long-term
mortgage covered bonds.
As of December 31, 2021 and 2020, 39.2% and 34.6%, respectively, of "Loans and advances to customers" with maturity greater than
one year have fixed-interest rates and 60,8% and 65.3%, respectively, have variable interest rates.
This heading also includes some loans that have been securitized and not derecognized since the risks or substantial benefits related
to them are retained because the Bank granted subordinated loans or other types of credit enhancements that substantially keep all
the expected credit losses for the transferred asset or the probable variation of its net cash flows. The balances recognized in the
accompanying balance sheets corresponding to these securitized loans are as follows:
Securitized loans (Millions of Euros)
2021
2020
Securitized mortgage assets
23,664
23,458
Other securitized assets
6,546
6,599
Total
30,210
30,057
13.Hedging derivatives and fair value changes of the hedged items in portfolio hedges
of interest rate risk
The balance of these headings in the accompanying balance sheets is as follows:
Derivatives – Hedge accounting and fair value changes of the hedged items in portfolio hedge of interest rate risk
(Millions of Euros)
2021
2020
ASSETS
Derivatives – Hedge accounting
841
1,011
Fair value changes of the hedged items in portfolio hedges of interest rate risk
5
51
LIABILITIES
Derivatives – Hedge accounting
2,126
1,510
Fair value changes of the hedged items in portfolio hedges of interest rate risk
—
—
As of December 31, 2021 and 2020, the main positions hedged by the Bank and the derivatives designated to hedge those positions
were:
–Fair value hedging:
a.Fixed-interest debt securities at fair value through other comprehensive income and at amortized cost: The interest
rate risk of these securities is hedged using interest rate derivatives (fixed-variable swaps) and forward sales.
b.Long-term fixed-interest debt securities issued by the Bank: the interest rate risk of these securities is hedged using
interest rate derivatives (fixed-variable swaps).
c.Fixed-interest loans: The equity price risk of these instruments is hedged using interest rate derivatives (fixed-variable
swaps).
P.88
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
d.Fixed-interest and/or embedded derivative deposit portfolio hedges: it covers the interest rate risk through fixed-
variable swaps. The valuation of the borrowed deposits corresponding to the interest rate risk is in the heading "Fair
value changes of the hedged items in portfolio hedges of interest rate risk”.
–Cash-flow hedges: Most of the hedged items are floating interest-rate loans and asset hedges linked to the inflation of the
financial assets at fair value through other comprehensive income portfolio. This risk is hedged using foreign-exchange,
interest-rate swaps, inflation and FRA (Forward Rate Agreement).
–Net foreign-currency investment hedges: These hedged risks are foreign-currency investments in the Group’s foreign
subsidiaries. This risk is hedged mainly with foreign-exchange options and forward currency sales and purchases.
Note 5 analyzes the Bank’s main risks that are hedged using these financial instruments..
The details of the net positions by hedged risk of the fair value of the hedging derivatives recognized in the accompanying balance
sheets are as follows:
Derivatives - Hedge accounting. Breakdown by type of risk and type of hedge. (Millions of Euros)
2021
2020
Assets
Liabilities
Assets
Liabilities
Interest rate
553
273
711
332
OTC
553
273
711
332
Organized market
—
—
—
—
Equity instruments
—
—
—
—
Foreign exchange and gold
—
—
—
—
Credit
—
—
—
—
Commodities
—
—
—
—
Other
—
—
—
—
FAIR VALUE HEDGES
553
273
711
332
Interest rate
72
1,562
8
868
OTC
72
1,562
8
868
Organized market
—
—
—
—
Equity instruments
—
—
—
—
Foreign exchange and gold
—
—
107
—
OTC
—
—
107
—
Organized market
—
—
—
—
Credit
—
—
—
—
Commodities
—
—
—
—
Other
—
—
—
—
CASH FLOW HEDGES
72
1,562
115
868
HEDGE OF NET INVESTMENTS IN A FOREIGN
OPERATION
198
196
166
139
PORTFOLIO FAIR VALUE HEDGES OF INTEREST
RATE RISK
18
95
18
170
PORTFOLIO CASH FLOW HEDGES OF INTEREST
RATE RISK
—
—
—
—
DERIVATIVES-HEDGE ACCOUNTING
841
2,126
1,011
1,510
Of which: OTC - credit institutions
646
1,796
866
1,269
Of which: OTC - other financial corporations
195
330
145
241
Of which: OTC - other
—
—
—
—
P.89
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Below there is a breakdown of the items covered by fair value hedges:
Hedged items in fair value hedges (Millions of Euros)
Carrying amount
Hedge adjustments
included in the carrying
amount of assets/
liabilities
Remaining adjustments
for discontinued micro
hedges including
hedges of net positions
Hedged items in
portfolio hedge of
interest rate risk
2021
2020
2021
2020
2021
2020
2021
2020
ASSETS
Financial assets measured at fair value through other
comprehensive income
18,133
25,620
(75)
267
—
—
—
—
Interest rate
18,133
25,620
(75)
267
Financial assets measured at amortized cost
7,796
10,704
228
483
—
—
1,997
2,500
Interest rate
7,796
10,704
228
483
1,997
2,500
LIABILITIES
Financial liabilities measured at amortized costs
19,492
18,880
(682)
(1,179)
—
—
—
—
Interest rate
19,492
18,880
(682)
(1,179)
The following is the breakdown, by their notional maturities, of the hedging instruments as of December 31, 2021:
Calendar of the notional maturities of the hedging instruments (Millions of Euros)
3 months or
less
From 3 months
to 1 year
From 1 to 5
years
More than 5
years
Total
FAIR VALUE HEDGES
2,589
7,798
23,266
12,978
46,632
Of which: Interest rate
2,589
7,798
23,266
12,978
46,632
CASH FLOW HEDGES
—
2,640
32,980
4,102
39,722
Of which: Interest rate
—
2,640
32,980
4,102
39,722
HEDGE OF NET INVESTMENTS IN A FOREIGN
OPERATION
2,241
2,617
—
—
4,857
PORTFOLIO FAIR VALUE HEDGES OF
INTEREST RATE RISK
175
647
1,258
1,108
3,187
PORTFOLIO CASH FLOW HEDGES OF
INTEREST RATE RISK
—
—
—
—
—
DERIVATIVES-HEDGE ACCOUNTING
5,005
13,702
57,504
18,188
94,399
In 2021 and 2020, there was no reclassification in the accompanying consolidated income statements of any amount corresponding
to cash flow hedges that was previously recognized in equity (see Note 37).
The amount for derivatives designated as accounting hedges that did not pass the effectiveness test in December 31, 2021 and 2020
were not material.
IBOR Reform
The transition from IBOR indices to the new risk free rates (RFR) (see Note 2.21) may cause uncertainty about the future of some
references or its impact on the contracts held by an entity, which could cause uncertainty about the term or the amounts of the cash
flows of the hedged instrument or the hedging instrument. Due to such uncertainties, in the period before the benchmark rate reform
actually takes place, some entities may be forced to discontinue hedge accounting, or not be able to designate new hedging
relationships.
To avoid this, Circular 5/2020, in line with the international accounting standards issued, made a series of transitory modifications to
those providing temporary exceptions to the application of certain specific hedge accounting requirements that are applicable to all
hedging relationships that are affected by the uncertainty derived from the IBOR Reform. These exceptions should end once the
uncertainty is resolved (rates to be modified according to the new RFRs) or the hedge ceases to exist.
P.90
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
The nominal amount of the hedging instruments for hedging relationships directly affected by the IBOR reform as of December 31,
2021 is the following:
Hedges affected by the IBOR reform (Millions of Euros)
LIBOR USD
LIBOR GBP
Other
Total
Cash flow hedges
—
—
—
—
Fair value hedges
2,023
332
—
2,355
14.Investments in joint ventures and associates
14.1.Investments in subsidiaries
The heading “Investments in subsidiaries, joint venture and associates- Subsidiaries” in the accompanying balance sheets includes
the carrying amount of the shares of companies forming part of the BBVA Group. The percentages of direct and indirect ownership
and other relevant information on these companies are provided in Appendix II.
The breakdown, by currency and listing status, of this heading in the accompanying balance sheets is as follows:
Investments in subsidiaries (Millions of Euros)
2021
2020
Subsidiaries
By currency
33,970
33,755
In euros
18,829
19,131
In foreign currencies (*)
15,141
14,624
By share price
33,970
33,755
Listed
6,567
6,838
Unlisted (*)
27,403
26,917
Loss allowances
(16,744)
(16,208)
Total
17,226
17,547
Garanti Bank
During 2021 and 2020, the negative evolution of the Turkish economy caused a depreciation of the Turkish lira in accordance with the
accounting standards applicable to the individual financial statements, the Bank holds the stake in Garanti BBVA, A.S. valued at
historic cost (weighted average price in euros of the various acquisitions made since 2011) and at each closing date the recoverability
of the investment in euros is evaluated whenever there is any indication of impairment.
As of December 31, 2021 and 2020, BBVA estimated impairment in its holding stake in Garanti BBVA, A.S. affecting the Bank's
individual financial statements. This estimation had a net negative impact on the individual result of the Bank, net of taxes, 877 and 
288  million euros respectively, which is mainly as a result of the depreciation of the Turkish Lira. The Net Equity of the Bank was
reduced by the same amount. As of December 31, 2021, the total impairment of the stake in Garanti is 3,224 million euros.
This impairment had no impact on the financial statements of the Bank, since currency translation differences are recognized under
"Other accumulated comprehensive income" of the Group's consolidated equity, in accordance with the accounting standards
applicable to the consolidated financial statements, so that the depreciation of the Turkish Lira was already recorded, reducing the
consolidated net equity of the Group.
BBVA USA
In 2020, BBVA announced the sale of the BBVA subsidiary in the United States. Thus, the balances of the headings “Dividend income”
and “Impairment or reversal of impairment of investments in subsidiaries, joint ventures or associates”, net of their corresponding tax
effects, corresponding to companies for sale have been reclassified to heading "Profit (loss) after tax from discontinued activities" in
the accompanying income statement for the year 2020. The balances of the assets corresponding to the investment in such
companies for sale have been reclassified from their corresponding accounting headings in the balance sheet to the heading "Non-
current assets and disposal groups that have been classified as held for sale" (see Notes 1.3 and 19).
As of March 31, 2020, BBVA estimated an impairment in BBVA USA Bancshares, Inc. that affected the Bank financial statements.
That estimation supposed a negative net impact on the Bank’s benefit of €1.475 million, which was mainly due to the negative impact
of the update of the macroeconomic scenario following the COVID-19 pandemic and the expected evolution of interest rates (See
Note 1.5). Bank´s net equity decreased in the same amount. In 2020, an additional impairment has been recorded in this holding
stake to adjust its book value to the price set for its sale (see below “Sale of BBVA’s U.S. subsidiary to PNC Financial Service Group”),
which has had a negative impact on the individual result of the Bank of 933 million euros.
P.91
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Movements
The changes in 2021 and 2020 in the balance under this heading in the balance sheets, disregarding the balance of the loss
allowances, are as follows:
Investments in subsidiaries: changes in the year (Millions of Euros)
2021
2020
Balance at the beginning
33,755
46,179
Acquisitions and capital increases
103
37
Merger transactions
—
(141)
Disposals and capital reductions (*)
(403)
(208)
Transfers
467
(11,681)
Exchange differences and others
48
(431)
Balance at the end
33,970
33,755
(*) The movement in 2020 corresponds to BBVA USA Bancshares Inc (See Note 1.3 and 19).
Changes in the holdings in Group entities
The most notable transactions performed in 2021 and 2020 are as follows:
Voluntary takeover bid for the entire share capital of Türkiye Garanti Bankası A.Ş (Garanti).
On November 15, 2021, BBVA announced a voluntary takeover bid addressed to the holders of the 2,106,300,000 shares not
controlled by BBVA, representing 50.15% of Garanti's total share capital. BBVA submitted for authorization an application of the
voluntary takeover bid to the Capital Markets Board of Turkey (CMB) on November 18, 2021.
The consideration offered by BBVA to Garanti shareholders is 12.20 Turkish Liras in cash for each share. The maximum amount
payable by BBVA will be 25,697 million Turkish Liras (equivalent to approximately €1,690 million at an exchange rate of 15.23 Turkish
Liras per Euro estimated as of December 31, 2021) assuming all of Garanti's shareholders sell their shares. BBVA will pay the
consideration with its current shareholder's funds. BBVA reserves the right to reduce or otherwise modify the voluntary takeover bid
price by an amount equal to the gross amount of the distribution per share, if Garanti declares or distributes dividends, reserves or
any other kind of distribution to its shareholders at any time from the date of the announcement on November 15, 2021 until the day
of completion of the voluntary takeover bid. BBVA may cancel the takeover bid at any time before the commencement of the
acceptance period.
The acquisition by BBVA of more than 50% of Garanti's total share capital is subject to the prior approval of several authorities, both
in Turkey and in other jurisdictions. BBVA will disclose to the market when all relevant authorizations are obtained. BBVA has received
confirmation from the CMB that it will not formally approve the voluntary takeover bid application until the CMB receives confirmation
from BBVA that all relevant approvals required by BBVA have been duly obtained. Only after approval by the CMB of the voluntary
takeover bid application will the voluntary takeover bid period begin. The estimated impact will depend on the percentage of shares
that are tendered. As of December 31, 2021, BBVA estimated maximum impact of minus 32 basis points in the Common Equity Tier 1
fully loaded ratio and approximately 2% accretion to its book value per share, (all the above assuming that all Garanti shareholders
accept the offer)
Divestitures
Sale of BBVA’s U.S. subsidiary to PNC Financial Service Group
On June 1 2021, after obtaining all the required authorizations, BBVA completed the sale to The PNC Financial Services Group, Inc. of
100% of the capital stock of its subsidiary BBVA USA Bancshares, Inc., which in turn owned all the capital stock of the bank, BBVA
USA.
The consideration received in cash by BBVA amounted to approximately 11,500 million USD (price provided in the agreement minus
the agreed closing price adjustments) equivalent to approximately 9,600 million euros (with an exchange rate of 1.20 EUR / USD).
The operation after the closing of the sale, had a profit net of taxes of 272 million euros in the year 2021,  which is recorded under the
heading "Profits (losses) after taxes from discontinued operations" in the income statement as of December 31, 2021.
BBVA continues to develop an institutional and wholesale business in the United States that it currently carries out through its broker-
dealer BBVA Securities Inc. and the New York branch. BBVA also maintains its investment activity in the fintech sector through its
participation in Propel Venture Partners US Fund I, L.P.
Sale of the BBVA Group's stake in Paraguay
On January 22, 2021 and once the mandatory authorizations were obtained, BBVA completed the sale of its direct and indirect
shareholding of 100% of the capital stock of Banco Bilbao Vizcaya Argentaria Paraguay, S.A. (“BBVA Paraguay”) to Banco GNB
Paraguay S.A., a subsidiary of the Gilinski Group.
P.92
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
The total amount received by BBVA amounted to approximately USD 250 million (approximately €210 million). The transaction has
generated a capital loss net of taxes of approximately €9 million. However, this transaction has a positive impact on the Common
Equity Tier 1 (fully loaded) of the BBVA Group of approximately 6 basis points, which is reflected in the capital base of the BBVA
Group in the first half of 2021.
14.2.Investments in joint ventures and associates
The breakdown, by currency and listings status, of this heading in the accompanying balance sheets is as follows:
Joint ventures and associates (Millions of Euros)
2021
2020
Associates
By currency
536
1,103
In euros
302
887
In foreign currencies
234
216
By share price
536
1,103
Listed
272
284
Unlisted
264
819
Loss allowances
(311)
(323)
Subtotal
225
780
Joint ventures
By currency
55
55
In euros
55
55
In foreign currencies
—
—
By share price
55
55
Listed
—
—
Unlisted
55
55
Loss allowances
(1)
(1)
Subtotal
54
54
Total
279
834
The investments in associates as of December 31, 2021 as well as the most important data related to them, can be seen in Appendix
III.
The following is a summary of the gross changes in 2021 and 2020 under this heading in the accompanying balance sheets:
Joint ventures and associates: changes in the year  (Millions of Euros)
2021
2020
Balance at the beginning
1,158
1,203
Acquisitions and capital increases
28
2
Disposals and capital reductions
(50)
(47)
Transfers
(545)
—
Exchange differences and others
—
—
Balance at the end
591
1,158
During the 2021 financial year, the most significant movement corresponds to the sale of the 20% stake in Divarian Property SA,
which was previously reclassified under the heading "Non-current assets and disposal groups that have been classified as held for
sale".
During 2021 and 2020, there has been no significant change.
14.3.Notifications about acquisition of holdings
Appendix IV provides notifications on acquisitions and disposals of holdings in associates or jointly-controlled entities, in compliance
with Article 155 of the Corporations Act and Article 125 of the Securities Market Act 4/2015.
P.93
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
14.4.Impairment
The breakdown of the changes in loss allowances in 2021 and 2020 under this heading is as follows:
Impairment (Millions of Euros)
Notes
2021
2020
Balance at the beginning
16,532
16,818
Increase in loss allowances charged to income
43
933
626
Decrease in loss allowances credited to income
43
(22)
(307)
Companies held for sale (*)
(25)
(279)
Merger transactions
—
(141)
Amount used
(361)
(185)
Transfers
—
—
Balance at the end
17,057
16,532
(*During the year 2021, the movement corresponds mainly to the transfer of the impairment of the 20% stake in Divarian Property, S.A.U. as a result of their reclassification
under the heading "Non-current assets and disposal groups that have been classified as held for sale" in July 2021 and their subsequent sale in October 2021. The amount for the
2020 financial year corresponds to the company BBVA USA Bancshares, Inc. The 2020 movement refers to the reclassification of the impairment associated with the
participation to the chapter "Non-current assets and disposal groups that have been classified as held for sale" of the accompanying balance sheet.. Additionally, in 2020 there
were additional impairments associated with this stake for the amount of 2,409 million euros in the heading "Profit (loss) after taxes from discontinued activities" of the
accompanying income statement (see Note 1.3, 14.1 and 19).
15.Tangible assets
The breakdown and movement of the balance and changes of this heading in the accompanying balance sheets, according to the
nature of the related items, is as follows:
Tangible assets. Breakdown by type of assets and changes in the year 2021 (Millions of Euros)
Right to use asset
Total
Notes
Land and
Buildings
Work in
Progress
Furniture,
Fixtures and
Vehicles
Tangible
asset of own
use
Investment
Properties
Investment
Properties
Revalued cost
Balance at the beginning
1,156
2
2,888
3,057
125
16
7,244
Additions
1
—
55
124
1
—
181
Retirements
—
(1)
(222)
(54)
—
—
(277)
Transfers
(109)
—
(26)
(35)
35
(2)
(137)
Exchange difference and other
—
—
5
—
—
—
5
Balance at the end
1,047
1
2,700
3,092
161
14
7,015
Accrued depreciation
Balance at the beginning
193
—
2,301
414
26
2
2,936
Additions
40
14
—
96
195
15
—
320
Retirements
—
—
(204)
(11)
—
—
(215)
Transfers
(22)
—
(16)
(5)
5
—
(38)
Exchange difference and other
—
—
3
—
—
—
3
Balance at the end
185
—
2,180
592
46
2
3,005
Impairment
Balance at the beginning
94
—
—
265
26
7
392
Additions (*)
44
—
—
5
207
9
220
Retirements
44
—
—
—
(55)
(1)
—
(56)
Transfers
(24)
—
13
—
—
(1)
(12)
Exchange difference and other
—
—
(18)
—
—
—
(18)
Balance at the end
70
—
—
417
34
6
527
Net tangible assets
Balance at the beginning
869
2
587
2,377
73
7
3,915
Balance at the end
792
1
520
2,083
81
6
3,482
(*) In 2021, it includes allowances on right of use of the rented offices after the agreement with union representatives on the collective layoff procedure proposed for Banco Bilbao
Vizcaya Argentaria, S.A. in Spain (see Notes 21 and 44).
P.94
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Tangible assets. Breakdown by type of assets and changes in the year 2020 (Millions of Euros)
Right to use asset
Total
Notes
Land and
Buildings
Work in
Progress
Furniture,
Fixtures and
Vehicles
Tangible
asset of own
use
Investment
Properties
Investment
Properties
Revalued cost
Balance at the beginning
1,360
—
3,063
3,143
100
15
7,681
Additions
25
2
69
10
—
—
106
Retirements
—
—
(216)
(36)
—
—
(252)
Transfers
(229)
—
(25)
(60)
25
1
(288)
Exchange difference and other
—
—
(3)
—
—
—
(3)
Balance at the end
1,156
2
2,888
3,057
125
16
7,244
Accrued depreciation
Balance at the beginning
215
—
2,404
215
10
2
2,845
Additions
40
16
—
105
214
12
—
347
Retirements
—
—
(188)
(6)
—
—
(194)
Transfers
(38)
—
(16)
(9)
4
—
(59)
Exchange difference and other
—
—
(3)
—
—
—
(3)
Balance at the end
193
—
2,301
414
26
2
2,936
Impairment
Balance at the beginning
162
—
—
187
14
6
369
Additions
44
—
—
26
68
12
—
105
Retirements
44
—
—
—
—
—
—
—
Transfers
(68)
—
—
10
—
1
(57)
Exchange difference and other
—
—
(26)
—
—
—
(26)
Balance at the end
94
—
—
265
26
7
392
Net tangible assets
Balance at the beginning
983
—
660
2,741
76
7
4,467
Balance at the end
869
2
587
2,377
73
7
3,915
The right to use asset consists mainly of the rental of commercial real estate premises for central services and the network branches.
The clauses included in rental contracts correspond to a large extent to rental contracts under normal market conditions in the
country where the property is rented.
As of December 31, 2021 and 2020, the cost of fully amortized tangible assets that remained in use were €1,580 million and €1,636
million, respectively.
The main activity of the Bank is carried out through a network of bank branches located geographically as shown in the following
table:
Branches by geographical location (Number of branches)
2021 (*)
2020
Spain
1,895
2,482
Rest of the world
24
24
Total
1,919
2,506
(*) The variation in 2021 is mainly due to the reclassification of owned offices and facilities from "Tangible assets" to "Non-current assets and disposal groups classified as held for
sale" (see Notes 21 and 45).
As of December 31, 2021 and 2020, the percentage of branches leased from third parties in Spain was 68% and 68%, respectively.
P.95
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
16.Intangible assets
The breakdown of the balance under this heading in the balance sheets as of December 31, 2021 and 2020 relates mainly to the net
balance of the disbursements made on the acquisition of computer software. The average life of the Bank's intangible assets is 5
years.
The breakdown of the balance under this heading in the balance sheets, according to the nature of the related items, is as follows:
Other intangible assets (Millions of Euros)
2021
2020
Transactions in progress
797
783
Accruals
44
57
Total
841
840
The breakdown of the changes in 2021 and 2020 in the balance under this heading in the balance sheets is as follows:
Other intangible assets. Changes over the year (Millions of Euros)
2021
2020
Notes
Computer
software
Other
intangible
assets
Total of
intangible
assets
Computer
software
Other
intangible
assets
Total of
intangible
assets
Balance at the beginning
783
57
840
836
70
905
Additions
323
323
251
251
Contributions from merger
transactions
—
—
—
—
—
—
Amortization in the year
40
(305)
(13)
(318)
(304)
(13)
(316)
Net variation of impairment through
profit or loss
44
(4)
—
(4)
—
—
—
Balance at the end
797
44
841
783
57
840
17.Tax assets and liabilities
The balance of the heading “Tax Liabilities” in the accompanying balance sheets contains the liability for applicable taxes, including
the provision for corporation tax of each year, net of tax with holdings and prepayments for that period, and the provision for current
period corporation tax in the case of companies with a net tax liability. The amount of the tax refunds due to Group companies and the
tax with holdings and prepayments for the current period are included under “Tax Assets” in the accompanying balance sheets.
Banco Bilbao Vizcaya Argentaria, S.A. and its tax-consolidable subsidiaries file consolidated tax returns. The subsidiaries of
Argentaria, which had been in Tax Group 7/90, were included in Tax Group 2/82 from 2000. On December, 30, 2002, the pertinent
notification was made to the Ministry of Economy and Finance to extend its taxation under the consolidated taxation regime
indefinitely, in accordance with current legislation. Similarly, on the occasion of the acquisition of Unnim Group in 2012, the
companies composing the Tax Group No. 580/11 which met the requirements became part of the Tax Group 2/82 from January 1,
2013. On the occasion of the acquisition of Catalunya Banc Group in 2015, the companies composing the Tax Group No. 585/11 which
met the requirements became part of the Tax Group 2/82 from January 1, 2016.
In previous years, the Bank has participated in various corporate restructuring operations covered by the special regime for mergers,
divisions, transfers of assets and exchange of securities under the terms provided in the Corporate Tax Law  in force in each of the
years corresponding. These operations are explained in detail in the financial statements, part of the annual accounts for the
respective years. Similarly, the information requirements under the above legislation are included in the financial statements
corresponding to the year in which the mentioned operations were carried out, as well as in the merger by absorption deed, other
official documents or in the internal records of the Bank, available to the tax authorities.
17.1Years open for review by the tax authorities
At the date of preparation of these financial statements, BBVA in Spain has 2017 and subsequent years subject to inspection, with
respect to the main taxes applicable to it.
In the year 2021, as a result of the inspection activities of the tax authorities, inspection reports have been issued for the years 2014 to
2016, signed in conformity, except for those corresponding to the year 2016 in relation to which a partial disagreement has been
expressed. The reports signed in conformity have become final as of the date of preparation of these financial statements. The
conclusion of the previous inspections did not have a material impact on the Financial Statements as a whole.
P.96
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
In view of the varying interpretations that can be made of some applicable tax legislation, the outcome of the tax inspections of the
open years that may be conducted by the tax authorities in the future may give rise to contingent tax liabilities which cannot be
reasonably estimated at the present time. However, the Group considers that the possibility of these contingent liabilities becoming
actual liabilities is remote and, in any case, the tax charge which might arise therefore would not materially affect the Bank’s
accompanying financial statements.
17.2Reconciliation
The reconciliation of the corporation tax expense resulting from the application of the standard tax rate to the recognized corporation
tax expense is as follows:
Reconciliation of the Corporate Tax Expense Resulting from the Application of the Standard Rate and the Expense
Registered by this Tax (Millions of Euros)
2021
2020
Corporation tax
224
75
Decreases due to permanent differences:
—
—
Tax credits and tax relief at consolidated Companies
(49)
(49)
Other items net
(384)
(106)
Net increases (decreases) due to temporary differences
85
94
Charge for income tax and other taxes
—
—
Deferred tax assets and liabilities recorded (utilized)
(85)
(94)
Income tax and other taxes accrued in the period
(209)
(80)
Adjustments to prior years' income tax and other taxes
151
116
Income tax and other taxes
(58)
36
The heading “Other items net” of the previous table in 2021 includes mainly the tax effect on dividends and capital gains, which are
exempt in order to avoid double taxation, for an amount of €2,286 million and non-deductible impairments for an amount of €909
million. In 2020, the effect of those concept were €1,533 and €319 million, respectively.
The Bank avails itself of the tax credits for investments in new fixed assets (in the scope of the Canary Islands tax regime, for a non-
material amount), tax relief, R&D tax credits, donation tax credits and double taxation tax credits, in conformity with corporate
income tax legislation.
Under the regulations in force until December 31, 2001, the Bank and the savings banks which would form Unnim Banc and Catalunya
Banc were available to the tax deferral for reinvestment. The information related to this tax credit can be found in the corresponding
annual reports.
From 2002 to 2014, the Bank and the savings banks which would form Unnim Banc and Catalunya Banc were available to the tax
credit for reinvestment of extraordinary income obtained on the transfer for consideration of properties and shares representing
ownership interests of more than 5%. The information related to this tax credit can be found in the corresponding financial
statements.
17.3Income tax recognized in equity
In addition to the income tax registered in the income statements, at the end of 2021 and 2020 the Bank recognized the following
amounts in equity:
Tax recognized in Total Equity (Millions of Euros)
2021
2020
Charges to total equity
Debt securities
(148)
(142)
Equity instruments
(2)
(2)
Other
—
—
Subtotal
(150)
(144)
Credits to total equity
Debt securities
—
—
Equity instruments
—
—
Other
288
114
Subtotal
288
114
Total
138
(30)
P.97
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
17.4Current and deferred taxes
The balance under the heading "Tax assets" in the accompanying balance sheets includes the tax receivables relating to deferred tax
assets. The balance under the “Tax liabilities” heading includes the liabilities relating to the Bank's various deferred tax liabilities. The
details of the most important tax assets and liabilities are as follows:
Tax Assets and Liabilities (Millions of Euros)
2021
2020
Variation
Tax assets-
Current tax assets
546
633
(87)
Deferred tax assets
11,748
12,131
(383)
Pensions
215
312
(97)
Financial Instruments
330
227
103
Other assets
60
81
(21)
Impairment losses
283
251
32
Other
549
422
127
Secured tax assets (*)
9,303
9,360
(57)
Tax losses
1,008
1,478
(470)
Total
12,294
12,764
(470)
Tax Liabilities-
Current tax liabilities
187
173
14
Deferred tax liabilities
812
898
(86)
Charge for income tax and other taxes
812
898
(86)
Total
999
1,071
(72)
(*)      The Law guaranteeing the deferred tax assets was approved in Spain in 2013.
Based on the available information, including historical profit levels and projections that the Bank handles for the coming 15 years
results, the recoverability plan for deferred tax assets and liabilities has been reviewed, taking into account the impacts of COVID-19
(see Note 1.5) and it is considered that there is sufficient positive evidence, greater than the negative, that sufficient taxable income to
recover deferred tax assets detailed above would be generated when they become deductible under the provisions of tax legislation.
With respect to the changes in assets and liabilities due to deferred tax contained in the above table, the following should be pointed
out:
–The increase in assets for deferred tax assets related to financial instruments are mainly due to valuation adjustments in
Total Equity
–Deferred tax assets have been reclassified from the category Pensions to Others for an amount of 82 million euros, because
they fit better this classification.
–The other changes in deferred tax assets and liabilities are mainly due to the adjustments on the corporate income tax
finally presented for year 2020 and the estimation for 2021.
–The variation in  guaranteed tax assets and tax losses are due to the estimation for 2021 and the accounting of the closing of
the tax inspection corresponding to years 2014 to 2016.
On the deferred tax assets and liabilities contained in the table above, those included in section 17.4 above have been recognized
against the entity's equity, and the rest against earnings for the year or reserves.
From the guaranteed tax assets contained in the above table, the detail of the items and amounts guaranteed by the Spanish
Government is as follows:
Secured tax assets (Millions of Euros)
2021
2020
Pensions
1,759
1,924
Loss allowances
7,544
7,436
Total
9,303
9,360
On the other hand, BBVA, S.A., has not recognized certain negative tax bases and deductions for which, in general, there is no legal
period for offsetting, which are mainly originated by Catalunya Banc.
P.98
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
18.Other assets and liabilities
The composition of the balance of these captions of the accompanying balance sheets is:
Other assets and liabilities (Millions of Euros)
Notes
2021
2020
ASSETS
Insurance contracts linked to pensions
22
1,882
2,074
Rest of other assets
415
763
Transactions in progress
80
106
Accruals
317
269
Other items
18
388
Total
2,296
2,837
LIABILITIES
Transactions in progress
30
68
Accruals
893
726
Other items
962
749
Total
1,885
1,543
P.99
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
19.Non-current assets and disposal groups classified as held for sale and liabilities
included in disposal groups classified as held for sale
The composition of the balances under the headings “Non-current assets and disposal groups classified as held for sale” and
“liabilities included in disposal groups classified as held for sale” in the accompanying balance sheets, broken down by the origin of
the assets, is as follows:
Non-current assets and disposal groups classified as held for sale: Breakdown by items (Millions of Euros)
2021
2020
Foreclosures and recoveries
921
993
Foreclosures
876
959
Recoveries from financial leases
44
34
Assets from tangible assets (*)
559
476
Business sale - Assets (**)
—
11,699
Accrued amortization (***)
(112)
(89)
Loss allowances (*)
(483)
(3,100)
Total non-current assets and disposal groups classified as held for sale
885
9,978
(*) In 2021, it includes the reclassification of owned offices and facilities from "tangible assets" to "non-current assets and disposal groups classified as held for sale" and the
adjustments due to the closure of the owned offices and the decommissioning of facilities after the agreement with the union representatives on the collective layoff procedure
proposed for Banco Bilbao Vizcaya Argentaria, S.A. in Spain. (See note 21 and 45).
(**) The balance for 2020 corresponds mainly to the participation in BBVA USA Bancshares Inc. (see Note 14).
(***) Corresponds to the accumulated depreciation of assets before classification as “Non-current assets and disposal groups classified as held for sale".
The changes in the balances under this heading in 2021 and 2020 are as follows:
Non-current assets and disposal groups classified as held for sale. Changes in the year (Millions of Euros)
Notes
Foreclosed assets
From own use
assets (*)
Business sale -
assets (**)
Total
Cost  (1)
2021
2020
2021
2020
2021
2020
2021
2020
Balance at the beginning
992
1,021
387
231
11,699
23
13,078
1,275
Additions
193
212
—
—
11
2
204
215
Retirements (sales and other
decreases)
(203)
(163)
(39)
(44)
(11,787)
—
(12,029)
(206)
Transfers, other movements
and exchange differences
14
(62)
(79)
99
199
77
11,674
114
11,794
Balance at the end
920
992
447
387
—
11,699
1,367
13,078
Impairment  (2)
Balance at the beginning
205
183
206
125
2,688
—
3,100
308
Net variations through profit
and loss
14,45
40
47
61
28
(469)
933
(368)
1,008
Retirements (sales and other
decreases)
14
(33)
(20)
(13)
(13)
(2,244)
—
(2,290)
(33)
Transfers, other movements
and exchange differences
14
4
(5)
12
66
25
1,755
41
1,816
Balance at the end
216
205
266
206
—
2,688
482
3,100
Balance at the end of Net
carrying value (1)-(2)
704
787
181
180
—
9,011
885
9,978
(*) Net of accumulated amortizations until their classification as "Non-current assets and disposable groups of elements that have been classified as held for sale".
(**) The balance for 2020 corresponds to the stake in BBVA USA Bancshares Inc. and BBVA Paraguay (see Note 14).
As indicated in Note 2.3, “Non-current assets and disposal groups held for sale” and “liabilities included in disposal groups classified
as held for sale” are valued at the lower amount between its fair value less costs to sell and its book value. As of December 31, 2021,
practically all of the carrying amount of the assets recorded at fair value on a non-recurring basis coincides with their fair value.
P.100
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Assets from foreclosures or recoveries
The table below shows the main non-current assets held for sale from foreclosures or recoveries:
Non-current assets and disposal groups classified as held for sale. From foreclosures or recoveries (Millions of Euros)
2021
2020
Residential assets
532
628
Industrial assets
158
141
Agricultural assets
12
13
Total
702
782
The table below shows the length of time for which the main assets from foreclosures or recoveries that were on the balance sheet as
of December 31, 2021 and 2020 had been held:
Assets from foreclosures or recoveries. Period of ownership (Millions of Euros)
2021
2020
Up to one year
64
105
From 1 to 3 years
209
353
From 3 to 5 years
225
163
Over 5 years
204
161
Total
702
782
In 2021 and 2020, some of the sales of these assets were financed by the Bank. The amount of the loans granted to the buyers of
these assets in those years totaled €15 and €14 million respectively, with a mean percentage financed of 83% and 83%, respectively,
of the price of sale. The total nominal amount of these loans and receivables, which are recognized under “Financial assets at
amortized cost” was €1,401 and €1,503 million, as of December 31, 2021 and 2020, respectively.
As of December 31, 2021 and 2020, there were no gains not recognized in the income statement from the sale of assets financed by
the Bank.
20.Financial liabilities at amortized cost
20.1.Breakdown of the balance
The breakdown of the balance under this heading in the accompanying balance sheets is as follows:
Financial liabilities measured at amortized cost (Millions of Euros)
2021
2020
Deposits
272,226
277,369
Deposits from central banks
40,839
37,903
Demand deposits
4
162
Time deposits and other
40,835
37,741
Deposits from Credit Institutions
14,936
22,106
Demand deposits
7,414
6,569
Time deposits and other (*)
4,133
11,419
Repurchase agreements
3,389
4,118
Customer deposits
216,452
217,360
Demand deposits
193,671
180,409
Time deposits and other (*)
22,026
36,332
Repurchase agreements
754
619
Debt certificates
37,866
43,692
Other financial liabilities
11,756
10,127
Total
321,848
331,189
(*) The variation in financial year 2021 is mainly due to the decrease in the balance in term accounts at Banco Bilbao Vizcaya Argentaria, S.A. offset by increases in demand
accounts and investment funds (off balance sheet) due to the current rate situation.
P.101
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
The amount recorded in Deposits from central banks - Time deposits includes the provisions of the TLTRO III facilities of the European
Central Bank amounting to €38,392 and 34,902  million  euros as of December 31, 2021 and 2020 (See Note 5.5.2).
On April 30, 2020, the European Central Bank modified some of the terms and conditions of the TLTRO III facilities in order to support
the continued access of companies and households to bank credit in the face of interruptions and temporary shortages of funds
associated with the COVID-19 pandemic. Entities whose eligible net lending exceeded 0% between March 1, 2020 and March 31, 2021
paid an interest rate 0.5% lower than the average rate of the deposit facilities during the period from June 24, 2020 to June 23, 2021.
On December 10, 2020, the European Central Bank extended the support via targeted lending operations (TLTRO), extending by
twelve additional months, until June 2022, the period of application of favorable interest rates to credit institutions for which the net
variation of their eligible loans, between October 1, 2020 and December 31, 2021, reaches a given lending performance threshold.
Additionally, the maximum borrowing amount was increased to 55% of the eligible loans (from 50% previously).This means that the
interest rate applicable to the outstanding operations is -1% provided that  the lending objectives are met according to the conditions
of the European Central Bank.
As of December 31, 2021, the Group fulfilled these lending objectives. Therefore, the recognition of the favorable interest rate
associated with the COVID-19 pandemic has been recognized for the period from June 24, 2020 to December 31, 2021 and will
continue to be recognized until June 2022.
The positive remuneration currently being generated by the TLTRO III operations is recorded under the heading of "Interest and other
income – other income" in the consolidated income statements and amounts to €381 and €211 million for the years ended December
31, 2021 and 2020 respectively (See Note 33.1).
20.2.Deposits from credit institutions
The breakdown by geographical area and the nature of the related instruments of this heading in the accompanying balance sheets is
as follows:
Deposits from credit institutions (Millions of Euros)
Demand
deposits
Time deposits
and other
Repurchase
agreements
Total
December 2021
Spain
1,737
375
—
2,112
Rest of Europe
1,851
2,071
2,341
6,263
Mexico
85
—
—
85
South America
764
360
—
1,124
Rest of the world
2,977
1,327
1,048
5,352
Total
7,414
4,133
3,389
14,936
December 2020
Spain
1,983
1,366
—
3,349
Rest of Europe
2,885
3,548
4,051
10,484
Mexico
106
—
—
106
South America
460
498
—
958
The United States
758
3,734
—
4,492
Rest of the world
377
2,273
67
2,717
Total
6,569
11,419
4,118
22,106
P.102
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
20.3.Customer deposits
The breakdown of this heading in the accompanying balance sheets, by type of instrument and geographical area, is as follows:
Customer deposits (Millions of Euros)
Demand
deposits
Time deposits and
other
Repurchase
agreements
Total
December 2021
Spain
184,677
10,557
—
195,234
Rest of Europe
6,557
9,370
754
16,681
Mexico
218
76
—
294
South America
1,145
301
—
1,446
The United States
—
Rest of the world
1,074
1,723
—
2,797
Total
193,671
22,026
754
216,452
December 2020
Spain
172,012
20,520
—
192,532
Rest of Europe
5,953
10,359
619
16,931
Mexico
198
70
—
268
South America
792
609
—
1,401
The United States
601
4,086
—
4,687
Rest of the world
853
688
—
1,541
Total
180,409
36,332
619
217,360
Previous table includes as of 31, December 2021 and 2020, subordinated deposits amounted to €173 million, vinculated to
subordinated debt issues and preferred shares launched BBVA International Preferred, S.A.U., As of December 31, 2020, these
deposits amounted to 360 million euros and were linked to issues made by the aforementioned company as well as by BBVA Global
Finance, Ltd. and Caixa Terrassa Societat de Participacions Preferents, S.A.
20.4.Debt certificates
The breakdown of the balance under this heading, by financial instruments and by currency, is as follows:
P.103
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Debt certificates (Millions of Euros)
2021
2020
In Euros
32,603
37,949
Promissory bills and notes
300
759
Non-convertible bonds and debentures
16,066
14,794
Mortgage Covered bonds (**)
7,615
10,320
Other securities
938
2,831
Accrued interest and others (*)
463
837
Subordinated liabilities
7,221
8,407
Convertible perpetual certificates
3,500
4,500
Other non- convertible subordinated liabilities
3,528
3,613
Valuation adjustments (*)
193
294
In Foreign Currency
5,263
5,743
Promissory bills and notes
106
333
Non-convertible bonds and debentures
2,111
1,956
Mortgage Covered bonds (**)
110
105
Other securities
412
1,016
Accrued interest and others (*)
5
3
Subordinated liabilities
2,518
2,329
Convertible perpetual certificates
1,766
1,630
Other non-convertible subordinated liabilities
745
693
Valuation adjustments (*)
7
7
Total
37,866
43,692
(*)          Accrued interest but pending payment, valuation adjustments and issuance costs included
(**)        See Appendix X.
As of December 31, 2021 and 2020, 59% and 64% of “Debt certificates” have fixed-interest rates, and 41% and 36% have variable
interest rates, respectively.
The total cost of the accrued interest under “Debt securities issued” in 2021 and 2020 totaled €460 million and €600 million,
respectively.
As of December 31, 2021 and 2020 the accrued interest pending payment from promissory notes and bills and bonds and debentures
amounted to €290 million and €354 million, respectively.
The heading “Nonconvertible bonds and debentures” as of December 31, 2021 includes several issues, the latest maturing in 2039.
The heading “Mortgage Covered Bonds" as of  December 31, 2021  includes issues with various maturities, the latest in 2037.
Subordinated liabilities included in this heading and in Note 20.3, and accordingly, for debt seniority purposes, they rank behind
ordinary debt, but ahead of the Bank’s shareholders, without prejudice to any different seniority that may exist between the different
types of subordinated debt instruments according to the terms and conditions of each issue. The breakdown of this heading in the
accompanying balance sheets, disregarding valuation adjustments, by currency of issuance and interest rate is shown in Appendix
VII.
The balance variances are mainly due to the following transactions:
Convertible perpetual liabilities 
The AGM held on March 17, 2017, resolved, under agenda item five, to confer authority to the Board of Directors to issue securities
convertible into newly issued BBVA shares, on one or several occasions, within the maximum term of five years to be counted from
the approval date of the authorization, up to a maximum overall amount of €8 billion or its equivalent in any other currency. Likewise,
the AGM resolved to confer to the Board of Directors the authority to totally or partially exclude shareholders' pre-emptive
subscription rights within the framework of a specific issue of convertible securities, although this power was limited to ensure the
nominal amount of the capital increases resolved or effectively carried out for conversion of mandatory convertible issuances made
under this authority (without prejudice to anti-dilution adjustments), with exclusion of pre-emptive subscription rights and of those
likewise resolved or carried out with exclusion of pre-emptive subscription rights in use of the authority to increase the share capital
conferred by the AGM held on March 17, 2017, under agenda item four, do not exceed the maximum nominal amount, overall, of 20%
of the share capital of BBVA at the time of the authorization, this limit not being applicable to contingent convertible issues.
Under that delegation, BBVA made the following contingently convertible issuances that qualify as additional tier 1 capital of the Bank
and the Group in accordance with Regulation (EU) 575/2013:
P.104
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
–In May and November 2017, BBVA carried out two issues of perpetual contingent convertible securities (additional Tier 1
capital instruments) excluding shareholders' pre-emptive rights, for a nominal amount of 500 million euros and 1,000
million U.S. dollars, respectively. These issues are listed on the Global Exchange Market of Euronext Dublin of the Irish Stock
Exchange and were directed only to qualified investors and foreign private banking clients, and cannot be placed or
subscribed in Spain or among investors resident in Spain.
–In September 2018 and March 2019, BBVA carried out both issuances of perpetual contingent convertible securities
(additional tier 1 instruments), with exclusion of pre-emptive subscription rights of shareholders, for a total nominal amount
of €1 billion each. These issuances are listed in the AIAF Fixed Income Securities Market and were targeted only at
professional clients and eligible counterparties, not being offered or sold to any retail clients.
–On September 5, 2019, BBVA carried out an issuance of perpetual contingent convertible securities (additional tier 1
instruments), with exclusion of pre-emptive subscription rights of shareholders, for a total nominal amount of $1 billion. This
issuance is listed in the Global Exchange Market of Euronext Dublin and was targeted only at qualified investors, not being
offered to, and not being subscribed for, in Spain or by Spanish residents.
–On July 15, 2020, BBVA carried out an issuance of perpetual contingent convertible securities (additional tier 1
instruments), with exclusion of pre-emptive subscription rights of shareholders, for a total nominal amount of €1 billion.
This issuance is listed in the AIAF Fixed Income Securities Market and was targeted only at professional clients and eligible
counterparties, not being offered or sold to any retail clients.
These perpetual securities will be converted into newly issued ordinary shares of BBVA if the CET 1 ratio of the Bank or the Group is
less than 5.125%, in accordance with their respective terms and conditions.
These issuances may be fully redeemed at BBVA's option only in the cases contemplated in their respective terms and conditions
and, in any case, in accordance with the provisions of the applicable legislation. In particular:
–On February 19, 2019 the Bank early redeemed the issuance of contingently convertible preferred securities (additional tier
1 instruments), carried out by the Bank on February 19, 2014, for a total amount of €1.5 billion and once the prior consent
from the Regulator had been On February 19, 2019 the Bank early redeemed the issuance of contingently convertible
preferred securities (additional tier 1 instruments), carried out by the Bank on February 19, 2014, for a total amount of €1.5
billion and once the prior consent from the Regulator had been obtained.
–On February 18, 2020, the Bank early redeemed the issuance of contingently convertible preferred securities (additional tier
1 instruments) carried out by the Bank on February 18, 2015, for an amount of €1.5 billion on the First Reset Date of the
issuance and once the prior consent from the Regulator had been obtained.
–On 14 April 2021, the Bank early redeemed the issuance of contingently convertible preferred securities (additional tier 1
instruments) carried out by the Bank on 14 April 2016, for an amount of €1.0 billion on the First Reset Date of the issuance
and once the prior consent from the Regulator had been obtained.
On the other hand, the AGM held on March 17, 2017, resolved, under agenda item five, to confer authority to the Board of Directors to
issue perpetual contingent convertible securities, envisaged to meet regulatory requirements for their eligibility as capital
instruments, pursuant to solvency regulations applicable at any time (CoCos), subject to the legal and statutory provisions applicable
at any time, on one or several occasions, within the maximum term of five years to be counted from the approval date of the
authorization, up to a maximum overall amount of €8 billion or its equivalent in any other currency. Likewise, the AGM resolved to
confer to the Board of Directors the authority to totally or partially exclude  shareholders' pre-emptive subscription rights, complying
at all times with the requirements and limitations laid down by Law. The AGM also resolved to repeal the powers it conferred on March
17, 2017, under agenda item five.
20.5.Other financial liabilities
The breakdown of the balance under this heading in the accompanying balance sheets is as follows:
Other financial liabilities (Millions of Euros)
2021
2020
Lease liabilities
2,765
2,886
Creditors for other financial liabilities
3,384
3,223
Collection accounts
3,045
2,728
Creditors for other payment obligations (*)
2,561
1,289
Total
11,756
10,127
(*) This heading includes the amount committed for the acquisition of treasury shares in the buyback program (see Notes 2.12 and 3).
P.105
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
A breakdown of the maturity of the lease liabilities, due after December 31, 2021 is provided below:
Maturity of future payment obligations (Millions of Euros)
Up to 1 year
1 to 3 years
3 to 5 years
Over 5 years
Total
Operating leases
189
378
368
1,830
2,765
The information required by Final Provision second of Law 31/2014 of December 3, which amends the Corporate Law to improve
corporate governance modifies Additional Provision third of Law 15/2010, of July 5, amending the Law 3/2004 of December 29,
through which measures for combating late payment in commercial transactions are set, is as follows:
Payments made and pending payments (*) (Millions of Euros)
2021
2020
BBVA S.A.
BBVA GROUP IN
SPAIN
BBVA S.A.
BBVA GROUP IN
SPAIN
Average payment period to suppliers (days)
25
25
22
22
Ratio of outstanding payment transactions (days)
25
25
22
22
Ratio outstanding payment transactions (days)
18
18
19
19
Total payments
2,294
2,300
2,342
2,352
Total outstanding payments
95
96
104
104
(*)    It is considered on time payments made within 60 days, and not on time those which exceeds 60 days.
The data shown in the table above on payments to suppliers refer to those which by their nature are trade creditors for the supply of
goods and services, so data relating to "Other financial liabilities other liabilities -Trade pay " is included in the balance.
21.Provisions
The breakdown of the balance under this heading in the accompanying balance sheets, based on type of provisions, is as follows:
Provisions: Breakdown by concepts (Millions of Euros)
Notes
2021
2020
Provisions for pensions and similar obligations
22
3,027
3,544
Other long term employee benefits (*)
22
600
18
Provisions for taxes and other legal contingencies
401
439
Provisions for contingent risks and commitments
310
270
Other provisions (**)
150
177
Total
4,488
4,449
(*) The variation is mainly explained by  the collective layoff procedure that has been carried out at Banco Bilbao Vizcaya Argentaria, S.A
(**)  Individually insignificant provisions or contingencies, for various concepts in different geographies.
P.106
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Below are the changes in 2021 and 2020 in the balances under this heading :
Provisions for pensions and similar obligations and Other long term employee benefits. Changes over the year (Millions of
Euros)
2021
2020
Balance at the beginning
3,563
3,835
Add
Charges to income for the year
108
235
Interest expense and similar charges
2
2
Personnel expense
5
4
Provision expense
102
228
Charges to equity (*)
(2)
—
Transfers and other changes (**)
590
3
Less
Benefit payments
(412)
(475)
Employer contributions
(191)
(24)
Unused amounts reversed during the period
(30)
(11)
Balance at the end
3,627
3,563
(*) Corresponds to actuarial losses (gains) arising from certain post-employment defined-benefit commitments for pensions (see Note 2.9).
(**) Provisions for different concepts that, individually, are not significant.
Provisions for taxes, legal contingencies and other provisions. Changes over the year (Millions of Euros)
2021
2020
Balance at beginning
886
782
Additions (*)
1,226
555
Acquisition of subsidiaries
—
—
Unused amounts reversed during the year
(328)
(297)
Amount used and other variations (*)
(923)
(154)
Balance at the end
861
886
(*) In 2021, it includes the initial recognition of the estimated cost of the collective layoff procedure that is being carried out at Banco Bilbao Vizcaya Argentaria, S.A., and the
subsequent reclassification from "Other provisions" to "Other long term employee benefits" for the remaining amount at the time of the reclassification.
Collective layoff procedure
On June 8, 2021, BBVA reached an agreement with the union representatives on the collective layoff procedure proposed for Banco
Bilbao Vizcaya Argentaria, S.A. in Spain on April 13, 2021, which would affect 2,935 employees. The agreement also included the
closing of 480 offices (most of which had closed as of December 31, 2021). The cost of the process amounts to €994 million before
taxes, of which €754 million correspond to the collective layoff and €240 million to the closing of offices (see Notes 15, 19, 41, 44 and
45). As of December 31, 2021, 2,888 employees had already signed out of BBVA S.A. (some of them effectively departed on January 1,
2022). It is expected that during January and February, additional departures will take place until the agreement is completed, which
could be extended until March 31, 2022,
Ongoing legal proceedings and litigation
The financial sector faces an environment of increased regulatory pressure and litigation. In this environment, the various Group
entities are often sued on lawsuits and are therefore involved in individual or collective legal proceedings and litigation arising from
their activity and operations, including proceedings arising from their lending activity, from their labor relations and from other
commercial, regulatory or tax issues, as well as in arbitration.
On the basis of the information available, the Group considers that, as of December 31, 2021, the provisions made in relation to judicial
proceedings and arbitration, where so required, are adequate and reasonably cover the liabilities that might arise, if any, from such
proceedings. Furthermore, on the basis of the information available and with the exceptions indicated in Note 5.1 "Risk factors", BBVA
considers that the liabilities that may arise from such proceedings will not have, on a case-by-case basis, a significant adverse effect
on the Group's business, financial situation or results of operations.
22.Post-employment and other employee benefit commitments
As stated in Note 2.9, the Bank has assumed commitments with employees including short-term employee benefits (Note 39.1),
defined contribution and defined benefit plans, as well as other long-term employee benefits.
The main Employee Welfare System has been implemented in Spain. Under the collective labor agreement, Spanish banks are
required to supplement the social security benefits received by employees or their beneficiary right-holders in the event of retirement
(except for those hired after March 8, 1980), permanent disability, death of spouse or death of parent.
P.107
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
The Employee Welfare System in place at the Bank supersedes and improves the terms and conditions of the collective labor
agreement for the banking industry; including benefits in the event of retirement, death and disability for all employees, including
those hired after March 8, 1980. The Bank externally funded all its pension commitments with active and retired employees pursuant
to Royal Decree 1588/1999, of October 15. These commitments are instrumented in external pension plans, insurance contracts with
non-Group companies and insurance contracts with BBVA Seguros, S.A. de Seguros y Reaseguros, which is 99.96% owned by the
Banco Bilbao Vizcaya Argentaria Group.
The table below shows a breakdown of recorded balance sheet liabilities relating to defined benefit plans as at December 31, 2021 and
2020:
Net defined benefit  liability (asset) on the balance sheet (Millions of Euros)
Notes
2021
2020
Pension commitments
3,132
3,464
Early retirement commitments
943
1,236
Other long-term employee benefits
600
18
Total commitments
4,675
4,718
Pension plan assets
1058
1,172
Total plan assets
1,058
1,172
Total net liability/asset
3,617
3,546
Of which: provisions- provisions for pensions and similar obligations
21
3,027
3,544
Of which: provisions-other long-term employee benefits (*)
21
600
18
Other net assets in pension plans
(10)
(16)
Of which: Insurance contracts linked to pensions
18
(1,882)
(2,074)
(*) The variation is mainly explained by the collective layoff procedure that is being carried out at Banco Bilbao Vizcaya Argentaria, S.A.
The following table shows defined benefit plan costs recorded in the income statement for fiscal years 2021 and 2020:
Income Statement and equity impact (Millions of Euros)
Notes
2021
2020
Interest and similar expense
2
2
Interest expense
2
2
Interest income
—
—
Personnel expense
45
51
Defined contribution plan expense
39
38
44
Defined benefit plan expense
39
2
2
Other benefit expense
5
5
Provisions or reversal of provisions
41
52
217
Early retirement expense
100
220
Past service cost expense
(25)
—
Remeasurements (*)
(16)
(7)
Other provision expense
(7)
4
Total effects in income statements: debit (credit)
99
270
Total effects on equity: debit (credit) (**)
(2)
—
(*)          Actuarial losses (gains) on remeasurement of the net defined benefit liability relating to early retirements in Spain and other long-term employee benefits that are charged
to the income statement (see Note 2.9).
(**)        Actuarial gains (losses) on remeasurement of the net defined benefit pension liability before income taxes (see Note 2.9).
22.1Defined benefit plans
Defined benefit commitments relate mainly to employees who have already retired or taken early retirement, certain closed groups of
active employees still accruing defined benefit pensions, and in-service death and disability benefits provided to most active
employees. For the latter, BBVA pays the required premiums to fully insure the related liability.
The change in these commitments as of December 31, 2021 and 2020 was as follows:
P.108
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Defined Benefit Plans (Millions of Euros)
2021
2020
Defined
benefit
obligation
Plan
assets
Net
liability
(asset)
Insurance
contracts
linked to
pensions
Defined
benefit
obligation
Plan
assets
Net
liability
(asset)
Insurance
contracts
linked to
pensions
Balance at the beginning
4,700
1,172
3,528
2,074
5,001
1,200
3,801
2,096
Current service cost
6
—
6
—
6
—
6
—
Interest income or expense
27
11
16
15
36
13
23
20
Contributions by plan participants
—
—
—
—
—
—
—
—
Employer contributions
—
(11)
11
—
—
—
—
—
Past service costs (*)
78
—
78
—
223
—
223
—
Remeasurements:
(124)
(51)
(73)
(58)
149
70
79
99
Return on plan assets (**)
—
(51)
51
(58)
—
70
(70)
99
From changes in demographic
assumptions
—
—
—
—
60
—
60
—
From changes in financial
assumptions
(66)
—
(66)
—
96
—
96
—
Other actuarial gain and losses
(58)
—
(58)
—
(7)
—
(7)
—
Benefit payments
(632)
(80)
(552)
(149)
(710)
(113)
(597)
(132)
Settlement payments
(1)
(1)
—
—
—
—
—
—
Business combinations and disposals
—
—
—
—
—
—
—
—
Effect on changes in foreign exchange
rates
10
8
2
—
(7)
(7)
—
—
Other effects
11
10
1
—
2
9
(7)
(9)
Balance at the end
4,075
1,058
3,017
1,882
4,700
1,172
3,528
2,074
(*)          Including gains and losses arising from settlements.
(**)          Excluding interest, which is recorded under "Interest income or expense".
The balance under the heading “Provisions – Pensions and other post-employment defined benefit obligations” of the accompanying
balance sheet as of December 31, 2021 includes €311 million for commitments for post-employment benefits maintained with
previous members of the Board of Directors and the Bank’s Management Committee.(see Note 49)
Both the costs and the present value of the commitments are determined by independent qualified actuaries using the “projected unit
credit” method.
In order to guarantee the good governance of these plans, the Bank has established an Employee Benefits Committee including
members from the different areas to ensure that all decisions are made taking into consideration all of the associated impacts.
The following table sets out the key actuarial assumptions used in the valuation of these commitments as at December 31, 2021 and
2020:
Actuarial Assumptions. Commitments  in Spain
2021
2020
Discount rate
0.74%
0.53%
Rate of salary increase
—
—
Mortality tables
PER 2020
PER 2020
The discount rate shown as of December 31, 2021, corresponds to the weighted average rate, the actual discount rates used are  0%
and 1% depending on the type of commitment.
The discount rate used to value future benefit cash flows has been determined by reference to Eurozone high quality corporate bonds
(see Note 2.9).
The expected return on plan assets has been set in line with the adopted discount rate.
Assumed retirement ages have been set by reference to the earliest age at which employees are entitled to retire or the contractually
agreed age in the case of early retirements.
Changes in the actuarial main assumptions can affect the calculation of the commitments. Should the discount rate have increased or
decreased by 50 basis points, an impact on equity for the commitments in Spain would have been registered amounting to
approximately an increase or decrease of €7 million net of tax.
P.109
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
In addition to the commitments to employees shown above, the Group has other less material long-term employee benefits. These
include leave and long-service awards, which consist of either an established monetary award or shares in Banco Bilbao Argentaria
A.A. granted to employees when they complete a given number of years of qualifying service. Additionally, this heading includes a
fund related to the collective layoff procedure that has been carried out in the bank in 2021. As of December 31, 2021 and 2020 the
value of these commitments amounted to €600 and €18 million respectively. These amounts are recorded under the heading
"Provisions - Other long-term employee benefits" of the accompanying balance sheet (see Note 21).
Information on the various commitments is provided in the following sections.
Pension commitments
These commitments relate mainly to retirement, death and disability pension payments. They are covered by insurance contracts,
pension funds and internal provisions.
The change in pension commitments as of December 31, 2021 and 2020 is as follows:
Pensions commitments (Millions of Euros)
2021
2020
Defined
Benefit
Obligation
Plan
Assets
Net
Liability
(asset)
Insurance
contracts
linked to
pensions
Defined
Benefit
Obligation
Plan
Assets
Net
Liability
(asset)
Insurance
contracts
linked to
pensions
Balance at the beginning
3,464
1,172
2,292
2,074
3,523
1,200
2,323
2,096
Net commitments addition
—
—
—
—
—
—
—
—
Current service cost
6
—
6
—
6
—
6
—
Interest income or expense
27
11
16
15
36
13
23
20
Contributions by plan participants
—
—
—
—
—
—
—
—
Employer contributions
—
(11)
11
—
—
—
—
—
Past service costs (*)
(22)
—
(22)
—
3
—
3
—
Remeasurements:
(118)
(51)
(67)
(58)
160
70
90
99
Return on plan assets (**)
—
(51)
51
(58)
—
70
(70)
99
From changes in demographic
assumptions
—
—
—
—
58
—
58
—
From changes in financial assumptions
(66)
—
(66)
—
96
—
96
—
Other actuarial gain and losses
(52)
—
(52)
—
6
—
6
—
Benefit payments
(246)
(80)
(166)
(149)
(262)
(113)
(149)
(132)
Settlement payments
(1)
(1)
—
—
—
—
—
—
Business combinations and disposals
—
—
—
—
—
—
—
—
Defined contribution transformation
—
—
—
—
—
—
—
—
Effect on changes in foreign exchange rates
10
8
2
—
(7)
(7)
—
—
Other  effects
12
10
2
—
5
9
(4)
(9)
Balance at the end
3,132
1,058
2,074
1,882
3,464
1,172
2,292
2,074
Of Which: Vested benefit obligation
relating to current employees
2,978
—
—
—
3,284
—
—
—
Of Which: Vested benefit obligation
relating to retired employees
154
—
—
—
180
—
—
—
(*)          Including gains and losses arising from settlements.
(**)          Excluding interest, which is recorded under "Interest income or expense".
In Spain, local regulation requires that pension and death benefit commitments must be funded, either through a qualified pension
plan or an insurance contract.
These pension commitments are insured through policies with the insurer belonging to the Group, and with other unrelated insurers
whose policyholder is BBVA. There are also commitments in the Group's insurance company whose policyholder is the BBVA
Employment Pension Plan.
All the policies meet the requirements established by the accounting regulations regarding the non-recoverability of contributions.
However, the policies whose policyholder is the Entity that have been carried out with BBVA Seguros –a BBVA related party – and
consequently these policies cannot be considered plan assets under the applicable standards. For this reason, the liabilities insured
under these policies are fully recognized under the heading "Provisions – Pensions and other post-employment defined benefit
obligations" of the accompanying balance sheet (see Note 21), while the related assets held by the insurance company are included
under the heading “Insurance contracts linked to pensions “.
Additionally, there are commitments in insurance policies of the Pension Plan and with insurance companies not related to the Bank.
In this case the accompanying balance sheet reflects the value of the obligations net of the fair value of the qualifying insurance
policies. As of December 31, 2021 and 2020, the plan assets related to the aforementioned insurance contracts equaled the amount
of the commitments covered; therefore, no amount for this item is included in the accompanying balance sheets.
P.110
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Pension benefits are paid by the insurance companies with whom BBVA has insurance contracts and to whom all insurance premiums
have been paid. The premiums are determined by the insurance companies using “cash flow matching” techniques to ensure that
benefits can be met when due, guaranteeing both the actuarial and interest rate risk.
The Bank signed a Social Benefit Standardization Agreement for its employees in Spain. The agreement standardizes the existing
social benefits for the different groups of employees and, in some cases where a service was provided, quantified it as an annual
amount in cash.
In addition, some overseas branches of the Bank maintain defined-benefit pension commitments with some of their active and
inactive personnel. These arrangements are closed to new entrants who instead participate in defined-contribution plans.
Early retirement commitments
In 2021 the Bank offered certain employees the possibility of taking retirement or early retirement before the age stipulated in the
collective labor agreement in force. This offer was accepted by 432 employees (769 in 2020). The commitments to early retirees
include the compensation and indemnities and contributions to external pension funds payable during the period of early retirement.
The change in these commitments during financial years 2021 and 2020 is shown below:
Early retirement commitments (Millions of Euros)
2021
2020
Defined
Benefit
Obligation
Plan
assets
Net
liability
(asset)
Defined
benefit
obligation
Plan
assets
Net
liability
(asset)
Balance at the beginning
1,236
—
1,236
1,478
—
1,478
Current service cost
—
—
—
—
—
—
Interest income or expense
—
—
—
—
—
—
Contributions by plan participants
—
—
—
—
—
—
Employer contributions
—
—
—
—
—
—
Past service costs (*)
100
—
100
220
—
220
Remeasurements:
(6)
—
(6)
(11)
—
(11)
Return on plan assets (**)
—
—
—
—
—
—
From changes in demographic assumptions
—
—
—
2
—
2
From changes in financial assumptions
—
—
—
—
—
—
Other actuarial gain and losses
(6)
—
(6)
(13)
—
(13)
Benefit payments
(386)
—
(386)
(448)
—
(448)
Settlement payments
—
—
—
—
—
—
Business combinations and disposals
—
—
—
—
—
—
Defined contribution transformation
—
—
—
—
—
—
Effect on changes in foreign exchange rates
—
—
—
—
—
—
Other  effects
(1)
—
(1)
(3)
—
(3)
Balance at the end
943
—
943
1,236
—
1,236
(*)          Including gains and losses arising from settlements.
(**)          Excluding interest, which is recorded under "Interest income or expense".
The valuation and account treatment of these commitments is the same as that of the pension commitments, except for the
treatment of actuarial gains and losses (see Note 2.9).
Estimated benefit payments
As of December 31, 2021 the estimated payments over the next ten years are as follows:
Estimated future payments (Millions of Euros)
2022
2023
2024
2025
2026
2027 - 2031
Commitments in Spain
625
477
395
332
284
920
Of which: Early retirements
284
218
154
106
74
107
P.111
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
22.2Defined contribution plans
The Bank sponsors defined contribution plans, in some cases with employees making contributions which are matched by the
employer.
These contributions are accrued and charged to the income statement in the corresponding financial year. No liability is therefore
recognized in the accompanying balance sheets for this purpose (see Note 2.9).
23.Common stock
As of December 31, 2021, 2020 and 2019, BBVA’s common stock amounted to €3,267,264,424.20 divided into 6,667,886,580 fully
subscribed and paid-up registered shares, all of the same class and series, at €0.49 par value each, represented through book-
entries. All of the Bank shares carry the same voting and dividend rights, and no single stockholder enjoys special voting rights. Each
and every share is part of the Bank’s common stock.
The Bank’s shares are traded on the stock markets of Madrid, Barcelona, Bilbao and Valencia through the Sistema de Interconexión
Bursátil Español (Mercado Continuo), as well as on the London and Mexico stock markets. BBVA American Depositary Shares (ADSs)
traded on the New York Stock Exchange under the ticker “BBVA”.
Additionally, as of December 31, 2021, the shares of Banco BBVA Peru, S.A., BBVA Banco Provincial, S.A., Banco BBVA Colombia,
S.A., Banco BBVA Argentina, S.A., and Garanti BBVA A.S., were listed on their respective local stock markets. Banco BBVA Argentina,
S.A. was also quoted in the Latin American market (Latibex) of the Madrid Stock Exchange and the New York Stock Exchange. Also,
the Depositary Receipts (“DR”) of Garanti BBVA, A.S. are listed in the London Stock Exchange. BBVA is also currently included,
amongst other indexes, in the IBEX 35® Index, which is made up by the 35 most liquid securities traded on the Spanish Market and,
technically, it is a price index that is weighted by capitalization and adjusted according to the free float of each company comprised in
the index.
As of December 31, 2021, State Street Bank and Trust Co., The Bank of New York Mellon SA NV and Chase Nominees Ltd in their
capacity as international custodian/depositary banks, held 14.26%, 2.45%, and 7.69% of BBVA common stock, respectively. Of said
positions held by the custodian banks, BBVA is not aware of any individual shareholders with direct or indirect holdings greater than
or equal to 3% of BBVA common stock outstanding.
On April 18, 2019, Blackrock, Inc. reported to the Spanish Securities and Exchange Commission (CNMV) that, it had an indirect
holding of BBVA common stock totaling 5.917%, of which 5.480% are voting rights attributed to shares and 0.437% are voting rights
through financial instruments.
GQG Partners LLC, on February 11, 2021, notified the Spanish National Securities Market Commission (CNMV) that it now has a direct
interest in BBVA's capital stock, totaling 3.090%, through voting rights attributed to the shares.
On the other hand, BBVA is not aware of any direct or indirect interests through which control of the Bank may be exercised.
Furthermore, BBVA has not received any information on stockholder agreements including the regulation of the exercise of voting
rights at its annual general meetings or restricting or placing conditions on the free transferability of BBVA shares. No agreement is
known that could give rise to changes in the control of the Bank.
Resolutions adopted by the Annual General Meeting
Capital increase
BBVA's AGM held on March 17, 2017 resolved, under agenda item four, to confer authority on the Board of Directors to increase
Bank's share capital, on one or several occasions, within the legal term of five years of the approval date of the authorization, up to the
maximum amount corresponding to 50% of Bank's share capital at the time on which the resolution was adopted, likewise conferring
authority to the Board of Directors to totally or partially exclude shareholders' pre-emptive subscription rights over any specific issue
that may be made under such authority.
However, the power to exclude pre-emptive subscription rights was limited, such that the nominal amount of the capital increases
resolved or effectively carried out with the exclusion of pre-emptive subscription rights in use of the referred authority and those that
may be resolved or carried out to cover the conversion of mandatory convertible issues that may also be made with the exclusion of
pre-emptive subscription rights in use of the authority to issue convertible securities conferred by the AGM held on March 17, 2017,
under agenda item five (without prejudice to the anti-dilution adjustments and this limit not being applicable to contingent convertible
issues) shall not exceed the nominal maximum overall amount of 20% of the share capital of BBVA at the time of the authorization.
Convertible and/or exchangeable securities:
Note 20.4 introduces the details of the convertible and/or exchangeable securities.
P.112
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
24.Share premium
As of December 31, 2021 and 2020, the balance under this heading in the accompanying balance sheets was €23,599 and €23,992
million, respectively (see Note 3).
The amended Spanish Corporation Act expressly permits the use of the share premium balance to increase capital and establishes no
specific restrictions as to its use (see Note 23).
25.Retained earnings, revaluation reserves and other reserves
25.1.Breakdown of the balance
The breakdown of the balance under this heading in the accompanying balance sheets is as follows:
Retained earnings, revaluation reserves and other reserves (Millions of Euros)
2021
2020
Restricted reserves
Legal reserve
653
653
Restricted reserve for retired capital
761
120
Revaluation Royal Decree-Law 7/1996
—
—
Voluntary reserves
Voluntary and others (*)
3,994
8,117
Total
5,409
8,890
(*) The variation corresponds mainly to the application of the result for the year 2020 and the share buyback program (see Note 3).
25.2.Legal reserve
Under the amended Corporations Act, 10% of any profit made each year must be transferred to the legal reserve. The transfer must
be made until the legal reserve reaches 20% of the common stock.
The legal reserve can be used to increase the common stock provided that the remaining reserve balance does not fall below 10% of
the increased capital. While it does not exceed 20% of the common stock, it can only be allocated to offset losses exclusively in the
case that there are not sufficient reserves available.
25.3.Restricted reserves
As of December 31, 2021 and 2020, the Bank’s restricted reserves are as follows:
Restricted reserves. Breakdown by concepts (Millions of Euros)
2021
2020
Restricted reserve for retired capital
88
88
Restricted reserve for Parent Company shares and loans for those shares (*)
672
30
Restricted reserve for redenomination of capital in euros
2
2
Total
761
120
(*) The variation in 2021 is mainly due to the share buyback program (see Note 3).
The restricted reserve for retired capital resulted from in the reduction of the nominal par value of the BBVA shares made in April
2000.
The second heading corresponds to restricted reserves related to the amount of shares issued by the Bank in its possession at each
date, as well as the amount of customer loans outstanding at those dates that were granted for the purchase of, or are secured by, the
parent company shares.
Finally, pursuant to Law 46/1998 on the Introduction of the Euro, a restricted reserve is recognized as a result of the rounding effect
of the redenomination of the Bank’s common stock in euros.
P.113
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
25.4.Revaluation and regularizations of the balance sheet
Prior to the merger, Banco de Bilbao, S.A. and Banco de Vizcaya, S.A. availed themselves of the legal provisions applicable to the
regularization and revaluation of balance sheets. Thus, on December 31, 1996, Banco Bilbao Vizcaya, S.A. revalued its tangible assets
pursuant to Royal Decree-Law 7/1996 of June 7 by applying the maximum coefficients authorized, up to the limit of the market value
arising from the existing valuations. As a result of these updates, the increases in the cost and depreciation of tangible fixed assets
were calculated and allocated as follows.
Following the review of the balance of the “Revaluation reserve pursuant to Royal Decree-Law 7/1996 of June 7" account by the tax
authorities in 2000, this balance could only be used, free of tax, to offset recognized losses and to increase share capital until January
1, 2007. From that date, the remaining balance of this account can also be allocated to unrestricted reserves, provided that the
surplus has been depreciated or the revalued assets have been transferred or derecognized.
The breakdown of the calculation and movement to voluntary reserves under this heading are:
Revaluation and Regularization of the Balance Sheet (Millions of Euros)
Legal revaluations and regularizations of tangible assets:
—
Cost
187
Less:
Single revaluation tax (3%)
(6)
Balance as of December 31, 1999
181
Rectification as a result of review by the tax authorities in 2000
(5)
Transfer to voluntary reserves
(176)
Total as of December 2020 and 2021
—
26.Treasury shares
In 2021 and 2020 the Group companies performed the following transactions with shares issued by the Bank:
Treasury shares (Millions of euros)
2021
2020
Number of
Shares
Millions of Euros
Number of
Shares
Millions of Euros
Balance at beginning
14,352,832
46
12,617,189
62
+ Purchases (*)
203,530,570
1,022
234,691,887
807
- Sales and other changes
(90,250,003)
(417)
(232,956,244)
(830)
+/- Derivatives on BBVA shares
—
(4)
—
7
+/- Other changes
—
—
—
—
Balance at the end
127,633,399
647
14,352,832
46
Of which:
Held by BBVA, S.A.(*)
112,733,730
574
592,832
9
Held by Corporación General Financiera, S.A.
14,899,669
72
13,760,000
37
Held by other subsidiaries
—
—
—
—
Average purchase price in Euros
5.02
—
3.44
—
Average selling price in Euros
4.89
—
3.63
—
Net gains or losses on transactions
(Shareholders' funds-Reserves)
17
—
(*) In 2021 includes the share buyback program (see Note 3).
The percentages of treasury shares held by the Group in 2021 and 2020 are as follows:
Treasury Stock
2021
2020
Min
Max
Closing
Min
Max
Closing
% treasury stock
0.108%
1.922%
1.914%
0.008%
0.464%
0.215%
P.114
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
The number of BBVA shares accepted by the Bank in pledge of loans as of December 31, 2021 and 2020  is as follows:
Shares of BBVA accepted in pledge
2021
2020
Number of shares in pledge
29,372,853
39,407,590
Nominal value (Euros)
0.49
0.49
% of share capital
0.44%
0.59%
The number of BBVA shares owned by third parties but under management of a company within the Group as of December 31, 2021
and 2020 is as follows:
Shares of BBVA Owned by Third Parties but Managed by the Group
2021
2020
Number of shares owned by third parties
17,645,506
18,266,509
Nominal value (Euros)
0.49
0.49
% of share capital
0.26%
0.27%
27.Accumulated other comprehensive income (loss)
The breakdown of the balance under this heading in the accompanying balance sheets is as follows:
Accumulated other comprehensive income (loss). Breakdown by concepts (Millions of Euros)
Notes
2021
2020
Items that will not be reclassified to profit or loss
(1,177)
(1,376)
Actuarial gains (losses) on defined benefit pension plans
(52)
(61)
Non-current assets and disposal groups classified as held for sale
—
—
Fair value changes of equity instruments measured at fair value through other
comprehensive income
11.4
(1,127)
(1,294)
Hedge ineffectiveness of fair value hedges for equity instruments measured at fair
value through other comprehensive income
—
—
Fair value changes of financial liabilities at fair value through profit or loss attributable
to changes in their credit risk
2
(21)
Items that may be reclassified to profit or loss
(284)
252
Hedge of net investments in foreign operations (effective portion)
—
—
Foreign currency translation
—
—
Hedging derivatives. Cash flow hedges (effective portion)
(626)
(100)
Fair value changes of debt instruments measured at fair value through other
comprehensive income
11.4
342
352
Hedging instruments (non-designated items)
—
—
Non-current assets and disposal groups classified as held for sale
—
—
Total
(1,461)
(1,124)
The balances recognized under these headings are presented net of tax.
P.115
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
28.Capital base and capital management
As of December 31, 2021 and 2020, own funds is calculated in accordance to the applicable regulation of each year on minimum
capital requirements for Spanish credit institutions –both as individual entities and as consolidated group– that establish how to
calculate them, as well as the various internal capital adequacy assessment processes they should have in place and the information
they should disclose to the market
Following the latest SREP (Supervisory Review and Evaluation Process) decision, applicable as from March 1, 2022, the ECB has
informed the Group that the Pillar 2 requirement would remain at 1.5% (0.84% must be CET1 at least). Therefore, BBVA must
maintain, on an individual level, a CET1 capital ratio of f 7.85% and a total capital ratio of 12.01%.
The minimum capital base requirements established by the current regulation are calculated according to BBVA S.A.’s exposure to
credit and dilution risk, counterparty and liquidity risk relating to the trading portfolio, exchange-rate risk and operational risk. In
addition, BBVA S.A. must fulfill the risk concentration limits established in said regulation and the internal corporate governance
obligations.
A reconciliation of the main figures between the accounting and regulatory own funds as of December 31, 2021 and 2020 is shown
below:
Eligible capital resources (Millions of Euros)
Notes
2021 (*)
2020
Capital
23
3,267
3,267
Share premium
24
23,599
23,992
Retained earnings, revaluation reserves and other reserves
25.1
5,409
8,890
Other equity instruments, net
49
34
Treasury shares
26
(574)
(9)
Profit (loss) for the year
1,080
(2,182)
Attributable dividend
(533)
—
Total Equity
32,296
33,992
Accumulated other comprehensive income (loss)
(1,461)
(1,124)
Shareholders´ equity
30,836
32,867
Intangible assets
(363)
(355)
Fin. treasury shares
(17)
(98)
Deductions
(380)
(712)
Temporary CET 1 adjustments
320
618
Equity not eligible at solvency level
320
618
Other adjustments and deductions (**)
(5,208)
(2,372)
Common Equity Tier 1 (CET 1)
25,568
30,660
Additional Tier 1 before regulatory adjustments
5,266
6,130
Tier 1
30,834
36,790
Tier 2
4,678
5,106
Total Capital (Total Capital=Tier 1 + Tier 2)
35,511
41,896
Total Minimum equity required
21,720
24,325
(*) Provisional data.
(**) Includes mainly the amount of repurchase of own shares pending to be executed and up to the maximum limit authorized by the ECB for the BBVA Group (see Note 3).
P.116
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
The BBVA S.A.’s own funds in accordance with the aforementioned applicable regulation as of December 31, 2021 and 2020 is shown
below:
Amount of capital CC1 (Millions of Euros)
2021 (*)
2020
Capital and share premium
26,866
27,259
Retained earnings and equity instruments
5,729
9,509
Other accumulated income and other reserves
(887)
(996)
Net interim attributable profit
1,080
(2,182)
Ordinary Tier 1 (CET 1) beforeother reglamentary adjustments
32,788
33,590
Goodwill and intangible assets
(319)
(355)
Direct and indirect holdings in equity (**)
(2,209)
—
Deferred tax assets
(1,008)
(1,478)
Other deductions and filters
(3,684)
(1,096)
Total common equity Tier 1 reglamentary adjustments
(7,221)
(2,930)
Common equity TIER 1 (CET1)
25,568
30,660
Equity instruments and share premium classified as liabilities
5,266
6,130
Additional Tier 1 (CET 1) before regulatory adjustments
5,266
6,130
Transitional CET 1 adjustments
—
—
Total regulatory adjustments of additional equity l Tier 1
—
—
Additional equity Tier 1  (AT1)
5,266
6,130
Tier 1 (Common equity TIER 1+ additional TIER 1)
30,834
36,790
Equity instruments and share premium accounted as Tier 2
4,324
4,540
Credit risk adjustments
364
576
Tier 2 before regulatory adjustments
4,688
5,116
Tier 2 regulatory adjustments
(10)
(10)
Tier 2
4,678
5,106
Total capital (Total capital=Tier 1 + Tier 2)
35,511
41,896
Total RWA's
180,831
202,559
CET 1 (phased-in)
14.14%
15.10%
Tier 1 (phased-in)
17.05%
18.20%
Total capital (phased-in)
19.64%
20.70%
(*)  Provisional data.
(**) Mainly includes the amount of repurchase of shares pending execution and up to the maximum limit authorized by the ECB to the BBVA Group (see Note 3).
As of December 31, 2021, Common Equity Tier 1 Capital (CET1) fully-loaded ratio stood at 14.11%, which represented a decrease of 71
basis points compared to December 31, 2020, standing the CET1 phased-in ratio at 14. 14%. These ratios incorporate the effects of
the divestment in the United States in the second quarter (see Note 14). The difference between both ratios is mainly explained by the
effect of the temporary adjustments for the treatment in the solvency indicators of the impacts of IFRS 9 and the subsequent
modifications in response to the COVID-19 pandemic.
In addition, these ratios include the singular effects of the restructuring process as well as the deduction of the total amount of the
share buyback programme authorized by the European Central Bank for €3,500 million.
Fully-loaded risk-weighted assets (RWA) decreased by approximately 21,757 million euros in 2021, mainly as a result of the
divestment in the United States and the impairment of Turkey (see note 14).
The fully-loaded additional Tier 1 capital ratio (AT1) stood at 2.91% as of December 31, 2021 (2.91% phased-in). In this vein, it should
be noted that in March 2021 an AT1 instrument was amortized by BBVA S.A. for an amount of 1,000 million euros.
The evolution of the eligible elements as Tier 2 capital has led the Tier 2 fully-loaded ratio to 2.66% as of December 31, 2021.
Additionally, the phased-in Tier 2 stood at 2.59%, being the main difference between the former and the Tier 2 fully-loaded ratio, the
temporary treatment of certain subordinated issuances.
The aim of capital management within BBVA and the Group is to ensure that both BBVA and the Group have the necessary capital at
any given time to develop the corporate strategy reflected in the Strategic Plan, in line with the risk profile set out in the Group Risk
Appetite Framework.
In this regard, BBVA's capital management is also part of the most relevant forward-looking strategic decisions in the Group's
management and monitoring, which include the Annual Budget and the Liquidity and Funding Plan, with which it is coordinated — all
with the aim of achieving the Group's overall strategy.
P.117
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Capital must be allocated optimally in order to meet the need to preserve the solvency of BBVA and the Group at all times. Together
with the Group's solvency risk profile included in the RAF, this optimal allocation serves as a guide for the Group's capital
management and seeks a solid capital position that makes it possible to:
–Anticipate ordinary and extraordinary consumption that may occur, even under stress;
–Promote the development of the Group's business and align it with capital and profitability objectives by allocating
resources appropriately and efficiently;
–Cover all risks—including potential risks—to which it is exposed;
–Comply with regulatory and internal management requirements at all times; and
–Remunerate BBVA shareholders in accordance with the Shareholder Remuneration Policy in force at any given time.
The areas involved in capital management in the Group shall follow and respect the following principles in their respective areas of
responsibility:
–Ensuring that capital management is integrated and consistent with the Group's Strategic Plan, RAF, Annual Budget and
other strategic-prospective processes, to help achieve the Group's long-term sustainability.
–Taking into account both the applicable regulatory and supervisory requirements and the risks to which the Group is—or
may be—exposed when conducting its business (economic vision), when establishing a target capital level, all while
adopting a forward-looking vision that takes adverse scenarios into consideration.
–Carrying out efficient capital allocation that promotes good business development, ensuring that expectations for the
evolution of activity meet the strategic objectives of the Group and anticipating the ordinary and extraordinary consumption
that may occur.
–Ensuring compliance with the solvency levels, including the minimum requirement for own funds and eligible liabilities
(MREL), required at any given time.
–Compensating BBVA shareholders in an adequate and sustainable manner.
–Optimizing the cost of all instruments used for the purpose of meeting the target capital level at any given time
To achieve the aforementioned principles, capital management will be based on the following essential elements:
–An adequate governance and management scheme, both at the corporate body level and at the executive level.
–Planning, managing and monitoring capital properly, using the measurement systems, tools, structures, resources and
quality data necessary to do so.
–A set of metrics, which is duly updated, to facilitate the tracking of the capital situation and to identify any relevant
deviations from the target capital level.
–A transparent, correct, consistent and timely communication and dissemination of capital information outside the Group.
–An internal regulatory body, which is duly updated, including the regulations and procedures that, ensure adequate capital
management.
P.118
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
29.Commitments and guarantees given
The breakdown of the balance under these headings in the accompanying balance sheets is as follows:
Commitments and guarantees given (Millions of Euros)
Notes
2021
2020
Loan commitments given
89,353
80,959
Of which: impaired
109
100
Central banks
—
—
General governments
3,405
2,177
Credit institutions
16,043
11,313
Other financial corporations
4,797
4,571
Non-financial corporations
52,255
49,259
Households
12,854
13,639
Financial guarantees given
11,662
8,745
Of which: impaired
170
156
Central banks
—
—
General governments
40
85
Credit institutions
325
258
Other financial corporations
5,803
4,416
Non-financial corporations
5,383
3,862
Households
111
124
Other commitments given
24,181
25,711
Of which: impaired
393
305
Central banks
—
112
General governments
77
77
Credit institutions
1,769
3,114
Other financial corporations
1,711
3,541
Non-financial corporations
20,522
18,746
Households
102
121
Total
5.2.2
125,197
115,415
The amount registered recorded in the balance sheet as of December 31, 2021, for loan commitments given, financial guarantees
given and other commitments given is €130 million, 66 million and €114 million, respectively (see Note 21).
Since a significant portion of the amounts above will expire without any payment obligation materializing for the companies, the
aggregate balance of these commitments cannot be considered the actual future requirement for financing or liquidity to be provided
by the Bank to third parties.
In the years 2021 and 2020, no issuance of debt securities carried out by associates of the BBVA, joint venture entities or non-Group
entities have been guaranteed,
30.Other contingent assets and liabilities
As of December 31, 2021 and 2020,  there were no material contingent assets or liabilities other than those disclosed in the
accompanying Notes to the financial statements.
31.Purchase and sale commitments and future payment obligations
The purchase and sale commitments of BBVA are disclosed in notes 8, 12 and 20.
Future payment obligations mainly correspond to leases payable derived from operating lease contracts, as detailed in Note 20.5, and
estimated employee benefit payments, as detailed in Note 22.1.
P.119
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
32.Transactions on behalf of third parties
As of December 31, 2021 and 2020 the details of the relevant transactions on behalf of third parties are as follows:
Transactions on behalf of third parties. Breakdown by concepts (Millions of Euros)
2021
2020
Financial instruments entrusted by third parties
316,288
318,218
Conditional bills and other securities received for collection
4,496
3,935
Securities lending
4,681
6,991
Total
325,465
329,144
33.Net interest income
33. 1.Interest and similar income
The breakdown of the interest and similar income recognized in the accompanying income statement is as follows:
Interest income. Breakdown by origin (Millions of Euros)
2021
2020
Financial assets held for trading
129
176
Financial assets designated at fair value through profit or loss
7
4
Financial assets at fair value through other comprehensive income
235
253
Financial assets at amortized cost
3,426
3,839
Hedging derivatives
(125)
(126)
Cash flow hedges (effective portion)
80
45
Fair value hedges
(204)
(171)
Other assets
3
57
Liabilities interest income (*)
614
425
Total
4,289
4,629
(*) Includes accrued interest following TLTRO III transactions in 2021 and 2020 (see Note 20.1).
The amounts recognized in equity in connection with hedging derivatives for the years ended December 31, 2021 and 2020 and the
amounts derecognized from the equity and taken to the consolidated income statements during those years are included in the
accompanying statements of recognized income and expense.
33.2.Interest expense
The breakdown of the balance under this heading in the accompanying income statements is as follows:
Interest expense. Breakdown by origin (Millions of Euros)
2021
2020
Financial liabilities held for trading
51
120
Financial liabilities designated at fair value through profit or loss
47
45
Financial liabilities at amortized cost
816
1,080
Hedging derivatives and interest rate risk
(325)
(369)
Cash flow hedges
3
3
Fair value hedges
(328)
(372)
Other liabilities
8
10
Assets interest expense
264
228
Total
861
1,115
P.120
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
34.Dividend income
The breakdown of the balance under this heading in the accompanying income statements is as follows:
Dividend income (Millions of Euros)
2021
2020
Investments in associates
2
3
Investments in joint venture
5
2
Investments in subsidiaries
1,699
1,245
Other shares and dividend income
102
110
Total
1,808
1,360
35.Fee and commission income
The breakdown of the balance under this heading in the accompanying income statements is as follows:
Fee and commission income (Millions of Euros)
2021
2020
Bills receivables
12
15
Demand accounts
334
223
Credit and debit cards and OPS
404
339
Checks
5
5
Transfers and other payment orders
183
155
Insurance product commissions
184
142
Loan commitments given
129
105
Other commitments and financial guarantees given
167
159
Asset management
167
126
Securities fees
48
65
Custody securities
107
94
Other fees and commissions
775
697
Total
2,515
2,125
36.Fee and commission expense
The breakdown of the balance under this heading in the accompanying income statements is as follows:
Fee and commission expense (Millions of Euros)
2021
2020
Credit and debit cards
162
126
Transfers and other payment orders
8
4
Custody securities
14
13
Other fees and commissions
279
215
Total
463
358
P.121
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
37.Gains (losses) on financial assets and liabilities, hedge accounting and exchange
differences, net
The breakdown of the balance under this heading, by source of the related items, in the accompanying income statement is as
follows:
Gains (losses) on financial assets and liabilities, hedge accounting and exchange differences, net. Breakdown by heading
(Millions of Euros)
2021
2020
Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through
profit or loss, net
84
87
Financial assets at amortized cost
23
100
Other financial assets and liabilities
61
(13)
Gains (losses) on financial assets and liabilities held for trading, net
295
353
Reclassification of financial assets from fair value through other comprehensive income
—
—
Reclassification of financial assets from amortized cost
—
—
Other gains (losses)
295
353
Gains (losses) on non-trading financial assets mandatorily at fair value through profit or loss, net
114
28
Reclassification of financial assets from fair value through other comprehensive income
—
—
Reclassification of financial assets from amortized cost
—
—
Other gains (losses)
114
28
Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net
45
(69)
Gains (losses) from hedge accounting, net
(36)
13
Subtotal gains (losses) on financial assets and liabilities
501
412
Exchange differences, net
56
(29)
Total
558
383
The breakdown of the balance (excluding exchange rate differences) under this heading in the accompanying income statements by
the nature of financial instruments is as follows:
Gains (losses) on financial assets and liabilities. Breakdown by nature of the financial instrument (Millions of Euros)
2021
2020
Debt instruments
77
299
Equity instruments
1,756
(36)
Loans and advances to customers
63
4
Derivatives
(1,457)
286
Derivatives held for trading
(1,421)
274
Interest rate agreements
113
(252)
Security agreements
(1,585)
118
Commodity agreements
—
—
Credit derivative agreements
(24)
(25)
Foreign-exchange agreements
75
433
Hedging Derivatives Ineffectiveness
(36)
13
Fair value hedges
(36)
13
Hedging derivative
238
(316)
Hedged item
(274)
329
Cash flow hedges
—
—
Customer deposits
63
(139)
Other
(2)
(2)
Total
501
412
In addition, in 2021 and 2020, under the heading “Exchange differences, net” of the income statements, net amounts of negative €41
million and negative €57 million, respectively, are recognized for transactions with foreign exchange trading derivatives.
P.122
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
38.Other operating income and expense
The breakdown of the balance under the heading “Other operating income” and in the accompanying income statements is as follows:
Other operating income (Millions of Euros)
2021
2020
Real estate income
29
28
Financial income from non-financial services
130
104
Other operating income
10
11
Total
170
142
The breakdown of the balance under the heading “Other operating expense” in the accompanying income statements is as follows:
Other operating expense (Millions of Euros)
Notes
2021
2020
Contributions to guaranteed banks deposits funds
1.8
405
382
Real estate agencies
35
47
Other operating expense
105
100
Total
546
529
In accordance with the applicable regulations, it is reported that the following enforceable sanction have been imposed on BBVA
during the financial year 2021: Sanction imposed by the Bank of Spain: 2 sanctions imposed in the same case for alleged breaches of
the Code of Best Practices regulated by the Royal Decree-Law 6/2012, for a total of € 6.000.000 €. As in the previous case, a
contentious-administrative appeal has been filed and is pending resolution.
39.Administration costs
39.1 Personnel expense
The breakdown of the balance under this heading in the accompanying income statements is as follows:
Personnel expense (Millions of Euros)
Notes
2021
2020
Wages and salaries
1,736
1,639
Social security costs
354
377
Defined contribution plan expense
22
38
44
Defined benefit plan expense
22
2
2
Other personnel expense
107
83
Total
2,237
2,144
Share-based employee remuneration
The amounts recognized under the heading “Administration costs - Personnel expense - Other personnel expense” in the income
statements for the year ended December 31, 2021 and 2020, corresponding to the remuneration plans based on equity instruments
in each year, amounted to €31 million and €10 million for BBVA, respectively. These amounts have been recognized with a
corresponding entry under the heading “Shareholders’ funds - Other equity instruments” in the accompanying balance sheets, net of
tax effect.
The characteristics of the Group's remuneration plans based on equity instruments are described below.
Variable remuneration in shares
BBVA has a specific remuneration scheme applicable to those employees whose professional activities have a material impact on the
risk profile of BBVA and/or its Group (hereinafter “Identified Staff”) involving the delivery of BBVA shares, designed within the
framework of applicable regulations to credit institutions and considering best practices and recommendations at the local and
international levels in this matter.
In 2021, this remuneration scheme is reflected in the following remuneration policies:
–BBVA Group General Remuneration Policy, approved by the Board of Directors on June 30, 2021, that applies to
employees and senior managers at BBVA (excluding BBVA executive directors) and at Group companies with respect to
which BBVA exercises control over management. This policy includes the specific rules applicable to the members of the
Identified Staff, including Senior Management.
P.123
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
–BBVA Directors’ Remuneration Policy, approved by the General Shareholders’ Meeting of BBVA held on April 20, 2021,
that it’s applicable to the members of the Board of Directors of BBVA. The remuneration system for executive directors
corresponds, generally, with the applicable system to the Identified Staff, incorporating some particularities of their own,
derived from their condition of directors.
The variable remuneration for the Identified Staff members is subject to the following rules established in their corresponding
remuneration policies, specifically:
–Annual Variable Remuneration for Identified Staff members for each financial year will be subject to ex ante adjustments, so
that it shall be reduced at the time of their appraisal in the event of a downturn in the Group’s results or other parameters
such as the level of achievement of budgeted targets, and it will not accrue or it will accrue in a reduced amount, should a
certain level of profits and capital ratio not be achieved in accordance with the provisions of applicable regulations at any
given time.
–60% of the Annual Variable Remuneration will be vested and paid, if conditions are met, as a general rule, in the first four
months of the financial year following that to which the Annual Variable Remuneration corresponds (the “Upfront Portion”).
For executive directors, members of the Senior Management and Identified Staff members with particularly high variable
remuneration, the Upfront Portion will be 40% of the Annual Variable Remuneration. The remaining portion will be deferred
in time (hereinafter, the “Deferred Portion”) for a 5 year-period for executive directors and members of the Senior
Management, and 4 years for the remaining  members of the Identified Staff.
–50% of the Annual Variable Remuneration, including both the Upfront Portion and the Deferred Portion, shall be established
in BBVA shares or in instruments linked to BBVA shares. As regards executive directors and Senior Management, 60% of
the Deferred Portion shall be established in shares.
–The shares or instruments awarded as Annual Variable Remuneration, both from the Upfront Portion and the Deferred
Portion, shall be withheld for a one-year period after delivery. This will not apply to those shares or instruments the sale of
which would be required to honor the payment of taxes accruing on delivery.
–The Deferred Portion of the Annual Variable Remuneration may be reduced, but never increased, depending on the results
of multi-year performance indicators which are aligned with the Group’s core risk management and control metrics related
to the solvency, liquidity, profitability or value creation.
–The cash amounts of the Deferred Portion of Annual Variable Remuneration finally vested, shall be updated by applying the
Consumer Price Index (CPI), measured as year-on-year change in prices, or any other criteria established for such purposes
by the Board of Directors.
–The entire Annual Variable Remuneration corresponding to each financial year shall be subject to arrangements for the
reduction of variable remuneration ("malus") and arrangements for the recovery of variable remuneration already paid
("clawback") during the whole deferral and withholding period, which will be applicable in the event of the occurrence of any
of the circumstances expressly named in the remuneration policies.
–No personal hedging strategies or insurances shall be used in connection with variable remuneration or liability that may
undermine the effects of alignment with prudent risk management.
–The variable component of the remuneration for a financial year (understood as the sum of all variable components of the
remuneration) shall be limited to a maximum amount of 100% of the fixed component of the total remuneration
(understood as the sum of all fixed components of the remuneration), unless the General Shareholders' Meeting of BBVA
resolves to increase this percentage up to a maximum of 200%.
In this regard, the General Shareholders’ Meeting of BBVA held on April 20, 2021 resolved to increase this limit to a
maximum level of 200% of the fixed component of the total remuneration for a given number of the Identified Staff
members, in the terms indicated in the report issued for this purpose by the Board of Directors dated March 15, 2021.
–Any type of remuneration, other than Annual Variable Remuneration, considered to be variable remuneration shall be
subject to the rules regarding award, vesting and payment applicable in accordance with the type and nature of the
remuneration component itself.
During 2021, in accordance with the applicable remuneration policies, a total amount of 1,159,766 BBVA shares corresponding to the
Upfront Portion of 2020 Annual Variable Remuneration, mostly, and other variable components of remuneration, has been delivered
to the Identified Staff
Additionally, according to the Remuneration Policy applicable in 2017, during 2021 a total amount of  1,419,165 BBVA shares
corresponding to the first payment of the Deferred Portion of 2017 Annual Variable Remuneration of executive directors and Senior
Management, to the full Deferred Portion of the 2017 Annual Variable Remuneration of the rest of the Identified Staff and other
variable components of remuneration, has been delivered.
Detailed information on the delivery of shares to executive directors and Senior Management of BBVA who held this position as of
December 31, 2021, is included in Note 49.
P.124
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
39.2Other administrative expense
The breakdown of the balance under this heading in the accompanying income statements is as follows:
Other administrative expense. Breakdown by main concepts (Millions of Euros)
2021
2020
Technology and systems
670
662
Communications
53
48
Advertising
78
75
Property, fixtures and materials
117
128
Taxes
69
49
Surveillance and cash courier services
34
35
Other expense
436
413
Total
1,456
1,409
40.Depreciation and amortization
The breakdown of the balance under this heading in the accompanying income statements is as follows:
Depreciation and amortization (Millions of Euros)
Notes
2021
2020
Tangible assets
15
320
347
For own use
110
121
Right-of-use assets
210
226
Intangible assets
16
318
316
Total
639
663
41.Provisions or reversal of provisions
For years ended December  2021 and 2020, the net provisions recognized in this income statement line item were as follows:
Provisions or reversal of provisions (Millions of Euros)
Notes
2021
2020
Pensions and other post-employment defined benefit obligations
22
52
217
Commitments and guarantees given
21
43
41
Other Provisions (*)
21
855
217
Total
950
475
(*) In 2021, it includes a provision for the agreement with the union representatives on the collective layoff procedure proposed for Banco Bilbao Vizcaya Argentaria, S.A. in Spain
(see Note 21).
42.Impairment or reversal of impairment on financial assets not measured at fair
value through profit or loss or net gains by modification
The breakdown of impairment or reversal of impairment on financial assets not measured at fair value through profit or loss  or net
gains by modification by the nature of those assets in the accompanying income statements is as follows:
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by
modification (Millions of Euros)
Notes
2021
2020
Financial assets at fair value through other comprehensive income
(7)
4
Financial assets at amortized cost (*)
482
1,228
Of which: Recovery of written-off assets by cash collection
5.2.5
(253)
(238)
Total
475
1,232
(*) In 2020, the amount included the negative impact of the update of the macroeconomic scenario following the COVID-19 pandemic (see Notes 1.5, 5.1 and 5.2)
P.125
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
43.Impairment or reversal of impairment of investments in subsidiaries, joint ventures
and associates
The impairment losses on non-financial assets and investments in subsidiaries, joint ventures or associates broken down by the
nature of these assets in the accompanying income statements is as follows:
Impairment or reversal of impairment of Investments in subsidiaries, joint ventures and associates (Millions of Euros)
2021
2020
Investments in subsidiaries, joint ventures and associates (*)
911
319
Total
911
319
(*) Includes impairment recorded in Garanti (see Note 14).
44.Impairment or reversal of impairment on non-financial assets
The impairment losses on non-financial assets broken down by the nature of those assets in the accompanying income statements
are as follows:
Impairment or reversal of impairment on non-financial assets (Millions of Euros)
Notes
2021
2020
Tangible assets (*)
15
164
105
Intangible assets
16
4
—
Other
(1)
—
Total
167
105
(*) In 2021, it includes the impairment due to the closure of rented offices after the agreement with the union representatives on the collective layoff procedure proposed for
Banco Bilbao Vizcaya Argentaria, S.A. in Spain (see Notes 15 and 21).
45.Gains (losses) from non-current assets and disposal groups classified as held for
sale not qualifying as discontinued operations
The main items included in the balance under this heading in the accompanying consolidated income statements are as follows:
Gains (losses) from non-current assets and disposal groups classified as held for sale not qualifying as discontinued
operations (Millions of Euros)
Notes
2021
2020
Gains on sale of real estate
20
33
Impairment of non-current assets held for sale (*)
19
(100)
(75)
Gains (losses) on sale of investments classified as non-current assets held for sale (**)
187
—
Gains on sale of equity instruments classified as non-current assets held for sale
—
—
Total
107
(43)
(*) In 2021, it includes the impairment due to the closing of owned offices and the decommissioning of facilities after the agreement with the union representatives on the
collective layoff procedure proposed for Banco Bilbao Vizcaya Argentaria, S.A. in Spain (see Notes 19 and 21).
(**) The balance for 2021 corresponds to the participation in BBVA Paraguay (see Note 14).
46.Statements of cash flows
The table below shows the breakdown of the main cash flows related to financing activities as of December 31, 2021 and 2020:
Main Cash Flows in financing activities 2021 (Millions of Euros)
December 31,
2021
December 31,
2020
Net Cash Flows
Foreign Exchange
movements and other
Subordinated deposits
173
360
Issuances of subordinated liabilities
9,739
10,736
Total
9,912
11,096
(1,325)
141
P.126
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Main cash flows in financing activities 2020 (Millions of Euros)
December 31,
2020
December 31,
2019
Net Cash Flows
Foreign Exchange
movements and other
Subordinated deposits
360
304
Issuances of subordinated liabilities
10,736
10,058
Total
11,096
10,362
784
(50)
47.Accountant fees and services
The details of the fees for the services contracted by BBVA for the year ended December 31, 2021 and 2020 with its auditors and
other audit entities are as follows:
Fees for Audits Conducted and other related services (Millions of Euros) (**)
2021
2020
Audits of the companies audited by firms belonging to the KPMG worldwide
organization and other reports related with the audit  (*)
12.9
12.6
Other reports required pursuant to applicable legislation and tax regulations issued by
the national supervisory bodies of the countries in which the Group operates, reviewed
by firms belonging to the KPMG worldwide organization
0.5
0.5
Fees for audits conducted by other firms
—
—
(*)      Including fees pertaining to annual legal audits (€11,7  and €11.1 million as of December 31, 2021 and December 31, 2020, respectively)
(**)        Regardless of the billed period.
In addition, in 2021 and 2020, the Bank contracted services (other than audits) as follows: 
Other services rendered (Millions of Euros)
2021
2020
Firms belonging to the KPMG worldwide organization
—
—
This total of contracted services includes the detail of the services provided by KPMG Auditores, S.L. to BBVA, S.A. at the date of
preparation of these financial statements as follows:
Fees for Audits Conducted (*) (Millions of Euros)
2021
2020
Legal audit of BBVA,S.A.
5.8
4.9
Other audit services of BBVA, S.A.
5.2
5.4
Limited Review of BBVA, S.A.
0.9
0.9
Reports related to issuances
0.1
0.3
Assurance services and other required by the regulator
0.5
0.6
Other
—
—
(*) Services provided by KPMG Auditores, S.L. to BBVA S.A., branch of BBVA in New York and branch of BBVA in London.
Information related to the services provided by KPMG AUDITORES, S.L., to companies controlled by BBVA, S.A., during the year
ended December 31, 2021, is in the accompanying financial statement and dependent companies as of December 31, 2021.
The services provided by the auditors meet the independence requirements of the external auditor established under Audit of
Accounts Law (Law 22/2015) and under the Sarbanes-Oxley Act of 2002 adopted by the Securities and Exchange Commission
(SEC).
P.127
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
48.Related-party transactions
As a financial institution, BBVA engages in transactions with related parties in the normal course of business. These transactions are
not relevant and are carried out under normal market conditions. As of December 31, 2021 and 2020 the following are the
transactions with related parties:
48.1.Transactions with significant shareholders
As of December 31, 2021 and 2020 there were no shareholders considered significant (see Note 23).
48.2.Transactions with BBVA Group entities
The balances of the main captions in the accompanying balance sheets arising from the transactions carried out by the Group
companies, which consist of ordinary business and financial transactions carried out under normal market conditions, are as follows:
Balances arising from transactions with Entities of the Group (Millions of Euros)
2021
2020 (*)
Assets:
Loans and advances to credit institutions
365
258
Loans and advances to customers
4,755
3,659
Debt securities
393
316
Liabilities:
Deposits from credit institutions
1,180
887
Customer deposits
13,207
8,814
Debt certificates
—
—
Memorandum accounts:
Financial guarantees given
5,238
4,251
Contingent commitments
1,235
1,210
Other commitments given
1,210
1,693
(*) Includes balances with BBVA USA.
The balances of the main captions in the accompanying income statements resulting from transactions carried out by the Bank with
Group companies, which consist of ordinary business and financial transactions carried out under normal market conditions, are as
follows:
Balances of Income Statement arising from transactions with Entities of the Group (Millions of Euros)
2021
2020 (*)
Income statement:
Financial Incomes
42
40
Financial Costs
98
110
Fee and commission income
601
513
Fee and commission expense
120
78
(*) Includes balances with BBVA USA.
There were no other material effects in the financial statements arising from dealings with these entities, and from the insurance
policies to cover pension or similar commitments, which are described in Note 22.
In addition, as part of its normal activity, the Bank has entered into agreements and commitments of various types with shareholders
of subsidiaries and associates, which have no material effects on the financial statements.
48.3.Transactions with members of the Board of Directors and Senior Management
Pursuant to the provisions of the Corporate Enterprises Act, the power to approve transactions that the Company or its subsidiaries
conclude with members of the Board of Directors or Senior Management of the Bank or their related parties rests on the General
Shareholders’ Meeting if the amount or value of the transaction is equal to or exceeds 10% of total asset items according to the last
approved annual balance sheet and, on the Board of Directors, in relation to the rest of related party transactions entered into, which
may not be delegated, except for transactions that comply with the requirements of the Corporate Enterprises Act.
P.128
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
The Regulations of the Board of Directors establish that the Board of Directors will be responsible for approving, where appropriate,
transactions between the Company or companies within its Group and directors or their related parties. In addition, in accordance
with specific sectoral regulations, with regard to transactions with related parties, are governed by Royal Decree 84/2015 of 13
February, implementing Act 10/2014 of 26 June, on the regulation, supervision and solvency of credit institutions, and Bank of Spain
Circular 2/2016 of 2 February, on the supervision and solvency of credit institutions, the Bank has specific internal regulations in this
regard, which specifically govern the process of granting and approving credit risk transactions for members of BBVA Board of
Directors and Senior Management, the approval of which lies with the Bank Board of Directors, and for their related parties.
The transactions entered into between BBVA or its Group companies with members of the Board of Directors and Senior
Management of the Bank or their related parties were within the scope of the ordinary course of business of the Bank and were
immaterial, defined as transactions the disclosure of which is not necessary to present a true and fair view of the Bank's equity,
financial position and results, and were concluded on normal  markets terms or on terms applicable to the rest of employees.
The amount and nature of the main transactions carried out with members of the Board of Directors and Senior Management of the
Bank, or their respective related parties, are shown below.
Balance at 31st December of each year  (EUR thousand)
2021
2020
Directors
Related parties of
Directors
Senior
Management*
Related parties of
Senior
Management
Directors
Related parties of
Directors
Senior
Management*
Related parties of
Senior
Management
Loans and credits
765
207
5,419
573
—
—
5,349
580
Bank guarantees
—
—
10
—
—
—
10
25
Business credit
—
—
—
—
—
—
—
—
*Excluding executive directors
Information on remuneration paid and other benefits granted to members of the Board of Directors and Senior Management of BBVA
is provided in Note 49.
48.4.Transactions with other related parties
As of December 31, 2021 and 2020 the Bank did not conduct any transactions with other related parties that are not in the ordinary
course of its business, which were carried out at arm's-length market conditions and of marginal relevance; whose information is not
necessary to give a true picture of the BBVA Group’s net equity, net earnings and financial situation.
49.Remuneration and other benefits for the Board of Directors and members of the
Bank's Senior Management
Remuneration received by non-executive directors in 2021
The remuneration paid to non-executive members of the Board of Directors during the 2021 financial year is indicated below,
individualized and itemized:
Remuneration for non-executive directors (thousands of Euros)
Board of
Directors
Executive
Committee
Audit
Committee
Risk and
Compliance
Committee
Remuneration
Committee
Appointments
and Corporate
Governance
Committee
Technology
and
Cybersecurity
Committee
Other
positions
(1)
Total
José Miguel Andrés Torrecillas
129
167
66
115
50
527
Jaime Caruana Lacorte
129
167
165
107
567
Raúl Galamba de Oliveira
129
107
43
278
Belén Garijo López
129
66
107
46
349
Sunir Kumar Kapoor
129
43
172
Lourdes Máiz Carro
129
66
43
238
José Maldonado Ramos
129
167
46
342
Ana Peralta Moreno
129
66
43
238
Juan Pi Llorens
129
214
46
43
80
512
Ana Revenga Shanklin
129
107
236
Susana Rodríguez Vidarte
129
167
107
46
449
Carlos Salazar Lomelín
129
43
172
Jan Verplancke
129
43
43
214
Total (2)
1,673
667
431
642
278
301
171
130
4,293
(1) Amounts received during the 2021 financial year by José Miguel Andrés Torrecillas, in his capacity as Deputy Chair of the Board of Directors, and by Juan Pi Llorens, in his
capacity as Lead Director.
(2) Includes amounts corresponding to membership on the Board and its various committees during the 2021 financial year..
Also, during the 2021 financial year, €102 thousand was paid out in casualty and healthcare insurance premiums for non-executive
directors.
P.129
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Remuneration received by executive directors in 2021
During the 2021 financial year, the executive directors received the amount of Annual Fixed Remuneration corresponding to that
financial year, established for each director in the BBVA Directors' Remuneration Policy, which was approved by the General Meeting
held on 20 April 2021 .
In view of the exceptional circumstances arising from the COVID-19 crisis, the executive directors voluntarily waived the generation of
all Annual Variable Remuneration (AVR) corresponding to the 2020 financial year, and as such, they did not accrue any remuneration
in this respect.
2021 Annual Fixed Remuneration (thousands of Euros)
Chairman
2,924
Chief Executive Officer
2,179
Total
5,103
In addition, in accordance with the conditions established in the BBVA Directors' Remuneration Policy, during the 2021 financial year,
the Chief Executive Officer received €654 thousand for the cash in lieu of pension item (equivalent to 30% of his Annual Fixed
Remuneration)—given that he does not have a retirement pension (see the "Pension commitments" section of this Note), and €600
thousand for the mobility allowance item.
2020 Annual Variable Remuneration
In cash
(thousands of Euros)
In shares
Chairman
0
0
Chief Executive Officer
0
0
Total
0
0
In accordance with the remuneration policies applicable in 2017 and in application of the settlement and payment system for the
Annual Variable Remuneration for said financial year, in 2021, the executive directors have received, the portion of the Deferred
Annual Variable Remuneration for the 2017 financial year (60% of the total AVR) payable in 2021 (60% of the Deferred Portion in the
case of the Chairman and the entire Deferred Portion in the case of the Chief Executive Officer), after it was determined that no
downward adjustment had to be made, based on the result of the multi-year performance indicators approved for such remuneration.
In the case of the Chairman, 40% of this remuneration was paid in cash and 60% in shares; and in the case of the Chief Executive
Officer, this remuneration was paid in equal parts cash and shares, together, in both cases, with the corresponding update in cash,
thus concluding the payment of the Chief Executive Officer's Annual Variable Remuneration for the 2017 financial year.
Deferred Annual Variable Remuneration for previous financial years (1)
In cash
(thousands of Euros)
In shares
Chairman
411
83,692
Chief Executive Officer
307
39,796
Total
717
123,488
(1) Remuneration corresponding to the Deferred AVR for the 2017 financial year payable in 2021, together with its update in cash. The Deferred AVR of the Chairman and the Chief
Executive Officer for the 2017 financial year is associated with their previous positions as Chief Executive Officer and President & CEO of BBVA USA, respectively.
In addition, the executive directors received remuneration in kind during the 2021 financial year, including insurance premiums and
others, amounting to an aggregate total of €486 thousand, of which €328 thousand corresponds to the Chairman and €158 thousand
to the Chief Executive Officer.
Remuneration received by Senior Management in 2021
During the 2021 financial year, the members of Senior Management, excluding executive directors, received the amount of the Annual
Fixed Remuneration corresponding to that financial year.
As in the case of the executive directors, the members of Senior Management did not accrue any Annual Variable Remuneration for
the 2020 financial year, given that, in view of the exceptional circumstances arising from the COVID-19 crisis, they all voluntarily
waived its accrual.
The remuneration paid during the 2021 financial year to members of Senior Management as a whole, who held that position as at 31
December 2021 (16 members, excluding executive directors), is itemized by remuneration item below:
2021 Annual Fixed Remuneration (thousands of euros)
Senior Management total
16,435
P.130
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
2020 Annual Variable Remuneration
In cash
(thousands of Euros)
In shares
Senior Management total
0
0
Even though the members of Senior Management have not accrued any amount corresponding to 2020 Annual Variable
Remuneration as they waived it, two members of Senior Management have received in 2021 variable remunerations corresponding to
retention bonuses derived from their former positions. Therefore, in accordance with the BBVA Group General Remuneration Policy,
which is applicable to the members of Senior Management, retention bonuses are considered variable remuneration and comply with
applicable rules regarding payment in shares, deferral, ex post adjustments and malus and clawback arrangements established in
such Policy for the Annual Variable Remuneration. The variable remunerations received in this regard in 2021 by the members of
Senior Management amount to a total aggregate amount of €862 thousand and 203,834 BBVA shares.
In accordance with the remuneration policy for this group applicable in 2017 and in application of the settlement and payment system
for the Annual Variable Remuneration for said financial year, in 2021, the members of Senior Management who were beneficiaries of
such remuneration received the portion of the Deferred Annual Variable Remuneration for the 2017 financial year payable in 2021,
after it was determined that no downward adjustment had to be made, based on the result of the multi-year performance indicators
approved for such remuneration. In accordance with the remuneration policy applicable in 2017, current members of Senior
Management who held such a position in the 2017 financial year were paid 40% of this remuneration in cash and 60% in shares, while,
in the case of members who did not hold such a position in the 2017 financial year, this remuneration was paid in equal parts cash and
shares. In both cases, the corresponding update in cash was included. This payment concluded the payment of the Annual Variable
Remuneration for the 2017 financial year to the members of Senior Management who, while being members of the Identified Staff,
were not members of Senior Management in that financial year.
Annual Variable Remuneration corresponding to previous financial years (1)
In cash
(thousands of Euros)
In shares
Senior Management total
667
119,313
(1) Remuneration corresponding to the Deferred AVR for the 2017 financial year payable in 2021, in the case of members of Senior Management who were beneficiaries, together
with its update in cash. .
In addition, all members of Senior Management, excluding executive directors, received remuneration in kind during the 2021
financial year, including insurance premiums and others, amounting to a total of €1,409 thousand.
Remuneration of executive directors due in 2022 and subsequent financial years
–Annual Variable Remuneration for executive directors for the 2021 financial year
Following the end of the 2021 financial year, the amount corresponding to the Annual Variable Remuneration of executive directors
for said financial year was determined, applying the calculation rules set out in the BBVA Directors' Remuneration Policy approved by
the General Meeting held on 20 April 2021, in which it is also established that the remuneration will be subject to the following vesting
and payment rules:
•The Upfront Portion (40% of the 2021 Annual Variable Remuneration) will be paid, provided that the applicable conditions
are met, during the first quarter of the 2022 financial year, in equal parts cash and shares, amounting to: €849 thousand
and 159,235 BBVA shares in the case of the Chairman, and €645 thousand and 120,977 BBVA shares in the case of the
Chief Executive Officer.
•The remaining 60% of the 2021 Annual Variable Remuneration will be deferred (40% in cash and 60% in shares) for a
period of five years (Deferred Portion) and paid, provided that the applicable conditions are met, proportionally at the end of
each year for each of the five years of deferral, in an amount equal to 20% of the Deferred Portion each year: 20% in 2023,
20% in 2024, 20% in 2025, 20% in 2026 and 20% in 2027. The Deferred Portion may be reduced, but never increased,
based on the result of the multi-year performance indicators determined by the Board of Directors, on the proposal of the
Remuneration Committee and following analysis by the Risk and Compliance Committee, at the beginning of the 2021
financial year. Following the end of the financial year corresponding to the third year of deferral, the result of the multi-year
performance indicators will determine the application of the ex post adjustments that, if appropriate, should be made to the
outstanding amount of the Deferred Portion. All of this is subject to the vesting and payment rules provided for in the BBVA
Directors' Remuneration Policy.
•Moreover, the rest of the rules set forth in the BBVA Directors’ Remuneration Policy regarding the Annual Variable
Remuneration of executive directors will be applicable to 2021 Annual Variable Remuneration, including: (i) a withholding
period of one year after delivery of the BBVA shares received; (ii) the prohibition of using personal hedging strategies or
insurance that may undermine the effects of alignment with prudent risk management; (iii) update criteria for the Deferred
Portion in cash; (iv) malus and clawback arrangements during the whole deferral and withholding period; and (v) the
limitation of variable remuneration up to a maximum amount of 200% of the fixed component of the total remuneration, as
resolved  by the General Meeting held on 2021.
–Deferred Annual Variable Remuneration for executive directors for the 2018 financial year 
P.131
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Following the end of the 2021 financial year, the Deferred Annual Variable Remuneration for the 2018 financial year of executive
directors, due to be delivered in 2022, provided that the applicable conditions are met, to executive directors, in the percentages
applicable in each case in accordance with the payment schedule established in the remuneration policies in effect in the 2018
financial year and applicable to each of them, was determined.
Therefore, the final amount of the Deferred Annual Variable Remuneration for the 2018 financial year was determined, which has been
adjusted downwards based on the result of the multi-year performance indicators set by the Board of Directors in 2018 for its
calculation and in application of the corresponding scales of achievement and their corresponding targets and weightings. In addition,
the amount of the 2018 Deferred Annual Variable Remuneration of executive directors payable in 2022 (60% of the Deferred Portion
of the 2018 AVR in the case of the Chairman and the entire 2018 Deferred AVR in the case of the Chief Executive Officer) was
determined in the amount of €364 thousand and 107,386 BBVA shares in the case of the Chairman, and €332 thousand and 61,282
BBVA shares in the case of the Chief Executive Officer. In both cases, this includes the corresponding updates in cash.
–Deferred Annual Variable Remuneration for the Chairman for the 2017 financial year
Following the close of the 2020 financial year, the Deferred Annual Variable Remuneration for the 2017 financial year of executive
directors, due to be delivered in 2021, provided that the applicable conditions were met, to executive directors, in the percentages
applicable in each case in accordance with the payment schedule established in the remuneration policies in effect in the 2017
financial year and applicable to each of them, was determined.
Thus, based on the result of each of the multi-year performance indicators set by the Board of Directors in 2017 to calculate the
Deferred Portion of this remuneration, and in application of the corresponding scales of achievement and their corresponding targets
and weightings, the final amount of the Deferred Annual Variable Remuneration for the 2017 financial year for executive directors was
determined and the amounts due to be paid in 2021 were paid (60% of his Deferred Annual Variable Remuneration for the 2017
financial year in the case of the Chairman, and the whole of it in the case of the Chief Executive Officer); all of which was reported in
that financial year.
In 2022, the second payment (20%) of the 2017 Deferred AVR, which was determined to amount to €146 thousand and 27,898 BBVA
shares, is due  to the Chairman, including the corresponding update.
–Outstanding deferred Annual Variable Remuneration for executive directors
As of the end of the 2021 financial year, in accordance with the conditions established in the remuneration policies applicable in
previous years, in addition to the third payment (20%) of the 2017 Deferred AVR (due to be paid in 2023) and 40% of the 2018
Deferred AVR of the Chairman (due to be paid in 2023 and 2024), 60% of the 2019 and 2021 Annual Variable Remuneration for both
executive directors remains deferred and will be received in future years, provided that the applicable conditions are met.
Remunerations of Senior Management due in 2022 and subsequent financial years
–Annual Variable Remuneration for Senior Management for the 2021 financial year
Following the end of the 2021 financial year, the Annual Variable Remuneration of members of Senior Management corresponding to
said financial year was determined (16 members as at 31 December 2021, excluding executive directors). For all members of Senior
Management in aggregate, excluding executive directors, this Annual Variable Remuneration amounted to a total of €9,151 thousand,
applying the rules established in the BBVA Group General Remuneration Policy, in which the following applicable vesting and payment
rules are established:
•The Upfront Portion (40% of the 2021 Annual Variable Remuneration) will be paid, provided that the applicable conditions
are met, during the first four months of the 2022 financial year, in equal parts cash and shares, which represents a total
aggregate amount of €1,830 thousand and 346,106 BBVA shares.
•The remaining 60% of the 2021 Annual Variable Remuneration will be deferred (40% in cash and 60% in shares) for a
period of five years (Deferred Portion) and paid, provided that the applicable conditions are met, proportionally at the end of
each year for each of the 5 years of deferral, in an amount equal to 20% of the Deferred Portion each year: 20% in 2023,
20% in 2024, 20% in 2025, 20% in 2026 and 20% in 2027. The Deferred Portion may be reduced, but never increased,
based on the result of the multi-year performance indicators determined by the Board of Directors, on the proposal of the
Remuneration Committee and following analysis by the Risk and Compliance Committee, at the beginning of the 2021
financial year. Following the end of the financial year corresponding to the third year of deferral, the result of the multi-year
performance indicators  will determine the application of the ex post adjustments that, if appropriate, should be made to the
outstanding amount of the Deferred Portion. All of this is subject to the vesting and payment rules provided for in the BBVA
Group General Remuneration Policy.
•Moreover, the rest of the rules set forth in the BBVA Group General Remuneration Policy regarding the Annual Variable
Remuneration of members of Senior Management will be applicable to 2021 Annual Variable Remuneration, including: (i) a
withholding period of one year after delivery of the BBVA shares received; (ii) the prohibition of using personal hedging
strategies or insurance that may undermine the effects of alignment with prudent risk management; (iii) update criteria for
the Deferred Portion in cash; (iv) malus and clawback arrangements during the whole deferral and withholding period; and
(v) the limitation of variable remuneration up to a maximum amount of 200% of the fixed component of the total
remuneration, as agreed by the General Meeting held on 2021.
–Deferred Annual Variable Remuneration for Senior Management for the 2018 financial year.
P.132
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Following the end of the 2021 financial year, the Deferred Annual Variable Remuneration for members of Senior Management (16
members as at 31 December 2021, excluding executive directors) for the 2018 financial year due to be delivered in 2022, provided
that the applicable conditions are met, to members of Senior Management who were beneficiaries of said remuneration, in the
percentages applicable in each case in accordance with the payment schedule established in the remuneration policies in effect in the
2018 financial year and applicable to each of them, was determined.
Thus, the final amount of the Deferred Annual Variable Remuneration for the 2018 financial year, which has been adjusted downwards
based on the result of the multi-year performance indicators set by the Board of Directors in 2018 for its calculation and in application
of the corresponding scales of achievement and their corresponding objectives and weightings, was determined. Thus, the amount of
the Deferred Portion of the Annual Variable Remuneration for the 2018 financial year due for delivery in 2022 to those members of
Senior Management who were beneficiaries thereof, excluding executive directors, was determined to amount to an aggregate total
amount of €691 thousand and 177,104 BBVA shares, including the corresponding updates.
–Deferred Annual Variable Remuneration for Senior Management for the 2017 financial year
Following the end of the 2020 financial year, the Deferred Annual Variable Remuneration for the 2017 financial year for members of
Senior Management, excluding executive directors, payable in 2021 to the members of Senior Management who were beneficiaries
thereof, provided that the applicable conditions were met, in the corresponding amounts in each case in accordance with the
percentages applicable per the payment schedule established in the remuneration policies in effect in the 2017 financial year and
applicable to each of them, was determined.
Thus, based on the result of each of the multi-year performance indicators set by the Board of Directors in 2017 to calculate the
Deferred Portion of this remuneration, and in application of the corresponding scales of achievement and their corresponding targets
and weightings, the final amount of the Deferred Annual Variable Remuneration for the 2017 financial year for members of Senior
Management, excluding executive directors, was determined and the amounts payable in 2021 in each case were paid, all of which
was reported in that financial year.
In 2022, provided that the applicable conditions are met, an aggregate total amount of €156 thousand euros and 29,267 BBVA
shares, including the corresponding updates, is due to be paid to members of Senior Management (16 members as at 31 December
2021, excluding executive directors) as Deferred Annual Variable Remuneration for the 2017 financial year.
–Outstanding deferred Annual Variable Remuneration for  Senior Management
As of the end of the 2021 financial year, in accordance with the conditions established in the remuneration policies applicable in
previous years, in addition to the third payment (20%) of the 2017 Deferred AVR (due to be paid in 2023), 40% of the 2018 Deferred
AVR (due to be paid in 2023 and 2024), and 60% of the 2019 Deferred AVR (due to be paid in 2023, 2024 and 2025) in the case of
some members of Senior Management, 60% of the Annual Variable Remuneration for the 2021 financial year remains deferred and
will be received in future years, if the applicable conditions are met.
Fixed remuneration system with deferred delivery of shares for non-executive directors
BBVA has a fixed remuneration system with BBVA shares with deferred delivery for its non-executive directors, which was approved
by the General Meeting held on 18 March 2006 and extended by resolutions of the General Meetings held on 11 March 2011 and 11
March 2016 for a further five-year period in each case, and by the General Meeting held on 20 April 2021 for a further three-year
period.
This system is based on the annual allocation to non-executive directors of a number of "theoretical shares" of BBVA equivalent to
20% of the total annual fixed allowance in cash received by each director in the previous financial year, calculated according to the
average closing price of the BBVA share during the 60 trading sessions prior to the dates of the Annual General Meetings approving
the corresponding financial statements for each financial year.
These shares will be delivered to each beneficiary, where applicable, after they leave their positions as directors for any reason other
than serious dereliction of their duties.
The "theoretical shares" allocated to non-executive directors who are beneficiaries of the fixed remuneration system with shares with
deferred delivery in the 2021 financial year, corresponding to 20% of the total annual fixed allowance in cash received by each of them
in the 2020 financial year, were as follows:
P.133
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Theoretical shares
allocated in 2021 (1)
Theoretical shares
accumulated as at 31
December 2021
José Miguel Andrés Torrecillas
22,860
98,772
Jaime Félix Caruana Lacorte
25,585
56,972
Raúl Galamba de Oliveira
9,500
9,500
Belén Garijo López
15,722
77,848
Sunir Kumar Kapoor
7,737
30,652
Lourdes Máiz Carro
10,731
55,660
José Maldonado Ramos
15,416
123,984
Ana Peralta Moreno
10,731
26,396
Juan Pi Llorens
23,079
115,896
Ana Revenga Shanklin
7,568
7,568
Susana Rodríguez Vidarte
20,237
161,375
Carlos Salazar Lomelín
5,642
5,642
Jan Verplancke
9,024
21,416
Total
183,832
791,681
(1)The number of "theoretical shares" allocated to each non-executive director is equal to 20% of the total annual fixed allowance in cash  received by each such director in 2020
based on the average closing price of the BBVA share during the 60 trading sessions prior to the General Meeting of 20 April 2021, which was €4.44 per share.
Pension commitments with executive directors and Senior Management
The Bank has not assumed pension commitments with non-executive directors.
With regard to the Chairman, the BBVA Directors' Remuneration Policy establishes a pension framework whereby he is eligible,
provided that he does not leave his position as a result of serious dereliction of his duties, to receive a retirement pension, paid in
either income or capital, when he reaches the legally established retirement age. The amount of this pension will be determined by the
annual contributions made by the Bank, together with their corresponding accumulated yields at that date.
The annual contribution to cover the retirement contingency for the Chairman's defined-contribution system, as established in the
BBVA Directors' Remuneration Policy approved by the General Meeting in 2021, amounts to €439 thousand. The Board of Directors
may update this amount during the term of the Policy, in the same way and under the same terms as it may update the Annual Fixed
Remuneration.
15% of the agreed annual contribution will be based on variable components and considered “discretionary pension benefits” and will,
therefore, be subject to the conditions regarding delivery in shares, withholding and clawback established in the applicable
regulations, as well as any other conditions concerning variable remuneration that may be applicable in accordance with the BBVA
Directors' Remuneration Policy.
In the event that the Chairman's contract is terminated before he reaches retirement age for reasons other than serious dereliction of
duties, the retirement pension due to the Chairman upon him reaching the legally established retirement age will be calculated based
on the funds accumulated through the contributions made by the Bank, under the terms set out, up to that date, plus the
corresponding accumulated yield, with no additional contributions to be made by the Bank from the time of termination.
With respect to the commitments in favour of the Chairman to cover the contingencies of death and disability, the Bank will pay the
corresponding annual insurance premiums in order to top up this coverage.
In line with the above, during the 2021 financial year, the following amounts were recorded to meet the pension commitments for the
Chairman: an amount of €340 thousand with regard to the retirement contingency, which corresponds to the annual contribution
agreed to cover the retirement contingency reduced in an amount of  €98 thousand corresponding to the downwards adjustment of
the “discretionary pension benefits” of 2020 financial year, which were declared at the close of said financial year and had to be
registered in the accumulated fund in 2021. Likewise, an amount of €574 thousand has been recorded for the payment of premiums
for the death and disability contingencies.
As at 31 December 2021, the total accumulated amount of the fund to meet the retirement commitments for the e Chairman
amounted to €24,546 thousand.
With regard to the agreed annual contribution for the retirement contingency corresponding to the 2021 financial year, 15% (€66
thousand) was recorded in said financial year as “discretionary pension benefits”. Following the end of the financial year, this amount
was adjusted by applying the same criteria used to determine the Chairman's Annual Variable Remuneration for the 2021 financial
year and was determined to amount to €78 thousand, which represents an upwards adjustment of €12 thousand. These
“discretionary pension benefits” will be included in the accumulated fund in the 2022 financial year and will be subject to the
conditions established for them in the BBVA Directors' Remuneration Policy.
With regard to the Chief Executive Officer, in accordance with the provisions of the BBVA Directors' Remuneration Policy approved by
the General Meeting and those of his contract, the Bank is not required to make any contributions to a retirement pension, although
he is entitled to an annual cash sum instead of a retirement pension (cash in lieu of pension) equal to 30% of his Annual Fixed
Remuneration. However, the Bank does have pension commitments to cover the death and disability contingencies, for which
purpose the corresponding annual insurance premiums are paid.
P.134
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
In accordance with the above, in the 2021 financial year, the Bank paid the Chief Executive Officer the fixed-remuneration amount set
out for cash in lieu of pension in the "Remuneration received by executive directors in 2021" section of this Note and, likewise, €295
thousand was recorded for the payment of the annual insurance premiums to cover the death and disability contingencies.
Furthermore, in the 2021 financial year, to meet the pension commitments for members of Senior Management (16 members holding
that position as at 31 December 2021, excluding executive directors), the following was recorded: an amount of €3,222  thousand for
contribution to the retirement contingency and an amount of €1,333 thousand for premiums to cover the death and disability
contingencies, as well as a downwards adjustment of €167 thousand for “discretionary pension benefits” corresponding to the 2020
financial year, which were declared at the end of that financial year and had to be registered in the accumulated fund in 2021.
As at 31 December 2021, the total accumulated amount of the fund to meet the retirement commitments for members of Senior
Management amounts to €27,472 thousand.
As for the executive directors, 15% of the agreed annual contributions for members of Senior Management to cover the retirement
contingency will be based on variable components and considered “discretionary pension benefits”, and are therefore subject to the
conditions regarding delivery in shares, withholding and clawback established in the applicable regulations, as well as any other
conditions concerning variable remuneration that may be applicable in accordance with the remuneration policy applicable to
members of Senior Management.
As such, with regard to the annual contribution for the retirement contingency registered in the 2021 financial year, an amount of
€482 thousand was registered in the 2021 financial year as “discretionary pension benefits” and, following the end of the financial
year, as in the case of the Chairman, this amount was adjusted by applying the same criteria used to determine the 2021 Annual
Variable Remuneration for members of Senior Management. Accordingly, the "discretionary pension benefits" for the financial year,
corresponding to all members of Senior Management, were determined to amount to a total of €591 thousand, representing an
upwards adjustment of €109 thousand. These “discretionary pension benefits” will be included in the accumulated fund for the 2022
financial year, and will be subject to the conditions established for them in the remuneration policy applicable to members of Senior
Management, in accordance with the regulations applicable to the Bank on this matter.
Payments for the termination of the contractual relationship
In accordance with the BBVA Directors' Remuneration Policy, the Bank has no commitments to pay severance indemnity to executive
directors.
With regard to Senior Management, excluding executive directors, the Bank did not make any payments arising from the termination
of contractual relationships in 2021.
50.Other information
50.1.Environmental impact
Given the activities the Bank engage in, the Group has no environmental liabilities, expenses, assets, provisions or contingencies that
could have a significant effect on its equity, financial situation and profits. Consequently, as of December 31, 2021, there is no item
included that requires disclosure in an environmental information report pursuant to Ministry  JUS/794/2021, of July 22, by which the
new model for the presentation in the Commercial Register of the consolidated annual accounts of the subjects obliged to its
publication is approved.
BBVA's management of environmental impacts and risks is presented in more detail in the attached Management Report.
50.2.Breakdown of agents of credit institutions
Appendix XIII contains a list of the Bank's agents as required by article 21 of Royal Decree 84/2015, dated February 13, of the Ministry
of Economy and Finance.
50.3.Report on the activity of the Customer Care Service and the Customer Ombudsman
The report on the activity of the Customer Care Service and the Customer Ombudsman, required pursuant to Article 17 of Ministry of
Economy Order ECO/734/2004 dated March 11, is included in the Management Report accompanying these financial statements.
50.4.Mortgage market policies and procedures
The disclosure required by Bank of Spain Circular 5/2011 under the provisions of Spanish Royal Decree 716/2009, of April 24,
(implementing certain aspects of Act 2/1981, of March 25, on the regulation of the mortgage market and other mortgage and financial
market regulations) is detailed in Appendix X.
P.135
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
50.5.Reporting requirements of the Spanish National Securities Market Commission (CNMV)
Dividends paid
The table below presents the dividends per share paid in cash in 2021 and 2020 (cash basis accounting, regardless of the year in
which they are accrued). For a complete analysis of all remuneration awarded to shareholders in 2021 and 2020 (see Note 3).
Paid Dividends
2021
2020
% Over
nominal
Euros per
share
Amount
(Millions of
Euros)
% Over
nominal
Euros per
share
Amount
(Millions of
Euros)
Ordinary shares
16.33%
0.08
533
32.65%
0.16
1,067
Rest of shares
—
—
—
—
—
—
Total dividends paid in cash
16.33%
0.08
533
32.65%
0.16
1,067
Dividends with charge to income
16.33%
0.08
533
32.65%
0.16
1,067
Dividends with charge to reserve or share
premium
—
—
—
—
—
—
Dividends in kind
—
—
—
—
—
—
Flexible payment
—
—
—
—
—
—
Interest income by geographical area
The breakdown of the balance under the heading “Interest Income and similar income” in the accompanying income statements by
geographical area is as follows:
Interest Income. Breakdown by Geographical Area (Millions of Euros)
Notes
2021
2020
Domestic
3,945
4,168
Foreign
344
461
European Union
117
154
Eurozone
117
154
No Eurozone
—
—
Rest of countries
227
307
Total
33.1
4,289
4,629
Number of employees
The breakdown of the average number of employees in the Bank in 2021 and 2020, by gender, is as follows:
Average number of employees
2021
2020
Male
Female
Male
Female
Management team
732
252
764
249
Other line personnel
9,535
10,171
10,259
10,696
Clerical staff
683
1,179
826
1,366
General services
—
—
—
—
Branches abroad
554
427
556
423
Total (*)
11,504
12,029
12,405
12,734
(*) In 2021, the variation is mainly due to the agreement with the union representatives on the collective layoff procedure that is being carried out at Banco Bilbao Vizcaya
Argentaria, S.A (see Note 21).
During 2021 and 2020, the average number of handicap employees with disabilities greater than or equal to 33% was 175 employees
and 152, respectively.
P.136
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
The breakdown of the number of employees in the Bank as of December 31, 2021 and 2020 , by category and gender, is as follows:
Number of employees at the end of year. Professional category and gender
2021
2020
Male
Female
Male
Female
Management team
700
259
755
251
Other line personnel
8,574
9,288
10,153
10,639
Clerical staff
483
883
806
1,367
General services
—
—
—
—
Branches abroad
568
440
548
421
Total
10,325
10,870
12,262
12,678
50.6.Responsible lending and consumer credit granting
BBVA has incorporated the best practices of responsible lending and credit granting to Retail Customers, and has policies and
procedures that contemplate these practices complying with the provisions of the Central Bank of Spain, ECB and the Ministries of 
Asuntos Económicos y Transformación Digital and Hacienda y Función Pública.
Specifically, the Corporate Retail Credit Risk Policy (approved by the Executive Committee of the Board of Directors of the Bank on
September 18, 2019) and the Rules and the Operating Frameworks derived from it, establish policies, practices and procedures in
relation to responsible granting of loans and credit to Retail Customers.
In compliance with the different Regulation of the Bank of Spain, ECB and the Ministries of Asuntos Económicos y Transformación
Digital and Hacienda y Función Pública, the following summary of those policies contained in the Corporate Retail Credit Risk Policy
BBVA is provided:
–The need to adapt payment plans with sources of payment capacity;
–The evaluation requirements of affordability;
–The need when applicable, to take into account the existing financial obligations payments;
–In cases where, for commercial reasons or the type of rate/currency, the offer to the borrowers includes contractual
clauses or contracting financial products to hedge interest rate and exchange rate risks.
–The need, when there is collateral, to establish a reasonable relationship between the amount of the loan and its potential
extensions and value of collateral, regardless revaluations thereof;
–The need for extreme caution in the use of appraisal values on credit operations that have real estate as an additional
borrower's personal guarantee;
–The periodic review of the value of collateral taken to hedge loans;
–A number of elements of management in order to ensure independence in the activity of appraisal companies;
–The need to warn customers of potential consequences in terms of cost by default interest and other expenses that would
continue in default;
–Debt renegotiation criteria (refinancing and restructurings);
–The minimum documentation that operations should have in order to be granted and during its term.
In order to maintain an effective monitoring of these policies, BBVA has the following control mechanisms:
–Validations and computer controls built into the workflows of analysis, decision and contracting operations, in order to
embed these principles in management;
–Alignment between the specifications of the product catalog with the policies of responsible lending;
–Different areas of sanction to ensure adequate hierarchy decision levels in response to the complexity of operations;
–A reporting scheme that allows to monitor the proper implementation of the policies of responsible lending.
P.137
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
51.Subsequent events
Between January 1 and February 3, 2022, J.P. Morgan AG, as manager of the first tranche, has acquired 65,272,189 BBVA shares as
part of its share buyback program(see Note 3).
On February 3, 2022, BBVA announced that its Board of Directors agreed, within the Framework Program, to carry out a second
buyback program (the “Second Tranche”) aimed at reducing BBVA’s share capital, for a maximum amount of €2,000 million and a
maximum number of shares to be acquired equal to the result of subtracting from 637,770,016 own shares (9.6% of BBVA’s share
capital at that date) the number of own shares finally acquired in execution of the First Tranche. The implementation of the Second
Tranche, which will also be executed externally through a lead-manager, will begin after the end of the implementation of the First
Tranche and shall end no later than October 15, 2022 (see Note 3).
On January 3, 2022, it was announced that a cash distribution in the amount of €0.23 gross per share as shareholder remuneration in
relation to the Group's result in the 2021 financial year was expected to be submitted to the relevant governing bodies of BBVA for
consideration (see Note 3).
From January 1, 2022 to the date of preparation of these consolidated financial statements, no other subsequent events not
mentioned above in these financial statements have taken place that could significantly affect the Group’s earnings or its equity
position.
52.Explanation added for translation into English
These accompanying consolidated financial statements are presented on the basis of IFRS, as adopted by the European Union.
Certain accounting practices applied by the Group that conform to EU-IFRS may not conform to other generally accepted accounting
principles.
P.138
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Appendices
P.139
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
APPENDIX I.  BBVA Group Consolidated Financial Statements
Consolidated balance sheets as of December 31, 2021, 2020 and 2019
ASSETS (Millions of Euros)
2021
2020 (*)
2019 (*)
CASH, CASH BALANCES AT CENTRAL BANKS AND OTHER DEMAND DEPOSITS
67,799
65,520
44,303
FINANCIAL ASSETS HELD FOR TRADING
123,493
105,878
99,469
Derivatives
30,933
40,183
32,232
Equity instruments
15,963
11,458
8,892
Debt securities
25,790
23,970
26,309
Loans and advances to central banks
3,467
53
535
Loans and advances to credit institutions
31,916
18,317
19,020
Loans and advances to customers
15,424
11,898
12,482
NON-TRADING FINANCIAL ASSETS MANDATORILY AT FAIR VALUE THROUGH PROFIT OR
LOSS
6,086
5,198
5,557
Equity instruments
5,303
4,133
4,327
Debt securities
128
356
110
Loans and advances to customers
655
709
1,120
FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS
1,092
1,117
1,214
Debt securities
1,092
1,117
1,214
FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME
60,421
69,440
61,183
Equity instruments
1,320
1,100
2,420
Debt securities
59,074
68,308
58,731
Loans and advances to credit institutions
27
33
33
FINANCIAL ASSETS AT AMORTIZED COST
372,676
367,668
439,162
Debt securities
34,781
35,737
38,877
Loans and advances to central banks
5,681
6,209
4,275
Loans and advances to credit institutions
13,276
14,575
13,649
Loans and advances to customers
318,939
311,147
382,360
DERIVATIVES - HEDGE ACCOUNTING
1,805
1,991
1,729
FAIR VALUE CHANGES OF THE HEDGED ITEMS IN PORTFOLIO HEDGES OF INTEREST
RATE RISK
5
51
28
JOINT VENTURES AND ASSOCIATES
900
1,437
1,488
Joint ventures
152
149
154
Associates
749
1,288
1,334
INSURANCE AND REINSURANCE ASSETS
269
306
341
TANGIBLE ASSETS
7,298
7,823
10,068
Properties, plant and equipment
7,107
7,601
9,816
For own use
6,874
7,311
9,554
Other assets leased out under an operating lease
233
290
263
Investment properties
191
222
252
INTANGIBLE ASSETS
2,197
2,345
6,966
Goodwill
818
910
4,955
Other intangible assets
1,379
1,435
2,010
TAX ASSETS
15,850
16,526
17,083
Current tax assets
932
1,199
1,765
Deferred tax assets
14,917
15,327
15,318
OTHER ASSETS
1,934
2,513
3,800
Insurance contracts linked to pensions
—
—
—
Inventories
424
572
581
Other
1,510
1,941
3,220
NON-CURRENT ASSETS AND DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE
1,061
85,987
3,079
TOTAL ASSETS
662,885
733,797
695,471
(*) Presented for comparison purposes only.
P.140
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Consolidated balance sheets as of December 31, 2021, 2020 and 2019
LIABILITIES AND EQUITY (Millions of Euros)
2021
2020 (*)
2019 (*)
FINANCIAL LIABILITIES HELD FOR TRADING
91,135
84,109
86,414
Derivatives
31,705
41,680
34,066
Short positions
15,135
12,312
12,249
Deposits from central banks
11,248
6,277
7,635
Deposits from credit institutions
16,176
14,377
22,704
Customer deposits
16,870
9,463
9,761
FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS
9,683
10,050
10,010
Customer deposits
809
902
944
Debt certificates
3,396
4,531
4,656
Other financial liabilities
5,479
4,617
4,410
Memorandum item: Subordinated liabilities
—
—
—
FINANCIAL LIABILITIES AT AMORTIZED COST
487,893
490,606
516,641
Deposits from central banks
47,351
45,177
25,950
Deposits from credit institutions
19,834
27,629
28,751
Customer deposits
349,761
342,661
384,219
Debt certificates
55,763
61,780
63,963
Other financial liabilities
15,183
13,358
13,758
Memorandum item: Subordinated liabilities
14,808
16,488
18,018
DERIVATIVES - HEDGE ACCOUNTING
2,626
2,318
2,233
FAIR VALUE CHANGES OF THE HEDGED ITEMS IN PORTFOLIO HEDGES OF INTEREST
RATE RISK
—
—
—
LIABILITIES UNDER INSURANCE AND REINSURANCE CONTRACTS
10,865
9,951
10,606
PROVISIONS
5,889
6,141
6,538
Pensions and other post-employment defined benefit obligations
3,576
4,272
4,631
Other long term employee benefits
632
49
61
Provisions for taxes and other legal contingencies
623
612
677
Commitments and guarantees given
691
728
711
Other provisions
366
479
457
TAX LIABILITIES
2,413
2,355
2,808
Current tax liabilities
644
545
880
Deferred tax liabilities
1,769
1,809
1,928
OTHER LIABILITIES
3,621
2,802
3,742
LIABILITIES INCLUDED IN DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE
—
75,446
1,554
TOTAL LIABILITIES
614,125
683,777
640,546
(*) Presented for comparison purposes only.
P.141
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Consolidated balance sheets as of December 31, 2021, 2020 and 2019
LIABILITIES AND EQUITY (Continued) (Millions of Euros)
2021
2020 (*)
2019 (*)
SHAREHOLDERS’ FUNDS
60,383
58,904
58,950
Capital
3,267
3,267
3,267
Paid up capital
3,267
3,267
3,267
Unpaid capital which has been called up
—
—
—
Share premium
23,599
23,992
23,992
Equity instruments issued other than capital
—
—
—
Other equity
60
42
56
Retained earnings
31,841
30,508
29,388
Revaluation reserves
—
—
—
Other reserves
(1,857)
(164)
(119)
Reserves or accumulated losses of investments in joint ventures and associates
(247)
(164)
(119)
Other
(1,610)
—
—
Less: treasury shares
(647)
(46)
(62)
Profit or loss attributable to owners of the parent
4,653
1,305
3,512
Less: Interim dividends
(532)
—
(1,084)
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
(16,476)
(14,356)
(10,226)
Items that will not be reclassified to profit or loss
(2,075)
(2,815)
(1,875)
Actuarial gains (losses) on defined benefit pension plans
(998)
(1,474)
(1,498)
Non-current assets and disposal groups classified as held for sale
—
(65)
2
Share of other recognized income and expense of investments in joint ventures and associates
—
—
—
Fair value changes of equity instruments measured at fair value through other comprehensive
income
(1,079)
(1,256)
(403)
Hedge ineffectiveness of fair value hedges for equity instruments measured at fair value through
other comprehensive income
—
—
—
Fair value changes of financial liabilities at fair value through profit or loss attributable to changes
in their credit risk
2
(21)
24
Items that may be reclassified to profit or loss
(14,401)
(11,541)
(8,351)
Hedge of net investments in foreign operations (effective portion)
(146)
(62)
(896)
Foreign currency translation
(14,988)
(14,185)
(9,147)
Hedging derivatives. Cash flow hedges (effective portion)
(533)
10
(44)
Fair value changes of debt instruments measured at fair value through other comprehensive
income
1,274
2,069
1,760
Hedging instruments (non-designated items)
—
—
—
Non-current assets and disposal groups classified as held for sale
—
644
(18)
Share of other recognized income and expense of investments in joint ventures and associates
(9)
(17)
(5)
MINORITY INTERESTS (NON-CONTROLLING INTERESTS)
4,853
5,471
6,201
Accumulated other comprehensive income (loss)
(8,414)
(6,949)
(5,572)
Other items
13,267
12,421
11,773
TOTAL EQUITY
48,760
50,020
54,925
TOTAL EQUITY AND TOTAL LIABILITIES
662,885
733,797
695,471
MEMORANDUM  ITEM (OFF-BALANCE SHEET EXPOSURES)  (Millions of Euros)
2021
2020 (*)
2019 (*)
Loan commitments given
119,618
132,584
130,923
Financial guarantees given
11,720
10,665
10,984
Other commitments given
34,604
36,190
39,209
(*) Presented for comparison purposes only.
P.142
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Consolidated income statements for the years ended December 31, 2021, 2020 and 2019
CONSOLIDATED INCOME STATEMENTS (Millions of Euros)
2021
2020 (*)
2019 (*)
Interest and other income
23,015
22,389
27,762
Interest expense
(8,329)
(7,797)
(11,972)
NET INTEREST INCOME
14,686
14,592
15,789
Dividend income
176
137
153
Share of profit or loss of entities accounted for using the equity method
1
(39)
(42)
Fee and commission income
6,997
5,980
6,786
Fee and commission expense
(2,232)
(1,857)
(2,284)
Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss,
net
134
139
186
Gains (losses) on financial assets and liabilities held for trading, net
341
777
419
Gains (losses) on non-trading financial assets mandatorily at fair value through profit or loss, net
432
208
143
Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net
335
56
(98)
Gains (losses) from hedge accounting, net
(214)
7
55
Exchange differences, net
883
359
581
Other operating income
661
492
639
Other operating expense
(2,041)
(1,662)
(1,943)
Income from insurance and reinsurance contracts
2,593
2,497
2,890
Expense from insurance and reinsurance contracts
(1,685)
(1,520)
(1,751)
GROSS INCOME
21,066
20,166
21,522
Administration costs
(8,296)
(7,799)
(8,769)
    Personnel expense
(5,046)
(4,695)
(5,351)
    Other administrative expense
(3,249)
(3,105)
(3,418)
Depreciation and amortization
(1,234)
(1,288)
(1,386)
Provisions or reversal of provisions
(1,018)
(746)
(614)
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net
gains by modification
(3,034)
(5,179)
(3,552)
    Financial assets measured at amortized cost
(3,017)
(5,160)
(3,470)
    Financial assets at fair value through other comprehensive income
(17)
(19)
(82)
NET OPERATING INCOME
7,484
5,153
7,202
Impairment or reversal of impairment of investments in joint ventures and associates
—
(190)
(46)
Impairment or reversal of impairment on non-financial assets
(221)
(153)
(128)
    Tangible assets
(161)
(125)
(94)
    Intangible assets
(19)
(19)
(12)
    Other assets
(41)
(9)
(23)
Gains (losses) on derecognition of non-financial assets and subsidiaries, net
24
(7)
(5)
Negative goodwill recognized in profit or loss
—
—
—
Gains (losses) from non-current assets and disposal groups classified as held for sale not qualifying as
discontinued operations   
(40)
444
23
PROFIT (LOSS) BEFORE TAX FROM CONTINUING OPERATIONS
7,247
5,248
7,046
Tax expense or income related to profit or loss from continuing operations
(1,909)
(1,459)
(1,943)
PROFIT (LOSS) AFTER TAX FROM CONTINUING OPERATIONS
5,338
3,789
5,103
Profit (loss) after tax from discontinued operations
280
(1,729)
(758)
PROFIT (LOSS)
5,618
2,060
4,345
ATTRIBUTABLE TO MINORITY INTEREST (NON-CONTROLLING INTEREST)
965
756
833
ATTRIBUTABLE TO OWNERS OF THE PARENT
4,653
1,305
3,512
2021
2020 (*)
2019 (*)
EARNINGS (LOSSES) PER SHARE  (Euros)
0.67
0.14
0.47
Basic earnings (losses) per share from continuing operations
0.63
0.40
0.58
Diluted earnings (losses) per share from continuing operations
0.63
0.40
0.58
Basic earnings (losses) per share from discontinued operations
0.04
(0.26)
(0.11)
Diluted earnings (losses) per share from discontinued operations
0.04
(0.26)
(0.11)
(*) Presented for comparison purposes only.
P.143
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Consolidated statements of recognized income and expense for the years ended
December 31, 2021, 2020 and 2019
CONSOLIDATED STATEMENTS OF RECOGNIZED INCOME AND EXPENSE (Millions of Euros)
2021
2020 (*)
2019 (*)
PROFIT (LOSS) RECOGNIZED IN INCOME STATEMENT
5,618
2,060
4,345
OTHER RECOGNIZED INCOME (EXPENSE)
(3,977)
(5,375)
(286)
ITEMS NOT SUBJECT TO RECLASSIFICATION TO INCOME STATEMENT
358
(822)
(584)
Actuarial gains (losses) from defined benefit pension plans
218
(88)
(364)
Non-current assets and disposal groups held for sale
(3)
17
2
Share of other recognized income and expense of entities accounted for using the equity method
—
—
—
Fair value changes of equity instruments measured at fair value through other comprehensive
income, net
189
(796)
(229)
Gains (losses) from hedge accounting of equity instruments at fair value through other
comprehensive income, net
—
—
—
Fair value changes of financial liabilities at fair value through profit or loss attributable to changes
in their credit risk
33
4
(133)
Income tax related to items not subject to reclassification to income statement
(80)
40
140
ITEMS SUBJECT TO RECLASSIFICATION TO INCOME STATEMENT
(4,335)
(4,553)
298
Hedge of net investments in foreign operations (effective portion)
(117)
378
(687)
Valuation gains (losses) taken to equity
(117)
378
(687)
Transferred to profit or loss
—
—
—
Other reclassifications
—
—
—
Foreign currency translation
(2,256)
(4,873)
(104)
Translation gains (losses) taken to equity
(2,239)
(4,873)
(123)
Transferred to profit or loss
(17)
—
1
Other reclassifications
—
—
18
Cash flow hedges (effective portion)
(691)
230
(203)
Valuation gains (losses) taken to equity
(553)
230
(193)
Transferred to profit or loss
(137)
—
(10)
Transferred to initial carrying amount of hedged items
—
—
—
Other reclassifications
—
—
—
Debt securities at fair value through other comprehensive income
(1,139)
460
1,131
Valuation gains (losses) taken to equity
(1,082)
515
1,280
Transferred to profit or loss
(57)
(54)
(149)
Other reclassifications
—
—
—
Non-current assets and disposal groups held for sale
(663)
(492)
461
Valuation gains (losses) taken to equity
(30)
(472)
472
Transferred to profit or loss
(633)
(20)
—
Other reclassifications
—
—
(11)
Entities accounted for using the equity method
8
(13)
31
Income tax relating to items subject to reclassification to income statements
523
(243)
(332)
TOTAL RECOGNIZED INCOME (EXPENSE)
1,640
(3,315)
4,060
Attributable to minority interest (non-controlling interests)
(500)
(606)
552
Attributable to the parent company
2,141
(2,709)
3,509
(*)Presented for comparison purposes only.
P.144
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Consolidated statements of changes in equity for the years ended December 31, 2021, 2020 and 2019
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Millions of Euros)
Capital
(Note
26)
Share
Premium
(Note 27)
Equity
instruments
issued other
than capital
Other
Equity
Retained
earnings
(Note 28)
Revaluation
reserves
(Note 28)
Other
reserves
(Note 28)
(-)
Treasury
shares
(Note 29)
Profit or loss
attributable to
owners of the
parent
(-) Interim
dividends
(Note 4)
Accumulated
other
comprehensive
income (loss)
(Note 30)
Non-controlling interest
Total
2021
Accumulated
other
comprehensiv
e income
(loss) (Note
31)
Other
(Note 31)
Balances as of January 1, 2021 (*)
3,267
23,992
—
42
30,508
—
(164)
(46)
1,305
—
(14,356)
(6,949)
12,421
50,020
Effect of changes in accounting policies
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Adjusted initial balance
3,267
23,992
—
42
30,508
—
(164)
(46)
1,305
—
(14,356)
(6,949)
12,421
50,020
Total income/expense recognized
—
—
—
—
—
—
—
—
4,653
—
(2,512)
(1,465)
965
1,640
Other changes in equity
—
(393)
—
17
1,333
—
(1,693)
(600)
(1,305)
(532)
391
—
(119)
(2,900)
Issuances of common shares
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Issuances of preferred shares
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Issuance of other equity instruments
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Settlement or maturity of other equity
instruments issued
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Conversion of debt on equity
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Common Stock reduction
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Dividend distribution
—
(393)
—
—
—
—
—
—
—
(532)
—
—
(119)
(1,045)
Purchase of treasury shares
—
—
—
—
—
—
—
(1,022)
—
—
—
—
—
(1,022)
Sale or cancellation of treasury shares
—
—
—
—
—
—
17
421
—
—
—
—
—
438
Reclassification of other equity instruments to
financial liabilities
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Reclassification of financial liabilities to other
equity instruments
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Transfers within total equity
—
—
—
—
1,693
—
(780)
—
(1,305)
—
391
—
—
—
Increase/Reduction of equity due to business
combinations
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Share based payments
—
—
—
(11)
—
—
—
—
—
—
—
—
—
(11)
Other increases or (-) decreases in equity
—
—
—
28
(360)
—
(930)
—
—
—
—
—
1
(1,260)
Balances as of December 31, 2021
3,267
23,599
—
60
31,841
—
(1,857)
(647)
4,653
(532)
(16,476)
(8,414)
13,267
48,760
(*)  Balances as of December 31, 2020 as originally reported in the consolidated Financial Statements for the year 2020.
P.145
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter, which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a
discrepancy, the original Spanish-language version prevails.
Consolidated statements of changes in equity for the years ended December 31, 2021, 2020 and 2019
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Millions of Euros)
2020 (*)
Capital
(Note
26)
Share
Premium
(Note 27)
Equity
instruments
issued other
than capital
Other
Equity
Retained
earnings
(Note 28)
Revaluation
reserves
(Note 28)
Other
reserves
(Note 28)
(-)
Treasury
shares
(Note 29)
Profit or loss
attributable to
owners of the
parent
(-) Interim
dividends
(Note 4)
Accumulated
other
comprehensive
income (loss)
(Note 30)
Non-controlling interest
Total
Accumulated
other
comprehensiv
e income
(loss) (Note
31)
Other
(Note 31)
Balances as of January 1, 2020 (**)
3,267
23,992
—
56
26,402
—
(125)
(62)
3,512
(1,084)
(7,234)
(3,527)
9,728
54,925
Effect of changes in accounting policies
—
—
—
—
2,986
—
6
—
—
—
(2,992)
(2,045)
2,045
—
Adjusted initial balance
3,267
23,992
—
56
29,388
—
(119)
(62)
3,512
(1,084)
(10,226)
(5,572)
11,773
54,925
Total income/expense recognized
—
—
—
—
—
—
—
—
1,305
—
(4,014)
(1,361)
755
(3,315)
Other changes in equity
—
—
—
(14)
1,120
—
(45)
16
(3,512)
1,084
(116)
(16)
(107)
(1,590)
Issuances of common shares
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Issuances of preferred shares
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Issuance of other equity instruments
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Settlement or maturity of other equity
instruments issued
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Conversion of debt on equity
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Common Stock reduction
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Dividend distribution
—
—
—
—
(1,066)
—
—
—
—
—
—
—
(124)
(1,190)
Purchase of treasury shares
—
—
—
—
—
—
—
(807)
—
—
—
—
—
(807)
Sale or cancellation of treasury shares
—
—
—
—
—
—
—
823
—
—
—
—
—
823
Reclassification of other equity instruments to
financial liabilities
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Reclassification of financial liabilities to other
equity instruments
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Transfers within total equity (see Note 2.2.19)
—
—
—
—
2,585
—
(41)
—
(3,512)
1,084
(116)
(16)
16
—
Increase/Reduction of equity due to business
combinations
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Share based payments
—
—
—
(22)
—
—
—
—
—
—
—
—
—
(22)
Other increases or (-) decreases in equity
—
—
—
8
(399)
—
(4)
—
—
—
—
—
1
(394)
Balances as of December 31, 2020
3,267
23,992
—
42
30,508
—
(164)
(46)
1,305
—
(14,356)
(6,949)
12,421
50,020
(*)          Presented for comparison purposes only.
(**)        Balances as of December 31, 2019 as originally reported in the consolidated Financial Statements for the year 2019.
P.146
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter, which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a
discrepancy, the original Spanish-language version prevails.
Consolidated statements of changes in equity for the years ended December 31, 2021, 2020 and 2019
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Millions of Euros)
Capital
(Note
26)
Share
Premium
(Note 27)
Equity
instruments
issued other
than capital
Other
Equity
Retained
earnings
(Note 28)
Revaluation
reserves
(Note 28)
Other
reserves
(Note 28)
(-)
Treasury
shares
(Note 29)
Profit or loss
attributable to
owners of the
parent
(-) Interim
dividends
(Note 4)
Accumulated
other
comprehensive
income (loss)
(Note 30)
Non-controlling interest
Total
2019 (*)
Accumulated
other
comprehensiv
e income
(loss) (Note
31)
Other
(Note 31)
Balances as of January 1, 2019 (**)
3,267
23,992
—
50
23,017
3
(56)
(296)
5,324
(975)
(7,216)
(3,236)
9,000
52,874
Effect of changes in accounting policies
—
—
—
—
3,046
—
19
—
76
(134)
(3,007)
(2,054)
2,054
—
Adjusted initial balance
3,267
23,992
—
50
26,063
3
(37)
(296)
5,400
(1,109)
(10,223)
(5,290)
11,054
52,874
Total income/expense recognized
—
—
—
—
—
—
—
—
3,512
—
(3)
(282)
833
4,060
Other changes in equity
—
—
—
6
3,325
(3)
(82)
234
(5,400)
25
—
—
(114)
(2,009)
Issuances of common shares
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Issuances of preferred shares
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Issuance of other equity instruments
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Settlement or maturity of other equity
instruments issued
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Conversion of debt on equity
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Common Stock reduction
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Dividend distribution
—
—
—
—
(1,063)
—
—
—
—
(1,084)
—
—
(142)
(2,289)
Purchase of treasury shares
—
—
—
—
—
—
—
(1,088)
—
—
—
—
—
(1,088)
Sale or cancellation of treasury shares
—
—
—
—
13
—
—
1,322
—
—
—
—
—
1,335
Reclassification of other equity instruments to
financial liabilities
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Reclassification of financial liabilities to other
equity instruments
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Transfers within total equity (see Note 2.2.19)
—
—
—
—
4,364
(3)
(70)
—
(5,400)
1,109
—
—
—
—
Increase/Reduction of equity due to business
combinations
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Share based payments
—
—
—
(4)
—
—
—
—
—
—
—
—
—
(4)
Other increases or (-) decreases in equity
—
—
—
10
11
—
(12)
—
—
—
—
—
28
37
Balances as of December 31, 2019
3,267
23,992
—
56
29,388
—
(119)
(62)
3,512
(1,084)
(10,226)
(5,572)
11,773
54,925
(*)  Presented for comparison purposes only.
(**) Balances as of December 31, 2018 as originally reported in the consolidated Financial Statements for the year 2018.
P.147
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter, which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a
discrepancy, the original Spanish-language version prevails.
Consolidated statements of cash flows for the years ended December 31, 2021, 2020 and 2019
CONSOLIDATED FINANCIAL STATEMENTS OF CASH FLOWS (Millions of Euros)
2021
2020 (*)
2019 (*)
A) CASH FLOWS FROM OPERATING ACTIVITIES (1 + 2 + 3 + 4 + 5)
(1,242)
39,349
(10,654)
1. Profit for the year
5,618
2,060
4,345
2. Adjustments to obtain the cash flow from operating activities
7,688
11,653
9,582
Depreciation and amortization
1,234
1,288
1,386
Other adjustments
6,454
10,365
8,196
3. Net increase/decrease in operating assets
(38,267)
(57,370)
(37,127)
Financial assets held for trading
(17,031)
(10,351)
(9,604)
Non-trading financial assets mandatorily at fair value through profit or loss
(908)
(241)
(318)
Other financial assets designated at fair value through profit or loss
25
97
99
Financial assets at fair value through other comprehensive income
7,116
(16,649)
(3,755)
Financial assets at amortized cost
(28,062)
(30,212)
(26,559)
Other operating assets
592
(15)
3,010
4. Net increase/decrease in operating liabilities
25,266
84,961
14,148
Financial liabilities held for trading
6,479
247
6,001
Other financial liabilities designated at fair value through profit or loss
(837)
647
2,680
Financial liabilities at amortized cost
19,682
84,853
8,016
Other operating liabilities
(58)
(787)
(2,549)
5. Collection/Payments for income tax
(1,546)
(1,955)
(1,602)
B) CASH FLOWS FROM INVESTING ACTIVITIES (1 + 2)
(1,634)
(37)
97
1. Investment
(12,472)
(1,185)
(1,494)
Tangible assets
(396)
(632)
(852)
Intangible assets
(550)
(491)
(528)
Investments in joint ventures and associates
(50)
(62)
(114)
Subsidiaries and other business units
—
—
—
Non-current assets classified as held for sale and associated liabilities
(11,476)
—
—
Other settlements related to investing activities
—
—
—
2. Divestments
10,838
1,148
1,592
Tangible assets
78
558
128
Intangible assets
—
—
—
Investments in joint ventures and associates
80
307
98
Subsidiaries and other business units
10
—
5
Non-current assets classified as held for sale and associated liabilities
10,670
283
1,198
Other collections related to investing activities
—
—
162
C) CASH FLOWS FROM FINANCING ACTIVITIES (1 + 2)
(4,349)
(2,069)
(2,703)
1. Payments
(4,786)
(5,316)
(7,418)
Dividend distribution (shareholders remuneration)
(926)
(1,065)
(2,147)
Subordinated liabilities
(2,301)
(2,820)
(3,571)
Treasury stock amortization
—
—
—
Treasury stock acquisition
(1,022)
(807)
(1,088)
Other items relating to financing activities
(538)
(624)
(612)
2. Collections
438
3,247
4,716
Subordinated liabilities
—
2,425
3,381
Treasury shares increase
—
—
—
Treasury shares disposal
438
822
1,335
Other items relating to financing activities
—
—
—
D) EFFECT OF EXCHANGE RATE CHANGES
(1,864)
(4,658)
(634)
E) NET INCREASE/DECREASE IN CASH OR CASH EQUIVALENTS (A+B+C+D)
(9,089)
32,585
(13,893)
F) CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR  (**)
76,888
44,303
58,196
G) CASH AND CASH EQUIVALENTS AT END OF THE YEAR (E+F) (***)
67,799
76,888
44,303
COMPONENTS OF CASH AND EQUIVALENT AT END OF THE YEAR (Millions of Euros)
2021
2020 (*)
2019 (*)
Cash
6,877
6,447
7,060
Balance of cash equivalent in central banks
55,004
53,079
31,756
Other financial assets
5,918
5,994
5,488
Less: Bank overdraft refundable on demand
—
—
—
TOTAL CASH AND CASH EQUIVALENTS AT END OF THE YEAR
67,799
65,520
44,303
TOTAL CASH AND CASH EQUIVALENTS CLASSIFIED AS NON-CURRENT ASSETS AND DISPOSABLE
GROUPS CLASSIFIED AS HELD FOR SALE IN THE UNITED STATES
—
11,368
—
  (*) Presented for comparison purposes only.
(**) In fiscal year 2021, the balance of Group companies in the United States included in the sale to PNC is included.
(***) In 2020, the balance of Group companies that were in the process of being sold in the United States included in the sale to PNC
is included.
This Appendix is an integral part of Note 1.9 of the financial statements for the year ended December 31, 2021.
P.148
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
APPENDIX II.  Additional information on subsidiaries and structured entities composing
the BBVA Group
% share of participation (**) 
Millions of Euros (*)
Affiliate entity data
Company
Location
Activity
Direct
Indirect
Total
Net carrying
amount
Equity
excluding
profit (loss)
31.12.21
Profit (loss)
31.12.21
ACTIVOS MACORP SL
SPAIN
REAL ESTATE
50.63
49.37
100.00
23
22
2
ADQUIRA MEXICO SA DE CV
MEXICO                             
SERVICES
—
100.00
100.00
4
3
1
ALCALA 120 PROMOC. Y GEST.IMMOB. S.L.
SPAIN
REAL ESTATE
—
100.00
100.00
17
15
1
ANIDA GRUPO INMOBILIARIO SL
SPAIN
INVESTMENT COMPANY
100.00
—
100.00
1,456
1,451
(15)
ANIDA INMOBILIARIA, S.A. DE C.V.
MEXICO                             
INVESTMENT COMPANY
—
100.00
100.00
18
38
4
ANIDA OPERACIONES SINGULARES, S.A.
SPAIN
REAL ESTATE
—
100.00
100.00
1,321
1,341
(20)
ANIDA PROYECTOS INMOBILIARIOS, S.A. DE C.V.
MEXICO                             
REAL ESTATE
—
100.00
100.00
22
22
1
ANIDAPORT INVESTIMENTOS IMOBILIARIOS, UNIPESSOAL,
LTDA
PORTUGAL                           
REAL ESTATE
—
100.00
100.00
25
17
—
ANTHEMIS BBVA VENTURE PARTNERSHIP LLP
UNITED KINGDOM
INVESTMENT COMPANY
—
100.00
100.00
9
9
—
APLICA NEXTGEN OPERADORA S.A. DE C.V.
MEXICO                             
SERVICES
—
100.00
100.00
1
2
—
APLICA NEXTGEN SERVICIOS S.A. DE C.V
MEXICO                             
SERVICES
—
100.00
100.00
1
1
—
APLICA TECNOLOGIA AVANZADA SA DE CV
MEXICO                             
SERVICES
100.00
—
100.00
203
221
17
ARRAHONA IMMO, S.L.
SPAIN
REAL ESTATE
—
100.00
100.00
53
114
—
ARRAHONA NEXUS, S.L.
SPAIN
REAL ESTATE
—
100.00
100.00
58
64
—
ARRELS CT FINSOL, S.A.
SPAIN
REAL ESTATE
—
100.00
100.00
64
79
—
ARRELS CT PATRIMONI I PROJECTES, S.A.
SPAIN
REAL ESTATE
—
100.00
100.00
22
22
—
ARRELS CT PROMOU SA
SPAIN
REAL ESTATE
—
100.00
100.00
28
29
25
BAHIA SUR RESORT S.C.
SPAIN
INACTIVE
99.95
—
99.95
—
1
—
BANCO BBVA ARGENTINA S.A.
ARGENTINA
BANKING
39.97
26.59
66.55
157
606
536
BANCO BILBAO VIZCAYA ARGENTARIA URUGUAY SA
URUGUAY                           
BANKING
100.00
—
100.00
110
180
20
BANCO INDUSTRIAL DE BILBAO SA
SPAIN
BANKING
—
99.93
99.93
52
47
6
BANCO OCCIDENTAL SA
SPAIN
BANKING
49.43
50.57
100.00
17
18
—
BANCO PROVINCIAL OVERSEAS NV
CURAÇAO
BANKING
—
100.00
100.00
49
45
4
BANCO PROVINCIAL SA - BANCO UNIVERSAL
VENEZUELA
BANKING
1.46
53.75
55.21
41
127
8
BBV AMERICA SL
SPAIN
INVESTMENT COMPANY
99.80
0.20
100.00
79
640
12
BBVA (SUIZA) SA
SWITZERLAND
BANKING
100.00
—
100.00
110
129
6
BBVA AGENCIA DE SEGUROS COLOMBIA LTDA
COLOMBIA                           
INSURANCES SERVICES
—
100.00
100.00
—
—
—
BBVA AI FACTORY SL
SPAIN
SERVICES
—
100.00
100.00
6
4
—
BBVA ASSET MANAGEMENT ARGENTINA S.A, SOCIEDAD
GERENTE DE FONDOS COMUNES DE INVERSIÓN
ARGENTINA
INVESTMENT FUND
MANAGEMENT
—
100.00
100.00
14
1
13
BBVA ASSET MANAGEMENT MEXICO SA DE CV,
SOC.OPERADORA DE FONDOS DE INVERSION, GRUPO
FRO. BBVA MEXICO
MEXICO                             
INVESTMENT FUND
MANAGEMENT
—
100.00
100.00
30
21
10
BBVA ASSET MANAGEMENT SA SAF
PERU                               
INVESTMENT FUND
MANAGEMENT
—
100.00
100.00
8
5
3
BBVA ASSET MANAGEMENT SA SGIIC
SPAIN
INVESTMENT FUND
MANAGEMENT
100.00
—
100.00
43
(98)
164
BBVA ASSET MANAGEMENT SA SOCIEDAD FIDUCIARIA
(BBVA FIDUCIARIA)
COLOMBIA                           
INVESTMENT FUND
MANAGEMENT
—
100.00
100.00
24
18
6
BBVA BANCO CONTINENTAL SA (1)
PERU                               
BANKING
—
46.12
46.12
1,042
1,920
340
BBVA BOLSA SOCIEDAD AGENTE DE BOLSA S.A.
PERU                               
SECURITIES DEALER
—
100.00
100.00
4
4
1
BBVA BRASIL BANCO DE INVESTIMENTO SA
BRAZIL
BANKING
100.00
—
100.00
16
18
—
BBVA BROKER ARGENTINA SA
ARGENTINA
INSURANCES SERVICES
—
99.96
99.96
—
3
6
(*) Amount without considering the interim dividends of the year, according to the provisional financial statements of each company, generally as of December 31, 2021. In the
carrying amount (net of provision and hedge in foreign operations), the Group´s ownership percentage has been applied, without considering the impairment of goodwill.
Information on foreign companies at exchange rate as of December 31, 2021.
(**)  In accordance with Article 3 of Royal Decree 1159/2010, of September 17, in order to determine the state, the voting power relating to subsidiaries was added to the voting
power directly held by the parent. Therefore, the number of votes corresponding to the parent company (including indirect control subsidiaries), corresponds to each subsidiary
holding a direct ownership interest.
(1) Full consolidation method is used according to accounting rules (see Glossary).
Additional information on subsidiaries and structured entities composing the BBVA Group
(Continued)
P.149
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
% share of participation (**) 
Millions of Euros (*)
Affiliate entity data
Company
Location
Activity
Direct
Indirect
Total
Net
carrying
amount
Equity
excluding profit
(loss)
31.12.21
Profit (loss)
31.12.21
BBVA BROKER CORREDURIA DE SEGUROS Y REASEGUROS SA
SPAIN
FINANCIAL SERVICES
99.94
0.06
100.00
—
1
6
BBVA COLOMBIA SA
COLOMBIA                           
BANKING
77.41
18.06
95.47
348
1,135
202
BBVA CONSUMER FINANCE ENTIDAD DE DESARROLLO A LA PEQUEÑA
Y MICRO EMPRESA EDPYME SA (BBVA CONSUMER FINANCE -
EDPYME)
PERU                               
IN LIQUIDATION
—
100.00
100.00
23
18
5
BBVA DISTRIBUIDORA DE SEGUROS S.R.L.
URUGUAY                           
FINANCIAL SERVICES
—
100.00
100.00
5
2
2
BBVA FINANZIA SPA
ITALY
IN LIQUIDATION
100.00
—
100.00
8
8
—
BBVA FUNDOS S.GESTORA FUNDOS PENSOES SA
PORTUGAL                           
PENSION FUND MANAGEMENT
100.00
—
100.00
8
6
2
BBVA GLOBAL FINANCE LTD
CAYMAN ISLANDS
OTHER ISSUANCE COMPANIES
100.00
—
100.00
—
5
—
BBVA GLOBAL MARKETS BV
NETHERLANDS
OTHER ISSUANCE COMPANIES
100.00
—
100.00
—
—
—
BBVA GLOBAL SECURITIES, B.V.
NETHERLANDS
OTHER ISSUANCE COMPANIES
100.00
—
100.00
—
—
—
BBVA HOLDING CHILE SA
CHILE
INVESTMENT COMPANY
61.22
38.78
100.00
158
251
55
BBVA INFORMATION TECHNOLOGY ESPAÑA SL
SPAIN
SERVICES
76.00
—
76.00
1
3
1
BBVA INSTITUIÇAO FINANCEIRA DE CREDITO SA
PORTUGAL                           
FINANCIAL SERVICES
49.90
50.10
100.00
39
58
5
BBVA LEASING MEXICO SA DE CV
MEXICO                             
FINANCIAL SERVICES
—
100.00
100.00
51
155
26
BBVA MEDIACION OPERADOR DE BANCA-SEGUROS VINCULADO, S.A.
SPAIN
FINANCIAL SERVICES
99.99
0.01
100.00
11
(15)
26
BBVA MEXICO SA INSTITUCION DE BANCA MULTIPLE GRUPO
FINANCIERO BBVA MEXICO
MEXICO                             
BANKING
—
100.00
100.00
12,211
9,698
2,512
BBVA NEXT TECHNOLOGIES OPERADORA, S.A. DE C.V.
MEXICO                             
SERVICES
—
100.00
100.00
—
1
—
BBVA NEXT TECHNOLOGIES SLU
SPAIN
INVESTMENT COMPANY
100.00
—
100.00
34
26
3
BBVA NEXT TECHNOLOGIES, S.A. DE C.V.
MEXICO                             
SERVICES
—
100.00
100.00
1
3
—
BBVA OP3N S.L.
SPAIN
SERVICES
—
100.00
100.00
—
2
—
BBVA OPERADORA MEXICO SA DE CV
MEXICO                             
SERVICES
—
100.00
100.00
76
98
(21)
BBVA PENSIONES MEXICO, S.A. DE C.V., GRUPO FINANCIERO BBVA
MEXICO
MEXICO                             
INSURANCES SERVICES
—
100.00
100.00
313
247
66
BBVA PENSIONES SA ENTIDAD GESTORA DE FONDOS DE PENSIONES
SPAIN
PENSION FUND MANAGEMENT
100.00
—
100.00
13
16
9
BBVA PERU HOLDING SAC
PERU                               
INVESTMENT COMPANY
100.00
—
100.00
110
892
157
BBVA PLANIFICACION PATRIMONIAL SL
SPAIN
IN LIQUIDATION
80.00
20.00
100.00
—
1
—
BBVA PREVISION AFP SA ADM.DE FONDOS DE PENSIONES
BOLIVIA                           
PENSION FUND MANAGEMENT
75.00
5.00
80.00
2
5
10
BBVA PROCESSING SERVICES INC.
UNITED STATES
FINANCIAL SERVICES
100.00
—
100.00
1
1
—
BBVA RE INHOUSE COMPAÑIA DE REASEGUROS, S.E.
SPAIN
INSURANCES SERVICES
—
100.00
100.00
39
51
7
BBVA SECURITIES INC
UNITED STATES
FINANCIAL SERVICES
100.00
—
100.00
233
242
8
BBVA SEGUROS ARGENTINA SA
ARGENTINA
INSURANCES SERVICES
87.78
12.22
100.00
10
23
24
BBVA SEGUROS COLOMBIA SA
COLOMBIA                           
INSURANCES SERVICES
94.00
6.00
100.00
10
16
11
BBVA SEGUROS DE VIDA COLOMBIA SA
COLOMBIA                           
INSURANCES SERVICES
94.00
6.00
100.00
14
101
11
BBVA SEGUROS MÉXICO SA DE CV GRUPO FINANCIERO BBVA MEXICO
MEXICO                             
INSURANCES SERVICES
—
100.00
100.00
559
386
174
BBVA SEGUROS SA DE SEGUROS Y REASEGUROS
SPAIN
INSURANCES SERVICES
99.96
—
99.96
713
782
238
BBVA SEGUROS SALUD MEXICO SA DE CV GRUPO FRO. BBVA MEXICO.
MEXICO                             
INSURANCES SERVICES
—
100.00
100.00
8
9
(1)
BBVA SERVICIOS ADMINISTRATIVOS MEXICO, S.A. DE C.V.
MEXICO                             
SERVICES
—
100.00
100.00
47
54
(8)
BBVA SERVICIOS CORPORATIVOS MEXICO, S.A. DE C.V.
MEXICO                             
SERVICES
—
100.00
100.00
6
5
—
BBVA SERVICIOS, S.A.
SPAIN
COMMERCIAL
—
100.00
100.00
—
—
—
(*) Amount without considering the interim dividends of the year, according to the provisional financial statements of each company, generally as of December 31, 2021. In the
carrying amount (net of provision and hedge in foreign operations), the Group´s ownership percentage has been applied, without considering the impairment of goodwill.
Information on foreign companies at exchange rate as of December 31, 2021.
(**)  In accordance with Article 3 of Royal Decree 1159/2010, of September 17, in order to determine the state, the voting power relating to subsidiaries was added to the voting
power directly held by the parent. Therefore, the number of votes corresponding to the parent company (including indirect control subsidiaries), corresponds to each subsidiary
holding a direct ownership interest.
Additional information on subsidiaries and structured entities composing the BBVA Group
(Continued)
P.150
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
% share of participation (**) 
Millions of Euros (*)
Affiliate entity data
Company
Location
Activity
Direct
Indirect
Total
Net carrying amount
Equity excluding
profit (loss)
31.12.21
Profit (loss)
31.12.21
BBVA SOCIEDAD TITULIZADORA S.A.
PERU                               
OTHER ISSUANCE
COMPANIES
—
100.00
100.00
1
1
—
BBVA TRADE, S.A.
SPAIN
INVESTMENT COMPANY
—
100.00
100.00
8
13
(3)
BBVA VALORES COLOMBIA SA COMISIONISTA
DE BOLSA
COLOMBIA                           
SECURITIES DEALER
—
100.00
100.00
9
9
—
BILBAO VIZCAYA HOLDING SAU
SPAIN
INVESTMENT COMPANY
100.00
—
100.00
120
97
69
CAIXA MANRESA IMMOBILIARIA ON CASA SL
SPAIN
REAL ESTATE
100.00
—
100.00
2
2
—
CARTERA E INVERSIONES SA CIA DE
SPAIN
INVESTMENT COMPANY
100.00
—
100.00
92
125
4
CASA DE BOLSA BBVA MEXICO SA DE CV
MEXICO                             
SECURITIES DEALER
—
100.00
100.00
65
42
24
CATALONIA PROMODIS 4, S.A.
SPAIN
REAL ESTATE
—
100.00
100.00
1
1
—
CATALUNYACAIXA IMMOBILIARIA SA
SPAIN
REAL ESTATE
100.00
—
100.00
295
314
(22)
CATALUNYACAIXA SERVEIS SA
SPAIN
SERVICES
100.00
—
100.00
2
2
—
CDD GESTIONI S.R.L.
ITALY
REAL ESTATE
100.00
—
100.00
—
—
—
CIDESSA DOS, S.L.
SPAIN
INVESTMENT COMPANY
—
100.00
100.00
15
15
—
CIERVANA SL
SPAIN
INVESTMENT COMPANY
100.00
—
100.00
53
51
—
COMERCIALIZADORA CORPORATIVA SAC
PERU                               
FINANCIAL SERVICES
—
50.00
50.00
—
—
—
COMERCIALIZADORA DE SERVICIOS
FINANCIEROS, S.A.
COLOMBIA                           
SERVICES
—
100.00
100.00
6
4
1
COMPAÑIA CHILENA DE INVERSIONES SL
SPAIN
INVESTMENT COMPANY
99.97
0.03
100.00
221
259
13
CONSOLIDAR A.F.J.P SA
ARGENTINA
IN LIQUIDATION
46.11
53.89
100.00
1
—
—
CONTENTS AREA, S.L.
SPAIN
SERVICES
—
100.00
100.00
4
4
—
CONTINENTAL DPR FINANCE COMPANY
CAYMAN ISLANDS
FINANCIAL SERVICES
—
100.00
100.00
—
—
—
CONTRATACION DE PERSONAL, S.A. DE C.V.
MEXICO                             
SERVICES
—
100.00
100.00
2
1
—
CORPORACION GENERAL FINANCIERA SA
SPAIN
INVESTMENT COMPANY
100.00
—
100.00
510
855
29
DATA ARCHITECTURE AND TECHNOLOGY
MEXICO SA DE CV
MEXICO                             
SERVICES
—
100.00
100.00
1
1
—
DATA ARCHITECTURE AND TECHNOLOGY S.L.
SPAIN
SERVICES
—
51.00
51.00
—
3
—
DATA ARQUITECTURE AND TECHNOLOGY
OPERADORA SA DE CV
MEXICO                             
SERVICES
—
100.00
100.00
—
—
—
DEUTSCHE BANK MEXICO SA FIDEICOMISO
F/1859
MEXICO                             
FINANCIAL SERVICES
—
100.00
100.00
—
—
—
DEUTSCHE BANK MEXICO SA FIDEICOMISO
F/1860
MEXICO                             
FINANCIAL SERVICES
—
100.00
100.00
—
—
—
DISTRITO CASTELLANA NORTE, S.A.
SPAIN
REAL ESTATE
—
75.54
75.54
125
169
(3)
ECASA, S.A.
CHILE
FINANCIAL SERVICES
—
100.00
100.00
33
24
9
EMPRENDIMIENTOS DE VALOR S.A.
URUGUAY                           
FINANCIAL SERVICES
—
100.00
100.00
2
2
—
EUROPEA DE TITULIZACION SA SGFT.
SPAIN
FINANCIAL SERVICES
88.24
—
88.24
2
17
3
F/11395 FIDEICOMISO IRREVOCABLE DE
ADMINISTRACION CON DERECHO DE
REVERSION (1)
MEXICO                             
REAL ESTATE
—
42.40
42.40
—
1
—
F/253863 EL DESEO RESIDENCIAL
MEXICO                             
REAL ESTATE
—
65.00
65.00
—
1
—
FIDEICOMISO 28991-8 TRADING EN LOS
MCADOS FINANCIEROS
MEXICO                             
FINANCIAL SERVICES
—
100.00
100.00
3
2
—
FIDEICOMISO F/29764-8 SOCIO LIQUIDADOR
DE OPERACIONES FINANCIERAS DERIVADAS
MEXICO                             
FINANCIAL SERVICES
—
100.00
100.00
43
39
3
FIDEICOMISO F/403112-6 DE
ADMINISTRACION DOS LAGOS
MEXICO                             
REAL ESTATE
—
100.00
100.00
—
—
—
FIDEICOMISO HARES BBVA BANCOMER F/
47997-2
MEXICO                             
REAL ESTATE
—
100.00
100.00
3
2
1
FIDEICOMISO INMUEBLES CONJUNTO
RESIDENCIAL HORIZONTES DE VILLA
CAMPESTRE
COLOMBIA                           
REAL ESTATE
—
100.00
100.00
—
1
—
(*) Amount without considering the interim dividends of the year, according to the provisional financial statements of each company, generally as of December 31, 2021. In the
carrying amount (net of provision and hedge in foreign operations), the Group´s ownership percentage has been applied, without considering the impairment of goodwill.
Information on foreign companies at exchange rate as of December 31, 2021.
(**)  In accordance with Article 3 of Royal Decree 1159/2010, of September 17, in order to determine the state, the voting power relating to subsidiaries was added to the voting
power directly held by the parent. Therefore, the number of votes corresponding to the parent company (including indirect control subsidiaries), corresponds to each subsidiary
holding a direct ownership interest.
(1) Full consolidation method is used according to accounting rules (see Glossary).
P.151
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Additional information on subsidiaries and structured entities composing the BBVA Group
(Continued)
% share of participation (**) 
Millions of Euros (*)
Affiliate entity data
Company
Location
Activity
Direct
Indirect
Total
Net carrying
amount
Equity excluding
profit (loss)
31.12.21
Profit (loss)
31.12.21
FIDEICOMISO LOTE 6.1 ZARAGOZA
COLOMBIA                           
REAL ESTATE
—
59.99
59.99
—
2
—
FIDEICOMISO SCOTIABANK INVERLAT S A F100322908
MEXICO                             
REAL ESTATE
—
100.00
100.00
2
2
—
FINANCIERA AYUDAMOS S.A. DE C.V., SOFOMER
MEXICO                             
IN LIQUIDATION
—
100.00
100.00
5
5
—
FOMENTO Y DESARROLLO DE CONJUNTOS RESIDENCIALES S.L.
EN LIQUIDACION
SPAIN
IN LIQUIDATION
—
60.00
60.00
—
—
—
FORUM COMERCIALIZADORA DEL PERU SA
PERU                               
SERVICES
—
100.00
100.00
1
—
—
FORUM DISTRIBUIDORA DEL PERU SA
PERU                               
FINANCIAL SERVICES
—
100.00
100.00
6
5
1
FORUM DISTRIBUIDORA, S.A.
CHILE
FINANCIAL SERVICES
—
100.00
100.00
41
37
2
FORUM SERVICIOS FINANCIEROS, S.A.
CHILE
FINANCIAL SERVICES
—
100.00
100.00
239
202
53
FUTURO FAMILIAR, S.A. DE C.V.
MEXICO                             
IN LIQUIDATION
—
100.00
100.00
1
1
—
G NETHERLANDS BV
NETHERLANDS
INVESTMENT COMPANY
—
100.00
100.00
393
327
(2)
GARANTI BANK SA
ROMANIA
BANKING
—
100.00
100.00
254
315
29
GARANTI BBVA AS (1)
TURKEY
BANKING
49.85
—
49.85
3,124
4,241
1,091
GARANTI BBVA EMEKLILIK AS
TURKEY
INSURANCES SERVICES
—
84.91
84.91
80
34
58
GARANTI BBVA FACTORING AS
TURKEY
FINANCIAL SERVICES
—
81.84
81.84
19
10
13
GARANTI BBVA FILO AS
TURKEY
SERVICES
—
100.00
100.00
1
17
49
GARANTI BBVA LEASING AS
TURKEY
FINANCIAL SERVICES
—
100.00
100.00
90
72
18
GARANTI BBVA PORTFOY AS
TURKEY
INVESTMENT FUND
MANAGEMENT
—
100.00
100.00
17
11
6
GARANTI BBVA YATIRIM AS
TURKEY
FINANCIAL SERVICES
—
100.00
100.00
87
38
48
GARANTI BILISIM TEKNOLOJISI VE TIC TAS
TURKEY
SERVICES
—
100.00
100.00
1
—
1
GARANTI DIVERSIFIED PAYMENT RIGHTS FINANCE COMPANY
CAYMAN ISLANDS
OTHER ISSUANCE
COMPANIES
—
100.00
100.00
—
(35)
27
GARANTI FILO SIGORTA ARACILIK HIZMETLERI A.S.
TURKEY
FINANCIAL SERVICES
—
100.00
100.00
—
—
—
GARANTI HOLDING BV
NETHERLANDS
INVESTMENT COMPANY
—
100.00
100.00
526
394
—
GARANTI KONUT FINANSMANI DANISMANLIK HIZMETLERI AS
(GARANTI MORTGAGE)
TURKEY
SERVICES
—
100.00
100.00
—
—
—
GARANTI KULTUR AS
TURKEY
SERVICES
—
100.00
100.00
—
—
—
GARANTI ODEME SISTEMLERI AS (GOSAS)
TURKEY
FINANCIAL SERVICES
—
100.00
100.00
—
1
2
GARANTI YATIRIM ORTAKLIGI AS (1) (2)
TURKEY
INVESTMENT COMPANY
—
3.61
3.61
—
3
—
GARANTIBANK BBVA INTERNATIONAL N.V.
NETHERLANDS
BANKING
—
100.00
100.00
675
591
18
GESCAT GESTIO DE SOL SL
SPAIN
REAL ESTATE
100.00
—
100.00
9
11
(2)
GESCAT LLEVANT, S.L.
SPAIN
REAL ESTATE
—
100.00
100.00
5
5
—
GESCAT LLOGUERS SL
SPAIN
REAL ESTATE
100.00
—
100.00
3
4
—
GESCAT VIVENDES EN COMERCIALITZACIO SL
SPAIN
REAL ESTATE
100.00
—
100.00
87
89
(2)
GESTION DE PREVISION Y PENSIONES SA
SPAIN
PENSION FUND
MANAGEMENT
60.00
—
60.00
9
17
4
GESTION Y ADMINISTRACION DE RECIBOS, S.A. - GARSA
SPAIN
SERVICES
—
100.00
100.00
1
1
—
GRAN JORGE JUAN SA
SPAIN
REAL ESTATE
100.00
—
100.00
424
437
14
GRUPO FINANCIERO BBVA MEXICO SA DE CV
MEXICO                             
FINANCIAL SERVICES
99.98
—
99.98
7,402
11,040
2,731
INMESP DESARROLLADORA, S.A. DE C.V.
MEXICO                             
REAL ESTATE
—
100.00
100.00
19
16
3
INMUEBLES Y RECUPERACIONES CONTINENTAL SA
PERU                               
REAL ESTATE
—
100.00
100.00
40
38
2
(*)  Amount without considering the interim dividends of the year, according to the provisional financial statements of each company, generally as of December 31, 2021. In the
carrying amount (net of provision and hedge in foreign operations), the Group´s ownership percentage has been applied, without considering the impairment of goodwill.
Information on foreign companies at exchange rate as of December 31, 2021.
(**)  In accordance with Article 3 of Royal Decree 1159/2010, of September 17, in order to determine the state, the voting power relating to subsidiaries was added to the voting
power directly held by the parent. Therefore, the number of votes corresponding to the parent company (including indirect control subsidiaries), corresponds to each subsidiary
holding a direct ownership interest.
(1) Full consolidation method is used according to accounting rules (see Glossary).
(2) The percentage of voting rights owned by the Group entities in this company is 99.97%.
P.152
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Additional information on subsidiaries and structured entities composing the BBVA Group
(Continued)
% share of participation (**) 
Millions of Euros (*)
Affiliate entity data
Company
Location
Activity
Direct
Indirect
Total
Net carrying amount
Equity excluding
profit (loss)
31.12.21
Profit (loss)
31.12.21
INVERAHORRO SL
SPAIN
INVESTMENT
COMPANY
100.00
—
100.00
112
115
(3)
INVERSIONES ALDAMA, C.A.
VENEZUELA
IN LIQUIDATION
—
100.00
100.00
—
—
—
INVERSIONES BANPRO INTERNATIONAL INC NV (1)
CURAÇAO
INVESTMENT
COMPANY
48.00
—
48.01
16
47
4
INVERSIONES BAPROBA CA
VENEZUELA
FINANCIAL
SERVICES
100.00
—
100.00
—
—
—
INVERSIONES P.H.R.4, C.A.
VENEZUELA
INACTIVE
—
60.46
60.46
—
—
—
JALE PROCAM, S.L. (EN LIQUIDACIÓN)
SPAIN
IN LIQUIDATION
—
50.00
50.00
—
(60)
(3)
MADIVA SOLUCIONES, S.L.
SPAIN
SERVICES
—
100.00
100.00
3
3
—
MISAPRE, S.A. DE C.V.
MEXICO                             
IN LIQUIDATION
—
100.00
100.00
—
—
—
MOMENTUM SOCIAL INVESTMENT HOLDING, S.L.
SPAIN
INVESTMENT
COMPANY
—
100.00
100.00
7
8
—
MOTORACTIVE IFN SA
ROMANIA
FINANCIAL
SERVICES
—
100.00
100.00
35
30
3
MOTORACTIVE MULTISERVICES SRL
ROMANIA
SERVICES
—
100.00
100.00
—
2
1
MOVISTAR CONSUMER FINANCE COLOMBIA SAS
COLOMBIA                           
FINANCIAL
SERVICES
—
50.00
50.00
1
4
(2)
MULTIASISTENCIA OPERADORA S.A. DE C.V.
MEXICO                             
INSURANCES
SERVICES
—
100.00
100.00
—
—
—
MULTIASISTENCIA SERVICIOS S.A. DE C.V.
MEXICO                             
INSURANCES
SERVICES
—
100.00
100.00
—
—
—
MULTIASISTENCIA, S.A. DE C.V.
MEXICO                             
INSURANCES
SERVICES
—
100.00
100.00
47
34
13
OPCION VOLCAN, S.A.
MEXICO                             
REAL ESTATE
—
100.00
100.00
2
2
—
OPENPAY ARGENTINA SA
ARGENTINA
PAYMENT ENTITIES
—
100.00
100.00
5
10
—
OPENPAY COLOMBIA SAS
COLOMBIA                           
PAYMENT ENTITIES
—
100.00
100.00
2
1
(1)
OPENPAY PERÚ SA
PERU                               
PAYMENT ENTITIES
—
100.00
100.00
3
3
(1)
OPENPAY S.A. DE C.V.
MEXICO                             
PAYMENT ENTITIES
—
100.00
100.00
18
4
1
OPENPAY SERVICIOS S.A. DE C.V.
MEXICO                             
SERVICES
—
100.00
100.00
—
—
—
OPERADORA DOS LAGOS S.A. DE C.V.
MEXICO                             
SERVICES
—
100.00
100.00
—
—
—
OPPLUS OPERACIONES Y SERVICIOS SA
SPAIN
SERVICES
100.00
—
100.00
1
16
6
PECRI INVERSION SL
SPAIN
INVESTMENT
COMPANY
100.00
—
100.00
265
263
2
PORTICO PROCAM, S.L.
SPAIN
REAL ESTATE
—
100.00
100.00
26
26
—
PROMOTORA DEL VALLES, S.L.
SPAIN
REAL ESTATE
—
100.00
100.00
51
51
8
PROMOU CT GEBIRA, S.L.
SPAIN
REAL ESTATE
—
100.00
100.00
2
2
—
PROMOU CT OPENSEGRE, S.L.
SPAIN
REAL ESTATE
—
100.00
100.00
5
5
—
PRONORTE UNO PROCAM, S.A.
SPAIN
REAL ESTATE
—
100.00
100.00
1
—
1
PROPEL EXPLORER FUND I SL
SPAIN
INVESTMENT
COMPANY
—
99.50
99.50
12
13
(1)
PROPEL VENTURE PARTNERS BRAZIL S.L.
SPAIN
INVESTMENT
COMPANY
—
99.80
99.80
11
11
1
PROPEL VENTURE PARTNERS GLOBAL, S.L
SPAIN
FINANCIAL
SERVICES
—
99.50
99.50
63
91
84
PROPEL VENTURE PARTNERS US FUND I, L.P.
UNITED STATES
FINANCIAL
SERVICES
99.50
—
99.50
235
175
87
PRO-SALUD, C.A.
VENEZUELA
INACTIVE
—
58.86
58.86
—
—
—
PROVINCIAL DE VALORES CASA DE BOLSA CA
VENEZUELA
SECURITIES DEALER
—
90.00
90.00
1
1
—
PROVINCIAL SDAD.ADMIN.DE ENTIDADES DE
INV.COLECTIVA CA
VENEZUELA
INVESTMENT FUND
MANAGEMENT
—
100.00
100.00
1
1
—
PROVIVIENDA ENTIDAD RECAUDADORA Y ADMIN.DE
APORTES, S.A.
BOLIVIA                           
PENSION FUND
MANAGEMENT
—
100.00
100.00
2
2
—
(*) Amount without considering the interim dividends of the year, according to the provisional financial statements of each company, generally as of December 31, 2021. In the
carrying amount (net of provision and hedge in foreign operations), the Group´s ownership percentage has been applied, without considering the impairment of goodwill.
Information on foreign companies at exchange rate as of December 31, 2021.
(**)  In accordance with Article 3 of Royal Decree 1159/2010, of September 17, in order to determine the state, the voting power relating to subsidiaries was added to the voting
power directly held by the parent. Therefore, the number of votes corresponding to the parent company (including indirect control subsidiaries), corresponds to each subsidiary
holding a direct ownership interest.
(1) Full consolidation method is used according to accounting rules (see Glossary).
P.153
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Additional information on subsidiaries and structured entities composing the BBVA Group
(Continued)
% share of participation (**) 
Millions of Euros (*)
Affiliate entity data
Company
Location
Activity
Direct
Indirect
Total
Net carrying amount
Equity excluding
profit (loss)
31.12.21
Profit (loss)
31.12.21
PSA FINANCE ARGENTINA COMPAÑIA FINANCIERA SA
ARGENTINA
BANKING
—
50.00
50.00
10
13
7
RALFI IFN SA
ROMANIA
FINANCIAL SERVICES
—
100.00
100.00
37
19
1
RPV COMPANY
CAYMAN ISLANDS
OTHER ISSUANCE
COMPANIES
—
100.00
100.00
—
(1)
1
SATICEM GESTIO SL
SPAIN
REAL ESTATE
100.00
—
100.00
4
4
—
SATICEM HOLDING SL
SPAIN
REAL ESTATE
100.00
—
100.00
5
5
—
SATICEM IMMOBILIARIA SL
SPAIN
REAL ESTATE
100.00
—
100.00
19
15
3
SATICEM IMMOBLES EN ARRENDAMENT SL
SPAIN
REAL ESTATE
100.00
—
100.00
2
2
—
SEGUROS PROVINCIAL CA
VENEZUELA
INSURANCES
SERVICES
—
100.00
100.00
10
5
5
SERVICIOS CORPORATIVOS DE SEGUROS, S.A. DE C.V.
MEXICO                             
SERVICES
—
100.00
100.00
2
4
(2)
SERVICIOS EXTERNOS DE APOYO EMPRESARIAL, S.A
DE C.V.
MEXICO                             
SERVICES
—
100.00
100.00
7
7
(1)
SOCIEDAD DE ESTUDIOS Y ANALISIS FINANCIERO SA
SPAIN
SERVICES
100.00
—
100.00
65
63
2
SOCIEDAD GESTORA DEL FONDO PUBLICO DE
REGULACION DEL MERCADO HIPOTECARIO SA
SPAIN
INACTIVE
77.20
—
77.20
—
—
—
SPORT CLUB 18 SA
SPAIN
INVESTMENT
COMPANY
100.00
—
100.00
11
10
1
TRIFOI REAL ESTATE SRL
ROMANIA
REAL ESTATE
—
100.00
100.00
1
1
—
UNIVERSALIDAD TIPS PESOS E-9
COLOMBIA                           
FINANCIAL SERVICES
—
100.00
100.00
—
25
—
UNNIM SOCIEDAD PARA LA GESTION DE ACTIVOS
INMOBILIARIOS SA
SPAIN
REAL ESTATE
100.00
—
100.00
619
508
(4)
URBANIZADORA SANT LLORENC SA
SPAIN
INACTIVE
60.60
—
60.60
—
—
—
VERIDAS DIGITAL AUTHENTICATION SOLUTIONS S.L.
SPAIN
SERVICES
—
51.00
51.00
1
4
—
VOLKSWAGEN FINANCIAL SERVICES COMPAÑIA
FINANCIERA SA
ARGENTINA
BANKING
—
51.00
51.00
18
23
12
(*) Amount without considering the interim dividends of the year, according to the provisional financial statements of each company, generally as of December 31, 2021. In the
carrying amount (net of provision and hedge in foreign operations), the Group´s ownership percentage has been applied, without considering the impairment of goodwill.
Information on foreign companies at exchange rate as of December 31, 2021.
(**)  In accordance with Article 3 of Royal Decree 1159/2010, of September 17, in order to determine the state, the voting power relating to subsidiaries was added to the voting
power directly held by the parent. Therefore, the number of votes corresponding to the parent company (including indirect control subsidiaries), corresponds to each subsidiary
holding a direct ownership interest. .
This Appendix is an integral part of Note 14.1 of the financial statements for the year ended December 31, 2021.
APPENDIX III.  Additional information on investments joint ventures and associates in the
BBVA Group as of December 31, 2021
Most significant companies are included, which together represent 99.9% of the total investment in this group.
P.154
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
% Legal share of participation
Millions of Euros (*)
Affiliate entity data
Company
Location
Activity
Direct
Indirect
Total
Net
carrying
amount
Assets
31.12.21
Liabilitie
s
31.12.21
Equity
excluding
profit
(loss)
31.12.21
Profit
(loss)
31.12.21
ASSOCIATES
ADQUIRA ESPAÑA, S.A.
SPAIN
SERVICES
—
44.44
44.44
4
19
11
8
1
ATOM BANK PLC
UNITED
KINGDOM
BANKING
38.97
—
38.97
77
4,765
4,568
226
(29)
AUREA, S.A. (CUBA)
CUBA
REAL ESTATE
—
49.00
49.00
4
10
1
9
—
BBVA ALLIANZ SEGUROS Y REASEGUROS, S.A.
SPAIN
INSURANCES SERVICES
—
50.00
50.00
254
805
253
547
5
COMPAÑIA ESPAÑOLA DE FINANCIACION DEL DESARROLLO
SA
SPAIN
PUBLIC COMPANIES AND
INSTITUTIONS
16.67
—
16.67
28
174
7
149
18
COMPAÑIA PERUANA DE MEDIOS DE PAGO SAC (VISANET
PERU)
PERU                               
ELECTRONIC MONEY ENTITIES
—
21.15
21.15
2
184
176
2
5
FIDEICOMISO F/00185 FIMPE - FIDEICOMISO F/00185 PARA
EXTENDER A LA SOCIEDAD LOS BENEFICIOS DEL ACCESO A LA
INFRAESTRUCTURA DE LOS MEDIOS DE PAGO ELECTRONICOS
MEXICO                             
FINANCIAL SERVICES
—
28.50
28.50
1
3
—
4
(1)
METROVACESA SA
SPAIN
REAL ESTATE
9.44
11.41
20.85
259
2,790
720
2,060
10
PLAY DIGITAL SA
ARGENTINA
PAYMENT ENTITIES
—
10.83
10.83
1
11
2
18
(8)
REDSYS SERVICIOS DE PROCESAMIENTO SL
SPAIN
FINANCIAL SERVICES
24.90
—
24.90
19
108
33
71
4
ROMBO COMPAÑIA FINANCIERA SA
ARGENTINA
BANKING
—
40.00
40.00
7
121
104
16
1
SBD CREIXENT, S.A.
SPAIN
REAL ESTATE
—
23.05
23.05
1
4
1
4
—
SEGURIDAD Y PROTECCION BANCARIAS SA DE CV
MEXICO                             
SERVICES
—
26.14
26.14
1
3
—
3
—
SERVICIOS ELECTRONICOS GLOBALES SA DE CV
MEXICO                             
SERVICES
—
46.14
46.14
15
33
—
25
7
SERVIRED SOCIEDAD ESPAÑOLA DE MEDIOS DE PAGO SA
SPAIN
FINANCIAL SERVICES
28.72
—
28.72
7
110
84
27
(1)
SISTEMAS DE TARJETAS Y MEDIOS DE PAGO SA
SPAIN
PAYMENT ENTITIES
20.61
—
20.61
1
1,925
1,920
5
—
SOLARISBANK AG (1)
GERMANY
BANKING
—
15.40
15.40
61
3,450
3,218
259
(27)
TELEFONICA FACTORING COLOMBIA, S.A.
COLOMBIA                           
FINANCIAL SERVICES
—
24.30
24.30
1
68
64
1
2
TELEFONICA FACTORING ESPAÑA SA (2)
SPAIN
FINANCIAL SERVICES
30.00
—
30.00
4
84
70
7
7
TELEFONICA FACTORING MEXICO SA DE CV
MEXICO                             
IN LIQUIDATION
24.30
—
24.30
1
3
—
2
—
TF PERU SAC
PERU                               
FINANCIAL SERVICES
—
24.30
24.30
1
7
1
3
2
JOINT VENTURES
ALTURA MARKETS SOCIEDAD DE VALORES SA
SPAIN
SECURITIES DEALER
50.00
—
50.00
76
3,317
3,165
144
8
COMPAÑIA MEXICANA DE PROCESAMIENTO SA DE CV
MEXICO                             
SERVICES
—
50.00
50.00
8
17
—
17
—
CORPORACION IBV PARTICIPACIONES EMPRESARIALES, S.A.
(3)
SPAIN
INVESTMENT COMPANY
—
50.00
50.00
29
63
5
58
—
DESARROLLOS METROPOLITANOS DEL SUR, S.L.
SPAIN
REAL ESTATE
—
50.00
50.00
18
93
58
32
3
FIDEICOMISO 1729 INVEX ENAJENACION DE CARTERA (3)
MEXICO                             
REAL ESTATE
—
44.09
44.09
10
167
—
167
—
FIDEICOMISO F/402770-2 ALAMAR
MEXICO                             
REAL ESTATE
—
42.40
42.40
7
17
—
17
—
INVERSIONES PLATCO CA
VENEZUELA
FINANCIAL SERVICES
—
50.00
50.00
1
4
2
3
—
PROMOCIONS TERRES CAVADES, S.A.
SPAIN
REAL ESTATE
—
39.11
39.11
1
3
—
15
(12)
RCI COLOMBIA SA COMPAÑIA DE FINANCIAMIENTO
COLOMBIA                           
FINANCIAL SERVICES
—
49.00
49.00
40
630
549
66
15
(*)  In foreign companies the exchange rate of December 31, 2021 is applied.
(1) The percentage of voting rights owned by the Group entities in this company is 22.22%.
(2) Financial Statements as of December 31, 2020.
(3) Classified as Non-current asset in sell.
This Appendix is an integral part of Note 14.2 of the financial statements for the year ended December 31, 2021.
P.155
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
APPENDIX IV.  Changes and notifications of participations in the BBVA Group in 2021
Acquisitions or increases of interest ownership in consolidated subsidiaries
Company (*)
Type of transaction
Total voting rights
controlled after the
disposal
Effective Date for the
Transaction (or
Notification Date)
OPENPAY PERÚ SA
FOUNDING
100.00
08-Mar-21
MOVISTAR CONSUMER FINANCE COLOMBIA SAS
FOUNDING
50.00
31-Mar-21
PROPEL EXPLORER FUND I SL
FOUNDING
99.50
01-Jun-21
OPENPAY ARGENTINA SA
FOUNDING
100.00
01-Jul-21
(*) Variations of less than 0.1% have not been considered due to immateriality.
Changes and notifications of participations in the BBVA Group in 2021 (continued)
Disposals or reduction of interest ownership in consolidated subsidiaries
Company (*)
Type of
transaction
Total voting rights
controlled after the
disposal
Effective date
for the
transaction (or
notification
date)
BBVA AUTOMERCANTIL COMERCIO E ALUGER DE VEICULOS AUTOMOVEIS LDA.
LIQUIDATION
—
21-Jan-21
BBVA PARAGUAY SA
DISPOSAL
—
22-Jan-21
HOLVI PAYMENT SERVICE OY
DISPOSAL
—
01-Feb-21
CAIXASABADELL PREFERENTS SA
LIQUIDATION
—
04-Mar-21
BBVA INTERNATIONAL PREFERRED SOCIEDAD ANONIMA
LIQUIDATION
—
12-Mar-21
CAIXA TERRASSA SOCIETAT DE PARTICIPACIONS PREFERENTS SAU
LIQUIDATION
—
25-Mar-21
DENIZEN FINANCIAL, INC
MERGER
—
27-Apr-21
COVAULT, INC
MERGER
—
11-May-21
ENTRE2 SERVICIOS FINANCIEROS E.F.C SA
LIQUIDATION
—
21-May-21
BBVA TRANSFER SERVICES INC
DISPOSAL
—
01-Jun-21
BBVA FOREIGN EXCHANGE INC.
DISPOSAL
—
01-Jun-21
BBVA REAL ESTATE MEXICO, S.A. DE C.V.
LIQUIDATION
—
01-Jun-21
BBVA USA BANCSHARES, INC.
DISPOSAL
—
01-Jun-21
BBVA USA
DISPOSAL
—
01-Jun-21
SIMPLE FINANCE TECHNOLOGY CORP.
DISPOSAL
—
01-Jun-21
BBVA INSURANCE AGENCY, INC.
DISPOSAL
—
01-Jun-21
BBVA FINANCIAL CORPORATION
DISPOSAL
—
01-Jun-21
BBVA WEALTH SOLUTIONS, INC.
DISPOSAL
—
01-Jun-21
BBVA MORTGAGE CORPORATION
DISPOSAL
—
01-Jun-21
HUMAN RESOURCES PROVIDER, INC
DISPOSAL
—
01-Jun-21
HUMAN RESOURCES SUPPORT, INC
DISPOSAL
—
01-Jun-21
TUCSON LOAN HOLDINGS, INC.
DISPOSAL
—
01-Jun-21
COMPASS TEXAS MORTGAGE FINANCING, INC
DISPOSAL
—
01-Jun-21
PHOENIX LOAN HOLDINGS, INC.
DISPOSAL
—
01-Jun-21
COMPASS MORTGAGE FINANCING, INC.
DISPOSAL
—
01-Jun-21
COMPASS LOAN HOLDINGS TRS, INC.
DISPOSAL
—
01-Jun-21
PI HOLDINGS NO. 1, INC.
DISPOSAL
—
01-Jun-21
P.I. HOLDINGS NO. 3, INC.
DISPOSAL
—
01-Jun-21
COMPASS CAPITAL MARKETS, INC.
DISPOSAL
—
01-Jun-21
ARIZONA FINANCIAL PRODUCTS, INC
DISPOSAL
—
01-Jun-21
COMPASS LIMITED PARTNER, INC.
DISPOSAL
—
01-Jun-21
COMPASS GP, INC.
DISPOSAL
—
01-Jun-21
COMPASS SOUTHWEST, LP
DISPOSAL
—
01-Jun-21
TEXAS LOAN SERVICES LP
DISPOSAL
—
01-Jun-21
LIQUIDITY ADVISORS LP
DISPOSAL
—
01-Jun-21
COMPASS INSURANCE TRUST
DISPOSAL
—
01-Jun-21
GUARANTY BUSINESS CREDIT CORPORATION
DISPOSAL
—
01-Jun-21
TMF HOLDING INC.
DISPOSAL
—
01-Jun-21
(*) Variations of less than 0.1% have not been considered due to immateriality.
P.156
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Company (*)
Type of
transaction
Total voting rights
controlled after the
disposal
Effective date
for the
transaction (or
notification
date)
GUARANTY PLUS HOLDING COMPANY
DISPOSAL
—
01-Jun-21
RWHC, INC
DISPOSAL
—
01-Jun-21
SAGE OG I, INC
DISPOSAL
—
01-Jun-21
SAGE OG2, LLC
DISPOSAL
—
01-Jun-21
BBVA TRANSFER HOLDING INC
DISPOSAL
—
01-Jun-21
BBVA OPEN PLATFORM INC
DISPOSAL
—
01-Jun-21
DALLAS CREATION CENTER, INC
DISPOSAL
—
01-Jun-21
AZLO BUSINESS, INC
DISPOSAL
—
01-Jun-21
UPTURN FINANCIAL INC
DISPOSAL
—
01-Jun-21
ARRAHONA AMBIT, S.L.
LIQUIDATION
—
01-Jun-21
ARRELS CT LLOGUER, S.A.
LIQUIDATION
—
01-Jun-21
GARRAF MEDITERRANIA, S.A.
LIQUIDATION
—
01-Jun-21
PROMOU CT 3AG DELTA, S.L.
LIQUIDATION
—
01-Jun-21
PROMOU CT EIX MACIA, S.L.
LIQUIDATION
—
01-Jun-21
PROMOU CT VALLES, S.L.
LIQUIDATION
—
01-Jun-21
PROMOCIONES Y CONSTRUCCIONES CERBAT, S.L.U.
LIQUIDATION
—
01-Jun-21
CETACTIUS SL
LIQUIDATION
—
01-Jun-21
PROV-INFI-ARRAHONA, S.L.
LIQUIDATION
—
03-Jun-21
BBVA PROCUREMENT SERVICES AMERICA DEL SUR SPA, EN LIQUIDACION
LIQUIDATION
—
01-Sep-21
BBVA IRELAND PLC ( En liquidación)
LIQUIDATION
—
28-Oct-21
PUERTO CIUDAD LAS PALMAS, S.A.
LIQUIDATION
—
17-Nov-21
PARCSUD PLANNER, S.L.
LIQUIDATION
—
14-Dec-21
PROMOU GLOBAL, S.L.
LIQUIDATION
—
14-Dec-21
NOVA TERRASSA 3, S.L.
LIQUIDATION
—
14-Dec-21
OPPLUS SAC (En liquidación)
LIQUIDATION
—
15-Dec-21
IRIDION SOLUCIONS IMMOBILIARIES SL
LIQUIDATION
—
16-Dec-21
QIPRO SOLUCIONES S.L.
DISPOSAL
—
22-Dec-21
CATALONIA GEBIRA, S.L. (EN LIQUIDACION)
LIQUIDATION
—
22-Dec-21
INVERPRO DESENVOLUPAMENT, S.L.
LIQUIDATION
—
22-Dec-21
INPAU, S.A.
LIQUIDATION
—
31-Dec-21
(*) Variations of less than 0.1% have not been considered due to immateriality.
Changes and notifications of participations in the BBVA Group in 2021 (continued)
Business combinations and other acquisitions or increases of interest ownership in associates and
joint-ventures accounted for under the equity method
Company (*)
Type of transaction
Total voting rights
controlled after the
disposal
Effective date for the
transaction (or
notification date)
PLAY DIGITAL SA
SHAREHOLDERS
AGREEMENT
10.83
01-Mar-21
REDSYS SERVICIOS DE PROCESAMIENTO SL
DISPOSAL
24.90
02-Sep-21
COMPAÑIA PERUANA DE MEDIOS DE PAGO SAC (VISANET PERU)
DISPOSAL
21.15
01-Oct-21
SISTEMAS DE TARJETAS Y MEDIOS DE PAGO SA
DISPOSAL
20.61
14-Oct-21
(*) Variations of less than 0.1% have not been considered due to immateriality.
P.157
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Changes and notifications of participations in the BBVA Group in 2021 (continued)
Disposal or reduction of interest ownership in associates and joint-ventures companies accounted
for under the equity method
Company (*)
Type of transaction
Total voting rights
controlled after the
disposal
Effective date for the
transaction (or
notification date)
DIVARIAN PROPIEDAD, S.A.U.
DISPOSAL
—
15-Oct-21
SOLARISBANK AG (1)
CAPITAL INCREASE
DILUTION
15.40
16-Dec-21
CORPORATIVO VITAMEDICA, S.A. DE C.V.
DISPOSAL
—
22-Jan-21
SERVICIOS VITAMEDICA, S.A. DE C.V.
DISPOSAL
—
22-Jan-21
VITAMEDICA ADMINISTRADORA, S.A. DE C.V
DISPOSAL
—
22-Jan-21
(*) Variations of less than 0.1% have not been considered due to immateriality.
(1) The percentage of voting rights owned by the Group entities in this company is 22.22%.
This Appendix is an integral part of Note 14.3 of the financial statements for the year ended December 31, 2021.
P.158
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
APPENDIX V.  Fully consolidated subsidiaries with more than 10% owned by non-Group
shareholders as of December 31, 2021
% of voting rights controlled by the
Bank
Company
Activity
Direct
Indirect
Total
BBVA BANCO CONTINENTAL SA
BANKING
—
46.12
46.12
BANCO PROVINCIAL SA - BANCO UNIVERSAL
BANKING
1.46
53.75
55.21
INVERSIONES BANPRO INTERNATIONAL INC NV
INVESTMENT COMPANY
48.00
—
48.01
PRO-SALUD, C.A.
INACTIVE
—
58.86
58.86
INVERSIONES P.H.R.4, C.A.
INACTIVE
—
60.46
60.46
BBVA PREVISION AFP SA ADM.DE FONDOS DE PENSIONES
PENSION FUND MANAGEMENT
75.00
5.00
80.00
COMERCIALIZADORA CORPORATIVA SAC
FINANCIAL SERVICES
—
50.00
50.00
DISTRITO CASTELLANA NORTE, S.A.
REAL ESTATE
—
75.54
75.54
GESTION DE PREVISION Y PENSIONES SA
PENSION FUND MANAGEMENT
60.00
—
60.00
F/253863 EL DESEO RESIDENCIAL
REAL ESTATE
—
65.00
65.00
DATA ARCHITECTURE AND TECHNOLOGY S.L.
SERVICES
—
51.00
51.00
VOLKSWAGEN FINANCIAL SERVICES COMPAÑIA FINANCIERA SA
BANKING
—
51.00
51.00
FIDEICOMISO LOTE 6.1 ZARAGOZA
REAL ESTATE
—
59.99
59.99
F/11395 FIDEICOMISO IRREVOCABLE DE ADMINISTRACION CON
DERECHO DE REVERSION
REAL ESTATE
—
42.40
42.40
VERIDAS DIGITAL AUTHENTICATION SOLUTIONS S.L.
SERVICES
—
51.00
51.00
MOVISTAR CONSUMER FINANCE COLOMBIA SAS
FINANCIAL SERVICES
—
50.00
50.00
GARANTI BBVA EMEKLILIK AS
INSURANCES SERVICES
—
84.91
84.91
FOMENTO Y DESARROLLO DE CONJUNTOS RESIDENCIALES S.L. EN
LIQUIDACION
IN LIQUIDATION
—
60.00
60.00
BBVA INFORMATION TECHNOLOGY ESPAÑA SL
SERVICES
76.00
—
76.00
JALE PROCAM, S.L. (EN LIQUIDACIÓN)
IN LIQUIDATION
—
50.00
50.00
PSA FINANCE ARGENTINA COMPAÑIA FINANCIERA SA
BANKING
—
50.00
50.00
P.159
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
APPENDIX VI.  BBVA Group’s structured entities as of December 31, 2021. Securitization
funds
Millions of Euros
Securitization fund
(consolidated)
Company
Origination
date
Total securitized
exposures at the
origination date
Total securitized
exposures as of
December 31, 2021
TDA 18 MIXTO, FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
20-Nov-03
91
9
TDA 22 Mixto, FTA (Unnim)
BANCO BILBAO VIZCAYA ARGENTARIA SA
09-Dec-04
592
17
AYT Hipotecario Mixto IV, FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
27-Jun-05
100
10
AYT HIP MIXTO V
BANCO BILBAO VIZCAYA ARGENTARIA SA
21-Jul-06
120
22
TDA 27 Mixto, FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
22-Dec-06
275
69
TDA 28 Mixto, FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
23-Jul-07
250
70
HIPOCAT 6 FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
17-Sep-03
850
68
HIPOCAT 7 FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
08-Jun-04
1,400
166
HIPOCAT 8 FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
06-May-05
1,500
179
HIPOCAT 9 FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
25-Nov-05
1,016
149
HIPOCAT 10 FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
05-Jul-06
1,526
236
HIPOCAT 11 FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
09-Mar-07
1,628
307
TDA 19 MIXTO, FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
27-Feb-04
600
20
TDA 23 MIXTO, FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
18-Mar-05
860
25
TDA TARRAGONA 1 FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
30-Nov-07
397
81
GAT VPO (UNNIM)
BANCO BILBAO VIZCAYA ARGENTARIA SA
25-Jun-09
780
45
BBVA CONSUMO 10 FT
BANCO BILBAO VIZCAYA ARGENTARIA SA
08-Jul-19
2,000
1,364
BBVA CONSUMO 11 FT
BANCO BILBAO VIZCAYA ARGENTARIA SA
12-Mar-21
2,500
2,053
BBVA CONSUMO 9 FT
BANCO BILBAO VIZCAYA ARGENTARIA SA
27-Mar-17
1,375
405
BBVA CONSUMER AUTO 2018-1
BANCO BILBAO VIZCAYA ARGENTARIA SA
18-Jun-18
800
379
BBVA CONSUMER AUTO 2020-1
BANCO BILBAO VIZCAYA ARGENTARIA SA
15-Jun-20
1,100
1,100
BBVA RMBS 1 FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
19-Feb-07
2,500
743
BBVA RMBS 2 FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
26-Mar-07
5,000
1,355
BBVA RMBS 3 FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
22-Jul-07
3,000
1,300
BBVA RMBS 5 FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
24-May-08
5,000
2,312
BBVA RMBS 9 FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
18-Apr-10
1,295
734
BBVA RMBS 10 FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
19-Jun-11
1,600
1,011
BBVA RMBS 11 FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
09-Jun-12
1,400
892
BBVA RMBS 12 FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
09-Dec-13
4,350
2,763
BBVA RMBS 13 FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
14-Jul-14
4,100
2,730
BBVA RMBS 14 FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
24-Nov-14
700
397
BBVA RMBS15 FT
BANCO BILBAO VIZCAYA ARGENTARIA SA
11-May-15
4,000
2,681
BBVA RMBS 16 FT
BANCO BILBAO VIZCAYA ARGENTARIA SA
09-May-16
1,600
1,129
BBVA RMBS 17 FT
BANCO BILBAO VIZCAYA ARGENTARIA SA
21-Nov-16
1,800
1,309
BBVA RMBS 18 FT
BANCO BILBAO VIZCAYA ARGENTARIA SA
20-Nov-17
1,800
1,484
BBVA RMBS 19 FT
BANCO BILBAO VIZCAYA ARGENTARIA SA
25-Nov-19
2,000
1,807
BBVA RMBS 20 FT
BANCO BILBAO VIZCAYA ARGENTARIA SA
14-Jun-21
2,500
2,500
BBVA LEASING 1 FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
24-Jun-07
2,500
81
BBVA LEASING 2 FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
27-Jul-20
2,100
1,353
BBVA-6 FTPYME FTA
BANCO BILBAO VIZCAYA ARGENTARIA SA
10-Jun-07
1,500
37
P.160
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
APPENDIX VII. BBVA Group’s structured entities. Securitization funds as of December 31,
2021
Issue Type and data (Millions of Euros)
2021
2020
Interest rate in force
in 2021
Fix (F) or variable (V)
Maturity date
Non-convertible
ago-06
—
40
—%
V
9-Aug-21
ago-06
—
46
—%
V
9-Aug-21
mar-07
73
73
0.73%
V
Perpetual
abr-07
68
68
0.02%
V
4-Apr-22
mar-08
125
125
6.03%
F
3-Mar-33
may-08
50
50
3.83%
V
19-May-23
jul-08
100
100
6.20%
F
4-Jul-23
feb-17
1,000
1,000
3.50%
F
10-Feb-27
feb-17
99
99
4.00%
F
24-Feb-32
mar-17
65
65
4.00%
F
24-Feb-32
mar-17
53
53
2.00%
V
16-Mar-27
mar-17
106
98
5.70%
F
31-Mar-32
may-17
19
19
1.60%
F
24-May-27
may-17
150
150
2.54%
F
24-May-27
may-18
263
243
5.25%
F
29-May-33
feb-19
750
750
2.58%
F
22-Feb-29
ene-20
994
994
1.00%
F
16-Jan-30
jul-20
357
334
3.10%
F
15-Jul-31
Subordinated debt - convertible
abr-16
—
1,000
8.88%
V
Perpetual
may-17
500
500
5.88%
V
Perpetual
nov-17
883
815
6.13%
V
Perpetual
sep-18
1,000
1,000
5.88%
V
Perpetual
mar-19
1,000
1,000
6.00%
V
Perpetual
sep-19
883
815
6.50%
V
Perpetual
jul-20
1,000
1,000
6.00%
V
Perpetual
Subtotal
9,538
10,437
Subordinated deposits
173
360
Total
9,711
10,797
This Appendix is an integral part of Note 20.4 of the financial statements for the year ended December 31, 2021.
P.161
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
APPENDIX VIII.  Balance sheets held in foreign currency as of December 31, 2021 and
2020
2021 (Millions of Euros)
USD
Pounds
sterling
Other
currencies
TOTAL
Assets
Financial assets held for trading
10,864
5,845
796
17,505
Non-trading financial assets mandatorily at fair value through profit or
loss
83
—
66
149
Financial assets designated at fair value through other comprehensive
income
3,464
109
5,152
8,725
Financial assets at amortized cost
21,608
1,855
3,064
26,527
Investments in subsidiaries, joint ventures and associates
—
—
11,968
11,968
Tangible assets
6
3
6
15
Other Assets
3,856
166
489
4,511
Total
39,881
7,978
21,541
69,400
Liabilities
Financial assets held for trading
10,334
234
189
10,757
Other financial liabilities designated at fair value through profit or loss
1,605
163
153
1,921
Financial liabilities at amortized cost
22,632
3,117
2,592
28,341
Other Liabilities
301
40
95
436
Total
34,872
3,554
3,029
41,455
2020 (Millions of Euros)
USD
Pounds
sterling
Other
currencies
TOTAL
Assets
Financial assets held for trading
4,955
3,019
1,049
9,022
Non-trading financial assets mandatorily at fair value through profit or
loss
84
5
48
137
Financial assets designated at fair value through other comprehensive
income
3,552
91
4,690
8,334
Financial assets at amortized cost
18,330
1,737
2,542
22,609
Investments in subsidiaries, joint ventures and associates
—
—
12,313
12,313
Tangible assets
8
4
8
20
Other Assets
6,600
439
8,967
16,005
Total
33,528
5,295
29,618
68,440
Liabilities
Financial assets held for trading
4,553
210
234
4,997
Other financial liabilities designated at fair value through profit or loss
2,028
263
469
2,760
Financial liabilities at amortized cost
26,183
4,035
1,557
31,776
Other Liabilities
190
41
39
269
Total
32,954
4,550
2,299
39,802
This Appendix is an integral part of Note 2.13 of the financial statements for the year ended December 31, 2021.
P.162
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
APPENDIX IX.  Income statement corresponding to the first and second half of 2021 and
2020
INCOME STATEMENTS (Millions of Euros)
Six months
ended June 30,
2021
Six months
ended June 30,
2020
Six months
ended
December 31,
2021
Six months
ended
December 31,
2020
Interest income
2,155
2,394
2,134
2,234
Interest  expense
(428)
(614)
(432)
(501)
NET INTEREST INCOME
1,727
1,780
1,701
1,734
Dividend income
898
927
910
434
Fee and commission income
1,183
1,067
1,332
1,058
Fee and commission expense
(204)
(173)
(259)
(185)
Gains (losses) on derecognition of financial assets and liabilities not
measured at fair value through profit or loss, net
61
141
22
(54)
Gains (losses) on financial assets and liabilities held for trading, net
229
300
66
53
Gains (losses) on non-trading financial assets mandatorily at fair
value through profit or loss, net
79
8
34
21
Gains (losses) on financial assets and liabilities designated at fair
value through profit or loss, net
42
(65)
3
(4)
Gains (losses) from hedge accounting, net
(28)
10
(8)
3
Exchange differences, net
28
(65)
29
36
Other operating income
89
71
80
70
Other operating expense
(264)
(248)
(282)
(281)
GROSS INCOME
3,840
3,752
3,631
2,885
Administrative expense
(1,816)
(1,785)
(1,877)
(1,768)
Personnel expense
(1,086)
(1,057)
(1,150)
(1,087)
Other administrative expense
(729)
(728)
(727)
(680)
Depreciation and amortization
(322)
(332)
(317)
(331)
Provisions or reversal of provisions
(939)
(372)
(11)
(102)
Impairment or reversal of impairment on financial assets not
measured at fair value through profit or loss or net gains by
modification
(326)
(945)
(149)
(287)
NET OPERATING INCOME
437
318
1,277
396
Impairment or reversal of impairment of investments in
subsidiaries,  joint ventures and associates
(35)
(348)
(876)
29
Impairment or reversal of impairment on non-financial assets
(155)
(46)
(12)
(60)
Gains (losses) on derecognition of non - financial assets and
subsidiaries, net
3
—
—
1
Negative goodwill recognized in profit or loss
—
—
—
—
Gains (losses) from non-current assets and disposal groups
classified as held for sale not qualifying as discontinued operations   
110
(24)
(4)
(19)
PROFIT (LOSS) BEFORE TAX FROM CONTINUING
OPERATIONS
360
(99)
386
347
Tax expense or income related to profit or loss from continuing
operations
208
(24)
(150)
(12)
PROFIT (LOSS) AFTER TAX FROM CONTINUING
OPERATIONS
568
(122)
235
335
Profit (loss) after tax from discontinued operations
277
(1,468)
—
(927)
PROFIT(LOSS) FOR THE YEAR
845
(1,590)
235
(592)
P.163
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
APPENDIX X. Information on data derived from the special accounting registry and other
information bonds
The Bank has implemented policies and procedures for its activities in the mortgage market and in the financing of exportation of
goods and services or the process of internationalization of companies, which allow ensuring compliance with the applicable
regulations of the mortgage market and for the issuance of bonds.
a.Mortgage market policies and procedures
Information required pursuant to Circular 5/2011 of the Bank of Spain is indicated as follows.
The mortgage origination policy is based on principles focused on assessing the adequate ratio between the amount of the loan, and
the payments, and the income of the applicant. Applicants must in all cases prove sufficient repayment ability (present and future) to
meet their repayment obligations, for both the mortgage debt and for other debts detected in the financial system. Therefore, the
applicant’s repayment ability is a key aspect within the credit decision-making tools and retail risk acceptance manuals, and has a
high weighting in the final decision.
During the mortgage risk transaction analysis process, documentation supporting the applicant’s income (payroll, etc.) is required,
and the applicant’s position in the financial system is checked through automated database queries (internal and external). This
information is used for calculation purposes in order to determine the level of indebtedness/compliance with the remainder of the
system. This documentation is kept in the transaction’s file.
In addition, the mortgage origination policy assesses the adequate ratio between the amount of the loan and the appraisal value of the
mortgaged asset. The policy also establishes that the property to be mortgaged be appraised by an independent appraisal company
as established by Circular 3/2010 and Circular 4/2016. BBVA selects those companies whose reputation, standing in the market and
independence ensure that their appraisals adapt to the market reality in each region. Each appraisal is reviewed and checked before
the loan is granted and, in those cases where the loan is finally granted, it is kept in the transaction’s file.
As for issues related to the mortgage market, the Finance area annually defines the strategy for wholesale finance issues, and more
specifically mortgage bond issues, such as mortgage covered bonds or mortgage securitization. The Assets and Liabilities Committee
tracks the budget monthly. The volume and type of assets in these transactions is determined in accordance with the wholesale
finance plan, the trend of the Bank’s “Loans and advances” outstanding balances and the conditions in the market.
The Board of Directors of the Bank authorizes each of the issues of Mortgage Transfer Certificates and/or Mortgage Participations
issued by BBVA to securitize the credit rights derived from loans and mortgage loans. Likewise, the Board of Directors authorizes the
establishment of a Base Prospectus for the issuance of fixed-income securities through which the mortgage-covered bonds are
implemented.
As established in article 24 of Royal Decree 716/2009, of April, 24, by virtue of which certain aspects of Law 2/1981, of 25 March, of
regulation of the mortgage market and other rules of the mortgage and financial system are developed, “the volume of outstanding
mortgage-covered bonds issued by a bank may not exceed 80% of a calculation base determined by adding the outstanding principal
of all the loans and mortgage loans in the bank’s portfolio that are eligible” and which are not covered by the issue of mortgage bonds,
mortgage participations or mortgage transfer certificates. For these purposes, in accordance with the aforementioned Royal Decree
716/2009, in order to be eligible, loans and mortgage loans, on a general basis: (i) must be secured by a first mortgage on the
freehold; (ii) the loan’s amount may not exceed 80% of the appraisal value for residential mortgages, and 60% for other mortgage
lending; (iii) must be established on assets exclusively and wholly owned by the mortgagor; (iv) must have been appraised by an
independent appraisal company unrelated to the Group and authorized by the Bank of Spain; and (v) the mortgaged property must be
covered at least by a current damage insurance policy.
The Bank has set up a series of controls for mortgage covered bonds, which regularly control the total volume of issued mortgage
covered bonds issued and the remaining eligible collateral, to avoid exceeding the maximum limit set by Royal Decree 716/2009, and
outlined in the preceding paragraph. In the case of securitizations, the preliminary portfolio of loans and mortgage loans to be
securitized is checked according to an agreed procedures engagement, by the Bank’s external auditor as required by the Spanish
Securities and Exchange Commission. There is also a series of filters through which some mortgage loans and credits are excluded in
accordance with legal, commercial and risk concentration criteria.
P.164
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
b.Quantitative information on activities in the mortgage market
The quantitative information on activities in the mortgage market required by Bank of Spain Circular 5/2011 as of December 31, 2021
and 2020 is shown below.
b.1) Ongoing operations
Mortgage loans. Eligibility for the purpose of the mortgage market (Millions of Euros)
2021
2020
Nominal value of outstanding loans and mortgage loans
86,112
88,753
Minus: Nominal value of all outstanding loans and mortgage loans that form part of the portfolio, but
have been mobilized through mortgage bond holdings or mortgage transfer certificates.
(27,106)
(27,549)
Nominal value of outstanding loans and mortgage loans, excluding securitized loans
59,006
61,204
Of which: Loans and mortgage loans which would be eligible if the calculation limits set forth in
Article 12 of Spanish Royal Decree 716/2009 were not applied.
45,006
44,854
Of which: Minus: Loans and mortgage loans which would be eligible but, according to the criteria set
forth in Article 12 of Spanish Royal Decree 716/2009, cannot be used to collateralize any issuance of
mortgage bonds.
(1,043)
(1,169)
Eligible loans and mortgage loans that, according to the criteria set forth in Article 12 of
Spanish Royal Decree 716/2009, can be used as collateral for the issuance of mortgage
bonds
43,963
43,685
Issuance limit: 80% of eligible loans and mortgage loans that can be used as collateral
35,170
34,948
Issued Mortgage-covered bonds
31,899
32,069
Outstanding Mortgage-covered bonds
9,399
12,559
Capacity to issue mortgage-covered bonds
3,271
2,879
Memorandum items:
Percentage of overcollateralization across the portfolio
185%
191%
Percentage of overcollateralization across the eligible used portfolio
138%
136%
Nominal value of available sums (committed and unused) from all loans and mortgage loans.
5,765
5,549
Of which: Potentially eligible
4,972
4,885
Of which: Ineligible
793
664
Nominal value of all loans and mortgage loans that are not eligible, as they do not meet the
thresholds set in Article 5.1 of Spanish Royal Decree 716/2009, but do meet the rest of the
eligibility requirements indicated in Article 4 of the Royal Decree.
7,623
9,006
Nominal value of the replacement assets subject to the issue of mortgage-covered bonds.
—
—
Mortgage loans. Eligibility for the purpose of the mortgage market (Millions of Euros)
2021
2020
Total loans
(1)
86,112
88,753
Issued mortgage participations
(2)
3,703
4,114
Of which: recognized on the balance sheet
2,632
2,928
Issued mortgage transfer certificates
(3)
23,403
23,435
Of which: recognized on the balance sheet
21,530
21,098
Mortgage loans as collateral of mortgages bonds
(4)
—
Loans supporting the issuance of mortgage-covered bonds
1-2-3-4
59,006
61,204
Non eligible loans
14,000
16,350
Comply requirements to be eligible except the limit provided for under the article 5.1 of the
Spanish Royal Decree 716/2009
7,623
9,006
Other
6,377
7,344
Eligible loans
45,006
44,854
That cannot be used as collateral for issuances
1,043
1,169
That can be used as collateral for issuances
43,963
43,685
Loans used to collateralize mortgage bonds
—
—
Loans used to collateralize mortgage-covered bonds
43,963
43,685
P.165
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Nominal value of the total mortgage loans (Millions of Euros)
2021
2020
Total
mortgage
loans
Eligible
Loans (*)
Eligibles that
can be used as
collateral for
issuances (**)
Total
mortgage
loans
Eligible
Loans (*)
Eligibles that
can be used as
collateral for
issuances (**)
Total
59,006
45,006
43,963
61,204
44,854
43,685
By source of the operations
Originated by the bank
54,830
41,426
40,413
56,593
40,975
39,846
Subrogated by other institutions
687
549
545
763
589
584
Rest
3,489
3,031
3,005
3,848
3,290
3,255
By Currency
In Euros
58,873
44,908
43,865
61,033
44,742
43,573
In foreign currency
133
98
98
171
112
112
By payment situation
Normal payment
53,002
42,477
41,789
54,197
42,245
41,388
Other situations
6,004
2,529
2,174
7,007
2,609
2,297
By residual maturity
Up to 10 years
11,948
9,776
9,505
13,031
10,037
9,759
10 to 20 years
24,634
21,332
20,653
25,898
22,116
21,359
20 to 30 years
19,513
13,139
13,064
18,713
11,718
11,613
Over 30 years
2,911
759
741
3,562
983
954
By Interest rate
Fixed rate
16,657
12,529
12,462
13,412
9,318
9,260
Floating rate
42,349
32,477
31,501
47,792
35,536
34,425
Mixed rate
—
—
—
By target of operations
For business activity
9,494
6,316
5,482
10,699
6,598
5,681
Of which: RE development
2,116
1,415
695
2,215
1,555
757
Household and NPISHs
49,512
38,690
38,481
50,505
38,256
38,004
By type of guarantee
Secured by completed assets/buildings
57,390
44,052
43,275
59,190
43,696
42,868
Residential use
50,941
39,806
39,182
52,145
39,454
38,781
Of which: public housing
3,418
2,851
2,728
3,791
3,078
2,942
Commercial
6,407
4,236
4,083
7,015
4,233
4,078
Other
42
10
10
30
9
9
Secured by assets/buildings under
construction
1,132
779
556
1,303
942
660
Residential use
836
619
400
1,004
734
453
Of which: public housing
1
—
—
1
—
—
Commercial
296
160
156
299
208
207
Other
—
—
—
Secured by land
484
175
132
711
216
157
Urban
178
73
33
275
88
34
Non-urban
306
102
99
436
128
123
(*)  Not taking into account the thresholds established by article 12 of Spanish Royal Decree 716/2009.
(**) Taking into account the thresholds established by article 12 of Spanish Royal Decree 716/2009.
P.166
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Nominal value of the total mortgage loans (Millions of Euros)
Loan to Value (Last available appraisal risk)
Less than or
equal to
40%
Over 40%
but less
than or
equal to
60%
Over 60%
but less
than or
equal to
80%
Over 80%
Total
December 2021
Home mortgages
13,612
13,935
13,004
—
40,551
Other mortgages
2,264
2,191
4,455
Total
15,876
16,126
13,004
—
45,006
December 2020
Home mortgages
13,665
14,339
12,211
—
40,215
Other mortgages
2,351
2,288
4,639
Total
16,016
16,627
12,211
—
44,854
Eligible and non-eligible mortgage loans. Changes of the nominal values in the period (Millions of Euros)
2021
2020
Eligible (*)
Non eligible
Eligible (*)
Non eligible
Balance at the beginning
44,854
16,350
44,759
17,825
Retirements
6,829
6,033
6,429
4,535
Held-to-maturity cancellations
4,008
1,013
3,918
736
Anticipated cancellations
2,283
971
1,913
930
Subrogations to other institutions
56
20
48
19
Rest
482
4,029
550
2,850
Additions
6,981
3,684
6,524
3,060
Originated by the bank
5,275
3,138
3,740
2,396
Subrogations to other institutions
25
10
3
1
Rest
1,682
535
2,781
664
Balance at the end
45,006
14,000
44,854
16,350
(*) Not taking into account the thresholds established by Article 12 of Spanish Royal Decree 716/2009.
Mortgage loans supporting the issuance of mortgage-covered bonds. Nominal value (Millions of Euros)
2021
2020
Potentially eligible
4,972
4,885
Ineligible
793
664
Total
5,765
5,549
P.167
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
b.2)  Liabilities operations
Issued Mortgage Bonds (Millions of Euros)
2021
2020
Nominal value
Average
residual
maturity
Nominal value
Average
residual
maturity
Mortgage bonds
—
—
Mortgage-covered bonds
31,899
32,069
Of which: Non recognized as liabilities on balance
22,500
19,510
Of Which: outstanding
9,399
12,559
Debt securities issued through public offer
7,700
10,450
Residual maturity up to 1 year
1,250
2,750
Residual maturity over 1 year and less than 2 years
2,250
1,250
Residual maturity over 2 years and less than 3 years
1,000
2,250
Residual maturity over 3 years and less than 5 years
3,000
3,000
Residual maturity over 5 years and less than 10 years
—
1,000
Residual maturity over 10 years
200
200
Debt securities issued without public offer
22,610
19,605
Residual maturity up to 1 year
2,000
1,500
Residual maturity over 1 year and less than 2 years
9,000
2,000
Residual maturity over 2 years and less than 3 years
—
9,000
Residual maturity over 3 years and less than 5 years
8,500
4,000
Residual maturity over 5 years and less than 10 years
3,110
3,105
Residual maturity over 10 years
—
—
Deposits
1,589
2,014
Residual maturity up to 1 year
368
425
Residual maturity over 1 year and less than 2 years
100
368
Residual maturity over 2 years and less than 3 years
—
100
Residual maturity over 3 years and less than 5 years
371
371
Residual maturity over 5 years and less than 10 years
750
100
Residual maturity over 10 years
—
650
Mortgage participations
2,632
251
2,928
257
Issued through public offer
2,632
251
2,928
257
Issued without public offer
—
—
Mortgage transfer certificates
21,530
251
21,098
257
Issued through public offer
21,530
251
21,098
257
Issued without public offer
—
—
—
—
Given the characteristics of the type of covered bonds issued by the Bank, there is no substituting collateral related to these issues.
The Bank does not hold any derivative financial instruments relating to mortgage bond issues, as defined in the aforementioned Royal
Decree.
c.Quantitative information on internationalization covered bonds
Below is the quantitative information of BBVA, S.A. internationalization covered bonds required by Bank of Spain Circular 4/2017 as
of December 31, 2021 and 2020:
c.1) Assets operations
Principal outstanding payment of loans (Millions of Euros)
Nominal value
2021
Nominal value
2020
Eligible loans according to article 34.6 y 7 of the Law 14/2013
3,539
3,284
Minos: Loans that support the issuance of internationalization bonds
—
—
Minos: NPL to be deducted in the calculation of the issuance limit, according to Article 13
del Royal Decree 579/2014
15
8
Total Loans included in the base of all issuance limit
3,524
3,276
P.168
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
c.2) Liabilities operations
Internationalization covered bonds (Millions of Euros)
Nominal value
2021
Nominal value
2020
(1) Debt securities issued through public offer (a)
1,500
1,500
Of which: Treasury shares
1,500
1,500
Residual maturity up to 1 year
1,500
—
Residual maturity over 1 year and less than 2 years
—
1,500
Residual maturity over 2 years and less than 3 years
—
—
Residual maturity over 3 years and less than 5 years
—
—
Residual maturity over 5 years and less than 10 years
—
—
Residual maturity over 10 years
—
—
(2) Debt securities issued without public offer (a)
—
—
Of which: Treasury shares
—
—
Residual maturity up to 1 year
—
—
Residual maturity over 1 year and less than 2 years
—
—
Residual maturity over 2 years and less than 3 years
—
—
Residual maturity over 3 years and less than 5 years
—
—
Residual maturity over 5 years and less than 10 years
—
—
Residual maturity over 10 years
—
—
(3) Deposits (b)
—
—
Residual maturity up to 1 year
—
—
Residual maturity over 1 year and less than 2 years
—
—
Residual maturity over 2 years and less than 3 years
—
—
Residual maturity over 3 years and less than 5 years
—
—
Residual maturity over 5 years and less than 10 years
—
—
Residual maturity over 10 years
—
—
TOTAL: (1) + (2) + (3)
1,500
1,500
Percentage
Percentage
Coverage ratio of internationalization covered bonds on loans (c)
43%
46%
a.Balance that includes all internationalization covered bonds issued by the entity pending amortization, although they are not recognized in the liability (because they
have not been placed to third parties or have been repurchased).
b.Nominative bonds.
c.Percentage that results from the value of the quotient between the nominal value of the issued and non-overdue bonds, even if they are not recognized in the liability,
and the nominal value balance pending collection of the loans that serve as guarantee.
Given the characteristics of the Bank's internationalization covered bonds, there are no substitute assets assigned to these issuances.
P.169
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
d.Territorial bonds
d.1)  Assets operations
Loans that serves as collateral for the territorial bonds
Nominal Value(a)
Total
Spanish Residents
Residents in other
countries of the
European Economic
Area
December 2021
Central Governments
1,435
1,422
13
Regional Governments
7,756
7,729
27
Local Governments
3,598
3,598
—
Total loans
12,789
12,749
40
December 2020
Central Governments
1,505
1,396
109
Regional Governments
7,633
7,605
28
Local Governments
3,665
3,665
—
Total loans
12,803
12,666
137
(a)Principal pending payment of loans.
d.2)  Liabilities operations
TERRITORIAL  BONDS
Nominal value
2021
Nominal value
2020
Territorial bonds issued (a)
6540
6540
Issued through a public offering
6,540
6,540
Of which: Treasury stock
6,040
6,040
Residual maturity up to 1 year
840
2,000
Residual maturity over 1 year and less than 2 years
200
840
Residual maturity over 2 years and less than 3 years
500
200
Residual maturity over 3 years and less than 5 years
5,000
3,500
Residual maturity over 5 years and less than 10 years
—
—
Residual maturity over 10 years
—
—
Other issuances
—
—
Of which: Treasury stock
—
—
Residual maturity over 1 year and less than 2 years
—
—
Residual maturity over 2 years and less than 3 years
—
—
Residual maturity over 3 years and less than 5 years
—
—
Residual maturity over 5 years and less than 10 years
—
—
Residual maturity over 10 years
—
—
Percentage
Percentage
Coverage ratio of the territorial bonds on loans (b)
51%
51%
a.Includes the nominal value of all loans that serve as collateral for the territorial bonds, regardless of the item in which they are included in the balance sheet. Principal
pending payment of loans. The territorial bonds include all the instruments issued by the entity pending amortization, although they are not recognized in the liability
(because they have not been placed to third parties or have been repurchased).
b.Percentage that results from the value of the quotient between the nominal value of the issued and non-overdue bonds, even if they are not recognized in the liability,
and the nominal value balance pending collection of the loans that serve as guarantee.
This Appendix is an integral part of Notes 12.3, 20.4 and 50.4 of the consolidated financial statements for the year ended December
31, 2021.
P.170
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
APPENDIX XI. Risks related to the developer and real-estate sector in Spain
a.Policies and strategies established by the Group to deal with risks related to the developer and
real-estate sector
BBVA has teams specializing in the management of the Real-Estate Sector risk, given its economic importance and specific technical
component. This specialization is not only in the Risk-Acceptance teams, but throughout the handling, commercial, problematic
management  legal, etc. . Specialization has been increased and the management teams in the areas of recovery and the Real Estate
Unit itself have been reinforced.
The portfolio management policies, established to address the risks related to the developer and real-estate sector, aim to
accomplish, among others, the following objectives: to avoid concentration in terms of customers, products and regions; to estimate
the risk profile for the portfolio; and to anticipate possible worsening of the portfolio.
Specific policies for analysis and admission of new real estate developer risk transactions
there are guidelines for action that most of the operations follow, among which the contrast of the commercialization that guarantees
the economic and financial viability of the project is of special importance.
In this context, the strategy with clients in the development sector is subject, to an asset allocation limit and to an action framework 
that allows defining a target portfolio, both in volume and in credit quality specifications.
Risk monitoring policies
Monitoring Committees are held on a monthly basis in which the evolution of the real estate portfolio is reviewed, with a review of its
credit quality, the ratings given to customers and the entries in arrears that have occurred.
Monitoring Committees are held on a quarterly basis with the risk areas of the countries in which the development of all financed
projects, their correct evolution in terms of works and sales, and compliance with the expected delivery schedules are analyzed.
As for the policies relating to risk refinancing with the developer and real-estate sector, they are the same as the general policies used
for all of the Group’s risks  (Annex XII). In the developer and real estate sector, they are based on clear solvency and viability criteria
for projects,  being demanding in obtaining additional guarantees and legal compliance with a refinancing tool that standardizes the
criteria and variables to be considered in any refinancing. 
b.Quantitative information on activities in the real-estate market in Spain
Lending for real estate development according to the purpose of the loans as of December 31, 2021 and 2020 is shown below:
Financing Allocated to Construction and Real Estate Development and its Coverage (Millions of Euros)
Gross amount
Drawn over the
guarantee value
Accumulated
impairment
2021
2020
2021
2020
2021
2020
Financing to construction and real estate
development (including land) (Business in Spain)
2,123
2,565
455
650
(224)
(317)
Of which: Impaired assets
336
473
132
213
(158)
(254)
Memorandum item:
Write-offs
2,155
2,288
Memorandum item:
Total loans and advances to customers, excluding the
Public Sector (Business in Spain)
172,877
166,589
Total consolidated assets (total business)
442,279
443,032
Impairment and provisions for normal exposures
(1,825)
(1,709)
P.171
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
The following is a description of the real estate credit risk based on the types of associated guarantees:
Financing allocated by credit institutions to Construction and Real Estate Development and lending for house purchase
(Millions of Euros)
2021
2020
Without secured loan
248
372
With secured loan
1,875
2,193
Terminated buildings
1,172
1,307
Homes
936
991
Other
235
316
Buildings under construction
517
614
Homes
509
430
Other
8
184
Land
186
272
Urbanized land
124
143
Rest of land
62
129
Total
2,123
2,565
As of December 31, 2021 and 2020, 55.2% and 51.0% of loans to developers were guaranteed with buildings (79.9% and 75.8%, are
homes), and only 8.8% and 10.6% by land, of which 66.6% and 52.6% are in urban locations, respectively.
The table below provides the breakdown of the financial guarantees given as of December 31, 2021 and 2020:
Financial guarantees given (Millions of Euros)
2021
2020
Houses purchase loans
56
58
Without mortgage
3
5
The information on the retail mortgage portfolio risk (housing mortgage) as of December 31, 2021 and 2020 is as follows:
Financing Allocated by credit institutions to Construction and Real Estate Development and lending for house purchase
(Millions of Euros)
Gross amount
Of which: impaired
loans
2021
2020
2021
2020
Houses purchase loans
74,094
74,689
2,748
2,841
Without mortgage
1,631
1,693
13
20
With mortgage
72,463
72,996
2,735
2,821
The loan to value (LTV) ratio of the above portfolio is as follows:
LTV Breakdown of mortgage to households for the purchase of a home (Business in Spain) (Millions of Euros)"
Total risk over the amount of the last valuation available (Loan To Value-LTV)
Less than or
equal to 40%
Over 40% but
less than or
equal to 60%
Over 60% but
less than or
equal to 80%
Over 80% but
less than or
equal to
100%
Over 100%
Total
December 2021
Gross amount
15,189
18,107
22,782
9,935
6,449
72,463
of which: Impaired loans
216
327
462
483
1,246
2,735
December 2020
Gross amount
15,197
18,891
20,716
10,624
7,568
72,996
of which: Impaired loans
170
294
426
470
1,461
2,821
Outstanding home mortgage  loans  for house purchase as of December 31, 2021 and 2020 had an average LTV of 46%
P.172
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
The breakdown of foreclosed, acquired, purchased or exchanged assets from debt from loans relating to business in Spain, as well as
the holdings and financing to non-consolidated entities holding such assets is as follows:
Information about Assets Received in Payment of Debts (Business in Spain) (Millions of Euros)
Gross
Value
Provisions
Of which: Valuation
adjustments on
impaired assets, at
the time of
foreclosure
Carrying Amount
2021
2020
2021
2020
2021
2020
2021
2020
Real estate assets from loans to the construction
and real estate development sectors in Spain.
28
28
(20)
(20)
(1)
(1)
8
8
Terminated buildings
4
4
(2)
(2)
—
—
2
2
Homes
3
3
(1)
(1)
—
—
2
2
Other
1
1
(1)
(1)
—
—
—
—
Buildings under construction
—
—
—
—
—
—
—
—
Homes
—
—
—
—
—
—
—
—
Other
—
—
—
—
—
—
—
—
Land
24
24
(18)
(18)
(1)
(1)
6
6
Urbanized land
24
24
(18)
(18)
(1)
(1)
6
6
Rest of land
—
—
—
—
—
—
—
—
Real estate assets from mortgage financing for
households for the purchase of a home
943
1,090
(505)
(570)
(141)
(144)
438
520
Rest of foreclosed real estate assets
494
481
(264)
(259)
(62)
(48)
230
222
Equity instruments, investments and financing to
non-consolidated companies holding said assets
434
1,022
(316)
(317)
(278)
(279)
118
705
Total
1,899
2,621
(1,105)
(1,166)
(482)
(472)
794
1,455
The gross book value of real-estate assets from mortgage lending to households for home purchase as of December 31, 2021 and
2020 amounted to €943 and €1,090 million, respectively, with an average coverage ratio of 53.6% and 52.3%, respectively.
As of December 31, 2021 and 2020, the gross book value  total real-estate assets (business in Spain), including other real-estate
assets received as debt payment, was €1,465 and €1,599 million, respectively. The coverage ratio was 53.9% and 53.1%,
respectively.
This Appendix is an integral part of Note 5 of the financial statements for the year ended December 31, 2021.
P.173
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
APPENDIX XII.  Refinanced and restructured operations and other requirements under
Bank of Spain Circular 6/2012
a)Policies and strategies established by the Group to deal with risks related to refinancing
and restructuring operations.
Refinancing and restructuring operations (see definition in the Glossary) are carried out with customers who have requested such an
operation in order to meet their current loan payments if they are expected, or may be expected, to experience financial difficulty in
making the payments in the future.
The basic aim of a refinancing and restructuring operation is to provide the customer with a situation of financial viability over time by
adapting repayment of the loan incurred with the Group to the customer’s new situation of fund generation. The use of refinancing
and restructuring for other purposes, such as to delay loss recognition, is contrary to BBVA Group policies.
The BBVA Group’s refinancing and restructuring policies are based on the following general principles:
–Refinancing and restructuring is authorized according to the capacity of customers to pay the new installments. This is done
by first identifying the origin of the payment difficulties and then carrying out an analysis of the customers’ viability,
including an updated analysis of their economic and financial situation and capacity to pay and generate funds. If the
customer is a company, the analysis also covers the situation of the industry in which it operates.
–With the aim of increasing the solvency of the operation, new guarantees and/or guarantors of demonstrable solvency are
obtained where possible. An essential part of this process is an analysis of the effectiveness of both the new and original
guarantees.
–This analysis is carried out from the overall customer or group perspective.
–Refinancing and restructuring operations do not in general increase the amount of the customer’s loan, except for the
expenses inherent to the operation itself.
–The capacity to refinance and restructure loan is not delegated to the branches, but decided on by the risk units.
–The decisions made are reviewed from time to time with the aim of evaluating full compliance with refinancing and
restructuring policies.
These general principles are adapted in each case according to the conditions and circumstances of each geographical area in which
the Group operates, and to the different types of customers involved.
In the case of retail customers (private individuals), the main aim of the BBVA Group’s policy on refinancing and restructuring loan is
to avoid default arising from a customer’s temporary liquidity problems by implementing structural solutions that do not increase the
balance of customer’s loan. The solution required is adapted to each case and the loan repayment is made easier, in accordance with
the following principles:
–Analysis of the viability of operations based on the customer’s willingness and ability to pay, which may be reduced, but
should nevertheless be present. The customer must therefore repay at least the interest on the operation in all cases. No
arrangements may be concluded that involve a grace period for both principal and interest.
–Refinancing and restructuring of operations is only allowed on those loans in which the BBVA Group originally entered into.
–Customers subject to refinancing and restructuring operations are excluded from marketing campaigns of any kind.
In the case of non-retail customers (mainly companies, enterprises and corporates), refinancing/restructuring is authorized
according to an economic and financial viability plan based on:
–Forecasted future income, margins and cash flows to allow entities to implement cost adjustment measures (industrial
restructuring) and a business development plan that can help reduce the level of leverage to sustainable levels (capacity to
access the financial markets).
–Where appropriate, the existence of a divestment plan for assets and/or operating segments that can generate cash to
assist the deleveraging process.
–The capacity of shareholders to contribute capital and/or guarantees that can support the viability of the plan.
In accordance with the Group’s policy, the conclusion of a loan refinancing and restructuring operation does not meet the loan is
reclassified from "impaired" or "standard under special monitoring" to outstanding risk. The reclassification to the "standard under
special monitoring" or normal risk categories must be based on the analysis mentioned earlier of the viability, upon completion of the
probationary periods described below.
The Group maintains the policy of including risks related to refinanced and restructured loans as either:
–"Impaired assets", as although the customer is up to date with payments, they are classified as impaired for reasons other
than their default when there are significant doubts that the terms of their refinancing may not be met; or
P.174
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
–"Normal-risk assets under special monitoring" until the conditions established for their consideration as normal risk are
met).
The conditions established for assets classified as “standard under special monitoring” to be reclassified out of this category are as
follows:
–The customer must have paid past-due amounts (principal and interest) since the date of the renegotiation or restructuring
of the loan or other objective criteria, demonstrating the borrower´s ability to pay, have been verified; and
–At least two years must have elapsed since completion of the renegotiation or restructuring of the loan;
–It is unlikely that the customer will have financial difficulties and, therefore, it is expected that the customer will be able to
meet its loan payment obligations (principal and interest) in a timely manner.
The BBVA Group’s refinancing and restructuring policy provides for the possibility of two modifications in a 24 month period for loans
that are not in compliance with the payment schedule.
The economic impact caused by the COVID-19 pandemic has required the adaptation of the amortization schedule of a high volume of
loans in all geographies and portfolios. In general, this support has been instrumentalized through the application of payment
deferrals that comply with the principles established by the EBA, which has made it possible to apply a differential accounting and
prudential treatment.
Renewals and renegotiations are classified as normal risk as long as there is no significant increase in risk. This classification is
applicable at the inception, and in the event of any worsening, the criteria established in current regulations are followed. In this sense,
the conditions mentioned above are considered, including, among others, not having defaults of more than 30 days and not being
identified as unlikely to pay.
The Group has established in its policy as a maximum refinancing limit for operations with clients, who do not comply with the
payment plan and require another refinancing, two refinancing in 24 months.
The internal models used to determine allowances for loan losses consider the restructuring and renegotiation of a loan, as well as re-
defaults on such a loan, by assigning a lower internal rating to restructured and renegotiated loans than the average internal rating
assigned to non-restructured/renegotiated loans. This downgrade results in an increase in the probability of default (PD) assigned to
restructured/renegotiated loans (with the resulting PD being higher than the average PD of the non- renegotiated loans in the same
portfolios).
In any case, a restructured operation will be considered impaired when the reduction in the net present value of the financial
obligation is greater than 1%, consistent with the new management criteria introduced during 2021.
P.175
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
b)Quantitative information on refinancing and restructuring operations
BALANCE OF FORBEARANCE
    (Millions of Euros)"
TOTAL
Unsecured loans
Secured loans
Accumulated
impairment or
accumulated
losses in fair
value due to
credit risk
Number of
operations
Gross carrying
amount
Number of
operations
Gross carrying
amount
Maximum amount of secured
loans that can be considered
Real estate
mortgage
secured
Rest of
secured loans
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
Credit institutions
General Governments
57
65
62
76
32
64
22
62
15
45
—
—
11
14
Other financial corporations and
individual entrepreneurs
(financial business)
313
251
29
5
24
22
2
2
2
2
—
—
5
2
Non-financial corporations and
individual entrepreneurs
(corporate non-financial
activities)
43,314
42,142
2,885
2,663
6,368
7,421
2,139
2,144
1,365
1,374
20
29
1,481
1,644
  Of which: financing the
construction and property
(including land)
164
336
31
48
727
932
379
526
208
302
—
8
168
242
Rest homes
61,650
55,669
901
804
41,299
44,877
4,353
4,846
3,284
3,566
5
2
1,016
1,154
Total
105,334
98,127
3,877
3,548
47,723
52,384
6,516
7,054
4,666
4,987
25
31
2,513
2,814
of which: IMAPAIRED
TOTAL
Unsecured loans
Secured loans
Accumulated
impairment or
accumulated
losses in fair
value due to
credit risk
Number of
operations
Gross carrying
amount
Number of
operations
Gross carrying
amount
Maximum amount of secured
loans that can be considered
Real estate
mortgage
secured
Rest of secured
loans
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
Credit institutions
General Governments
29
39
29
36
23
29
10
20
6
14
—
—
10
11
Other financial corporations and
individual entrepreneurs (financial
business)
212
151
10
2
16
11
1
1
1
1
—
—
4
2
Non-financial corporations and
individual entrepreneurs (corporate
non-financial activities)
31,186
25,133
1,426
1,542
4,368
4,632
1,275
1,323
665
687
9
20
1,289
1,493
  Of which: financing the construction
and property (including land)
150
313
30
44
529
633
262
356
118
164
—
8
145
217
Rest homes
35,566
31,460
521
456
20,547
22,319
2,178
2,425
1,486
1,597
—
1
885
978
Total
66,993
56,783
1,986
2,036
24,954
26,991
3,464
3,769
2,158
2,299
9
21
2,188
2,484
P.176
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
c)Loans and advances to customers by activity (carrying amount)
December 2020 (Millions of euros)
Collateralized loans and receivables -Loans and advances to customers. Loan to value
Less than or equal
to 40%
Over 40% but less
than or equal to
60%
Over 60% but less
than or equal to
80%
Over 80% but less
than or equal to
100%
Over 100%
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
General governments
13,273
13,621
279
318
498
500
91
75
135
176
47
50
503
511
1
6
Other financial institutions
and  financial individual
entrepreneurs
21,105
16,212
185
162
14,639
9,379
15
34
400
1,418
2,922
2,600
10,535
5,216
951
273
Non-financial institutions
and non-financial
individual entrepreneurs
84,814
80,806
10,005
10,545
1,599
1,964
4,257
4,462
3,533
3,766
2,203
1,961
317
1,001
1,294
1,319
Construction and property
development
1,730
1,970
1,618
1,794
8
18
678
752
567
628
244
290
54
90
82
52
Construction of civil works
5,007
5,270
566
586
246
264
239
258
187
189
85
88
39
41
261
274
Other purposes
78,077
73,566
7,822
8,165
1,345
1,682
3,340
3,452
2,779
2,949
1,874
1,583
223
870
951
993
Large companies
52,972
48,028
2,505
2,494
863
692
1,044
1,031
815
895
945
530
41
221
523
509
SMEs (**) and individual
entrepreneurs
25,104
25,538
5,317
5,671
483
990
2,296
2,421
1,964
2,054
929
1,053
182
649
429
484
Rest of households and
NPISHs (***)
91,202
90,376
73,641
74,201
358
371
16,218
16,173
18,797
19,714
23,228
21,424
9,847
10,489
5,909
6,772
Housing
74,729
75,166
72,695
73,087
114
112
15,911
15,859
18,564
19,433
23,004
21,181
9,669
10,260
5,660
6,466
Consumption
13,472
12,149
96
88
152
163
66
62
65
71
67
77
26
12
24
29
Other purposes
3,000
3,061
850
1,026
92
96
242
252
167
210
157
166
152
217
224
277
TOTAL
210,393
201,015
84,110
85,226
17,094
12,214
20,581
20,744
22,865
25,074
28,401
26,035
21,202
17,217
8,155
8,370
MEMORANDUM:
Forbearance operations
(****)
7,879
7,788
5,292
5,663
31
40
991
991
949
982
1,025
1,186
775
860
1,582
1,684
(*)              The amounts included in this table are net of loss allowances.
(**)            Small and medium enterprises
(***)          Nonprofit institutions serving households.
(****)          Net of provisions.
d)Concentration of risks by activity and geographical area (carrying amount)
December 2020 (Millions of Euros)
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
Credit institutions
110,717
102,399
44,085
41,466
30,776
25,212
13,127
14,647
22,729
21,074
General governments
65,578
69,969
44,751
52,317
13,488
10,441
1,515
1,660
5,823
5,551
Central Administration
49,933
54,332
30,009
37,302
13,190
10,159
1,217
1,601
5,517
5,270
Other
15,645
15,637
14,742
15,015
297
282
299
59
307
281
Other financial institutions
and  financial individual
entrepreneurs
54,128
54,938
14,419
18,222
22,716
17,466
11,506
14,479
5,487
4,771
Non-financial institutions
and non-financial individual
entrepreneurs
135,255
124,529
81,120
78,705
22,946
20,832
14,806
12,979
16,384
12,013
Construction and
property development
2,715
3,046
2,715
3,046
—
—
—
—
—
—
Construction of civil
works
7,745
7,571
5,851
5,629
999
1,034
176
231
719
677
Other purposes
124,796
113,912
72,555
70,030
21,947
19,798
14,629
12,748
15,664
11,336
Large companies
97,769
86,553
46,452
43,403
21,541
19,336
14,272
12,543
15,503
11,271
SMEs and individual
entrepreneurs
27,027
27,359
26,103
26,627
406
462
357
205
161
65
Other households and
NPISHs
91,472
90,651
89,680
88,546
1,326
1,571
98
103
367
431
Housing
74,730
75,167
73,145
73,383
1,178
1,317
86
93
320
374
Consumer
13,472
12,149
13,436
12,117
15
16
11
7
10
9
Other purposes
3,270
3,335
3,099
3,046
133
238
1
3
37
48
TOTAL
457,150
442,486
274,055
279,256
91,252
75,522
41,052
43,868
50,790
43,840
(*) The definition of risk for the purpose of this statement includes the following items on the public balance sheet: Loans and advances to credit institutions, Loans and advances,
Debt securities, Equity instruments, Other equity securities, Derivatives and hedging derivatives, Investments in subsidiaries, joint ventures and associates and guarantees given
and Contingent risks. The amounts included in this table are net of loss allowances.
P.177
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
December 2020 - Spain (Millions of euros)
TOTAL (*)
Andalucia
Aragon
Asturias
Baleares
Canarias
Cantabria
Castilla La
Mancha
Castilla y León
Cataluña
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
Credit
institutions
44,085
41,466
2,231
355
51
14
—
—
34
18
—
—
1,119
1,117
—
—
—
—
307
329
Government
agencies
44,751
52,317
1,115
1,189
556
581
367
366
659
500
803
583
11
14
362
248
1,070
954
1,797
2,229
Central
Administration
30,009
37,302
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Other
14,742
15,015
1,115
1,189
556
581
367
366
659
500
803
583
11
14
362
248
1,070
954
1,797
2,229
Other financial
institutions
and  financial
individual
entrepreneurs
14,419
18,222
144
133
58
51
4
2
17
90
3
3
—
1
1
1
13
18
402
551
Non-financial
institutions
and non-
financial
individual
entrepreneurs
81,120
78,705
7,124
6,598
1,706
1,549
1,299
1,165
2,310
2,425
2,276
2,309
534
475
1,376
1,292
1,467
1,492
13,883
14,221
Construction
and property
development
2,715
3,046
334
405
20
27
41
47
22
49
106
105
6
7
31
43
26
28
680
727
Construction
of civil works
5,851
5,629
529
497
98
82
47
49
148
130
121
130
55
27
119
97
85
77
1,028
1,091
Other
purposes
72,555
70,030
6,260
5,696
1,587
1,440
1,211
1,069
2,140
2,246
2,050
2,074
473
441
1,227
1,152
1,355
1,387
12,176
12,403
Large
companies
46,452
43,403
2,154
1,850
812
695
904
734
1,448
1,561
784
859
260
235
412
376
464
529
6,399
6,371
SMEs and
individual
entrepreneurs
26,103
26,627
4,106
3,846
776
745
307
335
691
685
1,266
1,215
213
206
815
776
891
858
5,777
6,032
Other
households
and NPISHs
89,680
88,546
13,407
13,139
1,433
1,413
1,250
1,251
2,006
2,019
3,894
3,864
874
857
2,583
2,572
2,972
2,924
27,370
27,448
Housing
73,145
73,383
10,820
10,796
1,168
1,171
926
950
1,695
1,724
2,862
2,888
727
721
2,017
2,068
2,338
2,338
23,106
23,477
Consumer
13,436
12,117
2,257
2,021
235
211
268
246
286
270
939
882
116
105
513
452
528
477
3,264
2,934
Other
purposes
3,099
3,046
330
322
30
31
56
55
25
25
93
94
31
31
52
52
107
109
1,000
1,037
TOTAL
274,055
279,256
24,022
21,414
3,804
3,608
2,921
2,784
5,026
5,052
6,976
6,759
2,538
2,464
4,322
4,113
5,522
5,388
43,759
44,778
December 2020 - Spain (Millions of euros)
Extremadura
Galicia
Madrid
Murcia
Navarra
Comunidad
Valenciana
País Vasco
La Rioja
Ceuta y Melilla
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
Credit institutions
—
—
1,940
39
37,172
38,705
—
—
3
—
743
713
486
176
—
—
—
—
Government agencies
365
321
797
788
3,456
3,845
171
113
370
421
941
1,042
1,732
1,700
84
78
87
43
Central Administration
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Other
365
321
797
788
3,456
3,845
171
113
370
421
941
1,042
1,732
1,700
84
78
87
43
Other financial institutions
and  financial individual
entrepreneurs
1
1
46
48
13,150
16,688
2
1
—
—
5
14
573
620
—
—
—
—
Non-financial institutions
and non-financial individual
entrepreneurs
922
902
2,514
2,171
29,663
28,792
1,738
1,616
1,011
912
5,350
5,070
7,522
7,311
322
298
104
107
Construction and property
development
10
12
61
84
1,003
1,097
38
33
5
5
158
205
165
159
4
4
7
9
Construction of civil works
49
45
192
188
2,664
2,568
102
96
66
66
275
246
251
220
11
10
11
10
Other purposes
863
845
2,261
1,899
25,996
25,127
1,598
1,487
940
841
4,918
4,619
7,105
6,932
307
284
87
88
Large companies
311
201
1,277
950
21,818
20,459
709
608
599
507
2,241
1,864
5,744
5,509
111
89
5
6
SMEs and individual
entrepreneurs
552
644
984
949
4,178
4,668
889
879
341
334
2,677
2,755
1,362
1,423
196
195
82
82
Other households and
NPISHs
1,444
1,424
3,340
3,133
14,368
13,928
1,962
1,897
505
502
8,254
8,240
2,908
2,850
336
331
772
754
Housing
1,097
1,106
2,419
2,425
12,040
11,788
1,533
1,501
399
402
6,725
6,792
2,360
2,331
271
272
641
633
Consumer
312
283
620
555
1,721
1,515
394
363
85
76
1,340
1,209
386
360
53
48
118
110
Other purposes
35
35
300
153
607
625
34
33
21
24
189
239
162
159
12
11
12
11
TOTAL
2,732
2,648
8,637
6,179
97,809
101,95
8
3,873
3,627
1,888
1,835
15,293
15,079
13,220
12,657
742
707
963
904
(*)The definition of risk for the purpose of this statement includes the following items on the public balance sheet: Loans and advances to credit institutions, Loans and advances,
Debt securities, Equity instruments, Other equity securities, Derivatives and hedging derivatives, Investments in subsidiaries, joint ventures and associates and guarantees given
and Contingent risks. The amounts included in this table are net of loss allowances.
P.178
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Appendix XIII Agency Network
LUIS RAMON VIDAL JAMARDO
VICENTE BELTRAN BENITEZ
ALPHALYNX CAPITAL S.L.
MARIA DEL MAR MUIÑO DIAZ
SARA ROBLES ALONSO
JOSE RAMON MORSO PELAEZ
A E S T E S.L.
JOSE IGNACIO ARIAS HERREROS
SAYAR Y RIVAS ASOCIADOS S.L.
DURFERAL S.L.
DAVID REYES HERNANDO
RAFAEL RUBIALES REGORDAN
IBERFIS GESTION FINANCIERA S.L.
MIGUEL IZQUIERDO DOLS
JOANNA OSTROWSKA
PAULA REY FERRIN
VICENTE MONTESINOS CONTRERAS
DAVID JIMENEZ BETANZOS
ROCIO REY PAZ
GESTIO I ASSESSORAMENT OROPESA
S.L.
RAFAEL MARTIN CARLOSENA
MANUEL ABELENDA MONTES
IGNACIO VALLS BENAVIDES
REGINA MARIA ARESTI MUGICA
JOSE ANDRES RAMOS SOBRIDO
MARIA JOSE MARTI AVILES
ASSET GROWTH XXI EAF SLU
ASESORIA LEMA Y GARCIA S.L.
MARIA PILAR ESCRIG CASTAÑO
LACMAC 2012 INVESTMENTS
S.L.
GONZALO GONZALEZ MAYO
LEOPOLDO MARTINEZ BERMUDEZ
ROCIO ARCONES GARCIA
FRANCISCO MANUEL GOMEZ RODRIGUEZ
ANGEL ALEJANDRINO FERNANDEZ
ALMANSA
GUILLERMO CARBO PRACHNER
ANDRES LOPEZ GARCIA
GESTION FINANCIERA MIGUELTURRA
S.L.
PAPOI AND PARTNERS S.L.
CRISTINA ARDAO ESPUCH
HELP CONTROL DE GESTION S.L.
BELRIVER PARTNERS S.L.
DEBCO ESTRUCTURA PROFESIONAL S L P
CARLOS FERNANDEZ AYALA
FRANCISCO JAVIER EUGERCIO
HERRA
FATIMA ROMERO FORMOSO
PEDRO CRUCERA GARCIA
RICARDO BARRAL CASADO
MIGUEL DIAZ GARCIA FUENTES
JOSE MARIA GUILLAMON CAMARERO
TRYCICLO ADVISORS S.L.
JULIAN CALVO FERNANDEZ
MARIA ISABEL CALVO SANCHEZ
ENDOR INVERSIONES S.L.
LUCIA MARTINEZ FERNANDEZ
MANUEL ANTONIO DE LAS MORENAS
LOPEZ ASTILLERO
Q INVEST FAMILY OFFICE S.L.
RAUL ANTELO JALLAS
MARIA ISABEL MORENO SILVERIA
JARAIZ SELECCION S.L.
ENRIQUE DE AGUINAGA ANDREU
GESTITRAMI FINANCIAL S.L.
BPRADOS ASESORES
FINANCIEROS S.L.
LAURA SOTOCA SANCHEZ
GREGORIO FLORES MOLERO
DAVID ACEBES MAYA
FRANCES Y BARCELO C B
DORA MAIPU S.L.
PEDRO BARRIADA GARCIA
ANGEL ENRIQUE EUGENIO CUBEROS
VIRGINIA FENOY CRUZ
ALLIED CAPITAL S.L.
JUAN ENRIQUE CRESPO MARTINEZ
GONZALO CAMPOS BRAVO
VALDELASIERRA ASESORES S.L.
ALERCIA INTERNATIONAL WEALTH
MANAGEMENT S.L.
MARIA VICTORIA VADILLO ALMAGRO
ALDAVERO ROMERO
INVERSIONES S.L.
PASTOR ARANDA CB
JAVIER CANALES FUENTE
ASESORES TRIBUTARIOS
TEFICO S.L.
FERNANDO PEGUERO LANZOS
DIEGO TORRES PARRA
GONZALO CACERES SANCHEZ
EASY MODE S C
NANOBOLSA S.L.
SOCIEDAD COOP. AGRICOLA
NTRA. SRA. DEL CARMEN.
AGENTES TRIBUTARIOS Y FINANCIEROS S.L.
SERVICIOS FINANCIEROS AZMU S.L.
SISTHEMA GESTION
EMPRESARIAL S.L.
GONZALO CASTEJON DE LA ENCINA
PEIO TELLECHEA ABASCAL
FRANCISCO JOSE GARCIA
RODRIGUEZ
MONICA MIGUEL MOLINA
AITOR ZUBIZARRETA UNCETA
ALFONSO MARTINEZ PUJANTE
LUIS DURO DOMENE
CRISTINA CEBALLOS URCELAY
ISABEL GARRIDO GOMEZ
JOSE BARTOLOME MARTINEZ MARTINEZ
RAMON GARCIA PEREZ DE ARRILUCEA
MARIA ISABEL PIÑERO
MARTINEZ
JOSE JUAN LAFUENTE ALMELA
ASIER LARREA ORCOYEN
PEDRO JOSE GARCIA LOPEZ
LUIS ALBERTO LARA GARCIA
ANDER BENITO BARONA
JUAN LOPEZ MARTINEZ
JOSE MARIA TORRECILLAS BELMONTE
ESTIBALIZ REBOLLO GARCIA
DOLORES MARIA RAMIREZ
PEREA
RAMON LINARES LOPEZ
ISKANDER LOPEZ RUIZ
FRANCISCO JAVIER GOMEZ
CARRILLO
JUAN MIGUEL ALARCON MOLINA
CANOVAS 1852 S.L.
BEATRIZ MARIN ROBLES
ALZO CAPITAL S.L.
POU ADVOCATS S L P
JESUS FERNANDEZ LERGA
GARRALDA
P.179
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
ASESORES Y CONSULTORES AFICO S.L.
ELENA NOVOSELOVA
ENRIQUE MATA SANTIN
ALZO SOLAR S.L.
ROBIPAL 2016 S.L.
CHILCO GESTION S.L.
MEDINA FINANZAS S.L.
MONTSERRAT GARCIA PUJADAS
MARIA LOPEZ GALINDO
CORCUERA ABOGADOS Y ASESORES DE
PATRIMONIO S.L.
JOAN PARNAU BOSCH
MARCELINO DIAZ Y BARREIROS
S.L.
LLANA CONSULTORES S.L.
MSJN FINANCIAL ADVISORS S.L.
JULIA OTERO ALVAREZ
ARMANDO GRANDA RODRIGUEZ DE LA FLOR
STRAFY 4 ASSET MANAGEMENT S.L.
BELEN FIRVIDA PLAZA
TARSIUS FINANCIAL ADVICE S.L.
MARTIN GUERRERO ARPI
LUCAS CRESPO GOMEZ
BEATRIZ INMACULADA JUNQUERA FRESCO
LLUIS CERVERA SABALLS
MARIA JOSE RODRIGUEZ PEREZ
ENRIQUE JUESAS FERNANDEZ
VICENC COMAS VICENS
SILVIA ATANES GONZALEZ
JUAN CARLOS RODRIGUEZ RODRIGUEZ
JUAN DIOS COBLER FERNANDEZ
MANUEL SALGADO FEIJOO
ALEXIA MARIA GONZALEZ LANZA
ESTHER MONTOYA CARRASCO
EVA MARIA FERNANDEZ CAMPO
LAFUENTE SERVICIOS EXTERNOS S.L.
ISAAC OLIVA RUIZ
MARIA ISABEL ARCOS PEIXOTO
INVERSIONES SUAREZ IBAÑEZ S.L.
FRANCISCO EULOGIO ORTIZ MARTIN
FINANZAS MAYOR PRINCIPAL
S.L.
MARIA TERESA DE ZAYAS CAMPOS
GESTORA PAMASA S.L.
INVESTIMENTOS XURDE PABLO
S.L.
JOSE LUIS GARCIA PRIETO
ANTONIO RUIZ SORIA
JULIO MOREIRA GARCIA
ALEJANDRO NUEVO DIAZ
VICTOR MANUEL FERNANDEZ PUERTAS
ASESORES E CONSULTORES
GESCON S.L.
ANGEL GARCIA DESCALZO
ANTONIO JOSE PLEGUEZUELO WITTE
JOSE MANUEL LOPEZ IRIARTE
JAVIER PAZOS SANCHEZ
JUAN JOSE GARRIDO RODRIGUEZ
XESCONTA ASESORIA DE
EMPRESAS SOCIEDAD LTDA.
SERBANASER 2000 S.L.
MARIA ESMERALDA RUIZ ALMIRON
RUFINO NIETO GONZALEZ
JUAN JOSE ORTIZ S.L.
INFOGES PYME S.L.
ALBERTO MARTIN NADAL
TOMAS SECO ASESORES S.L.
ANTONIO LOPEZ GARCIA
DIEGO LOPEZ PRO
BENALWIND S.L.
JUAN LORENZO S.L.
FRESNO CAPITAL S.L.
LUIS DONAIRE MOLANO
SERGIO GONZALEZ RUIZ
JAVIER ANTONIO GONZALEZ
GOMEZ
ROLO GESTION E INVERSION SOCIEDAD
LTDA.
JOAQUIN SALAMERO MORENO
IVAN PELAYO MARTIN
CARLOS LARA MARTINEZ
PEDRO RAFAEL MARTINEZ GARCIA
FERTAPDO S.L.
LEONARDO JAEN CLAVEL
PATRIAL S.A.
CRISTINA ACEBES PEREZ
ANGEL MAYA MONTERO
FRANCISCO GINE ABAD
RAFAEL JESUS DOMINGUEZ
JARA
BEATRIZ MARIA PACHA PRIOR
LAURA GISTAU LATRE
ANTONIO GARCIA ALVAREZ
REMENTERIA
ARTURO MARIA GOMEZ JUEZ
LINA CAYUELA
FRANCISCO JAVIER SERRANO
DOMINGUEZ
DOMINGO SERRANO TEJADA
ASEFINSO SC
URBANSUR GLOBAL S.L.
ASESORES FINANCIEROS R V SABIO S L U
ALFREDO ABADIAS ANORO
ASESORES DE EMPRESA Y
GESTION ADMINISTRATIVA
MARIN MARIN S.L
JUAN CARLOS RODRIGUEZ HERNANDEZ
CREACIONES CARLINA S.L.
ESCRIVA DE ROMANI S.L.
JOSE ANTONIO PAREDES GOMEZ
FRANCISCO CAÑAS AYUSO
MANUEL LUIS DEL BARCO
ASENCIO
CAPAFONS Y CIA S.L.
CANO Y MARTIN ASESORES
FINANCIEROS S.L.
ACOFI S.L.
MONTSERRAT COSTA CALAF
GABINET OBRADOR TAULER S.L.
ISABEL SOTO DE PRADO
JOSE LUIS ORTUÑO CAMARA
ARCADIO INVERSIONES Y
ASESORAMIENTO S.L.
JAIME PINEDA ALCALA
TIO CODINA ASSESSORS D INVERSIONS S.L.
INMACULADA MASCARO VECINO
JOSE CARLOS MOREJON
ALTURA
AYCE CONSULTING S.L.
MARIA JESUS LOPEZ RASCON
EMPRENDE SERVICIOS
FINANCIEROS S.L.
PUENTE B GESTION INTEGRAL S.L.
ASESORIA RANGEL 2002 S.L.
HECTOR JAVIER LAGIER
MATEOS
INVERSIONES Y GESTION AINARCU S.L.
IVAN RODRIGUEZ CIFUENTES
ESPERANZA MACARENA POZO
GONZALEZ
P.180
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
MEDONE SERVEIS S.L.
FRANCISCO JOSE PEÑUELA SANCHEZ
S.L.
TOMAS RECIO CEÑA
CROWE LEGAL Y TRIBUTARIO BCN S L P
DANIEL FERNANDEZ ONTAÑON
MARIA ENCARNACION
MARTINEZ MEZQUITA
MIQUEL VALLS ECONOMISTES ASSOCIATS
S.L.
GESCOFI CFICINAS S.L.
MARIANO PELLICER BARBERA
MARESME CONSULTORS S.L.
LUIS ALBERTO GRAÑON LOPEZ
PILAR SAMPER CAMPANALS
CENTRE CORPORATIU INI 6 S.L.
CLUSTER ASESORES S.L.
JOSE JORGE CARBO ROYO
INVERSIONES GEFONT S.L.
GALARRETA Y PROVEDO S.L.
MARIA TERESA ESPALLARGAS
MONTSERRAT
MARIANO DOMINGO BALTA
ANA CAÑAS BLANCO
JOSE CARCOLE ARDEVOL
FELIPE LABORDA CARNICER
ESTUDIOS FISCALES Y FINANCIEROS
RIOJANOS S.L.
MARIA DOLORES SUBIRATS
ESPUNY
ALEJANDRO PEREZ ANDREU
PABLO GOPAR MARRERO
FAMILYSF SALUFER S.L.
DIAZ Y FERRAZ ASOCIADOS S.L.
JUAN ALFONSO RAVELO RAMIREZ
MONTSERRAT TUTUSAUS
LASHERAS
FRANCISCO GONZALEZ JIMENEZ
CANDELARIA DE LA TORRE DEL
CASTILLO
MARIA PILAR CALVET REVERTE
JAVIER GARCIA LORENZO
INVERTIA SOLUCIONES S.L.
MIGUEL BELLO NAVARRO
MARQUES BARO S.L.
FINACO ASESORES S.L.
NURIA ROIG MARTORELL
FOGARPI SINERGIAS SLP
TEODOMIRO SANTANA GONZALEZ
JAUME PARES FONTANALS
KANOPA S.L.
MARCO MISTO
SERVEIS ALDOMA MAS S.L.
PROELIA S.L.
JUAN FRANCISCO DIAZ FLORES
OKAPI SES SALINES S.L.
LLUIS CASAS CASTELLA
REGINA DOMINICA VEGA RODRIGUEZ
MARCOS GIL TEJADA
JUAN ANTONIO ASTORGA SANCHEZ
PDCE CONSULTING DE EMPRESAS S.L.
SALVADOR CASELLAS GASSO
JOSEP GIBERT GATELL
FISCATEL CONSULTORES Y ASESORES
SCP
ANNA MARIA CESARI MORA
TRUC PEBE SALLENT S.L.
OSCAR GARCIA OVALLE
ISABEL ALVAREZ CALDERON
JESUS MARTOS LOPEZ
MARBELLA CASADO RODRIGUEZ
LEONILA PLUS S.L.
DAVID SOTERAS MORERA
MIGUEL ANGEL LANERO PEREZ
NURIA NOGUERON
MATAMOROS
JOAQUIN MALGOSA MORERA
RUBEN SANTOS MAYORDOMO
ABONA GESTION SERVICIOS
INTEGRADOS S.L.
MATIAS LOZANO MARTIN
LETICIA ALONSO CUESTA
VICTOR MIGUEL PEREZ
CORDOBA
JOSEFA FOLCRA MARTIN
ALBERTO GOMEZ MARTINEZ
CAYETANO MENDEZ
HERNANDEZ
GERARD MARTINEZ ALCAÑIZ
ALBERTO BLANCO OVIEDO
RAMON JESUS GARCIA DIAZ
ASESORIA LIZARDI SL
ESTHER SIERRA SIERRA
ESTHER ANDREINA BITORAGE
RANGEL
INVAL 02 S.L.
PERUCHET GRUP CONSULTOR D
ENGINYERIA SCP
FERNANDO MARIA ARTAJO
JARQUE
FRANCIAMAR S L U
RAMON CLAPES ESQUERDA
ASESORIA VELSINIA,S.L.
FAUSBE 2005 S.L.
ANNA DURAN VIDAL
GESTION ESTUDIO Y AUDITORIA
DE EMPRESAS GEA S.R.L.
ASESORIA SAGASTIZABAL S.L.
MARIA TERESA SEGURA MASSOT
RAQUEL SANCHEZ MUÑOZ
AITOR REMENTERIA LECUE
MARIA CISTERO BOFARULL
ANA GAROZ DURO
EMASFA S.L.
CRISTINA MODOL RUIZ
MARIA ROSARIO CLIMENT
MARTOS
FRANCISCO JAVIER NAVARRO UNAMUNZAGA
CRISTINA FARRE BOSCH
CARLOS GOMEZ EBRI
J RETA ASOCIADOS S.L.
AGRICOLA D´ALBATÀRREC SOCIETAT
COOPERATIVA CATALANA LIMITADA
MUÑOZ VIÑOLES S.L.
SAENZ DE TEJADA ASESORES S.L.
MARIA ANGELS MIRO SALA
AMPARO ALBIÑANA BOLUDA
ASESORIA INFIS S.L.
ALBA ASENSIO REIG
FRANCISCO JOSE DIEGO MARTI
ARTI INVERSIONES Y PATRIMONIOS S.L.
NOELIA MARIA SINDIN RODRIGUEZ
SANTAMANS ASESORES
LEGALES Y TRIBUTARIOS S.L.
MARTA MARIA GOMEZ DE MAINTENANT
JULIAN FERREIRA FRAGA
PABLO GAGO COMES
MARIA VICTORIA AROSTEGUI ARGALUZA
MIRIAN RODRIGUEZ OTERO
PERELLO Y TOMAS S.L.
P.181
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
INVERSIONES IZARRA 2000, S.L.
FRANCISCO JOSE PAZ GRANDIO
EZEQUIEL AND SANCHEZ
CONSULTORES S.L.
FERNANDO M ORTEGA ALTUNA
MARIA CRISTINA FERREIRO GARCIA
GESTAE VALENCIA S.L.
TELEMEDIDA Y GAS S.L.
DORLETA LOPEZ LOPEZ
JUAN LUIS CU AT ALVAREZ
OSSORIO
YBIS XXI S.L.
ANABEL VARELA PAZ
MEDITERRANEA BLAVA S.L.
ALDAIA 94 S.L.
SILVIA LOPEZ PARDO
G F CONSULTORIA DE
EMPRESAS SDAD. LTDA.
BEGOÑA MONICA FERNANDEZ QUILEZ
MARIA ISABEL GONZALEZ ALVAREZ
NURIA VAZQUEZ CARRASCO
FRANCISCO JAVIER SMITH BASTERRA
MARIA LOPEZ PEREZ
RAFAEL CLAVER GIMENO
SERGIO DIENTE ALONSO
ACREMUN S.L.
JOAN ALBERT ROS
JOSE IGNACIO DE PRADO MANEIRO
MORILLO-MUÑOZ CB
GUTIERREZ DE GUEVARA S.L.
NAGORE LOMBIDE HERNANDEZ
OFICINAS EMA S.L.
JUAN CARLOS DUQUE
MEDRANO
MARIA GUTIERREZ FERNANDEZ
AULES ASESORES S.L.
FRANCISCO JAVIER REZA
MONTES
FRANCIAMAR GORLIZ S.L.
TRINIDAD CASTRILLO PEREZ
BAY NAMRATA S.L.
CONSEJEROS Y PROYECTOS DE GESTION S.L.
PERALTA Y ARENSE ASESORES Y
CONSULTORES S.L.
VIRGINIA GARCIA DEL HOYO
LEIRE TERRADILLOS PEREZ
MONTE AZUL CASAS S.L.
JOSE ANTONIO SANCHEZ
SANCHEZ
FRANCIAMAR AREATZA S.L.
MARIA MILAGROS GANDARA DUQUE
BLANMED ASESORES
SOCIEDAD COOP.
JULIO MARCO MORERA CELDRAN
ANAIS BEATRIZ DE LA FUENTE TORRES
IVAN CALLES VAQUERO
ALVARO FUENTE VILLARAN
PV1 S.L.
ANTONIO DAVILA RUEDA
SIRA ASUNCION ORUE BARASOAIN
CLUB AVOD S.L.
MARTA GIL USON
EMILIO GUSTAVO GONZALEZ GUTIERREZ
GABINETE JURIDICO FINANCIERO
SERRANO S.L.
JESUS ARIZA GIL
MIGUEL JOSE FERNANDEZ MARDOMINGO
BARRIUSO
RAFAEL SOTO PASTOR
IBERBROKERS ASESORES
LEGALES Y TRIBUTARIOS, S.L.
GESTION Y SERVICIOS SAN ROMAN DURAN
S.L.
VIVIAL ASESORAMIENTO Y ALQUILER
S.L.
RENTA INMOBILIARIA
ARAGONESA S.L.
JUSTO GONZALEZ GARCIA
ALTEX PARTNERS S.L.
JESUS GASCON VAL
REBECA GUTIERREZ FERNANDEZ
ASESORIA Y GESTION DE PATRIMONIOS
DE ENTIDADES RELIGIOSAS S
DARIO ALFONSO GINES LAHERA
CONSTANTINO GARCIA FONDON
MITJAVILA Y ASOCIADOS ESTUDIO
JURIDICO FISCAL S.L.
JESUS ANGEL ZUECO GIL
ARANE PROMOCION Y GESTION S.L.
MARIA ISABEL HERNANDEZ SANCHEZ
ACERTIUS SUMA CAPITAL
SOCIEDAD LTDA.
CENTRO ASESOR MONTEHERMOSO S.L.
RICARDO BALSEIRO PEREZ DE VILLAR
WORKUP ASESORES S.L.
SALOR XVI CB
ANTONIO FERMIN LUNA GARCIA MINA
NOELIA TORRELLAS GRAMAJE
JUAN FRANCISCO CIUDAD BRONCANO
BORJA POLO PRIETO
DIEZ AMORETTI S.L.
JORGE LUIS RAMOS ROMAN
ALVARO CHAVARRI GONZALEZ
ARAN PALLARS ASSESSORS S.L.
FRANCISCO JAVIER SANCHEZ PARRA
ANDISARU S.L.
TERESA VERNET VILLAGRASA
P.182
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Glossary
Additional Tier 1
Capital
Includes: Preferred stock and convertible perpetual securities and deductions.
Adjusted acquisition
cost
The acquisition cost of the securities less accumulated amortizations, plus interest accrued, but not net of
any other valuation adjustments.
Amortized cost
The amortized cost of a financial asset or financial liability is the amount at which the financial asset or
financial liability is measured at initial recognition minus the principal repayments, plus or minus, the
cumulative amortization using the effective interest rate method of any difference between the initial
amount and the maturity amount and, for financial assets, adjusted for any loss allowance.
Associates
Companies in which the Group has a significant influence, without having control. Significant influence is
deemed to exist when the Group owns 20% or more of the voting rights of an investee directly or indirectly.
Baseline
macroeconomic
scenarios
IFRS 9 requires that an entity must evaluate a range of possible outcomes when estimating provisions and
measuring expected credit losses, through macroeconomic scenarios. The baseline macroeconomic
scenario presents the situation of the particular economic cycle.
Basic earnings per
share
Calculated by dividing “Profit attributable to Parent Company” corresponding to ordinary shareholders of
the entity by the weighted average number of shares outstanding throughout the year (i.e., excluding the
average number of treasury shares held over the year).
Basis risk
Risk arising from hedging exposure to one interest rate with exposure to a rate that reprices under slightly
different conditions.
Business combination
A business combination is a transaction, or any other event, through which a single entity obtains the
control of one or more businesses.
Business Model
The assessment as to how an asset shall be classified is made on the basis of both the business model for
managing the financial asset and the contractual cash flow characteristic of the financial asset (SPPI
Criterion). Financial assets are classified on the basis of its business model for managing the financial
assets. The Group’s business models shall be determined at a level that reflects how groups of financial
assets are managed together to achieve a particular business objective and generate cash flows.
Cash flow hedges
Those that hedge the exposure to variability in cash flows attributable to a particular risk associated with a
recognized asset or liability or a highly probable forecast transaction and could affect profit or loss.
Commissions
Income and expenses relating to commissions and similar fees are recognized in the income statement
using criteria that vary according to their nature. The most significant income and expense items in this
connection are:
· Fees and commissions relating linked to financial assets and liabilities measured at fair value through
profit or loss, which are recognized when collected.
· Fees and commissions arising from transactions or services that are provided over a period of time, which
are recognized over the life of these transactions or services.
· Fees and commissions generated by a single act are accrued upon execution of that act.
Consolidation method
Method used for the consolidation of the accounts of the Group’s subsidiaries. The assets and liabilities of
the Group entities are incorporated line-by-line on the consolidate balance sheets, after conciliation and the
elimination in full of intragroup balances, including amounts payable and receivable. Group entity income
statement income and expense headings are similarly combined line by line into the consolidated income
statement, having made the following consolidation eliminations: a) income and expenses in respect of
intragroup transactions are eliminated in full. b) profits and losses resulting from intragroup transactions
are similarly eliminated. The carrying amount of the parent's investment and the parent's share of equity in
each subsidiary are eliminated.
Contingencies
Current obligations of the entity arising as a result of past events whose existence depends on the
occurrence or non-occurrence of one or more future events independent of the will of the entity.
Contingent
commitments
Possible obligations of the entity that arise from past events and whose existence depends on the
occurrence or non-occurrence of one or more future events independent of the entity’s will and that could
lead to the recognition of financial assets.
Control
An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns through its power over the investee. An investor
controls an investee if and only if the investor has all the following:
a) Power; An investor has power over an investee when the investor has existing rights that give it the
current ability to direct the relevant activities, i.e. the activities that significantly affect the investee’s
returns. b) Returns; An investor is exposed, or has rights, to variable returns from its involvement with the
investee when the investor’s returns from its involvement have the potential to vary as a result of the
investee’s performance. The investor’s returns can be only positive, only negative or both positive and
negative. c) Link between power and returns; An investor controls an investee if the investor not only has
power over the investee and exposure or rights to variable returns from its involvement with the investee,
but also has the ability to use its power to affect the investor’s returns from its involvement with the
investee.
Correlation risk
Correlation risk is related to derivatives whose final value depends on the performance of more than one
underlying asset (primarily, stock baskets) and indicates the existing variability in the correlations between
each pair of assets.
Credit Valuation
Adjustment (CVA)
An adjustment to the valuation of OTC derivative contracts to reflect the creditworthiness of OTC derivative
counterparties.
P.183
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Current service cost
Current service cost is the increase in the present value of a defined benefit obligation resulting from
employee service in the current period.
Current tax assets
Taxes recoverable over the next twelve months.
Current tax liabilities
Corporate income tax payable on taxable profit for the year and other taxes payable in the next twelve
months.
Debit Valuation
Adjustment (DVA)
An adjustment made by an entity to the valuation of OTC derivative liabilities to reflect within fair value the
entity’s own credit risk.
Debt certificates
Obligations and other interest-bearing securities that create or evidence a debt on the part of their issuer,
including debt securities issued for trading among an open group of investors, that accrue interest, implied
or explicit, whose rate, fixed or benchmarked to other rates, is established contractually, and take the form
of securities or book-entries, irrespective of the issuer.
Default
An asset will be considered as defaulted whenever it is more than 90 days past due.
Deferred tax assets
Taxes recoverable in future years, including loss carry forwards or tax credits for deductions and tax
rebates pending application.
Deferred tax liabilities
Income taxes payable in subsequent years.
Defined benefit plans
Post-employment obligation under which the entity, directly or indirectly via the plan, retains the
contractual or implicit obligation to pay remuneration directly to employees when required or to pay
additional amounts if the insurer, or other entity required to pay, does not cover all the benefits relating to
the services rendered by the employees when insurance policies do not cover all of the corresponding post-
employees benefits.
Defined contribution
plans
Defined contribution plans are retirement benefit plans under which amounts to be paid as retirement
benefits are determined by contributions to a fund together with investment earnings thereon. The
employer's obligations in respect of its employees current and prior years' employment service are
discharged by contributions to the fund.
Deposits from central
banks
Deposits of all classes, including loans and money market operations, received from the Bank of Spain and
other central banks.
Deposits from credit
institutions
Deposits of all classes, including loans and money market operations received, from credit entities.
Deposits from
customers
Redeemable cash balances received by the entity, with the exception of debt certificates, money market
operations through counterparties and subordinated liabilities, which are not received from either central
banks or credit entities. This category also includes cash deposits and consignments received that can be
readily withdrawn.
Derivatives
The fair value in favor (assets) or again (liabilities) of the entity of derivatives not designated as accounting
hedges.
Derivatives - Hedging
derivatives
Derivatives designated as hedging instruments in an accounting hedge. The fair value or future cash flows
of those derivatives is expected to offset the differences in the fair value or cash flows of the items hedged.
Diluted earnings per
share
Calculated by using a method similar to that used to calculate basic earnings per share; the weighted
average number of shares outstanding, and the profit attributable to the parent company corresponding to
ordinary shareholders of the entity, if appropriate, is adjusted to take into account the potential dilutive
effect of certain financial instruments that could generate the issue of new Bank shares (share option
commitments with employees, warrants on parent company shares, convertible debt instruments, etc.).
Dividends and
retributions
Dividend income collected announced during the year, corresponding to profits generated by investees
after the acquisition of the stake.
Domestic activity
Domestic balances are those of BBVA´s Group entities domiciled in Spain, which reflect BBVA´s domestic
activities, being the allocation of assets and liabilities based on the domicile of the Group entity at which the
relevant asset or liability is accounted for.
Early retirements
Employees that no longer render their services to the entity but which, without being legally retired, remain
entitled to make economic claims on the entity until they formally retire.
Economic capital
Methods or practices that allow banks to consistently assess risk and attribute capital to cover the
economic effects of risk-taking activities.
Effective interest rate
(EIR)
Discount rate that exactly equals the value of a financial instrument with the cash flows estimated over the
expected life of the instrument based on its contractual period as well as its anticipated amortization, but
without taking the future losses of credit risk into consideration.
Employee expenses
All compensation accrued during the year in respect of personnel on the payroll, under permanent or
temporary contracts, irrespective of their jobs or functions, irrespective of the concept, including the
current costs of servicing pension plans, own share based compensation schemes and capitalized
personnel expenses. Amounts reimbursed by the state Social Security or other welfare entities in respect of
employee illness are deducted from personnel expenses.
Equity
The residual interest in an entity's assets after deducting its liabilities. It includes owner or venturer
contributions to the entity, at incorporation and subsequently, unless they meet the definition of liabilities,
and accumulated net profits or losses, fair value adjustments affecting equity and, if warranted, non-
controlling interests.
Equity instruments
An equity instrument that evidences a residual interest in the assets of an entity, that is after deducting all
of its liabilities.
Equity instruments
issued other than
capital
Includes equity instruments that are financial instruments other than “Capital” and “Equity component of
compound financial instruments”.
P.184
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Equity Method
Is a method of accounting whereby the investment is initially recognized at cost and adjusted thereafter for
the post-acquisition change in the investor’s share of the investee’s net assets. The investor’s profit or loss
includes its share of the investee’s profit or loss and the investor’s other comprehensive income includes its
share of the investee’s other comprehensive income.
Exchange/translation
differences
Exchange differences (P&L): Includes the earnings obtained in currency trading and the differences arising
on translating monetary items denominated in foreign currency to the functional currency. Exchange
differences (valuation adjustments): those recorded due to the translation of the financial statements in
foreign currency to the functional currency of the Group and others recorded against equity.
Expected Credit Loss
(ECL)
Expected credit losses are a probability-weighted estimate of credit losses over the expected life of the
financial instrument. Hence, credit losses are the present value of expected cash shortfalls. The
measurement and estimate of these expected credit losses should reflect:
1. An unbiased and probability-weighted amount.
2. The time value of money by discounting this amount to the reporting date using a rate that approximates
the EIR of the asset, and
3. Reasonable and supportable information that is available without undue cost or effort.
The expected credit losses must be measured as the difference between the asset’s gross carrying amount
and the present value of estimated future cash flows discounted at the financial asset’s original effective
interest rate or an approximation thereof (forward looking).
Exposure at default
EAD is the amount of risk exposure at the date of default by the counterparty.
Fair value
The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
Fair value hedges
Derivatives that hedge the exposure to changes in the fair value of assets and liabilities or firm
commitments that have not be recognized, or of an identified portion of said assets, liabilities or firm
commitments, attributable to a specific risk, provided it could affect the income statement.
Financial Assets at
Amortized Cost
Financial assets that do not meet the definition of financial assets designated at fair value through profit or
loss and arise from the financial entities' ordinary activities to capture funds, regardless of their
instrumentation or maturity.
Financial Assets at fair
value through other
comprehensive
income
Financial instruments with determined or determinable cash flows and in which the entire payment made
by the entity will be recovered, except for reasons attributable to the solvency of the debtor. This category
includes both the investments from the typical lending activity as well as debts contracted by the
purchasers of goods, or users of services, that form part of the entity’s business. It also includes all finance
lease arrangements in which the subsidiaries act as lessors.
Financial guarantees
Contracts that require the issuer to make specified payments to reimburse the holder for a loss it incurs
when a specified debtor fails to make payment when due in accordance with the original or modified terms
of a debt instrument, irrespective of its instrumentation. These guarantees may take the form of deposits,
technical or financial guarantees, insurance contracts or credit derivatives.
Financial guarantees
given
Transactions through which the entity guarantees commitments assumed by third parties in respect of
financial guarantees granted or other types of contracts.
Financial instrument
A financial instrument is any contract that gives rise to a financial asset of one entity and to a financial
liability or equity instrument of another entity.
Financial liabilities at
amortized cost
Financial liabilities that do not meet the definition of financial liabilities designated at fair value through
profit or loss and arise from the financial entities' ordinary activities to capture funds, regardless of their
instrumentation or maturity.
Foreign activity
International balances are those of BBVA´s Group entities domiciled outside of Spain, which reflect our
foreign activities, being the allocation of assets and liabilities based on the domicile of the Group entity at
which the relevant asset or liability is accounted for.
Goodwill
Goodwill acquired in a business combination represents a payment made by the acquirer in anticipation of
future economic benefits from assets that are not able to be individually identified and separately
recognized.
Hedges of net
investments in foreign
operations
Foreign currency hedge of a net investment in a foreign operation.
Held for trading
(assets and liabilities)
Financial assets and liabilities acquired or incurred primarily for the purpose of profiting from variations in
their prices in the short term.
This category also includes financial derivatives not qualifying for hedge accounting, and in the case of
borrowed securities, financial liabilities originated by the firm sale of financial assets acquired under
repurchase agreements or received on loan (“short positions”).
P.185
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Impaired financial
assets
An asset is credit-impaired according to IFRS 9 if one or more events have occurred and they have a
detrimental impact on the estimated future cash flows of the asset. Evidence that a financial asset is credit-
impaired includes observable data about the following events:
a.significant financial difficulty of the issuer or the borrower,
b.a breach of contract (e.g. a default or past due event),
c.a lender having granted a concession to the borrower – for economic or contractual reasons
relating to the borrower’s financial difficulty – that the lender would not otherwise consider,
d.it becoming probable that the borrower will enter bankruptcy or other financial reorganization,
e.the disappearance of an active market for that financial asset because of financial difficulties, or
f.the purchase or origination of a financial asset at a deep discount that reflects the incurred credit
losses.
Income from equity
instruments
Dividends and income on equity instruments collected or announced during the year corresponding to
profits generated by investees after the ownership interest is acquired. Income is recognized gross, i.e.,
without deducting any withholdings made, if any.
Insurance contracts
linked to pensions
The fair value of insurance contracts written to cover pension commitments.
Inventories
Assets, other than financial instruments, under production, construction or development, held for sale
during the normal course of business, or to be consumed in the production process or during the rendering
of services. Inventories include land and other properties held for sale at the real estate development
business.
Investment properties
Investment property is property (land or a building—or part of a building—or both) held (by the owner or by
the lessee under a finance lease) to earn rentals or for capital appreciation or both, rather than for own use
or sale in the ordinary course of business.
Joint arrangement
An arrangement of which two or more parties have joint control.
Joint control
The contractually agreed sharing of control of an arrangement, which exists only when decisions about the
relevant activities require the unanimous consent of the parties sharing control.
Joint operation
A joint arrangement whereby the parties that have joint control of the arrangement have rights to the
assets of the arrangement and obligations for the liabilities. A joint venturer shall recognize the following for
its participation in a joint operation: a) its assets, including any share of the assets of joint ownership; b) its
liabilities, including any share of the liabilities incurred jointly; c) income from the sale of its share of
production from the joint venture; d) its share of the proceeds from the sale of production from the joint
venturer; and e) its expenses, including any share of the joint expenses. A joint venturer shall account for
the assets, liabilities, income and expenses related to its participation in a joint operation in accordance
with IFRS applicable to the assets, liabilities, income and expenses specific question.
Joint venture
A joint arrangement whereby the parties that have joint control of the arrangement have rights to the net
assets of the arrangement. A joint venturer shall recognize its interest in a joint venture as an investment
and shall account for that investment using the equity method in accordance with IAS 28 Investments in
Associates and Joint Ventures.
Leases
A lease is an agreement whereby the lessor conveys to the lessee in return for a payment or series of
payments the right to use an asset for an agreed period of time, a stream of cash flows that is essentially
equivalent to the combination of principal and interest payments under a loan agreement. a) A lease is
classified as a finance lease when it substantially transfers all the risks and rewards incidental to ownership
of the asset forming the subject-matter of the contract. b) A lease will be classified as operating lease when
it is not a financial lease.
Lease liability
Lease that represents the lessee’s obligation to make lease payments during the lease term.
Liabilities included in
disposal groups
classified as held for
sale
The balance of liabilities directly associated with assets classified as non-current assets held for sale,
including those recognized under liabilities in the entity's balance sheet at the balance sheet date
corresponding to discontinued operations.
Liabilities under
insurance contracts
The technical reserves of direct insurance and inward reinsurance recorded by the entities to cover claims
arising from insurance contracts in force at period-end.
Loans and advances to
customers
Loans and receivables, irrespective of their type, granted to third parties that are not credit entities.
Loss given default
(LGD)
It is the estimate of the loss arising in the event of default. It depends mainly on the characteristics of the
counterparty, and the valuation of the guarantees or collateral associated with the asset.
Mortgage-covered
bonds
Financial asset or security created from mortgage loans and backed by the guarantee of the mortgage loan
portfolio of the entity.
Non performing
financial guarantees
given
The balance of non performing risks, whether for reasons of default by customers or for other reasons, for
financial guarantees given. This figure is shown gross: in other words, it is not adjusted for value corrections
(loan loss reserves) made.
Non Performing Loans
(NPL)
The balance of non performing risks, whether for reasons of default by customers or for other reasons, for
exposures on balance loans to customers. This figure is shown gross: in other words, it is not adjusted for
value corrections (loan loss reserves) made.
Non-controlling
interests
The net amount of the profit or loss and net assets of a subsidiary attributable to associates outside the
group (that is, the amount that is not owned, directly or indirectly, by the parent), including that amount in
the corresponding part of the earnings for the period.
P.186
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Non-current assets
and disposal groups
held for sale
A non-current asset or disposal group, whose carrying amount is expected to be realized through a sale
transaction, rather than through continuing use, and which meets the following requirements: a) it is
immediately available for sale in its present condition at the balance sheet date, i.e. only normal procedures
are required for the sale of the asset.
b) the sale is considered highly probable.
Non-monetary assets
Assets and liabilities that do not provide any right to receive or deliver a determined or determinable
amount of monetary units, such as tangible and intangible assets, goodwill and ordinary shares subordinate
to all other classes of capital instruments.
Non-trading financial
assets mandatorily at
fair value through
Profit or loss
The financial assets registered under this heading are assigned to a business model whose objective is
achieved by obtaining contractual cash flows and / or selling financial assets but which the contractual
cash flows have not complied with the SPPI test conditions.
Option risk
Risks arising from options, including embedded options.
Other financial assets/
liabilities at fair value
through profit or loss
Instruments designated by the entity from the inception at fair value with changes in profit or loss. An entity
may only designate a financial instrument at fair value through profit or loss, if doing so more relevant
information is obtained, because:
a) It eliminates or significantly reduces a measurement or recognition inconsistency (sometimes called
"accounting mismatch") that would otherwise arise from measuring assets or liabilities or recognizing the
gains and losses on them on different bases. It might be acceptable to designate only some of a number of
similar financial assets or financial liabilities if doing so a significant reduction (and possibly a greater
reduction than other allowable designations) in the inconsistency is achieved. b) The performance of a
group of financial assets or financial liabilities is managed and evaluated on a fair value basis, in accordance
with a documented risk management or investment strategy, and information about the group is provided
internally on that basis to the entity´s key management personnel. These are financial assets managed
jointly with “Liabilities under insurance and reinsurance contracts” measured at fair value, in combination
with derivatives written with a view to significantly mitigating exposure to changes in these contracts' fair
value, or in combination with financial liabilities and derivatives designed to significantly reduce global
exposure to interest rate risk.
These headings include customer loans and deposits effected via so-called unit-linked life insurance
contracts, in which the policyholder assumes the investment risk.
Other Reserves
This heading is broken down as follows:
i) Reserves or accumulated losses of investments in subsidiaries, joint ventures and associate: include the
accumulated amount of income and expenses generated by the aforementioned investments through
profit or loss in past years.
ii) Other: includes reserves different from those separately disclosed in other items and may include legal
reserve and statutory reserve.
Other retributions to
employees long term
Includes the amount of compensation plans to employees long term.
Own/treasury shares
The amount of own equity instruments held by the entity.
Past service cost
It is the change in the present value of the defined benefit obligation for employee service in prior periods,
resulting in the current period from the introduction of, or changes to, post-employment benefits or other
long-term employee benefits.
Post-employment
benefits
Retirement benefit plans are arrangements whereby an enterprise provides benefits for its employees on or
after termination of service.
Probability of default
(PD)
It is the probability of the counterparty failing to meet its principal and/or interest payment obligations. The
PD is associated with the rating/scoring of each counterparty/transaction.
Property, plant and
equipment/tangible
assets
Buildings, land, fixtures, vehicles, computer equipment and other facilities owned by the entity or acquired
under finance leases.
Provisions
Provisions include amounts recognized to cover the Group’s current obligations arising as a result of past
events, certain in terms of nature but uncertain in terms of amount and/or cancellation date.
Provisions for
contingent liabilities
and commitments
Provisions recorded to cover exposures arising as a result of transactions through which the entity
guarantees commitments assumed by third parties in respect of financial guarantees granted or other
types of contracts, and provisions for contingent commitments, i.e., irrevocable commitments which may
arise upon recognition of financial assets.
Provisions for
pensions and similar
obligation
Constitutes all provisions recognized to cover retirement benefits, including commitments assumed vis-à-
vis beneficiaries of early retirement and analogous schemes.
Provisions or (-)
reversal of provisions
Provisions recognized during the year, net of recoveries on amounts provisioned in prior years, with the
exception of provisions for pensions and contributions to pension funds which constitute current or interest
expense.
Refinanced Operation
An operation which is totally or partially brought up to date with its payments as a result of a refinancing
operation made by the entity itself or by another company in its group.
P.187
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Refinancing Operation
An operation which, irrespective of the holder or guarantees involved, is granted or used for financial or
legal reasons related to current or foreseeable financial difficulties that the holder(s) may have in settling
one or more operations granted by the entity itself or by other companies in its group to the holder(s) or to
another company or companies of its group, or through which such operations are totally or partially
brought up to date with their payments, in order to enable the holders of the settled or refinanced
operations to pay off their loans (principal and interest) because they are unable, or are expected to be
unable, to meet the conditions in a timely and appropriate manner.
Renegotiated
Operation
An operation whose financial conditions are modified when the borrower is not experiencing financial
difficulties, and is not expected to experience them in the future, i.e. the conditions are modified for reasons
other than restructuring.
Repricing risk
Risks related to the timing mismatch in the maturity and repricing of assets and liabilities and off-balance
sheet short and long-term positions.
Restructured
Operation
An operation whose financial conditions are modified for economic or legal reasons related to the holder's
(or holders') current or foreseeable financial difficulties, in order to enable payment of the loan (principal
and interest), because the holder is unable, or is expected to be unable, to meet those conditions in a timely
and appropriate manner, even if such modification is provided for in the contract. In any event, the following
are considered restructured operations: operations in which a haircut is made or assets are received in
order to reduce the loan, or in which their conditions are modified in order to extend their maturity, change
the amortization table in order to reduce the amount of the installments in the short term or reduce their
frequency, or to establish or extend the grace period for the principal, the interest or both; except when it
can be proved that the conditions are modified for reasons other than the financial difficulties of the holders
and, are similar to those applied on the market on the modification date for operations granted to
customers with a similar risk profile.
Retained earnings
Accumulated net profits or losses recognized in the income statement in prior years and retained in equity
upon distribution.
Right of use asset
Asset that represents the lessee’s right to use an underlying asset during the lease term.
Securitization fund
A fund that is configured as a separate equity and administered by a management company. An entity that
would like funding sells certain assets to the securitization fund, which, in turn, issues securities backed by
said assets.
Share premium
The amount paid in by owners for issued equity at a premium to the shares' nominal value.
Shareholders' funds
Contributions by stockholders, accumulated earnings recognized in the income statement and the equity
components of compound financial instruments.
Short positions
Financial liabilities arising as a result of the final sale of financial assets acquired under repurchase
agreements or received on loan.
Significant increase in
credit risk
In order to determine whether there has been a significant increase in credit risk for lifetime expected
losses recognition, the Group has develop a two-prong approach:
a.Quantitative criterion: based on comparing the current expected probability of default over the
life of the transaction with the original adjusted expected probability of default. The thresholds used for
considering a significant increase in risk take into account special cases according to geographic areas and
portfolios.
b) Qualitative criterion: most indicators for detecting significant risk increase are included in the Group's
systems through rating/scoring systems or macroeconomic scenarios, so quantitative analysis covers the
majority of circumstances. The Group will use additional qualitative criteria when it considers it necessary
to include circumstances that are not reflected in the rating/score systems or macroeconomic scenarios
used.
Significant influence
Is the power to participate in the financial and operating policy decisions of the investee but is not control or
joint control of those policies. If an entity holds, directly or indirectly (i.e. through subsidiaries), 20 per cent
or more of the voting power of the investee, it is presumed that the entity has significant influence, unless it
can be clearly demonstrated that this is not the case. Conversely, if the entity holds, directly or indirectly
(i.e. through subsidiaries), less than 20 per cent of the voting power of the investee, it is presumed that the
entity does not have significant influence, unless such influence can be clearly demonstrated. A substantial
or majority ownership by another investor does not necessarily preclude an entity from having significant
influence.
The existence of significant influence by an entity is usually evidenced in one or more of the following ways:
a) representation on the board of directors or equivalent governing body of the investee; b) participation in
policy-making processes, including participation in decisions about dividends or other distributions;
c) material transactions between the entity and its investee;
d) interchange of managerial personnel; or
e) provision of essential technical information.
Solely Payments of
Principle and Interest
(SPPI)
The assessment as to how an asset shall be classified is made on the basis of both the business model for
managing the financial asset and the contractual cash flow characteristic of the financial asset (SPPI
Criterion). To determine whether a financial asset shall be classified as measured at amortized cost or
FVOCI, a
Group assesses (apart from the business model) whether the cash flows from the financial asset represent,
on specified dates, solely payments of principal and interest on the principal amount outstanding (SPPI).
P.188
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Stages
IFRS 9 classifies financial instruments into three categories, which depend on the evolution of their credit
risk from the moment of initial recognition. The first category includes the transactions when they are
initially recognized - without significant increase in credit risk (Stage 1); the second comprises the
operations for which a significant increase in credit risk has been identified since its initial recognition -
significant increase in credit risk (Stage 2) and the third one, the impaired operations Impaired (Stage 3).
The transfer logic is defined in a symmetrical way, whenever the condition that
triggered a transfer to Stage 2 is no longer met, the exposure will be transferred to
Stage 1. In the case of forbearances transferred to stage 2, as long as the loan is flagged as forbearance it
will keep its status as Stage 2. However, when the loan is not flagged as forbearance it will be transferred
back to Stage 1.
Statements of cash
flows
The indirect method has been used for the preparation of the statement of cash flows. This method starts
from the entity’s profit and adjusts its amount for the effects of transactions of a non-cash nature, any
deferrals or accruals of past or future operating cash receipts or payments, and items of income or expense
associated with cash flows classified as investment or finance. As well as cash, short-term, highly liquid
investments subject to a low risk of changes in value, such as cash and deposits in central banks, are
classified as cash and equivalents. When preparing these financial statements the following definitions have
been used:
· Cash flows: Inflows and outflows of cash and equivalents.
· Operating activities: The typical activities of credit institutions and other activities that cannot be classified
as investment or financing activities.
· Investing activities: The acquisition, sale or other disposal of long-term assets and other investments not
included in cash and cash equivalents or in operating activities.
· Financing activities: Activities that result in changes in the size and composition of the Group’s equity and
of liabilities that do not form part of operating activities.
Statements of changes
in equity
The statements of changes in equity reflect all the movements generated in each year in each of the
headings of the equity, including those from transactions undertaken with shareholders when they act as
such, and those due to changes in accounting criteria or corrections of errors, if any.
The applicable regulations establish that certain categories of assets and liabilities are recognized at their
fair value with a charge to equity. These charges, known as “Valuation adjustments” (see Note 31), are
included in the Group’s total equity net of tax effect, which has been recognized as deferred tax assets or
liabilities, as appropriate.
statements of
recognized income
and expenses
The statement of recognized income and expenses reflect the income and expenses generated in each
fiscal year, distinguishing between those recognized in the profit and loss accounts and the “Other
recognized income and expenses”; which are recorded directly in the equity.
The “Other recognized income and expenses” includes the variations that have occurred in the period in
“accumulated other comprehensive income”, detailed by concepts.
The sum of the variations recorded in the “accumulated other comprehensive income” caption of the equity
and the profit for the year represents the “Total income and expenses”.
Structured credit
products
Special financial instrument backed by other instruments building a subordination structure.
Structured Entities
A structured entity is an entity that has been designed so that voting or similar rights are not the dominant
factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks only
and the relevant activities are directed by means of contractual arrangements. A structured entity often
has some or all of the following features or attributes:
a) restricted activities.
b) a narrow and well-defined objective, such as to effect a tax-efficient lease, carry out research and
development activities, provide a source of capital or funding to an entity or provide investment
opportunities for investors y passing on risks and rewards associated with the assets of the structured
entity to investors.
c) insufficient equity to permit the structured entity to finance its activities without subordinated financial
support.
d) financing in the form of multiple contractually linked instruments to investors that create concentrations
of credit or other risks (tranches).
Subordinated liabilities
Financing received, regardless of its instrumentation, which ranks after the common creditors in the event
of a liquidation.
Subsidiaries
Companies over which the Group exercises control. An entity is presumed to have control over another
when it possesses the right to oversee its financial and operational policies, through a legal, statutory or
contractual procedure, in order to obtain benefits from its economic activities. Control is presumed to exist
when the parent owns, directly or indirectly through subsidiaries, more than one half of an entity's voting
power, unless, exceptionally, it can be clearly demonstrated that ownership of more than one half of an
entity's voting rights does not constitute control of it. Control also exists when the parent owns half or less
of the voting power of an entity when there is:
a) an agreement that gives the parent the right to control the votes of other shareholders; b) power to
govern the financial and operating policies of the entity under a statute or an agreement; power to appoint
or remove the majority of the members of the board of directors or equivalent governing body and control
of the entity is by that board or body;
c) power to cast the majority of votes at meetings of the board of directors or equivalent governing body
and control of the entity is by that board or body.
P.189
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Tangible book value
Tangible Book Value represents the tangible equity's value for the shareholders as it does not include the
intangible assets and the minority interests (non-controlling interests). It is calculated by discounting
intangible assets, that is, goodwill and the rest of consolidated intangibles recorded under the public
balance sheet (goodwill and intangible assets of companies accounted for by the equity method or
companies classified as non-current assets for sale are not subtracted).It is also shown as ex-dividends.
Tax liabilities
All tax related liabilities except for provisions for taxes.
Territorial bonds
Financial assets or fixed asset security issued with the guarantee of portfolio loans of the public sector of
the issuing entity.
Tier 1 Capital
Mainly includes: Common stock, parent company reserves, reserves in companies, non-controlling
interests, deductions and others and attributed net income.
Tier 2 Capital
Mainly includes: Subordinated, preferred shares and non- controlling interest.
Unit-link
This is life insurance in which the policyholder assumes the risk. In these policies, the funds for the technical
insurance provisions are invested in the name of and on behalf of the policyholder in shares of Collective
Investment Institutions and other financial assets chosen by the policyholder, who bears the investment
risk.
Write- off
When the recovery of any recognized amount is considered to be remote, this amount is removed from the
balance sheet, without prejudice to any actions taken by the entities in order to collect the amount until
their rights extinguish in full through expiry, forgiveness or for other reasons.
Value at Risk (VaR)
Value at Risk (VaR) is the basic variable for measuring and controlling the Group’s market risk. This risk
metric estimates the maximum loss that may occur in a portfolio’s market positions for a particular time
horizon and given confidence level VaR figures are estimated following two methodologies:
a) VaR without smoothing, which awards equal weight to the daily information for the immediately
preceding last two years. This is currently the official methodology for measuring market risks vis-à-vis
limits compliance of the risk.
a.VaR with smoothing, which weighs more recent market information more heavily. This is a metric
which supplements the previous one.
b.VaR with smoothing adapts itself more swiftly to the changes in financial market conditions,
whereas VaR without smoothing is, in general, a more stable metric that will tend to exceed VaR with
smoothing when the markets show less volatile trends, while it will tend to be lower when they present
upturns in uncertainty.
Yield curve risk
Risks arising from changes in the slope and the shape of the yield curve.
P.190
Translation of Financial Statements originally issued in Spanish and prepared in accordance with Bank of Spain Circular 4/2017, and as amended thereafter,
which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.
Contents
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
1.BBVA in brief
Banco Bilbao Vizcaya Argentaria, S.A. (hereinafter, the “Bank” or “BBVA”) is a private-law entity governed by the rules and
regulations applicable to banks operating in Spain.
BBVA S.A is a bank founded in 1857 and constitutes the parent company of the BBVA Group, a global financial services group with a
vision focused on the customer and significant presence in the traditional banking business of retail banking, asset management and
wholesale banking.
Its purpose is to bring the age of opportunities to everyone. This purpose is based on customers' real needs: providing the best
solutions and helping them make the best financial decisions, through an easy and convenient experience. The entity is based on solid
values: customer comes first, we think big and we are one team.
The Bank has a solid position in Spain and, for its development activity and carries out its activity through branches and agencies in
more than 15 countries.
BBVA, S.A., as the parent company of the BBVA Group, operates internationally, which is why it is affected by economic and
regulatory trends in all the geographical areas where it operates through the entities of the BBVA Group. More information related to
the economic and sector environment and perspectives, as well as a summary of the significant aspects of the regulatory
environment, are included in the chapter “Macroeconomic and regulatory environment” of the BBVA Group Consolidated
Management Report.
Organizational Chart
2
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
2. Non-financial information report
In accordance with the provisions of the Commercial Code and the Capital Companies Law, this “Non-financial information report”
includes, among other matters: the information necessary to understand the performance, results and situation of the Bank; and the
impact of its activity with respect to environmental and social issues, respect for human rights and the fight against corruption and
bribery, as well as regarding employees. This Non-financial information report of Banco Bilbao Vizcaya Argentaria, SA, which forms
part of its Individual Management Report, includes references to the sections of the Consolidated Non-Financial Information Report
included in the BBVA Group Consolidated Management Report when these sections contain additional and complementary
information to obtain a better understanding of the Bank, the BBVA Group and their respective actions in the matters described
above.
For the publication of the key indicators of non-financial results, the guide of the Global Reporting Initiative (hereinafter, GRI) has been
followed as an international information framework in its selected GRI option, as well as the Communication of the European
Commission of July 5 of 2017 on Guidelines on non-financial reporting (Methodology for reporting non-financial information, 2017/C
215/01). In preparing the non-financial information contained in this Non-financial information report, the Bank has carried out, in
accordance with this framework, a materiality analysis that has allowed it to identify the most relevant aspects on which to inform its
stakeholders. For more information on the materiality analysis that has been carried out at BBVA Group level, and which then also
applies to the Bank, see the section “Materiality Analysis: the most relevant issues for stakeholders and for BBVA” within the chapter
“ Our stakeholders” of the BBVA Group Consolidated Management Report.
The information included in the non-financial information report is verified by KPMG Auditores, S.L., in its capacity as independent
provider of verification services.
2.1 Information on strategy and objectives
BBVA’s strategy and business model comprises the Group as a whole, including BBVA,S.A.
At the end of 2019, BBVA approved its current strategic plan, which anticipated many of the main global trends that have been
accelerated by to the pandemic. Trends such as mass digitalization of all sectors and activities, boosted by the change in consumer
habits. Beyond the use of digital and remote channels, there has been an unprecedented wave of disruptions encouraged by
technology and data. It is a real era of opportunities supported by new technologies such as artificial intelligence, cloud processing,
quantum computation, blockchain technology, etc., which are transforming the economy and will have a major impact on economic
growth and productivity.
The decarbonization of the economy to limit the effects of climate change is the main and most important disruption of all. The
challenge of achieving the net zero emissions target by 2050 requires a drastic modification of habits and behavior, together with the
deployment of non-carbon emission technologies in all sectors, not only energy. Unprecedented levels of innovation and investment
are required to achieve this; according to some estimates1, in the order of 5% of global GDP until approximately 2050.
The acceleration of these trends validates the strategy pursued by BBVA. It is a strategy based on a single purpose: "to bring the age
of opportunity to everyone”. Thanks to innovation and technology, the Bank provides access to products, advice and solutions that
help customers make better decisions on their finances and achieve their life and business goals.
3
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
1 OCDE/The World Bank/UN Environment (2018), Financing Climate Futures: Rethinking Infrastructure, OECD Publishing, Paris
Guided by this purpose, BBVA's strategy is built around six strategic priorities:
1. Improving our clients’ financial health
BBVA aspires to be its clients’ trusted financial partner, helping them to improve their financial health by offering personalized advice
based on technology and the use of data.
Money management is one of the greatest concerns for people. BBVA wants to help its customers improve their financial health in
two ways:
–First, by supporting them in the day-to-day management of their finances, helping them understand and be aware of their
income and expenses, management of future needs, capacity to save, etc.
–Second, by advising them how to achieve their life and business goals in the medium and long term.
2. Helping our clients transition toward a sustainable future
BBVA wants to help its clients transition toward a more sustainable future with finance, advice and innovative solutions, with the focus
primarily on two areas:
–Climate action: mobilizing the appropriate resources to manage the challenge of climate change.
–Inclusive growth: mobilizing the investments needed to build inclusive infrastructures and support inclusive economic
development in an equitable way that leaves no one behind.
BBVA considers that the commitment to sustainability is not only a challenge that requires an urgent response, but also an important
opportunity for business. The energy transition, in particular, will require major investments over the coming decades to replace fossil
fuels with other cleaner and more efficient sources of energy. This will have an impact on practically all industries, and also on how
people move, consume or arrange their homes.
3. Reaching more clients
Scale is increasingly critical in the banking business. BBVA aims to accelerate profitable growth, supporting itself through its own
channels and where the customers are (in third-party channels), with a special focus on digital and more profitable segments.
In this respect, the focus of profitable growth for BBVA over the coming years will be activities such as payments, insurance, asset
management, value segments such as SMEs and private banking, as well as the activities of Corporate and Investment Banking (CIB).
4. Driving operational excellence
BBVA is committed to providing the best experience possible and is transforming its model of customer relations to adapt to changes
in client behavior. To do so, it provides access to its products and services through simple processes. The role of the commercial
network is increasingly more focused on transactions of greater added value for customers. Interactions of lower added value are
redirected to self-service channels, thus reducing unit costs and increasing productivity. 
The transformation of the relational model is accompanied by a change in the operational model, focused on process reengineering in
the search for greater automation and improved productivity, as well as speedy delivery to the market of new products and
functionalities.
Without forgetting disciplined management of both financial and non-financial risks and optimized use of capital.
5. The best and most engaged team
The team continues to be a strategic priority for the Group. A diverse and empowered team, with an outstanding culture, guided by
the BBVA purpose and values and driven by a model of talent development which provides growth opportunities for all.
6. Data and technology
Data and technology are obvious accelerators to achieve our strategy. The commitment to developing advanced data analysis
capacities, together with secure and reliable technology, allows the creation of outstanding high-quality solutions.
The use of data and new technologies also generates the opportunity for increasingly global processes which can be used in the
different geographies and are easily scalable, thus reducing the unit cost of the processing.
BBVA continues to make progress in the development of an increasingly robust model of security and privacy (cybersecurity,
business processes, fraud and data security).
For additional information on the financial and business objectives for the coming years in terms of efficiency, profitability, the
creation of added value for the investor, growth in customers and channeling sustainable financing of the BBVA Group (which
therefore includes the Bank), as well as the main advances in the execution of the strategic priorities previously described, see section
“Strategy” of the Consolidated management report of BBVA Group.
4
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
2.2 Information on customers
The Bank puts customers at the heart of its activity and aims to establish a responsible relation with them, helping them to make
better financial decisions to achieve their life and professional objectives.
In this sense, there are some basic pillars linked to the Group's compliance system with which BBVA aspires to be the partner of trust
for its customers, in both management and control of their finances, based on personalized advice and with the aim of improving the
financial health of its customers.
Information security must also be a key pillar to guarantee the operational resilience of any organization. That is why the Group has
established policies, procedures and controls for the security of global infrastructures, digital channels and payment methods, with a
holistic approach based on intelligence in the face of challenges.
Customer experience
Consumers are increasingly demanding, and expect agile and personalized attention. BBVA is working to satisfy their needs and
exceed their expectations with the aim of guaranteeing a new standard in customer experience.
Customer satisfaction
The internationally recognized Net Promoter Score (NPS, Net Recommendation Index) methodology measures customers’
willingness to recommend a company and therefore, the level of satisfaction of BBVA’s customers with its products, channels and
services. The index is based on a survey that measures on a scale of zero to ten whether a bank’s customers are promoters (a score
of nine or ten), passives (a score of seven or eight) or detractors (a score of zero to six) when asked if they would recommend their
bank, a specific channel or a specific customer journey to a friend or family member. This information is vital for checking for
alignment between customer needs and expectations and the initiatives that have been implemented, establishing plans that
eliminate detected gaps and providing the best experiences.
The  internalization and application of this methodology over the last ten years provides a common language both internally and with
customers that facilitates everyone’s involvement and the integration of the voice of customers in everything the Bank does, from the
beginning. This has led to a steady increase in customers’ level of trust, as they recognize BBVA to be one of the most secure and
recommendable banking institutions in every country where it operates.
As of December 31, 2021, BBVA has maintained its leadership under the NPS retail in Spain, standing at first position. With respect to
NPS SME, BBVA raised from third to second position and under NPS commercial, BBVA has gone down from second to third position.
Transparency, Clarity and Accountability (TCR)
The relationship of the Bank with its customers must be based on transparency, clarity and responsibility. That is why BBVA
integrates these three principles (TCR) systematically into the design and implementation of the main solutions, deliverables and
experiences for its customers. The objective pursued is to help them make good life choices, and to maintain and increase their trust
in the Bank.
Three work lines have been developed to turn these principles into reality:
–Implementing the TCR principles in new digital solutions through the participation of TCR experts in the conceptualization
and design of these solutions, especially in massive impact digital solutions for retail customers.
–Incorporating the TCR principles into the creation and maintenance of key content for customers (product sheets,
contracts, sales scripts. responses to customer letters, communication regarding COVID-19, etc.).
–TCR awareness-raising and training throughout the Group, through a virtual community, on-site workshops and online
activities.
In 2021, the Bank has placed particular emphasis on designing TCR solutions for people who have some type of visual, hearing, motor
or cognitive disability, making progress in making all the digital solutions available in the different countries. With this aim, a process
has been defined so that new global designs and developments are accessible, extending them globally as they are reused in the
different geographical areas.
BBVA has an indicator to measure its TCR performance: the Net TCR Score (NTCRS), which is calculated following the same NPS
methodology. Based on the same survey, the NTCRS measures the degree to which customers perceive BBVA as a transparent and
clear bank in comparison with its peers, in the main countries where the Group operates.
According to the data as of December 2021, BBVA is a leader in NTCRS in Spain.
5
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Behavior with customers
BBVA´s Code of Conduct establishes the guidelines for conduct, in line with the internal values of the Bank.
BBVA counts on policies and governance procedures which establish the principles to be followed when assessing the characteristics
and risks of products and services, as well as defining their conditions for their distribution and monitoring. Thus, based on customer
insight, their interests should be taken into account at all times, and products and services should be offered in accordance with their
financial needs. Moreover, any customer protection regulations applicable must always be complied.
BBVA has also implemented processes geared toward the prevention, or, when this has not been possible, the management of
potential conflicts of interest that may arise in the marketing of its products.
In 2021, BBVA has continued to evolve and strengthen its internal regulation, as well as the frameworks of mitigation, control and
monitoring within the scope of protection of the customers, also considering the priorities of regulators and supervisors. In this
respect, the following main lines of action should be highlighted:
–The update of standards in customer protection at Group level, covering also aspects related to the creation and
distribution of sustainable products, within the framework of the protection of vulnerable customers and the processes of
granting loans and credit responsibly.
–The changing indicators in customer conduct, to identify early the possible indications of inadequate sales practices,
applying for this purpose advanced data analysis techniques.
–Monitoring of the measures promoted by the regulators and governments on occasion of the crisis derived from the
pandemic, as well as those proposed for exit from it, advising the business units on their implementation and carrying out
the corresponding monitoring.
Moreover, the Bank has continued to work to incorporate the vision of customer protection into the development of new products and
businesses, both retail and wholesale, from the moment of its design and creation.
Customer safety and protection
For BBVA security of information is one of the key aspects of its digital transformation. In this sense, information security is organized
into three fundamental pillars: cybersecurity, data security and security in the business and fraud processes. For each of them, a
program has been designed with the aim of reducing the risks to which the Group is exposed. These programs, which take into
account security industry best practices established in internationally accepted security standards, are periodically reviewed to
evaluate the progress and the effective impact on these risks.
In 2021, the measures adopted have been strengthened to guarantee effective protection of the information and assets which support
the Entity's business processes from a global perspective and an integrated approach, i.e. considering not only the technological area
but also the areas of people, processes and security governance.
Among these measures are those designed to: (I) ensure end-to-end protection of business processes, considering logical and
physical security, privacy and fraud management; (II) ensure compliance of the principles of security and privacy by design for new
products and services; and (III) improve access and authentication control for customers associated with the provision of online
services, both from the point of view of security and customer experience.
Below are some of the initiatives carried out during the year that are now implemented in the Group to improve customer security and
protection:
–Use of biometrics to sign transactions on the BBVA app, which improves the user experience and prevents SIM duplication
and smishing attacks.
–Strengthening security measures implemented in all the business processes with greatest risk of fraud.
–Implementation of behavioral biometrics and malware protection for digital clients to reinforce analytical and fraud
detection capabilities in mobile channels.
–Use of advanced analytics models to protect the funds of BBVA customers.
–Enhancement of the section with security advice to make customers aware of the main cybersecurity risks they are exposed
to, so that they can prevent or act against possible threats.
These new initiatives improve the protection of BBVA customers. In addition, robust customer authentication mechanisms have been
employed in e-commerce and the security of cards has been improved to prevent possible fraudulent use of their data. One example
is the Aqua card, which is the first card without a number or printed CVV, and with a dynamic CVV.
Additionally, BBVA has continued performing the training and awareness initiatives related to security and privacy, including training
actions and awareness campaigns for BBVA’s employees, clients and society in general.
Among the main campaigns and awareness initiatives performed and the recommendations included in the app, BBVA online
channels and social media, it is worth highlighting those related to information protection, secure password management, protection
of devices (computers, smartphones, etc.), detection of phishing and other computer and social engineering attacks, detection of
cybernetic scams, and security in online purchases.
Other lines of action also include periodic performance of global and local simulation exercises in order to raise the level of training
and awareness of key BBVA personnel and ensure an immediate and effective response in case of a security incident.
6
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Governance
BBVA has implemented a model of governance for information security, including the work of the Information Security Steering
Committee, responsible for the approval and monitoring of the information security strategy execution and the effective
implementation of the different programs designed for each of the three pillars that compose it.
Also, the Corporate Security function is organized by a system of committees and working groups to manage the different areas
related to information security: security in transactions, security associated with technology, physical security, security in business
processes, security related to personnel, etc.
There are also committees responsible for information protection and fraud management, where both the Corporate Security
function and the rest of the areas involved in the Bank participate.
Lastly, BBVA has a Technology and Cybersecurity Commission, whose functions include the supervision of technology and
cybersecurity strategy and cybersecurity risk management. This Commission assists the Board of Directors in monitoring the
technological risks to which the Bank is exposed, current cybersecurity and technology trends, and any relevant technological
security event that could affect the Group.
Data Protection
The main initiatives performed in this area are related to the adoption of measures to ensure that all BBVA´s information assets are
properly protected, limiting their use to related processes and controlling access to them, considering the security guidelines
established by the Group. All the initiatives are performed guaranteeing compliance with the security and privacy regulatory
requirements applicable, especially those related to personal data protection.
All activities related to the data protection program are reviewed by the Data Protection Committee, where all relevant stakeholders
of the organization are represented.
Cybersecurity
The pandemic has increased the scope of social engineering attacks through e-mail, SMS, instant messaging systems and social
media. It has also contributed to the emergence of new risks and challenges for companies, like the ones related to security in
telework, security in cloud environments and the increase in the attack surface. As a result, as cyberattacks evolve and become more
sophisticated, BBVA has strengthened its prevention and monitorization efforts.
The Global Computer Emergency Response Team (CERT) is the Group’s first line of detection and response to cyberattacks aimed at
global users and the Group’s infrastructure, combining information on cyber threats from our Threat Intelligence Unit. The Global
CERT, which is based in Madrid, operates 24/7 and provides services in all countries where BBVA operates, under a scheme of
managed security services.
In 2021, the monitoring capacity of the systems has increased, in particular with respect to the critical assets which support business
processes. Incident prevention, detection and response capabilities have also been strengthened through the use of integrated
information sources, improved analytical capabilities and automated platforms. Moreover, work is being done on the development of
new artificial intelligence and machine learning models which can predict and prevent cyberattacks against bank infrastructure,
providing a more secure experience for customers.
Measures implemented have improved information security management from a predictive and proactive approach, based on the use
of digital intelligence and advanced analytical capabilities. The main objective of these measures is to ensure an immediate and
effective response to any security incident that may occur, with the coordination of different business and support areas involved,
reduce the possible negative impact and, if necessary, report in a timely manner to the corresponding supervisory or regulatory
authorities.
BBVA also routinely reviews, reinforces and tests its security processes and procedures through simulation exercises in the areas of
physical security and digital security. Specialized teams periodically perform technical security tests in order to detect and correct
possible security vulnerabilities.
In 2020 and 2021, the Group detected an increase in the number of attacks in a number of countries, accentuated by the presence of
organized crime groups specialized in the banking sector and across various countries.
Security in business processes and fraud
Cybersecurity efforts are always undertaken in close coordination with fraud prevention processes, so there are considerable
interactions and synergies between the relevant teams. As part of the efforts to monitor fraud and to actively support the deployment
of adequate anti-fraud policies and measures, a Corporate Fraud Committee to oversee the evolution of all external and internal fraud
types in all countries where the Group operates exists.
Among the functions of this committee are: (I) actively monitor fraud risk and mitigation plans; (ii) assess their impact on Group
businesses and customers; and (III) monitor the relevant  facts, events and fraud trends.
Both the Bank and the rest of the Group's subsidiaries have cybersecurity and fraud insurance policies, subject to certain loss limits,
applicable deductions and exclusions, as the case may be.
7
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Business Continuity
In 2021 and 2020, Business Continuity continued to be reinforced from a holistic perspective, paying special attention to the Bank’s
resilience. As a result thereof, a shift from a model basically geared to ensuring the uninterrupted delivery of products and services in
situations of great impact which are infrequent but plausible, toward a model in which the organization has been provided with the
ability to absorb and adapt to situations with an operational impact due to disruptions of various kinds (pandemics, cybersecurity
incidents, natural disasters or technological failures), has been consolidated. This transition has been reflected in an intense activity
by the Business Resilience Office, which together with the Crisis Management Committees and Group Continuity has played a very
important role in the management of the crisis resulting from COVID-19 in the numerous areas it has impacted.
Customer care
Complaints and claims
The Customer Care Service in compliance with European claims guidelines established by the relevant authorities. ESMA (European
Securities Market Authority) and EBA (European Banking Authority) has continued to work during 2021 on preventing from recurring
problems, either systemic or potential, of the Entity. The activity of the Customer Care Service goes beyond merely managing claims,
but rather, it works in preventing and anticipating from them and in cooperation with other BBVA departments, leading the
development of plans which would prevent from the response to situations likely to turn into a claim.
Year 2021 has continued to be affected by the consequences of the COVID-19 pandemic. Although these difficulties, this Service has
maintained its function as a safeguard for the customers and the Entity. Thus, activity levels as well as a careful respect on the timing
for response which is obliged to have been maintained.
The volume of claims in 2021 increased to 78% compared 2020, mainly as a result of the increased number of claims related to
account settlement fees. The average claim resolution time is 11 days2, well below the required legal term. There were no
substantiated claims related to privacy violations and client data loss, turned before the supra-banking authorities, thanks to the
policies as well as the preventing and control measures of the risk, which may arise from client data leakage.
Customer Care Service and Customer Ombudsman in Spain
The activities of the Customer Care Service and Customer Ombudsman in 2021 were carried out in accordance with the stipulations
of Article 17 of the Ministerial Order (OM) ECO/734/2004, dated March 11, of the Ministry of the Economy, in compliance with the
competences and procedures established in the Customer Protection Charter in Spain of BBVA Group, approved on July 23, 2004 by
the Board of Directors of the Bank, with subsequent amendments (the latest on February 25, 2021).
Based on the above regulations, the Customer Care Service is in charge of handling and resolving customers complaints and claims
regarding products and services marketed and contracted in Spanish territory by BBVA Group entities.
In addition, in accordance with the aforementioned regulation, the Customer Ombudsman is made aware of and resolves, in the first
instance, all complaints and claims submitted by the participants and beneficiaries of the pension plans. It also resolves those related
to insurance and other financial products that BBVA Group Customer Care Service considers appropriate to transfer it, based on the
amount or particular complexity, as established under article 4 of the Customer Protection Charter. At the next level, the Customer
Ombudsman is made aware of and resolves the complaints and claims that the customers decide to submit for their consideration
after their claim or complaint has been dismissed by the Customer Care Service.
Activity report on the Customer Care Service in Spain
The Customer Care Service works to detect recurring, systemic or potential problems in the Entity, in compliance with European
claims guidelines established by the relevant authorities (ESMA and EBA). Its activity, therefore, goes beyond merely managing
claims, but rather, it works to prevent them and in cooperation with other BBVA departments.
The main types of claims received in 2021 were those related to the collection of fees for settling accounts, as well as those relating to
residential mortgages.
In 2021, the Customer Care Service received extra training on transparency regulations, the Mortgage Loan Act (Ley de Crédito
Inmobiliario) and the prevention of money laundering in MiFID itineraries and the new Second Chance Act (Ley de Segunda
Oportunidad). This guarantees that the managers of the Customer Care Service can remain up to date with the most important new
legislation and case-law affecting is activity.
Customer claims admitted to BBVA’s Customer Care Service in Spain amounted to 179,061 cases in 2021. In the same period 182,831
were resolved by the Customer Care Service itself (including claims pending at the close of 2020). Pending analysis are 2,991 claims
as of December 31, 2021, and 20,786 cases were not admitted to processing due to a failure to comply with the requirements of OM
ECO/734.
8
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
2 The claims taken into account for the calculation of the average resolution time include the claims resolved during 2021, including claims which were pending to be resolved at
the end of 2020.
COMPLAINTS HANDLED BY THE CUSTOMER CARE SERVICE BY COMPLAINT TYPE (BBVA, S.A. PERCENTAGE)
Type
2021
2020
Resources
52
39
Assets products
18
27
Collection and other services
3
4
Financial counselling and quality service
3
5
Credit cards
14
17
Securities and equity portfolios
1
1
Other
9
7
Total
100
100
COMPLAINTS HANDLED BY THE CUSTOMER CARE SERVICE ACCORDING TO RESOLUTION (BBVA, S.A. NUMBER)
2021
2020
In favor of the person submitting the complaint
94,395
44,066
Partially in favor of the person submitting the complaint
17,123
12,421
In favor of the BBVA Group
71,313
36,002
Total
182,831
92,489
Activity report of the Customer Ombudsman in Spain
One more year, the Customer Ombudsman, along with the BBVA Group, once more achieved the objective of unifying criteria and
favoring customer protection and security, making progress in compliance with transparency and customer protection regulations. In
order to efficiently translate their observations and criteria on the matters submitted for their consideration, the Ombudsman
promoted several meetings with the Group’s areas and units: Insurance, Pension Plan Management, Business, Legal Services, etc.
In 2021, 2,314 claims were filed at the Customer Ombudsman Office (compared to 3,849 in 2020). Of these, 46 were not admitted to
processing due to a failure to comply with the requirements of OM ECO/734/2004 and 101 were pending as of December 31, 2021.
57.05% of customers who brought claims before the Customer Ombudsman during the course of the year obtained some type of
satisfaction, total or partial, by resolution of the Customer Ombudsman Office in 2021. Customers who are not satisfied with the
Customer Ombudsman’s response can go to the official supervisory bodies (the Bank of Spain, the CNMV and General Directorate of
Insurance and Pension Funds). 236 claims were filed by customers to supervisory bodies in 2021.
The Bank continues making progress in the implementation of the different recommendations and suggestions of the Customer
Ombudsman with regard to adapting products to the customer profiles and the need for transparent, clear and responsible
information throughout the year. In 2021, these recommendations and suggestions focused on raising the level of transparency and
clarity of the information that the Bank provides for its customers, both in terms of commercial offers available to them for each
product, and in compliance with the orders and instructions thereof, so that the following is guaranteed:
–An understanding by customers of the nature and risks of the financial products offered to them,
–The suitability of the product for the customer profile, and
–The impartiality and clarity of the information that the Entity targets at customers, including advertising information.
COMPLAINTS HANDLED BY THE CUSTOMER OMBUDSMAN OFFICE BY COMPLAINT TYPE (BBVA, S.A. NUMBER)
Type
2021
2020
Insurance and welfare products
2
3
Assets operations
401
1,810
Investment services
110
262
Liabilities operations
257
350
Other banking products (credit card, ATMs, etc.)
817
862
Collection and payment services
344
249
Other 
383
311
Total
2,314
3,849
The categorization of the claims managed in the previous table follows the criteria established by the Complaints Department of the
Bank of Spain, in its requests for information.
COMPLAINTS HANDLED BY THE CUSTOMER OMBUDSMAN OFFICE ACCORDING TO RESOLUTION (BBVA, S.A. NUMBER)
2021
2020
Formal resolution
—
—
Estimate (in whole or in part)
1,456
1,788
Dismissed
1,050
1,790
Processing suspended
—
—
Total
2,506
3,578
9
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
2.3 Information on employees
Culture & Values
BBVA’s values and behaviors are the action guidelines for the Group in its day-to-day decision-making and help it accomplish its
purpose "to bring the age of opportunity to everyone." The values and behaviors are the hallmark of everyone working in the Bank and
define the DNA of BBVA.
The values form part of the main levers for the Bank’s transformation and in the Talent & Culture processes: from the selection of new
employees to the procedures for allocating roles, people development, training, and incentives for achieving goals.
The values also boost commitment at BBVA. The Group carries out annually the Employee Commitment Survey, managed by Gallup.
which has granted to BBVA the Gallup Exceptional Workplace Award for being one of the 40 best organizations in the world which has
worked most on engagement in 2021. Moreover, the most notable aspect is that 76% of teams have launched action plans to improve
engagement (over 24,000 plans).
BBVA has expressed its will to reinforce its corporate culture of social and environmental engagement, facilitating the conditions for
its employees to carry out volunteer work. For further information on volunteer work, see the "Volunteer Work" section below in this
chapter.
People management
BBVA continues to boost its employees' commitment and performance, accompanying its transformation process with a variety of
initiatives in questions related to staff, such as:
–Transformation and development of the employee relations model: fostering a more accessible model and driving
enterprise, empowerment and responsibility; providing the different areas in the Group with the advice to boost talent
management based on their objectives and the employees with support for the development of their professional careers;
the search for opportunities and the reinforcement of their role with more personal advice from the employee's supervisor.
–Maintenance of the Agile model of organization with the digital factories formed by multi-disciplinary teams which share the
same objective and work with autonomy and capacity for execution with the aim of improving quality, productivity, the
launch period and commitment.
–Launch of a solution to improve the mass training of employees. This solution represents a radical transformation for the
employees of their training experience, introducing modern learning techniques based on an attractive training journey, and
allowing them to manage this enormous challenge while generating the incentives for them to adopt it.
–The strengthening of a corporate culture of collaboration and entrepreneurship, which revolves around the set of values and
behaviors described above and which generate certain identity traits that differentiate it from other entities.
Professional development
In 2021, work continued on BBVA's model of professional development by the consolidation of an ecosystem in which the employees
have available certain elements through three different modules that allow them to know themselves better, improve, grow and
explore new pathways.
10
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Talent attraction
BBVA aims to offer its employees a unique value proposition, through a common brand, in line with a global and digital company. In
2021, BBVA has launched a talent attraction program whose aim is to hire key talent with the potential to support BBVA Group's
transformation process and provide an outstanding program for their training and international development.
Thanks to brand positioning actions and the promotion of professional opportunities available at BBVA through various channels, it
was possible to attract over 175,000 candidates in 2021. All this is carried out under a global reference model for attracting talent,
with clear policies that strengthen transparency, trust and flexibility for all stakeholders involved in the process.
BBVA also has a global scorecard to measure compliance levels with each of the internal mobility policies, ensuring follow-up and
commitment to compliance in each of the geographical and global areas in which BBVA operates.
In 2021, 234 professionals joined the Bank following this initiative to attract, select and incorporate profiles with new skills necessary
for BBVA in its transformation process.
RECRUITMENT OF EMPLOYEES BY GENDER (BBVA, S.A. NUMBER)
2021
2020
Total
Male
Female
Total
Male
Female
Total
729
299
430
1,205
431
774
Of which new hires are (1):
234
132
102
156
97
59
(1) Including hires through consolidations.
Development
The professional development model is based on a 360º assessment process. For the first time, in 2021 employees know their
position on the BBVA Group talent map; in other words how they compare with other professionals who occupy similar positions to
theirs. This allows them to identify their development plan and access the tools that BBVA makes available to them to help them
achieve their objectives.
Moreover, BBVA's professional development has been enriched in 2021 through the incorporation of tools that allow employee
growth: Project Review linked to the implementation of Agile organizational models and an internal coaching program. These tools
complement those already in place in the professional development model, such as Open Mentoring, BBVA Campus, Mobility and
Opportunity, whose impulse has been a priority in 2021.
Training3
BBVA's training model gives employees a leading role in their own development and provides them with the autonomy to decide their
learning pathways. In this way, the employees no longer have to wait to be invited to a training action; they now have the means to
decide themselves on their learning pathways and how to grow professionally. This commitment to decentralization allows the
employees themselves to generate knowledge and share it with their colleagues. Sessions of this type have involved the participation
of 19,941 employees from all geographies to assess the usefulness of the content.
The solidity and level of implementation of the training model across the Bank is allowing to be proactive and guarantee that
knowledge (internal or external) is obtained which the Bank needs at any time and continuously for the growth of its professionals.
In 2021, with the aim of reinforcing this commitment, BBVA launched a program to accelerate the acquisition of new competencies
and develop the competencies needed within the same post or profile (up/reskilling). In this way, employees will be able to focus on
their growth in knowledge that is a priority for BBVA.
To meet this challenge, BBVA's training model has been transformed to continue boosting a culture of "learning skills" which allow
professionals to have the capacities required at any time and thus improve their employability. In the context of a changing
environment, it is not only necessary to be flexible and adaptable to change; it is also essential for employees to update their
knowledge all the time (continuous learning).
As a result, BBVA has been recognized in recent years as an extremely innovative entity in the training world, with a deep-rooted
culture of online learning (in the last 4 years, over 70% of the training has been online and in 2021 it was 73%) and a wide-ranging
digital training offer for its employees channeled through its global training platform BBVA Campus.
This training platform provides employees with over 8,000 training resources (MOOCs, podcast, videos, blogs, practice communities,
portals structured by knowledge area, simulators, etc.), specific experiences geared at specialized technical profiles and links to
external training platforms of recognized prestige at global level or courses offered by key educational institutions.
For this reason all employees have been offered 14 expeditions through The Camp (one for each strategic knowledge area),
structured into 3 different levels of increasing specialization, providing a response to Strategic People Planning, on which the
capacities required by BBVA for the bank of the future have been defined.
11
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
3 The quantitative data in the “Training” section corresponds to the employees of BBVA, S.A. in Spain.
Through these expeditions, the professionals have focused on extending their knowledge and training on more strategic subjects for
the Group. In 2021, more than 18,970 professionals have completed 273,477 hours of training on subjects related to sustainability,
cybersecurity, data, Agile, design and the behavioral economy.
Another extremely relevant line of training for professionals has been the knowledge required for the transformation of the business,
transforming their current and future capacities. It is also worth noting that BBVA continued to boost the certification of its
professionals' knowledge in 2021. Thanks to internal or official external certifications, employees have been able to accredit
specialized knowledge in the main business subjects.
Specifically, training in sustainability has taken a leading role in helping to boost knowledge related to this strategic priority across the
whole Group. In 2021, 50,963 hours of training were completed (53% more than in 2020) and over 13,545 professionals have taken
part in a sustainability-related training initiative. Moreover, 5,503 employees have exceeded the EFPA-ESG (European certifier) and
IASE ISF1 (international certifier) certifications.
BASIC TRAINING DATA (BBVA, S.A.)
2021
2020
Total investment in training (millions of euros)
21.6
14.3
Investment in training per employee (euros) (1)
1,019.0
572.2
Employees who received training (%)
99.0
92.5
Satisfaction with the training (rating out of 10)
9.2
9.4
Amounts received from FORCEM for training in Spain (millions of euros)
1.5
1.2
(1) Ratio calculated considering the BBVA´s workforce at the end of each year (21,194 in 2021 y 24,940 in 2020).
TRAINING DATA BY PROFESSIONAL CATEGORY AND GENDER (BBVA, S.A. 2021)
Number of employees with training
Training hours
Total
Male
Female
Total
Male
Female
Management team (1)
934
680
254
34,364
23,771
10,593
Middle controls
1,993
1,217
776
79,705
46,469
33,236
Specialists
5,065
2,584
2,481
213,088
107,204
105,885
Sales force
10,912
4,662
6,250
583,414
244,470
338,944
Base positions
1,037
489
548
39,371
17,812
21,559
Total
19,941
9,632
10,309
949,942
439,725
510,217
(1) The management team includes the highest range of the Bank´s management.
TRAINING DATA BY PROFESSIONAL CATEGORY AND GENDER (BBVA, S.A. 2020)
Number of employees with training
Training hours
Total
Male
Female
Total
Male
Female
Management team (1)
938
704
234
20,868
15,541
5,327
Middle controls
1,957
1,207
750
42,604
26,486
16,118
Specialists
5,337
2,798
2,539
131,875
69,341
62,535
Sales force
12,605
5,436
7,169
587,027
246,212
340,815
Base positions
2,227
1,124
1,103
48,989
21,739
27,251
Total
23,064
11,269
11,795
831,364
379,319
452,045
(1) The management team includes the highest range of the Bank´s management.
Diversity, inclusion and different capacities
At BBVA, diversity and inclusion are firmly aligned with its purpose and consistent with its values. BBVA is committed to diversity in
its workforce as one of the key elements in attracting and retaining the best talent and offering the best possible service to its
customers. In 2018 a global diversity plan was designed with several lines of action, focused mainly on gender diversity, but without
forgetting other aspects of diversity such as ethnic, inter-generation, different capacities and sexual orientation.
With respect to gender diversity, a number of initiatives have been developed since 2018 whose aim is to facilitate the professional
growth of women in BBVA and accelerate their access to positions of responsibility. Among these initiatives implemented in 2021 are:
–Setting gender diversity targets at area and country level. A target has been set for the percentage of women to be
promoted to categories of greater responsibility over the next five years. This target is supported by a specific diversity plan
developed by each of the areas, which is revised quarterly and must ensure compliance with the plan.
–New initiatives favoring female talent that speed up the professional growth of women in BBVA, ensuring equity and
neutrality in the selection and professional growth processes.
12
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
–Improved capacity to identify the women in BBVA with the greatest potential through the Talent Map tool. Within this line of
work are the extension of the Rooney Rule to more levels of the Organization, improvement of training, mentoring targeted
at women with high potential and the introduction of the gender component in the succession plans (line-up plan) to
positions of high responsibility.
–Continuing work on a flexible working environment in which men can assume their family responsibilities to the same extent
as women, and where maternity does not represent a professional obstacle for women (the Work Better, Enjoy Life
initiative). A hybrid work model has been implemented for this purpose to balance personal and professional life better.
Paternity leave has also been extended in a number of geographical areas.
Initiatives include the creation of the Employee Resource Group (hereinafter, ERG), a form of intrapreneurship in which employees
themselves decide to get together to promote diversity and foster personal relations between people with common interests; and the
support to a variety of organizations and initiatives working for diversity and equal opportunities between men and women, such as
participation in the fight against the gender gap in science, technology, engineering and maths, or collaboration with initiatives such
as Inspiring Girls, the Girls' Olympiad in Informatics and Technovation for Girls.
As for LGTBI+ diversity, a guide was prepared in 2021 called "Trans Diversity, Meeting Point." It is a manual which includes guidelines
and protocols focused on supporting transsexual or transgender employees or customers. BBVA was elected president of the
Business Network for Diversity and LGTBI inclusion (REDI), the first business association in Spain created to promote an inclusive and
respectful environment in organizations. Over 95 Spanish companies form part of this organization. In 2021, two global events were
held for BBVA employees related to diversity and inclusion: the International LGTBI+ Pride Day and the Diversity Days, which are
internal days held for the second year in a row to share the significant progress made in terms of diversity and inclusion and to create
a learning space.
BBVA's leadership in diversity issues has led to it being included for the fourth consecutive year in the Bloomberg Gender-Equality
Index, a ranking that includes the 100 global companies with the best gender diversity practices. The Bank has also been finalist in the
Euromoney awards as Best Global Diversity and Inclusion Bank; and in the LinkedIn Talent Awards in the Diversity Champions
category. Moreover, Gartner published a study praising the Bank's global strategy in terms of diversity and inclusion.
Regarding the statement "BBVA always values diversity" in the Employee Engagement Survey, managed by Gallup, in 2021 the Bank
obtained a score of 4.53 out of 5, slightly more than the 2020 results (4.52).
As all the companies of the Group, the Bank has protocols for preventing sexual harassment, expressly stating their rejection of any
conduct of a sexual nature or with a sexual connotation that has the purpose or effect of violating a person's dignity, and they
undertake to apply this agreement as a means of preventing, detecting, correcting and punishing this type of conduct within the
company.
With respect to different capacities, BBVA has expressed its commitment to the social integration of individuals with different
capacities. It has an ERG related to different capacities which organizes talks to raise awareness of this issue.
There are numerous initiatives to boost the inclusion of people with disabilities, such as grants to students and programs for the
incorporation of people with different capacities, with the collaboration of specialized organizations and companies, as well as
educational centers and universities. For example, in Spain BBVA has alliances with the leading Spanish organizations in the disability
sector with the aim of promoting accessibility, fostering labor integration and increasing knowledge and awareness of the needs and
potential of disabled people. There are two pilot projects: first, one which employs people with mental disabilities in reception and
support tasks in BBVA buildings in Madrid; and second, a neurodiversity pilot project which integrates people with autism spectrum
disorder (mainly Asperger) into engineering teams.
As of December 31, 2021, BBVA had 175 people with different capacities on the Bank's staff (152 in 2020).
13
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
EMPLOYEES BY COUNTRIES AND GENDER (BBVA, S.A. NUMBER)
2021
2020
Number of
employees
Male
Female
Number of
employees
Male
Female
Spain
20,186
9,756
10,430
23,971
11,714
12,257
The United States
197
121
76
161
100
61
France
66
42
24
68
44
24
United Kingdom
118
80
38
118
85
33
Italy
51
29
22
49
27
22
Germany
41
27
14
42
26
16
Belgium
22
13
9
22
13
9
Portugal
360
181
179
367
184
183
Hong Kong
90
54
36
80
46
34
China
28
6
22
28
8
20
Japan
4
3
1
3
2
1
Singapore
12
4
8
10
3
7
United Arab Emirates
2
1
1
2
1
1
Russia
—
—
—
1
1
—
India
2
1
1
2
1
1
Indonesia
2
1
1
2
1
1
South Korea
2
1
1
2
1
1
Taiwan
11
4
7
11
4
7
Cuba
1
1
—
1
1
—
Total
21,195
10,325
10,870
24,940
12,262
12,678
EMPLOYEES AVERAGE AGE AND DISTRIBUTION BY AGE STAGES (BBVA, S.A. YEARS AND PERCENTAGE)
2021
2020
Average age
<25
25-45
>45
Average age
<25
25-45
>45
Total
45.2
0.2
52.7
47.1
45.3
0.3
52.6
47.2
EMPLOYEES DISTRIBUTION BY PROFESSIONAL CATEGORY AND GENDER (BBVA, S.A. PERCENTAGE)
2021
2020
Total
Male
Female
Total
Male
Female
Management team (1)
4.9
73.2
26.8
4.3
75.3
24.7
Middle controls
10.2
61.8
38.2
8.9
62.9
37.1
Specialists
26.2
50.8
49.2
24.2
52.1
47.9
Sales force
53.5
43.1
56.9
52.8
43.4
56.6
Base positions
5.2
47.4
52.6
9.9
49.3
50.7
Total
100.0
48.7
51.3
100.0
49.2
50.8
(1) The management team includes the highest range of the Bank´s management.
EMPLOYEE DISTRIBUTION BY TYPE OF CONTRACT AND GENDER (BBVA, S.A. PERCENTAGE)
2021
2020
Total
Male
Female
Total
Male
Female
Permanent employee full-time
97.8
49.7
50.3
97.2
50.3
49.7
Permanent employee part-time
2.2
5.4
94.6
2.0
4.8
95.2
Temporary employee
—
—
100.0
0.8
28.1
71.9
Total
100.0
48.7
51.3
100.0
49.2
50.8
14
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
EMPLOYEE DISTRIBUTION BY TYPE OF CONTRACT AND AGE STAGES (BBVA , S.A. PERCENTAGE)
2021
2020
Total
<25
25-45
>45
Total
<25
25-45
>45
Permanent employee full-time
97.8
0.2
52.2
47.7
97.2
0.2
51.8
48.0
Permanent employee part-time
2.2
—
77.8
22.2
2.0
—
79.2
20.8
Temporary employee
—
40.0
60.0
—
0.8
8.1
81.9
10.0
Total
100.0
0.2
52.7
47.1
100.0
0.3
52.6
47.2
EMPLOYEE DISTRIBUTION BY PROFESSIONAL CATEGORY AND TYPE OF CONTRACT (BBVA, S.A. PERCENTAGE)
2021
2020
Permanent
employee full-
time
Permanent
employee
part-time
Temporary
employee
Permanent
employee full-
time
Permanent
employee
part-time
Temporary
employee
Management team (1)
99.7
0.3
—
99.6
0.4
—
Middle controls
99.0
1.0
—
98.7
1.2
0.1
Specialists
98.1
1.8
0.1
98.1
1.8
0.1
Sales force
97.2
2.8
—
96.9
2.3
0.8
Base positions
97.9
2.1
—
93.8
2.3
3.9
Media BBVA
97.8
2.2
—
97.2
2.0
0.8
(1) The management team includes the highest range of the Bank´s management.
In 2021, the annual average of full-time permanent contract, part-time permanent contract and temporary contract was 97.6%, 2.0%
and 0.4%, respectively (in 2020, 97.2%, 2.0% and 0.8%, respectively).
DISCHARGE OF EMPLOYEES BY DISCHARGE TYPE AND GENDER (BBVA S.A. NUMBER)
2021
2020
Total
Male
Female
Total
Male
Female
Retirement and early retirement
628
381
247
744
463
281
Voluntary redundancies
35
14
21
58
28
30
Resignations
230
145
85
124
72
52
Dismissals
22
15
7
64
35
29
Others (1)
3,566
1,686
1,880
1,226
404
822
Total
4,481
2,241
2,240
2,216
1,002
1,214
(1) Others include permanent termination and death.
DISMISSALS BY PROFESSIONAL CATEGORY AND AGE STAGES (BBVA. S.A. NUMBER)
2021
2020
Total
<25
25-45
>45
Total
<25
25-45
>45
Management team (1)
5
—
—
5
13
—
2
11
Middle controls
2
—
—
2
9
—
6
3
Specialists
2
—
1
1
27
—
19
8
Sales force
10
—
7
3
12
—
5
7
Base positions
3
—
1
2
3
—
—
3
Total
22
—
9
13
64
—
32
32
(1) The management team includes the highest range of the Bank´s management.
Working environment
BBVA continues to make progress in its transformation process, anticipating and redefining the aspects which are key for motivating
and protecting its teams, and making it easier for them to work together. Below are the actions and/or policies implemented by the
Group in the area of employee conditions and rights, the work/life balance and occupational health and safety.
Work organization
In 2021, in a context of a profound transformation marked by an enormous competitive pressure, low interest rates, the accelerated
adoption of digital channels by clients and the entry of new digital actors, and with the aim of guaranteeing the competitiveness of the
Organization and the sustainability of future employment, work was done on the search for formulas to allow the Group to reduce its
cost structure.
15
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
In this respect, a collective bargaining process open to dialog began with the workers' legal representatives, with the aim of reaching
the best possible agreement for all parties, to reduce the workforce in Spain through a collective redundancy procedure. The
agreement was approved by 72.69% of the labor union representatives. It affected 2,935 people and included support measures to
minimize or lessen the effects of the workforce reduction. These measures included conditional voluntary redundancy as a
preferential mechanism for those affected, a process of internal outplacement within BBVA, possibility of access to a 5-year leave,
measures to protect the most vulnerable groups, an external outplacement plan to protect and promote outplacement or self-
employment, and compensation for dismissal adjusted by age groups.
Digital disconnection
The right to digital disconnection is included in the internal regulations and policies of each country agreement, and recognized as a
fundamental element for achieving better organization of working time in order to respect private and family life, to improve the
balance between personal, family and working life and to contribute to the optimization of workers' occupational health.
In Spain this right is embodied in measures such as avoiding communications outside working hours, at weekends or public holidays,
and calling meetings within working hours.
Extension of maternity and paternity leave
In Spain, during maternity or paternity leave, the Group supplements financial provisions up to 100% of normal salary and extends
from half an hour to one hour the reduction in working hours provided for by law for the care of the lactating infant up to the age of 9
months.
Freedom of association and representation
In accordance with the different regulations in force in the countries in which BBVA is present, the working conditions and the rights of
the employees, such as freedom of association and union representation, are included in the rules, collective conventions and
agreements signed, in their case, with the corresponding workers' legal representations. Dialog and negotiation are part of how to
address any dispute or conflict within the Group, for which there are specific procedures for consultation with labor union
representatives across different countries, including the issues concerning labor health and safety.
In Spain, workers' representatives are elected every four years by personal, free, direct and secret ballot, and are informed of the
relevant changes that may occur in the organization of work in the Entity, under the terms provided in accordance with the legislation
in force.
Also, the banking sector collective agreement is applied to 100% of the workforce, except for members of senior management and
top-level positions, complemented by the company collective agreements which build upon and improve the provisions of sector
agreement, and which are entered into by the workers' legal representatives. In 2021, the banking sector entered into a new collective
agreement which incorporated significant improvements for all the people making up this sector. It regulates aspects such as
registration of working hours, digital disconnection and the update of salary tables and social benefits, boosting the construction of
labor environments that promote equal opportunities, with an emphasis on the work/life balance, diversity, inclusion and
digitalization.
Health and labor safety
BBVA considers the promotion of occupational health and safety to be one of its basic principles and fundamental goals which is
addressed through the continuous improvement of working conditions.
Thus, the occupational risk prevention model in Spain is regulated by laws, conventions and agreements, such as the Law on
Occupational Risk Prevention and the collective labor health agreement for the consultation and participation of workers in BBVA on
occupational risk prevention matters.
In Spain, the Bank has a preventive policy applicable to 100% of its staff, which is carried out primarily by the Occupational Risk
Prevention Service. This service has two lines of action: a) the technical-preventive line, which involves, among other activities,
carrying out of assessments of occupational risks (which are periodically updated), the preparation of action plans to eliminate or
minimize the risks detected, monitoring of the implementation of action plans, and implementation of emergency and evacuation
plans, training in health and safety, and coordination of preventive activities; and b) occupational medicine, which involves carrying
out staff medical examinations, providing protection for particularly sensitive employees and equipping workplaces with appropriate
ergonomic equipment, as well as carrying out preventive activities and campaigns to maintain and improve workers' health and
contribute to the development of a culture of prevention and the promotion of healthy habits.
With the preventive and corrective measures resulting from these processes, the Prevention Service designs the action plans to
eliminate risks or minimize them. Each of them details the actions to be implemented, as well as those responsible for their resolution
and the timelines for it, which will depend on the quantification of the risk. Through an application, those involved in the
implementation of the measures receive indications of the measures to be carried out, and report on their execution once complete.
Also, the preventive policy includes and covers the regulatory requirements and recognized standards for external staff who work in
the Bank, for which one coordination procedure has been established for services and the other for works activities. In the case of
coordination of activities with service suppliers, external companies are informed of the security and emergency measures present in
the work centers. Companies are asked for documentary evidence of compliance with the Occupational Risk Prevention (PRL)
regulations. In the case of coordination of activities with works suppliers, the procedure describes the different actions and steps to
be followed in the coordination of health and safety and coordination of Business Activities according to the different types of works
16
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
to be executed in BBVA branches, offices and work centers.
For the supervision and control of its employees' health, the Medicine Area of the Occupational Risk Prevention Service Work focuses
on drafting medical protocols, carrying out medical examinations for staff, protecting particularly sensitive employees and adapting
job positions with specific ergonomic material; as well as carrying out preventive activities and campaigns with the aim of maintaining
and improving the health of the workers and contributing to the development of preventive culture and healthy habits.
Moreover, the corresponding apps have been developed allowing employees to manage their appointments from their work stations,
complete the tests required through the tool and download the report of the health exam, always complying with all the requirements
of the General Data Protection Regulation (GDPR) on this matter.
In Spain there has been a gradual return in 2021 to medical checkups and the rest of the preventive activities which had been
suspended by COVID-19. Worth noting with respect to the actions undertaken to deal with the pandemic is the role of the Prevention
Service. From the start, in Spain measures have been established relating to the organization of work and secondments, as well as
guides and protocols for action for employees, following the indications of the health authorities.
In 2021, measures were maintained to adapt the work centers so that they had the necessary control resources available, and thus
eliminate or minimize the risk of contagion. Among these measures are: the installation of signage on hygienic procedures,
methacrylate screens, facial screens, disinfection kits for employees in branches, and Personal Protective Equipment (PPE) and face
masks for employees at certain work centers such as the Data Protection Center (CPD).
The distribution of masks, hydroalcoholic gels and gloves has also continued in branches offering services for the public, and a safety
distance has been established between the work stations, while the branches have been provided with signage that indicate positions
for people to guarantee the safety distance. Moreover, the specific cleaning procedures in the work centers have continued, including
those carried out routinely and those performed as a result of positive cases.
The indication to telework has been maintained for the vulnerable group until September 1, when they were considered appropriate
for on-site work, given the great progress made in the vaccination of the Spanish population against COVID-19. However, pregnant
women have been maintained in this group; they are given the choice of whether or not to work on site.
With respect to the tests for detecting the virus, PCR and serological tests continued beyond what was established by the health
authorities for employees who through the daily surveys declare they have symptoms compatible with infection by COVID-19, are
positive, or have had close contact with positive cases.
In confirmed cases of COVID-19 infection, health status of the affected employees has been subject to special tracking, both those
who were in their homes, as well as those hospitalized. The families of the employees whose health status was most serious is also
monitored.
In all the above, the Group's goal has been to preserve the health of its employees and families, customers and society in general, and
to implement plans to update and improve data-driven decision-making. As in the case of 2020, the BBVA work centers and
environments have been kept safe.
OCCUPATIONAL HEALTH MAIN DATA (BBVA, S.A. NUMBER)
2021
2020
Number of technical preventive actions
22,149
10,740
Number of preventive actions to improve working conditions
22,352
11,054
Employees represented in health and safety committees (%)
100
100
Number of withdrawn
6,719
8,424
Total number of absenteeism hours(1)
2,042,934
2,556,743
Number of accidents with medical withdrawn (2)
34
50
Absenteeism rate (%)
3
4
(1) Total withdrawn hours by medical leave or accident during the year.
(2) In itinere accidents are not included.
Spain itself did not register any case of occupational disease. The number of accidents was 103, of which 34 entailed medical leave
and 69 did not, indicating a very low rate of work-related accidents, with levels below the sector average. Thus, the Bank's severity
index is 0,04 (0.03 men and 0.05 women) in 2021, while the frequency index is 0.89 (0.64 men and 1.12 women). In the case of
accidents with medical leave, the main types of injuries have been sprains and strains, superficial injuries and foreign bodies in the
eyes and closed fractures.
Remuneration
BBVA has a General Remuneration Policy, which applies to all Group employees, including Senior Management (the “BBVA Group
General Remuneration Policy”) and a Remuneration Policy for BBVA Directors, both designed in the framework of the specific
regulations applicable to credit institutions, considering the best practices and recommendations in remuneration matters both
locally and internationally.
17
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
These Policies are based on the same principles and are oriented towards the recurring generation of value for the Group, the
alignment of the interests of its employees and shareholders with prudent risk management and the development of the strategy
defined by the Group. The Remuneration Policies are part of the elements designed by the Board of Directors as part of BBVA's
Corporate Governance System to promote adequate management and supervision of the Group, and are based on the following
principles: the creation of long-term value; the achievement of results based on a prudent and responsible assumption of risks; the
attraction and retention of the best professionals; to reward the level of responsibility and career path; to ensure internal equity and
external competitiveness; to ensure pay equality between men and women; and to ensure the transparency of the remuneration
model.
These principles are developed in such a way that the Policies:
–Contribute to BBVA Group’s business strategy and to the achievement of the goals, values, interests, value creation and long-
term sustainability.
–Are consistent and promote sound and effective risk management, not offering incentives to encourage taking risks that exceed
the level set by the Group, consistently with the risk strategy and culture of BBVA Group.
–Are clear, comprehensible and transparent and simply drafted, allowing easy understanding of the different elements that make
up the remuneration and conditions for its concession, consolidation and payment. To this end, they clearly distinguish between
the criteria for the establishment of fixed remuneration and variable remuneration.
–Are impartial in terms of gender, reflecting an equal compensation for the same functions or functions of equal value, and does
not establish any difference or discrimination for reasons of gender.
–Include measures to avoid conflicts of interest, encouraging independence of criteria of people who participate in the decision-
making process and management supervision and control, and establishing remuneration schemes.
–Aim for a remuneration not based exclusively on quantitative criteria, also taking into account appropriate qualitative criteria
that reflect compliance with applicable regulations.
The remuneration system generally applicable to all BBVA Group staff comprises the following:
–A fixed remuneration, constituting a relevant part of the total compensation, which takes into account the level of responsibility,
the functions performed and the professional career of each employee, the principles of internal equity and the value of the
function in the market.
–A variable remuneration constituted by those payments or benefits additional to the fixed remuneration, monetary or not, that
revolve around variable parameters. This remuneration must be linked, in general, to the achievement of previously established
objectives. All Group employees have a corporate variable remuneration model, which is complemented by sales incentive
models, specific to certain business area groups. For all of them, some financial and non-financial indicators of the Group are
defined, which are aligned with the strategic priorities and serve as management parameters to determine the payment of
variable remuneration based on the degree of compliance with BBVA's strategy.
n 2021, the level of achievement of the Group's indicators has resulted in 122%, based on the result obtained from each of the
financial and non-financial indicators. The level of achievement of the Group's financial indicators for incentive purposes is detailed
below:
ANNUAL VARIABLE REMUNERATION (AVR) (MEASUREMENT PERIOD 2021) (BBVA GROUP. 2021) - FINANCIAL INDICATORS
Annual Evaluation Financial Indicators
Results
Level of achievement
2021 (1)
2020 (2)
2021 Target (3)
%
100%
Net Attributable Profit without corp. transactions (millions of euros)
5,028
3,084
150
Tangible Book Value per share (TBV per share) (euros)
6.55
6.15
97
RORC (%)
14.03
6.76
150
Efficiency Ratio (%)
45.51
46.82
123
(1) Results approved for incentive purposes (not including the results generated until June 2021 by BBVA USA and the rest of the companies sold to PNC, nor the impact of
BBVA's restructuring plan in Spain).
(2) In 2020 the executive directors renounced the generation of the AVR for the year. For comparison purposes, the result of the remuneration indicators for the rest of the staff
is shown. 
(3) The 2021 targets were approved at the beginning of 2021. At that time, despite the context marked by the high impact of the economic crisis originated by COVID-19 and the
high uncertainty regarding the prospects for recovery, the Corporate Bodies determined targets for the calculation of the 2021 AVR that were above the analysts' consensus,
which in the case of the Net Attributable Profit was set for 2021 at 2,944 million of euros.
In 2021 a new indicator related to sustainability was incorporated (mobilization of sustainable finance) to calculate the annual variable
remuneration, directly associated with the activity carried out by the Group in compliance with its commitments to the market on
climate change and in line with the strategic priority of helping customers in their transition to a sustainable future. The Group is
driving the incorporation of metrics related to sustainability and ESG risks in the variable remuneration schemes of its employees,
BBVA Senior Management and the BBVA executive directors.
For non-financial indicators, the objectives are determined for each of the countries. The Group's level of achievement of each non-
financial indicator for incentive purposes is detailed below:
18
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
ANNUAL VARIABLE REMUNERATION (AVR) (MEASUREMENT PERIOD 2021) (BBVA GROUP. 2021) - NON-FINANCIAL INDICATORS
Annual Evaluation Non-financial Indicators
Level of achievement
2021 Target
%
100%
Customer satisfaction (NPS)
101
Mobilization of sustainable financing
120
Digital sales
99
Target customers
115
Transactional linking of company clients
129
Below is the table showing the average remuneration of employees in BBVA, S.A.:
AVERAGE REMUNERATION (1) BY PROFESSIONAL CATEGORY (2), AGE STAGES AND GENDER (BBVA, S.A. EUROS)
2021
2020
< 25 years
25-45 years
> 45 years
< 25 years
25-45 years
> 45 years
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Management team (3)(4)
—
—
124,305
102,534
126,969
115,371
—
—
117,028
98,911
122,571
112,633
Middle controls (3)
—
—
75,291
68,416
79,122
69,914
—
—
72,350
65,424
76,116
70,283
Specialists
53,657
54,944
45,275
42,446
51,908
48,345
40,042
36,393
44,723
42,117
52,032
48,548
Base positions
29,421
30,195
36,018
35,577
46,378
43,107
25,661
25,503
34,470
34,743
46,579
43,573
(1) Considering fixed remuneration.
(2) The professional categories reflected in this table differ from those included in the rest of the chapter. The category Sales force is included in each of the remaining
categories presented in this table.
(3) There is no information both in the Management team and the Middle controls in the segment under 25 years due to insufficient sample.
(4) This category does not include the Top Management.
The differences observed in the average remunerations of certain professional categories arise from factors such as the length of
service and their composition; they are not representative of the wage gap. This is due to the fact that only four professional
categories are being used, and in each of them very diverse positions with very different remunerations are included. Therefore, the
average remuneration of each category is affected by issues such as the different distribution between men and women in the most
valued positions, or the higher proportion of women in countries where the average remuneration is lower.
In the case of executive directors and members of BBVA Senior Management who held their positions on December 31, 2021, the
information on their remuneration is included in Note 49 of the accompanying Financial Statements. The remuneration paid to
executive directors is individualized and itemized, while for the members of Senior Management the amounts are presented as an
aggregate. The average total remuneration of Senior management in 2021 was €1,383 thousand for men and €1,244 thousand for
women.
Wage gap
The BBVA Group's General Remuneration Policy is impartial in terms of gender, reflecting an equal compensation for the same
functions or functions of equal value, and does not establish any difference or discrimination for reasons of gender. The remuneration
model takes into account the level of responsibility, the functions carried out and the professional career of each employee, ensuring
internal equity and external competitiveness, as well as equal remuneration for men and women.
The wage equality ratio can be obtained from the average remuneration tables above. The ratio is expressed as a percentage, and
calculated as the difference in total average remuneration between men and women with the same professional category, over the
total average remuneration of men. However, this ratio does not take into account the concept of a position of equal value in the Bank.
BBVA's remuneration model defines certain job positions on which remuneration pivots. Each of these positions has a single
theoretical value determined by a variety of factors, such as level of responsibility, complexity of the function, impact on results, etc.
In the same way, each position has a unique defined value linked to the achievement of pre-defined objectives.
The concept of a position of equal value is reflected in the calculation of the wage gap that compares the total remuneration received
by men and women who occupy positions of equal value in the Bank.
For each of the aforementioned positions, the median of the total remuneration received by all the men and women who occupy said
positions is calculated. The wage gap for the position is calculated as the percentage resulting from dividing the difference between
the median salaries of men minus the median salaries of women by the median salaries of men. Bank’s salary gap is calculated as the
weighted average of the gaps obtained in each of the positions.
The total remuneration considered includes the fixed remuneration and the objective annual variable performance-linked
remuneration (target bonus). Items such as allowances, social benefits, etc. are not included in the calculation, as their amount is very
unrepresentative within the total remuneration of employees, and whose award criteria and amounts are clearly defined, not
discriminating between men and women.
19
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
As of December 31, 2021, the salary gap by professional categories of equal value is 3.5%4, which is lower than in the previous year.
In 2021 a number of initiatives were launched to support gender diversity, with the aim of balancing the professional possibilities
between men and women: Setting gender diversity targets at area and country level, supported by a specific diversity plan; more
active work to incorporate more women into the talent selection processes; and a flexible working environment in which men can
assume family responsibilities to an equal extent as women, so that this does not represent a professional obstacle for women.
Additional information about remuneration
Annual total compensation ratio
The annual total compensation ratio is calculated for the employees of BBVA, S.A. located in Spain as the ratio between the annual
total compensation (fixed remuneration plus accrued variable remuneration and contributions to pensions) of the highest paid person
and the median annual total compensation (fixed remuneration plus accrued variable remuneration plus pension contributions) of all
employees earning full-time annualized remuneration, excluding the best-paid person.
In 2021, the annual total compensation ration stood at 129, increasing from 80.9 as of December 2020, due to the fact that the best
paid person in each geographic area had relinquished their variable remuneration corresponding to the 2020 financial year, which
contributed to a lower annual total compensation for the year.
Percentage increase in annual total compensation ratio
The percentage increase in annual total compensation ratio is calculated as the ratio between the increase in annual total
compensation (fixed compensation plus accrued variable compensation and contributions to pensions) of the best paid person and
the percentage increase in the median total annual compensation (fixed compensation plus accrued variable compensation and
pension contributions) of all employees, using full-time annualized compensation, excluding the best paid person.
The annual total compensation of the highest paid person in 2021 increased more than the increase in annual total compensation of
the rest of employees, because the best paid person had relinquished their variable remuneration for 2020. For 2021, the increase in
the annual total compensation of the best paid person is 5.2 times higher than the increased median annual total compensation of the
rest of the employees.
Ratio of standard entry-level wage by gender compared to local minimum wage
The standard initial category is the lowest full-time employment category. In BBVA, this category is established by level and by nature
of the function to be performed, and does not distinguish by gender. The minimum local salary is the minimum legal amount
established in Spain which each employee has a right to be remunerated for services rendered. The salary ratio of the standard initial
category is calculated as the quotient of the salary of the initial category between the minimum salary.
In 2021, the entry-level remuneration of BBVA S.A. in Spain was 1.4 times higher than the local legal minimum wage for both men and
women, maintaining the same ratio as the previous year.
Pensions and other benefits
BBVA has social welfare systems, differentiated according to the geographical areas and coverage it offers to different groups of
employees, not establishing differences due to gender or personal aspects of any other kind. In general, the social welfare system is a
defined contribution system for retirement. The Group’s Pension Policy is compatible with the Company’s business strategy,
objectives and long-term interests.
Contributions to the social welfare systems of the employees of the Bank will be carried out within the framework of the labor
regulations, and of the individual or collective agreements of application in each entity, sector or geographical area. Calculation
criteria on which benefits are based (commitments for retirement, death and disability) reflect fixed annual amounts, with no
temporary fluctuations derived from variable components or individual results being present.
With regard to other benefits, the Bank has a package of employee benefits within its specific remuneration scheme, not establishing
differences due to gender or personal aspects of any other kind.
In 2021, the Bank in Spain made a payment of €26m (€27.2m in 2020) in savings contributions to pension plans and life and accident
insurance premiums, of which €14.3m corresponded to contributions for men and €11.7m for women (in 2020, €15.2m and €12.0m,
respectively). This payment accounts for more than 95% of Spain’s pension expenditure, excluding special systems. On average, the
contribution received by each employee was €1,049 in 2021 (€1,186 for men and €918 for women), compared with €1,076 in 2020
(€1,224 for men and €932 for women).
Volunteer work
In its Corporate Social Responsibility (CSR) Policy, BBVA expresses its determination to reinforce its corporate culture of social and
environmental engagement, facilitating the conditions for its employees to carry out volunteer work. This policy is applied in all
countries in which the Group is present.
20
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
4 The median is used for this calculation, since this statistical indicator is less affected by the presence of biases in the distribution of extreme values and better represents the real
situation of the Bank.
The BBVA's corporate volunteer work initiatives promote employee collaboration to generate a relevant social impact, enhance a
sense of pride in belonging, its satisfaction and productivity, as well as positioning BBVA as a model company for corporate voluntary
work, thus increasing its attractiveness for both existing and potential employees.
In this respect, voluntary work constitutes a key element for development the approaches and lines of work in Engagement with the
Community 2025 (explained in the "Contribution to society" chapter in this report). This is in line with the Agenda for Sustainable
Development 2030, which has explicitly recognized voluntary work as a vehicle for the sustainable development and voluntary work
groups as actors for achieving the seventeen SDGs. BBVA also boosts cooperation and collaboration through commitments and
alliances for sustainable and inclusive development.
Additionally, the volunteer work activities are aligned with the BBVA purpose and values that guide its actions.
Overall, 1,884 employees of the Bank participated in the volunteer work initiatives promoted by the Group in 2021, having dedicated
6,000 hours (17% during working hours and 83% outside working hours). The time dedicated by employees in 2021 is equivalent to a
contribution of €51,774.
2.4 Information on suppliers
BBVA provides complete and transparent information to its suppliers in the procurement processes, to ensure compliance with the
legal requirements on labor and environment, respecting the human rights and stimulating the demand for socially responsible
products and services.
Within the procurement process, BBVA carries out an adequate management of the impacts generated in the development of its
activity, both real and potential, through a series of mechanisms and standards established by the BBVA Group: the General
Procurement Principles, the supplier evaluation process and the Corporate Standard for Procurement of Goods and Contracting
Services. These impacts can be environmental, derive from the labor practices carried out in the suppliers' companies, the absence of
freedom of association or the violation of human rights.
The General Procurement Principles and the BBVA Code of conduct for suppliers establish the fundamental guidelines that all
suppliers with whom any company or entity of the Group is related must respect.
–The General Procurement Principles establish, among other aspects, the duty to ensure compliance with the applicable
legal requirements regarding human, labor, association and environmental rights by all those involved in the procurement
process, as well as how to involve them in the efforts to prevent corruption. In the same way, it ensures that the selection of
suppliers complies with the existing internal regulations at all times and, especially, with the values of the Code of Conduct,
based on respect for legality, commitment to integrity, concurrency, objectivity, transparency, value creation,
confidentiality, continuous improvement and segregation of duties.
–Through the implementation of the Code of conduct for suppliers in the purchasing units of all the countries in which the
Group is present, minimum standards of behavior have been established in terms of ethical, social and environmental
conduct that suppliers must respect when provide products and services.
BBVA understands the integration of ethical, social and environmental factors in the supply chain as part of its duties. Thus, in 2021,
the Group consolidated its purchasing function, which is based on three basic pillars of the procurement model:
–Service: maximizing the quality and experience of the internal customer, who is accompanied throughout the process.
–Risk: limiting the Bank's operational risk in supplier contracts, thus ensuring compliance with regulations and processes.
–Efficiency: contributing to the Bank's efficiency by the proactive management of costs and suppliers.
ESSENTIAL DATA ABOUT SUPPLIERS (BBVA SPAIN)
2021
2020
Number of suppliers (1)
1,040
1,138
Volume provided by suppliers (millions of euros) (1)
2,191
2,169
Average payment period to suppliers (days)
35
49
Suppliers satisfaction index (2)
82
n.a
Number of approved suppliers (3)
1,350
1,238
n.a. = not applicable.
(1) Payments to third parties. Suppliers lower than €100.000 are not included.
(2) Suppliers Net Promoter Score. Obtained from a satisfaction survey carried out each 2 years for the Group's suppliers with grants of more than €10.000 and a turnover of
more than €100.000. It is calculated by the difference between the average of promoters, who have answered 9 and 10 up to 10 to the question if they would recommend
working with the Procurement area, and the average of detractors, whose answers to the same question have gone from 1 to 6.
(3) For 2021, the figure includes suppliers of more than €10,000 in billing (for 2020, suppliers of more than €100,000 in billing).
The average period payment to suppliers during the year 2021 is 35 days, below the maximum legal limit of 60 days established by
Law 15/2010 of July 5, for which measures are put into place combating late payment in commercial transactions, well beyond 2020
data (49 days). The calculation of the average period for payment was made as established in the Act.
BBVA has technological platforms that support all phases of the Group's procurement process, from budgeting to the recording and
accounting of invoices. Furthermore, the BBVA supplier portal facilitates BBVA's digital relationship with its suppliers. It is a
collaborative environment aimed at companies and freelancers who work or want to work with the Group, which allows them to
interact with BBVA electronically throughout the supply cycle.
21
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Both the supplier evaluation process and the Corporate Standard for Procurement of Goods and Contracting of Services have
undergone significant updates throughout 2021, evolving toward a more complete evaluation of supplier risk and greater control over
the entire procurement process.
The supplier evaluation process carried out by BBVA has ended implementation in 2021, considerably expanding the number of
aspects to review related to each supplier: financial, legal, labor, reputational, anti-corruption and money laundering, technological
risks, concentration and country risks, and client protection. The analysis of these aspects aims to mitigate possible risks in
contracting with third parties, as well as to verify that it complies with its legal responsibilities, allowing in turn to promote its civic
responsibilities and validate that they share the same values as the Bank in terms of social responsibility.
In this evaluation process, the supplier must declare that it has its own code of conduct, which complies with the highest standards in
its industry. In the event that it does not have its own code of conduct, the supplier must declare that it knows and accepts BBVA's
Code of Conduct, which includes the following aspects: legal compliance; commitment to human rights; commitment to the
environment; supply chain (outsourcing); combating corruption; prevention of money laundering and financing of terrorist activities;
political contributions; conflict of interest; free competition; and confidentiality.
The evaluation of suppliers is periodically reviewed and is subject to continuous monitoring. As of December 31, 2021, the percentage
of awards made to evaluated suppliers reached 97.9%.
As of December 31, 2021, 97.6% of the total number of BBVA suppliers (representing 90.7% of total billing) corresponds to local
suppliers, which makes it possible to contribute to the economic and social development of the countries in which BBVA is present.
The Group defines a local supplier as one whose tax identification matches the country of the company receiving the good or service.
BBVA also favors inclusion and diversity by hiring services in Spain through the so-called “special employment centers” (CEE),
protected employment companies where the labor integration of people with disabilities is promoted. During fiscal year 2021, the
turnover of CEE to the Bank was €1.7m (as of December 31, 2020, the turnover amounted to €2.4m).
Finally, it should be noted that in the fiscal year 2021, the Internal Audit area evaluated hired suppliers on the procurement processes
of goods and services from different areas and on the service provided by certain suppliers, generally outsourcing. These are risk-
based evaluations and the reviews are carried out according to a defined internal methodology.
22
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
2.5 Information on social matters
Contribution to society
BBVA promotes the development of the societies and communities where it operates through community investment initiatives and
activities and acts as a driver of opportunities for people to make reality its purpose of “to bring the age of opportunity to everyone”.
Community Commitment
In 2021, BBVA presented its Community Commitment, by which €550m will be allocated between 2021 and 2025 to social initiatives
supporting inclusive growth in the countries where the Group operates. This commitment is a response to the most important social
challenges and aims to contribute to a sustainable and inclusive recovery. The plan is structured around three main scopes of action
to comply with specific Sustainable Development Goals (SDGs): reducing inequality and promoting entrepreneurship (SDGs 8 and
10), providing opportunities for all through education (SDG 4) and supporting research and culture (SDGs 9 and 11). BBVA also boosts
cooperation and collaboration through commitments and alliances for sustainable and inclusive development (SDG 17).
BBVA puts this community contribution pledge into practice through its local banks and foundations, as well as supporting other
foundations such as the BBVA Foundation (FBBVA) and the BBVA Microfinance Foundation (FMBBVA). The foundations play a key
role in this respect through their community investment.
In 2021, the BBVA Group allocated €19.97m to investment in the community, with 13.7 million beneficiaries.
COMMUNITY INVESTMENT BY FOCUS OF ACTIONS.
2021
BENEFICIARIES OF COMMUNITY INVESTMENT BY
FOCUS OF ACTIONS.  2021
The lines of action of the Community Commitment are shown next:
Focus 1: Reduce inequality and promote entrepreneurship
The arrival of the COVID-19 pandemic in 2020 led to an unprecedented social and economic crisis. Among the challenges faced by
society are the worrying increase in poverty, vulnerability and inequality. At the same time, the lack of jobs has aggravated the existing
social challenges. This reality requires a global response to develop initiatives geared to promote a sustainable and inclusive recovery.
In 2021, €2,28m were allocated to initiatives designed to reduce inequality and promote entrepreneurship, impacting on SDG 8 and
SDG 10. A total of 46,505 people have benefited directly from this focus of action.
The lines of action of this focus are geared to:
–Reduce social and economic equality through initiatives that provide access to basic goods and services necessary to
guarantee the social welfare of people, and in particular of the most vulnerable groups; provide training in financial
education to empower the population and improve people's financial resilience; and train people in digital skills to improve
aspects such as financial inclusion, employability and digital security. In 2021, BBVA invested €1.38m and benefited directly
24,693 people. In particular, it has trained 12,624 people in financial education, field of action in which BBVA has a long-
term commitment, investing €18m and benefiting 9.7 million people in a variety programs since 2008.
–Support other entrepreneurs and SMEs through initiatives to contribute to their consolidation and/or growth and to the
development of capacities such as innovation, digital transformation and sustainable management of their business. In
2021, 2,808 people have benefited directly and 19,004 have had access to content related to supporting entrepreneurship.
23
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Focus 2: Create opportunities for all through education
Education is the driving force for growth in society and a source of opportunities to contribute to the inclusive growth in the countries
where BBVA operates.
The pandemic has increased existing educational inequalities and demonstrated the existence of great challenges in the area of
education, such as digitalization and adaptation of the educational systems, universal access to quality education and the fostering of
free and accessible educational resources.
In 2021, BBVA invested €14.28m in educational initiatives benefiting 13.62 million people. Specifically, BBVA has contributed to the
quality education of 77,141 people which participated in educational programs. The activities of this focus have a direct impact on SDG
4.
The lines of action of this focus are geared to:
–Close the digital education gap and adapt schools to guarantee educational continuity. In 2021, a total of €535,664 was
allocated to initiatives geared to promote connectivity, provide access to digital devices and training in digital skills in the
world of education, benefiting directly 14,665 people. Notable among these initiatives is the Connected Education program
in Spain, in collaboration with Fad, which benefited 14,336 people in 2021, including students, teachers and other
participants in the educational community.
–Support access to quality education, offering grants for access to education, programs to develop values and skills,
collaboration with public educational systems and programs to support higher education and professional training. In 2021,
€1.26m were invested in this line of action, and 46.189 people benefited from it in Spain.
–Offer a quality, accessible and useful education for all. In 2021, €12.48m was invested in this line of action, benefiting
directly 16,287 persons, and more than 13.5 million people had access to current content related to education, finance,
sustainability, science and innovation, etc., through programs such as "Aprendemos Juntos" (Learning Together) and BBVA
Research blogs.
Focus 3: Support research and culture
The promotion of research provides a response to the economic and environmental challenges and boosts respect for culture and
local values. BBVA has a long record of fostering research and culture.
In 2021, BBVA allocated €1.74m to help provide access for 30,160 people to research and culture, impacting SDG 9 and SDG 11.
The lines of action of this focus are geared to:
–Support researchers and creators in the field of science, culture and the economy through grants, recognitions and financial
assistance. In 2021, 94 people received financial assistance for the development of their research or cultural creations.
Additionally, 1,622 people have had access to the knowledge generated with these investigations.
–Increase the publicity given to research through events and other acts to bring the most advanced knowledge within the
reach of all and at the service of society. In 2021, 362 people have accessed these contents in a variety of spaces for the
dissemination of knowledge and culture.
–Support cultural institutions through collaboration with key organizations for the promotion of cultural activities to make
access to them possible by the whole of society. In total, 28,082 people have had access to culture through BBVA's
collaboration with these entities.
Other contributions to society
BBVA's community support extends to other important activities, such as volunteer work (more information in the chapter
"Information on employees"), support for foundations and non-profit organizations and the promotion of corporate responsibility
through participation in a number of working groups and the acquisition of commitments and alliances for sustainable and inclusive
development (SDG 17). For more information on the participation in international initiatives of the BBVA Group, see the section
“Participation in International Initiatives” within the chapter “Report on climate change and other environmental and social issues” of
the BBVA Group Consolidated Management Report.
In relation to contributions to foundations, associations and other non-profit entities, the global amount of contributions to
foundations and non-profit organizations in 2021 was €11.22m. In 2021, the BBVA Group made:
–97 donations to foundations and non-profit organizations for an amount of €6.02m, including both one-off contributions
and those which contribute to social programs.
–258 contributions, of a non-social nature, to foundations, associations, lobbies, think-tanks and other non-profit entities for
an amount of €5.20m.
24
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Compliance
The BBVA Group's commitment to carrying out all its activities and businesses in strict compliance with current legislation at all times
and in accordance with strict standards of ethical behavior, with a detailed description of the key elements of its compliance system
(such as Mission and scope of action, Organization, internal governance and management model as well as the established policies
and procedures, among other things) as well as the procedures, processes and policies applicable in matters of conduct in the
securities markets, the protection of personal data, other standards of conduct and the criminal prevention model are described in
the "Compliance" section within the Chapter "Our stakeholders" of BBVA Group’s Consolidated Management Report and are
developed in the Bank through local functions in Spain.
Prevention of money laundering and terrorist financing
Anti-money laundering and prevention of terrorist financing (AML) is an indispensable requirement for preserving corporate integrity,
and one of its main assets: the trust of the people and institutions with which it works on a daily basis (mainly customers, employees,
shareholders and suppliers) in the different jurisdictions where it operates.
The Bank also pays particular attention to compliance with the AML regulation and the restrictions imposed by national or
international organizations on operations with certain jurisdictions and individuals or legal entities, to avoid sanctions and significant
economic fines imposed by the competent authorities of the various geographical locations in which the Group operates.
As a result of the above, as a global financial group with branches and subsidiaries operating in numerous countries, BBVA applies the
compliance model described above for AML risk management. This model takes into account the regulations of the jurisdictions in
which BBVA is present, the best practices of the international financial industry regarding this matter, and recommendations issued
by international bodies such as the Financial Action Task Force (FATF).
This management model is constantly evolving. Thus, the risk analyses carried out annually tighten controls and establish, where
appropriate, additional mitigating measures to enhance the model.
The BBVA Code of Conduct establishes the basic guidelines for action in this area. In line with these guidelines, BBVA has established
a series of corporate procedures that are applied in each geographical area, including the Corporate Procedure of Action for the
Establishment of Business Relations with Politically Exposed Persons (PEPs), the Corporate Procedure of Action for the Prevention of
Money Laundering and the Financing of Terrorist Activities in the Provision of Cross-Border Correspondent Services, and the
Standard that establishes the Operational Restrictions with Countries, Jurisdictions and Entities designated by National or
International Organizations. All applicable standards are available for consultation by employees in each geographical area.
In 2021, BBVA Group resolved 4,621 investigation files that resulted in 2,629 reports of suspicious transactions sent to the
corresponding authorities.
In the area of training related to AML, BBVA,S.A. offers an annual training plan for its employees. This plan, defined according to the
needs identified, establishes training actions such as face-to-face or e-learning courses, videos, brochures, etc. for both new hires and
employees. Likewise, the content of each training action is adapted to the target group, including general concepts derived from the
applicable internal and external AML regulations, as well as specific issues that affect the functions performed by the target group of
the training. In 2021, 3,729 attendees participated in AML training activities; this figure includes 2,134 employees belonging to the
most sensitive groups from the perspective of AML, who received an enhanced level of training.
Anti-corruption information
In relation to the evaluation of the risk of corruption in the Bank, different types of operations have been evaluated (i) 36,709
operations out of a total of 37,038 (99.1%) in relation to the PBC risk (to see the number of communications made to the
corresponding authorities see previous section); (ii) regarding the risk of internal fraud, a total of 1,354 operations out of a total of
1,356 (99.9%) have been analyzed.
In addition, in recent years risk assessments have been carried out in the area of anti-corruption in the banks of the main geographical
areas in which the BBVA Group has a presence. Based on the overall result of this analysis, it has been concluded that the corruption
risk control framework in the BBVA Group is adequate.
In relation to the training program on the prevention of corruption, during the 2020 financial year, the training of managers and
employees of the BBVA Group in the Anti-Corruption Policy was promoted globally through different initiatives based mainly on
practical cases. In this sense, the launch of a corporate online course in most of the jurisdictions in which BBVA is present stands out.
At the end of the 2021 financial year, this course had been taken by a total of 19,172 (88.9%) employees in Spain.
Tax contribution
BBVA operates in compliance with its tax obligations and avoids any practice which represents illicit avoidance of its obligations to
pay tax or prejudice to the public treasury.
The principles that guide BBVA's fiscal action are not detached from its responsible and sustainable way of understanding finance and
banking. In the tax area, in addition to providing legitimate added value to investors, BBVA's actions must also address other
stakeholders and must align with the values and commitments that it has undertaken with society in order to bring the age of
opportunities to everyone.
25
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
As such, the principles that guide its actions are as follows:
–Integrity: in the fiscal sphere, integrity is defined as the observance of the letter and spirit of the law and the maintenance of
a cooperative and good faith relationship with the various tax administrations.
–Prudence: in the fiscal context, BBVA always assesses the implications of its decisions beforehand, including, among other
assessments, the impact that its activity may have in the geographical areas in which it operates.
–Transparency: in the tax area, BBVA provides information on its activity and its approach to taxation to customers and other
stakeholders in a clear and accurate manner.
BBVA is committed to transparency in paying taxes and this is the reason why, for yet another year, the Group voluntarily breaks
down the total tax contribution in countries in which it has a significant presence.
Total Tax Contribution of BBVA in Spain (TTC), which includes own and third-party payments for corporate tax, VAT, local taxes and
fees, income tax withholdings, Social Security payments, and payments made during the year due to tax litigation in relation to the
aforementioned taxes.
GLOBAL TAX CONTRIBUTION (BBVA ESPAÑA. MILLIONS OF EUROS)
2021
2020
Own taxes
996
146
Third-party taxes
1,067
1,176
Total tax contribution
2,063
1,322
Offshore financial centers
As a result of the express policy on activities in permanent establishments domiciled in offshore financial centers, the Bank closed in
2018 the branch it had in the Cayman Islands and, therefore, does not have activities in offshore financial centers.
Other tax information by countries
26
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
TAX INFORMATION BY COUNTRIES (BBVA, S.A. MILLIONS OF EUROS)
2021
2020
CIT payment
cash basis(***)
CIT
expense
PBT(*)
Subsidies
CIT payment
cash basis(***)
CIT
expense
PBT(*)
Subsidies
Spain (**)(****)
86
560
1,286
—
(701)
36
(2,448)
—
Of which:
Tax Group
—
16
1,041
—
—
—
568
—
Subsidiaries
—
21
658
—
—
11
673
—
Impairment of Garanti
—
—
(877)
—
—
—
(288)
—
Impairment of BBVA USA
—
—
—
—
—
—
(2,408)
—
The United States
10
22
135
—
20
17
70
—
United Kingdom
8
8
61
—
5
3
40
—
Hong-Kong
8
9
57
—
8
5
31
—
Italy
28
16
52
—
8
20
65
—
Portugal
4
15
47
—
4
14
40
—
France
7
9
42
—
13
3
14
—
Germany
26
5
26
—
26
8
23
—
Singapore
2
3
18
—
1
2
11
—
Belgium
—
—
4
—
—
—
4
—
Taiwan
—
(1)
(2)
—
—
—
1
—
Japan
—
—
(1)
—
—
—
—
—
China
—
—
1
—
—
—
2
—
Switzerland
4
—
—
—
10
—
—
—
Chile
2
—
—
—
2
—
—
—
Colombia
2
—
—
—
3
—
—
—
Paraguay
10
—
—
—
—
—
—
—
Peru
3
—
—
—
3
—
—
—
Total
202
646
1,726
—
(598)
36
(2,147)
—
(*) PBT: Profit before tax.
(**) Including dividends from foreign subsidiaries which are taxed in their home country. See Note 4 of Dividends of the Financial Statements.
(***) The amounts of "Cash payments of corporate income tax" are highly conditioned and derive fundamentally from the methodology for calculating the instalment payments
provided for in the regulations governing corporate income tax in the different geographical areas, producing differences between the instalment payments made in the current
year and the refund of instalments from previous years that may result once the final tax returns have been filed. In this respect, it should also be noted that it is normal for there
to be, differences between the amounts of "Corporate tax cash payments" and "Corporate tax expense", as the tax paid in the year is not necessarily directly related to the pre-
tax profit existing in a jurisdiction, but takes into account the tax payments (and refunds) in respect of profits made in previous years, as well as the instalment payments made
in the current year and the withholding of input tax. However, the "Corporate Income Tax Expense" for the current year is more directly related to the existing Profit before tax
for a given year.
(****) The PBT includes the capital gain generated in 2021 as a result of the sale of the US  business, which is classified in the income statement under the heading "Profits
(losses) after taxes from discontinued operations ". Likewise, the balance of "Corporate tax expense" in Spain is highly conditioned because it includes the tax effects associated
with the sale of the US, which is classified in the income statement under the heading "Profits (losses) after tax from discontinued operations".
The total gross margin of the Bank that appears in this table does not match that existing in the consolidated profit and loss account
since the total gross margin in this table also includes the gross margin generated, up to the time of its sale, by the US companies
sold, whose "Profit before taxes" and "Corporate income tax expense" are classified under "Profits (losses) after taxes from
discontinued operations".
In 2020, the BBVA Group has not received any significant public aid allocated to the financial sector intended for the promotion of
banking activity, as mentioned in Appendix XIII -Annual Banking Report of the Consolidated Financial Statements of BBVA Group.
Commitment to human rights
BBVA is committed to compliance with all applicable laws and to respect for internationally recognized human rights. This
commitment applies to all of the relationships that BBVA establishes with its customers, suppliers, employees, and with the
communities in which it conducts its business and activities.
BBVA has had a commitment to human rights since 2007, which was updated in 2020. It seeks to ensure respect for the dignity of all
people and their inherent rights.
BBVA's human rights commitment is part of the Group's Corporate Social Responsibility Policy and is aligned with its Code of
Conduct. This commitment takes the UN Guiding Principles on Business and Human Rights as a reference. Its purpose is to guide the
Group in its strategic vision and its operations, as well as its relationship with its stakeholders.
27
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
In 2021, BBVA has adopted an active role within the framework of future EU legal initiatives. As part of its participation in the Working
Groups on Sustainable Finance of the European Banking Federation (EBV) and the Association of Financial Markets of Europe
(AFME), BBVA has contributed to the drafting of responses to public consultations made to the European Commission. In this context
it is worth highlighting the response to the consultation launched by the European Sustainable Finance Platform on the development
of a social taxonomy, a project whose objectives include criteria that guarantee the support and respect of companies for human
rights. BBVA also forms part of the EBF advisory group on diversity and inclusion.
BBVA identifies the social and labor risks derived from its activity in the different areas and countries in which it operates in order to
manage their possible impacts through processes designed specifically for this purpose, or through already existing processes which
integrate the human rights perspective. For more information on the Equator Principles, see the chapter "Management of indirect
environmental and social impacts" in this report.
Moreover, the methodology for assessing the risk to BBVA's reputation mentioned in the "Reputational Risk" section within the
chapter “Risk management”, is an essential companion to this management, since assessing reputational risk highlights the fact that
issues related to human rights have the potential to affect the Group's reputation.
BBVA has a Whistleblowing Channel, through which any stakeholder can report confidentially and, if they wish, anonymously, any
behavior that is linked directly or indirectly to human rights. In the complaints received through this channel, there are no human
rights violations attributable to the Bank as of December 31, 2021.
For more information on a new human rights due diligence process in order to prevent, mitigate and remedy potential impacts on
human rights (in line with the United Nations Guiding Principles on Business and Human Rights), which the BBVA Group carried out in
2021, see the section “Commitment to Human Rights” within the chapter “Our stakeholders” of the BBVA Group Consolidated
Management Report.
28
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
2.6 Report on climate change and other environmental
and social issues
The fight against climate change represents one of the greatest disruptions in history, with extraordinary economic consequences, to
which all actors (governments, regulators, companies, consumers and society in general) have to adapt.
Climate change and the transition to a low-carbon economy have relevant implications for the value chains of most productive
sectors, and may require significant investments in many industries. However, technological advances around energy efficiency,
renewable energies, efficient mobility or the circular economy represent a source of new opportunities for everyone.
On the other hand, customers, markets and society as a whole not only expect large companies to create value, but also expect them
to contribute positively to society, especially that the economic development to which they contribute with their activity is inclusive.
BBVA is aware of the outstanding role of the banking sector in this transition towards a more sustainable world through its financial
activity. It has adhered to the Principles of Responsible Banking promoted by the UN, the Katowice Commitment and the Collective
Commitment to Climate Action, and is willing to play a relevant role, as society demands, and help its clients in the transition towards
that sustainable future.
In 2021, BBVA has obtained the highest score (89 points) among world banks5 in the Dow Jones Sustainability Index (DJSI), which
measures the performance of the largest companies by market capitalization in economic, environmental and social matters. The
Group has achieved the highest score (100 points) in the sections on financial inclusion, environmental and social information,
development of human capital, materiality and tax strategy.
As a financial entity, BBVA has a direct impact on the environment and society, through the use of natural resources and the
relationship with its stakeholders; and indirectly, the most relevant, through its credit activity and the projects it finances.
In accordance with the provisions of Law 7/2021, of May 20, on climate change and energy transition (hereinafter, Law 7/2021),
BBVA presents a report (hereinafter, Report on climate change of BBVA Group) which includes, among other issues: the governance
structure of the organization, the strategic approach, both in terms of adaptation and mitigation of the entity to manage the financial
risks associated with climate change, the real and potential impacts of the associated risks and opportunities to climate change, the
processes of identification, evaluation, control and management of climate-related risks and the metrics, scenarios and objectives
used to assess and manage the relevant risks and opportunities related to climate change.
This Report on climate change of Banco Bilbao Vizcaya Argentaria, SA, which forms part of its Individual Management Report,
includes by reference the sections of the Consolidated Report on climate change which is included in the BBVA Group Consolidated
Management Report. These sections contain additional and complementary information to obtain a better understanding of the Bank,
the BBVA Group and their respective actions in the matters required by article 32 of Law 7/2021, as shown in the table below:
Non-financial Information Report. Contents index of the Law 7/2021, of May 20, about climate change and
energetic transition
Topic
Reporting criteria
Response included in BBVA Group's
consolidated management report
Govern
Governance structure of organization, including the role that its
various bodies perform, in relation to the identification, evaluation
and management of risks and opportunities related to climate
change.
BBVA in brief/The Group’s Organizational Chart/
NFIS/Report on climate change and other
environmental and social issues
Strategy
Strategic approach, in terms of adaptation and mitigation of the
entities to manage the financial risks associated with climate
change, taking into account the current risks at the time of writing
the report, and those that may arise in the future, identifying the
actions necessary at that time to mitigate such risks.
NFIS/Strategic Priorities
NFIS/Report on climate change and other
environmental and social issues
Impacts
The real and potential impacts of risks and opportunities associated
with climate change on the organization's activities and its strategy,
as well as on its financial planning.
NFIS/Report on climate change and other
environmental and social issues
Risk management
The processes for identifying, evaluating, controlling and managing
climate-related risks and how these are integrated into its global
business risk analysis and its integration into the organization's
global risk management.
NFIS/Strategic Priorities
NFIS/Report on climate change and other
environmental and social issues
Metrics and goals
Metrics, scenarios and objectives used to assess and manage
important risks and opportunities related to climate change and, if
calculated, the scope 1, 2 and 3 of its carbon footprint and how its
reduction is addressed .
NFIS/Report on climate change and other
environmental and social issues
The calculation of scope 1, 2 and 3 of the carbon footprint and how BBVA Spain deals with its reduction, as well as other aspects
related to direct and indirect impacts, are broken down in the section “Management of direct and indirect impacts” at continuation.
29
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
5 Shared ranking position
Management of direct and indirect impacts
As a financial entity, BBVA has a direct impact on the environment and society, through the use of natural resources and the
relationship with its stakeholders; and indirectly, through its credit activity and the projects it finances.
Management of direct environmental impacts
BBVA has a clear commitment to both society and the environment. The global strategy of the reduction of direct impacts is
organized around four core elements: reduction in consumption through the energy efficiency initiatives; use of renewable energy;
awareness and involvement of employees and other stakeholders in the path toward a low-carbon economy; and offsetting its carbon
footprint through the purchase of credits of projects of the Voluntary Carbon Market to comply with the commitment acquired in
2020 to be a carbon-neutral company.
This commitment embodies in BBVA's climate change strategy (the Pledge 2025), whose objectives are, first, a reduction of 68% of
Scope 1 and 2 CO2 emissions with respect to 2015, and a consumption of 70% of renewable energy by 2025, and 100% by 2030. In
line with the latter objective, BBVA has since 2018 adhered to the RE100 initiative, through which the most influential companies in
the world have agreed that their energy would be 100% renewable by 2050.
New Ecoefficiency Plan
BBVA has also established other ambitious objectives in its climate strategy. They are included in the Global Eco-Efficiency Plan, in
force from 2008, and which was renewed in 2021 for the period 2021-20256.
The New Global Eco-Efficiency Plan sets direct targets for year-on-year impact reduction and the achievement of the Pledge 2025:
GLOBAL ECOEFFICIENCY PLAN GOALS 2021-2025 (BBVA Spain)
Vector
Indicators
Global target(1)
Consumptions
Renewable electricity (%)
100%
Electricity consumption per employee (MWh/FTE)
(15)%
Energy consumption per employee (MWh/FTE)
(6)%
Water consumption per employee (m3/FTE)
(21)%
Paper consumption per employee (kg/FTE)
(4)%
Circular economy
Net waste per employee (t/FTE)
(14)%
Carbon footprint
Scope 1&2 carbon emissions (tCO2e)
(6)%
Sustainable building
Environmentally certified area (%)
43%
(1) Base year 2019
This plan is based on four lines of action:
1.Consumption
With the aim of reducing BBVA's environmental footprint, the following lines of actions will be implemented:
–Electricity consumption: BBVA's strategy is focused on the use of renewable energy, given that the most
important level for contributing to the decarbonization of energy markets. In Spain, since 2015 energy is
renewable through the purchase of Guarantees of Origin. And since 2020, part of the consumption comes from a
wind farm built within the Power Purchase Agreement (PPA), completing up to 100% of the consumption with
Guarantees of Origin. There will also be a commitment to the self-generation of renewable energy through the
installation of photovoltaic and thermosolar solar panels in buildings, as it is already the case in several.
–Implementation of energy saving measures (ESMs) for the operation of buildings, to control and reduce
consumption.
–Initiatives for the reduction of water consumption, such as gray water recycling systems and rainwater
recirculation for irrigation in the headquarters of the Group in Spain, and the installation of waterless urinals in
some of the buildings in Spain.
–Finally, there are measures for the digitalization and centralization of printing to reduce the consumption of paper,
which is to 100% recycled or environmentally certified.
2.The circular economy
Waste generation is becoming a serious problem at global level, so part of BBVA's contribution to sustainable development
must consist in transitioning linear consumption practices to circular consumption. BBVA has been working for many years
to reduce this impact through sustainable construction standards and the implementation of environmental management
systems certified with ISO 14001. The aim is to reduce to a minimum the waste which is sent to landfills, so our facilities
have clearly differentiated and clearly marked zones which allow to carry out a correct segregation and recycling of waste.
30
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
6  To establish the PGE 2021-2025 targets the base year 2019 has been used, as consumption in 2020 was skewed by the effect of the pandemic.
Moreover, the action plan foresees that all these sustainable practices are certified under zero waste management
standards.
3.Carbon footprint
The reduction of the carbon footprint is one of the goals established within the Pledge 2025. BBVA's total emissions are
composed of:
–Scope 1 greenhouse gas emissions, which include direct emissions from combustion facilities for own use,
combustion of the fleet of vehicles and refrigerant gasses.
–Scope 2 greenhouse gas emissions, including indirect emissions related to electricity production, purchased and
consumed by buildings and branches.
–Scope 3 greenhouse gas emissions, which include other indirect emissions. This scope for BBVA includes the
emissions from business trips (plane or train), emissions by waste management and emissions due to the trips
made by our employees to their place of work.
Both Scope 1 and 2 emissions and Scope 3 emissions are calculated according to the GHG Protocol standard established by
the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD).
Since 2020, BBVA has been a Carbon Neutral company by offsetting its residual emissions through the purchase of credits
on the Voluntary Carbon Market. Moreover, in line with the recommendations of the Taskforce on Scaling Voluntary Carbon
Markets, BBVA has established requirements for the selection of projects with which to offset its residual emissions. Among
these requirements are the obligation for projects to be certified under the maximum quality standards such as the Verra
Verified Carbon Standard (VCS) and the Gold Standard; and that preferably they should be projects for the absorption or
capture of CO2.
4.Sustainable construction
Another of the objectives is to guarantee the implementation of the best environmental and energy standards in BBVA
buildings to achieve a large percentage of environmentally certified area. In fact, the BBVA facilities hold a number of
construction and management certification.
Among the construction certifications, there are 5 buildings with the prestigious LEED (Leadership in Energy and
Environmental Design) for sustainable construction.
With respect to management certifications, BBVA has implemented an Environmental Management System in many of its
buildings, based on the ISO 14.001:2015 Standard, which is certified every year by an independent entity. This certification
is used to control and evaluate environmental performance in the operations of some of its buildings. This system is
implemented in 16 buildings and 8 branches. Moreover, the Ciudad BBVA, the Bank's headquarters in Spain, has obtained
the AENOR "toward zero waste" seal as a prior stage to obtaining the "zero waste" certification of a standard which
promotes the circular economy. Finally, 3 of our buildings in Spain also have an Energy Management System that has been
certified by an independent third party and complies with the ISO 50.001:2018 standard.
MAIN INDICATORS OF THE GLOBAL ECO-EFFICIENCY PLAN(1) (BBVA Spain)
2021
2020
2021 Goal
(%)
Reference
value
∆ 21-19
∆ 21-20
Reference
value
Renewable electricity (%)
100%
100%
100%
Electricity consumption per employee (MWh/FTE)
(6)%
5.73
(17)%
(2.0)%
5.82
Energy consumption per employee (MWh/FTE)
(3)%
6.21
(16)%
(1)%
6.29
Water consumption per employee (m3/FTE)
(9)%
7.90
(25)%
26%
6.25
Paper consumption per employee (kg/FTE)
(3)%
58.15
(24)%
22%
47.58
Net waste per employee (t/FTE)(2)
(11)%
0.01
(83)%
61%
—
Scope 1&2 carbon emissions (tCO2e)(3)
(6)%
3,818.14
31%
45%
2,630.53
Environmentally certified area (%)(4)
37%
39%
34%
Note: These indicators are calculated on the basis of full time employees. The base year for the new Global Ecoefficiency Plan will be 2019 since 2020 has been a year that, due
to the circumstances of the pandemic, could distort the evolution.
(1) Some of the data for 2021 are estimates, as complete information for the year was not yet available at the close of the report.
(2) Net waste is the total waste generated minus the waste that is recycled.
(3) Includes scope 1 (fuels in installations and vehicle fleet and refrigerant gases), scope 2 market-based. Data for the years prior to 2021 do not include Scope 1 due to vehicle
fleet and refrigerant gases.
(4) Includes IS0 14001, ISO 50001, LEED, Edge and WWF Green Office certifications.
31
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Environmental performance in 2021
BBVA's environmental footprint shows very positive data compared to the baseline year 2019, with reductions of 17% in electricity
consumption, 25% in water consumption and 24% in paper (all per employee). The percentage of renewable energy consumption
continues at 100%, and the environmentally certified surface area reached 39%. Scope 1 and 2 emissions (according to the market-
based method) have increased compared to the base year 2019 due to the incorporation this year of Scope 1 data on emissions due
to vehicle fleets and refrigerant gases, which do not They were part of the footprint of the previous years.
ENVIRONMENTAL FOOTPRINT (BBVA Spain) (1)
2021
2020 (7)
Consumption
Total water comsuption (cubic meters)
219,764.67
190,033.66
Public water supply (cubic meters)
206,093.94
190,033.66
Recycled water (cubic meters)
13,670.73
nd
Paper (tons)
1,618.45
1,406.62
Energy (Megawatt hour) (2)
172,930.51
185,846.81
Energy from renewable sources (Megawatt hour)
159,353.60
172,093.47
Energy from non renewable sources (Megawatt hour)
13,576.91
13,753.33
CO2 emissions
Scope 1 emissions (tons CO2e) (2)
3,818.14
2,630.53
Emissions from fuels in facilities (t CO2e)
2,666.34
2,630.53
Emissions from vehicle fleet fuels (t CO2e)
570.50
nd
Emissions from refrigerant gases (t CO2e)
581.30
nd
Scope 2 emissions (tons CO2e) market-based method (3)
0.00
0.00
Scope 2 emissions (tons CO2e) location-based method (4)
31,743.24
44,830.35
Scope 1&2 emissions (tons CO2e) market-based method
3,818.14
2,630.53
Scope 1&2 emissions (tons CO2e) location-based method
35,561.37
47,460.88
Scope 3 emissions (t CO2e) (6)
4,599.09
2,269.82
Emissions from waste management (t CO2e)
83.61
nd
Emissions from business travel (t CO2e) (5)
1,238.01
2,269.82
Emissions from employees commuting (t CO2e) (6)
3,277.47
0.00
Total CO2e emissions (t CO2e) market-based method
8,417.22
4,900.35
Total CO2e emissions (t CO2e) location-based method
40,160.46
49,730.70
Social cost of carbon (Scope 1&2) (€) (8)
171,057.73
nd
Waste
Hazardous waste (tons)
81.04
6.56
Recycled hazardous waste (tons)
42.89
nd
Disposed hazardous waste (tons)
38.15
nd
Non-hazardous waste (tons)
2,118.76
921.37
Recycled non-hazardous waste (tons)
2,016.57
nd
Disposed non-hazardous waste (tons)
102.18
nd
Single-use plastics (9)
0.32
nd
Donated IT equipment (units)
485.00
25.00
(1) The data shown here include Argentina, Colombia, Spain and Portugal, Mexico, Peru, Turkey and Uruguay. Some of the data for 2021 are estimates, as complete information
for the year was not yet available at the close of the report.
(2) Includes consumption of electricity and fossil fuels (diesel, natural gas and LP gas), except fuels consumed in vehicle fleets.       
(3) Emissions from direct energy consumption (fossil fuels) and calculated based on the emission factors of the 2006 IPCC Guidelines for National Greenhouse Gas Inventories.
The IPCC Fifth Assessment Report and the IEA have been used as sources for conversion to CO2e. From 2021 onwards, emissions derived from the use of the vehicle fleet and
refrigerant gas leaks at our facilities have been included in this scope.
(4) Emissions from electricity consumption and calculated based on contractual data and, failing that, on the latest available IEA emission factors for each country.
(5) Emissions from electricity consumption and calculated based on the energy mix of each geography. Emission factors are the latest available according to IEA for each
country.       
(6) From 2021 onwards, in addition to emissions from business travel by air, emissions from business travel by train, emissions from waste management and emissions from
employee commuting have been included in this scope, using emission factors published by DEFRA in 2021. For our employees' commuting emissions, a survey has been sent
to BBVA employees although only those from Central Services have been taken into account so that the data compares with those published in 2019.
(7) 2020 data differ from those published in the previous annual report due to the exit of the USA from the perimeter.
(8) The impact of greenhouse gas emissions for 2021 is calculated only with Scope 1 and 2 emissions and using the CO2 social cost factor according to a proportional estimate
of the EPA's social cost of carbon for 2020 ($51/tCO2) and 2025 ($56/tCO2), (discount rate of 3%, with exchange rate 1.192 €/USD).
(9) Masks purchased for our employees have been taken into account and the data provided on single-use plastics from catering suppliers.
32
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Given the business activities in which the BBVA engages, the Bank has no environmental liabilities, expenses, assets, provisions or
contingencies that are significant in relation to its equity, financial position and earnings. As such, as of December 31, 2021, the
accompanying Financial Statements do not include any item that warrants inclusion in the environmental information document
provided for in Order JUS/318/2018, of March 21, approving a new template for filing the consolidated annual accounts at the
Companies Register for those entities obligated to disclose such information.
Management of indirect environmental and social impacts
BBVA addresses environmental and social risks from the perspective of impact prevention and mitigation. To do this, it uses tools
such as the Environmental and Social Framework or the Equator Principles that have an environmental and social focus, and which
are described below. Managing the impacts that customers generate on the environment is part of the Pledge 2025. To manage them,
BBVA has implemented a number of initiatives and tools.
Environmental and social framework
In 2020, the Environmental and Social Framework for the due diligence in the field of mining, agribusiness, energy, infrastructure and
defense was approved (Framework), which revised and integrated the previous Sector Norms (approved in 2018) and the Rules of
Conduct in Defense (in force since 2012).
In line with the previous regulation, this Framework provides a decision-making guideline with regard to transactions and customers
that operate in these five sectors (mining, agribusiness, energy, infrastructure and defense); as they are considered to have a bigger
social and environmental impact. The Framework is public and available on the BBVA shareholders and investors website.
To guarantee its effective implementation, BBVA receives advice from an independent external expert, with whose collaboration it
carries out an enhanced due diligence on its customers and transactions, in order to mitigate the risks associated with these sectors
and contribute to the compliance with the General Sustainability and Social Corporate Responsibility Policies.
For the Framework review, new market trends in this area, the expectations of stakeholders and the strengthening of the
implementation procedures are taken into account.
The following were the highlights of the December 2020 review:
–restriction to the applying of exceptions in the field of mining and energy for countries with high energy dependence only to
projects under construction and existing customers;
–the reduction from 35% to 25% of the threshold applied to the exclusion of customers with high coal exposure, which
applies both to the extractive activity and the energy generation;
–extension of the prohibition related to bituminous sands;
–the incorporation of new prohibited activities such as deep-sea mining, Artic oil and gas transportation, as well as large
dams that are not built under the World Commission on Dams (WDC) framework.
In the March 2021 review, BBVA highlighted the commitment to remove customer exposure to carbon by 2030 for developed
countries and 2040 globally, by dialog with customers and active monitoring with their portfolios.
Principles of Ecuador
Energy, transport and social service infrastructures, which drive economic development and create jobs, can have an impact on the
environment and society. BBVA’s commitment is to manage the financing of these projects to reduce and avoid negative impacts and
in this way enhance their economic, social and environmental value.
All decisions to finance projects are based on the criterion of principle-based profitability. This implies meeting stakeholder
expectations and the social demand for adaptation to climate change and respect for human rights.
In line with this commitment, since 2004 BBVA has adhered to the Equator Principles (EP), which include a series of standards for
managing environmental and social risk in project financing. The EPs were developed on the basis of the International Finance
Corporation’s (IFC) Policy and Performance Standards on Social and Environmental Sustainability and the World Bank’s General
Guidelines on Environment, Health and Safety. These principles have set the benchmark for responsible finance.
The analysis of the projects consists of subjecting each operation to an environmental and social due diligence process, including
potential impacts on human rights. The first step is the allocation of a category (A, B or C), which reflects the project’s level of risk.
Category A: projects with potentially significant adverse social or environmental impacts that are irreversible or unprecedented.
Category B: Projects with potentially limited adverse social and environmental impacts that are few in number, generally site-specific,
largely reversible and readily addressed through mitigation measures. Category C: Projects with minimal or no social or
environmental impacts. Reviewing the documentation provided by the customer and independent advisers is a way to assess
compliance with the requirements established in the EPs, according to the project category. Financing agreements include the
customer’s environmental and social obligations. The application of the EPs at BBVA is integrated into the internal processes for
structuring, acceptance and monitoring of operations, and is subject to regular checks by the Internal Audit area.
BBVA has reinforced due diligence procedures associated with the financing of projects whose development affects indigenous
peoples. When this circumstance occurs, the prior free and informed consent is required from these communities, irrespective of the
geographic location of the project, including for projects in countries where a robust legislative system is presupposed, which
guarantees the protection of the environment and the social rights of its inhabitants. When identifying potential risks, the operation
must include an effective form of management of these risks, as well as operational mechanisms to support claims management.
33
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
2.7 Additional information
Contents index of the Law 11/2018
Non-financial information report. Contents Index to the Law 11/2018
Page / Section Management report BBVA
2021
GRI reporting
criteria
Page(s)
General information
Business model
Brief description of the group’s
business model
BBVA in brief
GRI 102-2
GRI 102-7
2
Geographical presence
BBVA in brief
GRI 102-3
GRI 102-4
GRI 102-6
2
Objectives and strategies of the
organization
NFIS/Information on strategy and objectives
GRI 102-14
3-4
Main factors and trends that may
affect your future evolution
NFIS/Information on strategy and objectives
GRI 102-15
3-4
General
Reporting framework
Non-financial information report
GRI 102-54
3
Principle of materiality
Non-financial information report
GRI 102-46
GRI 102-47
3
Management approach
Description of the applicable
policies
NFIS/Information on strategy and objectives,
Information on customers, Information on
employees, Information on suppliers,
Information on social matters, Report on
climate change and other environmental and
social issues
GRI 103-2
3-33
The results of these policies
NFIS/Information on strategy and objectives,
Information on customers, Information on
employees, Information on suppliers,
Information on social matters, Report on
climate change and other environmental and
social issues
GRI 103-2
3-33
The main risks related to these
issues involving the activities of
the group
NFIS/Information on strategy and objectives,
Information on customers, Information on
employees, Information on suppliers,
Information on social matters, Report on
climate change and other environmental and
social issues
GRI 102-15
3-33
Environmental questions
Environmental management
Detailed information on the
current and foreseeable effects
of the company's activities on the
environment and, where
appropriate, health and safety
NFIS/Report on climate change and other
environmental and social issues/
Management of direct and indirect impacts
GRI 102-15
30-33
Environmental assessment or
certification procedures
NFIS/Report on climate change and other
environmental and social issues/
Management of direct and indirect impacts
GRI 103-2
30-33
Resources dedicated to the
prevention of environmental risks
NFIS/Report on climate change and other
environmental and social issues
GRI 103-2
29-33
Application of the precautionary
principle
NFIS/Report on climate change and other
environmental and social issues
GRI 102-11
29-33
Amount of provisions and
guarantees for environmental
risks
NFIS/Report on climate change and other
environmental and social issues
GRI 103-2
29-33
Contamination
Measures to prevent, reduce or
repair emissions that seriously
affect the environment; taking
into account any form of activity-
specific air pollution, including
noise and light pollution
NFIS/Report on climate change and other
environmental and social issues/
Management of direct and indirect impacts
GRI 103-2
30-33
Circular economy and waste
prevention and management
Prevention, recycling, reuse,
other forms of recovery and
types of waste disposal
NFIS/Report on climate change and other
environmental and social issues/
Management of direct and indirect impacts
GRI 103-2
GRI 306-2 with
respect to
reusing and
recycling
30-33
Actions to combat food waste
BBVA Group considers this indicator not to
be material
GRI 103-2
34
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Sustainable use of resources
Water consumption and water
supply according to local
constraints
NFIS/Report on climate change and other
environmental and social issues/
Management of direct and indirect impacts
GRI 303-5
(2018) with
respect to total
water
consumption
30-33
Use of raw materials and
measures taken to improve the
efficiency of their utilization
NFIS/Report on climate change and other
environmental and social issues/
Management of direct and indirect impacts
GRI 301-1  with
respecto to the
weight of
renewable
material used
30-33
Energy use, direct and indirect
NFIS/Report on climate change and other
environmental and social issues/
Management of direct and indirect impacts
GRI 302-1
GRI 302-3
30-33
Measures taken to improve
energy efficiency
NFIS/Report on climate change and other
environmental and social issues/
Management of direct and indirect impacts
GRI 103-2
GRI 302-4
30-33
Use of renewable energies
NFIS/Report on climate change and other
environmental and social issues/
Management of direct and indirect impacts
GRI 302-1 with
respect to
renewable
energies
consumption
30-33
Climate change
Greenhouse gas emissions
generated as a result of the
company's activities, including
the use of the goods and services
it produces
NFIS/Report on climate change and other
environmental and social issues/
Management of direct and indirect impacts
GRI 305-1
GRI 305-2
GRI 305-3
GRI 305-4
30-33
Measures taken to adapt to the
consequences of climate change
NFIS/Report on climate change and other
environmental and social issues
GRI 103-2
GRI 201-2
30-33
Reduction goals established
voluntarily in the medium and
long term to reduce greenhouse
gas emissions and measures
implemented for that purpose
NFIS/Report on climate change and other
environmental and social issues
GRI 305-5
29-33
Protection of biodiversity
Measures taken to protect or
restore biodiversity
The metric describes the size of the
protected or restored areas of habitats and
BBVA's financial activity, as well as the
activity of its offices, has no impact in this
regard. This metric and its various
breakdowns are currently considered non-
material.
GRI 304-3
Impacts caused by activities or
operations in protected areas
The operations centers and / or offices
owned, leased or managed by BBVA are
located in urban areas, so the impacts of the
entity's activities on biodiversity are
considered not significant.
Although the products and services
commercialised can potentially have an
impact on it, they are managed according to
the regulations and criteria applicable to the
nature of the financed activities, and
nowadays there are no defined and
comparable metrics for their monitoring and
reporting in relation with BBVA's value chain.
However, the entity undertakes to follow up
on regulatory developments regarding
biodiversity for future reporting if necessary.
GRI 304-1
GRI 304-2
Social and personnel questions
35
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Employees
Total number and distribution of
employees according to country,
gender, age, country and
professional classification
NFIS/Information on employees/
Professional development/Diversity,
inclusion and different capacities
GRI 102-8
GRI 405-1
14-15
Total number and distribution of
work contract modalities
NFIS/Information on employees/
Professional development/Diversity,
inclusion and different capacities
GRI 102-8
14-15
Annual average of work contract
modalities (permanent,
temporary and part-time) by sex,
age, and professional
classification
NFIS/Information on employees/
Professional development/Diversity,
inclusion and different capacities
GRI 102-8
14-15
Number of dismissals by sex,
age, and professional
classification
NFIS/Information on employees/
Professional development/Diversity,
inclusion and different capacities
GRI 103-2
GRI 401-1 with
respect to staff
turn-over by
age group, sex
and
professional
category
15
The average remunerations and
their evolution disaggregated by
sex, age, and professional
classification or equal value
NFIS/Information on employees/
Remuneration
GRI 103-2
GRI 405-2 with
respect to
women's
remuneration
compared to
men
17-20
The average remuneration of
directors and executives,
including variable remuneration,
allowances, compensation,
payment to long-term forecast
savings and any other perception
broken down by gender
NFIS/Information on employees/
Remuneration
GRI 103-2
GRI 405-2 with
respect to
women
remuneration
compared to
men's by
professional
category
17-20
Salary gap
NFIS/Information on employees/
Remuneration
GRI 103-2
GRI 405-2 with
respect to
women
remuneration
compared to
men's by
professional
category
19-20
Implementation of employment
termination policies
NFIS/Information on employees/ Work
environment /Work organization
GRI 103-2
15-16
Employees with disabilities
NFIS/Information on employees/
Professional development/Diversity,
inclusion and different capacities
GRI 405-1
12-13
Work organization
Work schedule organization
NFIS/Information on employees/ Work
environment /Work organization
GRI 103-2
15-16
Number of hours of absenteeism
NFIS/Information on employees/ Work
environment/Health and labor safety
GRI 403-9
16-17
Measures designed to facilitate
access to mediation resources
and encourage the responsible
use of these by both parents
NFIS/Information on employees/ Work
environment /Work organization
GRI 103-2
15-16
Health and safety
Work health and safety
conditions
NFIS/Information on employees/ Work
environment/Health and labor safety
GRI 103-2
GRI 403-1
GRI 403-2
GRI 403-3
GRI 403-7
(2018)
16-17
Work accidents, in particular their
frequency and severity,
disaggregated by gender
NFIS/Information on employees/ Work
environment/Health and labor safety
GRI 403-9
(2018) with
respect to
labor accident
injuries
16-17
Occupational diseases,
disaggregated by gender
NFIS/Information on employees/ Work
environment/Health and labor safety
GRI 403-10
(2018) with
respect to
recordable
labor diseases
16-17
36
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Social relationships
Organization of social dialog,
including procedures to inform
and consult staff and negotiate
with them
NFIS/Information on employees/ Work
environment/Freedom of association and
representation
GRI 103-2
16
Percentage of employees
covered by collective agreement
by country
NFIS/Information on employees/ Work
environment/Freedom of association and
representation
GRI 102-41
16
The balance of collective
agreements, particularly in the
field of health and safety at work
NFIS/Information on employees/ Work
environment/Health and labor safety
GRI 403-4
( 2018)
16-17
Training
Policies implemented for training
activities
NFIS/Information on employees/
Professional development/Training
GRI 103-2
GRI 404-2
11-12
The total amount of training
hours by professional category
NFIS/Information on employees/
Professional development/Training
GRI 404-1
11-12
Universal accessibility for
people with disabilities
Integration and universal
accessibility of people with
disabilities
NFIS/Information on employees/
Professional development/Diversity,
inclusion and different capacities
GRI 103-2
12-15
Equality
Measures taken to promote equal
treatment and opportunities
between women and men
NFIS/Information on employees/
Professional development/Diversity,
inclusion and different capacities
GRI 103-2
12-15
Equality plans (Section III of
Organic Law 3/2007, of March
22, for effective equality of
women and men)
NFIS/Information on employees/
Professional development/Diversity,
inclusion and different capacities
GRI 103-2
12-15
Measures adopted to promote
employment, protocols against
sexual and sex-based
harassment.
NFIS/Information on employees/
Professional development/Diversity,
inclusion and different capacities
GRI 103-2
12-15
Policy against any type of
discrimination and, where
appropriate, diversity
management
NFIS/Information on employees/
Professional development/Diversity,
inclusion and different capacities
GRI 103-2
12-15
Information about the respect for human rights
Human rights
Application of due diligence
procedures in the field of human
rights; prevention of the risks of
violation of human rights and,
where appropriate, measures to
mitigate, manage, and repair
possible abuses committed
NFIS/Information on social matters/
Commitment to human rights
GRI 102-16
GRI 102-17
GRI 412-1
GRI 412-2
GRI 412-3
27-28
Claims regarding cases of human
rights violations
NFIS/Information on social matters/
Commitment to human rights
GRI 103-2
GRI 406-1
27-28
Promotion and compliance with
the provisions contained in the
related fundamental Conventions
of the International Labor
Organization with respect for
freedom of association and the
right to
collective bargaining; the
elimination of discrimination in
employment and occupation; the
elimination of forced or
compulsory labor; and the
effective abolition of child labor
NFIS/Information on employees/ Work
environment/Freedom of association and
representation
NFIS/Information on social matters/
Commitment to human rights
GRI 103-2
GRI 407-1
GRI 408-1
GRI 409-1
16, 27-28
Information about anti-bribery and anti-corruption measures
Corruption and bribery
Measures adopted to prevent
corruption and bribery
NFIS/Information on social matters/
Compliance
GRI 103-2
GRI 102-16
GRI 102-17
GRI 205-2
GRI 205-3
25
Measures adopted to fight
against antimoney laundering
NFIS/Information on social matters/
Compliance
GRI 103-2
GRI 102-16
GRI 102-17
GRI 205-2
GRI 205-3
25
Contributions to foundations and
non-profit-making bodies
NFIS/Information on social matters/
Contribution to society
GRI 102-13
GRI 201-1 with
respect to
community
investment
24
Information about the society
37
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Commitment by the company
to sustainable development
Impact of the company’s
activities on employment and
local development
NFIS/Information on social matters/
Contribution to society
GRI 103-2
GRI 203-2 with
respect to
significant
indirect
economic
impacts
GRI 204-1
23-24
The impact of company activity
on local populations and on the
territory
NFIS/Information on social matters/
Contribution to society
GRI 413-1
GRI 413-2
23-24
The relationships maintained with
representatives of the local
communities and the modalities
of dialog with these
NFIS/Information on social matters/
Contribution to society
GRI 102-43
GRI 413-1
23-24
Actions of association or
sponsorship
NFIS/Information on social matters/
Contribution to society
GRI 103-2
GRI 201-1 with
respect to
investments in
the community
23-24
Subcontractors and suppliers
The inclusion of social, gender
equality and environmental
issues in the purchasing policy
NFIS/Information on suppliers
GRI 103-2
21-22
Consideration of social and
environmental responsibility in
relations with suppliers and
subcontractors
NFIS/Information on suppliers
GRI 102-9
GRI 308-1
GRI 414-1
21-22
Supervision systems and audits,
and their results
NFIS/Information on suppliers
GRI 102-9
GRI 308-1
GRI 308-2
GRI 414-2
21-22
Consumers
Customer health and safety
measures
NFIS/Information on social matters/
Customer security and protection
GRI 103-2
GRI 416-1
6-8
Claims systems, complaints
received and their resolution
NFIS/Information on social matters/
Customer care
GRI 103-2
GRI 418-1
8-9
Tax information
Benefits obtained by country
NFIS/Information on social matters/Tax
contribution
GRI 201-1
GRI 207-4
(2019) with
respect to tax
on corporate
profit payed
and tax on
corporate
profit
25-27
Taxes on paid benefits
NFIS/Information on social matters/Tax
contribution
GRI 201-1
GRI 207-4
(2019) respect
to tax on
corporate
profit payed
and tax on
corporate
profit accrued
on profit or
loss
25-27
Public subsidies received
NFIS/Information on social matters/Tax
contribution
GRI 201-4
27
Requirements of the Taxonomy regulation
NFIS/Additional information/Information
related to article 8 of the European
Taxonomy
39-40
38
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Information related to article 8 of the European Taxonomy
Article 8 of the Taxonomy defined by Regulation (EU) 2020/852 of the European Parliament and of the Council, of June 18, 2020, on
the establishment of a framework to facilitate sustainable investment (hereinafter, the "Taxonomy" or "Sustainability Regulation"),
establishes certain obligations on the reporting of non-financial information for companies subject to the Non-Financial Reporting
Directive (NFRD). Based on this regulation, the financial institutions must include in their Spanish Statement of Non-Financial
Information (EINF for the Spanish initials) information on their exposure to the economic activities included within the EU
sustainability framework under said Article 8.
At present, Delegated Act 2021/2139 of the EU Sustainability Regulation is limited to the mitigation of greenhouse gas emissions, or
climate change mitigation (CCM), and adaptation to the effects of climate change, or climate change adaptation (CCA).
The other environmental goals included in the Taxonomy, such as protection of water and marine reserves, transition to a circular
economy, prevention of pollution and protection of the ecosystem, together with other social goals or transitional activities, have not
yet been developed. As the regulation is developed, BBVA's commitment is to make public the sustainability information in
accordance with the best practices observed at any time.
Based on the above, the ratios as of December 31, 2021 for the Bank in accordance with the provisions of Delegated Regulation
2121/2178 of July 6, 2021 and the clarifications of the European Commission are as follows7:
RATIOS 2021 (BBVA, S.A.)
%
% exposure to economic activities included in the Taxonomy (Taxonomy elegible) (1) (2)
42.3
% exposure to economic activities not included in the Taxonomy (Taxonomy non elegible) (1) (2)
20.5
% exposure to central governments and central banks
23.9
% exposure of non accredited to NFRD. (1)(3)
22.7
% trading portfolio exposure
23.2
% sight inter-bank portfolio exposure
0.6
% derivatives exposure
6.5
(1) The financial assets analyzed correspond to the categories of financial instruments valued "At amortized cost", "Fair Value with Changes in Other Comprehensive Income
(FVOCI)", "Fair Value with Changes in P&L" and "Non-negotiable at Fair Value with changes in results". These ratios represent the best estimates available to date
(2) Regarding the eligibility of an asset, the economic activities of the clients are classified as eligible according to the Delegated Regulations that complement Regulation (EU)
2020/852 of the European Parliament and of the Council. Economic activities covered by the Delegated Acts of Climate Change Mitigation and Climate Change Adaptation are
considered eligible. EU regulation has not been developed for the other environmental goals, therefore eligibility does not cover a wide range of potentially sustainable
economic activities and exposures.
(3) BBVA considers Not Subject to the NFRD those counterparties within the category of “Non-Financial Corporations” that are considered SMEs located in the EU for
regulatory reporting purposes, as well as counterparties with registered offices outside the EU.
The following have been considered when preparing the ratios: ratios number 3, percentage exposure to central governments and
central banks, number 5 percentage exposure to the trading portfolio, and number 7, derivative exposure percentage,  are calculated
on the Bank's total assets. The other ratios are calculated using the same methodology as in the definition provided by the European
Commission for the Green Asset Ratio (hereinafter, the GAR), which enters into force on January 1, 2024. Thus the percentages are
calculated on the total assets covered in the GAR, which are all the exposures on the balance sheet, except for the exposures to
central governments, central banks and the trading portfolio.
In addition, to determine eligibility, information has been used on the economic activities of clients based on the National
Classification of Economic Activities (CNAE), in the case of the activities of Spanish companies. These local classifications by activity
have an equivalence to the statistical classification of economic activities in the European Community (NACE). This information is
also available in the computer systems and is used to assess the specific economic activities of clients, both in internal management
(origination, risk assessment) and in the regulatory area (FINREP). 
Starting in 2022 the companies subject to the Non-Financial Reporting Directive (NFRD) must make public information
corresponding to the economic activities they perform with respect to the Taxonomy. BBVA shall incorporate this information into its
analysis on the economic activities covered in the regulation (eligible), allowing greater precision in the measurement of the economic
activities it finances based on the Taxonomy.
The information regarding how BBVA is aligning its objectives and economic activities with the European Taxonomy, the description
of its strategy, the products developed and marketed, as well as the integration of ESG aspects in the relationship with its customers
are included in the chapters "Report on climate change and other environmental and social issues" and "Integration of ESG aspects in
customer relations" within "Additional information" of BBVA Group’s Consolidated Management report.
39
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
7 Sustainable-finance-taxonomy-article-8-report-eligible-activities-assets-faq_en” published on December 20, 2021
Clarifications with respect to the Sustainable Finance Taxonomy ratios
The eligibility ratios mentioned above have been prepared following the regulatory definitions of the European Commission's Green
Asset Ratio (GAR). However, the European Commission allows the option of supplementing the mandatory information with voluntary
information, and along these lines, the EU's Platform for Sustainable Finance recommends that banks include the voluntary
information they deem appropriate.
Currently the methodology of the  EU Taxonomy does not allow financial institutions to include in the sustainability ratios any
exposures to companies not subject to the NFRD. Therefore, companies domiciled in a third country outside the EU to which the
Directive does not apply, and companies in the EU which are not subject to this obligation, such as the vast majority of SMEs, are
excluded from the above ratios.
However, the European Banking Authority (EBA) on January 24, 2022, has published the Implementation Guidelines on information to
be disclosed in the framework of the "Report with Prudential Relevance-Pillar III" on ESG matters, where It is requested that, in
addition to the GAR information, entities must report another additional ratio known as BTAR (Banking Book Taxonomy Alignment
Ratio) that includes exposure to non-NFRD counterparties. This ratio will enter into force in June 2024.
In this sense, taking into account that the BTAR ratio would cover the eligible exposures of countries outside the EU, and the
recommendation of the European Commission on voluntary disclosures, the degree of eligibility of global exposures is presented
below following the methodology calculation of the BTAR ratio.
ELIGIBILITY RATIOS ACCORDING TO BTAR METHODOLOGY
% exposure of eligible economic
activities
% exposure of non-eligible economic
activities
TOTAL(1)(2)(3)
50.5
35.1
(1) Public administrations, central governments and trading portfolio are excluded as they are not part of the Green Asset Ratio (GAR)
(2) The main difference to the ratios calculated according to the Taxonomy methodology is that all exposures are included, both NFRD and Non-NFRD, in order to have a holistic
view of the Group.
(3) Those items excluded in the denominator or numerator of the GAR, such as interbank loans, derivatives, cash or other assets such as Goodwill, are not included in the
components of the ratio.
Other non-financial risks
Spanish judicial authorities are investigating the activities of Centro Exclusivo de Negocios y Transacciones, S.L. (Cenyt). Such
investigation includes the provision of services by Cenyt to the Bank. On 29th July, 2019, the Bank was named as an investigated
party (investigado) in a criminal judicial investigation (Preliminary Proceeding No. 96/2017 – Piece No. 9, Central Investigating Court
No. 6 of the National High Court) for alleged facts which could be constitutive of bribery, revelation of secrets and corruption. On
February 3, 2020, the Bank was notified by the Central Investigating Court No. 6 of the National High Court of the order lifting the
secrecy of the proceedings. Certain current and former officers and employees of the Group, as well as former directors have also
been named as investigated parties in connection with this investigation. The Bank has been and continues to be proactively
collaborating with the Spanish judicial authorities, including sharing with the courts the relevant information obtained in the internal
investigation hired by the entity in 2019 to contribute to the clarification of the facts. As of the date of the approval of the Consolidated
Financial Statements, no formal accusation against the Bank has been made.
This criminal judicial proceeding is at the pre-trial phase. Therefore, it is not possible at this time to predict the scope or duration of 
such proceeding or any related proceeding or its or their possible outcomes or implications for the Group, including any fines,
damages or harm to the Group’s reputation caused thereby.
40
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
3. Risk management
The Bank's general risk management and control model is integrated into the BBVA Group's general model.
3.1 General risk management and control model
The BBVA Group has a general risk management and control model (hereinafter, the “Model”) that is appropriate for its business
model, its organization, the countries where it operates and its corporate governance system. This model allows the Group to carry
out its activity within the management and risk control strategy and policy defined by the corporate bodies of BBVA (considering
sustainability specifically) and to adapt itself to a changing economic and regulatory environment, facing this management at a global
level and aligned to the circumstances at all times.
The Model, for which the Group’s Chief Risk Officer (CRO) is responsible and that must be updated or reviewed at least annually, is
fully applied in the Group and it comprises the following basic elements:
–Governance and organization
–Risk Appetite Framework
–Assessment, monitoring and reporting
–Infrastructure.
The Group promotes the development of a risk culture that ensures a consistent application of the Model in the Group, and that
guarantees that the risks function is understood and internalized at all levels of the organization.
Governance & Organization
The risk governance model in the BBVA Group is characterized by a special involvement of its corporate bodies, both in setting the
risk strategy and in monitoring and supervising its implementation on an ongoing basis.
Thus, and as explained below, the corporate bodies are responsible for approving the risk strategy and the general policies for the
different types of risks. Global Risk Management (hereinafter, GRM) and Regulation & Internal Control (including, among other areas,
Non-Financial Risks) are the functions responsible for its implementation and development, with the appropriate reporting to
corporate bodies.
Responsibility for day-to-day management of risks falls on business and corporate areas, the activities of which adhere to the general
policies, regulation, infrastructures and controls that, based on the framework set by corporate bodies, are defined by GRM and
Regulation & Internal Control in their corresponding areas of responsibility.
To carry out this work adequately, the financial risks function in the BBVA Group has been set up as a single, global function and
independent from commercial areas.
The head of the risks function at an executive level, with respect to financial risks, is the Group's Chief Risk Officer (CRO), who is
appointed by the Board of Directors as a member of its senior management, and reports directly on the development of the
corresponding functions to the corporate bodies. The Chief Risk Officer, for the best fulfilment of the functions, is supported by a
structure consisting of cross-cutting risk units in the corporate area and specific risk units in the Group's geographical and/or
business areas.
In addition, and with regard to non-financial risks and internal control, the Group has a Regulation & Internal Control area independent
from the rest of units and whose head (Head of Regulation & Internal Control) is also appointed by the Board of Directors of BBVA and
reports directly to corporate bodies on the performance of its functions. This area is responsible for proposing and implementing non-
financial risks policies and the Internal Control Model of the Group, and it is composed by, among other, the Non-Financial Risks,
Regulatory Compliance and Risk Internal Control units.
The Risk Internal Control unit, within the Regulation & Internal Control area and, therefore, independent from the financial risks
function (GRM), acts as a control unit for the activities carried out by GRM. In this regard, and without prejudice to the functions
performed in this regard by the Internal Audit area, Risk Internal Control checks that the regulatory framework, processes and
established measures are sufficient and appropriate for each type of financial risk. It also monitors its implementation and operation,
and confirms that those decisions taken by GRM are taken independently from the business lines and, in particular, that there's an
adequate segregation of functions between units.
Governance and organizational structure are basic pillars for ensuring an effective risk management and control. This section
summarizes the roles and responsibilities of the corporate bodies in the risks area, of the Group's Chief Risk Officer and, in general, of
the risks function, its interrelation and the group of committees, in addition to the Risk Internal Control unit.
Corporate Bodies of BBVA
According to the corporate governance system of BBVA, the Board of Directors of the Bank has certain reserved competencies,
concerning management, through the implementation of the corresponding most relevant decisions, and concerning supervision and
control, through the monitoring and supervision of implemented decisions and management of the Bank.
41
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
In addition, and to ensure an adequate performance of the management and supervisory functions of the Board of Directors, the
corporate governance system comprises different committees supporting the Board of Directors with regard to matters falling within
their competence, and according to the specific charters of each committee. For this purpose, a coordinated work scheme between
these corporate bodies has been established.
With regard to risks, the Board of Directors' competencies are those relating to establishing the policy for controlling and managing
risk and the oversight and control of its implementation.
In addition, and for an adequate performance of its duties, the Board of Directors is assisted by the Risk and Compliance Committee
(hereinafter, CRC), on the issues detailed below, and by the Executive Committee (hereinafter, CDP), which is focused on the
strategy, finance and business functions of the Group, for the purposes of which it monitors the risks of the Group.
The involvement of the corporate bodies of BBVA in the control and management of the risks of the Group is detailed below:
Board of Directors
The Board of Directors is responsible for establishing the risk strategy of the Group and, in this role, it determines the control and risk
management policy, through the following documents:
–The Risk Appetite Framework of the Group, which includes in the one hand the risk appetite statement of the Group, that is,
the general principles governing the risk strategy of the Group and its target profile; and, on the other hand, and based on
the above mentioned risk appetite statement, a set of quantitative metrics (core metrics, and their corresponding
statements, and by type of risk metrics), reflecting the risk profile of the Group;
–the framework of management policies of the different types of risk to which the Bank is or could be exposed, which contain
the basic lines for managing and controlling risks in a uniform way across the Group and consistently with the Model and
Risk Appetite Framework;
–and the Model.
All of the above in coordination with the rest of prospective-strategic decisions of the Bank, which includes the Strategic Plan, the
Annual Budget, the Capital Plan and the Liquidity & Funding Plan, in addition to the rest of management objectives, whose approval is
a responsibility of the Board of Directors.
In addition to defining the risk strategy, the Board of Directors (in the performance of its risks monitoring, management and control
tasks) also monitors the evolution of the risks of the Group and of each main geographical and/or business area, ensuring compliance
with the Risk Appetite Framework of the Group; and also supervising the internal information and control systems.
For the development of all these functions, the Board of Directors is supported by the CRC and the CDP, which are responsible for the
functions detailed below.
Risk and Compliance Committee
The CRC is, according to its own charter, composed of non-executive directors and its main purpose is to assist the Board of
Directors on the establishment and monitoring of the risk control and management policy of the Group.
For this purpose, it assists the Board of Directors in a variety of risk control and monitoring areas, in addition to its analysis functions,
based on the strategic pillars established at all times by both the Board of Directors and the CDP, the proposals on the strategy,
control and risk management of the Group, which are particularly specified in the Risk Appetite Framework and in the “Model”. After
the analysis, the Risk Appetite Framework and Model proposal is submitted to the Board of Directors for consideration and, where
appropriate, approval purposes.
In addition, the CRC proposes, in a manner consistent with the Risk Appetite Framework of the Group approved by the Board of
Directors, the control and management policies of the different risks of the Group, and supervises the information and internal control
systems.
With regard to the monitoring of the evolution of the risks of the Group and their degree of compliance with the Risk Appetite
Framework and defined general policies, and without prejudice to the monitoring task carried out by the Board of Directors and the
CDP, the CRC carries out monitoring and control tasks with greater frequency and receives information with a sufficient granularity to
achieve an adequate performance of its duties.
The CRC also analyzes all measures planned to mitigate the impact of all identified risks, should they materialize, which must be
implemented by the CDP or the Board of Directors, as the case may be. The CRC also monitors the procedures, tools and
measurement indicators of those risks established at a Group level in order to have a comprehensive view of the risks of BBVA and its
Group, and monitors compliance with the regulation and supervisory requirements in terms of risks.
The CRC is also responsible for analyzing those project-related risks that are considered strategic for the Group or corporate
transactions that are going to be submitted to the Board of Directors of the CDP, within its scope of competence.
In addition, it contributes to the setting of the remuneration policy, checking that it is compatible with an appropriate and effective
management of risks and that it does not provide incentives to take risks breaching the level tolerated by the Bank.
Lastly, the CRC ensures the promotion of the risk culture in the Group.
In 2021, the CRC has held 22 meetings.
42
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Executive Committee
In order to have a complete and comprehensive view of the progress of the businesses of the Group and its business units, the CDP
monitors the evolution of the risk profile and the core metrics defined by the Board of Directors, being aware of any potential deviation
or breach of the metrics of the Risk Appetite Framework and implementing, when applicable, the appropriate measures, as explained
in the Model.
In addition, the CDP is responsible for proposing the basis for developing the Risk Appetite Framework, which will be established in
coordination with the rest of prospective/strategic decisions of the Bank and the rest of management objectives.
Lastly, the CDP is the committee supporting the Board of Directors in decisions related to business risk and reputational risk,
according to the dispositions set out in its own charter.
Chief Risk Officer of the Group
The Group's Chief Risk Officer (CRO) is responsible for the management of all the financial risks of the Group with the necessary
independence, authority, rank, experience, knowledge and resources. The CRO is appointed by the Board of Directors of BBVA and
has direct access to its corporate bodies (Board of Directors, CDP and CRC), with the corresponding regular reporting on the risk
situation in the Group.
The GRM area has a responsibility as the unit transversal to all the businesses of the BBVA Group. This responsibility is part of the
structure of the BBVA Group, which is formed by subsidiaries based in different jurisdictions, which have autonomy and must comply
with their local regulations, but always according to the risk management and control scheme designed by BBVA as the parent
company of the BBVA Group.
The Chief Risk Officer of the BBVA Group is responsible for ensuring that the risks of BBVA Group, within the scope of its functions,
are managed according to the established model, assuming, among other, the following responsibilities:
–Prepare, in coordination with the rest of areas responsible for risks monitoring and control, and propose to corporate bodies
the risk strategy of the BBVA Group, which includes the Risk Appetite statement of the BBVA Group, core (and their
respective statements) and by type of risk metrics, and the Model.
–Ensure the necessary coordination to define and prepare the proposals for the Appetite Framework of the Group
companies, and make sure they are applied correctly.
–Define, in coordination with the rest of areas responsible for risks monitoring and control, and propose to corporate bodies
the general policies for each type of risk within its scope of responsibility and, as part these, to establish the required
specific regulation.
–Prepare, in coordination with the rest of areas responsible for risks monitoring and control, and propose for approval, or
approving if within its competence, the risk limits for the geographical areas, business areas and/or legal entities, which
shall be consistent with the defined Risk Appetite Framework; it is also responsible for the monitoring, supervision and
control of risk limits within its scope of responsibility.
–Submit to the Risk and Compliance Committee the information required to carry out its supervisory and control functions.
–Regular reporting to the corresponding corporate bodies on the situation of those risks of the BBVA Group within its scope
of responsibility.
–Identify and assess the material risks faced by the BBVA Group within its scope of responsibility, with an effective
management of those risks and, where necessary, with the implementation of the required mitigation measures.
–Early warning to the relevant corporate bodies and the Chief Executive Officer of any material risk within its scope of
responsibility that could compromise the solvency of the BBVA Group.
–Ensure, within its scope of responsibility, the integrity of measurement techniques and management information systems
and, in general, the provision of models, tools, systems, structures and resources to implement the risk strategy defined by
the corporate bodies.
–Promote the risk culture of the BBVA Group to ensure the consistency of the Model in the different countries where it
operates, strengthening the cross-cutting model of the risks function.
For decision-making, the Group’s Chief Risk Officer has a governance structure for the role that culminates in a support forum, the
Global Risk Management Committee (GRMC), which is established as the main executive-level committee on the risks within its remit.
Its purpose is to develop the strategies, policies, regulations and infrastructures needed to identify, assess, measure and manage the
material risks within its remit that the Group faces in its business activity. This committee is composed by the Chief Risk Officer, who
chairs the meetings, and the heads of the Corporate Area of the disciplines of GRM, the “Risk Management Group”, “Strategy and
Development”, “South America and Turkey”, and “Risk Internal Control”; and by the heads of GRM in the three most important
geographical units and in CIB. The purpose of the GRMC is to propose and challenge, among other issues, the internal regulatory
framework of GRM and the infrastructures required to identify, assess, measure and manage the risks faced by the Group in carrying
out its businesses and to approve risk limits.
The GRMC carries out its functions assisted by various support committees which include:
–Global Credit Risk Management Committee: It is responsible for analyzing and decision-making related to wholesale credit
risk admission.
–Wholesale Credit Risk Management Committee: It is responsible for analyzing and making decisions related to wholesale
credit risk admission in specific customer segments of BBVA Group, as well as being informed of the relevant decisions
adopted by members of the committee within their scope of decision-making at corporate level.
43
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
–Work Out Committee: Its purpose is to be informed about decisions taken under the delegation framework regarding risk
proposals concerning clients on Watch List and clients classified as NPL or written-off of certain customer segments of
BBVA Group; and the sanction of proposals regarding entries, exits and changes of Watch List, entries and exits in non-
performing, unlikely to pay and turns to written off; as well as the approval of other proposals that must be seen in this
Committee according to the established thresholds and criteria.
–Asset Allocation Committee: The executive authority responsible for managing the limits by asset class for credit risk,
equities and real estate not for own use and by business area and at group level established in the Asset Allocation limits
planning exercise, which aims to achieve an optimal combination and composition of portfolios under the restrictions
imposed by the Risk Appetite Framework (RAF), which allows maximizing the risk- adjusted return on regulatory and
economic capital when appropriate. Additionally, it takes into account the concentration and asset quality objectives of the
portfolio, as well as the prospects and strategic needs of the Bank.
–Risk Models Management Committee: It ensures an appropriate decision-making process regarding the planning,
development, implementation, use, validation and monitoring of the models required to achieve an appropriate
management of the Model Risk in the BBVA Group.
–Global Market Risk Unit Global Committee (CGGMRU): its purpose is to formalize, supervise and communicate the trading
risk monitoring in all Global Markets business units, as well as coordinating and approving the key decisions to GMRU
activity, and preparing and proposing the corporate regulation of the unit to the GRMC.
–Retail Credit Risk Committee: it ensures for the analysis, discussion and decision support on all issues regarding the retail
credit risk management that impact or potentially do in the practices, processes and corporate metrics established in the
General Policies, Rules and Operating Frameworks.
–Asset Management Global Risk Committee: the purpose of the committee is to develop and coordinate the strategies,
policies, procedures and infrastructure necessary to identify, evaluate, measure and manage the material risks faced by the
institution in the performance of its businesses linked to BBVA Asset Management.
–Global Insurance Risk Committee: its purpose is to serve as the basis for the development of the risk management model
and the monitoring of the insurance companies of the BBVA Group by developing and coordinating the strategies, policies,
procedures and infrastructure necessary to identify, evaluate, measure, monitor and manage the material risks faced by
insurance companies.
–Products, Operations and Risks Committee (COPOR): Its purpose is the analysis and decision-making in relation to the
operations in the various geographical areas in which Global Markets is present.
Also:
–GRM Continuity Committee: this committee operates under the provisions of the Corporate Continuity Committee for the
different Areas. Its purpose is to analyze and make decisions about exceptional crisis situations, with the aim of managing
continuity and the restoration of critical GRM processes, minimizing the impact of its operations through the Continuity
Plan, which covers crisis management and Recovery Plans.
–The Corporate Committee for Admission of Operational Risk and Product Governance (CCAROyGP) aims to ensure the
adequate evaluation of initiatives with significant operational risk (new business, product, outsourcing, process
transformation, new systems, etc.) from the perspective of operational risk and approval of the proposed control
environment.
Risk units of the corporate area and the business/geographical areas
The risks function is comprised of risk units from the corporate area, which carry out cross-cutting functions, and of risk units of the
geographical/business areas.
–The risk units of the corporate area develop and submit to the Group's Chief Risk Officer the different elements required to
define the proposal for the Group's Risk Appetite Framework, the general policies, regulation and global infrastructures
within the operating framework approved by corporate bodies; they ensure their application and report directly or through
the Group's Chief Risk Officer to the corporate bodies of BBVA. With regard to non-financial risks and reputational risk,
which are entrusted to the Regulation & Internal Control and Communications & Responsible Business areas respectively,
the corporate units of GRM will coordinate, with the corresponding corporate units of those areas, the development of the
elements that should be integrated into the Appetite Framework of the Group.
–The risk units of the business and/or geographical areas develop and submit to the Chief Risk Officer of the geographical
and/or business areas the Risk Appetite Framework proposal applicable in each geographical and/or business area,
independently and always according to the Group's Risk Appetite Framework. In addition, they ensure the application of
general policies and corporate rules with the necessary adaptations, when applicable, to local requirements, providing the
appropriate infrastructures for risk management and control purposes, within the global risk infrastructure framework
defined by the corporate areas, and reporting to the corresponding corporate bodies and senior management, as
applicable. With regard to Non-financial risks, which are integrated in the Regulation & Internal Control area, the local risk
units will coordinate, with the unit responsible for those risks, the development of the elements that should be integrated
into the local Risk Appetite Framework.
Thus, the local risk units work with the risk units of the corporate area with the aim of adapting themselves to the risk strategy at
Group level and pooling all the information required to monitor the evolution of their risks.
As previously mentioned, the risks function has a decision-making process supported by a structure of committees, and also a top-
level committee, the GRMC, whose composition and functions are described in the section "Chief Risk Officer of the Group."
Each geographical and/or business area has its own risk management committee(s), with objectives and contents similar to those of
the corporate area. These committees perform their duties consistently and in line with general risk policies and corporate rules, and
its decisions are reflected in the corresponding minutes.
44
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Under this organizational scheme, the risks function ensures the integration and application throughout the Group of the risk
strategy, the regulatory framework, the infrastructures and standardized risk controls. It also benefits from the knowledge and
proximity to customers in each geographical and/or business area, and conveys the corporate risk culture to the Group's different
levels. Moreover, this organization enables the risks function to conduct and report to the corporate bodies an integrated monitoring
and control of the risks of the entire Group.
Chief Risk Officers of geographical and/or business areas
The risks function is cross-cutting, i.e. it is present in all of the Group's geographical and/or business areas through specific risk units.
Each of these units is headed by a Chief Risk Officer for the geographical and/or business area who, within the relevant scope of
responsibility, carries out risk management and control functions and is responsible for applying the Model, the general policies and
corporate rules approved at Group level in a consistent manner, adapting them if necessary to local requirements and with the
subsequent reporting to local corporate bodies.
The Chief Risk Officers of the geographical and/or business areas have functional reporting to the Group's Chief Risk Officer and
hierarchical reporting to the head of their geographical and/or business area. This dual reporting system aims to ensure the
independence of the local risks function from the operational functions and enable its alignment with the Group's general policies and
goals related to risks.
Risk Internal Control
The Group has a specific Risk Internal Control unit, within the Regulation & Internal Control area, that, among other tasks,
independently challenges and control the regulation and governance structure in terms of financial risks and its implementation and
deployment in GRM, in addition to the challenge of the development and implementation of financial risks control and management
processes. It is also responsible for the validation of risk models.
For this purpose, it has 3 subunits: RIC-Processes, Risks Technical Secretariat and Risk Internal Validation.
–RIC-Processes. It is responsible for challenging an appropriate development of the functions of GRM units, and for reviewing
that the functioning of financial risk management and control processes is appropriate and in line with the corresponding
regulation, identifying potential opportunities for improvement and contributing to the design of the action plans to be
implemented by the responsible units. In addition, it is the Risk Control Specialist (RCS) in the Group's Internal Control
Model and, therefore, establishes the frameworks for mitigating and controlling the risks for which it is responsible.
–Risks Technical Secretariat. It is responsible for the definition, design and management of the principles, policies, criteria
and processes through which the regulatory risk framework is developed, processed, reported and disclosed to the
countries; and for the coordination, monitoring and assessment of its consistency and completeness. In addition, it
coordinates the definition and structure of the most relevant GRM Committees, and monitors their proper functioning, in
order to ensure that all risk decisions are taken through an adequate governance and structure, ensuring their traceability. It
also provides to the CRC the technical support required in terms of financial risks for a better performance of its functions.
–Risk Internal Validation. It is responsible for validating the risks models. In this regard, it effectively challenges the relevant
models used to manage and control the risks faced by the Group, as an independent third party from those developing or
using the models in order to ensure its accuracy, robustness and stability. This review process is not restricted to the
approval process, or to the introduction of changes in the models; it is a plan to make a regular assessment of those models,
with the subsequent issue of recommendations and actions to mitigate identified weaknesses.
The Head of Risk Internal Control of the Group is responsible for the function and reports about his activities and work plans to the
Head of Regulation & Internal Control and to the CRC, with the corresponding support in the issues required, and, in particular,
challenging that GRM's reports submitted to the Committee are aligned with the criteria established at the time.
In addition, the risk internal control function is global and transversal, it includes all types of financial risks and has specific units in all
geographical and/or business areas, with functional reporting to the Head of Risk Internal Control of the Group.
The Risk Internal Control function must ensure compliance with the general risks strategy defined by the Board of Directors, with
adequate proportionality and continuity. In order to comply with the control activity within its scope. Risk Internal Control is member
of GRM's top-level committees (sometimes even assuming the Secretariat role), independently verifying the decisions that may be
taken and, specifically, the decisions related to the definition and application of internal risk regulation.
Furthermore, the control activity is developed within a homogeneous methodological framework at a Group level, covering the entire
life cycle of financial risk management and carried out under a critical and analytical approach.
The Risk Internal Control team reports the results of its control function to the corresponding heads and teams, promoting the
implementation of corrective measures and submitting these assessments and the resolution commitments in a transparent manner
to the established levels.
Lastly, and notwithstanding the control responsibility that GRM teams have in the first instance, Risk Internal Control teams promote
a control culture in GRM, conveying the importance of having robust processes.
45
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Risk appetite framework
Elements and development
The Group's Risk Appetite Framework approved by the corporate bodies determines the risks and the risk level that the Group is
willing to assume to achieve its business objectives considering the organic evolution of business. These are expressed in terms of
solvency, liquidity and funding, and profitability, as well as recurrence of revenue, which are reviewed not only periodically but also if
there are any substantial changes in the business strategy or relevant corporate transactions.
The Risk Appetite Framework is expressed through the following elements:
–Risk appetite statement: sets out the general principles of the Group's risk strategy and the target risk profile:
"The BBVA Group develops a multichannel and responsible universal banking business model, based on values, committed
to sustainable development and centred on our customers' needs, focusing on operational excellence and the preservation
of adequate security and business continuity.
BBVA intends to achieve these goals while maintaining a moderate risk profile, so the risk model established aims at
ensuring a robust financial position, facilitating its commitment with sustainability and obtaining a sound risk- adjusted
profitability throughout the cycle, as the best way to face adverse environments without jeopardizing its strategies.
BBVA Group's risk management is based on prudent management, and a comprehensive and prospective vision of all risks,
to allow us to adapt to the disruptive risks inherent in the banking business. It includes the climate factor, a diversification of
portfolios by geographies, asset classes and customer segments, prevention of money laundering and terrorist financing,
and the maintenance of a long-term relationship with customers, supporting them in the transition to a sustainable future,
to promote profitable growth and recurring generation of value."
–Statements and core metrics: Statements are established, based on the risk appetite statement, specifying the general
principles of risk management in terms of solvency, liquidity and funding, profitability and income recurrence. Moreover, the
core metrics reflect, in quantitative terms, the principles and the target risk profile set out in the Risk Appetite statement.
Each core metric has three thresholds ranging from usual management of the businesses to higher levels of impairment:
◦Management benchmark: a benchmark that determines a comfortable management level for the Group.
◦Maximum appetite: the maximum level of risk that the Group is willing to accept in its ordinary activity.
◦Maximum capacity: the maximum risk level that the Group could assume, which for some metrics is associated
with regulatory requirements.
–Metrics by type of risk: based on the core metrics and their thresholds, a number of metrics are determined for each type of
risk, whose observance enables compliance with the core metrics and the Group's Risk Appetite statement. These metrics
have a maximum risk appetite threshold.
In addition to this Framework, statements are established that include the general principles for each risk type, as well as a level of
management limits that is defined and managed by the areas responsible for the management of each type of risk in the development
of the structure of metrics by type of risk, in order to ensure that the early management of risks complies with that structure and, in
general, with the established Risk Appetite Framework.
Each significant geographical area (that is, those representing more than 1% of the assets or operating income of the BBVA Group)
has its own Risk Appetite framework, consisting of its local Risk Appetite statement, core statements and metrics, and metrics by
type of risk, which must be consistent with those set at the Group level, but adapted to their own reality. These are approved by the
corresponding corporate bodies of each entity. This Appetite Framework is supplemented by statements for each risk type and has a
limit structure in line and consistent with the above.
The corporate risks area works with the various geographical and/or business areas to define their Risk Appetite Framework, so that
it is coordinated with, and integrated into, the Group's Risk Appetite Framework, making sure that its profile is in line with the one
defined. Moreover, and for the purposes of monitoring at local level, the Chief Risks Officer of the geographical and/or business area
regularly reports on the evolution of the metrics of the Local Risk Appetite Framework to the corporate bodies, as well as to the
relevant top-level local committees, following a scheme similar to that of the Group, in accordance with its own corporate governance
systems.
Within the issuing process of the Risk Appetite Framework, Risk Internal Control carries out, within the scope of the GRM area the
effective challenge of the Framework proposal prior to its escalation to corporate bodies, which is also documented, and it is extended
to the approval of the management limits under which it is developed, also supervising its adequate approval and extension to the
different entities of the Group. Likewise, in each significant geographical area, the local Risk Internal Control unit, working in the Risk
Management Committee (hereinafter, RMC), carries out an effective challenge of the local Risk Appetite Framework prior to its
escalation to local corporate bodies, which is also documented, and extended to the local approval process of the management limits.
Monitoring of the Risk Appetite Framework and management of breaches
So that corporate bodies can develop the risk functions of the Group, the heads of risks at an executive level will regularly report
(more frequently in the case of the CRC, within its scope of responsibility) on the evolution of the metrics of the Risk Appetite
Framework of the Group, with the sufficient granularity and detail, in order to check the degree of compliance of the risks strategy set
out in the Risk Appetite Framework of the Group approved by the Board of Directors.
46
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
If, through the monitoring of the metrics and supervision of the Risk Appetite Framework by the executive areas, a relevant deviation
or breach of the maximum appetite levels of the metrics is identified, that situation must be reported and, where applicable, the
corresponding corrective measures must be submitted to the CRC.
After the relevant review by the CRC, the deviation must be reported to the CDP (as part of its role in the monitoring of the evolution of
the risk profile of the Group) and to the Board of Directors, which will be responsible, when applicable, for implementing the
corresponding executive measures, including the modification of any metric of the Risk Appetite Framework. For this purpose, the
CRC will submit to the corresponding corporate bodies all the information received and the proposals prepared by the executive
areas, together with its own analysis.
Notwithstanding the foregoing, once the information has been analyzed and the proposal of corrective measures has been reviewed
by the CRC, the CDP may adopt, on grounds of urgency and under the terms established by law, measures corresponding the Board
of Directors, but always reporting those measures to the Board of Directors in the first meeting held after the implementation for
ratification purposes.
In any case, an appropriate monitoring process will be established (with a greater information frequency and granularity, if required)
regarding the evolution of the breached or deviated metric, and the implementation of the corrective measures, until it has been
completely redressed, with the corresponding reporting to corporate bodies, in accordance with its risks monitoring, supervision and
control functions.
Integration of the Risk Appetite Framework into the management
The transfer of the Risk Appetite Framework to ordinary management is underpinned by three basic elements:
1.The existence of a standardized set of regulations: the corporate risks area defines and proposes the general policies within
its scope of action, and develops the additional internal regulation required for the development of those policies and the
operating frameworks on the basis of which risk decisions must be adopted within the Group. The approval of the general
policies for all types of risks is a responsibility of the corporate bodies of BBVA, while the rest of regulation is defined at an
executive level according to the framework of competences applicable at any given time. The Risks units of the geographical
and/or business areas comply with this regulation and performing, where necessary, the relevant adaptation to local
requirements, in order to have a decision-making process that is appropriate at local level and aligned with the Group's
policies.
2.Risk planning, which ensures the integration into the management of the Risk Appetite Framework through a cascade
process established to set limits adjusted to the target risk profile. The Risks units of the corporate area and of the
geographical and/or business areas are responsible for ensuring the alignment of this process with the Group's Risk
Appetite Framework in terms of solvency, liquidity and funding, profitability, and recurrence of earnings.
3.A comprehensive management of risks during their life cycle, based on differentiated treatment according to their type.
Assessment, monitoring and reporting
Assessment, monitoring and reporting is a cross-cutting function at Group level. This function ensures that the model has a dynamic
and proactive vision to enable compliance with the Risk Appetite Framework approved by the Board of Directors, even in adverse
scenarios.
This process is integrated in the activity of the Risk units, both of the corporate area and in the geographical and/or business units,
together with the units specialized in non-financial risks and reputational risk within the Regulation & Internal Control and
Communications & Responsible Business areas respectively, in order to generate a comprehensive and single view of the risk profile
of the Group.
This process is developed through the following phases:
1.Monitoring of the identified risk factors that can compromise the performance of the Group or of the geographical and/or
business areas in relation to the defined risk thresholds.
2.Assessment of the impact of the materialization of the risk factors on the metrics that define the Risk Appetite Framework
based on different scenarios, including stress testing scenarios (EU-wide stress testing).
3.Response to unwanted situations and proposals for redressing measures to the corresponding levels, in order to enable a
dynamic management of the situation, even before it takes place.
4.Monitoring the Group's risk profile and the identified risk factors, through internal, competitor and market indicators,
among others, to anticipate their future development.
5.Reporting: complete and reliable information on the evolution of risks to corporate bodies and senior management, in
accordance with the principles of accuracy, exhaustiveness, clarity and utility, frequency, and adequate distribution and
confidentiality. The principle of transparency governs all the risk information reporting process.
47
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Infrastructure
For the implementation of the Model, the Group has the resources required for an effective management and supervision of risks and
for achieving its goals. In this regard, the Group's risks function:
1.Has the appropriate human resources in terms of number, ability, knowledge and experience. The profile of resources will
evolve over time based on the specific needs of the GRM and Regulation & Internal Control areas, always with a high
analytical and quantitative capacity as the main feature in the profile of those resources. Likewise, the corresponding units
of the geographical and/or business areas have sufficient means from the resources, structures and tools perspective in
order to achieve a risk management process aligned with the corporate model.
2.Develops the appropriate methodologies and models for the measurement and management of the different risk profiles,
and the assessment of the capital required to take those risks.
3.Has the technological systems required to: support the Risk Appetite Framework in its broadest definition; calculate and
measure the variables and specific data of the risk function; support risk management according to this Model; and provide
an environment for storing and using the data required for risk management purposes and reporting to supervisory bodies.
4.Promotes adequate data governance, in accordance with the principles of governance, infrastructure, precision and
integrity, completeness, promptness and adaptability, following the quality standards of the internal regulations referring to
this matter.
Within the risk functions, both the profiles and the infrastructure and data shall have a global and consistent approach.
The human resources among the countries must be equivalent, ensuring a consistent operation of the risk function within the Group.
However, they will be distinguished from those of the corporate area, as the latter will be more focused on the conceptualization of
appetite frameworks, operating frameworks, the definition of the regulatory framework and the development of models, among other
tasks.
As in the case of the human resources, technological platforms must be global, thus enabling the implementation of the Risk Appetite
Framework and the standardized management of the risk life cycle in all countries.
The corporate area is responsible for deciding on the platforms and for defining the knowledge and roles of the human resources. It is
also responsible for defining risk data governance.
The foregoing is reported to the corporate bodies of BBVA so they can ensure that the Group has the appropriate means, systems,
structures and resources.
3.2 Risks associated with climate change
The information on the management of risks associated with climate change required by Law 7/2021, of May 20, on climate change
and energy transition, is described in the chapter "Report on climate change and other environmental and social issues” of this report.
3.3 Operational Risk
BBVA defines operational risk (“OR”) as any risk that could result in losses caused by human error; inadequate or flawed internal
processes; undue conduct with respect to customers, markets or the institution; antimoney laundering and financing of terrorist
activities; failures, interruptions or flaws in systems or communications; theft, loss or wrong use of information, as well as
deterioration of its quality, internal or external fraud, including in any case those derived from cyberattacks; theft or harm to assets or
persons; legal risks; risks derived from staff management and labor health; and defective service provided by suppliers; as well as
damages from extreme climate events, pandemics and other natural disasters.
Operational risk management is oriented towards the identification of the root causes to avoid their occurrence and mitigate possible
consequences. This is carried out through the establishment of control framework and monitoring and the development of mitigation
plans aimed at minimizing resulting economic and reputational losses and their impact on the recurrent generation of results, and
contributing the increase the quality, safety and availability of the provided service. Operational risk management is integrated into
the global risk management structure of the BBVA Group.
This section addresses general aspects of operational risk management as the main component of non-financial risks. However,
sections devoted to conduct and compliance risk and to cybersecurity risk management are also included in the non-financial
information report.
Operational risk management principles
The BBVA Group is committed to preferably applying advanced operational risk management models, regardless of the capital
calculation regulatory model applicable at the time. Operational risk management at the BBVA Group shall:
– Be aligned with the Risk Appetite Framework ratified by the BBVA Board of Directors.
–Address BBVA's management needs in terms of compliance with legislation, regulations and industry standards, as well as
the decisions or positioning of BBVA's corporate bodies.
48
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
–Anticipate the potential operational risk to which the Group may be exposed as a result of the creation or modification of
products, activities, processes or systems, as well as decisions regarding the outsourcing or hiring of services, and establish
mechanisms to assess and mitigate risk to a reasonable extent prior to implementation, as well as review the same on a
regular basis.
–Establish methodologies and procedures to enable regular reassessment of the significant operational risk to which the
Group is exposed, in order to adopt appropriate mitigation measures in each case, once the identified risk and the cost of
mitigation (cost/benefit analysis) have been considered, while safeguarding the Group's solvency at all times.
–Promote the implementation of mechanisms that support careful monitoring of all sources of operational risk and the
effectiveness of mitigation and control environments, fostering proactive risk management.
–Examine the causes of any operational events suffered by the Group and establish means to prevent the same, provided
that the cost/benefit analysis so recommends. To this end, procedures must be in place to evaluate operational events and
mechanisms and to record the operational losses that may be caused by the same.
–Evaluate key public events that have generated operational risk losses at other institutions in the financial sector and
support, where appropriate, the implementation of measures as required to prevent them from occurring at the Group.
–Identify, analyze and attempt to quantify events with a low probability of occurrence and a high impact, which by their
exceptional nature may not be included in the loss database; or if they are, feature with impacts that are not very
representative for the purpose of valuing possible mitigation measures.
–Have an effective system of governance in place, where the functions and responsibilities of the corporate areas and bodies
involved in operational risk management are clearly defined.
–Operational risk management must be performed in coordination with management of other risk, taking into consideration
credit or market events that may have an operational origin.
Operational risk control and management model
The operational risk management cycle at BBVA is similar to the one implemented for the rest of risks. Its elements are:
Operational risk management parameters
Operational risk forms part of the risk appetite framework of the Group and includes three types of metrics and limits:
–Economic capital calculated with the operational losses database of the Group, considering the corresponding
diversification effects and the additional estimation of potential and emerging risks through stress scenarios designed for
the main types of risks. The economic capital is regularly calculated for the main banks of the Group and simulation
capabilities are available to anticipate the impact of changes on the risk profile or new potential events.
–ORI metrics (Operational Risk Indicator: operational risk losses vs. gross income) broken down by geography, business area
and type of risk.
–Indicators by risk type: a more granular common scheme of metrics (indicators and limits) covering the main types of
operational risk is being implemented throughout the Group. These metrics make it possible to intensify the anticipatory
management of risk and objectify the appetite to different sources. These indicators are regularly reviewed and adjusted to
fix the main risks in force at any time.
Operational risk admission
The main purposes of the operational risk admission phase are the following:
–To anticipate potential operational risk to which the Group may be exposed due to the release of new, or modification of
existing, products, activities, processes or systems, as well as purchasing decisions (e.g. outsourcing).
–To ensure that implementation and the roll out of initiatives is only performed once appropriate mitigation measures have
been taken in each case, including external assurance of risks where deemed appropriate.
The Corporate Non-Financial Risk Management Policy sets out the specific operational risk admission framework through different
committees, both at a corporate and Business Area level, that follow a delegation structure based on the risk level of proposed
initiatives.
Operational risk monitoring
The purpose of this phase is to check that the target operational risk profile of the Group is within the authorized limits. Operational
risk monitoring considers 2 scopes:
–Monitoring the operational risk admission process, oriented towards checking that accepted risks levels are within the limits
and that defined controls are effective.
–Monitoring the operational risk "stock" mainly associated with processes. This is done by carrying out a periodic re-
evaluation in order to generate and maintain an updated map of the relevant operational risks in each Area, and evaluate the
adequacy of the monitoring and mitigation environment for said risks. This promotes the implementation of action plans to
redirect the weaknesses detected.
This process is supported by a corporate Governance, Risk & Compliance tool that monitors the operational risk at a local level and its
aggregation at a corporate level.
49
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
In addition, and in line with the best practices and recommendations provided by the Bank for International Settlements (hereinafter,
BIS), BBVA has procedures to collect the operational losses occurred both in the different entities of the Group and in other financial
groups, with the appropriate level of detail to carry out an effective analysis that provides useful information for management
purposes and to contrast the consistency of the Group's operational risks map. To that end, a corporate tool of the Group is used.
The Group ensures continuous monitoring by each Area of the due functioning and effectiveness of the control environment, taking
into consideration management indicators established for the Area, any events and losses that have occurred, as well as the results of
actions taken by the second line of defense, the internal audit unit, supervisors or external auditors.
Operational risk mitigation
The Group promotes the proactive mitigation of the financial risks to which it is exposed and which are identified in the monitoring
activities.
In order to rollout common monitoring and anticipated mitigation practices throughout the Group, several cross-sectional plans are
being promoted related to focuses from events, lived by the Group or by the industry, self-assessments and recommendations from
auditors and supervisors in different geographies, thereby analyzing the best practices at these levels and fostering comprehensive
action plans to strengthen and standardize the control environment.
Insurance of Operational Risk
Assurance is one of the possible options for managing the operational risk to which the Group is exposed, and mainly has two
potential purposes:
–Coverage of extreme situations linked to recurrent events that are difficult to mitigate or can only be partially mitigated by
other means.
–Coverage of non-recurrent events that could have significant financial impact, if they occurred.
The Group has a general framework that regulates this area, and allows systematizing risk assurance decisions, aligning insurance
coverage with the risks to which the Group is exposed and reinforcing governance in the decision-making process of arranging
insurance policies.
Operational Risk Control Model
BBVA Group's operational risk governance model is based on two components:
–Three-line defense control model, in line with industry best practices, and which guarantees compliance with the most
advanced operational risk internal control standards.
–Scheme of Corporate Assurance Committees and Internal Control and Operational Risk Committees at the level of the
different business and support areas.
Corporate Assurance establishes a structure of committees, both at local and corporate level, to provide senior management with a
comprehensive and homogeneous vision of the main non-financial risks and significant situations of the control environment. The aim
is to support rapid decision-making with foresight, for the mitigation or assumption of the main risks.
Each geography has a Corporate Assurance Committee chaired by the Country Manager and whose main functions are:
–Monitoring the changes in the non-financial risks and their alignment with the defined strategies and policies and the risk
appetite.
–Analyzing and assessing controls and measures established to mitigate the impact of the risks identified, should they
materialize.
–Making decisions about the proposals for risk taking that are conveyed by the working groups or that arise in the Committee
itself
–Promoting transparency by promoting the proactive participation of the three lines of defense in discharging their
responsibilities and the rest of the organization in this area
50
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
At the holding level there is a Global Corporate Assurance Committee, chaired by the Group's Chief Executive Officer. Its main
functions are similar to those already described but applicable to the most important issues that are escalated from the geographies
and the holding company areas.
The business and support areas have an Internal Control and Operational Risk Committee, whose purpose is to ensure the due
implementation of the operational risk management model within its scope of action and drive active management of such risk, taking
mitigation decisions when control weaknesses are identified and monitoring the same.
Additionally, the Non-Financial Risk unit periodically reports the status of the management of non-financial risks in the Group to the
Board's Risk and Compliance Committee.
3.4 Reputational risk
Reputational risk assessment
Since 2016, BBVA disposes of a reputational risk assessment methodology. Through this methodology, the Bank defines and reviews
regularly a map in which it prioritizes the reputational risks which have to be faced and the set of action plans to mitigate them. The
prioritization is done based on two variables: the impact on the perception of the stakeholders and the strength of BBVA facing the
risk.
This exercise is performed annually in all countries where the Group has bank entities. Following the result of the assessment carried
out in 2020, 17 mitigation action plans have been conducted during 2021.
Identification of the Reputational Risk
The Responsible Business teams collaborate, together with the rest of the members of BBVA’s second defense line, in the different
Committees of Admission of the Operational Risk, both at Group and the different geographical areas level. Those Committees
perform the initial identification of potential reputational risks, and, where appropriate, an assessment of the foreseeable impact on
BBVA’s reputation,
Reporting of the Reputational Risk
The results of the annual assessment of the Reputational Risk are reported in each geographical area at the appropriate governance
level. At Group level, these results are reported to the Global Corporate Assurance Committee and, since 2020, to the Board’s
Executive Committee.
3.5 Risk factors
BBVA has processes in place for identifying risks and analyzing scenarios in order to enable to manage risks in a dynamic and
proactive way.
The risk identification processes are forward looking to seek the identification of emerging risks and take into account the concerns of
both the business areas, which are close to the reality of the different geographical areas, and the corporate areas and senior
management.
Risks are identified and measured consistently using the methodologies deemed appropriate in each case. Their measurement
includes the design and application of scenario analyzes and stress testing and considers the controls to which the risks are
subjected.
As part of this process, a forward projection of the Risk Appetite Framework (RAF) variables in stress scenarios is conducted in order
to identify possible deviations from the established thresholds. If any such deviations are detected, appropriate measures are taken to
keep the variables within the target risk profile.
In this context, there are a number of emerging risks that could affect the evolution of the Bank's business. These risks are included in
the following blocks:
Risk associated with the COVID-19 pandemic
The COVID-19 (coronavirus) pandemic has adversely affected the world economy, and economic activity and conditions in the
countries in which the Group operates. Despite the gradual improvement experienced in 2021 driven by the increase in the rate of
vaccination, new waves of contagion continue to be a source of concern and the emergence of new strains remains a risk. Among
other challenges, these countries are still dealing with high unemployment levels, weak activity, supply disruptions and increasing
inflationary pressures, while public debt has increased significantly due to the support and spending measures implemented by the
government authorities. Furthermore, there has been an increase in loan losses from both companies and individuals, which has so
far been slowed down by the impact of government support measures, including bank payment deferrals, credit with public guarantee
and direct aid measures. Likewise, volatility in the financial markets has affected exchange rates - mainly in emerging economies- and
the value of assets and investments, which has adversely affected the Group's results in the past, and could do so again. There are still
uncertainties about the final future impact of the COVID-19 pandemic, mainly if there is an increase in infections caused by the new
51
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
variants of the coronavirus.
Furthermore, the Group has been and may be affected during the following quarters or years by the measures or recommendations
adopted by regulatory authorities in the banking sector, such as variations in reference interest rates, the modification of prudential
requirements, the temporary suspension of dividend payments, the modification of the deferral of monthly installments for certain
loans and the granting of guarantees or public guarantees to new credit operations for companies and self-employed persons, the
adoption of further similar measures or the termination of those already approved, as well as any changes in financial assets purchase
programs by the ECB.
Since the outbreak of the pandemic, the Group has experienced a decline in its activity. For example, the granting of new loans to
individuals has generally decreased. In addition, the Group faces various risks, such as an increased risk of volatility in the value of its
assets (including financial instruments valued at fair value, which may suffer significant fluctuations) and of the securities held for
liquidity reasons, a possible increase in the NPL ratio and risk-weighted assets, as well as a negative impact on the Group's cost of
financing and on its access to financing (especially in an environment where credit ratings are affected). Following the generalized
lifting of mobility restrictions and the increasing resumption of normal operations, greater emphasis is being placed on the particular
circumstances of each customer, in addition to its respective industry or sector.
Furthermore, the pandemic could continue to adversely affect the business and transactions of third parties that provide critical
services to the Group and, in particular, the higher demand and/or the lower availability of certain resources could, in some cases,
make it more difficult for the Group to maintain the required service levels. In addition, the widespread use of remote work has
increased the risks related to cybersecurity, as the use of non-corporate networks has increased.
In summary, while the COVID-19 pandemic had adverse effects on the Group's results and capital base during 2020, these were
mitigated throughout 2021, with improvements in the global economic background leading to a strong improvement in 2021 results
Macroeconomic and geopolitical risks
In 2021 the global economy has grown significantly, recovering in part from the crisis caused by the pandemic, which caused a sharp
fall in global GDP in 2020. The significant upturn in global growth has been due to progress in the vaccination against COVID-19 and
important economic stimuli adopted by public authorities.
Activity indicators show, however, that the economic recovery process has lost momentum in recent months. The recent slowdown in
economic growth is taking place in an environment marked by a sharp increase in infections caused by new variants of the COVID-19,
although the increasing immunization of the world population has helped to generally prevent the adoption of mobility restrictions,
which would have had a greater impact on the economy.
The effects of reduced production due to the pandemic and its persistence, coupled with fiscal stimuli and strong demand for goods,
once restrictions have been lifted, contribute to maintaining the problems in global supply chains observed since the beginning of
2021 which, in addition to negatively affecting economic activity, generate significant upward pressure on prices.
Against this backdrop, annual inflation in December 2021 stood at 7.0% in the United States and 5.0% in the Eurozone. In both
geographical areas, long-term inflation expectations from markets and surveys have been adjusted upwards, although in the case of
the Eurozone they remain generally below the European Central Bank’s 2% target.
High inflation rates and their increased persistence have put pressure on central banks to withdraw monetary stimuli earlier than they
had originally anticipated. The United States Federal Reserve, in particular, has begun the rollback in its bond-buying program and has
suggested that monetary policy interest rates will adjust upwards earlier and faster than expected by financial markets and financial
analysts, and also that a downsizing of its balance sheet may soon begin. In the Eurozone, the ECB will complete the pandemic
emergency purchase program (PEPP) in March 2022. Although the asset purchase program (APP) is maintained, asset purchases
will be moderated over the course of 2022. However, unlike the Federal Reserve, the ECB has continued to maintain that it rules out
an increase in benchmark interest rates in 2022.
According to BBVA Research, the global economic recovery process is expected to continue in the coming months, albeit at a slightly
slower pace than expected in autumn of 2021, due to the persistence of the pandemic, but also due to a higher-than-estimated impact
of supply chain problems and inflationary pressures. All this against a background of reduced fiscal and monetary stimulus. GDP
growth would therefore moderate, from an estimated 5.6% in 2021 to about 4.2% in 2022 in the United States, from 5.1% in 2021 to
3.7% in 2022 in the Eurozone and from 8.0% in 2021 to 5.2% in 2022 in China. The likely rise in monetary policy interest rates in the
United States, which could reach 1.25% by the end of 2022, as well as a progressive control of the pandemic and a moderation of
supply chain problems, would allow inflation to be moderated throughout the year; although inflation is expected to remain high,
particularly in the United States. Risks arising from this economic scenario expected by BBVA Research are significant and are biased
downwards in the case of activity, and include more persistent inflation, financial turbulence caused by a more aggressive withdrawal
of monetary stimuli, the emergence of new variants of the coronavirus that bypass current vaccines, a more intense slowdown in the
Chinese economy, as well as social and geopolitical tensions. Likewise, the countries in which the Group operates face various
idiosyncratic risks, beyond those related to the global environment.
52
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Regulatory and reputational risks
Financial institutions are exposed to a complex and ever-changing regulatory environment defined by governments and regulators.
This can affect their ability to grow and the capacity of certain businesses to develop, and result in stricter liquidity and capital
requirements with lower profitability ratios. The Group constantly monitors changes in the regulatory framework that allow for
anticipation and adaptation to them in a timely manner, adopt industry practices and more efficient and rigorous criteria in its
implementation.
The financial sector is under ever closer scrutiny by regulators, governments and society itself. In the course of activities, situations
which might cause relevant reputational damage to the entity could raise and might affect the regular course of business. The
attitudes and behaviors of the Group and its members are governed by the principles of integrity, honesty, long-term vision and
industry practices through, inter alia, the internal control model, the Code of Conduct, the Corporate Principles in tax matters and
Responsible Business Strategy of the Group.
Business, operational and legal risks
New technologies and forms of customer relationships: Developments in the digital world and in information technologies pose
significant challenges for financial institutions, entailing threats (new competitors, disintermediation, etc.) but also opportunities (new
framework of relations with customers, greater ability to adapt to their needs, new products and distribution channels, etc.). Digital
transformation is a priority for the Group as it aims to lead digital banking of the future as one of its objectives.
Technological risks and security breaches: The Group is exposed to new threats such as cyber-attacks, theft of internal and customer
databases, fraud in payment systems, etc. that require major investments in security from both the technological and human point of
view. The Group gives great importance to the active operational and technological risk management and control.
Regarding legal risks, the financial sector faces an environment of increasing regulatory and litigious pressure, and thus, the various
Group entities are usually party to individual or collective judicial proceedings (including class actions) resulting from their activity and
operations, as well as arbitration proceedings. The Group is also party to other government procedures and investigations, such as
those carried out by the antitrust authorities in certain countries which, among other things, have in the past and could in the future
result in sanctions, as well as lead to claims by customers and others. In addition, the regulatory framework, in the jurisdictions in
which the Group operates, is evolving towards a supervisory approach more focused on the opening of sanctioning proceedings while
some regulators are focusing their attention on consumer protection and behavioral risk.
In Spain and in other jurisdictions where the Group operates, legal and regulatory actions and proceedings against financial
institutions, prompted in part by certain judgments in favor of consumers handed down by national and supranational courts (with
regards to matters such as credit cards and mortgage loans), have increased significantly in recent years and this trend could
continue in the future. The legal and regulatory actions and proceedings faced by other financial institutions in relation to these and
other matters, especially if such actions or proceedings result in favorable resolutions for the consumer, could also adversely affect
the Group.
All of the above may result in a significant increase in operating and compliance costs or even a reduction of revenues, and it is
possible that an adverse outcome in any proceedings (depending on the amount thereof, the penalties imposed or the procedural or
management costs for the Group) could damage the Group's reputation, generate a knock-on effect or otherwise adversely affect the
Group.
It is difficult to predict the outcome of legal and regulatory actions and proceedings, both those to which the Group is currently
exposed and those that may arise in the future, including actions and proceedings relating to former Group subsidiaries or in respect
of which the Group may have indemnification obligations. Any of such outcomes could be significantly adverse to the Group. In
addition, a decision in any matter, whether against the Group or against another credit entity facing similar claims as those faced by
the Group, could give rise to other claims against the Group. In addition, these actions and proceedings attract resources from the
Group and may occupy a great deal of attention on part of the Group's management and employees.
As of December 31, 2021, the Group had €623 million in provisions for the proceedings it is facing (included in the line "Provisions for
litigation and pending tax cases" in the consolidated balance sheet) (see Note 24), of which €533 million correspond to legal
contingencies and €90 million to tax related matters. However, the uncertainty arising from these proceedings (including those for
which no provisions have been made, either because it is not possible to estimate them or for other reasons) makes it impossible to
guarantee that the possible losses arising from these proceedings will not exceed, where applicable, the amounts that the Group
currently has provisioned and, therefore, could affect the Group's consolidated results in a given period.
As a result of the above, legal and regulatory actions and proceedings currently faced by the Group or to which it may become subject
in the future or otherwise affected by, individually or in the aggregate, if resolved in whole or in part adversely to the Group's interests,
could have a material adverse effect on the Group’s business, financial condition and results of operations.
53
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Spanish judicial authorities are investigating the activities of Centro Exclusivo de Negocios y Transacciones, S.L. (Cenyt). Such
investigation includes the provision of services by Cenyt to the Bank. On 29th July, 2019, the Bank was named as an investigated
party (investigado) in a criminal judicial investigation (Preliminary Proceeding No. 96/2017 – Piece No. 9, Central Investigating Court
No. 6 of the National High Court) for alleged facts which could be constitutive of bribery, revelation of secrets and corruption. On
February 3, 2020, the Bank was notified by the Central Investigating Court No. 6 of the National High Court of the order lifting the
secrecy of the proceedings. Certain current and former officers and employees of the Group, as well as former directors have also
been named as investigated parties in connection with this investigation. The Bank has been and continues to be proactively
collaborating with the Spanish judicial authorities, including sharing with the courts the relevant information obtained in the internal
investigation hired by the entity in 2019 to contribute to the clarification of the facts. As of the date of the approval of the Consolidated
Financial Statements, no formal accusation against the Bank has been made.
This criminal judicial proceeding is at the pre-trial phase. Therefore, it is not possible at this time to predict the scope or duration of 
such proceeding or any related proceeding or its or their possible outcomes or implications for the Group, including any fines,
damages or harm to the Group’s reputation caused thereby.
54
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
4. Financial information
4.1 Balance sheet, business activity and earnings
The financial information included in this Management report has been prepared from the individual accounting and management
records of Banco Bilbao Vizcaya Argentaria, S.A. and with the criteria established by the Bank of Spain Circular 4/2017, on Public and
Confidential Financial Reporting Rules and Formats for Financial Statements, and its subsequent amendments.
The key figures in the Bank’s balance sheet and income statement related to its main activity are as follows:
As of December 31, 2021, the Bank’s total assets showed increased significantly to €442,279m compared to €443,032m as of
December 2020, mainly due to a decrease in “Cash, cash balances at central banks and other demand deposits” (€38,821m as of
December 31, 2021 vs. €44,107m as of the same date of the prior year) and “Financial assets at fair value through other
comprehensive income” (€28,205m at the end of 2021 compared to €37,528m), and “Non-current assets and disposal groups
classified as held for sale” (€885m as of December 31, 2021 compared to €9,978m as of the same date of the prior year). Meanwhile,
“Financial assets held For trading” and “Financial assets at amortized cost” amounts increased with respect to the previous year. On
the other hand, Total liabilities remained stable, where an increase in the heading “”Financial liabilities held for trading (€77,859m as
of December 31, 2021 compared to €67,135m as of December 31, 2020) was offset by the decrease in “Financial liabilities at
amortized cost”, €321,848m as of December 31, 2021 compared to €331,189m as of the same date of the prior year.
Net interest income has slightly decreased slightly during the fiscal year from €3,514m at December 31, 2020 to €3,428m at
December 31, 2021, mainly as a result of the lower interest rate environment on the investment portfolio and to the lower contribution
of the ALCO portfolio, partially offset by lower funding costs. Gross income in fiscal year 2021 stood at €7,470m, compared to the
€6,637m obtained in 2020, as a result of the positive evolution of net fees and commissions and accrued dividends. Compared to
previous years,  administrative expense remained stable (€3,553m in fiscal year 2020 and €3,693m in 2021). Impairment on financial
assets was reduced to €757m, mainly as a result of the negative impact of the deterioration in the macroeconomic scenario due to
COVID-19, after its outbreak in March 2020, as well as to the improvement of the macroeconomic environment in 2021. As a result
thereof, in the financial year 2021, the Bank obtained an before-tax profit from continuing activities of €746m (compared to €249m in
2020). After the 2020 reclassification of the balances under the headings “Dividend income” and “Impairment or reversal of
impairment of investments in subsidiaries, joint ventures or associates”, net of their corresponding tax effects which corresponded to
the companies for sale that were reclassified to the heading “Profit (loss) after tax from discounted operations” of the accompanying
income statement, the Bank recorded a negative result for the year 2020 of €-2,182m. As a result of the Sale of BBVA’s U.S.
subsidiary, the Bank recorded a positive result of €1,080m in 2021.
4.2 Capital, treasury stock, solvency and capital ratios
Capital and treasury stock
Information about common stock and transactions with treasury stock is detailed in Notes 23 and 26 of the accompanying Financial
Statements.
Share buyback program
On October 26, 2021, BBVA obtained the pertinent authorization from the European Central Bank to buy back up to 10% of its share
capital for a maximum of €3.5 billion, in one or several tranches and over the course of a 12-month period (the “Authorization”).
Upon receiving the authorization and making use of the delegation conferred by the BBVA Annual General Meeting held on March 16,
2018, at its meeting of October 28, 2021, BBVA Board of Directors resolved to carry out a framework share buyback program in
compliance with Regulation (EU) no. 596/2014 of the European Parliament and the Council of April 16, 2014 on market abuse and
Delegate Regulation (EU) no. 2016/1052 of the Commission, of March 8, 2016, to be executed in various tranches up to a maximum of
€3.5 billion, with the aim of reducing BBVA's share capital (the “Framework Program”), notwithstanding the possibility of terminating
or cancelling the Framework Program at an earlier date where advisable due to the concurrence of a series of specific circumstances,
as well as to carry out a first share buyback program within the Framework Program (the "First Tranche"), which was notified as
Privileged Information on October 29, 2021.
On November 19, BBVA notified by means of Privileged Information that the First Tranche would be executed externally through J.P.
Morgan AG as manager, for a maximum amount of €1,500 million, for the purchase of a maximum number of shares of 637,770,016
representing, approximately, 9.6% of BBVA's share capital as of the date of the agreement, and that the first program would begin on
November 22, 2021, and that it would conclude not earlier than November 22, 2021 or later than April 5, 2022, and, in any case,
whenever, within said timeframe the maximum monetary amount is reached, or the maximum number of shares is purchased.
Between November 22 and December 31, 2021, J.P. Morgan AG, as manager of the First Tranche, acquired 112,254,236 BBVA shares 
(see Note 29). Between January 1 and February 3, 2022, J.P. Morgan AG has acquired 65,272,189 BBVA shares.
On February 3, 2022, BBVA announced that its Board of Directors agreed, within the Framework Program, to carry out a second
buyback program (the “Second Tranche”) aimed at reducing BBVA’s share capital, for a maximum amount of €2,000 million and a
maximum number of shares to be acquired equal to the result of subtracting from 637,770,016 own shares (9.6% of BBVA’s share
capital at that date) the number of own shares finally acquired in execution of the First Tranche. The implementation of the Second
55
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Tranche, which will also be executed externally through a lead-manager, will begin after the end of the implementation of the First
Tranche and shall end no later than October 15, 2022. (see Note 51)
Amendment of Shareholder Remuneration Policy
On November 18, 2021, BBVA announced that the Board of Directors of BBVA agreed to modify the Group’s shareholder distribution
policy, which was communicated as relevant information on February 1, 2017, with registration number 247679 establishing a new
policy consisting in an annual distribution of between 40% and 50% of the consolidated ordinary profit of each year (excluding
extraordinary amounts and items included in the consolidated profit and loss account), compared to the previous policy of
distributing between 35% and 40%.
This policy will be implemented through the distribution of an interim dividend for the year (expected to be paid in October of each
year) and a final dividend (to be paid once the year has ended and the allocation of the year-end profit has been approved, expected to
take place in April of each year), with the possibility of combining cash distributions with share buybacks (the execution of the share
buyback program will be deemed an extraordinary shareholder remuneration and will, therefore, not be included within the scope of
the policy), all subject to the relevant authorizations and approvals applicable at any given time.
Capital ratios
BBVA's solvency and capital ratios required by the regulation in force in 2021 are outlined in Note 28 of the accompanying Financial
Statements.
56
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Subsequent events
Between January 1 and February 3, 2022, J.P. Morgan AG, as manager of the first tranche, has acquired 65,272,189 BBVA shares as
part of its share buyback program (see Note 3 of the accompanying Financial Statements).
On February 3, 2022, BBVA announced that its Board of Directors agreed, within the Framework Program, to carry out a second
buyback program (the “Second Tranche”) aimed at reducing BBVA’s share capital, for a maximum amount of €2,000 million and a
maximum number of shares to be acquired equal to the result of subtracting from 637,770,016 own shares (9.6% of BBVA’s share
capital at that date) the number of own shares finally acquired in execution of the First Tranche. The implementation of the Second
Tranche, which will also be executed externally through a lead-manager, will begin after the end of the implementation of the First
Tranche and shall end no later than October 15, 2022 (see Note 3 of the accompanying Financial Statements).
On January 3, 2022, it was announced that a cash distribution in the amount of €0.23 gross per share as shareholder remuneration in
relation to the Group's result in the 2021 financial year was expected to be submitted to the relevant governing bodies of BBVA for
consideration (see Note 3 of the accompanying Financial Statements).
From January 1, 2022 to the date of preparation of these consolidated financial statements, no other subsequent events not
mentioned above in these financial statements have taken place that could significantly affect the Group’s earnings or its equity
position.
57
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Annual Corporate Governance Report
In accordance with the provisions established by Article 540 of the Spanish Corporate Act, BBVA prepared the Annual Corporate
Governance Report for 2021 (which is an integral part of the Management Report for that year) following the contents set down in
Order ECC/461/2013, dated March 20, and in Circular 5/2013, dated June 12, of Comisión Nacional del Mercado de Valores (CNMV),
in the wording provided by Circular 3/2021, dated September 28, of CNMV. It includes a section detailing the degree to which the
Bank is compliant with the recommendations of the Good Governance Code of listed companies in Spain. In addition, all the
information required by Article 539 of the Spanish Corporate Act can be accessed on BBVA’s website www.bbva.com.
58
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
ANNUAL CORPORATE GOVERNANCE REPORT
OF LISTED COMPANIES
ISSUER IDENTIFICATION
YEAR-END DATE: 31/12/2021
CIF (Código de identificación fiscal — Tax Identification No.)A-48265169
Company Name: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Registered Office: 4 Plaza de San Nicolás, 48005 Bilbao (Biscay)
59
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
ANNUAL CORPORATE GOVERNANCE REPORT
OF LISTED COMPANIES
A. OWNERSHIP STRUCTURE
A.1 Fill in the following table on the company's share capital and the associated voting rights, including, if
applicable, any such rights corresponding to shares with loyalty votes, as of financial year-end:
Indicate whether the company's bylaws provide for double voting rights for loyalty:
YES
NO
X
Date of approval by the general meeting
Date of the last modification of
share capital
Share capital
Number of shares
Number of voting rights
24/04/2017
3,267,264,424.20
6,667,886,580
6,667,886,580
Indicate whether there are different classes of shares with different associated rights:
No
A.2 Detail the direct and indirect owners of significant shareholdings as of financial year-end, including
directors with significant shareholdings:
Name or corporate name
of the shareholder
% of voting rights attached to
shares
% of voting rights
through financial instruments
Total % of
voting rights
Direct
Indirect
Direct
Indirect
Blackrock, Inc.
0.00%
5.48%
0.44%
0.00%
5.92%
GQG Partners LLC
3.10%
0.00%
0.00%
0.00%
3.10%
Details of indirect shareholdings:
Name or corporate name
of the indirect shareholder
Name or corporate
name of the direct
shareholder
% of voting
rights attached
to shares
% of voting rights
through
financial
instruments
Total %
of voting
rights
Indicate the most significant changes in the shareholder structure during the financial year:
Most significant changes:
As of 31 December 2021, State Street Bank and Trust Co., The Bank of New York Mellon S.A.N.V. and
Chase Nominees Ltd., as international custodian/depositary banks, had custody of 14.26%, 2.45% and
7.69% of BBVA's share capital, respectively. Of said positions held by the custodian banks, BBVA is not
60
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
aware of any individual shareholders with direct or indirect holdings greater than or equal to 3% of the
BBVA share capital.
On 18 April 2019, Blackrock, Inc. informed the CNMV (Comisión Nacional del Mercado de Valores —
Spanish National Securities Market Commission) that it had an indirect holding of 5.917% of BBVA's
share capital, with 5.480% corresponding to voting rights attached to shares and 0.437% corresponding
to voting rights through financial instruments.
On 11 February 2021, GQG Partners LLC informed the CNMV that it had a direct holding in BBVA's share
capital of 3.090%, through voting rights attached to shares.
A.3Detail, regardless of the percentage, the shareholdings as of financial year-end of the members of
the board of directors that hold voting rights associated with company shares or through financial
instruments, excluding those directors identified in Section A.2 above:
Name or
corporate name
of the director
% of voting rights
attached to shares
% of voting rights
through financial
instruments
Total %
of voting
rights
% of voting rights that
can be transferred
through financial
instruments
Direct
Indirect
Direct
Indirect
Direct
Indirect
Carlos Torres Vila
0.01
0.00
0.00
0.00
0.01
0.00
0.00
Onur Genç
0.01
0.00
0.00
0.00
0.01
0.00
0.00
José Miguel
Andrés Torrecillas
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Jaime
Caruana Lacorte
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Raúl Galamba de
Oliveira
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Belén Garijo López
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Sunir Kumar Kapoor
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Lourdes Máiz Carro
0.00
0.00
0.00
0.00
0.00
0.00
0.00
José Maldonado
Ramos
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Ana Peralta Moreno
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Juan Pi Llorens
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Ana Revenga
Shanklin
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Susana Rodríguez
Vidarte
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Carlos Salazar
Lomelín
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Jan Verplancke
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Total % of voting rights held by members of the board of directors
0.02%
61
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Details of indirect shareholdings:
Name or
corporate name of
the director
Name or
corporate
name of the
direct
shareholder
% of voting
rights attached
to shares
% of voting rights
through financial
instruments
Total %
of voting
rights
% of voting rights that can
be transferred through
financial instruments
Detail the total percentage of voting rights held by the board:
Total % of voting rights held by the board of directors
0.00%
A.4 Where applicable, indicate any family, commercial, contractual or corporate relationships between
owners of significant shareholdings, insofar as they are known to the company, unless they are of
little relevance or attributable to ordinary trading or exchange activities, except those described in
Section A.6:
Name
of related person or company
Type of relationship
Brief description
A.5 Where applicable, indicate any commercial, contractual or corporate relationships between owners
of significant shareholdings and the company and/or its group, unless they are of little relevance or
attributable to ordinary trading or exchange activities:
Name
of related person or company
Type of relationship
Brief description
A.6Describe the relationships, unless they are of little relevance for the two parties, that exist between
significant shareholders or shareholders represented on the board and directors, or their
representatives in the case of directors that are legal entities.
Explain, where applicable, how significant shareholders are represented. Specifically, indicate those
directors appointed to represent significant shareholders, those whose appointment was proposed
by significant shareholders or those who are related to significant shareholders and/or their group
companies, and specify the nature of the relationships. In particular, state, where applicable, the
existence, identity and position of board members—or their representatives—of the listed company
who are also members—or representatives of members—of the management body of companies
that hold significant shareholdings in the listed company or in entities that are part of said significant
shareholders' group.
Name or corporate name of
related director or
representative
Name or corporate
name of related
significant
shareholder
Corporate name of the
company in the
significant
shareholder's group
Description of relationship/
position
A.7Indicate whether the company has been informed of any shareholder agreements that may affect it,
as established in Articles 530 and 531 of the Corporate Enterprises Act. Where applicable, briefly
describe them and list the shareholders bound by each such agreement:
No
62
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Indicate whether the company is aware of the existence of concerted actions by its shareholders. If
so, describe them briefly:
No
If any changes to or breaking of any such pacts, agreements or concerted actions have occurred
during the financial year, indicate this expressly:
A.8 Indicate whether any legal entities or natural persons exercise or may exercise control over the
company pursuant to Article 5 of the Securities Exchange Act. If so, identify them:
No
A.9 Fill in the following tables regarding the company's treasury shares:
As of financial year-end:
Number of
direct shares
Number of
indirect shares (*)
Total %
of share capital
112,733,730
14,899,669
1.91%
(*) Through:
Name or corporate name of direct owner of shares
Number of direct shares
Corporación General Financiera, S.A.
14,899,669
Total:
14,899,669
Explain any significant changes that have occurred during the financial year:
Explain significant changes
In 2021, 3 communications regarding treasury shares were sent to the CNMV, as the acquisitions had exceeded the 1%
threshold. The communications were as follows:
•Communication date: 18/05/2021. A total of 1,097,591 direct shares and 7,178,657 indirect shares, representing a
total of 0.124% of the share capital. This communication was made after acquisitions passed the 1% threshold.
•Communication date: 01/12/2021. A total of 28,947,371 direct shares and 14,900,424 indirect shares, representing a
total of 0.658% of the share capital. This communication was made after acquisitions passed the 1% threshold.
•Communication date: 27/12/2021. A total of 94,184,413 direct shares and 14,899,669 indirect shares, representing a
total of 1.636% of the share capital. This communication was made after acquisitions passed the 1% threshold.
A.10 Describe the conditions and term of the current mandate from the general meeting to the board
of directors to issue, buy back or transfer treasury shares.
•The BBVA General Meeting held on 17 March 2017, under item three of the Agenda, passed a
resolution to delegate to the Board the power to increase share capital for a period of five years
up to a maximum amount corresponding to 50% of BBVA's share capital on the date of the
authorisation. This can be done on one or several occasions by issuing new shares of any kind
allowed by law, with or without an issue premium, the counter-value of said shares comprising
cash considerations. The authorisation includes the setting out of the terms and conditions of the
increase in any respect not provided for in the resolution, and to authorise the Board to wholly or
partly exclude pre-emptive subscription rights in relation to any share capital increase carried out
by virtue of the resolution, in compliance with the applicable legal requirements. This power was
limited insofar as the nominal amount of capital increases agreed or carried out with an exclusion
of the pre-emptive subscription rights do not exceed the maximum nominal amount, overall, of
20% of BBVA's share capital at the time of authorisation, although this limit is expected to be
reduced to 10% in accordance with the proposals submitted to the BBVA General Meeting in
2022. To date, BBVA has not adopted any resolution using this delegated power.
63
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
•The BBVA General Meeting held on 16 March 2018, under item three of the Agenda, passed a
resolution to grant BBVA the authority, whether directly or through any of its subsidiaries, and for a
period of no more than five years, to derivatively acquire BBVA shares as well as their
subsequent disposal, by any means permitted by law, noting, in particular, that (i) the nominal
value of the shares acquired by means of this authorisation, in when added to those already
owned by BBVA and its subsidiaries, may exceed 10% of BBVA's subscribed share capital, or,
where appropriate, any lower limit established by applicable legislation; (ii) the acquisition price
per share may not be lower than the nominal value of the share, and must be under 10% higher
than the share price or any other price associated with the shares at the time that they are
acquired. It also authorised that the shares acquired through this authorisation be partially or
totally set aside for workers or directors of BBVA or its subsidiaries, either directly or as a result of
them exercising any option rights.
At its meeting on 28 October 2021, having received the mandatory authorisation of the European
Central Bank, the BBVA Board resolved to carry out a treasury share buyback framework
programme through the aforementioned delegation, in accordance with Regulation (EU) 596/2014
of the European Parliament and of the Council of 16 April 2014 and Commission Delegated
Regulation (EU) 2016/1052 of 8 March 2016, to be implemented in several tranches, for a
maximum amount of EUR 3.5 billion, with the aim of reducing BBVA's share capital. Within the
framework programme, it resolved to carry out an initial buyback programme for a maximum
amount of EUR 1.5 billion and a maximum number of shares to be acquired of 637,770,016
treasury shares. This first programme began on 22 November 2021 and will end between 16
February and 5 April 2022 and, in any case, when the maximum monetary amount or maximum
number of shares is reached within that period.
•The BBVA General Meeting held on 20 April 2021, under item five of the Agenda, passed a
resolution to delegate to the Board the power to issue securities that will eventually be convertible
into newly issued BBVA shares, for a period of five years, to meet regulatory requirements for
their eligibility as capital instruments, in accordance with the solvency regulations and the
applicable provisions and after obtaining the necessary authorisations, for a maximum overall
amount of EUR 8,000,000,000, or its equivalent in another currency, with the ability to determine:
(i) the terms, characteristics and conditions of issuances; (ii) the form, timing, assumptions, bases
and methods of conversion; and (iii) the conversion rate. It also delegated to the Board the power
to (i) request admission to trading of securities and shares that have been issued; (ii) increase
BBVA's capital by the amount necessary to meet the conversion commitments; and (iii) totally or
partially exclude pre-emptive subscription rights of shareholders within the framework of a specific
issuance, in compliance with applicable legal requirements and limitations. To date, BBVA has not
adopted any resolution using this delegated power.
•The BBVA General Meeting held on 20 April 2021, under item six of the Agenda, passed a
resolution to delegate to the Board (until the next General Meeting), the power to reduce, once or
several times, the share capital of BBVA up to a maximum of 10% of its capital at the time of
delegation, after obtaining the corresponding regulatory authorisations, through the redemption of
BBVA shares acquired under the authorisation of the General Meeting of 16 March 2018, through
any mechanism with the aim of redeeming such shares and in accordance with the provisions of
the applicable legislation and regulations, also resolving to empower it to set out the terms and
conditions of the increase in anything not foreseen herein. To date, BBVA has not implemented
the aforementioned share capital reduction.
A.11 Estimated floating capital:
%
Estimated floating capital
89.05%
Remarks
This estimated floating BBVA capital has been calculated by deducting, from the share capital, the capital held by the
direct and indirect holders of significant shares (Section A.2), the members of the Board of Directors (Section A.3) and
the capital held in treasury shares (Section A.9), all as of 31 December 2021, in accordance with the instructions for
completing the Annual Corporate Governance Report.
64
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
A.12Indicate whether there are any restrictions (statutory, legislative or of any other kind) on the
transferability of securities and/or any restrictions on voting rights. In particular, report the
existence of any restrictions that might hinder the takeover of the company through the
purchase of its shares on the market, as well as any authorisation or prior communication
regimes that are applicable to the purchase or transfer of the company's financial instruments
as provided by law in the sector.
Yes
Description of the restrictions
With regard to the exercise of voting rights, there are no legal or statutory restrictions. Thus, in accordance with Article
31 of the Bylaws, each voting share will confer the right to one vote on the holder, whether present or represented at
the General Shareholders' Meeting, regardless of its disbursement.
There are no statutory restrictions on the acquisition or transfer of holdings in the share capital.
As for the legal restrictions on the acquisition or transfer of holdings in the company's share capital, Spanish Act
10/2014, of 26 June, on the regulation, supervision and solvency of credit institutions (LOSS) establishes that the
direct or indirect acquisition of a significant holding (as defined in Article 16 of that Act) in a credit institution is subject
to assessment by the Bank of Spain as set out in Articles 16 et seq. of that Act. Additionally, Article 25 of Royal Decree
84/2015, implementing the LOSS (Royal Decree 84/2015), establishes that the Bank of Spain shall evaluate proposals
for acquisitions of significant shares and submit a proposal to the European Central Bank regarding whether to oppose
this acquisition or not. This same article establishes the criteria that should be considered during said evaluation and
the applicable timelines.
A.13Indicate whether the general meeting has resolved to adopt measures to neutralise a public
takeover bid pursuant to the provisions of Act 6/2007.
No
If so, explain the measures approved and the terms on which the restrictions would be rendered
ineffective:
A.14 Indicate whether the company has issued securities that are not traded on a regulated market in
the European Union.
Yes
Where applicable, indicate the different classes of shares and the rights and obligations
conferred by each such class.
Indicate the different classes of shares
All the shares in BBVA's share capital have the same class and series, and confer the same political and economic
rights. There are no different voting rights for any shareholder. There are no shares that do not represent capital.
The Bank's shares are admitted to trade on the stock exchanges in Madrid, Barcelona, Bilbao and Valencia, through
the Spanish Stock Exchange Interconnection System (Continuous Market), as well as on the stock exchanges in
London and Mexico. BBVA's American Depositary shares (ADS) are traded on the New York stock exchange.
B.  GENERAL SHAREHOLDERS' MEETING
B.1Indicate, providing details where applicable, whether there are any differences to the minimum
standards established under the Corporate Enterprises Act (CEA) with respect to the quorum for
holding the general meeting.
Yes
65
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
% quorum if different to that established in
Art. 193 of the CEA for general cases
% quorum if different to that established
in Art. 194 of the CEA for special cases
Quorum required on
first call
0.00%
66.66%
Quorum required on
second call
0.00%
60.00%
Description of the differences
Article 194 of the Corporate Enterprises Act establishes that in order for a general meeting (whether ordinary or
extraordinary) to validly resolve to increase or reduce capital or make any other amendment to the bylaws, bond issuance,
the suppression or limitation of pre-emptive subscription rights over new shares, or the transformation, merger or spin-off
of the company or global assignment of assets and liabilities or the offshoring of domicile, the shareholders present and
represented on first calling must own at least 50% of the subscribed capital with voting rights.
On second calling, 25% of said capital will be sufficient.
Notwithstanding the foregoing, Article 25 of the BBVA Bylaws requires a super quorum of members representing two thirds
of the subscribed capital with voting rights on first calling, and 60% of the subscribed capital on second calling, for the valid
adoption of resolutions on the following matters: re-definition of the corporate purpose; the transformation, total breakup or
dissolution of the Company; and the modification of the statutory article defining this super quorum.
B.2 Indicate, providing details where applicable, whether there are any differences to the minimum
standards established under the Corporate Enterprises Act (CEA) for the adoption of corporate
resolutions:
No
B.3 Indicate the rules applicable to amending the company's bylaws. In particular, report the majorities
needed to amend the bylaws as well as any rules established to safeguard shareholders' rights
when amending the bylaws.
Article 30 of the BBVA Company Bylaws establishes that the General Shareholders' Meeting is
empowered to amend the Company Bylaws and to confirm or rectify the manner in which they are
interpreted by the Board of Directors.
To such end, the rules established under Articles 285 et seq. of the Corporate Enterprises Act shall
apply.
The above paragraph notwithstanding, Article 25 of the BBVA Bylaws establishes that in order to
validly adopt resolutions regarding any change to the corporate purpose, transformation, total spin-
off or winding up of the Company and amendment of the second paragraph of said Article 25, two
thirds of the subscribed capital with voting rights must attend the General Meeting on first calling,
and 60% of said capital on second calling.
As regards the procedure for amending the Bylaws, Article 4.2 c) of the LOSS establishes that the
Bank of Spain shall be responsible for authorising the amendments to the bylaws of credit
institutions as set out by regulations.
Further to the above, Article 10 of Royal Decree 84/2015 stipulates that the Bank of Spain shall
make a decision within two months following receipt of the request for amendment of the Bylaws
and that said request must be accompanied by certified minutes recording the agreement, a report
substantiating the proposal drawn up by the board of directors and draft new bylaws, identifying the
cited amendments.
Notwithstanding the foregoing, the aforementioned Article 10 establishes that no prior authorisation
from the Bank of Spain is required, though the latter must be notified for the purposes of entry in
the Registro de Entidades de Crédito (Spanish register of credit institutions), for amendments with
the following purposes:
•Change of the registered office within the national territory.
•Share capital increase.
66
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
•Verbatim incorporation into the bylaws of legal or regulatory precepts of a mandatory or
prohibitive nature, or for the purpose of complying with legal or administrative decisions.
•Those amendments for which the Bank of Spain, in response to a prior enquiry made by
the affected bank, deems that authorisation is not required due to their little relevance.
This communication must be made within 15 working days following the adoption of the statute
amendment resolution.
Finally, as a significant entity, BBVA is under the direct supervision of the European Central Bank
(ECB) in cooperation with the Bank of Spain under the Single Supervisory Mechanism, so the
authorisation of the Bank of Spain mentioned above will be submitted to the ECB, prior to its
resolution by the Bank of Spain.
B.4 Provide data on attendance at general meetings held during the financial year covered in this
report and the previous financial year:
Attendance data
Date of general meeting
% physically
present
% present by
proxy
% voting remotely
Total
Electronic vote
Other
20/04/2021
1.23%
54.9%
7.37%
4.18%
67.71%
Of which is
floating capital:
1.21%
45.88%
7.37%
4.18%
58.64%
13/03/2020
0.06%
47.76%
4.34%
14.67%
66.83%
Of which is
floating capital:
0.04%
38.48%
4.34%
14.67%
57.53%
15/03/2019
1.77%
38.95%
0.92%
22.79%
64.43%
Of which is
floating capital:
1.75%
33.03%
0.92%
22.79%
58.49%
B.5 Indicate whether there were any items on the agenda for the general meetings that took place
during the financial year that were not approved by the shareholders for any reason.
No
B.6 Indicate whether there are any restrictions in the bylaws that establish a minimum number of
shares required to attend general meetings or vote remotely:
Yes
Number of shares required to attend general meetings
500
Number of shares required to vote remotely
1
67
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Remarks
Article 23 of the BBVA Bylaws establishes that holders of 500 or more shares may attend both annual and extraordinary
General Shareholders' Meetings, provided that their shares are registered in the corresponding accounting ledger at least
five days before the day on which the Meeting is scheduled, pursuant to the Securities Exchange Act and other applicable
provisions, and who conserve at least that number of shares until the Meeting is held.
Holders of fewer shares may group together until they have at least that number, and name a representative.
However, there is no minimum number of shares required to vote remotely. Pursuant to the provisions of Article 8 of BBVA's
Regulations of the General Shareholders' Meeting, shareholders may vote by proxy, by post, electronically or by any other
means of remote communication, provided that the shareholder confirms the identity of the person exercising their right to
vote. In terms of constituting the General Shareholders' Meeting, shareholders who vote remotely will be counted as present.
B.7Indicate whether it has been established that certain decisions, other than those provided for by
law, involving an acquisition, a disposal, the contribution of essential assets to another company or
a similar corporate transaction, must be submitted to the general shareholders' meeting for
approval.
No
B.8Indicate the address and means of access, on the company's website, to information on corporate
governance and other information on general meetings that must be made available to
shareholders on the company's website.
Information relating to corporate governance and the Company's general meetings can be
accessed via the Banco Bilbao Vizcaya Argentaria, S.A. company website, www.bbva.com, in the
Shareholders and Investors — Corporate Governance and Remuneration Policy section (https://
shareholdersandinvestors.bbva.com/corporate-governance-and-remuneration-policy/).
C.  COMPANY MANAGEMENT STRUCTURE
C.1 Board of directors
C.1.1 Maximum and minimum number of directors established in the bylaws and number set by the
general meeting:
Maximum number of directors
15
Minimum number of directors
5
Number of directors set by the general meeting
15
Remarks
In accordance with the provisions of Article 34, Paragraph 2 of the Bylaws, the General Shareholders' Meeting,
held on 20 April 2021, resolved to set the total number of directors on the Board of Directors of Banco Bilbao
Vizcaya Argentaria, S.A. at 15.
C.1.2 Fill in the following table on the board members:
Name or
corporate
name of the
director
Representative
Type of
director
Position
on the board
Date of first
appointment
Date of most
recent
appointment
Election
procedure
Carlos
Torres Vila
-
Executive
Group
Executive
Chairman
04/05/2015
15/03/2019
Resolution of
the General
Shareholders'
Meeting
Onur
Genç
-
Executive
Chief
Executive
Officer
20/12/2018
15/03/2019
Resolution of
the General
Shareholders'
Meeting
68
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
José Miguel
Andrés
Torrecillas
-
Independent
Deputy Chair
13/03/2015
20/04/2021
Resolution of
the General
Shareholders'
Meeting
Jaime Caruana
Lacorte
-
Independent
Director
16/03/2018
20/04/2021
Resolution of
the General
Shareholders'
Meeting
Raúl Galamba
de Oliveira
-
Independent
Director
13/03/2020
13/03/2020
Resolution of
the General
Shareholders'
Meeting
Belén Garijo
López
-
Independent
Director
16/03/2012
20/04/2021
Resolution of
the General
Shareholders'
Meeting
Sunir Kumar
Kapoor
-
Independent
Director
11/03/2016
15/03/2019
Resolution of
the General
Shareholders'
Meeting
Lourdes Máiz
Carro
-
Independent
Director
14/03/2014
13/03/2020
Resolution of
the General
Shareholders'
Meeting
José Maldonado
Ramos
-
Other external
Director
28/01/2000
20/04/2021
Resolution of
the General
Shareholders'
Meeting
Ana Peralta
Moreno
-
Independent
Director
16/03/2018
20/04/2021
Resolution of
the General
Shareholders'
Meeting
Juan Pi Llorens
-
Independent
Director
27/07/2011
20/04/2021
Resolution of
the General
Shareholders'
Meeting
Ana Revenga
Shanklin
-
Independent
Director
13/03/2020
13/03/2020
Resolution of
the General
Shareholders'
Meeting
Susana
Rodríguez
Vidarte
-
Other external
Director
28/05/2002
13/03/2020
Resolution of
the General
Shareholders'
Meeting
Carlos Salazar
Lomelín
-
Other external
Director
13/03/2020
13/03/2020
Resolution of
the General
Shareholders'
Meeting
Jan Verplancke
-
Independent
Director
16/03/2018
20/04/2021
Resolution of
the General
Shareholders'
Meeting
Total number of directors
15
69
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Indicate any departures, whether resulting from resignation or resolution of the general meeting, that
occurred on the board of directors during the reporting period:
Name or corporate
name of the
director
Type of director at
the
time of departure
Date of most recent
appointment
Departure
date
Specialised
committees
of which the
director was a
member
Indicate whether
the departure
occurred prior to
the end of the
term
C.1.3 Fill in the following tables on the board members and their directorship type:
EXECUTIVE DIRECTORS
Name or corporate
name of the
director
Position within
the company's
organisational
structure
Profile
Carlos Torres Vila
Group Executive
Chairman
Chairman of the BBVA Board of Directors.
He was Chief Executive Officer of BBVA from May 2015 to December 2018,
Head of Digital Banking from 2014 to 2015 and Head of Strategy and
Corporate Development from 2008 to 2014.
In addition, he previously held positions of responsibility in other companies,
with his roles as Chief Financial Officer, Corporate Director of Strategy and
member of the Executive Committee of Endesa being of particular note, as
well as his elected partnership at McKinsey & Company.
He completed his studies in Electrical Engineering (BSc) at the Massachusetts
Institute of Technology (MIT), where he also received a degree in Business
Administration. He holds a master's degree in Management (MSc) from the
MIT Sloan School of Management and also a Law degree from the National
Distance Education University (UNED).
Onur Genç
Chief Executive
Officer
Chief Executive Officer of BBVA.
He served as Chairman and CEO of BBVA Compass and as BBVA Country
Manager in the U.S.A from 2017 to December 2018, and served as Deputy
CEO and Executive Vice President of retail and private banking at Garanti
BBVA between 2012 and 2017.
He has also held positions of responsibility in different McKinsey & Company
offices, having previously been a Senior Partner and Manager of its Turkish
office.
He holds a degree in Electrical Engineering (BSc) from the University of
Boğaziçi in Turkey and a master's degree in Business Administration (MSIA/
MBA) from Carnegie Mellon University in the USA.
Total number of executive directors
2
% of all directors
13.33%
EXTERNAL PROPRIETARY DIRECTORS
Name or corporate name
of the director
Name or corporate name of the significant
shareholder represented by the director or that
proposed the director's appointment
Profile
70
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
EXTERNAL INDEPENDENT DIRECTORS
Name or corporate name of
the director
Profile
José Miguel Andrés
Torrecillas
Deputy Chairman of the BBVA Board of Directors.
His professional career began at Ernst & Young as General Managing Partner of Audit and
Advisory Services and the Chairman of Ernst & Young Spain until 2014.
He has been a member of various organisations such as the ROAC (Registro Oficial de
Auditores de Cuentas — official registry of auditors), the REA (Registro de Economistas
Auditores — registry of accounting auditors), the Junta Directiva del Instituto Español de
Analistas Financieros (Spanish Institute of Financial Analysts Management Board),
Fundación Empresa y Sociedad (the Business and Society Foundation), Instituto de
Censores Jurados de Cuentas de España (Spanish Institute of Chartered Accountants),
Consejo Asesor del Instituto de Auditores Internos (the Advisory Board of the Institute of
Internal Auditors) and the Institute of Chartered Accountants in England & Wales (ICAEW).
He holds a degree in Economic and Business Sciences from the Complutense University
of Madrid and has studied at post-graduate level in Management Programs from IESE,
Harvard and IMD.
For information on his roles in other entities, see section C.1.11 of this Report.
Jaime Caruana Lacorte
He is a member of the Group of 30 (G-30), Patron of the Spanish Aspen Institute
Foundation, Chairman of the Board of the International Center for Monetary and Banking
Studies (ICMB) and a member of the International Advisory Committee of the CBIRC
(China Banking and Insurance Regulatory Commission).
He has been General Manager of the Bank of International Settlements (BIS), Director of
the Monetary and Capital Markets Department and Financial Counsellor and General
Manager of the International Monetary Fund (IMF), Chairman of the Basel Committee on
Banking Supervision, Governor of the Bank of Spain and member of the Governing
Council of the ECB, among other positions.
He holds a degree in Telecommunications Engineering from the Escuela Técnica Superior
de Ingenieros de Telecomunicación (ETSIT) of the Universidad Politécnica de Madrid and
is a Commercial Technician and State Economist.
Raúl Galamba de Oliveira
His career has been linked to McKinsey & Company, where he was appointed Partner in
1995 and Senior Partner in 2000, and where he was Managing Partner for Spain and
Portugal (2005–2011), Managing Partner for Global Risk Practice (2013–2016), Member of
the Global Shareholders' Council (2005–2011), Member of the Global Partner Election and
Evaluation Committees (2001–2017). Member of the Remuneration Committee (2005–
2013) and Chairman of the Global Learning Board (2006–2011).
He holds a BSc in Mechanical Engineering and an MSc in Systems Engineering from the
Instituto Superior Técnico (IST) in Portugal, and an MBA from the Nova School of
Business Economics, also in Portugal.
For information on his roles in other entities, see section C.1.11 of this Report.
Belén Garijo López
Chair of the International Senior Executive Committee (ISEC) of Pharmaceutical Research
and Manufacturers of America (Farma).
She has held various positions of responsibility at Abbot Laboratories (1989–1996),
Rhône-Poulenc (1996–1999), Aventis Pharma (1999–2004), Sanofi Aventis (2004–2011)
and Merck (since 2011).
She is a graduate in Medicine from the University of Alcalá de Henares in Madrid and a
specialist in Clinical Pharmacology at Hospital de la Paz, Autonomous University of
Madrid. She also holds a master's degree in Business and Management from the Ashridge
Management School (UK).
For information on his roles in other entities, see section C.1.11 of this Report.
Sunir Kumar Kapoor
He has been Manager of Business Enterprise EMEA for Microsoft Europe and Director of
Worldwide Business Strategy for the Microsoft Corporation. Among other roles, she was
previously the Executive Vice President and Chief Marketing Officer (CMO) of Cassatt
Corporation and Chair and CEO of UBmatrix Incorporated.
He holds a Bachelor's in Physics from the University of Birmingham and a Master's in
Computer Systems from Cranfield Institute of Technology.
For information on his roles in other entities and other paid activities, see section C.1.11 of
this Report.
71
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Lourdes Máiz Carro
She was Secretary of the Board of Directors and Director of Legal Services at Iberia,
Líneas Aéreas de España until April 2016. She has also been a director of several
companies, including Renfe, GIF (Gerencia de Infraestructuras Ferroviarias — Railway
Infrastructure Administrator, now ADIF), the ICO (Instituto de Crédito Oficial — Official
Credit Institution), Aldeasa and Banco Hipotecario.
She worked in Research, giving classes in Metaphysics and Theory of Knowledge at the
Complutense University of Madrid for five years. She became an Attorney for the State
and held various positions of responsibility in Public Administration, including General
Director of Administrative Organisation, Job Positions and I.T. (Ministry of Public
Administrations), General Director of the Sociedad Estatal de Participaciones
Patrimoniales (SEPPA) at the Ministry of Economy and Finance and Technical General
Secretariat of the Ministry of Agriculture, Fisheries and Food.
She holds degrees in Law and Philosophy and Education Sciences as well as a Ph.D. in
Philosophy.
Ana Peralta Moreno
She was previously Chief Risk Officer and a member of the Bankinter Management
Committee, and Chief Risk Officer and member of the Banco Pastor Management
Committee. She has also held various positions at a number of financial organisations,
notably serving as an independent director at Deutsche Bank SAE, independent director at
Banco Etcheverría, independent director at Grupo Lar Holding Residencial, S.A.U., and
Senior Advisor at Oliver Wyman Financial Services.
She is a graduate in Economic and Business Sciences from Complutense University of
Madrid. She also has a master's degree in Economic-Financial Management from the
Centro de Estudios Financieros (CEF), Program for Management Development (PMD) at
Harvard Business School and PADE (Programa de Alta Dirección de Empresas – senior
management programme) at IESE.
For information on his roles in other entities, see section C.1.11 of this Report.
Juan Pi Llorens
Lead Director of BBVA.
He has had a professional career at IBM holding various senior positions at a national and
international level, including Vice President of Sales at IBM Europe, Vice President of
Technology & Systems at IBM Europe and Vice President of the Financial Services Sector
in the Growth Markets Units (GMU) in China. He was also Executive Chairman of IBM
Spain.
He holds a degree in Industrial Engineering from the Universidad Politécnica de Barcelona
and completed the PDG (Programa en Dirección General — general management
programme) at IESE.
For information on his roles in other entities, see section C.1.11 of this Report.
Ana Revenga Shanklin
Senior Fellow at the Brookings Institution, Associate Professor at the Walsh School of
Foreign Service at Georgetown University and President of the Board at the ISEAK
Foundation.
Her career has been linked mainly to the World Bank, where, after holding several
technical and management positions in East Asia and the Pacific, Europe and Central
Asia, Latin America and the Caribbean, she has held several leadership positions,
including Senior Director of Global Poverty & Equity (2014–2016) and Deputy Chief
Economist (2016–2017).
She holds a BA in Economics and Mathematics, magna cum laude, from Wellesley
College (USA), an MA and PhD in Economics from Harvard University (USA), and a
Certificate in Human Rights from the Faculty of Law at the University of Geneva
(Switzerland).
Jan Verplancke
He is currently an advisor to the internal advisory board at Abdul Latif Jameel.
His roles have included Chief Information Officer (CIO) and Group Head of Technology
and Banking Operations at Standard Chartered Bank, Vice President of Technology and
CIO for EMEA at Dell, as well as Vice President and Chief of Architecture and Vice
President of Information of the Youth Category at Levi Strauss.
He holds a bachelor's degree in Science, specialising in Computer Science, from the
Programming Centre of the North Atlantic Treaty Organization (NATO) in Belgium.
Total number of independent directors
10
% of all directors
66.67%
72
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Indicate whether any director considered to be an independent director is receiving, from the company or
its group, any amount or benefit that does not constitute remuneration for serving as a director, or
maintains or has maintained, over the last financial year, a business relationship with the company or any
company in its group, whether in their own name or as a significant shareholder, director or senior
manager of an entity that maintains or has maintained such a relationship.
Where applicable, include a reasoned statement from the board with the reasons why it deems that this
director can perform their duties as an independent director.
Name or corporate name
of the director
Description of the relationship
Reasoned statement
OTHER EXTERNAL DIRECTORS
Identify all other external directors and explain why they cannot be considered proprietary or independent
directors, detailing their relationships with the company or its executives or shareholders:
Name or corporate
name of the director
Reasons
Company, executive or
shareholder with
whom the relationship
is maintained
Profile
José Maldonado
Ramos
He has been a director for a
continuous period of more
than 12 years.
Banco Bilbao Vizcaya
Argentaria, S.A.
Over the course of his professional
career, he has held the positions of
Secretary of the Board of Directors at
a number of companies, most
notably as Corporate General
Secretary of Argentaria, before taking
up the position of Corporate
Secretary of BBVA. He took early
retirement as a Bank executive in
December 2009.
He holds a Law degree from
Complutense University of Madrid. In
1978, he passed State exams and
became an Attorney for the State.
Susana Rodríguez
Vidarte
She has been a director for a
continuous period of more
than 12 years.
Banco Bilbao Vizcaya
Argentaria, S.A.
She has been Professor of Strategy
at the Faculty of Economics and
Business Administration at the
University of Deusto and a non-
practising member of the Institute of
Accounting and Accounts Auditing.
She was Dean of the Faculty of
Economics and Business
Administration at the University of
Deusto, Director of the Postgraduate
Area and Director of the Instituto
Internacional de Dirección de
Empresas (INSIDE).
She holds a PhD in Economic and
Business Administration from the
University of Deusto.
73
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Carlos Salazar
Lomelín
Applying a criterion of
prudence in the interpretation
of the rule, Mr Salazar
Lomelín has been assigned
the status of external director
to Banco Bilbao Vizcaya
Argentaria, S.A., in view of
his membership of the
management bodies of
companies related to BBVA
Mexico for more than 15
years.
Grupo Financiero
BBVA Bancomer, S.A.
de C.V.
Chairman of Mexico's Business
Coordinating Council (since 2019).
His career has been linked mainly
to Grupo Fomento Económico
Mexicano S.A.B. de C.V. (Femsa),
where he was General Manager of
Cervecería Cuauhtémoc-
Moctezuma and Chief Executive
Officer of Femsa (this last role was
from 2014–2017).
He holds a degree in Economics
and has completed postgraduate
studies in Business Administration
at Instituto Tecnológico y de
Estudios Superiores de Monterrey
(Monterrey Institute of Technology
and Higher Education).
For information on his roles in other
entities, see sections C.1.10 and
C.1.11 of this Report.
Total number of other external directors
3
% of all directors
20%
Indicate any changes that occurred during the period in the type of each director:
Name or corporate name
of the director
Date of change
Previous type
Current type
C.1.4 Fill in the following table with information regarding the number of female directors as of the end
of the last four financial years and the types of such directors:
Number of female directors
% of all directors
of each type
Year 2021
Year 2020
Financial
year 2019
Financial
year
2018
Financial
year
2021
Year 2020
Financial
year 2019
Financial
year 2018
Executive
0
0
0
0
0.00%
0.00%
0.00%
0.00%
Proprietary
0
0
0
0
0.00%
0.00%
0.00%
0.00%
Independent
4
4
3
3
40%
40%
37.5%
37.5%
Other external
1
1
1
1
33.33%
33.33%
25%
25%
Total:
5
5
4
4
33.33%
33.33%
26.67%
26.67%
C.1.5 Indicate whether the company has diversity policies in relation to the company's board of directors
with regard to matters such as age, gender, disability or professional training and experience. In
accordance with the definition contained in the Spanish Account Auditing Act, small and medium-
sized companies are required to report, at a minimum, the policy that they have established with
regard to gender diversity.
Yes
74
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
In the event the company has them, please outline these diversity policies, their objectives, their
measures, the way in which they have been applied and the results thereof in this financial year.
Please also indicate any specific measures adopted by the board of directors and the
appointments and remunerations committee to achieve a balanced and diverse representation of
directors.
If the company does not have a diversity policy, explain the reasons for this.
Description of the policies, their objectives, their measures, the way in which they have been
applied and the results thereof
The Bank has a Policy on the selection, suitability and diversity of the BBVA Board of Directors, (the
Selection Policy) approved by the Board of Directors at the end of the 2020 financial year that sets out the
principles and criteria governing the process for the selection, appointment and renewal of BBVA Board
members, as well as the legal requirements that directors must meet, including those relating to suitability.
The Policy also provides for elements and objectives concerning the composition of the corporate bodies,
including diversity, the purpose of which is to ensure that the corporate bodies properly and effectively
exercise their functions. All of this is done in the Bank's best corporate interest.
In this sense, with regard to diversity, the Selection Policy states that the BBVA Board of Directors will
promote diversity in the composition of the Bank's corporate bodies by encouraging the inclusion of
people with different profiles, qualities, knowledge, training and experience.
In addition, to ensure that the corporate bodies have an adequate and balanced composition, the rotation
and selection processes will encourage diversity of their members, based on the needs of the Bank at all
times.
In particular, efforts will be made to ensure that the Board of Directors has a balanced representation of
men and women. To this end, the Appointments and Corporate Governance Committee has set a target
for representation of the lesser-represented gender, namely that female directors should represent at
least 40% of the Board of Directors by the end of the 2022 financial year and beyond, with the figure not
dropping below 30% prior to this.
Additionally, the aim is for the composition of the Board of Directors to feature an appropriate balance
between the different types of director, for non-executive directors to represent an ample majority over
executive directors and for the number of independent directors to account for at least 50% of the total
seats.
The corporate bodies will also be assessed to ensure that they have a mix of individuals who have
experience and knowledge of the Group, its businesses and the financial sector in general, as well as
others who have training, skills, knowledge and experience in other areas and sectors relevant to the
Bank.
In addition, BBVA's corporate bodies may take any other diversity factor into consideration that is relevant
at any given moment to adapt the composition of the corporate bodies to the needs of the Bank. They
may take into account criteria such as gender diversity, academic profile, professional experience,
knowledge, disability, origin or age, thus being able to achieve an adequate balance aimed at ensuring
that the corporate bodies can properly and effectively exercise their functions.
Continued in section H.
75
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
C.1.6Explain any measures that have been agreed by the appointments committee to ensure that
selection procedures are free from implicit biases that could hinder the selection of female
directors and to ensure that the company makes a conscious effort to search for, and includes
among its potential candidates, women who match the desired professional profile in order to
achieve a balanced representation of men and women. Further, indicate whether these measures
include facilitating a significant number of female senior managers at the company:
Explanation of the measures
As stated in Section C.1.5, the Board has a Selection Policy that establishes that, with respect to the
selection processes for new Bank directors, as part of the process of progressive and systematic rotation
of the corporate bodies, the Appointments and Corporate Governance Committee will ensure that they
promote diversity and that, in general, they are free from implicit biases that may lead to discrimination.
Furthermore, the Committee will ensure that these selection processes facilitate the selection of a
sufficient number of female directors so as to guarantee a balanced representation of women and men,
endeavouring to ensure that women who match the relevant professional profile are included amongst
potential candidates.
To this end, as indicated previously, the Appointments and Corporate Governance Committee has set a
target for representation of the lesser-represented gender, namely that female directors should represent
at least 40% of the Board by the end of the 2022 financial year and beyond, with the figure not dropping
below 30% prior to this.
In view of the above, and considering the constant analysis of the structure, size and composition of the
Board of Directors, in the 2021 financial year, the Appointments and Corporate Governance Committee
developed a selection process for directors, inspired by the principles of the Regulations of the Board and
the Selection Policy, which has taken into account the aim of female directors representing at least 40%
of the Board before the end of the 2022 financial year. In addition, it is based on a current situation in
which women make up one third of the Board, which fulfils the objective set out in the Selection Policy
that applies at this time.
This process has taken into account the criteria outlined in the Selection Policy, favouring the diversity of
experiences, knowledge, skills and gender. It has also been free from implicit bias that could lead to any
kind of discrimination, and has included women who may meet the desired professional profile.
As a result of this process, and having followed the company's required process, a proposal has been
made to the General Meeting, which will be held in the 2022 financial year, to appoint a new female
director as an independent director.
This new appointment, if approved, will contribute directly to the fulfilment of the Policy's representation
objective, therefore meaning that six female directors will form part of the Board of Directors, which would
represent 40% of its members.
In addition, it should be noted that the majority of the members of the Audit Committee and the
Remunerations Committee are women, including the Chair of the Remunerations Committee.
Continued in section H.
When, despite the measures taken, there are few or no female directors or senior managers,
explain the reasons therefor:
Explanation of the reasons
76
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
C.1.7 Explain the conclusions of the appointments committee regarding the verification of compliance with
the policy aimed at promoting an appropriate composition of the board of directors.
As part of the annual evaluation of the Board carried out for the 2021, the Appointments and Corporate
Governance Committee, in accordance with its Regulations, has analysed the structure, size and
composition of the corporate bodies, taking into account that these must remain balanced and adapted to
their needs at all times, and that the Board, as a whole, has the right knowledge, skills and experience to
understand the business, activities and main risks of BBVA and the Group, and ensures that it has the
effective capacity to carry out its functions in the Bank's best corporate interest.
This analysis takes place within the framework of the progressive and orderly rotation of the corporate
bodies developed by the Board, under which individuals with different profiles and experience are
admitted as often as it sees fit, in order to increase diversity, as well as to ensure an appropriate rotation
of the members of the Board. This guarantees a balanced representation of directors with diverse
experience on the Board.
The analysis also takes into account the forecasts and objectives regarding the structure, size and
composition of the Board as set out in applicable legislation, the Regulations of the corporate bodies and
the Selection Policy, as outlined above, as well as the finalisation of the directors' statutory terms, as
appropriate for each financial year.
The Committee also takes into account the functioning and performance of the corporate bodies in recent
years, and in particular how they have operated during the COVID-19 crisis, during which the directors
have shown a great deal of dedication to the Bank as well as demonstrating flexibility and an ability to
adapt to the current circumstances, and during which their knowledge of the landscape and the Group
itself has not only enabled the corporate bodies to adequately carry out their functions, it has also
contributed to the Group being able to tackle the crisis from a position of strength.
Furthermore, the Committee also takes into account the areas and matters that are of particular relevance
when it comes to carrying out the functions that correspond to the corporate bodies, in particular, the
Group's activities, business and strategies, both at present and going forwards.
Among the various sources of information the Committee uses to carry out its work, particularly
noteworthy is the matrix of skills and diversity on the Board, developed with a view to facilitating the
identification of the skills, characteristics and experience that the Board has, and those which could be
strengthened in the future. This matrix covers skill categories, sectors and areas related to banking and
finance, as well as others that are of particular relevance to the Group's strategy and activities.
This matrix covers the areas of banking and financial services; accounting and auditing; risk
management; innovation and information technologies; strategy and macroeconomic environment; human
resources and remuneration; institutional, legal and regulatory; and corporate governance and
sustainability.
Similarly, the matrix brings together the prior professional experience and career of directors in various
areas such as the company, boards of directors, public administration and academia, among others, at
both national and international level; it also indicates the percentage of women and men on the Board.
In relation to the foregoing, the Committee has been able to confirm that the Board includes individuals
with extensive knowledge and experience in the financial and banking field along with individuals who
have experience and knowledge in each of the other areas analysed; it also notes that there is a diversity
in the type of training undertaken and professional experience—both national and international—gained
by the directors.
This diversity of the Board's skills, knowledge and experience has been strengthened following the in-
depth process to renew the corporate bodies, which are being developed, with the appointment of several
directors over the last few years. As a result, individuals have been appointed who have enabled the
Board to strengthen its skills, knowledge and experience in areas of particular relevance to the Bank's
strategy, business and activities.
The Board, therefore, consists of directors with a range of experience in terms of the Board itself,
combining newly incorporated members with others who have experience in the corporate bodies
themselves and who have extensive knowledge of the Group and of the functional dynamics and working
culture of the corporate bodies themselves. They also ensure that the process of progressive rotation of
the corporate bodies, which involves the inclusion of new profiles, with lesser knowledge of the Bank,
without affecting its proper functioning
77
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
The Committee also observed that independent directors contribute to the suitable composition of both
the Board of Directors and its committees and, in particular, those that assist the Board in its supervision
and control functions. These Committees must have a significant number of independent directors, from
among which the chairs of these committees must also be appointed.
Continued in section H.
C.1.8 Where applicable, explain why proprietary directors have been appointed at the behest of
shareholders whose holding is less than 3% of the capital:
Name or corporate name of the shareholder
Justification
Indicate whether any formal requests for a seat on the board were denied where such requests
came from shareholders whose interests in the company's share capital were equal to or greater
than those of others at whose behest proprietary directors were appointed. Where applicable,
explain why these requests were not granted:
No
C.1.9 Where applicable, indicate the powers and authority delegated by the board of directors, including
as it relates to potential share issuances or buybacks, to directors or board committees:
Name or corporate name of the
director or committee
Brief description
Carlos Torres Vila
He holds the widest-ranging representative and management powers in line
with his duties as Group Executive Chairman of the Company.
Onur Genç
He holds the widest-ranging representative and management powers in line
with his duties as Chief Executive Officer of the Company.
Executive Committee
Pursuant to Article 30 of BBVA's Regulations of the Board of Directors and
Article 1.2 of the Regulations of the Executive Committee, the Executive
Committee will be made aware of matters delegated to it by the Board of
Directors, in accordance with the law, the Bylaws, the Regulations of the
Board or the Regulations of the Executive Committee.
In addition, in relation to those powers concerning potential share issuances
and buybacks, at its meeting on 28 October, 2021, the BBVA Board of
Directors resolved to carry out a framework programme for the buyback of
treasury shares and, within the scope of this framework programme, an
initial share buyback programme, agreeing to delegate to the Executive
Committee, with express substitution powers, the determination of its start
and termination date, its early termination or temporary suspension, as well
as its definitive terms, characteristics and conditions.
C.1.10 Where applicable, identify any members of the Board who hold positions as directors,
representatives of directors or executives in other companies that belong to the same group as
the listed Company:
Name or corporate name
of the director
Corporate name
of the group entity
Position
Does the director
have executive
duties?
Carlos Torres Vila
BBVA México, S.A., Institución de
Banca Múltiple, Grupo Financiero
BBVA México
Director
No
Carlos Torres Vila
Grupo Financiero BBVA México, S.A.
de C.V.
Director
No
Onur Genç
BBVA México, S.A., Institución de
Banca Múltiple, Grupo Financiero
BBVA México
Director
No
78
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Onur Genç
Grupo Financiero BBVA México, S.A.
de C.V.
Director
No
Carlos Salazar Lomelín
BBVA México, S.A., Institución de
Banca Múltiple, Grupo Financiero
BBVA México
Director
No
Carlos Salazar Lomelín
Grupo Financiero BBVA México, S.A.
de C.V.
Director
No
Carlos Salazar Lomelín
BBVA Seguros México, S.A. de C.V.
Grupo Financiero BBVA México
Director
No
Carlos Salazar Lomelín
BBVA Pensiones México, S.A. de C.V.
Grupo Financiero BBVA México
Director
No
Carlos Salazar Lomelín
BBVA Seguros Salud México, S.A. de
C.V. Grupo Financiero BBVA México
Director
No
C.1.11Detail the director or director representative roles held by directors or representatives of members
of the board of directors of the company in other companies, whether listed or not:
Name of the director or
representative
Corporate name of
the entity, whether listed or not
Position
José Miguel Andrés Torrecillas
Zardoya Otis, S.A.
Director
Raúl Galamba de Oliveira
CTT – Correios de Portugal, S.A.
Group Executive
Chairman
Raúl Galamba de Oliveira
José de Mello Capital
Director
Raúl Galamba de Oliveira
José de Mello Saúde
Director
Belén Garijo López
L'Oréal Société Anonyme
Director
Belén Garijo López
Merck Group
CEO
Sunir Kumar Kapoor
Stratio Big Data, Inc.
Director
Sunir Kumar Kapoor
Deep Image Analytics, Inc.
Director
Sunir Kumar Kapoor
McLaren Technology Adquisition Corp.
Director
Ana Peralta Moreno
Grenergy Renovables, S.A.
Director
Ana Peralta Moreno
Inmobiliaria Colonial SOCIMI, S.A.
Director
Juan Pi Llorens
Ecolumber, S.A.
Group Executive
Chairman
Juan Pi Llorens
Oesía Networks, S.L.
Director
Juan Pi Llorens
Tecnobit, S.L.U. (Grupo Oesía)
Director
Juan Pi Llorens
UAV Navigation, S.L. (Grupo Oesía)
Director
Carlos Salazar Lomelín
Alsea, S.A.B. de C.V.
Director
79
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Carlos Salazar Lomelín
Sukarne, S.A. de C.V.
Director
Indicate, where applicable, all paid activities of any nature engaged in by directors or their
representatives aside from those indicated in the table above:
Name of the director or representative
Other paid activities
Susana Rodríguez Vidarte
Professor Emeritus at the University of Deusto
Sunir Kumar Kapoor
Operating Partner at Atlantic Bridge Capital and
advisor to the CEO at mCloud Technologies Corp.
Lourdes Máiz Carro
Teaching of training activities
Jaime Caruana Lacorte
Teaching of training activities
C.1.12 Indicate and, where applicable, explain whether the company has established any rules regarding
the maximum number of company boards on which its directors may sit, identifying, where
applicable, where such rules are governed:
Yes
Explanation of the rules and identification of the document governing the same
Article 11 of the Regulations of the Board of Directors establishes that, in the performance of their duties,
directors will be subject to the rules on limitations and incompatibilities established under the current
applicable regulations, and in particular, to the provisions of Act 10/2014 on the regulation, supervision
and solvency of credit institutions (the LOSS).
In this regard, Article 26 of the LOSS stipulates that the directors of credit institutions may not
simultaneously hold more positions than those provided for in the following combinations: (i) one
executive position and two non-executive positions; or (ii) four non-executive positions. Executive
positions are understood to be those that undertake management duties irrespective of the legal bond
attributed by those duties. In this respect, the following will count as a single position: 1) executive or non-
executive positions held within the same group; 2) executive or non-executive positions held within (i)
entities that form part of the same institutional protection scheme or (ii) trading companies in which the
entity holds a significant shareholding. Positions held in non-profit organisations or entities or companies
pursuing non-commercial purposes will not count when determining the maximum number of positions.
Nevertheless, the Bank of Spain may authorise members of the Board of Directors to hold an additional
non-executive position if it deems that this would not interfere with the proper performance of the
director's activities in the credit institution.
In addition, pursuant to the provisions of Article 11 of BBVA's Regulations of the Board of Directors,
directors may not:
•Provide professional services to companies that compete with the Bank or any of the companies
within its Group, or agree to be an employee, manager or director of such companies, unless they
have received express prior authorisation from the Board of Directors or from the General
Shareholders' Meeting, as appropriate, or unless these activities were conducted before the director
joined the Bank, they posed no effective competition and the Bank had been informed of such at that
time.
80
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
•Have direct or indirect shareholdings in businesses or enterprises in which the Bank or companies
within its Group hold an interest, unless that shareholding was held prior to joining the Board of
Directors or prior to the Group's acquisition of its holding in such businesses or enterprises, or unless
such companies are listed on national or international securities markets, or unless authorised to do
so by the Board of Directors.
•Hold political positions or perform any other activities that might receive public attention or affect the
Company's image in any way, unless authorised to do so by the Bank's Board of Directors.
C.1.13 Indicate the amounts of the following items relating to the total remuneration of the board of
directors:
Remuneration accrued in favour of the board of directors during the financial year
(thousands of euro)
16,118
Amount of funds accumulated by current directors through long-term savings
systems with vested economic rights (thousands of euro)
0
Amount of funds accumulated by current directors through long-term savings
systems with non-vested economic rights (thousands of euro)
24,546
Amount of funds accumulated by former directors through long-term savings
systems (thousands of euro)
69,289
Remarks
The remuneration included in the first heading of this paragraph includes: (i) the fixed remuneration received by
all directors in 2021; and (ii) in the case of executive directors, the amount corresponding to the Upfront Portion
of the Annual Variable Remuneration for the 2021 financial year, in cash and shares, and to the payment of the
Deferred Portion of the Annual Variable Remuneration for the 2018 financial year, in cash and shares, to be
delivered in 2022, together with the corresponding update of the cash portion. In the case of the Chairman, the
amount corresponding to the payment of the Deferred Portion of the Annual Variable Remuneration for the 2017
financial year, in cash and shares, to be delivered in 2022, together with the corresponding update of the cash
portion.
The amounts of the Upfront Portion of the Annual Variable Remuneration for the 2021 financial year have been
determined in 2022, once the result of the Annual Performance Indicators established for their calculation is
known. They will be paid in the first quarter of 2022, providing that the conditions to that effect have been met.
The amounts of the Deferred Portion of the Annual Variable Remuneration for the 2018 financial year have been
determined in 2022, upon learning the result of the Multi-Year Performance Indicators to which said
remuneration was subject, and will be paid in the first quarter of 2022, providing that the conditions to that effect
have been met.
The amount of the second payment of the Deferred Portion of the Chairman's Annual Variable Remuneration for
the 2017 financial year, to be delivered in 2022 was determined in 2021, upon learning the result of the Multi-
Year Performance Indicators to which said remuneration was subject, and will be paid in the first quarter of
2022, providing that the conditions to that effect have been met.
C.1.14Identify the members of senior management who are not also executive directors, and indicate
the total remuneration accrued in their favour throughout the financial year:
Name or corporate name
Position(s)
María Luisa Gómez Bravo
Global Head of Corporate & Investment Banking
Jorge Sáenz-Azcúnaga Carranza
Country Monitoring
Peio Belausteguigoitia Mateache
Country Manager Spain
Eduardo Osuna Osuna
Country Manager Mexico
David Puente Vicente
Global Head of Client Solutions
Javier Rodríguez Soler
Global Head of Sustainability
81
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Rafael Salinas Martínez de Lecea
Global Head of Finance
Jaime Sáenz de Tejada Pulido
Head of Global Risk Management
José Luis Elechiguerra Joven
Global Head of Engineering
Carlos Casas Moreno
Global Head of Talent & Culture
Ricardo Martín Manjón
Global Head of Data
Victoria del Castillo Marchese
Global Head of Strategy & M&A
María Jesús Arribas de Paz
Global Head of Legal
Domingo Armengol Calvo
General Secretary
Ana Fernández Manrique
Global Head of Regulation & Internal Control
Joaquín Gortari Díez
Global Head of Internal Audit
Number of women in senior management
4
Percentage of all members of senior management
25%
Total remuneration of senior management (thousands of
euro)
25,425
C.1.15Indicate whether there have been any amendments to the regulations of the board during the
financial year:
Yes
Description of the modifications
On 29 July, 2021, coinciding with the creation of the new global area of Sustainability, the Board of
Directors resolved to make specific amendments to Articles 18 and 20 of the Regulations of the Board
of Directors of the Bank, in order to include the report of this new area to the Chief Executive Officer, as
well as to the Chairman of the Board of Directors (in this case, in the areas of strategy and
transformation).
To this end, and on the basis of the analysis and agreement previously expressed by the Appointments
and Corporate Governance Committee, the Board approved the proposal for a new Regulation, thus
drawing up a new consolidated text of the Regulation. This was later published on the Bank's website
and registered in the Commercial Registry, in compliance with the applicable regulations.
C.1.16Indicate the procedures for the selection, appointment, re-election and removal of directors.
Provide details regarding the competent bodies, the procedures to be followed and the criteria to
be used in each procedure.
Selection, appointment and re-election procedure:
The General Meeting is responsible for appointing and re-appointing members of the Board of Directors,
though the Board has the authority to co-opt members if a seat falls vacant, in accordance with the terms
established in the regulations, the Bylaws, the Regulations of the Board and the Selection Policy
described in Sections C.1.5 and C.1.6.
The persons proposed to be appointed or re-appointed as members of the Board of Directors must meet
the requirements set out in current legislation, in the specific regulations applicable to credit institutions, in
the Bylaws, in the Regulations of the Board and in the Selection Policy.
Proposals for appointment or re-appointment of directors submitted by the Board of Directors to the
General Meeting, as well as appointments made directly to fill vacancies under its co-opting authority, will
be approved at the proposal of the Appointments and Corporate Governance Committee for independent
directors and subject to a report from this Committee for all other directors.
82
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Furthermore, proposals for appointment and re-appointment submitted to the General Meeting must be
accompanied by a supporting report from the Board of Directors assessing the skills, experience and
merits of the proposed candidate. Proposals for the appointment or re-appointment of non-independent
directors must also be accompanied by a report from the Appointments and Corporate Governance
Committee.
To this end, said Committee will evaluate the balance of knowledge, skills and experience on the Board of
Directors, as well as the conditions that the candidates must meet to cover vacancies (applicable legal
and suitability requirements, inter alia), evaluating the time commitment considered necessary so that
they can carry out their duties, according to the needs of the corporate bodies.
Thus, the Appointments and Corporate Governance Committee will develop rotation and selection
processes for directors as part of the process of progressive and systematic rotation of the corporate
bodies with a view to ensuring that the structure and composition of the Board remains balanced and in
line with the needs of the Bank at all times, having directors with different profiles, knowledge, training,
experience and qualities.
Within these processes, the Committee will ensure that diversity is promoted and that, in general, there
are no implicit biases that may lead to any form of discrimination.
It shall also ensure that these processes facilitate the selection of a sufficient number of female directors
to guarantee a balanced representation of men and women, with the aim that female directors represent
at least 40% of the Board by the end of the 2022 financial year and beyond, with the figure not dropping
below 30% prior to this, while endeavouring to ensure that women who match the professional profile
sought are included amongst potential candidates.
Additionally, the aim is for the composition of the Board of Directors to feature an appropriate balance
between the different types of director, for non-executive directors to represent an ample majority over
executive directors and for the number of independent directors to account for at least 50% of the total
seats.
The corporate bodies will also be assessed to ensure that they have a mix of individuals who have
experience and knowledge of the Bank, the Group, its businesses and the financial sector in general, as
well as others who have training, skills, knowledge and experience in other areas and sectors relevant to
the Bank.
In any case, BBVA's corporate bodies may take any other relevant diversity factor into consideration to
adapt the composition of the corporate bodies to the needs of the Bank. They may take into account
criteria such as gender diversity, academic profile, professional experience, knowledge, disability, origin or
age, thus being able to achieve an adequate balance.
In the performance of its functions, the Appointments and Corporate Governance Committee may employ
external services to select potential candidates, when it deems this necessary or appropriate.
Duration of term and termination:
The directors will hold their position for the term set out in the company Bylaws (that is, three years, after
which they may be reappointed one or more times for an additional three-year term) or, if they have been
co-opted, until the first General Shareholders' Meeting has been held. They will resign from their post
when the term for which they were appointed expires, unless they are re-appointed.
Directors must also inform the Board of Directors of any circumstances affecting them that could harm the
company's standing and reputation, and any circumstances that may have an impact on their suitability
for their role. Directors must offer their resignation to the Board and accept the Board's decision regarding
their continuity in office. Should the Board decide against their continuity, they are required to tender their
resignation, in the circumstances listed in section C.1.19 below.
In any event, directors will resign from their posts upon reaching 75 years of age and must submit their
resignation at the first meeting of the Bank's Board of Directors held after the General Shareholders'
Meeting approving the accounts for the financial year in which they reach said age.
83
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
C.1.17 Explain the extent to which the annual evaluation of the board has led to significant changes in its
internal organisation and in the procedures applicable to its activities:
Description of changes
Article 17 of the Regulations of the Board of Directors establishes that the Board shall evaluate the quality
and efficiency of its functioning, on the basis of the report submitted to it by the Appointments and
Corporate Governance Committee.
The BBVA Board of Directors carried out its self-assessment according to the process described in the
following section, in the context of the evolution and constant improvement of BBVA's Corporate
Governance System, in such a way that it remains aligned at all times to the needs of the corporate
bodies, to the environment in which the Group operates, and to the regulatory requirements and best
practices.
This has enabled the corporate bodies to continue to deepen the implementation of the various
improvement measures resolved by the Board over the course of the last few financial years.
Thus, the following conclusions from the 2021 evaluation process were of particular note:
•The maintenance of an adequate structure and composition of the corporate bodies, following the re-
election processes of seven directors (six of them independent) which culminated in the 2021
general meeting. This composition allows the Bank to have directors with outstanding professional
backgrounds with diverse profiles and a high level of dedication when it comes to carrying out their
duties. All of which guarantees an adequate knowledge of the environment, activities, strategies and
risks of the Bank and its Group by the corporate bodies and contributes to the enhanced
performance of their functions.
•The existence of a large majority of independent directors (two thirds of the total) and a female
representation of at least 30% of the total (a target applicable to the 2021 financial year).
•The significant improvements implemented in the decision-making process of the corporate bodies,
as well as in the exercise of their supervisory and control functions, where progress has been made
in both the role of the committees and the information model, as well as in the Board's own dynamics
in dealing with matters.
•The constant adaptation of the dynamics of the corporate bodies' meetings when it comes to the
evolution of the pandemic.
•The measures aimed at ensuring that there is constant interaction between the Board, its committees
and the executive team for the analysis of all relevant information, including on the evolution of the
pandemic and its management by the Bank, as well as the supervision and control of the executive
team, either directly by the Board, through the committees, within the framework of their respective
functions.
•The mechanisms that have enabled corporate bodies to increase the time spent on issues of
greatest relevance to the Group, in particular with regard to their different strategic approaches and
progress in the area of sustainability.
In all of this, the Bank's corporate bodies sought to keep BBVA's Corporate Governance System adapted
to the reality, circumstances and needs of the Bank and, consequently, to emphasise the importance
attributed to ensuring its solidity and resilience under all circumstances.
In this regard, indicate that on the evaluation process for 2021 likewise, the following issues have been
detected for continuous improvement: increase the participation of the Appointments and Corporate
Governance Committee in planning the succession of the holders of key functions, as well as continue
developing the supervision of the Corporate Governance Policy of the Group, simplify the information
provided to the corporate bodies to improve the efficiency of their sessions; and strengthen the integration
of the second line of defense within the area of Regulation and Internal Control.
84
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Describe the evaluation process and the evaluated areas conducted by the board of directors,
assisted, where applicable, by an external consultant, regarding the functioning and composition
of the board, its committees and any other area or aspect that was evaluated.
Description of the evaluation process and the areas evaluated
In accordance with Article 17 of the Regulations of the Board of Directors, the Board assesses the quality
and efficiency of its operation, as well as the performance of the duties of the Chairman of the Board,
starting, in each case, with the report submitted to it by the Appointments and Corporate Governance
Committee. The Board of Directors also evaluates the performance of the Chief Executive Officer, based
on the report by the Appointments and Corporate Governance Committee, which includes the evaluation
performed by the Executive Committee. Finally, the Board of Directors also assesses the operation of its
committees, on the basis of the reports submitted to it by the latter.
The evaluation process carried out in relation to the 2021 financial year consisted of a thorough analysis
and evaluation of the quality and efficiency of the functioning of the corporate bodies and the performance
of the Chairman and the Chief Executive Officer. This evaluation was carried out by the Appointments and
Corporate Governance Committee, taking into account several aspects, such the Board's self-
assessment for the 2020 financial year, the directors' view of the Bank, and the various reports issued,
described below.
On this basis, the Board of Directors evaluated: the quality and efficiency of the operation of the Board of
Directors; the performance of the duties of the Chairman and the Chief Executive Officer; and the
functioning of the Board Committees; as detailed below.
•The Board of Directors has analysed the quality and efficiency of its functioning in the 2021 financial
year, for which it has used the work carried out by the Appointments and Corporate Governance
Committee, as contained in its report on the quality and efficiency of the operation of the Board, in
which the following issues have been analysed in detail, among others: the structure, size and
composition of the Board of Directors and its committees, in line with the points in sections C.1.5,
C.1.6 and C.1.7; the independence and suitability of the directors, as well as the degree of
dedication of the members of the Board, (in particular, the chair of each of the committees), which
the Bank requires for the proper execution of the duties of director and the proper operation of the
corporate bodies; and the functioning of the Board and the committees, including the decision-
making process, the performance of supervision and control functions, and the development of the
corporate bodies' meetings during the financial year.
The Board has also analysed the outcome of the opinions obtained from the directors on the above
issues through personal interviews with Board members, these interviews having been led by the
Lead Director for non-executive directors and by the Chair of the Committee for executive directors.
Furthermore, and within the framework of its competence to determine the Board's assessment
procedure, in 2021, the Committee determined the desirability of incorporating the expert advice of
an independent external firm, Following the provisions of the Good Governance Code of Listed
Companies published by the CNMV as to the desirability of having the support of an external
consultant in carrying out the assessment every three years (where 2018 was the financial year in
which the last analysis by an external party took place).
This advice has been carried out by the company Promontory Financial Group (Promontory), after
the verification of its independence by the Appointments and Corporate Governance Committee, and
it has allowed that company – which also carried out the external analysis in 2018 – to carry out an
independent and in-depth review of the evolution of BBVA's Corporate Governance System in the
last three financial years, including, in particular, the various improvement measures implemented.
Promontory submitted its report of conclusions to the Appointments and Corporate Governance
Committee and the Board of Directors at the beginning of the 2022 financial year.
The process described has the objective of ensuring that the Board's assessment is carried out on
the basis of a combination of elements that will provide Board members with an overall view of the
development of their functions, in addition to the good governance recommendations established in
this area.
•The evaluation of the performance of the duties of the Chairman of the Board of Directors, which was
led by the Lead Director in accordance with Article 21 of the Regulations of the Board, was carried
out by the Board on the basis of the report by the Appointments and Corporate Governance
Committee (in accordance with Article 5 of the Regulations of the Appointments and Corporate
Governance Committee) which details the key elements of the Chairman's performance for the 2021
financial year.
85
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
•The evaluation of the performance of the duties of the Chief Executive Officer was carried out by the
Board on the basis of the report by the Appointments and Corporate Governance Committee,
including the assessment carried out in this respect by the Executive Committee (in accordance with
Article 17 of the Regulations of the Board) which details the key elements of the Chief Executive
Officer's performance for the 2021 financial year.
In addition, the Board assessed the quality and efficiency of the functioning of each Committee on the
basis of the reports submitted by their respective Chairs, as described in Section H of this Report.
C.1.18For those financial years in which an external consultant assisted with the evaluation, provide
details of any business relationships that the consultant or any entity in their group maintains with
this company or any company in its group.
The independent external expert who has aided in the Board of Directors assessment process has
intervened throughout the financial year in the provision of other consulting services for the Company,
and there are no known significant business relationships between the Company and the external
consultant or any other company in its group.
Furthermore, it is indicated that the external expert who has assisted in the Board of Directors
assessment process has not advised the company on appointment of directors or senior managers or
on remuneration systems.
C.1.19 Indicate the circumstances under which directors are obliged to resign.
In addition to the circumstances established in applicable law, directors will resign from their post when
the term for which they were appointed expires, unless they are re-appointed.
Accordingly, as set forth in Article 12 of the Regulations of the Board of Directors, directors must offer
their resignation to the Board of Directors and accept the Board's decision regarding their continuity in
office. Should the Board decide against their continuity, they are required to tender their resignation, in
the following circumstances:
•If they find themselves in circumstances deemed incompatible or prohibited under current
legislation, in the Bylaws or in the Regulations of the Board of Directors.
•When significant changes occur in their personal or professional situation that may affect the status
under which they were appointed to the Board.
•When they are in serious dereliction of their duties as director;
•When, for reasons attributable to them, acting in their capacity as director, serious damage has
been done to the Company's net worth, standing or reputation; or
•When they are no longer fit to hold the position of director at the Bank.
C.1.20Are supermajorities, other than those provided for by law, required for any type of decision?
No
Where applicable, describe the differences.
C.1.21Explain whether there are specific requirements, other than those relating to directors, to be
appointed chairman of the board of directors.
No
C.1.22Indicate whether the bylaws or regulations of the board establish an age limit for directors:
Yes
Age limit
Group Executive Chairman
-
Chief Executive Officer
-
Director
75
86
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Remarks
As stipulated in Article 4 of the BBVA Regulations of the Board of Directors, directors will resign from their posts, in all
circumstances, upon reaching 75 years of age, and must submit their resignation at the first meeting of the Bank's Board
of Directors held after the General Shareholders' Meeting approving the accounts for the financial year in which they reach
said age.
C.1.23Indicate whether the bylaws or regulations of the board establish a limited term or other stricter
requirements for independent directors in addition to those provided for by law:
No
C.1.24Indicate whether the bylaws or regulations of the board of directors establish specific rules for
proxy voting within the board of directors in favour of other directors, how this is carried out and,
in particular, the maximum number of proxies that a director may have and whether there are any
restrictions as to what types of directors may be appointed as a proxy, beyond the limitations
provided for by law. Where applicable, provide a brief description of these rules.
Article 5 of the BBVA Regulations of the Board of Directors establishes that directors are required to
attend meetings of the corporate bodies of which they form part, unless they have a justifiable reason
for not doing so. Directors will participate in the deliberations, discussions and debates on matters
submitted for their consideration and must personally attend the meetings held.
However, as set forth in Article 26 of the Regulations of the Board of Directors, if it is not be possible for
a director to attend a meeting of the Board of Directors, this director may authorise another director to
act as their proxy and cast votes on their behalf, by sending a letter or email to the Company with the
information needed by the proxy director to follow the absent director's instructions. Applicable
legislation states, however, that non-executive directors may only grant proxy to another non-executive
director. In addition, this same system applies to attendance at meetings of Board of Directors
committees.
C.1.25Indicate the number of meetings that the Board of Directors has held during the financial year. In
addition, where applicable, indicate how many times the board met without the chairman in
attendance. For calculation purposes, the chairman will be deemed to have been in attendance if
represented by a proxy provided with specific instructions.
Number of board meetings
15
Number of board meetings without the chairman in attendance
0
Indicate how many meetings were held by the lead director with the other board members, without
any executive director in attendance or represented:
Number of meetings
66
Remarks
BBVA's Board of Directors has a Lead Director who performs the duties set forth in the applicable legislation, as well as
those stipulated by Article 21 of the Regulations of the Board of Directors.
With regard to the duties assigned to this position, during the financial year, the Lead Director maintained ongoing
contact, held recurring meetings and had conversations with other directors of the Bank in order to seek their opinions on
the corporate governance and operation of the Bank's corporate bodies.
In addition, in accordance with Article 37 of the Regulations of the Board, the Lead Director held and coordinated monthly
meetings of non-executive directors, which took place following the meetings of the Board of Directors.
Furthermore, as of the date of this report, the Lead Director serves as Chair of the Risk and Compliance Committee and
as a member of the Appointments and Corporate Governance Committee, which are composed of non-executive directors
with a majority of independent directors. In addition, the Lead Director has held individual meetings with non-executive
directors within the framework of the Board's annual self-assessment process, in addition to those meetings described
above, in order to fully fulfil his duties.
In addition to the above, it should be noted that the number of meetings indicated does not include those informal
meetings that the Lead Director frequently holds with the other directors of the Bank since, due to their very nature, there
is no record of them nor are they documented.
87
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Indicate how many meetings were held by the board committees during the financial year:
Number of meetings of the executive committee
22
Number of meetings of the audit committee
15
Number of meetings of the appointments and corporate governance committee
5
Number of meetings of the remunerations committee
7
Number of meetings of the risk and compliance committee
22
Number of meetings of the technology and cybersecurity committee
8
C.1.26Indicate how many meetings were held by the board of directors during the financial year and
provide details on the attendance of its members:
Number of meetings attended in person by at least 80% of the directors
15
% of in-person attendance of the total number of votes cast during the financial year
98.67%
Number of meetings where all directors, or proxies granted with specific instructions, attended in
person
15
% of votes cast by directors attending in person and through proxies granted with specific instructions
of the total number of votes cast during the financial year
100%
Remarks
The Board of Directors holds monthly ordinary meetings in accordance with the annual schedule of ordinary meetings
drawn up before the beginning of the financial year, and extraordinary meetings as often as deemed necessary.
In addition, the Board of Directors meetings were held remotely, connecting all its members through remote means of
communication that allowed attendees to be recognised, as well as to interact and contribute in real time, guaranteeing
the unity of the event. Meetings were also held in person, always taking into account the evolution of the pandemic caused
by the coronavirus and the measures taken in this regard by the authorities.
C.1.27Indicate whether the individual or consolidated annual financial statements that are being
presented to the board for approval have been certified beforehand:
No
Where appropriate, identify the person(s) who has/have certified the company's individual and
consolidated annual financial statements prior to board approval:
C.1.28Explain the mechanisms, if any, established by the board of directors to ensure that the annual
financial statements presented by the board of directors to the general shareholders' meeting are
prepared in accordance with accounting regulations.
Article 32 of the BBVA Regulations of the Board of Directors specifies that the main task of the Audit
Committee, which is composed exclusively of independent directors, is to assist the Board of Directors in
supervising the preparation of the financial statements and public information, as well the relationship with
the external auditor and the Internal Audit area.
In this regard, in accordance with Article 5 of the Regulations of the Audit Committee, it is the
responsibility of the Audit Committee to oversee the process of preparing and reporting financial
information and submit recommendations or proposals on safeguarding the integrity thereof to the Board
of Directors.
It is also the responsibility of the Audit Committee to analyse all financial information and in the rest of the
required financial information and any related non-financial information contained in the annual, half-
yearly and quarterly financial statements of both the Bank and its consolidated Group, prior to their
submission to the Board of Directors and with sufficient depth so as to verify their accuracy, reliability,
adequacy and clarity.
88
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
It is also the Committee's responsibility to review the correct application of accounting criteria, as well as
all relevant changes relating to the accounting principles used and the presentation of the financial
statements, including the accurate demarcation of the consolidation perimeter.
Similarly, in accordance with Article 5 of the Regulations of the Audit Committee, said Committee is
responsible for monitoring the effectiveness of the Company's internal control and risk management
systems in the preparation and presentation of financial information (including tax-related risks).
In the performance of these functions, the Audit Committee maintains direct and ongoing contact with the
heads of the area in the Group responsible for Accounting functions through monthly meetings,
monitoring the evolution of the main figures on the Balance Sheet and the Income Statement of the Bank
and its Group each month; overseeing the accounting policies, practices and principles as well as the
valuation criteria followed by the Bank and the Group during the process of preparing and submitting the
corresponding financial information; and analysing changes made in relation to the main applicable
accounting regulations, as well as the main impacts that their incorporation has had on the financial
information of the Bank and its Group. To this end, the Committee had all of the information that it
required, with the level of aggregation deemed appropriate.
In addition, given that the external audit is one of the core elements in the chain of control mechanisms
established to ensure the quality and integrity of the financial information, in accordance with the
Regulations of the Audit Committee, it is the Committee's responsibility to check, at appropriate intervals,
that the external audit schedule of work is being conducted under the agreed conditions, and that this
satisfies the requirements of the competent authorities and the corporate bodies.
Moreover, it will require the auditor to periodically—at least once a year—provide an evaluation of the
quality of the internal control procedures regarding the preparation and presentation of the Group's
financial information, discussing with the auditor any weaknesses in the internal control system identified
during the audit, without undermining its independence, to then be able to submit recommendations or
proposals to the Board of Directors, along with the deadline for their follow-up.
The Committee will also be apprised of any infringements, situations requiring adjustments or anomalies
that may be detected during the external audit and are material in nature, i.e. those that, in isolation or as
a whole, could cause significant and substantive harm to the Group's net worth, earnings or reputation.
Discernment of such matters will be at the discretion of the external auditor who, if in doubt, must opt to
report on them.
These matters are carefully considered by the Audit Committee, which maintains direct and ongoing
contact with the external auditors through monthly meetings not attended by the Bank's executives. At
these meetings, the auditors provide detailed information on their work and the results thereof, which
enables the Committee to continuously monitor said work and the conclusions thereof, ensuring that it is
performed under optimal conditions and without interference from management.
C.1.29 Is the secretary of the board a director?
No
If the secretary is not a director, complete the following table:
Name or corporate name of the secretary
Representative
Domingo Armengol Calvo
-
C.1.30Indicate the specific mechanisms established by the company to preserve the independence of
the external auditors, and, if any, the mechanisms to preserve the independence of financial
analysts, investment banks and rating agencies, including how legal measures have been
implemented in practice.
As set forth in the Regulations of the Audit Committee, one of the Committee's functions, described in the
following Section C.2.1, is to guarantee the independence of the statutory auditor through a dual
approach:
•Avoiding any possibility that the auditor's warnings, opinions or recommendations may be
adversely influenced. To this end, the Committee must ensure that compensation for the auditor's
work does not compromise either its quality or independence, in compliance with the account
auditing legislation in force at any given moment.
•Establishing incompatibility between the provision of audit and consulting services, unless they are
tasks required by supervisors or the provision of which by the auditor is permitted by applicable
89
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
legislation, and there are no alternatives on the market that are equal in terms of content, quality or
efficiency to those provided by the auditor, in which case, agreement by the Committee will be
required, and this decision may be delegated in advance to its Chair. The auditor will be prohibited
from providing unauthorised services outside the scope of the audit, in compliance with the auditing
legislation in force at any given moment.
This matter is carefully considered by the Audit Committee, which holds meetings with the auditor's
representatives at each of the monthly meetings it has, without Bank executives in attendance, to gain a
detailed understanding of any issues that may hinder the audit process, the progress and quality of the
work carried out, and to confirm independence in the performance of its work.
The Committee also continually oversees the engagement of additional services to guarantee compliance
with the Regulations of the Audit Committee and with applicable legislation and thus the independence of
the auditor, in accordance with the Bank's internal procedure established for these purposes.
Moreover, in accordance with the provisions of Point f), Section 4 of Article 529 quaterdecies of the
Spanish Corporate Enterprises Act and Article 5 of the Regulations of the Audit Committee, each year
before the audit report is issued, the Committee must issue a report expressing its opinion on whether or
not the independence of the auditor has been compromised. This report must, in all cases, contain a
reasoned assessment of the provision of each and every kind of additional service provided to the Group
companies, considered individually and collectively, except the legal audit and those relating to
independence or the regulations on audit activity. Each year, the auditor must issue a report confirming its
independence via-à-vis BBVA or entities linked to BBVA, either directly or indirectly, with detailed and
itemised information on any kind of additional services provided to these entities by the external auditor,
or by the individuals or entities linked to it, as set out in the consolidated text of the Spanish Account
Auditing Act.
The relevant auditor and Audit Committee reports confirming the statutory auditor's independence with
respect to the 2021 financial year have been issued, in compliance with the legislation in force.
In addition, as BBVA's shares are listed on the New York Stock Exchange, it is subject to compliance with
the Sarbanes Oxley Act and its implementing regulations.
The Board of Directors also has a policy in place for communication and interaction with shareholders and
investors. The policy is governed by the principle of equal treatment for all shareholders and investors,
who are in the same position in terms of information, involvement and the exercise of their rights as
shareholders and investors, inter alia.
Moreover, this policy contains the principles and channels established in relation to shareholders and
investors, which govern, where applicable, BBVA relations with other stakeholders, such as financial
analysts, Bank share management companies and custodians, and proxy advisors, among others.
C.1.31Indicate whether the company has changed its external auditor during the financial year. If so,
identify the incoming and outgoing auditors:
No
If there were any disagreements with the outgoing auditor, explain these disagreements:
No
C.1.32 Indicate whether the auditing firm does any other work for the company and/or its group other
than audit work. If so, state the amount of fees received for such work and the percentage that
the aforementioned amount represents of the total fees billed to the company and/or its group for
audit work:
Yes
Company
Group
companies
Total
Amount of non-audit
work (thousands of euro)
20
185
205
Amount of non-audit work/total amount billed by
the auditing firm (%)
0.15%
1.46%
0.78%
90
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
C.1.33Indicate whether the audit report on the annual financial statements for the previous financial year
contained qualifications. If so, indicate the reasons given by the chair of the audit committee to
the shareholders at the General Meeting to explain the content and scope of such qualifications.
No
C.1.34Indicate the number of consecutive financial years during which the current auditing firm has
been auditing the individual and/or consolidated annual financial statements of the company.
Likewise, indicate the total number of financial years audited by the current auditing firm as a
percentage of the total number of years in which the annual financial statements have been
audited:
Individual
Consolidated
Number of consecutive financial years
5
5
Number of financial years audited by the current auditing firm/
number of financial years the company or its group have been audited (%)
23.81%
23.81%
C.1.35 Indicate whether there is a procedure in place (and provide details, where applicable) whereby
directors are provided with the information they need with sufficient time to be able to prepare for
meetings of the management bodies:
Yes
Details of the procedure
As set forth in Article 5 of the Regulations of the Board of Directors, prior to the meetings, directors will be
provided with the information needed to form an opinion with respect to the matters within the remit of the
Bank's corporate bodies, and may ask for any additional information and advice required to perform their
duties. They may also ask the Board of Directors for external expert help for any matters put to their
consideration whose special complexity or importance so requires.
These rights will be exercised through the Chairman or Secretary of the Board of Directors, who will
attend to requests by providing the information directly or by establishing suitable arrangements within the
organisation for this purpose, unless a specific procedure has been established in the regulations
governing the Board of Directors' committees.
Furthermore, as set forth in Article 28 of the Regulations of the Board of Directors, the directors will be
provided with such information or clarifications as deemed necessary or appropriate with regards to the
matters to be discussed at the meeting, either before or after the meetings are held.
In addition, BBVA's information model ensures that decisions are made on the basis of complete,
comprehensive, appropriate and consistent information, prepared in accordance with common principles
so that analyses carried out by the corporate bodies are based on the correct data, thus allowing directors
to perform their duties to the best of their ability.
Thus, the Bank's corporate bodies have a procedure in place for checking the information submitted for
consideration, coordinated by the Board's Secretariat with the departments responsible for the
information, in order to provide directors with complete, comprehensive, appropriate and consistent
information in sufficient time for the meetings of the Bank's various corporate bodies. Prior to such
meetings, information is made available to the Bank's corporate bodies via an online system, to which all
members of the Board have access.
C.1.36Indicate and, where applicable, provide details regarding whether the company has established
rules that require directors to report and, if applicable, resign in the event they are affected by
circumstances that, whether or not related to their actions at the company itself, could harm the
company's standing and reputation:
Yes
Explanation of the rules
As set forth in Article 12 of the Regulations of the Board of Directors, directors must also inform the Board
of Directors of any circumstances that may affect them and harm the Company's standing and reputation,
and any circumstances that may have an impact on their suitability to perform their role.
91
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Directors must offer their resignation to the Board of Directors and accept its decision regarding their
continuity in office. Should the Board decide against their continuing, they are required to tender their
resignation when, for reasons attributable to the directors in their status as such, serious damage has
been done to the Company's net worth, standing or reputation or when they are no longer suitable to hold
the status of director at the Bank, among other circumstances referred to in Section C.1.19 of this report.
C.1.37 Indicate, unless there have been special circumstances recorded in the minutes, whether the
board was informed or otherwise came to know of any situation concerning a director, whether or
not related to their actions at the company itself, that could harm the company's standing and
reputation:
No
C.1.38 Detail any significant agreements entered into by the company that are coming into force, or were
amended or concluded, as a result of a change in the control of the company stemming from a
public takeover bid, and the effects thereof.
The Company has not reached any significant agreements that are coming into force, or were amended
or concluded as a result of a change in the control of the Company stemming from a public takeover
bid.
C.1.39 Identify, on an individual basis when referring to directors and in the aggregate for all other cases,
and indicate in detail, any agreements between the company and its directors, managers or
employees that provide for severance pay (guarantee or golden parachute clauses) in the event
such persons resign or are wrongfully dismissed or if the contractual relationship comes to an end
owing to a public takeover bid or other type of transaction.
Number of beneficiaries
61
Beneficiary type
Description of the agreement
61 managers and employees
The Bank has no payment or severance commitments to directors.
As at 31 December 2021, in accordance with the provisions of their contracts, 61
managers and employees are entitled to a severance pay in the event of leaving
on grounds other than their own will, retirement, disability or serious dereliction of
duties. Its amount will be calculated by factoring in the fixed elements of the
Bank employee's salary and length of service and will not, under any
circumstances, be paid in the event of dismissal for misconduct at the employer's
decision on grounds of the employee's serious dereliction of duties.
Indicate whether, in addition to the circumstances provided for by law, these contracts are
required to be communicated to and/or approved by bodies of the company or its group. If so,
specify the procedures, the circumstances provided for and the nature of the bodies responsible
for such approval or communication:
Board of directors
General meeting
Body that authorises the clauses
Yes
No
YES
NO
Is the general meeting informed of these clauses?
X
Remarks
The Board of Directors approves resolutions relating to the basic contractual conditions of members of Senior Management,
pursuant to the provisions of Article 17 of the Regulations of the Board and at the proposal of the Remunerations Committee,
which are hereby notified to the General Meeting through this Report and through the information contained in the Annual
Financial Statements, but does not approve the conditions applicable to other employees.
92
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
C.2Committees of the board of directors
C.2.1 Detail all of the committees of the board of directors, their members and the proportion of
executive, proprietary, independent and other external directors sitting thereon:
EXECUTIVE COMMITTEE
Name
Position
Type
Carlos Torres Vila
Chair
Executive
Onur Genç
Member
Executive
José Miguel Andrés Torrecillas
Member
Independent
Jaime Caruana Lacorte
Member
Independent
José Maldonado Ramos
Member
Other external
Susana Rodríguez Vidarte
Member
Other external
% of executive directors
33.33%
% of proprietary directors
0%
% of independent directors
33.33%
% of other external directors
33.33%
Explain the functions that have been delegated or assigned to this committee, other than those that
have already been described in Section C.1.9, and describe the procedures and organisational and
operational rules of the committee. For each of these functions, indicate its most significant actions
during the financial year and how it has, in practice, exercised each of the functions attributed to it,
whether by law, in the bylaws or in other corporate resolutions.
Pursuant to Article 30 of BBVA's Regulations of the Board of Directors and Article 1.2 of its own
Regulations, the Executive Committee will be made aware of matters that the Board, as required by law,
the Bylaws, the Regulations of the Board or its own Regulations, resolves to delegate to it.
In particular, in accordance with the powers conferred on it by Article 5 of the Regulations of the Executive
Committee, the Committee performs the following functions:
•Supporting the Board in its decision-making:
I.In relation to strategy: establishment of the bases on which proposals are prepared and prior
analysis of proposals submitted to the Board regarding the Strategic Plan or other strategic
decisions such as the Risk Appetite Framework (RAF); prior analysis of the strategic and
financial aspects of proposals submitted to the Board regarding corporate operations that fall
within its decision-making remit; and decision-making or implementation of the mandates
which are expressly delegated to it by the Board in these areas, once the decisions within its
remit have been adopted.
II.In relation to budgets: prior analysis of budget proposals submitted to the Board; decision-
making within its remit with regard to the implementation of the budget approved by the Board;
and analysis of deviations from the approved budget.
III.In relation to finance: establishment of the bases on which proposals are prepared and prior
analysis of proposals submitted to the Board regarding the funding plan, the capital and
liquidity structure and the Bank's dividend policy; and decision-making on the implementation
of mandates conferred upon it by the Board in these areas.
IV.In relation to business risk: analysis of matters relating to business risk in the proposals and
plans submitted to the Board; and, in relation to reputational risk, analysis, evaluation and
management of matters relating to reputational risk.
93
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
•Prior reporting of policies submitted to the Board and approval of Company and Group general
policies: analysis, prior to their consideration by the Board, of the general Group and Company
policies that, in accordance with the law or internal regulations, must be approved by the Board,
except for policies relating to issues handled by other Board committees, which will be approved or
reported to the Board beforehand by the appropriate committee.
•Oversight and control of the following matters: (i) Group activity and results; (ii) budgetary monitoring;
(iii) progress of the Strategic Plan, by analysing key performance indicators established for this
purpose; (iv) monitoring of the Group's funding and liquidity plan and capital situation, as well as the
activities of the Assets and Liabilities Committee; (v) monitoring of changes in the risk profile and
core metrics defined by the Board; (vi) share-price performance and changes in shareholder
composition; (vii) analysis of the markets in which the Group operates; and (viii) progress of projects
and investments agreed within its remit, as well as those agreed by the Board within the strategic
sphere.
•Decision-making powers on the following matters: (i) investments and divestments between
EUR 50 million and EUR 400 million, unless they are of a strategic nature, in which case they will be
the Board's responsibility; (ii) plans and projects that are considered to be of importance to the Group
and that arise from its activities, and that are not within the remit of the Board; (iii) decisions
regarding the assumption of risks that exceed the limits set by the Board, which must be reported to
the Board at its first meeting thereafter for ratification; (iv) granting and revoking of the Bank's
powers; (v) proposals for the appointment and replacement of directors in the Bank's subsidiaries or
affiliates with more than EUR 50 million in equity; and (vi) compliance so that executive directors may
hold management positions in subsidiaries, in which the Bank holds a direct or indirect controlling
interest, or in the Group's affiliate companies.
The Regulations of the Executive Committee set out the operational principles of the Committee and lay
down the basic rules of its organisation and operation.
The Regulations of the Executive Committee specifically provide that the Committee will meet whenever it
is called to do so by its Chair, who is empowered to call the Committee and to set the agenda, and also
set out the procedure for calling ordinary and extraordinary meetings.
For the proper performance of its functions, the Committee will have available, where necessary, the
reports of the relevant Board committees on matters within their remits, and may request as a matter of
relevance the attendance of the chairs of those committees at its own meetings where such reports are to
be dealt with.
Other aspects of the organisation and operation of the Committee shall be dealt with in the Regulations of
the Committee itself. All other matters not provided for in the aforementioned Regulations will be subject
to the Regulations of the Board, insofar as they are applicable.
The most significant actions carried out by the Executive Committee in the 2021 financial year are
detailed in Section H of this Report.
AUDIT COMMITTEE
Name
Position
Type
Jaime Caruana Lacorte
Chair
Independent
José Miguel Andrés Torrecillas
Member
Independent
Belén Garijo López
Member
Independent
Lourdes Máiz Carro
Member
Independent
Ana Peralta Moreno
Member
Independent
% of proprietary directors
0%
% of independent directors
100%
% of other external directors
0%
94
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Explain the functions that have been assigned to this committee, including, where applicable, any that are
in addition to those provided for by law, and describe the procedures and organisational and operational
rules of the committee. For each of these functions, indicate its most significant actions during the
financial year and how it has, in practice, exercised each of the functions attributed to it, whether by law,
in the bylaws or in other corporate resolutions.
The main task of the Audit Committee is to assist the Board of Directors in overseeing the preparation of
the financial statements and public information, and the relationship with the external auditor and the
Internal Audit area.
More specifically, in accordance with the powers assigned to it by Article 5 of the Regulations of the Audit
Committee, and notwithstanding any other functions assigned to it by law, by the Bank's internal
regulations or by resolution of the Board the Audit Committee is entrusted with the following functions,
inter alia:
In relation to overseeing the financial statements and public information:
•To oversee the process of preparing and reporting financial information and to submit
recommendations or proposals to the Board for safeguarding data integrity.
•Analyse, prior to their submission to the Board and in enough detail to guarantee their accuracy,
reliability, sufficiency and clarity, the financial statements of the Bank and of its consolidated Group
contained in the annual, six-monthly and quarterly reports, as well as all other required financial and
related non-financial information.
•Review the necessary consolidation perimeter, the correct application of accounting criteria, and all
the relevant changes relating to the accounting principles used and the presentation of the financial
statements.
•Monitor the effectiveness of the Company's internal control as well as its risk management systems,
in terms of the process of preparing and reporting financial information, including tax-related risks,
and discuss with the auditor any significant weaknesses detected in the internal control system
during the audit, without undermining its independence.
In relation to the Internal Audit function:
•Propose the selection, appointment, re-election and removal of the Head of the Internal Audit
function to the Board of Directors; monitor the independence, effectiveness and functioning of the
Internal Audit function; analyse and set objectives for the Head of the Internal Audit function and
conduct a performance evaluation; ensure that the Internal Audit function has the necessary material
and human resources; and analyse and, where appropriate, approve the annual work plan for the
Internal Audit function.
•Receive monthly information from the Head of the Internal Audit function regarding the activities
carried out by it, and regarding any incidents and obstacles that may arise, and verify that Senior
Management takes into account the conclusions and recommendations of the reports; and also
follow up on these plans.
•To be aware of the audited units' degree of compliance with corrective measures previously
recommended by the Internal Audit area and inform the Board of those cases that may involve a
significant risk for the Group.
In relation to the external audit process:
•Submit to the Board any proposals for the selection, appointment, re-election and replacement of the
external auditor, taking responsibility for the selection process in accordance with applicable
regulations, as well as for the engagement terms, and periodically obtain information from the
external auditor on the external audit plan and its execution, in addition to preserving its
independence in the performance of its functions.
•Ensure the independence of the auditor: (i) by avoiding any possibility that the auditor's warnings, opinions
or recommendations may be adversely influenced, ensuring that compensation for the auditor's work does
not compromise either its quality or independence; and (ii) by establishing incompatibility between the
provision of audit and consulting services, unless they are tasks required by supervisors or the provision of
which by the auditor is permitted by applicable legislation, and there are no alternatives on the market that
are equal in terms of content, quality or efficiency to those provided by the auditor, in which case,
agreement by the Committee will be required.
95
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
•Establish appropriate relationships with the statutory auditor in order to receive information regarding any
issues that may pose a threat to their independence and any other issues related to the account audit
process.
•Where appropriate, authorise the provision of additional services by the auditor or associated
persons or entities, excluding prohibited services, as required by applicable regulations in each case,
under the terms provided for in auditing legislation.
•Issue, on an annual basis and before the audit report is issued, a report expressing an opinion on
whether the statutory auditor's independence has been compromised. This report must contain a
reasoned assessment of each of the additional services mentioned in the previous section,
considered individually and collectively, over and above the legal audit and in relation to the
independence requirements or to the rules governing the account auditing process.
•Ensure that the auditor holds an annual meeting with the full Board of Directors to inform it of the
work undertaken and developments in the Company's risk and accounting situations.
The most significant actions and work carried out by the Audit Committee in the 2021 financial year, as
well as its organisational and operational rules, are detailed in Section H of this Report.
Identify the directors who are members of the audit committee and have been appointed on the basis of
their knowledge and experience of accounting, auditing or both, and specify the date on which the chair of
this committee was appointed to the position.
Names of the directors with experience
Jaime Félix Caruana Lacorte
José Miguel Andrés Torrecillas
Belén Garijo López
Lourdes Máiz Carro
Ana Cristina Peralta Moreno
Date of appointment of the chair to the position
29 April 2019
APPOINTMENTS AND CORPORATE GOVERNANCE COMMITTEE
Name
Position
Type
José Miguel Andrés Torrecillas
Chair
Independent
Belén Garijo López
Member
Independent
José Maldonado Ramos
Member
Other external
Juan Pi Llorens
Member
Independent
Susana Rodríguez Vidarte
Member
Other external
% of proprietary directors
0%
% of independent directors
60%
% of other external directors
40%
Explain the functions that have been assigned to this committee, including, where applicable, any that
are in addition to those provided for by law, and describe the procedures and organisational and
operational rules of the committee. For each of these functions, indicate its most significant actions
during the financial year and how it has, in practice, exercised each of the functions attributed to it,
whether by law, in the bylaws or in other corporate resolutions.
The main task of the Appointments and Corporate Governance Committee is to assist the Board of
Directors in matters relating to the selection and appointment of members of the Board of Directors; the
assessment of their performance; the drafting of succession plans; the Bank's Corporate Governance
System; and the oversight of the conduct of directors and any conflicts of interest that may affect them.
96
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Notwithstanding any others assigned to it by the law, the internal regulations of the Bank or by decision
of the Board of Directors, the Appointments and Corporate Governance Committee has, among others,
the following functions:
1.Submit proposals to the Board of Directors for the appointment, re-appointment or removal of
independent directors and report on proposals for the appointment, re-appointment or removal of
the remaining directors.
2.Propose to the Board of Directors the selection and diversity policies for members of the Board.
3.Establish a target for representation of the underrepresented gender on the Board of Directors and
draw up guidelines on how to reach that target.
4.Analyse the structure, size and composition of the Board of Directors, at least once per year, when
assessing its operation.
5.Analyse the suitability of the members of the Board of Directors.
6.Review the status of each director each year, so that this may be reflected in the Annual Corporate
Governance Report.
7.Report on proposals for the appointment of Chairman and Secretary and, where appropriate,
Deputy Chair and Deputy Secretary, as well as the Chief Executive Officer (Consejero Delegado).
8.Submit to the Board of Directors proposals for the appointment, dismissal or re-appointment of the
Lead Director
9.Determine the procedure for assessing the performance of the Chairman of the Board of Directors,
the Chief Executive Officer (Consejero Delegado), the Board of Directors as a whole and the
Board's committees, and oversee its implementation.
10.Report on the quality and efficiency of the performance of the Board of Directors.
11.Report on the performance of the Chairman of the Board of Directors and of the Chief Executive
Officer, incorporating for the latter the assessment made in this regard by the Executive Committee,
for the purpose of periodic evaluation of both by the Board.
12.Study and arrange the succession of the Chairman of the Board of Directors, the Chief Executive
Officer and, where applicable, the Deputy Chair, in conjunction with the Lead Director in the case of
the Chair, and, where appropriate, draft proposals to the Board of Directors to ensure that the
succession takes place in a planned and orderly manner.
13.Review the Board of Directors' policy on the selection and appointment of members of the Group's
Senior Management, and file recommendations with the Board when applicable.
14.Report on proposals for the appointment and removal of senior managers.
15.Regularly review and assess the Company's Corporate Governance System and, where
applicable, propose to the Board of Directors for its approval or submission at the General
Shareholders' Meeting any amendments and updates that would facilitate its implementation and
continuous improvement.
The organisational and operational rules and the most significant actions carried out by the
Appointments and Corporate Governance Committee in the 2021 financial year are detailed in
Section H of this Report.
97
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
REMUNERATIONS COMMITTEE
Name
Position
Type
Belén Garijo López
Chair
Independent
Lourdes Máiz Carro
Member
Independent
Ana Peralta Moreno
Member
Independent
Carlos Salazar Lomelín
Member
Other external
Jan Verplancke
Member
Independent
% of proprietary directors
0%
% of independent directors
80%
% of other external directors
20%
Explain the functions that have been assigned to this committee, including, where applicable, any that
are in addition to those provided for by law, and describe the procedures and organisational and
operational rules of the committee. For each of these functions, indicate its most significant actions
during the financial year and how it has, in practice, exercised each of the functions attributed to it,
whether by law, in the bylaws or in other corporate resolutions.
The main task of the Remunerations Committee is to assist the Board of Directors in remuneration
matters within its remit and, in particular, those relating to the remuneration of directors, senior
managers and those employees whose professional activities have a significant impact on the risk
profile of the Group (hereinafter, the Identified Staff), ensuring that the established remuneration policies
are observed.
More specifically, in accordance with the powers that are assigned to it by Article 5 of the Regulations of
the Remunerations Committee, and notwithstanding any other functions assigned to it by law, by the
Bank's internal regulations or by resolution of the Board, the Remunerations Committee broadly
performs the following functions:
1.Propose to the Board of Directors, for submission to the General Meeting, the Remuneration Policy
for BBVA Directors, and also submit to the Board its corresponding report, all in accordance with
the terms established by applicable regulations at any given moment.
2.Determine the remuneration of non-executive directors, as provided for in the Remuneration Policy
for BBVA Directors, and submit the corresponding proposals to the Board of Directors.
3.Determine the extent and amount of individual remunerations, rights and other economic rewards,
as well as other contractual conditions for executive directors, so that these can be contractually
agreed in line with the Remuneration Policy for BBVA Directors, by submitting the relevant
proposals to the Board.
4.Determine and propose to the Board the objectives and criteria for measuring the variable
remuneration of the executive directors, and evaluate their degree of achievement.
5.Analyse, where appropriate, the need to make ex-ante or ex-post adjustments to variable
remuneration, including the application of reduction or recovery arrangements for variable
remuneration, submitting the corresponding proposals to the Board, based on the report from the
relevant committees in each case.
6.Present an annual report on the remuneration of the Bank's directors to the Board of Directors,
which will be submitted to the Annual General Shareholders' Meeting, in accordance with the
provisions of the applicable law.
7.Propose to the Board of Directors, and oversee the implementation of, the remuneration policy for
senior managers and other employees of the Identified Staff, including the process of determining
the Identified Staff.
98
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
8.Propose to the Board of Directors, and oversee the implementation of, the remuneration policy for
the Group, which may include the policy for senior managers and other employees of the Identified
Staff, stated in the previous paragraph.
9.Submit to the Board of Directors the proposals for basic contractual conditions for senior managers,
including their remuneration and compensation in the event they leave their role.
10.Directly oversee the remuneration of senior managers and, within the framework of the
remuneration model applicable to Senior Management at any given time, the objectives and criteria
for measuring variable remuneration of the heads of the Regulation & Internal Control area and the
Internal Audit area, submitting the corresponding proposals to the Board of Directors, based on
those submitted to it in turn by the Risk and Compliance Committee and the Audit Committee,
respectively.
11.Ensure compliance with the remuneration policies established by the Company and review them
periodically, proposing, where appropriate, any modifications that it deems necessary to ensure,
amongst other things, that they are adequate for the purposes of attracting and retaining the best
professionals, and that they contribute to the creation of long-term value and adequate control and
management of risks, and address the principle of equal pay. In particular, the Committee shall
ensure that the remuneration policies established by the Company are subject to internal, central
and independent review at least once a year.
12.Verify the information on the remuneration of directors and senior managers contained in the
various corporate documents, including the Annual Report on the Remuneration of Directors.
13.Supervise the selection of external advisers, whose advice or support is required for the
performance of their duties in remuneration matters, ensuring that any conflicts of interest do not
impair the independence of the advice provided.
The organisational and operational rules and the most significant actions carried out by the
Remunerations Committee in the 2021 financial year are detailed in Section H of this Report.
RISK AND COMPLIANCE COMMITTEE
Name
Position
Type
Juan Pi Llorens
Chair
Independent
Jaime Caruana Lacorte
Member
Independent
Raúl Galamba de Oliveira
Member
Independent
Ana Revenga Shanklin
Member
Independent
Susana Rodríguez Vidarte
Member
Other external
% of proprietary directors
0%
% of independent directors
80%
% of other external directors
20%
Explain the functions that have been assigned to this committee and describe the procedures and
organisational and operational rules of the committee. For each of these functions, indicate its most
significant actions during the financial year and how it has, in practice, exercised each of the functions
attributed to it, whether by law, in the bylaws or in other corporate resolutions.
99
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
The main task of the Risk and Compliance Committee (RCC) is to assist the Board in the determination
and monitoring of the Group's risk control and management policy, including internal risk control and
non-financial risks, with the exception of those related to internal financial control, which are the
responsibility of the Audit Committee; those related to technological risk, which are the responsibility of
the Technology and Cybersecurity Committee; and those related to business and reputational risk,
which are the responsibility of the Executive Committee. It also assists the Board in monitoring the
Compliance function and implementing a risk and compliance culture in the Group.
More specifically, in accordance with Article 5 of its Regulations and notwithstanding any other functions
assigned to it by law, by the Bank's internal regulations or by resolution of the Board, the Risk and
Compliance Committee is entrusted with the following functions:
1.Analyse, in accordance with the strategic basis set by the Board or the Executive Committee, and
submit to the Board proposals on the Group's risk strategy, control and management, including the
Group's risk appetite and the establishment of a risk level considered acceptable according to the
Group's risk profile and risk capital, broken down by its businesses and areas of activity; on the
basis of the strategic financial approaches determined by the Board and the Executive Committee.
2.Propose the policies of control and management of the different risks of the Group, within its scope
of competence, in a manner that is consistent with the Risk Appetite Framework established by the
Board.
3.Monitor the effectiveness of the Regulation & Internal Control function (which includes the
Regulatory, Supervisory, Compliance, Internal Risk Control and Non-Financial Risk Units) and, in
particular: (a) propose to the Board the appointment and separation of the individual responsible for
the function; (b) analyse and establish the objectives of the individual responsible for the function
and assess their performance; (c) ensure that the function has the resources necessary for the
effective performance of their function; and d) analyse and/or approve the annual work plan of the
function and monitor its compliance.
4.Receive monthly information from the Head of Regulation & Internal Control regarding their
activities, as well as regarding any incidents that may arise, and verify that the Group's Senior
Management takes into account the conclusions and recommendations of their reports.
5.Monitor the evolution of the risks faced by the Group and their compatibility with established
strategies and policies, and with the Group's Risk Appetite Framework and monitor risk-
measurement procedures, tools and indicators established at the Group level to obtain a global
view of the risks faced by the Bank and the Group; monitor compliance with prudential regulations
and supervisory risk requirements; and analyse measures to mitigate the impact of identified risks,
should they materialise.
6.Analyse the risks associated with strategic projects or corporate operations to be presented to the
Board or the EC, within its scope of competence and, where appropriate, submit a report.
7.Analyse risk operations that will be submitted to the Board or the Executive Committee for
consideration.
8.Examine whether the prices of the assets and liabilities offered to customers take into account the
Bank's business model and risk strategy and, if not, submit a plan to the Board aimed at rectifying
the situation.
9.Participate in the process of establishing the remunerations policy, checking that it is compatible
with an adequate and effective risk management strategy and that it does not offer incentives to
assume risks that exceed the level tolerated.
10.Check that the Group has the means, systems, structures and resources that are consistent with
best practices to implement their risk management strategy, ensuring that the risk management
mechanisms are adequate in relation thereto.
11.Provide information on the matters within its competence provided for in law or company
regulations, prior to the adoption of the corresponding resolutions by the Board, where relevant.
100
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
12.Ensure compliance with applicable regulations on matters related to money laundering, conduct on
the securities markets, data protection and the scope of Group activities with respect to
competition, and ensure that any requests for action or information made by official authorities on
these matters are dealt with in due time and in an appropriate manner.
13.Receive information about any breaches of applicable regulations and relevant events that the
areas reporting to it have detected during its monitoring and control operations, and to be informed
of relevant issues related to legal risks that may arise in the course of the Group's activity.
14.Examine draft codes of ethics and conduct and their modifications, prepared by the corresponding
area of the Group, and give its opinion in advance of the proposals to be drafted to the Corporate
Bodies.
15.Have knowledge of the reports, submissions or communications from external supervisory bodies,
and confirm that the instructions, requirements and recommendations received from the
supervisory bodies are implemented in an appropriate manner in order to correct any irregularities,
deficiencies or inadequacies that have been identified.
16.To ensure the promotion of risk culture across the Group.
17.To supervise the Group's criminal risk prevention model.
18.Review and monitor the systems for reporting by employees of possible irregularities in financial
information or other matters.
The organisational and operational rules and the most significant actions carried out by the RCC in the
2021 financial year are detailed in Section H of this Report.
TECHNOLOGY AND CYBERSECURITY COMMITTEE
Name
Position
Type
Carlos Torres Vila
Chair
Executive
Raúl Galamba de Oliveira
Member
Independent
Sunir Kumar Kapoor
Member
Independent
Juan Pi Llorens
Member
Independent
Jan Verplancke
Member
Independent
% of executive directors
20%
% of proprietary directors
0%
% of independent directors
80%
% of other external directors
0%
Explain the functions that have been assigned to this committee and describe the procedures and
organisational and operational rules of the committee. For each of these functions, indicate its most
significant actions during the financial year and how it has, in practice, exercised each of the functions
attributed to it, whether by law, in the bylaws or in other corporate resolutions.
The main task of the Technology and Cybersecurity Committee is to assist the Board of Directors in
monitoring technological risk, in managing cybersecurity and in monitoring the Group's technological
strategy.
Specifically, in accordance with the powers assigned to it by Article 5 of the Technology and
Cybersecurity Committee Regulations, and notwithstanding any other functions assigned to it by law, by
the Bank's internal regulations or by resolution of the Board, the Technology and Cybersecurity
101
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Committee shall perform the following functions, which fall into two categories:
(a) Functions relating to monitoring technological risk and managing cybersecurity, such as:
(i) Reviewing the Bank's main technological risks, including risks related to information security and
cybersecurity, as well as the procedures adopted by the executive area for monitoring and controlling
these exposures.
(ii) Reviewing the policies and systems for assessment, control and management of the Group's
technological infrastructures and risks, including the response and recovery plans in the event of
cyberattacks.
(iii) Being informed of business continuity plans regarding technology and technological infrastructure
matters.
(iv) Being informed, as appropriate, about: (i) compliance risks associated with information technology;
(ii) the procedures established for identifying, assessing, overseeing, managing and mitigating these
risks.
(v) Being informed about any relevant events that may have occurred with regard to cybersecurity, i.e.
events that, either individually or as a whole, may cause significant impact or harm to the Group's net
equity, results or reputation.
(vi) Being informed, as required, by the Head of the Technological Security area regarding the activities
it carries out, as well as any incidents that may arise.
(b) Functions related to the Technology Strategy:
(i) Being informed, as appropriate, of the technology strategy and trends that may affect the Bank's
strategic plans, including through monitoring general trends in the sector.
(ii) Being informed, as appropriate, of the metrics established by the Group for management and control
in the technological area, including the Group's developments and investments in this area.
(iii) Being informed, as appropriate, of issues related to new technologies, applications, information
systems and best practices that may affect the Group's technological plans or strategy.
(iv) Being informed, as appropriate, of the main policies, strategic projects and plans defined by the
Engineering Area.
(v) Reporting to the Board of Directors and, where appropriate, to the Executive Committee, on matters
related to information technologies falling within its remit.
The organisational and operational rules and the most significant actions carried out by the Technology
and Cybersecurity Committee during the 2021 financial year are detailed in Section H of this Report.
C.2.2Fill in the following table with information on the number of female directors sitting on the
committees of the board of directors as of the end of the last four financial years:
Number of female directors
Year 2021
Year 2020
Financial year 2019
Financial year
2018
Number
%
Number
%
Number
%
Number
%
Executive Committee
1
16.66%
1
16.66%
1
16.66%
1
16.66%
Audit Committee
3
60%
3
60%
3
60%
3
60%
Appointments and
Corporate Governance
Committee
2
40%
2
40%
2
40%
3
60%
102
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Remunerations
Committee
3
60%
3
60%
3
60%
3
60%
Risk and Compliance
Committee
2
40%
2
40%
1
20%
1
20%
Technology and
Cybersecurity
Committee
-
-
-
-
-
-
-
-
C.2.3Indicate, where applicable, if there are regulations governing the board committees, where they
may be consulted and any amendments made thereto during the financial year. Indicate whether
an annual report on the activities of each committee has been prepared voluntarily.
All the Committees of the Board of Directors have their own regulations, approved by the Board and
available on the Bank's corporate website (www.bbva.com), under Shareholders and Investors, Corporate
Governance and Remuneration Policy, in the Board Committees section. The regulations were not
amended during the 2021 financial year.
In addition, within the framework of the annual process of evaluating their operation, all the Board
Committees have prepared and submitted a report to the Board of Directors detailing the activity carried
out by each of them in the exercise of their functions during the 2021 financial year, and which are
described in section H of this Report, further to section C.2.1.
D.  RELATED-PARTY TRANSACTIONS AND INTRA-GROUP TRANSACTIONS
D.1 Explain the procedure and competent bodies, if any, for the approval of related-party and intra-
group transactions, indicating the general criteria and internal rules of the entity that regulate the
obligation of the affected directors or shareholders to abstain and detailing the internal procedures
relating to reporting and periodic control established by the company in relation to related-party
transactions whose approval has been delegated by the board of directors.
The Regulations of the Board of Directors establish that the Board of Directors will be responsible for
approving, where appropriate, transactions between the Company or companies within its Group and
directors or shareholders who have, individually or together with others, significant shareholdings, as
well as with related persons to them.
In addition, in its capacity as a credit institution, BBVA is subject to specific sectorial regulations which,
with regard to transactions with related persons, are governed by Royal Decree 84/2015 of 13 February,
implementing Act 10/2014 of 26 June, on the regulation, supervision and solvency of credit institutions,
and Bank of Spain Circular 2/2016 of 2 February, on the supervision and solvency of credit institutions,
which completes the adaptation to Spanish law of Directive 2013/36/EU and Regulation (EU) No
575/2013, on the extension of credit and guarantees to members of the Board of Directors and Senior
Management. The foregoing transactions are subject to approval by the Board of Directors and, in the
event that the requirements established by the aforementioned applicable regulations are fulfilled, are
submitted to the Bank of Spain for authorisation.
In accordance with applicable sectorial legislation, the Bank has specific internal regulations in this
regard, which specifically govern the process of granting and approving credit risk transactions as
described above for members of BBVA's Board of Directors and Senior Management, the approval of
which, as indicated, lies with the Bank's Board of Directors, and for related parties.
Furthermore, following the amendments to the Corporate Enterprises Act regarding the regime for
related-party transactions in listed companies, introduced by Act 5/2021 of 12 April, the General Meeting
will be responsible for the approval of related-party transactions with an amount or value equal to or
greater than 10% of the company's total assets according to its last approved annual balance sheet;
while the Board of Directors will be responsible for the approval of all other related-party transactions,
and may not delegate transactions except those that fulfil certain requirements stipulated in the
Corporate Enterprises Act.
103
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
On the basis of the regulations established by the Spanish Corporate Enterprises Act, the Board of
Directors resolved to delegate, to those responsible for certain executive areas of the Bank, the
approval of related-party transactions that: (i) are carried out pursuant to contracts with standard terms
that are widely applicable to a large number of customers, at prices that are set on a general basis by
the party acting as a supplier of the goods or services in question, where the amount thereof does not
exceed 0.5% of the net turnover contained in the most recent consolidated annual financial statements;
and (ii) are carried out between companies that are part of the same group and in the ordinary course of
business and on market terms, with transactions with credit risk that, as indicated, have a specific
approval procedure that corresponds to the Board of Directors, being excluded from such delegation.
Similarly, with regard to the approval of delegated related-party transactions, the Board of Directors
approved an internal procedure for periodic reporting and control regarding such transactions to enable
the Bank's corporate bodies to monitor their fairness and transparency, as well as compliance with
applicable legal requirements, in particular those established in this respect by the Corporate
Enterprises Act, the supervision of which will be the responsibility of the Audit Committee which, on a
half-yearly basis, will analyse the transactions, if any, approved on the basis of the delegation conferred.
The regulations established with regard to the handling of possible conflicts of interest and the rules
regarding abstention are described in section D.6.
D.2Individually detail transactions that are significant due to their amount or content entered into
between the company or its subsidiaries and shareholders holding 10% or more of the voting rights
or represented on the board of directors of the company, and indicate the competent body for the
approval thereof and whether any affected shareholder or director abstained from voting thereon. If
the board is the competent body, indicate whether the proposed resolution was approved by the
board without a majority of the independent directors having voted against such proposal:
Name or
corporate
name of the
shareholder or
any of its
subsidiaries
%
shareholding
Name or
corporate
name of the
company or
subsidiary
Nature of the
transaction
Type of
transaction
and other
information
required to
evaluate the
same
Amount
(thousand
s of euro)
Approving
body
Name of any
abstaining
significant
shareholders
or directors
The proposal to
the general
meeting, where
applicable, has
been approved
by the board
without a
majority of the
independent
directors having
voted against
the same.
D.3Individually detail transactions that are significant due to their amount or content entered into
between the company or its subsidiaries and directors or executives of the company, including
transactions entered into with entities controlled or jointly controlled by the director or executive,
and indicate the competent body for the approval thereof and whether any affected shareholder or
director abstained from voting thereon. If the board is the competent body, indicate whether the
proposed resolution was approved by the board without a majority of the independent directors
having voted against such proposal:
Name or corporate
name of the
directors or
executives or of
the entities under
their control or
joint control
Name or
corporate name
of the company
or subsidiary
Relationsh
ip
Nature of the
transaction and
other information
required to
evaluate the same
Amount
(thousands
of euro)
Approving
body
Name of any
abstaining
shareholders
or directors
The proposal to
the general
meeting, where
applicable, has
been approved
by the board
without a
majority of the
independent
directors having
voted against
the same.
104
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
D.4Individually detail intra-group transactions that are significant due to their amount or content
entered into between the company and its parent company or other entities belonging to the
parent's group, including subsidiaries of the listed company, except in cases in which no other
related party of the listed company has an interest in such subsidiaries or where the subsidiaries
are wholly owned, directly or indirectly, by the listed company.
In any event, provide information regarding any intra-group transactions entered into with companies
established in countries or territories considered to be tax havens:
Corporate name of the group company
Brief description of the transaction and other
information required to evaluate the same
Amount
(thousands of
euro)
BBVA Global Finance LTD.
Current account deposits
2,676
BBVA Global Finance LTD.
Term account deposits
6,004
BBVA Global Finance LTD.
Issue-linked subordinated liabilities
176,949
D.5Individually detail transactions that are significant due to their amount or content entered into
between the company or its subsidiaries with other parties considered to be related parties in
accordance with the International Accounting Standards adopted by the EU that have not been
listed in the previous categories.
Corporate name of the related party
Brief description of the transaction and other
information required to evaluate the same
Amount
(thousands of
euro)
D.6Detail the mechanisms established to detect, determine and resolve possible conflicts of interest
between the company and/or its group, and its directors, executives, significant shareholders or
other related parties.
Articles 7 and 8 of BBVA's Regulations of the Board of Directors regulate issues relating to possible
conflicts of interest, in summary, as follows:
Article 7: Directors must adopt necessary measures to avoid incurring in situations where their interests,
whether on their own account or for that of others, may enter into conflict with the corporate interest and
with their duties with respect to the Company, unless the Company has granted its consent under the
terms established in applicable legislation and in the Regulations of the Board of Directors.
Likewise, they must refrain from participating in deliberations and votes on resolutions or decisions in
which they or a related party may have a direct or indirect conflict of interest, unless these decisions
relate to the appointment or severance of positions on the management body.
Directors must notify the Board of Directors of any situation of direct or indirect conflict that they or
parties related to them may have with respect to the Company's interests.
Article 8: The duty of avoiding situations of conflicts of interest referred to in Article 7 above obliges the
directors to refrain from, in particular:
•Carrying out transactions with the Company, unless these relate to ordinary business, performed
under standard conditions for customers and of insignificant quantity. Such transactions are
deemed to be those whose information is not necessary to provide a true picture of the Company's
equity, financial situation and results.
•Using the name of the Company or invoking their position as director to unduly influence the
performance of private transactions.
•Making use of corporate assets, including the Company's confidential information, for private ends.
•Taking advantage of the Company's business opportunities.
•Obtaining advantages or remuneration from third parties other than the Company and its Group,
associated with the performance of their position, unless they are mere tokens of courtesy.
105
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
•Engaging in activities on their own account or on behalf of third parties that involve effective actual
or potential competition with the Company or that, in any other way, bring them into permanent
conflict with the Company's interests.
The above provisions will also apply should the beneficiary of the prohibited acts or activities described
in the previous sections be a related party to the director.
However, the Company may dispense with the aforementioned prohibitions in specific cases,
authorising a director or a related party to carry out a certain transaction with the Company, to use
certain corporate assets, to take advantage of a specific business opportunity or to obtain an advantage
or remuneration from a third party.
When the authorisation is intended to dispense with the prohibition against obtaining an advantage or
remuneration from third parties, or affects a transaction whose value is over 10% of the corporate
assets, it must necessarily be agreed by the General Shareholders' Meeting.
The obligation not to compete with the Company may only be dispensed with when no damage is
expected to the Company or when any damage that is expected is compensated by the benefits that are
foreseen from the dispensation. The dispensation will be conferred under an express and separate
resolution of the General Shareholders' Meeting.
In other cases, the authorisation may also be resolved by the Board of Directors, provided that the
independence of the members conferring it is guaranteed with respect to the director receiving the
dispensation. Moreover, it will be necessary to ensure that the authorised transaction will not do harm to
the corporate equity or, where applicable, that it is carried out under market conditions and that the
process is transparent.
Approval by the Board of Directors of the transactions of the Bank or companies within its Group with
directors will be granted, where appropriate, after receiving a report from the Audit Committee.
Since BBVA is a credit institution, it is subject to the provisions of Spanish Act 10/2014 of 26 June, on
the regulation, supervision and solvency of credit institutions (the LOSS), whereby the directors and
general managers or similar may not obtain credits, bonds or guarantees from the Bank on whose
board or management they work, above the limit and under the terms established in Article 35 of Royal
Decree 84/2015, implementing the LOSS, unless expressly authorised by the Bank of Spain.
Continued in Section H of this Report.
D.7Indicate whether the company is controlled by another entity within the meaning of Article 42 of the
Spanish Commercial Code, whether listed or not, and has, directly or through its subsidiaries,
business relations with said entity or one of its subsidiaries (other than those of the listed company)
or engages in activities related to those of any one of them.
No
E.  RISK CONTROL AND MANAGEMENT SYSTEMS
E.1Explain the scope of the company's Risk Control and Management System for financial and non-
financial risks, including risks of a tax-related nature.
The BBVA Group has a general risk management and control model (hereinafter, the Model) adapted to its
business model, its organisation, the countries in which it operates and its Corporate Governance System.
This allows the BBVA Group to operate within the framework of the risk control and management strategy
and policy defined by the Bank's corporate bodies, in which sustainability is specifically considered, and to
adapt to an ever-changing economic and regulatory environment, addressing risk management on a global
level in a manner adapted to the circumstances at any moment.
This Model, which is the responsibility of the Chief Risk Officer (CRO) and which must be updated or
reviewed at least annually, is applied comprehensively in the Group and is made up of the basic elements
set out below:
I.Governance and organisation
II.Risk Appetite Framework
III.Assessment, monitoring and reporting
106
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
IV.Infrastructure
The Group promotes the development of a risk culture that ensures consistent application of the Model
within the Group, and that guarantees that the risk function is understood and internalised at all levels of
the organisation.
The Model applies to the management and control of all financial and non-financial risks of the Group,
including tax risks, without prejudice to the fact that, with regard to tax, in addition to the management of
this type of risk as a non-financial risk, BBVA has a tax risk management policy based on an adequate
control environment, a risk identification system and a process for the monitoring and continuous
improvement of the effectiveness of the established controls. This management model is revised and
assessed by an independent expert.
For more information on the basic elements of the Model, see General risk management and control model
in the Risk management chapter of the individual and consolidated Management Reports for the 2021
financial year.
E.2Identify the corporate bodies responsible for the preparation and enforcement of the Risk Control
and Management System for financial and non-financial risks, including tax-related risks.
With regard to risks, the Board of Directors' responsibilities are those relating to establishing the policy for
controlling and managing risk and the oversight and control of its implementation.
In addition, and for a proper discharge of its functions, the Board of Directors is assisted by the Risk and
Compliance Committee (RCC) in the matters specified below. It is also assisted by the Executive
Committee (EC), which focuses on strategy, finance and business-related matters in an integrated manner,
in order to monitor the Group's risks.
In particular, the Board of Directors establishes the Group's risk strategy and, in the discharge of this
function, determines the risk control and management policy, which is set out in: the BBVA Group's Risk
Appetite Framework, which includes the Group's risk appetite statement, containing the general principles
of the Group's risk strategy and its target profile, as well as a set of quantitative metrics (core metrics—with
their respective statements—and metrics by type of risk) originating from said statement that reflect the
Group's risk profile; the management policy framework for the different types of risk to which the Bank is or
may be exposed, which contains the basic principles for managing and controlling risks consistently
throughout the Group and in accordance with the Model and the Risk Appetite Framework; and the Model.
Furthermore, in parallel with the function of defining the risk strategy and within the scope of its risk
monitoring, supervision and control functions, the Board of Directors monitors the evolution of the BBVA
Group's risks as well as the risks of each of its main geographical and/or business areas, ensuring their
compliance with the BBVA Group's Risk Appetite Framework, and also overseeing internal information and
control systems.
At the executive level, the Chief Risk Officer is responsible for managing all of the Group's financial risks
with the independence, authority, rank, experience, knowledge and resources required. They are
responsible for ensuring, within their scope of functions, that the BBVA Group's risks are managed
according to the established model.
For decision-making, the Chief Risk Officer has a governance structure for the role that culminates in a
support forum, the Global Risk Management Committee (GRMC), which is established as the main
executive-level committee on the risks within its remit. Its purpose is to develop the strategies, policies,
regulations and infrastructures needed to identify, assess, measure and manage the material risks within its
remit that the Group faces in its business activity.
In addition, the chief risk officers of the geographical and business areas report functionally to the Chief
Risk Officer of the Group and report operationally to the head of their geographical and/or business area.
This dual reporting system aims to ensure the independence of the local risk management function from
the operating functions, and enable its alignment with the Group's risk-related general policies and goals.
With regard to non-financial risks and internal control, the Group has a Regulation & Internal Control area
that is independent from the other units. This area is under the ultimate responsibility of the Global Head of
Regulation & Internal Control, who is also appointed by the BBVA Board of Directors and depends
hierarchically on the corporate bodies, to which reports on the performance of its functions. This area is
responsible for proposing and implementing policies related to non-financial risks and the Group's Internal
Control Model. It also includes, amongst others, the Non-Financial Risk, Regulatory Compliance and
Internal Risk Control units.
107
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
For more information on the bodies responsible for risk management and control at BBVA, see Governance
and organisation in the General risk management and control model section in the Risk management
chapter of the individual and consolidated Management Reports for the 2021 financial year.
As far as tax risk is concerned, the Tax function of the BBVA Group is responsible for establishing the
control mechanisms and internal rules necessary to ensure compliance with current tax regulations, as well
as proposing tax strategy to the Board of Directors for their consideration and approval, where appropriate.
In addition, the Audit Committee is responsible for overseeing the tax risks in the process of preparing and
presenting financial information, which is evidenced by the reports made by the Head of the BBVA Group's
Tax function to the Committee.
E.3Indicate the primary financial and non-financial risks, including tax-related risks and, to the extent
significant, risks derived from corruption (the latter being understood as those within the scope of
Royal Decree Law 18/2017) that could impact the achievement of business objectives.
BBVA has processes to identify risks and analyse scenarios, enabling dynamic and advance risk
management. These processes are forward-looking to ensure the identification of emerging risks.
Risks are identified and measured in a consistent manner and in line with approved methodologies. Their
measurement includes the design and application of scenario analyses and the application of stress
testing, and considers the controls to which the risks are subject.
In this regard, there are a number of emerging risks that could impact the Group's business performance.
These risks are organised into the following large blocks:
•Risks associated with the COVID-19 pandemic
•Macroeconomic and geopolitical risks
•Regulatory and reputational risks
•Business, legal and operational risks
For more information on these risks, see Risk factors in the Risk management chapter of the individual and
consolidated Management Reports for the 2021 financial year, and the Other non-financial risks chapter of
the Non-Financial Information Statement, included in said Management Reports.
Likewise, amongst the possible crimes included in the criminal prevention model are those related to
corruption, since there are a number of risks that could manifest in a company with characteristics such as
those of BBVA. For more information, see Other standards of conduct and Criminal Prevention Model in the
Compliance section, as reflected in the Company chapter of the Non-Financial Information Statement as
reflected in the Consolidated Management Report for the 2021 financial year.
Moreover, and not having the significant risk character referred to in this paragraph, it should be noted that
the Spanish judicial authorities are investigating the activities of the company Centro Exclusivo de
Negocios y Transacciones, S.L. (Cenyt). The investigation includes services provided to the Bank.
In relation to this, on 29 July 2019, the Bank was served the notice from Central Magistrates Court No. 6 of
the Spanish National Court, citing the Bank as an investigated legal entity in the preliminary proceedings
96/2017 — investigation piece number 9 — for alleged events that could be constituent elements of the
criminal offences of bribery of a public official, discovery and disclosure of secrets and corruption in
business. On 3 February 2020 the Bank was notified of the order of Central Investigating Court No. 6 of the
National High Court lifting secrecy of the proceedings. Certain Group managers and employees, both
current and former, as well as some former directors, are also under investigation in relation to this case.
The Bank is continuing to cooperate proactively with judicial authorities and has shared the relevant
documentation arising from the internal investigation contracted by the entity in 2019 to contribute to a
clarification of the events. As of the date of this report, no indictment has been filed against the Bank for
any crime.
The above-mentioned criminal proceedings are in the pre-trial phase. It is therefore impossible at this time
to predict their scope or duration, their possible outcome or the possible implications for the Group,
including potential fines and losses and damage to the Group's reputation.
Continued in section H.
108
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
E.4Identify whether the company has risk tolerance levels, including for tax-related risks.
The Group's Risk Appetite Framework, approved by the Board of Directors, determines the risks and the
associated risk levels that the Group is prepared to assume to achieve its objectives, considering the
organic development pattern of the business. These are expressed in terms of solvency, liquidity and
funding, and profitability and recurrence of revenue, which are reviewed not only periodically but also if
there are any substantial changes in the business strategy or relevant corporate transactions.
The Risk Appetite Framework is expressed through the following elements:
•Risk Appetite statement: This contains the general principles of the Group's risk strategy and the
target risk profile.
•Statements and core metrics: Derived from the appetite statement, these statements set out the
general risk management principles in terms of solvency, liquidity and funding, profitability and
income recurrence.
•Metrics by type or risk: Based on the core metrics and their thresholds, a series of metrics are
determined for each type or risk and adherence to these ensures compliance with the core metrics
and the Group's Risk Appetite Statement.
In addition to this Framework, the general principles for each type of risk as well as the level of
management limits, which is defined and managed by the areas responsible for managing each type of risk
in developing the structure of the metrics by type of risk, are established. This is to ensure that anticipatory
risk management respects this structure and, in general, the established Risk Appetite Framework.
Each significant geographical area has its own Risk Appetite Framework consisting of its local Risk Appetite
statement, core metrics and statements and metrics by type of risk, which should be consistent with those
set at the Group level, but adapted to their reality and approved by the corresponding corporate bodies of
each entity. This Appetite Framework is supplemented by the statements for each type of risk and has a
limit structure that is in line consistent with the above.
The corporate Risk area (Global Risk Management) works together with the various geographical and/or
business areas to define their Risk Appetite Framework, so that it is coordinated with and integrated into
the Group's Risk Appetite Framework, making sure that its profile is in line with the one defined. Also, for
local monitoring purposes, the Chief Risk Officer for the geographical and/or business area will periodically
report on the evolution of the local Risk Appetite Framework metrics to its corporate bodies, as well as,
where appropriate, to the appropriate local top-level committees, following a scheme similar to that of the
Group, in accordance with its own corporate governance systems.
For more information on the Risk Appetite Framework described above and on its monitoring and
management integration, see Risk Appetite framework in the General Risk management and control model
section within the Risk management chapter of the individual and consolidated Management Reports for
the 2021 financial year.
E.5 State what financial and non-financial risks, including tax-related risks, have arisen during the
financial year.
Risk is inherent to financial activity, and the occurrence of minor and major risks is therefore an inseparable
part of the Group's activities. BBVA therefore offers detailed information on the evolution of risks which, by
their nature, continuously affect the Group in carrying out its activity. This information is provided in its
annual financial statements (notes 7 and 19 on risk management and tax risks, respectively, in the BBVA
Group's Consolidated Annual Financial Statements; and notes 5 and 17, on the same subject matters, in
BBVA's Individual Annual Financial Statements, both for the 2021 financial year) and in the individual and
consolidated Management Reports, both for the 2021 financial year (the Risk management chapter and
Other non-financial risks chapter of the Non-Financial Information Statement).
E.6Explain the response and oversight plans for the primary risks faced by the entity, including tax-
related risks, and the procedures followed by the company to ensure that the board of directors
responds to any new challenges.
The BBVA Group's internal control system for its operational risks is based on the best practices developed
both in the COSO (Committee of Sponsoring Organizations of the Treadway Commission) Enterprise Risk
Management — Integrated Framework and in the Framework for Internal Control Systems in Banking
Organisations drawn up by the Basel Bank for International Settlements (BIS).
109
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
The control model has a system comprising three lines of defence:
•The Group's business and support units constitute the first line of defence. They are responsible
for primary management of current and emerging risks, and implementing control procedures for
risk mitigation. They are also responsible for reporting to their business/support unit.
•The second line of defence is comprised of specialised control units in different areas of risk:
Compliance, Legal, Finance, People, Physical security, Technological security, Information and
Data Security, Suppliers, Internal Risk Control and Processes. This line defines the control
frameworks in its specialist field, across the entire Entity, and provides training to areas exposed to
risk. It also checks the identification of current and emerging risks carried out by the different
business and support units, and the assessment carried out by these units on the adequacy and
effectiveness of their control environments. This second line of defence is in place in all
geographical areas in which the Group is present and acts in accordance with standardised
practices that come from the corporate units in each of the fields.
With regard to operational risk, the control activity of the first and second lines of defence is
coordinated by the Non-Financial Risks Unit, which is responsible for providing the units with a
common internal control methodology and global tools.
The Group's Head of Non-Financial Risks is responsible for the function and, with the Chief
Compliance Officer and the Head of Internal Risk Control, reports on its activity to the Head of the
Regulation & Internal Control Area, with all of the foregoing reporting to the Risk and Compliance
Committee and, in the case of the Global Head of Regulation & Internal Control, also to the Board,
to which she reports directly, while also assisting the corporate bodies in any matters where
requested.
Moreover, as part of the second line of defence, the Group has a specific Internal Risk Control unit,
within the area of Regulation & Internal Control, which, among other tasks, independently checks
and monitors regulations and governance structure, in terms of financial risks, and the application
and operation thereof in the area of Global Risk Management, as well as checking the development
and implementation of financial risk management and control processes. It is also responsible for
the validation of risk models.
The Group's Head of Internal Risk Control is responsible for the function and reports on its
activities and work plans to the Head of Regulation & Internal Control and to the Risk and
Compliance Committee, assisting the Committee in any matters where requested, and in particular
checking that the GRM reports presented to the Committee comply with the established criteria at
all times.
In addition, the Internal Risk Control function is global and transversal, covering all types of
financial risks and having specific units in all geographical and/or business areas, with functional
dependency on the Group's Head of Internal Risk Control.
The Group also has Internal Financial Control and Technological Risk functions, which form part of
its second line of defence. Those responsible for these functions both report to the Head of the
Regulation & Internal Control Area, to the Heads of the Finance and Engineering Areas
(respectively), and to the Audit Committee and the Technology and Cybersecurity Committee
(respectively) within the scope of their respective remits, while also assisting the corporate bodies
in any matters where requested.
•The third line of defence is made up of the Internal Audit unit, the head of which reports directly to
the Board, and for which the Group assumes the guidelines of the Basel Committee on Banking
Supervision and of the Institute of Internal Auditors. Its function is to independently and objectively
assess the first and second lines of defence, evaluating the efficiency and effectiveness of internal
control policies and systems, risk management and the governance processes and policies
established by the Group.
As far as tax risk is concerned, the Tax Department, located within the Finance area, is responsible for
establishing the policies and controls necessary to ensure compliance at all times with the current tax
regulations and the tax strategy approved by the Board. The Internal Financial Control Unit, as a second
line of defence against financial, accounting and tax risks, is responsible for assessing the quality of the
design and effectiveness of the control model operating in tax processes, as detailed in Section F of this
document.
Continued in section H of this Report.
110
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
F.  INTERNAL CONTROL AND RISK MANAGEMENT SYSTEMS FOR FINANCIAL REPORTING (ICFR)
Describe the mechanisms comprising the risk management and control systems for financial reporting (ICFR)
in your entity.
F.1 The entity's control environment
Give information on the main features of at least:
F.1.1. Which bodies and/or functions are responsible for: (i) the existence and maintenance of an adequate
and effective ICFR; (ii) the implementation thereof and (iii) oversight thereof.
Pursuant to Article 17 of its Regulations, the Board of Directors approves the financial information that
BBVA is required to publish periodically as a listed company. The Board of Directors has an Audit
Committee whose main task, among others, is to assist the Board in monitoring the preparation of
financial statements and public information, as well as monitoring internal control of financial
information.
In this regard, the Rules of Procedure of BBVA's Audit Committee establish that one of the Committee's
functions is to monitor the effectiveness of the Company's internal control and the risk management
systems in the process of drawing up and presenting financial information, including tax risks, as well as
discussing with the statutory auditor the significant weaknesses of the internal control system detected
during the audit.
The BBVA Group complies with the requirements imposed by the Sarbanes Oxley Act (SOX) for each
financial year's consolidated annual financial statements due to its status as a publicly traded company
listed with the United States Securities Exchange Commission (SEC). The main Group executives are
involved in the design, compliance and maintenance of an effective internal control model that
guarantees the quality and veracity of the financial information. The Finance area has been responsible
during 2021 for producing the consolidated annual financial statements and maintaining the control
model for financial information generation. Specifically, this function is performed by the Financial
Internal Control area, which is integrated within the Group's general internal control model, which is
briefly outlined below:
The BBVA Group works continuously to bolster its internal control model, which comprises two key
elements. The first is the control structure organised into three lines of defence, which is described in
Section E.6 above; and the second is a governance scheme called Corporate Assurance, which
establishes a framework for monitoring the internal control model and bringing the main aspects of the
Group's internal control to the attention of Senior Management.
Corporate Assurance establishes a committee structure, both at the local and corporate levels, that
provides Senior Management with a comprehensive and homogeneous view of the main non-financial
risks and relevant situations as regards the control environment. The aim is to facilitate fast and
proactive decision-making in relation to the mitigation or assumption of major risks. These committees
are formed by the main executives responsible for the business and support areas, as well as those
responsible for the second line of defence.
The effectiveness of this internal control system is assessed periodically for those risks that may affect
the correct compilation of the Group's financial statements. This assessment is carried out under the
coordination of the Internal Financial Control area (within the control model of the Group is the specialist
area of risk mitigation in the processes of financial information elaboration: Risk Control Specialist –
RCS Finance) in collaboration with the other risk specialists (RCS) located within the second line of
defence and also the Risk Control Assurers (RCA), located within the main areas of the defence model,
in both business and support areas.
The Group's Internal Audit area also performs its own assessment of the internal control system with
regard to the generation of financial information.
In addition, the external auditor of the BBVA Group issues an opinion every year on the effectiveness of
internal control over financial reporting based on criteria established by COSO (Committee of
Sponsoring Organizations of the Treadway Commission) and in accordance with PCAOB (the US Public
Company Accounting Oversight Board). This opinion appears in Form 20-F, which is filed every year
with the SEC.
The result of the annual internal assessment of the System of Internal Control over Financial Reporting,
conducted by Internal Audit and Internal Financial Control, is reported to the Audit Committee by the
heads of Internal Financial Control.
F.1.2. Whether, especially in the process of preparing financial information, the following elements exist:
•Departments and/or mechanisms responsible for: (i) designing and reviewing the organisational
structure; (ii) clearly defining lines of responsibility and authority, with an adequate distribution of
tasks and functions; and (iii) ensuring that sufficient procedures exist to properly disseminate them
within the entity.
111
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Financial information is produced in the local Financial Management Units of the BBVA Group
banks in the different countries where it maintains a presence. The consolidation work is carried out
in the Corporate Centre, in the Finance Department, which has overall responsibility for the
preparation and issuance of the Group's financial and regulatory information.
BBVA's organisational structure clearly defines lines of action and responsibility for the areas
involved in the generation of financial information, both at the individual entity level and
consolidated Group level, and also provides the channels and circuits necessary for the proper
communication thereof. The units responsible for drawing up these financial statements have a
suitable distribution of tasks and the necessary segregation of functions to draw up these
statements in an appropriate operational and control framework.
Additionally, there is an accountability model aimed at extending the culture of, and commitment to,
internal control. Those in charge of the design and operation of the processes that have an impact
on financial reporting certify that all the controls associated with its operation under their
responsibility are sufficient and have worked correctly.
•Code of conduct, approval body, degree of dissemination and instruction, principles and values
included (indicating whether there are specific references to recording transactions and preparing
financial information), body charged with analysing non-compliance and proposing corrective
measures and sanctions.
BBVA has a Code of Conduct, approved by the Board of Directors, which sets out the behaviour
guidelines that BBVA members must follow in their professional activity.
The Code of Conduct can be accessed on the Bank's website (www.bbva.com) and on the
employees' website (Intranet). Additionally, Group members undertake personally and individually
to observe its principles and rules in an express declaration of awareness and adhesion.
BBVA has an online training course on the Code of Conduct at the global level, with scope for the
entire Group staff, including key staff in the financial function and new recruits. In addition,
communication campaigns are developed periodically and new content is disseminated in
connection with the Code of Conduct, taking advantage of new digital formats and channels.
The Code also establishes a Whistleblowing Channel where behaviours that deviate from the Code
of Conduct or violate the law or internal regulations can be reported.
One of the functions of the Risk and Compliance Committee is to examine draft codes of ethics and
conduct and their respective modifications prepared by the corresponding area of the Group, and
give its opinion in advance of the proposals to be drafted to the corporate bodies.
Additionally, BBVA has adopted a structure of Corporate Integrity Management Committees (with
individual powers at the jurisdictional level). Their joint scope of action covers all the Group
businesses and activities and their main function is to ensure effective application of the Code of
Conduct. There is also a Corporate Integrity Management Committee, which is global in scope for
the whole of BBVA.
For its part, the Compliance function is entrusted by the Board of Directors with the task of
independently and objectively promoting and monitoring integrity of action within the BBVA Group,
particularly regarding activities that may involve the risk of money laundering and the financing of
terrorism, or entail a compliance or conduct risk. The Compliance Unit has among its tasks the
fostering of knowledge and application of the Code of Conduct, helping to resolve doubts regarding
interpretation of the Code through the Code of Conduct Consultation Channel and managing the
Whistleblowing Channel. With regard to possible violations of the Code of Conduct, BBVA has a
disciplinary system through which appropriate measures are taken, if necessary.
•Whistleblowing channel that allows financial and accounting irregularities to be communicated to
the audit committee, together with potential breaches of the code of conduct and irregular activities
in the organisation, reporting, where applicable, if the channel is confidential in nature and if it
allows for anonymous communication that respects the rights of the reporting party and the subject
of the report.
The Whistleblowing Channel is an essential part of the BBVA Group compliance system and is one
of the processes established to ensure that the regulations and guidelines of the Code of Conduct
are effectively applied. This Channel is also a means of helping BBVA members and third parties
outside the Group to report confidentially and, if they wish, anonymously, behaviours that deviate
from the Code of Conduct or violate applicable law or internal regulations, including financial or
accounting irregularities.
112
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
The Compliance Unit processes complaints promptly in an objective and impartial manner and
guarantees the confidentiality of the investigatory processes.
During the 2021 financial year, the BBVA Group implemented a global Whistleblowing Channel tool
provided by an external supplier in most geographical areas where the Group has a presence. This
online platform is accessible to all employees through the corporate Intranet and third parties
outside BBVA can access it via a public link posted on the BBVA Group website (www.bkms-
system.com/bbva). This new global tool raises the standards of security, confidentiality and
anonymity and, therefore, the level of protection afforded the whistleblower and the party being
reported.
Whistleblowers play a key role in preventing and detecting inappropriate behaviour, so affording
them protection is a priority for the BBVA Group. Individuals who report facts or actions in good
faith via the Whistleblowing Channel will not face any reprisals or other adverse consequences for
what they report.
As explained in the previous section, a Corporate Integrity Management Committee, of global
scope exists for the whole BBVA Group, among whose roles and responsibilities (set out in greater
detail in its regulations) are:
–Driving and monitoring global initiatives to foster and promote a culture of ethics and integrity
among members of the Group.
–Ensuring the uniform application of the Code.
–Promoting and monitoring the functioning and effectiveness of the Whistleblowing Channel.
–In cases where they are not already included among the members of the Committee,
informing Senior Management and/or the person responsible for preparing the financial
statements of any events and circumstances from which significant risks might arise for
BBVA.
In addition, through the Compliance Unit, periodic reports are submitted to the Risk and
Compliance Committee which, in compliance with its Regulations, reviews and monitors the
systems under which Group professionals may confidentially report any irregularities in financial
information or other matters.
•Periodic training and refresher courses for employees involved in preparing and revising financial
information and in assessing ICFR, covering at least accounting standards, auditing, internal
control and risk management.
The Finance area has a specific programme of courses and seminars, run in both its classroom
and virtual campus, which complement the general training of all employees of the BBVA Group, in
line with their roles and responsibilities. Specific training and periodic refresher courses are given
on accounting and tax regulations, internal control and risk management, particularly for teams in
the areas involved in preparing and reviewing the financial and tax-related information and in
evaluating the internal control system, to help them perform their functions correctly. These courses
are taught by professionals from the area and renowned external providers.
Additionally, the BBVA Group has a personal development plan for all employees, which forms the
basis of a personalised training programme to deal with the areas of knowledge necessary to
perform their functions.
F.2 Financial reporting risk assessment
Give information on at least:
F.2.1. The key features of the risk identification process, including error and fraud risks, with respect to:
•Whether the process exists and is documented.
The ICFR was developed by the Group Management in accordance with international standards
set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO),
which establishes five components on which the effectiveness and efficiency of internal control
systems must be based:
–Establishing an adequate control environment for monitoring all these activities.
–Assessing the risks that may be incurred by an entity in drawing up its financial information.
–Designing the necessary controls to mitigate the most critical risks.
113
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
–Establishing the adequate information circuits to detect and communicate the system's
weaknesses or inefficiencies.
–Monitoring such controls to ensure that they are operational and to guarantee their
effectiveness over time.
In order to identify the risks with a greater potential impact on the generation of financial
information, the processes through which such information is generated are analysed and
documented, and an analysis of the risks, errors or inaccuracies that may arise in each is later
conducted.
Based on the corporate internal control methodology, the risks are categorised by type, including
process errors and fraud, and their probability of occurrence and possible impact are analysed.
The process of identifying risk in the preparation of Financial Statements, including risks of error,
falsehood or omission, is carried out by the first line of defence: those responsible for each of the
processes that contribute to the preparation of financial information and those responsible for their
control. This risk identification is performed taking into account the theoretical risk model and the
mitigation and control framework previously defined by the specialists for each type of risk (within
the second line of defence) which, in the case of Finance, is the Internal Financial Control unit (tax
and financial reporting risk specialist), who, in addition, challenges the functioning and
effectiveness of the controls implemented.
Whether the assessment of their controls is annual, quarterly or monthly is determined based on
the significance of the risks, this ensuring coverage of the risks considered critical for the financial
statements.
The assessment of the aforementioned risks and the design and effectiveness of their controls
begins with the understanding of and insight into the analysed operating process, considering
criteria of quantitative materiality, likelihood of occurrence and economic impact, in addition to
qualitative criteria associated with the type, complexity and nature of the risks or of the business or
process structure itself.
The system for identifying and assessing the risks of internal control over financial reporting is
dynamic. It evolves continuously, always reflecting the reality of the Group's business, changes in
operating processes, the regulations applicable at all times, the risks affecting them and the
controls that mitigate them.
All this is documented in a corporate management tool developed and managed by the Non-
Financial Risk area (MIGRO, newly implemented in 2021). This tool documents all the risks and
controls, by process, that are managed by the different risk specialists, including the Financial
Internal Control unit.
•Whether the process covers all of the objectives of financial reporting (existence and occurrence;
completeness; valuation; presentation, breakdown and comparability; and rights and obligations),
whether the information is updated and how frequently.
Each of the processes identified in the BBVA Group for drawing up financial information aim to
record all financial transactions, value the assets and liabilities in accordance with applicable
accounting regulations and provide a breakdown of the information in accordance with regulator
requirements and market needs.
The financial information control model analyses each of the phases of the processes mentioned
above (from procedural governance, documentation, criteria setting, decision making, information
provision, application operation, monitoring generated information, and reporting), in order to
ensure that the risks identified in each process are adequately covered by controls that operate
efficiently. The control model is updated when changes arise in the relevant processes or support
tools for producing financial information.
•The existence of a process for identifying the consolidation perimeter, taking into account aspects
including the possible existence of complex corporate structures, instrumental entities or special
purpose vehicles.
The Finance area includes a department responsible for the Group's financial consolidation, which
carries out a monthly process of identification, analysis and updating of the perimeter of the
Group's consolidated companies.
114
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
In addition, the information from the consolidation department on new companies set up by the
Group's different units and the changes made to existing companies is compared with the data
analysed by a specific committee at corporate level, whose objective is to analyse and document
the changes in the composition of the corporate group and optimise its corporate structure
(Corporate Structure Committee — CSC).
In addition, the Finance area of the Bank, in controlling special purpose entities, makes a periodic
report to the Audit Committee on the structure of the Group of companies.
•Whether the process takes into account the effects of other types of risks (operational,
technological, financial, legal, tax-related, reputational, environmental etc.) insofar as they impact
the financial statements.
The model of internal control over financial reporting applies to processes for directly drawing up
such financial information and to all operational or technical processes that could have a relevant
impact on the financial, accounting, tax-related or management information.
As mentioned above, the Group has an internal control model coordinated by the Regulation &
Internal Control area, which uses a single methodology to assess all the Group's non-financial risks
(mainly operational, technological, financial, legal, tax-related, reputational, third party and
compliance). All the specialist risk areas and heads of control use a common tool (MIGRO) to
document the identification of the risks, the controls that mitigate those risks and the assessment of
their effectiveness.
There are control assurers in all the operational or support areas, and therefore any type of risk that
may affect the Group's operations is analysed under that methodology and is included in the ICFR
insofar as it may have an impact on the financial information.
•Which of the entity's governing bodies supervises the process.
The process for identifying risks and assessing the design, effectiveness and suitability of the
controls for generating financial information is documented at least once a year, and is overseen by
the Internal Audit area.
Moreover, the Group's head of Internal Financial Control reports annually to the Audit Committee
on analysis work that has been carried out, on the conclusions of the assessment of the control
model relating to the generation of financial information, and on the process for downstream
certification of the effectiveness of the control model. This process is undertaken by the financial
officers of the main entities and holding control specialists. This work follows the SOX methodology
in compliance with the legal requirements, under the aforesaid regulation, on systems of internal
control over financial reporting, and is included in Form 20-F, submitted annually to the SEC, as
indicated in Section F.1 above.
F.3 Control activities
Give information on the main features thereof, if at least the following exist:
F.3.1. Procedures for the review and authorisation of financial information and the description of the ICFR to
be published in the stock markets, indicating the persons responsible therefor and the documentation
describing the activity flows and controls (including those concerning risk of fraud) for the different
types of transactions that may materially impact the financial statements, including the procedure for
closing the accounts and the specific review of the relevant judgements, estimates, valuations and
projections.
All of the processes relating to the generation of financial information are documented, as is the
corresponding control model, including potential risks associated with each process and the controls put
in place to mitigate them. As explained in Section F.2.1, the aforementioned risks and controls are
recorded in the corporate tool MIGRO, which also includes the result of the assessment of the
effectiveness of the controls and the degree of risk mitigation.
In particular, the main processes relating to the generation of financial information are found in the
Finance area, and they are: accounting, consolidation, financial reporting, financial planning and
monitoring, and financial and tax management. The analysis of these processes, their risks and their
controls is also supplemented by that of all other critical risks, in the processes of the various business
areas or other support areas, that may have a financial impact on the financial statements.
In the review procedures for functioning of the control model, special attention is paid to the financial
and tax-related information disseminated to the securities markets, including a specific review of
controls on relevant judgements, estimates and projections used in the preparation of the above-
mentioned information.
115
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
As noted in the annual financial statements themselves, it is occasionally necessary to make estimates
to determine the amount at which some assets, liabilities, income, expenses and commitments should
be recorded.
These estimates are made based on the best information available on the financial statement closing
date and, together with the other relevant issues for the closing of the annual and six-monthly financial
statements, are revised and authorised by a Committee made up of the principal experts in these
matters.
F.3.2. Internal control policies and procedures for information systems (among others, access security,
change control, the operation thereof, operational continuity and segregation of functions) that support
the relevant processes of the entity in relation to the preparation and publication of financial
information.
The Group's current internal control model has expanded the catalogue of technological risks managed
as non-financial risks to three distinct categories:
✔ Physical Security: Covers risks from inadequate management of the physical security of assets
(including technology) and individuals due to the damage and deterioration of such assets.
✔Technological Security: Covers risks from inadequate management of technology changes, IT
system failures, risk from low IT availability and performance, IT system integrity risk, application
tampering fraud, and logical impersonation.
✔Information and Data Security: Covers risks from unauthorised access, modification or
destruction of data infrastructure, loss, theft or misuse of information and cyber attacks that
affect the privacy, confidentiality, availability and integrity of information.
The internal control models therefore include procedures and controls regarding the operation of
information and access security systems, the segregation of functions, and the development and
modification of computer applications used to generate financial information.
Both types of control are identified in the model of internal control over financial reporting and are
analysed and assessed periodically, in order to guarantee the integrity and reliability of the information
drawn up.
Consequently, the control model of the BBVA Group covers the adequate management of access
control, establishes the correct and necessary steps taken to put applications into production as well as
ensuring their subsequent support, the creation of backup copies, and assurance of continuity in the
processing and recording of operations.
In summary, the entire process of preparing and publishing financial information has established and
documented the procedures and control models for technology and IT systems necessary to provide
reasonable assurance of the correctness of the BBVA Group's public financial information.
F.3.3. Internal control policies and procedures designed to supervise the management of activities
subcontracted to third parties and those aspects of evaluation, calculation or assessment outsourced
to independent experts which may materially impact the financial statements.
The internal control model sets out specific controls and procedures for the management of
subcontracted activities or those aspects of evaluation, calculation and assessment of assets or
liabilities outsourced to independent experts.
There is a specialist area for risk arising from third party operations, a regulation and a non-financial
risk admission committee that analyses outsourcing operations, the risks they can incorporate into the
Group and the controls necessary for their mitigation. Additionally, the requirements to be met at the
Group level for the activities to be subcontracted are established and monitored.
There are procedural manuals for the outsourced financial processes that identify the procedures to be
followed and the controls to be applied by the service provider units and outsourcing units. The
controls established in the outsourced processes concerning the generation of financial information
are also tested by the Internal Financial Control area of the entity that carried out the outsourcing.
The valuations from independent experts used for matters relevant for generating financial information
are included within the standard circuit of review procedures executed by internal control, internal
auditing and external auditing.
F.4 Information and communication
116
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Give information on the main features thereof, if at least the following exist:
F.4.1. A specific function charged with defining accounting policies (accounting policy department or area),
keeping them current and resolving queries or conflicts stemming from their interpretation, ensuring
fluid communication with those in charge of operations in the organisation and maintaining an up-to-
date manual of accounting policies that is communicated to the units through which the entity
operates.
The Finance area and in particular the Accounting & Regulatory Reporting area have robust governance
systems which include two Technical Committees: one for Accounting and one for Capital. The purpose
of these committees is to analyse, study and issue standards that may affect the compilation of the
Group's financial and regulatory information, to determine the accounting and solvency criteria required
to ensure that transactions are booked correctly, and to calculate capital requirements within the
framework of the applicable standards.
The Group also has an Accounting Policies Manual, which is updated and made available to all Group
units by means of the Intranet. This Manual is the tool that guarantees that all the decisions related to
accounting policies or specific accounting criteria to be applied in the Group are supported and are
standardised. This Manual is approved by the Technical Accounting Committee and is continuously
documented and updated for use and analysis by all the Group's entities.
F.4.2. Mechanisms to capture and prepare financial reporting in standardised formats for application and use
by all units comprising the entity or group that support the main financial statements and the notes
thereto, in addition to detailed information on ICFR.
The BBVA Group's Finance area and the countries' financial management units are responsible for the
processes for preparing financial statements in accordance with the current accounting and
consolidation manuals. There is also a consolidation computer application that collects the accounting
information of the various companies within the Group and performs the consolidation processes,
including the standardisation of accounting criteria, aggregation of balances and consolidation
adjustments.
Control measures have also been implemented in each of the aforementioned processes, both locally
and at consolidated level, to ensure that all the data supplying the financial information is collected in a
comprehensive, exact and timely manner. There is also a single and standardised financial reporting
system that is applicable to and used by all the Group units and supports the main financial statements
and the explanatory notes. There are also control measures and procedures to ensure that the
information disclosed to the markets contains a breakdown that is tailored to regulatory requirements
and sufficient so as to enable investors and other users of the financial information to understand and
interpret it.
F.5 Supervision of the system's operation
Give information on the main features of at least:
F.5.1. The ICFR supervision activities carried out by the audit committee and whether the entity has an
internal audit function with powers that include providing support to the audit committee in its task of
supervising the internal control system, including the ICFR. Likewise, information will be given on the
scope of the ICFR assessment carried out during the financial year and of the procedure by which the
person in charge of performing the assessment communicates its results, whether the entity has an
action plan listing the possible corrective measures, and whether its impact on financial reporting has
been considered.
The internal control units of the business areas and of the support areas conduct a preliminary review of
the internal control model, assess the risks identified in the processes, the effectiveness of controls, and
the degree of mitigation of the risks, as well as identifying possible weaknesses and designing,
implementing and monitoring the mitigation measures and action plans.
The first assessment of the effectiveness of the risk controls for the financial information preparation
process is carried out by the RCA (Risk Control Assurer), who is responsible for control in the first line of
defence, and layer by the RCS (Risk Control Specialist — second line of defence) who must challenge
the design and operation of the controls in order to issue a conclusion on the operation of the control
model established for the risks covered by his field of expertise.
BBVA also has an Internal Audit unit that supports the Audit Committee with regard to the independent
supervision of the internal financial information control system. The Internal Audit function is entirely
independent of the units that draw up the financial information.
All the weaknesses in controls, mitigation measures and specific action plans are documented in the
corporate tool MIGRO and submitted to the internal control and operational risk committees of the
areas, as well as to the local or global Corporate Assurance Committees, based on the significance of
the detected issues.
117
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Both the weaknesses identified by the internal control units and those detected by the internal or
external auditor have an action plan in place to correct or mitigate risk.
During the 2021 financial year, the areas responsible for Internal Control conducted a full assessment of
the system for internal control over financial reporting, and, to date, no material or significant weakness
having any impact on the preparation of financial information have been revealed therein.
Additionally, in compliance with the SOX, the Group's Internal Control and Internal Auditing areas
annually assesses the effectiveness of the model of internal control over financial reporting on a group
of risks (within the perimeter of SOX companies) that could affect the drawing up of financial statements
at local and consolidated levels. This perimeter incorporates risks and controls in Finance and other
specialisms that are not directly financial (technology, risks, operational processes, human resources,
procurement, legal etc.). The results of this assessment are reported annually to the Audit Committee.
F.5.2. Whether there is a discussion procedure pursuant to which the auditor (in line with the technical
auditing standards), the internal audit function and other experts can inform senior management and
the audit committee or the entity's directors of significant internal control weaknesses identified during
the review processes for the annual financial statements or any others within their remit. Also provide
information on whether there is an action plan that endeavours to correct or mitigate the weaknesses
observed.
As described in section (F.5.1) above, the Group has a procedure in place whereby the internal auditor
and the heads of Internal Financial Control report to the Audit Committee any significant internal control
weaknesses detected in the course of their work. Any significant or material weaknesses, if present, will
likewise be reported. Similarly, there is a procedure whereby the external auditor reports to the Audit
Committee the result of their work assessing the system for internal control over financial information.
Since BBVA is listed with the SEC, the BBVA Group's external auditor annually issues its opinion on the
effectiveness of the internal control over financial reporting contained in the Group's consolidated annual
financial statements on 31 December each year, under PCAOB (Public Company Accounting Oversight
Board) standards, with a view to filing the financial information with the SEC on Form 20-F. The latest
report issued on the financial information for the 2020 financial year is available at www.sec.gov and at
www.bbva.com.
All control weaknesses detected by the Internal Control, Internal Audit and External Audit areas have an
action plan for resolution and are reported to the Internal Control Committees of each area, to the
Corporate Assurance Committees (local or global, depending on the severity of the weaknesses) and
also to the Audit Committee.
The internal control oversight carried out by the Audit Committee, described in the Regulations of the
Audit Committee published on the Group website,www.bbva.com, includes the following activities:
•Analyse, prior to their presentation to the Board of Directors and in enough detail to guarantee
their accuracy, reliability, sufficiency and clarity, the financial statements of the Bank and of its
consolidated Group contained in the annual, six-monthly and quarterly reports, as well as in all
other required financial information and related non-financial information. For this purpose, the
Committee will have the support it needs from the Group's Senior Management, especially
that of the area responsible for accounting functions, and from the Company and Group
auditor, as well as all the necessary information made available to it with the level of
aggregation deemed appropriate.
•Review the necessary consolidation perimeter, the correct application of accounting criteria,
and all the relevant changes relating to the accounting principles used and the presentation of
the financial statements.
•Monitor the effectiveness of the Company's internal control as well as its risk management
systems, in terms of the process of preparing and reporting financial information, including tax-
related risks, and discuss with the auditor any significant weaknesses detected in the internal
control system during the audit, without undermining its independence. For such purposes,
and where appropriate, the Committee may submit recommendations or proposals to the
Board of Directors, along with the deadline for their follow-up.
•Analyse and, where appropriate, approve the annual work plan for the Internal Audit area, as
well as any other occasional or specific plans to be implemented as a result of regulatory
changes or as required for organisation of the Group's business.
118
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
•To be aware of the audited units' degree of compliance with corrective measures previously
recommended by the Internal Audit area and inform the Board of those cases that may involve
a significant risk for the Group.
The external auditor and the head of Internal Audit attend all regular meetings of the Audit Committee to
report on the matters dealt with within their respective remits.
F.6 Other relevant information
F.7External auditor report
Report on:
F.7.1. Whether the ICFR information disclosed to the markets has been subject to review by the external
auditor, in which case the entity must attach the corresponding report as an annex. If not, explain the
reasons therefor.
The information related to the BBVA Group's internal control over financial reporting described in this
report is reviewed by the external auditor, which issues its opinion on the control system and on its
effectiveness in relation to the accounts published at the close of each financial year.
On 26 February 2021, the BBVA Group, as a private foreign issuer in the United States, filed the
Annual Report (Form 20-F) for the financial year ending on 31 December 2020, which was published
on the SEC website on that same date.
In accordance with the requirements set out in Section 404 of the Sarbanes-Oxley Act of 2002 by the
Securities and Exchange Commission (SEC), the aforementioned Annual Report (Form 20-F) included
certification of the Group's executive principles with regard to the establishment, maintenance and
assessment of the Group's system of internal control over financial reporting. The Form 20-F report
also included the opinion of the external auditor regarding the effectiveness of the Company's system
of internal control over financial reporting at the close of the 2020 financial year in Item 15 (controls
and procedures).
The Form 20-F Annual Report is available on the corporate website of Banco Bilbao Vizcaya
Argentaria, S.A., www.bbva.com, in the “Shareholders and Investors” section, “Financial Reports”
subsection, financial year 2020 within the “Financial Information” section (https: (https://
shareholdersandinvestors.bbva.com/financials/financial-reports/#2020).
G  EXTENT OF COMPLIANCE WITH CORPORATE GOVERNANCE RECOMMENDATIONS
Indicate the extent of the company's compliance with the recommendations of the Good Governance Code
of Listed Companies.
If any recommendations are not being followed or are only being followed in part, a detailed explanation of the
reasons for this must be provided so that shareholders, investors and the market in general have sufficient
information to assess the actions of the company. General explanations will not be acceptable.
1.The bylaws of listed companies should not place an upper limit on the votes that can be cast by a single
shareholder, or impose other obstacles to the takeover of the company by means of share purchases on
the market.
✔ COMPLIANT
2.Where the listed company is controlled by another entity within the meaning of Article 42 of the Spanish
Commercial Code, whether listed or not, and has, directly or through its subsidiaries, business relations
with said entity or one of its subsidiaries (other than those of the listed company) or engages in activities
related to those of any one of them, it should publicly report accurately on:
a)The respective areas of activity and potential business relations between the listed company or its
subsidiaries and the parent company or its subsidiaries.
b)The mechanisms in place to resolve possible conflicts of interest.
NOT APPLICABLE
3.During the annual general meeting, as a supplement to the information circulated in the annual corporate
governance report, the chairman of the board of directors should verbally inform shareholders in sufficient
detail of the most relevant aspects of the company's corporate governance, particularly:
a)Changes that have occurred since the previous annual general meeting.
119
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
b)The specific reasons for the company not following a given Corporate Governance Code
recommendation, and any alternative rules applied in this regard.
✔ COMPLIANT
4.The company should establish and implement a policy of communication and contacts with shareholders
and institutional investors within the framework of their involvement in the company, as well as with proxy
advisers, that complies in full with market abuse regulations and accords equitable treatment to similarly
situated shareholders. This policy should be disclosed on the company's website, including information
relating to how it has been put into practice and identifying the relevant actors or individuals responsible
for the implementation thereof.
And, without prejudice to the legal obligations regarding the disclosure of privileged information and other
regulated information, the company also has a general policy regarding the communication of economic-
financial, non-financial and corporate information through the channels it deems appropriate (media, social
media, or other channels) to help maximise dissemination and the quality of information available to the
market, investors and other stakeholders.
✔ COMPLIANT
5.The board of directors should not make a proposal to the general meeting for the delegation of powers to
issue shares or convertible securities without pre-emptive subscription rights in an amount exceeding 20%
of capital at the time of such delegation.
When a board of directors approves the issuance of shares or convertible securities that exclude pre-
emptive subscription rights, the company should immediately post the reports contemplated by
commercial laws on its website regarding such exclusion.
PARTIALLY COMPLIANT
The General Shareholders' Meeting of the Company held on 17 March, 2017 delegated to the Board of Directors
the power to increase the share capital and to exclude, in whole or in part, the pre-emptive subscription rights of the
shareholders in relation to any specific issuance of shares made under that agreement, with this power to exclude
the pre-emptive subscription rights being limited to 20% of BBVA's share capital at the time of delegation, although
this limit is expected to be reduced to 10% in accordance with proposals submitted to the BBVA General Meeting
for 2022. Also, at its meeting on 20 April, 2021, the BBVA General Shareholders' Meeting delegated to the Board of
Directors the power to issue securities that are convertible into newly issued BBVA shares, the conversion of which
is possible and is foreseen to meet regulatory requirements concerning their eligibility as capital instruments and it
also delegated the power to exclude, in whole or in part, the preferential subscription right of shareholders within the
context of a specific issuance, when required in the corporate interest and in compliance with the legal
requirements and limitations applicable on each occasion, in which case limitation to 20% of the share capital shall
not apply as the holdings of the shareholders would not be diluted. All of this, in accordance with the new wording of
the additional fifteenth provision of the Corporate Enterprises Act, which states that the 20% limit provided for in
Article 511 shall not apply to this type of issuance.
6.Listed companies that prepare the reports listed below, whether on a mandatory or voluntary basis, should
publish them on their website with sufficient time prior to the annual general meeting, even when such
publication is not required:
a)Report on auditor independence.
b)Reports on the functioning of the audit committee and the appointments and remuneration
committee.
c)Audit committee report on related-party transactions.
✔ COMPLIANT
7.The company should broadcast its general shareholders' meetings live on its website.
And the company should have mechanisms that enable proxy voting, remote voting and, in the case of
large cap companies and to the extent the same are proportional, attendance and active participation in the
General Meeting.
✔ COMPLIANT
8.The audit committee should ensure that the annual financial statements presented by the board of
directors to the general shareholders' meeting are prepared in accordance with the accounting regulations.
And in cases where the auditor has included any qualifications in its audit report, the chair of the audit
committee should clearly explain to the general meeting the opinion of the audit committee on the content
and scope thereof, making a summary of this opinion available to shareholders at the time of publication of
the calling of the meeting, together with the other proposals and reports of the board.
✔ COMPLIANT
9.The company should disclose its requirements and procedures for demonstrating share ownership, the
right to attend the general shareholders' meeting and the exercise or delegation of voting rights, and
display them permanently on its website.
Such requirements and procedures should encourage shareholders to attend and exercise their rights and
be applied in a non-discriminatory manner.
✔ COMPLIANT
120
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
10.When an accredited shareholder exercises the right to supplement the agenda or submit new proposals
prior to the general shareholders' meeting, the company should:
a)Immediately circulate the supplementary items and new proposals.
b)Disclose the attendance card template and proxy appointment or remote voting form, duly modified
to allow for voting on new agenda items and alternative proposals on the same terms as those
submitted by the board of directors.
c)Put all these items or alternative proposals to a vote applying the same voting rules as for those
submitted by the board of directors, with particular regard to presumptions or deductions about the
direction of votes.
d)After the general shareholders' meeting, disclose the breakdown of votes on such supplementary
items or alternative proposals.
NOT APPLICABLE
11.In the event that the company plans to pay premiums for attendance at the general shareholders' meeting,
it should first establish a general, consistent policy regarding such premiums.
NOT APPLICABLE
12.The board of directors should perform its functions with unity of purpose and independent judgement,
according the same treatment to all similarly situated shareholders. It should be guided by the corporate
interest, understood as the achievement of a profitable business that is sustainable in the long term and
promotes the continuity thereof while maximising the economic value of the company.
In furtherance of the corporate interest, it should not only abide by laws and regulations and conduct itself
according to principles of good faith, ethics and respect for commonly accepted customs and good
practices, but also strive to reconcile its own interests with the legitimate interests of its employees,
suppliers, customers and other stakeholders that may be affected, as applicable, as well as with the impact
of its activities on the broader community and the natural environment.
✔ COMPLIANT
13.The board of directors should have an optimal size to promote its efficient functioning and maximise
participation. The recommended range is accordingly between five and fifteen members.
✔ COMPLIANT
14.The board of directors should approve a policy aimed at favouring an appropriate composition of the board
of directors and that:
a)Is concrete and verifiable;
b)Ensures that proposals for appointment or re-election are based on a prior analysis of the needs of
the board of directors; and
c)Favours a diversity of knowledge, experience, age and gender. To this end, measures that
encourage the company to have a significant number of female senior managers are considered to
favour gender diversity.
The results of the prior analysis of the needs of the board of directors should be contained in the
supporting report from the appointments committee published upon the calling of the general
shareholders' meeting at which the ratification, appointment or re-election of each director is to be
submitted.
The appointments committee should verify compliance with this policy on an annual basis and set out its
findings in the annual corporate governance report.
✔ COMPLIANT
15.Proprietary and independent directors should constitute an ample majority on the board of directors, while
the number of executive directors should be the minimum necessary, bearing in mind the complexity of the
corporate group and the percentage shares held by the executive directors in the company's capital.
The number of female directors should represent at least 40% of the members of the board of directors
before the end of 2022 and thereafter, representing no less than 30% prior to this.
✔ COMPLIANT
16.The percentage of proprietary directors out of all non-executive directors should be no greater than the
proportion of the ownership in the company represented by such directors to the remainder of the
company's capital.
This criterion may be relaxed:
a)In large cap companies where few or no equity shares are considered by law to be significant
shareholdings.
b)In companies with a plurality of shareholders represented on the board of directors but who are not
otherwise related.
✔ COMPLIANT
121
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
17.Independent directors should represent at least half of all board members.
However, when the company does not have a large market capitalisation, or when a large cap company has
shareholders who, individually or together, control over 30% of the share capital, independent directors
should constitute at least a third of the total number of directors.
✔ COMPLIANT
18.Companies should disclose the following information regarding their directors on their websites and keep
it up to date:
a)Background and professional experience.
b)Directorships held in other companies, whether listed or not, and other paid activities in which they
engage of whatever nature.
c)Indication of the class of directors to which they belong, specifying, in the case of proprietary
directors, the shareholder they represent or are related to.
d)Date of their first appointment as a board member and subsequent re-elections.
e)Shares they hold in the company, and any options over the same.
✔ COMPLIANT
19.Following verification by the appointments committee, the annual corporate governance report should
disclose the reasons for the appointment of proprietary directors at the behest of shareholders controlling
less than 3% of capital, and explain any formal requests for a seat on the board that were denied where
such requests came from shareholders whose interests in the company's share capital were equal to or
greater than those of others at whose behest proprietary directors were appointed.
NOT APPLICABLE
20.Proprietary directors should resign when the shareholders they represent dispose of their ownership
interest in its entirety. If such shareholders reduce their interests in the company to a point that requires a
decrease in their number of proprietary directors, the number of such directors should be reduced
accordingly.
NOT APPLICABLE
21.The board of directors should not propose the removal of independent directors before the expiry of their
term as provided for in the bylaws except for just cause as determined by the board of directors following a
report from the appointments committee. In particular, just cause will be presumed when directors take up
new posts or responsibilities that prevent them allocating sufficient time to the work of a board member, or
are in breach of their fiduciary duties or come under one of the disqualifying grounds for classification as
independent enumerated in the applicable legislation.
The removal of independent directors may also be proposed when a takeover bid, merger or similar
corporate transaction alters the company's capital structure, provided the changes in the structure of the
board of directors are in furtherance of the principle of proportionality set out in recommendation 16.
✔ COMPLIANT
22.Companies should establish rules obliging directors to report and, if applicable, resign in the event they
are affected by circumstances that, whether or not related to their actions at the company itself, could harm
the company's standing and reputation, and, in particular, to inform the board of directors of any criminal
charges brought against them and the procedural developments thereof.
And, having been informed or having otherwise become aware of any of the situations mentioned in the
previous paragraph, the board should examine the situation as promptly as possible and, taking into
account the specific circumstances, decide, following a report from the appointments and remunerations
committee, whether or not to adopt any measures, such as opening an internal investigation, requesting
the resignation of the director or proposing their removal. This should be reported in the annual corporate
governance report, unless special circumstances warrant otherwise, which must be recorded in the
minutes. This is without prejudice to the information that the company is required to disseminate, if
appropriate, at the time the corresponding measures are adopted.
✔ COMPLIANT
23.Directors should express their clear opposition when they feel a proposal submitted to the board of
directors might damage the corporate interest. In particular, independent and other directors not subject to
potential conflicts of interest should strenuously challenge any decision that could harm the interests of
shareholders lacking board representation.
When the board of directors makes significant or repeated decisions with regard to which a director has
expressed serious reservations, the director should draw the pertinent conclusions and, if they decide to
resign, should set out their reasons in the letter referenced in the next recommendation.
This recommendation also applies to the secretary of the board of directors, even if the secretary is not a
director.
✔ COMPLIANT
122
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
24.When, either due to resignation or following a resolution of the general meeting, a director leaves their role
prior to the end of their term, they should provide sufficient explanation for the resignation or, in the case
of non-executive directors, an opinion on the general meeting's grounds for removal, in a letter to be sent
to all board members.
And, without prejudice to the inclusion of all of the foregoing in the annual corporate governance report, to
the extent that it is relevant to investors, the company should make the departure public as soon as
possible, including sufficient reference to the reasons or circumstances provided by the director.
✔ COMPLIANT
25.The appointments committee should ensure that non-executive directors have sufficient time available to
fulfil their responsibilities effectively.
The regulations of the board of directors should establish the maximum number of company boards on
which its directors can serve.
✔ COMPLIANT
26.The board of directors should meet with the necessary frequency to properly perform its functions, eight
times a year at a minimum, in accordance with a calendar and agendas set at the start of the financial year
to which each director may propose the addition of initially unscheduled agenda items.
✔ COMPLIANT
27.Director absences should be kept to a strict minimum and quantified in the annual corporate governance
report. In the event of an absence, directors should designate a proxy with instructions.
✔ COMPLIANT
28.When directors or the secretary express concerns about a proposal or, in the case of directors, about the
company's performance, and such concerns are not resolved at the meeting, they should be recorded in
the minutes if the person expressing them so requests.
✔ COMPLIANT
29.The company should establish suitable channels for directors to obtain the advice they need to carry out
their duties, extending if necessary to external advisory services at the company's expense.
✔ COMPLIANT
30.Regardless of the knowledge directors must possess to carry out their duties, companies should also offer
directors refresher courses when circumstances so advise.
✔ COMPLIANT
31.The agendas of board meetings should clearly indicate on which points the board of directors must arrive
at a decision, so that directors can study or gather together the information they need beforehand.
For reasons of urgency, the chairman may wish to present decisions or resolutions for board approval that
were not on the meeting agenda. In such exceptional circumstances, the inclusion thereof will require the
express prior consent of a majority of the directors present, which shall be duly recorded in the minutes.
✔ COMPLIANT
32.Directors should be regularly informed of changes in share ownership and of the views of significant
shareholders, investors and rating agencies on the company and its group.
✔ COMPLIANT
33.The chairman, as the person charged with the efficient functioning of the board of directors, in addition to
performing the duties attributed thereto by law and the company's bylaws, should prepare and submit to
the board a schedule of meeting dates and agendas; organise and coordinate regular evaluations of the
board and, where appropriate, the company's chief executive; exercise leadership of the board and be
accountable for its proper functioning; ensure that sufficient time is given to the discussion of strategic
issues; and approve and review refresher courses for each director, when circumstances so advise.
✔ COMPLIANT
34.When a lead director has been appointed, the bylaws or regulations of the board of directors should grant
them the following powers over and above those conferred by law: chair the board of directors in the
absence of the chairman and any vice chairmen; give voice to the concerns of non-executive directors;
maintain contacts with investors and shareholders to hear their views and develop a balanced
understanding of their concerns, especially those to do with the company's corporate governance; and
coordinate the chairman's succession plan.
✔ COMPLIANT
35.The secretary of the board of directors should strive to ensure that the board's actions and decisions are
informed by the governance recommendations in the Good Governance Code that are applicable to the
company.
123
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
✔ COMPLIANT
36.The full board of directors should conduct an annual evaluation, adopting, where necessary, an action plan
to correct weaknesses detected in:
a)The quality and efficiency of the board's operation.
b)The operation and composition of its committees.
c)The diversity of board composition and skills.
d)The performance of the chairman of the board of directors and the company's chief executive.
e)The performance and contribution of individual directors, with particular attention to the chairs of
board committees.
The evaluation of board committees should be based on reports they send the board of directors, while
that of the board itself should be based on the report of the appointments committee.
Every three years, the board of directors should engage an external consultant to aid in the evaluation
process, the independence of which should be verified by the appointments committee.
Any business dealings that the consultant or members of its corporate group maintain with the company or
members of its corporate group should be detailed in the annual corporate governance report.
The process followed and areas evaluated should be detailed in the annual corporate governance report.
✔ COMPLIANT
37.When there is an executive committee, at least two non-executive directors should be present thereon, at
least one of whom should be independent, and its secretary should be the secretary of the board of
directors.
✔ COMPLIANT
38.The board of directors should be kept fully informed of the matters discussed and decisions made by the
executive committee, and all board members should receive a copy of the committee's minutes.
✔ COMPLIANT
39.When appointing members of the audit committee, and particularly its chair, their knowledge and
background in accounting, auditing and both financial and non-financial risk management should be taken
into account.
✔ COMPLIANT
40.There should be a unit in charge of the internal audit function, under the supervision of the audit
committee, to monitor the effectiveness of information and internal control systems. This unit should
report functionally to the board's non-executive chair or the chair of the audit committee.
✔ COMPLIANT
41.The head of the unit tasked with the internal audit function should submit its annual work plan to the audit
committee, for approval by the audit committee or the board, directly inform it of its implementation,
including potential impact and scope limitations arising during deployment and the results and monitoring
of its recommendations and submit an activity report to it at the end of each financial year.
✔ COMPLIANT
42.The audit committee should have the following functions over and above those conferred by law:
1.With respect to information and internal control systems:
a)Monitor and evaluate the process of preparing and the integrity of financial and non-financial
information, as well as the control and management systems for financial and non-financial risks
related to the company and, where applicable, the group, including operational, technological, legal,
social, environmental, political and reputational or corruption-related issues, reviewing compliance
with regulatory requirements, proper delimitation of the consolidation perimeter and proper
application of accounting criteria.
b)Monitor the independence of the unit handling the internal audit function; propose the selection,
appointment and dismissal of the head of the internal audit service; propose the service's budget;
approve or propose that the board approve its priorities and annual work plans, ensuring that its
activity focuses primarily on significant risks (including reputational risks); receive regular reports
on its activities; and verify that senior management is acting on the findings and recommendations
of its reports.
c)Establish and supervise a mechanism that allows employees and other persons related to the
company, such as directors, shareholders, suppliers, contractors and subcontractors, to
communicate irregularities of potential importance, including financial and accounting irregularities,
or those of any other nature, related to the company that they notice within the company or its
group. This mechanism must ensure confidentiality and, in any case, provide for scenarios under
which information can be passed on anonymously, safeguarding the rights of the reporting party
and the subject of the report.
124
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
d)Generally ensure that established internal control policies and systems are effectively implemented
in practice.
2.With regard to the external auditor:
a)Investigate the circumstances giving rise to the resignation of the external auditor, should this come
about.
b)Ensure that the remuneration of the external auditor does not compromise its quality or
independence.
c)Ensure that the company communicates any change in the external auditor through the CNMV,
accompanied by a statement regarding any disagreements arising with the outgoing auditor and the
reasons for the same.
d)Ensure that the external auditor has a yearly meeting with the full board of directors to inform it of
the work undertaken and developments in the company's risk and accounting positions.
e)Ensure that the company and the external auditor adhere to current regulations on the provision of
non-audit services, limits on the concentration of the auditor's business and other requirements
concerning auditor independence.
PARTIALLY COMPLIANT
Given that BBVA is a credit institution, it has a specific Board’s Committee of Risk and Compliance, in accordance
with the applicable sector regulations.
Therefore, certain functions contained in this recommendation, in particular paragraph 1(a) on the monitoring of risk
control and management systems; paragraph 1(c) on the monitoring of a mechanism for the reporting of
irregularities of particular importance; and paragraph 1(d), on the monitoring of the implementation of internal
control policies and systems, are assigned, in accordance with the provisions of the Regulations of the Board of
Directors, to the Risk and Compliance Committee, composed exclusively of non-executive directors, most of them
being independent directors, as well as its Chairman.
Within the framework of BBVA's Corporate Governance System, this Committee assists the Board in determining
and monitoring the policy for control and management of all risks (financial and non-financial) of the Group, with the
exception of the functions that correspond to internal financial control, that are the responsibility of the Audit
Committee; those of technological risk, which correspond to the Technology and Cybersecurity Committee; and
those of business and reputational risk, which correspond to the Executive Committee. It also carries out monitoring
of the information and internal control systems, the Regulation & Internal Control function (which includes, among
other units, the Compliance Unit) and implementation within the Group of risk and compliance culture.
Notwithstanding the foregoing, the Audit Committee may, where appropriate, receive information on the above,
within the framework of its responsibilities and under the inter-committee coordination mechanism provided for in
the Regulations of the Board, for the best exercise of its functions.
43.The audit committee should be empowered to meet with any company employee or manager, even
requesting that they appear without the presence of another manager.
✔ COMPLIANT
44.The audit committee should be informed of any structural or corporate changes the company is planning,
so the committee can analyse the transaction and report to the board of directors beforehand on its
economic terms and accounting impact and, in particular and when applicable, the proposed exchange
ratio.
✔ COMPLIANT
45.The risk control and management policy should identify or determine at least:
a)The different types of financial and non-financial risks the company is exposed to (including
operational, technological, legal, social, environmental, political and reputational risks, including
corruption-related risks), with the inclusion under financial or economic risks of contingent liabilities
and other off-balance-sheet risks.
b)A risk control and management model based on different levels, including a specialised risk
committee when sector regulations provide for this or the company deems it appropriate.
c)The level of risk the company sees as acceptable.
d)The measures in place to mitigate the impact of identified risks, should they materialise.
e)The information and internal control systems to be used to control and manage the above risks,
including contingent liabilities and off-balance-sheet risks.
✔ COMPLIANT
46.Companies should establish an internal risk control and management function in the charge of one of the
company's internal departments or units and under the direct supervision of the audit committee or some
other dedicated board committee. This function should be expressly charged with the following
responsibilities:
a)Ensure that risk control and management systems are functioning correctly and, specifically, that
major risks the company is exposed to are correctly identified, managed and quantified.
b)Actively participate in the preparation of risk strategies and in key decisions regarding the
management thereof.
125
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
c)Ensure that risk control and management systems are mitigating risks effectively within the
framework of the policy established by the board of directors.
✔ COMPLIANT
47.Members of the appointments and remunerations committee—or the appointments committee and the
remunerations committee, if separately constituted—should have the right balance of knowledge, skills and
experience for the duties they are called on to discharge. The majority of such members should be
independent directors.
✔ COMPLIANT
48.Large cap companies should have separately constituted appointments and remunerations committees.
✔ COMPLIANT
49.The appointments committee should consult with the chairman of the board of directors and the company's
chief executive, especially on matters relating to executive directors.
When there are vacancies on the board, any of the directors may request that the appointments committee
consider potential candidates that they might find suitable.
✔ COMPLIANT
50.The remunerations committee should operate independently and have the following functions in addition to
those conferred by law:
a)Propose to the board of directors the basic contractual conditions for senior managers.
b)Monitor compliance with the remuneration policy set by the company.
c)Periodically review the remuneration policy for directors and senior managers, including share-
based remuneration systems and their application, and ensure that their individual remuneration is
proportionate to the amounts paid to other directors and senior managers in the company.
d)Ensure that potential conflicts of interest do not undermine the independence of any external
advisory services rendered to the committee.
e)Verify the information on directors' and senior managers' remuneration contained in corporate
documents, including the annual report on the remuneration of directors.
✔ COMPLIANT
51.The remunerations committee should consult with the company's chairman and chief executive, especially
on matters relating to executive directors and senior managers.
✔ COMPLIANT
52.The rules regarding the composition and functioning of supervision and control committees should be set
out in the regulations of the board of directors and aligned with those imposed on committees by law as
specified in the preceding recommendations, including that:
a)Committees should be comprised exclusively of non-executive directors, with a majority of
independent directors.
b)They should be chaired by independent directors.
c)The board of directors should appoint the members of such committees with regard to the
knowledge, skills and experience of the directors on and remits of each committee; deliberate
regarding their proposals and reports; and provide reports on their activities and work at the first
board plenary following each committee meeting.
d)They may engage external advisory services when they deem this to be necessary for the discharge
of their functions.
e)Minutes should be taken at all meetings and made available to all directors.
✔ COMPLIANT
53.Monitoring of compliance with the policies and regulations of the company in environmental, social and
corporate governance matters, as well as with internal codes of conduct, should be assigned to one
committee or entrusted to several committees of the board of directors, which may be the audit committee,
the appointments committee, a specialised sustainability or corporate social responsibility committee or
another specialised committee that the board of directors, in furtherance of its powers of self-organisation,
may have chosen to create. And such a committee should be composed only of non-executive directors,
the majority being independent and specifically assigned the minimum duties set out in the following
recommendation.
PARTIALLY COMPLIANT
126
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
The responsibility of monitoring the Bank's compliance with policies and rules in the area of environmental, social
and corporate governance, as well as internal codes of conduct, and other matters referred to in Recommendation
54, is shared between several Board Committees: namely the Appointments and Corporate Governance
Committee, the Audit Committee and the Risk and Compliance Committee, composed exclusively of non-executive
directors; and also the Executive Committee.
In particular, the Executive Committee and the Risk and Compliance Committee play a more active role in assisting
the Board on environmental and social matters, each within the limits of their powers.
Non-executive directors comprise the majority of the Executive Committee, which was established to support the
Board in the area of strategy and finances and which monitors, on a recurrent basis, the integration of sustainability
into the Group's business processes and activity, in line with the strategic priorities set out by the Bank. It also
monitors application of the Bank’s General Sustainability Policy, following approval by the Board. This Committee
also monitors the implementation of the General Policy on Corporate Social Responsibility, also approved by the
Board.
In turn, the Risk and Compliance Committee, composed of a large majority of independent directors and without the
presence of executive directors, monitors and supervises the integration of sustainability into the Group's risk
analysis and management, from the perspectives of both risk planning and risk management. This Committee also
has among its regulatory powers the power to examine the draft codes of ethics and conduct and their respective
modifications, and in matters relating to money laundering, conduct in the securities markets, data protection, And
the scope of the Group's actions in the field of competition.
Finally, the Appointments and Corporate Governance Committee, composed of a majority of independent directors,
has among its responsibilities the evaluation and periodic review of BBVA's corporate governance system. For its
part, the Audit Committee, composed solely of independent directors, is responsible for overseeing the process of
drawing up and presenting related financial and non-financial information.
54.The minimum functions referred to in the above recommendation are as follows:
a)Monitoring of compliance with corporate governance rules and internal company codes of conduct,
ensuring the alignment of the corporate culture with its purpose and values.
b)Monitoring the implementation of the general policy relating to the communication of economic-
financial, non-financial and corporate information as well as communication with shareholders and
investors, proxy advisers and other stakeholders. In addition, the way in which the entity
communicates and engages with small and medium-sized shareholders will also be monitored.
c)Periodic evaluation and review of the effectiveness of the company's corporate governance system
and its environmental and social policy with the aim of procuring that they fulfil their mission to
promote the corporate interest and take account, as applicable, of the legitimate interests of the
remaining stakeholders.
d)Monitoring the company's environmental and social practices to ensure their alignment with the
established strategy and policy.
e)Monitoring and evaluating the company's interactions with its various stakeholder groups.
✔ COMPLIANT
55.Environmental and social sustainability policies should identify and include at least:
a)Principles, commitments, objectives and strategy in relation to shareholders, employees, customers,
suppliers, social and environmental matters, diversity, tax liability, respect for human rights and the
prevention of corruption and other illegal conduct.
b)Methods and systems to monitor compliance with policies, associated risks and the management
thereof.
c)Mechanisms for monitoring non-financial risks, including those related to ethics and business
conduct.
d)Channels for stakeholder communication, participation and dialogue.
e)Responsible communication practices that prevent the manipulation of information and protect
honour and integrity.
✔ COMPLIANT
56.Director remuneration should be sufficient to attract and retain individuals with the desired profile and
compensate the commitment, abilities and responsibility that the post demands, but not so high as to
compromise the independent judgement of non-executive directors.
✔ COMPLIANT
57.Variable remuneration linked to the company's and the director's performance, the award of shares,
options or any other right to acquire shares or instruments tied to the price of shares, and long-term
savings schemes such as pension and retirement plans and other social pension systems should be
limited to executive directors.
The company may consider the share-based remuneration of non-executive directors provided they retain
such shares until they are no longer serving as directors. The foregoing condition will not apply to any
shares that the director must dispose of to satisfy costs related to their acquisition.
✔ COMPLIANT
58.In the case of variable remuneration, remuneration policies should include limits and technical safeguards
to ensure that such remuneration reflects the professional performance of the beneficiaries and not simply
the general progress of the markets or the company's sector, or circumstances of that kind.
127
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
In particular, components of variable remuneration should:
a)Be tied to predetermined and measurable performance criteria that factor in the risk assumed to
obtain a given outcome.
b)Promote the sustainability of the company and include non-financial criteria that are suited to the
long-term creation of value, such as compliance with the company's internal rules and procedures
and its risk control and management policies.
c)Be structured around achieving a balance between the fulfilment of short, medium and long-term
objectives, such that performance-related pay rewards ongoing achievement over a sufficient period
of time to appreciate its contribution to the long-term creation of value and to ensure that
performance is not measured based solely on one-off, occasional or extraordinary events.
✔ COMPLIANT
59.The payment of variable remuneration components should be subject to sufficient verification that
performance-related or other previously established conditions have been effectively fulfilled. The criteria
in relation to the required timing and methods of such verification must be provided by the bodies in the
annual report on the remuneration of directors, according to the nature and characteristics of each variable
component.
In addition, entities must evaluate whether to establish a reduction ('malus') arrangement based on the
deferral, for a sufficient period, of the payment of a part of the variable components that entails the total or
partial loss thereof in the event this is deemed advisable due to an event occurring prior to the time of
payment.
✔ COMPLIANT
60.Remuneration tied to company results should take into account any qualifications stated in the external
auditor's report that reduce such results.
✔ COMPLIANT
61.A significant percentage of executive directors' variable remuneration should be tied to the award of shares
or financial instruments whose value is linked to the share price.
✔ COMPLIANT
62.Once the shares, options or financial instruments corresponding to the remuneration systems have been
allocated, the executive directors may not transfer their ownership of or exercise them until a period of at
least three years has elapsed.
An exception to the above is made in the event that the director has, at the time of transfer or exercise, a
net economic exposure to the change in the price of shares for a market value equal to at least twice their
annual fixed remuneration through the ownership of shares, options or other financial instruments.
The foregoing shall not apply to any shares that the director needs to dispose of in order to cover the costs
associated with the acquisition thereof or, subject to the approval of the appointments and remunerations
committee, in the event of extraordinary situations that so require.
✔ COMPLIANT
63.Contractual arrangements should include provisions that permit the company to request the
reimbursement of variable remuneration components when the payment thereof was not in line with the
conditions applicable to the director's performance or was based on data subsequently found to be
incorrect.
✔ COMPLIANT
64.Resolution or termination payments should not exceed an amount equal to two years of the director's total
annual remuneration and should not be paid until the company confirms that the director has met the
predetermined performance criteria or conditions established for the receipt thereof.
For purposes of this recommendation, contractual resolution or termination payments shall include any
credits whose accrual or payment obligation arises upon or as a consequence of the termination of the
contractual relationship linking the director with the company, including unvested amounts in long-term
savings systems and amounts awarded in connection with post-contractual non-compete agreements.
✔ COMPLIANT
H.  OTHER POINTS OF INTEREST
1.If there are any other significant aspects of corporate governance in the company or in the group
entities that have not been addressed in the rest of the sections of this report, but are necessary to
include to provide more comprehensive and well-grounded information on the corporate governance
structure and practices in the entity or its group, give a brief description of them.
2.This section may also include any other information, clarification or detail related to previous sections
of the report provided that it is relevant and not reiterative.
128
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
In particular, indicate whether the company is subject to the corporate governance laws of a country
other than Spain and, if so, include the information it is required to provide, if different from that
required in this report.
3.The company may also indicate whether it has voluntarily adhered to other international, industry-
wide or any other codes of ethical principles or good practices. Where applicable, identify the code in
question and the adhesion date. In particular, indicate whether it has adhered to the Code of Good
Tax Practices of 20 July 2010.
The data in this report refers to the financial year ending 31 December 2021, except in those cases when
another reference date is specifically stated.
Further to section A.3, BBVA has a fixed remuneration deferred share delivery system for its non-executive
directors, as approved by the General Meeting. This consists of the annual allocation to each non-executive
director of a number of BBVA theoretical shares equivalent to 20% of the total fixed cash allocation received
by the respective individual in the previous year. This will be delivered as appropriate, when their directorship
ends for any reason other than serious dereliction of duties. Details on the annual allocation made by the
Board and the accumulated theoretical shares can be found in Notes 54 and 49 on Remuneration and other
benefits to the Board of Directors and to members of the Bank's Senior Management within the notes to the
annual financial statements corresponding to BBVA's Individual and Consolidated Annual Accounts for the
2021 financial year, respectively, as well as in BBVA's Annual Report on the Remuneration of Directors.
The remuneration system for executive directors includes, among other elements, an annual variable
remuneration whose vesting and payment rules include a portion in shares and deferral periods. The details
of the shares held by each executive director as part of this remuneration are also set out in Notes 54 and 49
on Remuneration and other benefits to the Board of Directors and to members of the Bank's Senior
Management of the notes to the annual financial statements for the BBVA Individual and Consolidated
Annual Accounts the 2021 financial year, respectively, and in BBVA's Annual Report on the Remuneration of
Directors.
Additionally, the detail of the number of direct shares owned by BBVA directors is included below:
Director´s Name
Number of Direct shares
Carlos Torres Vila
859,051
Onur Genç
485,325
José Miguel Andrés Torrecillas
10,828
Jaime Caruana Lacorte
35,000
Raúl Galamba de Oliveira
30,000
José Maldonado Ramos
38,761
Susana Rodríguez Vidarte
26,980
Carlos Salazar Lomelín
260,929
Further to Section A.9, relating to income from treasury-share trading, Rule 21 of Circular 4/2017 and IAS 32,
Paragraph 33, expressly prohibit the recognition, in the income statement, of gains or losses made through
transactions carried out with own capital instruments, including their issuance and redemption. Said profits
and losses are directly booked against the company's net equity. In the table of significant variations, the
date of entry of CNMV Model IV in the registries of that organism, model corresponding to the
communications with treasury shares and the reason for such communication. In this regard, state that the
communications made to the CNMV in December 2021, outlined in said section, were made within the
framework of BBVA's own share buyback programme resolved by the Board of Directors.
Further to section B.4, state that the data regarding the physical presence percentage included with respect
to the General Shareholders' Meeting, held on 20 April 2021, includes the data on shareholders' remote
attendance thereof, since, as a result of the exceptional circumstances arising from COVID-19, BBVA
resolved, in accordance with the provisions of Royal Decree-Law 34/2020, of 17 November, on urgent
measures to support business solvency and the energy sector and on tax matters, to make it possible for the
BBVA General Shareholders' Meeting in the 2021 financial year to be attended exclusively by remote means
— that is, without physical attendance by shareholders or their representatives.
129
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
For the purpose of clarifying the information contained in Section C.1.2, it is indicated that Jaime Félix
Caruana Lacorte accepted his appointment on 4 June 2018; Ana Cristina Peralta Moreno accepted her
appointment on 8 May 2018; Ana Leonor Revenga Shanklin and Carlos Vicente Salazar Lomelín accepted
their appointments on 1 April 2020, with the date of appointment by the corresponding General Meeting set
out in Section C.1.2.
Further to Section C.1.5, state that within the framework of the continuous Board rotation process, the
Appointments and Corporate Governance Committee, in performing its duties, has in recent financial years
put in place different selection processes for directors aimed at identifying the most suitable candidates at all
times, based on the needs of the Corporate Bodies, and that these favour diversity in the manner specified in
preceding sections.
In this way, the Board currently has a diverse composition, combining people with extensive experience and
knowledge of the financial and banking field with profiles that possess experience and knowledge in different
areas that are of interest to the Bank and its Group, such as accounting and auditing, risk management,
innovation and information technologies, macroeconomic strategy and environment, human resources and
remuneration, institutional, legal and regulatory fields and corporate governance and sustainability. This
enables the Board overall to have a suitable balance in its composition and suitable knowledge of the Bank's
and the Group's environment, activities, strategies and risks, helping it to better perform its functions.
In particular, the Board meets the objectives set out in its Regulations and in the Selection Policy, namely
there is an appropriate balance between the different types of director. Non-executive directors make up
86.67% of all directors (thereby attaining the objective of having a large majority of non-executive directors),
independent directors make up two-thirds of the board (thereby attaining the objective of having at least 50%
independent directors) and women make up one-third of all board members, thereby attaining the current
target of at least 30%. The Board is also highly diverse in terms of skills, knowledge and experience at both
the national and international levels, which has been consolidated in recent years, in addition to the diversity
of experience within the Board itself.
In the context of the Board's continuous rotation process and taking into account the continuous analysis of
the structure, size and composition of the Board of Directors, the Committee developed a director selection
process in 2021, inspired by the principles of the Board of Directors' Regulations and Selection Policy, as a
result of which it was proposed to the General Meeting in March 2022 that a new director be appointed with
independent status, and that two directors be re-appointed with executive director status.
Should the mandatory approvals be granted by the General Meeting, this would continue to contribute to
attaining the objectives set out in the Selection Policy, and specifically that women should make up 40% of all
directors (thereby attaining the objective of the Selection Policy that women make up at least 40% of all
directors by the end of 2022). It would also consolidate the knowledge and experience of the Board in areas
of relevance to the Bank such as sustainability and institutional and regulatory environment.
Certainly, the Board, as a whole, has an adequate and diverse composition with a thorough knowledge of the
environment, strategy, activities, business and risks of the Bank and its Group, resulting in a balanced
composition and adapted to the needs of the moment, thus contributing to ensuring that the functions of the
Corporate Bodies are developed in the best corporate interest.
In addition to the information set out in section C.1.6, in accordance with the provisions of Article 540 of the
CEA, which stipulates that a brief description of the diversity policy, with regard to directors and to members
of management, must be provided, BBVA employs a Selection and Appointment Policy for members of
Senior Management that has been approved by the Board.
Said Policy is designed to ensure that individuals in Senior Management positions at BBVA have the capacity
to properly exercise the responsibilities conferred upon them. Thus, members of BBVA Senior Management
must have top-level academic and technical qualifications, professional skills—underpinned by their
professional careers to date—applicable to the responsibilities associated with the role to be fulfilled, a
recognised honourable business and professional reputation, and commitment to BBVA's values.
Pursuant to the provisions of this Policy on the assessment of internal talent, performance is assessed in
terms of the achievement of objectives, potential to assume greater responsibilities in the future, and
individuals' professional capabilities and skills. These assessments may be supported by means of review
sessions during which members of Senior Management analyse the profiles of certain employees and share
their opinions on the achievements and strengths of each individual.
130
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Moreover, for the selection of external candidates for senior management positions, references and top-level
executive search firms are used. The Talent & Culture area ensures that external candidates possess top-
level academic and technical qualifications, that their professional careers to date adequately encompass the
responsibilities associated with the roles to be fulfilled, that they have recognised business and professional
reputations, and that, during their careers at other organisations, they have demonstrated a high level of
alignment with BBVA's values. The candidates identified through the company's external selection process
are considered alongside internal candidates, in order to select the individual that best fits the role to be
fulfilled.
Moreover, in accordance with the Regulations of the Board, the functions of this body include appointing
members of Senior Management based on a report from the Appointments and Corporate Governance
Committee. Prior to the proposal and appointment, the Bank follows a selection process for members of
Senior Management which is governed by the principles and criteria outlined in the selection and
appointment policy for members of Senior Management. This process involves analysing the functions and
candidate profiles, confirming the suitability of the selected candidate, submitting the proposal for the
consideration of the Appointments and Corporate Governance Committee, which drafts a preliminary report
for the Board, and, finally, submitting the proposal to the Board for approval, which must be supported by a
favourable preliminary report from the Appointments and Corporate Governance Committee.
Appointment of senior managers, on the proposal of the Chairman for those who report thereto, and of the
Chief Executive Officer (Consejero Delegado), for those who report thereto instead of to the Chairman. The
Board of Directors will be responsible for the appointment and dismissal of the head of the Internal Audit
area, based on a proposal from the Audit Committee, and the Head of Regulation & Internal Control, on a
proposal from the Risk and Compliance Committee, as well as the determination of their objectives and
assessment of their performance, on a proposal from the corresponding committee.
As a supplement to section C.1.7, state that it is also appreciated that the Board has a continuous training
programme for directors, which ensures that their knowledge and skills are continuously being enriched,
including relevant trends and areas of interest within that programme, such as sustainability, the regulatory
framework and technological and innovation issues, among others, which helps ensure that the Board is
always in possession of the knowledge, capacities and information needed to discharge its roles.
Furthermore, state that the current make-up of the Board complies with the provisions of applicable
legislation, the regulations of the corporate bodies and the objectives provided for in this regard by the
Selection Policy, in line with what was set out in section C.1.5 above regarding striking an appropriate
balance between the different types director, having a large majority of non-executive and independent
directors and complying with the currently applicable objective for the representation of women on the Board.
For the above-mentioned reasons, the Board, as a whole, currently has an adequate and diverse
composition with a thorough knowledge of the environment, strategy, activities, business and risks of the
Bank and its Group, resulting in a balanced composition and adapted to the needs of the moment, thus
contributing to ensuring that the functions of the corporate bodies are developed in the best corporate
interest.
Finally, it should be noted that, as a result of the director selection process referred to in sections C.1.5 and
C.1.6 above, should the corresponding proposal for the appointment of an independent director be approved
by the General Meeting of March 2022, the Board would then meet the objective of women making up at
least 40% of all directors before the end of 2022 and the Board's knowledge and experience in areas of
relevance to the Bank such as sustainability and institutional and regulatory areas would be consolidated.
Finally, it should be noted that the director selection process implemented in the 2021 financial year sought
the expert advice of a specialist headhunting company for potential candidates, thereby ensuring optimal
professionalism and independence for the process. This process also took into account the number and
profile of directors whose three-year statutory term ends in the 2022 financial year, so that appropriate
proposals for appointment or re-appointment can be submitted to the next Annual General Shareholders'
Meeting.
Accordingly, the Board studied the various pre-selected profiles, decided on those which, a priori, would fit
the needs of the Bank, and assessed the training and career path of the candidates, their main professional
and personal competencies, their vision of the Bank and the Group and their willingness to join the Board of
Directors. Having chosen one of the candidates, the Board then submitted its respective proposals and
reports to the General Meeting to be held during the 2022 financial year, concerning the appointment of a
new director and the re-appointment of two directors.
Further to Section C.1.9, the various Board Committees with oversight and control functions also have
certain functions delegated by the Board of Directors, which are detailed in section C.2.1 of this Report and
which are also set out in their corresponding regulations which are available on the Bank's website.
131
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
As a supplement to section C.1.11, state that Juan Pi Llorens is a director of the companies in the Oesia
Group listed therein (Oesia Networks, S.L., Tecnobit, S.L.U. and UAV Navigation, S.L.) as a natural person
representative of the company Relocation & Execution Services, S.L.
Further to the information included in section C.1.13, it is stated that:
The amount included under Remuneration of the Board of Directors accrued during the financial year
corresponds, based on the instructions of this Report, with the amount declared as total remuneration
accrued according to Table c) Summary of remuneration of section C.1 – Breakdown of individual
remuneration accrued for each of the directors included in section 5 (Statistical Appendix) of the Annual
Report on the Remuneration of Directors of BBVA, which includes: (i) remuneration received in cash by the
directors in 2021, comprising, in the case of non-executive directors, fixed remuneration for membership of
the Board and its committees and, where applicable, for the role of lead director and vice-chairman of the
Board, and remuneration in kind, and, in the case of executive directors, their annual fixed remuneration,
remuneration in kind and cash amounts corresponding to the initial portion of 2021 Annual Variable
Remuneration, to the deferred portion of the 2018 Annual Variable Remuneration payable, where conditions
are met, in 2022, together with its corresponding update and, in the case of the Chairman, to the deferred
portion of the 2017 Annual Variable Remuneration payable, where conditions are met, in 2022, together with
its corresponding update; (ii) the gross earnings on shares or financial instruments vested in 2021 by the
executive directors, corresponding to the share portion that corresponds to the portion of the Annual Variable
Remuneration for 2021 and 2018 and, in the case of the Chairman, for 2017, to be delivered in 2022, the
shares of which have been monetised, for the purposes of this report, taking as a benchmark the average
closing BBVA share price for trading sessions between 15 December 2021 and 15 January 2022, which was
EUR 5,33 per share, insofar as these shares have not yet been delivered to their beneficiaries; and (iii) the
remuneration for other items paid by the Chief Executive Officer in 2021 (mobility allowance and cash in lieu
of pension).
These items are detailed, individually for each director, in Notes 54 and 49 of the notes to the annual
financial statements corresponding to BBVA's Annual Consolidated and Individual Accounts for the 2021
financial year, respectively.
With respect to the Amount of funds accumulated by current directors through long-term savings systems
with unvested economic rights, included in section C.1.13 of this Report, during the 2021 financial year, the
Bank had commitments made in respect of the Chairman's pension to cover the contingencies of retirement,
invalidity and death in accordance with the provisions of the By-laws, the Remuneration Policy for BBVA
Directors and his contract with the Bank. For the Chief Executive Officer, the Bank has no pension
commitments, although it does have commitments to cover the contingencies for disability and death, in
accordance with the Remuneration Policy for BBVA Directors and the contract entered into with the Bank.
The main characteristics of the pension system of the Chairman to cover the retirement contingency are
detailed in the BBVA Directors' Remuneration Policy, and include, inter alia, the following: a defined-
contribution system; no provision for receiving the retirement pension in advance; and 15% of the agreed
contribution has the status of discretionary pension benefits, in accordance with the requirements of the
applicable regulations. They are also included in Notes 54 and 49 of the Annual Report corresponding to
notes to the annual financial statements for BBVA's Consolidated and Individual Annual Financial Statements
for the 2021 financial year, respectively, which include the amounts of the entitlements accrued by the
Chairman as of 31 December 2021.
The balance of the item, Provisions — Funds for pensions and similar obligations, on the Group's
consolidated balance sheet as at 31 December 2021 includes EUR 69 million as post-employment provision
commitments maintained with former members of the Board of Directors.
Further to the information included in section C.1.14, it is stated that:
The item Senior Management total remuneration includes the remuneration of the members of Senior
Management (16 members as at 31 December 2021, excluding the executive directors), which includes: the
annual and in-kind fixed remuneration received during the 2020 financial year; the Upfront Portion of the
Annual Variable Remuneration for the 2021 financial year and payment of the Deferred Portion of the Annual
Variable Remuneration for the 2018 and 2017 financial years, in cash and monetised shares, together with
its corresponding update, payable in 2022, if the corresponding conditions are met. The monetised shares
stood at the same value as that indicated in the case of the executive directors (i.e. EUR 5,33 per share; see
Section C.1.13).
The main characteristics of the pension systems for this group are, inter alia, the following: defined
contributions; no provision for receiving the retirement pension in advance; and 15% of the agreed
contributions have the status of "discretionary pension benefits", in accordance with the requirements of the
applicable regulations.
132
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
The above concepts are detailed in Notes 54 and 49 of the notes to the annual financial statements
corresponding to BBVA's Consolidated and Individual Annual Financial Statements for the 2021 financial
year, respectively.
The balance of the item, Provisions — Funds for pensions and similar obligations, on the Group's
consolidated balance sheet as at 31 December 2021 includes EUR 241 million as post-employment
provision commitments maintained with former members of the Bank's Senior Management.
Furthermore, it is noted that, on 29 July 2021, Javier Rodriguez Soler was appointed as head of the
Sustainability area and also that his position as a senior manager of Banco Bilbao Vizcaya Argentaria, S.A.
was recorded in the Bank of Spain's Register of Senior Officers, in accordance with the applicable
regulations.
Further to Section C.1.17, set out below is the evaluation by the Board of Directors of its committees'
operation, based on reports submitted by their respective Chairs:
•The various committees have regularly informed the Board of Directors of the activities carried out and
the agreements adopted by each of the committees, as part of their functions. This has ensured that all
directors have a full understanding of the work being undertaken by the various Board committees and
has promoted coordination between the corporate bodies.
•In addition to the above, at its meeting held on 22 December 2021, the Board received the report by the
Chairman on the Technology and Cybersecurity Committee's activity for the 2021 financial year in terms
of the various areas within its remit, such as the technology and cybersecurity strategy, the plans,
policies and management of cybersecurity, and the monitoring and control of technological risks, among
other matters.
•During its meeting on 22 December 2021, the Board also received the report by the Chairman of the
Risk and Compliance Committee on its activities throughout the 2021 financial year. The report detailed
the tasks executed by the Committee in its ongoing monitoring and oversight of changes in the risks
faced by the Group and the extent to which consistency is maintained with certain strategies and
policies, such as the monitoring regulation & internal control and compliance.
•At its meeting held on 2 February 2022, the Board of Directors received the Chairman's report on the
activity carried out by the Executive Committee during the 2021 financial year. The report detailed,
among other activities, the Committee's work in support of the Board of Directors in decision-making in
the areas of strategy, budgets and finance, supervision and monitoring of activity and results, strategic-
forward information, as well as selected projects, operations and Group policies.
•At its meeting held on 2 February 2022, the Board of Directors received the report by the Chair of the
Audit Committee on the activities of the Committee during the 2021 financial year. The report detailed,
among other activities, the Committee's work in overseeing the preparation of financial statements and
the application of accounting criteria, the sufficient, adequate and effective operation of internal control
systems in the preparation of financial data, and the planning, progression and depth of external auditor
tasks, in addition to the activity carried out by the Internal Audit area.
•At its meeting held on 2 February 2022, the Committee also received the report by the Chair of the
Appointments and Corporate Governance Committee on the activities undertaken by the Committee
throughout the 2021 financial year in terms of its assigned functions, including its tasks relating to the
re-election and appointment of directors, the evaluation of the Board of Directors, the Chairman of the
Board and the Chief Executive Officer, and the monitoring of developments in the Corporate
Governance System, among others.
•Lastly, at its meeting held on 2 February 2022, the Board received the report by the Chair of the
Remunerations Committee on the activities undertaken by this Committee throughout the 2021 financial
year, reporting on, among other matters, the tasks performed by the Committee relating to the
preparation and implementation of the proposed resolutions submitted to the Board regarding
remuneration matters, particularly those relating to the remuneration of directors, Senior Management,
Identified Staff and the BBVA Group.
All of the foregoing has been taken into consideration by the Board of Directors during the evaluation
process carried out in respect of the 2021 financial year, described in the preceding paragraphs.
With regard to Section C.1.27, as BBVA shares are listed on the New York Stock Exchange, it is subject to
the supervision of the Securities and Exchange Commission (SEC) and, thus, to compliance with the
Sarbanes Oxley Act and its implementing regulations, and for this reason each year the Group Executive
Chairman, the Chief Executive Officer and the executive tasked with preparing the Accounts sign and submit
the certifications described in sections 302 and 906 of this Act, related to the content of the Annual Financial
Statements. These certificates are contained in the annual registration statement (Form 20-F) which the
Company files with this authority for the official record.
133
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Further to Section C.2.1, the following is a brief indication of what the regulations establish with regard to the
composition and functions of each of the remaining Board Committees:
•Executive Committee: Article 30 of the Regulations of the Board and the Regulations of the Executive
Committee establishes that the Board of Directors may, in accordance with the By-laws and with the
favourable vote of two-thirds of its members, appoint an Executive Committee, composed of a minimum
of four directors appointed by the Board of Directors, ensuring that there is a majority of non-executive
directors over executive directors. The Chairman of the Board of Directors will be an ex-officio member
of the Committee. The Secretary of the Board of Directors will hold the same position on the Committee.
If absent, the Secretary will be replaced by the Deputy Secretary or the person appointed by the
attendees of the relevant meeting.
•Audit Committee: the Audit Committee Regulations establish that it shall consist of a minimum of four
independent directors. Committee members will be appointed by the Board of Directors, seeking to
ensure that they possess the necessary dedication, skills and experience to carry out their roles. In any
event, at least one member will be appointed taking into account their knowledge and experience in
accounting, auditing or both. As a whole, the Committee members will possess relevant technical
expertise in the financial sector. The Board will, from amongst its members, appoint the Chair of this
Committee, who must be replaced every four years and may be re-appointed one year after the end of
their term of office. When the Chair cannot be present, meetings will be chaired by the longest-serving
independent director on the Committee, and, where multiple directors have equal length of service, by the
eldest. The Secretary of the Board of Directors or, on behalf thereof, the Deputy Secretary of the Board of
Directors, will act as Secretary for the Committee.
•Appointments and Corporate Governance Committee: the Regulations of the Appointments and
Corporate Governance Committee establish that it shall consist of a minimum of three directors, all of
them non-executive and most of them independent, as well as its Chairman. Committee members will be
appointed by the Board of Directors, seeking to ensure that they possess the necessary dedication, skills
and experience to carry out their roles. The Board of Directors will appoint the Chair of the Committee
from amongst its independent members. When the Chair cannot be present, meetings will be chaired by
the longest-serving independent director on the Committee, and, where multiple directors have equal
length of service, by the eldest. The Secretary of the Board of Directors or, on behalf thereof, the Deputy
Secretary of the Board of Directors, will act as Secretary for the Committee.
•Remunerations Committee: the Regulations of the Remunerations Committee establishes that it must
be comprised of a minimum of three non-executive directors and the majority, including the Chairman,
must be independent directors. Committee members will be appointed by the Board of Directors, seeking
to ensure that they possess the necessary dedication, skills and experience to carry out their roles. The
Board of Directors will appoint the Chair of the Committee from amongst its independent members. When
the Chair cannot be present, meetings will be chaired by the longest-serving independent director on the
Committee, and, where multiple directors have equal length of service, by the eldest. The Secretary of the
Board of Directors or, on behalf thereof, the Deputy Secretary of the Board of Directors, will act as
Secretary for the Committee.
•Risk and Compliance Committee: the Regulations of the Risk and Compliance Committee establishes
that it will consist of a minimum of three directors, appointed by the Board of Directors, who possess the
appropriate knowledge, skills and experience to understand and control the Bank's risk strategy. All the
members of the Committee must be non-executive directors, with its Chair and a majority of members
being independent directors. The Board will appoint the Chair of the Committee from amongst its
independent members. When the Chair cannot be present, meetings will be chaired by the longest-
serving independent director on the Committee, and, where multiple directors have equal length of
service, by the eldest. The Secretary of the Board of Directors or, on behalf thereof, the Deputy Secretary
of the Board of Directors, will act as Secretary for the Committee.
•Technology and Cybersecurity Committee: the Regulations of the Technology and Cybersecurity
Committee establish that the Committee shall consist of a minimum of three directors, most of whom shall
be non-executive directors. Committee members will be appointed by the Board of Directors, seeking to
ensure that they possess the necessary dedication, skills and experience to carry out their roles. The
Board will appoint the Chair of the Committee from amongst its members. When the Chair cannot be
present, meetings will be chaired by the longest-serving director on the Committee, and, where multiple
directors have equal length of service, by the eldest. The Secretary of the Board of Directors or, on behalf
thereof, the Deputy Secretary of the Board of Directors, will act as Secretary for the Committee.
Also, as a follow-up to the most important activities of the Board Committees and their organisational and
operational rules as set out in paragraph C.2.1:
134
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
•Executive Committee: the most noteworthy actions carried out by the Committee during the 2021
financial year included the monitoring of the monthly evolution of the Group and its business areas'
activity and results, its crucial role in ensuring the integrity, coordination, consistency and coherence of
the Group's strategic and prospective processes, such as the Strategic Plan, the RAF, the ICAAP, the
ILAAP, the Budget and planning of capital, liquidity and funding and the Recovery Plan, taking into
account aspects common to all processes, and driving the integration of the strategic bases established
by the Board into all processes.
In addition, the Committee, in discharging its fundamental role in monitoring and controlling the
measures implemented in BBVA to manage the health and economic crisis caused by COVID-19 during
the 2020 financial year, continued to monitor and control of the Bank's business and activities, in a still-
changing and uncertain environment during the 2021 financial year, prioritising the impact of the crisis
on activity, results and organisation, technological and operational continuity, capital, liquidity and
solvency situations and the evolution of risk management, among other areas.
Furthermore, the Committee has ensured the coherence and alignment of RAF with the strategy
established by the Board of Directors and has reviewed and proposed the bases for the proposals upon
which RAF has been drafted, which were, where appropriate, submitted to the Board by the Risk and
Compliance Committee. The Committee has also supported the Board in analysing and monitoring the
drafting of the Budget, the Capital Plan and the Liquidity and Funding Plan prior to submission to the
Board.
The Committee also undertook work to oversee, monitor and control the Group's risk management. It
monitored the evolution of the risk profile and metrics; the most significant aspects relating to changes
in the macroeconomic environment and other factors that impacted the Group's management and
activities over the course of the financial year; as well as any developments in BBVA share prices.
In addition, it has analysed progress in the corporate operation processes, the competence to decide on
which rested with the Board, including their strategic and financial aspects, in advance of their
consideration by the Board, as well as other issues and projects relating to the development of the
Strategic Plan, like the Group's progress in terms of sustainability, (including environmental and social
areas), participation by the Bank in other strategic initiatives, preparation of Investor Day, and the day-
to-day management of business.
The Committee has also monitored the progress made in promoting and accelerating the integration of
sustainability into activities, business, risks and governance (KPIs, deep dive on portfolio alignment and
climate-related risk work plan – ECB guide); and the Corporate Social Responsibility Policy, portfolio
alignment and social commitment with the United Nations.
Finally, particularly noteworthy is the work carried out by the Committee on the prior reporting of policies
submitted to the Board, except for policies relating to issues handled by other Board committees; as
well as the Group's authorisation to appoint administrators in subsidiaries or investee companies, and
the granting of the powers vested in the Group.
•Audit Committee: regarding organisational and operational rules, the operational principles of the Audit
Committee are indicated in its Regulations, which lay down the basic rules of its organisation and
operation. In particular, the Audit Committee's Regulations stipulate that, inter alia, the Committee shall
meet whenever it is called by its Chair, who is empowered to convene the Committee and to set the
agenda for its meeting. The Regulations contain the procedure for the calling of ordinary and
extraordinary meetings. Executives responsible for the areas that manage matters within their remits may
be called to meetings. This particularly applies to the Accounting and Internal Auditing areas, and, at the
request of the heads of these, those persons within the Group who have knowledge of or responsibility for
the matters covered by the agenda, when their presence at the meeting is deemed appropriate. The
Committee may also call any other Group employee or manager, and even arrange for them to attend
without the presence of any other manager. Notwithstanding the foregoing, it will seek to ensure that the
presence of persons outside the Committee during these meetings be limited to those cases where it is
necessary and to the items of the agenda for which they are called.
The Committee may, through its Secretary, engage external advisory services for relevant issues when it
considers that these cannot be properly provided by experts or technical staff within the Group on
grounds of specialisation and independence.
Other aspects of the organisation and operation of the Committee shall be dealt with in the Regulations of
the Committee itself. All matters not provided for in the aforementioned Regulations will adhere to the
Regulations of the Board, insofar as they are applicable.
135
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
In terms of the most significant actions and tasks carried out by the Audit Committee during the 2021
financial year, in the performance of the functions established to it by law, it has analysed the following
matters, submitting the corresponding reports and proposals to the Board for approval, where
appropriate.
In relation to overseeing the financial statements and public information, it analysed and oversaw the
process of preparing and presenting financial and non-financial information related to the Bank as well as
its consolidated Group from the annual, half-yearly and quarterly reports, in order to determine its
accuracy, reliability, adequacy and clarity, prior to its submission to the Board.
These financial information supervision functions were performed through a continuous process
throughout the year, in which it has monitored the monthly development of the balance sheet and income
statement, the quarterly and semi-annual financial reports, the closing results of each period and the
preparation process for the corresponding financial information, paying special attention to the accounting
criteria applied and any changes therein, as well as accounting regulations and the changes in the
Group's scope of consolidation.
In addition, the Committee has continuously monitored and analysed on a monthly basis the main impacts
that would affect the business, balance sheet and income statement of the Bank and its Group from an
accounting perspective. In particular, the analysis and monitoring carried out on (i) the extraordinary
update of macroeconomic information for the calculation of the expected loss due to credit risk, in
application of the IFRS-9 accounting standard; (ii) the analysis of evidence of impairment of goodwill
recorded in the Group's accounts for the major cash generating units (CGUs), in compliance with
International Accounting Standard (IAS) 36; (iii) the relative breakdowns concerning the closure of
corporate operations carried out by the Group and loans with public guarantees and the moratoria
granted; (iv) information concerning risks and uncertainties arising from the crisis generated by
COVID-19; and (v) changes in applied accounting policies or criteria, among other actions.
Hence, prior to their drafting and/or approval by the Board, the Committee oversaw the preparation of the
individual and consolidated annual financial statements for the financial year, the half-yearly and quarterly
financial statements, as well as other relevant financial information, including the CNMV Universal
Registration Document, US SEC Form 20-F of the Securities and Exchange Commission (SEC), and the
Prudential Relevance Report, among others, submitting to the Board the corresponding reports and/or
opinions of the Committee on the financial information of the Bank and its Group.
In addition, within the financial information monitoring process, the Committee oversaw the sufficiency,
suitability and effective functioning of the internal control systems established for the preparation of
financial information, including tax-related systems, as well as learning from the internal reports and the
reports by the executive areas of the Bank and the external auditor on the effectiveness of the internal
financial control, submitting to the Board the Committee's reports on the sufficiency of the internal control
systems established by the Group for the generation of financial information.
Similarly, at the same time as overseeing the main financial information of the Bank and its Group, the
Committee analysed the Group's main tax figures, monitoring, inter alia, the real tax rate, total tax risk, the
tax position on capital, as well as the main criteria used, the main decisions adopted and the impact on
the Group's financial information.
With regards to activities related to the external audit, the Committee has maintained appropriate
relationships with the heads of the external auditor, during each of the monthly meetings it has held, in
order to ascertain the planning, stage and progress of the Annual Plan established for performing its work
in connection with the audit of the Bank and Group annual financial statements, of the interim financial
statements, and of other financial information subject to review during the account auditing.
It also received and analysed the opinion reports and communications required by account auditing
legislation, from the external auditor, among which the following are of note: the work carried out on the
Group's financial information, other regulatory work of the External Auditor, such as the supplementary
report to the Bank's Annual Financial Statements, as well as confirmations of its independence with
regard to the Bank and other companies within its group.
Similarly, in relation to the independence of the external auditor, the Committee has ensured that internal
procedures are implemented to safeguard against situations that may give rise to independence conflicts.
It has also opposed declarations made by the external auditor concerning confirmation of its
independence with regard to BBVA and its Group, and issued the corresponding reports in accordance
with applicable legislation.
The Committee also analysed, prior to its submission to the Board, the overall proposal for the External
Auditor's fees for the 2021 financial year.
136
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
In addition, in 2021, in the best interest of the Bank and its Group, the Committee agreed to initiate a
process of selecting auditors for the financial years 2022, 2023 and 2024 and agreed to submit to the
Board of Directors, as a result of this selection process, its proposal for designation, which included the
Committee's recommendation that the auditing firm that would provide a higher quality service to BBVA
and its Group, and one that is better suited to its current needs, would be Ernst & Young, S.L. ("EY"),
having agreed to propose to the next BBVA General Shareholders' Meeting the appointment of EY as
auditor of the accounts of the Bank and its consolidated group for the financial years 2022, 2023 and
2024.
With regards to tasks carried out by Internal Audit, whose Head reports directly to the Audit Committee at
each of its monthly meetings, the Committee has ensured that the Internal Audit area has the necessary
material and human resources for effective performance of its functions, overseeing the efficiency and
operation of the role as well as its independence from other areas of the Bank for such purpose.
Accordingly, the Committee analysed and approved the Annual Internal Audit Plan for the 2022 financial
year, also overseeing at each of the monthly meetings held the development of the Annual Internal Audit
Plan for the 2021 financial year, and the activity and reports issued by the area. It was also notified of the
result of its most relevant work, weaknesses and opportunities for improvement identified, and the
recommendations made by the Internal Audit as a result of its review work.
With regard to the Strategic Plan established by the Internal Audit Area for the 2020–2024 period, the
Committee was informed of and monitored its progress during the financial year, analysing the
development of all projects established for each of the strategic priorities defined, as well as the new lines
of work defined by the Internal Audit area in the review of its strategy for attaining the objectives set forth
in the aforementioned Strategic Plan.
Similarly, it ratified the contracting of so-called additional accounts auditing services, not included in the
overall proposal for services of the external auditor, which had been pre-approved by the Chair of the
Committee, having analysed its compliance with the independence requirements provided for by the
regulations governing the auditing activity and the provisions in this respect of the Committee
Regulations.
Finally, with regard to functions carried out in relation to the Internal Audit activity, the Committee
assessed the performance of the head of the Internal Audit function based on the system of indicators
and targets proposed by the Talent and Culture area of the Group.
Other functions carried out by the Committee during the financial year consisted of (i) oversight of the
structure of the Group of Companies, as well as the Group's governance model for the control, oversight
and management of its corporate structure; (ii) analysis, prior to the decisions to be taken by the Board, of
the relevant corporate operations planned by the Group, monitoring the economic conditions and the
main accounting impacts foreseen in the Group's financial statements; and (iii) analysis, after the recent
changes incorporated in the Corporate Enterprises Act, of the procedure established by the Bank for
reporting and periodic control of related-party transactions that had been delegated by the Board, in order
to verify the fairness and transparency of transactions, as well as compliance with the legal criteria
applicable to the delegation of such transactions.
Lastly, during the Bank's General Shareholders' Meeting held in 2021, the Committee informed
shareholders of the main issues related to the matters within its remit, including overseeing the process of
preparing Bank and Group financial information, which had been provided to shareholders for their
approval, the result of the account auditing and of the function that the Committee had carried out in this
matter, as well as the main issues related to the matters described in this section and other issues that
were handled by the Committee.
•Appointments and Corporate Governance Committee: the Regulations of the Appointments and
Corporate Governance Committee set out the operational principles of the Committee and lay down the
basic rules of its organisation and operation. The Regulations of the Appointments and Corporate
Governance Committee specifically provide that the Committee will meet whenever it is called to do so
by its Chair, who is empowered to call the Committee and to set the agenda for its meetings, and set out
the procedure for calling ordinary and extraordinary meetings.
Executives responsible for the areas that manage matters within their remits may be called to meetings,
as well as, at the request thereof, those persons within the Group who have knowledge of or
responsibility for the matters covered by the agenda, when their presence at the meeting is deemed
appropriate. The Committee may also call on any other Group employee or manager, and even arrange
for them to appear without the presence of any other manager, while ensuring that the presence of non-
Committee members at its meetings is limited to those cases where it is necessary and to the items of
the agenda for which they are called.
137
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
The Committee may also, through its Secretary, engage external advisory services for relevant issues
when it considers that these cannot be properly provided by experts or technical staff within the Group
on grounds of specialisation or independence.
Other aspects of the organisation and operation of the Committee shall be dealt with in the Regulations
of the Committee itself. All other matters not provided for in the aforementioned Regulations will be
subject to the Regulations of the Board of Directors, insofar as they are applicable.
With respect to the Appointments and Corporate Governance Committee's most significant actions in
2021, in performing the functions assigned to it, of particular note were: the Committee's continuous
analysis of the structure, size and composition of the Board of Directors, ensuring that they are suitable
for the Corporate Bodies to best perform their functions; and the analysis of the directors' compliance
with the independence and suitability criteria and the absence of any conflicts of interest for the
performance of their duties, among other matters.
Taking this analysis framework into account, plus the process of ongoing renewal of the Board described
above and the director selection processes led by the Committee, the Committee carried out the
corresponding proposals and reports on the appointment and re-election of directors to the Board, for
subsequent submission to the Company's General Meeting in 2021.
The committee also carried out an analysis of the evaluation of the operation of the Board and the
performance of the functions of the Chairman of the Board and the Chief Executive Officer, submitting the
corresponding reports for consideration by the Board, described earlier in section C.1.17.
Furthermore, with regard to functions relating to the Bank's Corporate Governance System, the
Committee worked on this matter in 2021, and in this respect, it reviewed the draft Annual Corporate
Governance Report for the 2020 financial year and received information on the outcome of the Corporate
Governance Roadshow, based on which meetings were held with the Bank's main institutional investors
and proxy advisors during the last months of 2021.
In the context of the above, the Committee carried out an analysis of the revised regulations during the
2020 financial year with a view to determining their impact on the Corporate Governance System. As a
result of this analysis, it was determined it would be appropriate to amend the By-laws and Regulations of
the General Meeting to accommodate the holding of the Meeting in a fully remote manner and those
amendments were approved by the General Meeting held on 20 April 2021.
The Committee also verified that, in relation to matters affecting the conduct of executive directors for the
payment of variable remuneration earned in previous financial years, the circumstances set out in the
Remuneration Policy for BBVA Directors for the application of malus and clawback clauses had not
occurred.
Finally, the Committee analysed the appointment and departure of senior managers that were proposed
during the 2021 financial year, in line with the selection and appointment policy of the members of the
Senior Management; The Committee reviewed and verified the suitability of the proposed new senior
managers, submitting their corresponding reports to the Board.
•Remunerations Committee: Regulations of the Remunerations Committee set out the operational
principles of the Committee and lay down the basic rules of its organisation and functioning. The
Regulations of the Remunerations Committee specifically provide, amongst other things, that the
Remunerations Committee will meet whenever it is called to do so by its Chair, who is empowered to
call the Committee and to set the agenda for its meetings, and set out the procedure for calling ordinary
and extraordinary meetings.
Executives responsible for the areas that manage matters within their remits may be called to meetings,
as well as, at the request thereof, those persons within the Group who have knowledge of or
responsibility for the matters covered by the agenda, when their presence at the meeting is deemed
appropriate. The Committee may also call any other Group employee or manager, and even arrange for
them to appear without the presence of any other manager. It will, however, seek to ensure that the
presence of persons outside the Committee during its meetings be limited to those cases where it is
necessary and to the items on the agenda for which they had been called.
The Committee may also, through its Secretary, engage external advisory services for relevant issues
when it considers that these cannot be properly provided by experts or technical staff within the Group
on grounds of specialisation or independence.
Other aspects of the organisation and operation of the Committee shall be dealt with in the Regulations
of the Committee itself. All other matters not provided for in the aforementioned Regulations will be
subject to the Regulations of the Board of Directors, insofar as they are applicable.
138
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
With regard to the most important activities carried out by the Remunerations Committee during the
2021 financial year, the Committee has been focused on performing the duties assigned to it pursuant
to Article 5 of its Regulations and developing the framework established in the Remuneration Policy for
BBVA Directors, approved by the General Meeting held in April 2021, and in the BBVA Group's General
Remuneration Policy updated by the Board of Directors in June 2021, which is generally applicable to
all BBVA staff and which includes, in turn, the specific rules applicable to Identified Staff, including BBVA
Senior Management. These policies focus on the recurring generation of value for the Group and also
seeks to align the interests of its employees and shareholders with prudent risk management.
Therefore, the Remunerations Committee carried out the actions summarised below during the 2021
financial year to perform its functions and implement the aforementioned remuneration policies,
submitting the corresponding proposals to the Board of Directors for approval, where appropriate.
In particular, the Remuneration Committee analysed the approach proposed for the approval of a new
BBVA Directors' Remuneration Policy incorporating the new regulatory developments regarding
remuneration that entered into force in 2021, in addition to certain modifications that reflect advances in
market practices and the outcome of the dialogue between BBVA and its investors.
Accordingly, the Committee submitted to the Board of Directors for approval and subsequent
submission to the General Shareholders' Meeting the proposal for the BBVA Directors' Remuneration
Policy for financial years 2021, 2022 and 2023, together with the specific report on the Policy prepared
by the Committee and proposals for agreements on the maximum number of shares to be delivered to
the executive directors in execution of the same and those necessary to deal with the system of fixed
remuneration with deferred delivery of shares for non-executive directors, in accordance with the
provisions of the Policy.
In addition, the Remunerations Committee analysed and submitted the updated BBVA Group
Remuneration Policy to the Board of Directors for adaptation to the regulatory developments that
entered into force in 2021 and to align it with the changes made to the BBVA Directors' Remuneration
Policy for financial years 2021, 2022 and 2023, approved by the General Meeting held in April 2021.
With regard to the Executive Directors, the Remunerations Committee submitted to the Board the
necessary proposals for: determining the amount of the deferred portion of the Annual Variable
Remuneration for the 2017 financial year and the update amount to be received where conditions for
this were met, in 2021; agreement that the conditions for payment of the deferred portion of the Annual
Variable Remuneration for the 2017 financial year that was applicable in 2021 were met; determining
the calculation model and the amount of the discretionary pension benefits corresponding to the 2020
financial year for the Chairman and the former Executive Director, José Manuel Gonzalez-Paramo
Marinez-Murillo, which are usually calculated by reference to the total Annual Variable Remuneration,
which were not affected by the waiving by the Executive Directors of the Annual Variable Remuneration
for the 2020 financial year in response to the exceptional circumstances arising from the COVID19
crisis; novation of the Chairman's contract to adapt its terms and conditions to the amendments included
in the new BBVA Directors' Remuneration Policy approved in 2021; determining the minimum thresholds
for the Attributable Profit and Capital Ratio established for generation of the Annual Variable
Remuneration for 2021; and determining the Annual and Multi-year Performance Indicators for the
calculation of the Annual Variable Remuneration for the 2021 financial year and their respective
weightings, as well as the rules for updating the deferred cash portion of the remuneration; and
determining the targets and scales of achievement associated with the Annual Performance Indicators
for the calculation of the Annual Variable Remuneration for 2021.
As far as Senior Management is concerned, the Remunerations Committee submitted to the Board the
necessary proposals for approval of the basic contractual terms applicable to Senior Management
appointed by the Board of Directors in December 2020 and July 2021, in accordance with the basic
contractual framework approved at the time by the Board for Senior Management and the proposals
necessary for the salary review of certain senior managers, also within the aforementioned basic
contractual framework.
In addition, the Committee has monitored the deferred variable remuneration for the 2017 financial year
of those senior managers who benefited from this remuneration, whose payment was due in 2021.
Furthermore, given that the heads of Internal Audit and Regulation and Internal Control report directly to
the Board, the Committee, within the framework of the remuneration model applicable to Senior
Management, on the basis of the approaches taken by the Audit Committee and the Risk and
Compliance Committee, respectively, submitted to the Board the proposal for targets and Annual
Performance Indicators for the calculation of their Annual Variable Remuneration for the 2021 financial
year.
139
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
With regard to Identified Staff, which includes members of Senior Management, the Remuneration
Committee submitted to the Board the proposals for agreeing: determination of the achievement scales
of the Multi-year Performance Indicators for the deferred portion of the Annual Variable Remuneration
for the 2020 financial year, as well as the peer group for the TSR (Total Shareholder Return) indicator
that is one of these, applicable to Identified Staff members who have not waived the full Annual Variable
Remuneration for 2020 in view of the exceptional circumstances arising from the COVID19 crisis; and
determination that the Multi-year Performance Indicators for the 2021 Annual Variable Remuneration
and also the rules for updating the cash portion of that remuneration are the same as those established
for the calculation of the 2021 Annual Variable Remuneration of the Executive Directors.
In fulfilment of its function of ensuring compliance with the remuneration policies established by the
Company (BBVA Directors' Remuneration Policy and the BBVA Group General Remuneration Policy),
the Committee carried out a review of its implementation in 2020 on the basis of the annual report
issued to this effect by the Internal Audit area. In addition, the Committee has been informed of the
development and outcome of identifying the Identified Staff of BBVA and its Group in the 2020 financial
year.
The Committee also reviewed the information on remuneration of directors and senior management
contained in the financial statements and submitted the Annual Report on the Remuneration of BBVA
Directors for the 2020 financial year to the Board of Directors for approval and subsequent advisory
voting by the General Shareholders' Meeting.
Finally, the Committee submitted to the Board for approval and subsequent submission to the General
Meeting the approval of a maximum level of variable remuneration of up to 200 per cent of the fixed
component of the total remuneration applicable to a maximum of 339 Identified Staff members, and the
text of the report to be prepared by the Board in connection with this agreement.
•Risk and Compliance Committee: the Regulations of the Risk and Compliance Committee set out the
operational principles of the Committee and lay down the basic rules of its organisation and operation. In
particular, the Risk and Compliance Committee's Regulations stipulate, inter alia, that the Committee shall
meet whenever it is called by its Chair, who is empowered to call the Committee and to set the agenda for
its meeting. The Regulations contain the procedure for the calling of ordinary and extraordinary meetings.
Executives responsible for the areas that manage matters within their remits may be called to meetings.
This particularly applies to the Regulation & Internal Control area and the Risks area, and, at the request
of the heads of these, those persons within the Group who have knowledge of or responsibility for the
matters covered by the agenda, when their presence at the meeting is deemed appropriate. The
Committee may also call on any other Bank employee or manager, and even arrange for them to appear
without the presence of any other manager, while ensuring that the presence of non-Committee members
at its meetings is limited to those cases where it is necessary and to the items of the agenda for which
they have been called.
The Committee may also, through its Secretary, engage external advisory services for relevant issues
when it considers that these cannot be properly provided by experts or technical staff within the Group on
grounds of specialisation or independence.
Other aspects of the organisation and operation of the Committee shall be dealt with in the Regulations of
the Committee itself. All other matters not provided for in the aforementioned Regulations will be subject
to the Regulations of the Board of Directors, insofar as they are applicable.
With regard to the most important activities carried out by the Risk and Compliance Committee during the
2021 financial year, in several of its meetings the Committee analysed and finally submitted a proposal for
the BBVA Group's Risk Appetite Framework for the 2022 financial year (on the basis of the approach
taken by the Executive Committee), as well as an update to the BBVA Group's General Risk Management
and Control Model. These were submitted to the Board of Directors for its consideration and, where
appropriate, its approval.
On the other hand, during the 20201 financial year, the Committee reviewed reports on the internal capital
adequacy assessment process (ICAAP) and the internal liquidity adequacy assessment process (ILAAP),
as well as regulatorily required adequacy proposals for capital and liquidity. This review was carried out to
monitor the development of stress scenarios and verify their alignment with the approved Risk Appetite
Framework, with assistance from the Risk, Finance and Regulation & Internal Control areas, amongst
others. This made it possible to ensure that these reports and proposals faithfully reflected the Group's
situation in the areas analysed prior to them being submitted for consideration by the Executive
Committee and the Board of Directors.
The Risk and Compliance Committee has participated in the annual review and updating of the Group's
general risk management and control policies, both financial and non-financial, ensuring they are
consistent with the Group's General Risk Management and Control Model.
140
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
The Risk and Compliance Committee also confirmed that the model is adequate and that the Group has
structural risk-management areas both at corporate level and in each geographical and/or business area.
They added that these function correctly and provide the Committee with the information required to
understand the Group's risk exposure at all times, thus enabling the Committee to fulfil its monitoring,
supervision and control functions.
The Risk and Compliance Committee has monitored the effectiveness of the Regulation & Internal
Control area, involving itself in matters related to the Head of the area - among others, it has participated
in the establishment of its objectives for the year and in the evaluation of its performance with respect to
the previous year - and ensuring that the area has the resources necessary to carry out its functions.
The Risk and Compliance Committee has received monthly information from the Head of the Regulation
and Internal Control Area on the activity of each of the units that make up that area, on the basis of the
function´s Annual Plan presented to the Committee at the beginning of the year futher. In addition, the
Committee has received direct periodic reports from the Heads of the Compliance, Non-Financial Risks
and Internal Risk Control units, all of which are integrated into the Regulation and Internal Control Area.
Throughout the 2021 financial year, the Risk and Compliance Committee monitored the evolution of the
different risks to which the Group is exposed—both financial (e.g. credit risk, structural risks, market risk,
insurance risk) and non-financial (mainly operational risks)—as part of the BBVA Group's General Risk
Management and Control Model and in accordance with the Risk Appetite Framework approved by the
Board of Directors.
The Risk and Compliance Committee therefore received and analysed information from the Risk and
Regulation & Internal Control areas suitably frequently, and had the support of the Group's Chief Risk
Officer, the Head of Regulation & Internal Control, those in charge of each type of risk in the corporate
field and the risk directors of the Group's main geographical and/or business areas, and spoke directly
with each one to discuss this topic.
All of this afforded the Risk and Compliance Committee direct knowledge of the Group's risks, both
globally and locally, allowing it to perform its function of monitoring the evolution of the Group's risks,
regardless of the type of risk, the geographical or business area in which it originates, and even the sector
or portfolio to which it belongs.
In the performance of this function, the Risk and Compliance Committee also regularly monitored the
compliance of the metrics established for the 2021 financial year, with the necessary frequency and level
of detail to ensure adequate monitoring of said indicators. To further enhance its monitoring of the Risk
Appetite Framework, the Committee received information about key internal and external variables that
do not directly form part of the Risk Appetite Framework but affect its compliance. All of this prior to its
follow-up by the other corporate bodies with risk functions.
In particular, the Committee has carried out continuous cross-cutting monitoring of those risks most
affected by the COVID-19 pandemic, with a focus on the behaviour of those credit portfolios which were
subject to legal or sectoral moratoria, as well as new lending operations granted with public guarantees.
The Committee has also carried out cross-cutting monitoring including through specific presentations on
progress in integrating climate change risk into the Group's risk management.
In addition, the credit committees of Global Risk Management (GRM) informed the Risk and Compliance
Committee periodically of the main credit risk operations in their respective areas of competency, as well
as the Group's most significant cases of credit exposure. Also, the Risk and Compliance Committee was
periodically provided with information about the qualitative risk operations authorised by the committees
of Global Risk Management (GRM).
The Risk and Compliance Committee has analysed, in advance, the financial and non-financial risks of
corporate operations submitted for consideration by the Board of Directors.
In 2021, the Committee received recurring information on the evolution of metrics and analysis in terms of
profitability and capital, which evaluate the alignment of the resulting pricing in the financing and credit
activity against the risk strategy and risk transfer in the Group.
Additionally, the Committee monitored the profitability of portfolios and businesses and the performance
of the profitability indicators incorporated into the Bank's Risk Appetite Framework. All of this enabled the
Committee to confirm that the prices of the assets and liabilities offered to customers were aligned with
the Bank's business model and risk strategy.
141
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
The Committee was involved in establishing the Multi-year Performance Indicators for the 2021 Annual
Variable Remuneration, as well as the scales of achievement for the Multi-year Performance Indicators for
the 2020 Annual Variable Remuneration for Identified Staff members who did not waive this entirely due
to the exceptional circumstances arising from the COVID-19 crisis. It also analysed the result of the Multi-
year Performance Indicators associated with the deferred annual variable remuneration for the 2017
financial year for Identified Staff, including executive directors and the rest of senior management, by
checking its alignment with appropriate, effective and prudent risk management, prior to submission to the
Board by the Remunerations Committee.
Furthermore, the Committee has participated in the process of establishing the remuneration policy of
board members approved by the General Meeting in 2021, checking that it is compatible with an
adequate and effective risk management strategy and that it does not offer incentives to assume risks
that exceed the level tolerated by the Bank.
The Committee was informed of the Risk area's structure, organisation and resources and incentive
scheme as well as its means, systems and tools (including those in development stage), having verified
that the Group has adequate resources in relation to its strategy.
The Risk and Compliance Committee participated in the review of the Group's Recovery Plan with a view
to assessing its alignment with the Risk Appetite Framework approved by the Group and analysing the
risk scenarios used, with the help of the Risk and Finance areas, inter alia, before being submitted to the
Executive Committee and subsequently the Board of Directors for consideration.
With regard to the Committee's functions in the area of compliance, it should be noted, firstly, that during
the 2021 financial year, the Committee analysed the policies prepared by the executive areas in this area
(e.g. on conduct and prevention of money laundering and the financing of terrorism), as well as the
updated version of the System and Charter of the Compliance Function, prior to consideration thereof by
the Board of Directors.
The Committee also regularly monitored information received by the Compliance Unit over the course of
the financial year regarding the Group's compliance with applicable internal and external regulations. The
Committee examined the findings of the independent review processes carried out both internally within
the Group and externally by the competent authorities, as well as the degree of progress in implementing
planned measures within the various areas of activity (e.g. conduct, prevention of money laundering and
terrorist financing, data protection). It also specifically monitored the activity of the Compliance Unit in
relation to the MiFID regulations and bank transparency.
Moreover, the Committee was informed, as often as appropriate, of the findings of external audits and any
other reviews carried out by external experts on compliance-related matters, including existing internal
control measures concerning the prevention of money laundering and terrorist financing.
Also, regarding compliance with applicable internal regulations, the Committee was informed by the
heads of the relevant executive areas of any pertinent compliance-related issues concerning the
implementation of internal regulations (e.g. general policies, procedures) approved by the Group.
Furthermore, the Committee monitored the main legal risks deriving from litigation to which the Group is
exposed, through the Global Head of Legal's presentation to the Committee, and the monitoring of
developments in the Cenyt case, among other issues, was discussed.
Regarding BBVA's Crime Prevention and Criminal Risk Management Model, the Committee was informed
of its development over the course of the financial year and the main lines of work involved in relation to
the model's various elements.
The Committee was also informed by the head of the Compliance Unit—the unit responsible for
promoting and ensuring, in an independent and objective manner, that BBVA acts with integrity,
particularly in areas such as anti-money laundering, conduct with clients, security market conduct, anti-
corruption and other aspects of corporate conduct—of the functioning of the whistleblowing channel, as
well as of the noteworthy aspects of the area.
Finally, the Committee analysed the extent of implementation of the Annual Plan of the Compliance Unit
for the 2020 financial year. It also examined the Annual Plan created for 2021, with corresponding
monitoring of progress made in its implementation. The Committee was also informed of developments in
the Compliance Unit's strategy for the period 2021-2024.
142
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Regarding communications and recommendations from supervisors, the Committee was made aware of
the major communications and inspections carried out by the Group's supervisory bodies, whether
national or foreign, being informed, where appropriate, of the recommendations, weaknesses or areas of
improvement identified, as well as the action plans and other measures established by the relevant
executive areas in order to overcome them in time.
Finally, during the 2021 financial year, the Risk and Compliance Committee verified the progress and
effectiveness of the various actions and initiatives drawn up by the Risk and Regulation & Internal Control
areas to strengthen the risk and compliance culture in the Group, so as to enable employees to perform
their duties in a secure environment, and to encourage the mitigation of risks, both financial and non-
financial, to which their activities are exposed.
•Technology and Cybersecurity Committee: the Regulations of the Technology and Cybersecurity
Committee set out the operational principles of the Committee and lay down the basic rules of its
organisation and operation. In particular, the Technology and Cybersecurity Committee's Regulations
stipulate, inter alia, that the Committee shall meet whenever it is convened by its Chair, who is
empowered to call the Committee and set the agenda of its meetings. The Regulations contain the
procedure for the calling of ordinary and extraordinary meetings.
Executives responsible for the areas that manage matters within their remits may be called to meetings,
as well as, at the request thereof, those persons within the Group who have knowledge of or responsibility
for the matters covered by the agenda, when their presence at the meeting is deemed appropriate. The
Committee may also call on any other Bank employee or manager, and even arrange for them to appear
without the presence of any other manager, while ensuring that the presence of non-Committee members
at its meetings is limited to those cases where it is necessary and to the items of the agenda for which
they have been called.
The Committee may also, through its Secretary, engage external advisory services for relevant issues
when it considers that these cannot be properly provided by experts or technical staff within the Group on
grounds of specialisation or independence.
Other aspects of the organisation and operation of the Committee shall be dealt with in the Regulations of
the Committee itself. All other matters not provided for in the aforementioned Regulations will be subject
to the Regulations of the Board of Directors, insofar as they are applicable.
With regard to the most relevant actions carried out by the Technology and Cybersecurity Committee
during the 2021 financial year in the area of the Group's technology strategy, the Committee has received
information on this matter from the managers of the Engineering Area regarding the main strategic
projects and plans defined by the Engineering and Organization Area, with a focus on those related to the
platform and core banking systems, transformation of the software solution development function, the
reliability and resilience of the Group's platform and technology systems, the development of engineering
solutions for the rest of the Group's areas, as well as networking and communication systems.
Within the context of these plans and projects, the Committee has been informed of technological trends
and of other issues pertaining to new technologies, applications, IT systems and best practices that affect
or may affect the Group's technology strategy or plans.
The Committee also received regular information on the metrics in place to monitor progress in the
technology strategy set in place.
With regard to the Committee's compliance with its functions in the field of oversight of technological risk
and cybersecurity management within the Group,
The Committee received information about the updated framework of technological risks to which the
Group is exposed, as well as the plans set in place for identifying, managing, monitoring and mitigating
such risks.
In particular, the Committee has been provided with further detail on identification, management,
monitoring and mitigation of IT-related risks, as well as the risks posed to the Group as a result of
services that are contracted to third-party suppliers; along with the main risks associated with the use of
shadow IT elements. The Committee also reviewed business continuity plans from the standpoint of
technological infrastructure.
Moreover, the Committee has reviewed the main programmes in the field of cybersecurity and has been
informed about progress made, evolution of the established metrics and future plans.
The Committee was also informed in the first half of the year about the activity carried out by the
Engineering area to deal with the impacts of the pandemic, from three standpoints: ensuring business
continuity, strengthening protection against cyberattacks and attempted fraud, and the activity of the war
rooms created to manage the impacts of COVID-19
143
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Finally, at each of its meetings, the Committee also received information on the main cybersecurity-
related occurrences at industry level and on those that in turn are relevant to the BBVA Group. This
information was provided by the head of the Corporate Security unit, who explained how the Group is
prepared to deal with attacks of a similar nature, as well as how it has dealt with attacks and, where
applicable, mitigated their consequences for the Group.
With respect to Section D (Related-party and Intragroup Transactions), see notes 48 and 53 respectively
within the BBVA Individual and Consolidated Annual Financial Statements for the 2021 financial year. Section
D.4 details the transactions conducted by Banco Bilbao Vizcaya Argentaria, S.A. at the close of the financial
year, with the company issuing securities on international markets, carried out as part of ordinary trading
related to the management of outstanding issuances, guaranteed by BBVA. Moreover, with respect to
Section D.4, please refer to the section entitled 'Offshore financial centres' in the BBVA Consolidated
Management Report for the 2021 financial year.
Furthermore, with respect to Section D.6, all members of the Board of Directors and BBVA Senior
Management are subject to the provisions of the BBVA Code of Conduct, the Group's General Policy on
Conflicts of Interest and the Internal Standards of Conduct in the Securities Markets, which establish principles
and guidelines to identify, prevent and manage potential conflicts of interest. In particular, the Internal
Standards of Conduct in the Securities Markets establishes that all persons subject to them must notify the
head of their area or the Compliance unit of situations that could potentially and under specific circumstances
may entail conflicts of interest that might compromise their impartiality, before they engage in any transaction
or conclude any business in the securities market in which such may arise.
Complementary to Section E.3 of this report, and in relation to Preliminary Proceeding No. 96/2017 – Piece
No. 9 regarding the provision of services by Centro Exclusivo de Negocios y Transacciones, S.L. (Cenyt) to
the Bank, it should be noted that, since January 2019, this issue has been reported on a recurrent basis to the
Bank's corporate bodies; namely the Board of Directors itself and also its committees that have powers in
relation to this matter (the Audit Committee and the Risk and Compliance Committee). These bodies have
driven and monitored internal investigation procedures, ensuring that the Bank fully cooperates with the
judicial authorities and develops a policy of transparency.
In addition to the above, the Bank's management bodies have continued to implement various measures to
strengthen the internal control systems of the Bank, some of which are described in the Compliance section of
the Non-Financial Information Statement included in the Consolidated Management Report for the 2021
financial year, significant among which are the approval of new policies and other internal developments,
improvement of internal control processes and strengthening of the crime prevention model.
It is also worth noting that the relevant documentation obtained from the internal investigation undertaken by
the Bank in 2019 to help clarify the facts indicates that none of the current members of the Board of Directors
nor the Executive Chairman of the Bank are implicated, and it has not been proven that the Bank has
committed any criminal activity. BBVA argues that no criminal liability arises for the Bank from the facts
investigated.
It must also be stressed that, to date, the case has not impacted the development of the Bank's business, nor
has it negatively impacted the reputation indices, which are subject to recurrent monitoring by both the
executive team and by its management bodies.
BBVA has created a specific area on its corporate web page with information on issues related to the Cenyt
case (https://www.bbva.com/en/specials/the-cenyt-case/).
Complementary to section E.6 of this Report, in order to meet the new challenges that arise, the BBVA Group
has a governance system that allows the Board to be informed of the real and potential risks that affect or may
affect the Group at any time. Thus, in addition to the work carried out by the Bank's different areas of control
(Risk, Regulation & Internal Control and Internal Audit), as well as other areas of the Bank, such as legal and
finance, and the corresponding Board committees (such as the Risk and Compliance Committee or the Audit
Committee), there is also the monitoring and supervision carried out by the Technology and Cybersecurity
Committee. Its work allows the Board to be informed of the main technological risks to which the Group is
exposed—including those relating to information security risks, information technology compliance risks and
cybersecurity risks—as well as of current technological trends and strategies, business continuity plans in
matters of technology and relevant cybersecurity events affecting the Group or which might affect it in the
future, among other functions.
This risk control and management model, together with the procedures established to provide the corporate
bodies (Board and RCC) with the means and information necessary for the proper performance of their
functions (as detailed in section E.2 above and in the Governance and organisation section in the General risk
management and control model section in the Risk management chapter of the individual and consolidated
Management Reports for the 2021 financial year), enables the proper monitoring of new risks that, as the case
may be, arise for the entity.
144
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
In addition to Recommendation 64 set out in section G, it is pointed out that, in accordance with the provisions
of the BBVA Directors' Remuneration Policy, approved by the 2021 Annual General Shareholders' Meeting, the
Bank has no commitments regarding the payment of compensation to executive directors.
As set out in the above-mentioned Remunerations Policy, the contractual framework defined for the executive
directors establishes a post-contractual non-competition clause for executive directors, effective for a duration
of two years after they leave their role as BBVA Executive Directors, provided that they do not leave due to
retirement, disability or serious dereliction of duties. In compensation for this agreement, the Bank shall award
the executive directors remuneration of an amount equivalent to their annual fixed remuneration for each year
of the non-competition agreement, which will be awarded monthly over the course of the two years.
Furthermore, as stated in section C.1.13 above, the Bank has assumed pension commitments with the
Chairman to cover the contingencies of retirement, disability or death, under the terms set out in the BBVA
Directors' Remuneration Policy. In the case of the commitment to cover the retirement contingency, the
scheme operates under a defined contribution system, for which the annual contributions to be made are fixed
in advance. By virtue of this commitment, the Chairman is entitled to receive a retirement pension when he
reaches the retirement age established by law, which shall be the sum of the contributions made by the Bank
and its corresponding yields up to that date, provided that he does not leave his position as a result of serious
dereliction of his duties. They do not provide for the possibility of receiving the retirement pension in advance.
Regarding adherence to codes of ethics or good practice, in the 2011 financial year the BBVA Board of
Directors approved the Bank's adhesion to the CBPT (Código de Buenas Prácticas Tributarias — Code of
Good Tax Practices) approved by the Large Corporations Forum according to the wording proposed by the
Spanish Tax Agency (AEAT). The Group meets the obligations assumed as a result of this adherence and,
during the 2021 financial year, voluntarily prepared and submitted to the Spanish Tax Agency the Annual Fiscal
Transparency Report for companies adhering to the CBPT.
In addition, during the 2021 financial year and as part of the cooperative relationship maintained by the BBVA
Group with the Spanish Tax Agency, the Self-Assessment Report on the data reported country-by-country for
the 2019 financial year has been sent to the Spanish Tax Agency. In the process of analysing these data, the
BBVA Group has carried out an assessment of tax risks on the basis of the financial indicators and ratios
identified by the OECD in it document, Handbook on Effective Tax Risk Assessment.
In this vein, the BBVA Group has since adhered, during the 2013 financial year, to the Code of Practice on
Taxation for Banks promoted by British tax authorities, and has also met its obligations.
Furthermore, BBVA is committed to implementing the provisions of the Universal Declaration of Human Rights
and is a member of all major international initiatives for sustainable development, such as the Principles of
United Nations Global Compact, the United Nations Environment Programme Finance Initiative, the UN
Guiding Principles on Business and Human Rights, the Ecuador Principles, the Women's Empowerment
Principles, the Green Bond Principles, the Social Bond Principles, the Sustainability Linked Bond Principles,
the Green Loan Principles, the Social Loan Principles, the Sustainability Linked Loan Principles, the Thun
Group of Banks on Human Rights, the Carbon Disclosure Project (CDP), the RE100, Science Based Targets
and Grupo Español para el Crecimiento Verde (Spanish Green Growth Group) initiatives, the World Economic
Forum (WEF)'s Alliance of CEO Climate Leaders, as well as those of others conventions and treaties of
international organisations such as the Organization for Economic Co-operation and Development and the
International Labour Organization. Also noteworthy is the fact that in 2019 BBVA signed, as a founding
signatory, the Principles for Responsible Banking and joined the Collective Commitment to Climate Action as
part of this year's UN Secretary-General's Climate Action Summit. Moreover, BBVA is firmly committed to the
United Nations Sustainable Development Goals and the Paris Agreement on Climate Change and, since 2017,
the Bank has been part of the pilot group of banks committed to implementing the recommendations regarding
financing and climate change published by the Financial Stability Board of the G20. In addition, in 2021, the
Bank signed, as a founding signatory, the Net Zero Banking Alliance and the Collective Commitment to
Financial Health and Inclusion, and BBVA Asset Management signed the United Nations Principles for
Responsible Investment and the Net Zero Asset Managers Initiative.
----------------------------------------------------------------------------------------------------------------------------------------
This annual corporate governance report was adopted by the company's Board of Directors at its meeting
held on 9 February 2022.
Indicate whether any directors voted against or abstained from voting on the approval of this report.
No
145
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Annual Report on Directors' Remuneration
In accordance with the provisions established by Article 541 of the Spanish Corporate Act, BBVA prepared the Annual Report on the
Remuneration of BBVA Directors for 2021 (which is an integral part of the Management Report for that year), including the contents
set down in Order ECC/461/2013, dated March 20, and in Circular 4/2013, dated June 12, of Comisión Nacional del Mercado de
Valores (CNMV), in the wording provided by Circular 3/2021, dated September 28, of CNMV. In addition, all the information required
by Article 539 of the Spanish Corporate Act can be accessed on BBVA’s website www.bbva.com.
146
This English version is a translation of the original in Spanish for information purposes only. In case of a discrepancy, the Spanish original will prevail.
Contents
3.3. Remuneration system for executive directors
3.3.2. Main terms and conditions of the executive directors' contracts
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
147
2021 Executive summary
Remuneration of executive directors 2021
The remuneration accrued by executive directors in 2021 are the result of application of the Directors’
Remuneration Policies approved by the General Shareholders Meeting.
Summary table of remuneration accrued in 2021
(Thousands of euro and shares)
Director
Fixed (paid in 2021)
Variable (payable in 2022)
Deferred Variable  (payable in 2022)
Annual Fixed
Remuneration
Other items
Upfront Payment2
AVR 2021
Deferred AVR
20183
Deferred AVR
20174
In kind
Pension1
Other
Cash
Shares
Cash5
Shares
Cash5
Shares
Chairman
(Carlos Torres Vila)
2,924
328
340
849
159,235
364
107,38
6
146
27,898
Chief Executive
Officer
(Onur Genç)
2,179
158
1,254
645
120,977
332
61,282
-
-
(1)Agreed annual contribution to cover the retirement contingency (EUR 439 thousand) minus the downward adjustment to the “discretionary
pension benefits” of EUR 98 thousand registered in 2021 (see section 4.3. A. c.) and "Cash in lieu of pension" and mobility allowance of the Chief
Executive Officer. Moreover, and in accordance with the contractual provisions described in section 4.3 A. c) below, the Bank has paid in 2021
annual insurance premiums to cover death and disability contingencies of an amount of EUR 574 thousand in the case of the Chairman and EUR
295 thousand in the case of the Chief Executive Officer.
(2)40% AVR 2021.
(3)In 2022 falls due the payment of the Upfront Portion of 2018 Deferred AVR (60%) in the case of the Chairman and payment of the entire 2018
Deferred AVR in the case of the Chief Executive Officer, once the relevant downward adjustments due to the result of multi-year performance
indicators have been applied (see section 4.3 B c). Exchange rate at the end of January 2022 (1.1156 USD/EUR) in the case of the Chief Executive
Officer.
(4)In 2022 falls due the second payment to the Chairman of 2017 Deferred AVR (20%). The Chief Executive Officer does not have any 2017 Deferred
AVR pending payment.
(5)Includes updates made per the year-on-year CPI.
Total remuneration of  executive directors corresponding to 2021: link with results and comparison with
previous years
Remuneration accrued by executive directors corresponding to 2021 financial year is the result of the changes
introduced in the Remuneration Policy approved at the General Meeting of 20 April 2021, by virtue of which, in the
case of the Chairman, the amount of the annual contribution agreed to cover the retirement contingency was
reduced from EUR 1,642 thousand (67% of the Annual Fixed Remuneration) to EUR 439 thousand (15% of the
Annual Fixed Remuneration).
As a result of the foregoing, the remainder of the annual contribution established in the previous policy was
integrated, in part, in his Annual Fixed Remuneration and, in part, in its "Target" Annual Variable
Remuneration, abiding by, in each case, the balance established in the Policy between these two components
(45%-55%), with a reduction in the total amount to be transferred to them of EUR 157 thousand.
As a result of these changes the Chairman's total remuneration was reduced with respect to the figure
stipulated in the previous policy. Likewise the change of structure involved an increase of his pay at risk linked
to the Institution’s results.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
148
In the table included below, comparative information of the total remuneration corresponding to three
financial years (which in this case includes total remuneration of directors in each of them, considering the
total AVR of the financial year and not considering deferred variable remunerations from previous years).
For this purposes, together with the change of the  Directors’ Remuneration Policy approved in 2021 financial
year, it may be outlined that the executive directors waived the Annual Variable Remuneration corresponding
to 2020 financial year, in view of the situation arising from the COVID-19 crisis, which for the rest of the
workforce, who did not waive it, partially or in full, had an achievement of 60%.
On the other hand, 2021 Annual Variable Remuneration is explained by the excellent results obtained by the
Group in the different Annual Performance Indicators for the calculation of 2021 AVR determined by the
Board of Directors at the beginning of that year. Notwithstanding the context marked by the high impact of
the economic crisis originated by COVID-19 and the high uncertainty regarding the prospects for recovery,
the Corporate Bodies1 set targets for the calculation of the 2021 AVR, which were over the analysts
consensus at that time (set at EUR 2,944 million in the case of the Attributable Profit). As a result of the
management carried out, these targets have not only been achieved, but overachieved.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
149
1 For the purposes of this Report the Board of Directors of BBVA and its Committees.
Thus, the BBVA Group has obtained a recurring attributable profit of EUR 5,069 million, without including the
results generated, until June 2021, by BBVA USA and its subsidiaries and the costs of the restructuring plan in
Spain. The amount of profit considered for incentive purposes has been said recurring profit, excluding, in
addition, the cost savings not budgeted generated in the year by the restructuring plan in Spain, reaching,
therefore, an attributable profit of EUR 5,028 million. This data of profit is the one also considered for the
calculation of the rest of the financial indicators for incentive purposes.
Chairman
2021
2020
2019
Annual Fixed Remuneration (EUR thousand)
2,924
2,453
2,453
Remuneration in kind(EUR thousand)
328
228
184
Annual pension contribution (EUR thousand)
3401
1,657 2
1,6413
Annual Variable Remuneration 4 (miles €)
4,244
0
3,180
"Target" AVR (EUR thousand)
3,572
2,997
2,997
Level of achievement
119%
60%6
106.11%
Annual Performance Indicators
Wei.
Res.5
Tgt.
Ach.
Wei.
Res.
Tgt.6
Ach.
Wei.
Res.
Tgt.
Ach.
Attributable profit (excluding corporate transactions)
10%
5,028
mill.€
150
%
-
3,084
mill.€
0%
10%
4,830
mill.€
112%
Tangible Book Value per share
15%
6.55
97%
-
6.15
43%
10%
6.50
100%
RORC
10%
14.03
%
150
%
-
6.76%
0%
15%
8.79%
113%
Efficiency ratio
10%
45.51
%
123
%
-
46.82
%
119%
15%
48.50%
109%
Customer Satisfaction (NPS)
10%
101
101
%
-
107
107%
10%
97
97%
Mobilisation of sustainable financing
10%
30,615
mill. €
120
%
-
-
-
-
-
-
Digital sales
10%
99
99%
-
86
86%
10%
113
113%
Individual indicators
25%
120
120
%
-
-
-
30%
102
102%
TOTAL REMUNERATION (EUR thousand)
7,837
4,338
7,458
(1)From the annual agreed contribution to the retirement pension corresponding to 2020 (EUR 1,462 thousand), 15% (EUR 246 thousand) was
considered variable remuneration and registered as “discretionary pension benefits”. In 2021, this amount was adjusted by reference to the
result of 2020 AVR of the rest of the Bank’s staff (as the Chairman waived the accrual of AVR in 2020). The foregoing resulted in a downward
adjustment of EUR 98 thousand, which had to be registered in 2021, by reducing the annual agreed contribution for the retirement pension
corresponding to 2021 in such amount (see section 4.3 A c).
(2)From the annual agreed contribution to the retirement pension corresponding to 2019 (EUR 1,462 thousand), 15% (EUR 246 thousand) was
considered variable remuneration and registered as “discretionary pension benefits”. In 2020, this amount was adjusted by reference to the 2019
Annual Variable Remuneration of the Chairman. The foregoing resulted in an upward adjustment of EUR 15 thousand which had to be registered
in 2020 financial year. Therefore, in 2020 the annual agreed contribution to the retirement pension (EUR 1,462 thousand) was increased in an
amount of EUR 15 thousand.
(3)From the annual agreed contribution to the retirement pension corresponding to 2018 (EUR 1,462 thousand), the adjustment to the
“discretionary pension benefits” of that year, which had to be registered in 2019,  was of EUR 1 thousand, applying the criteria set forth in note 2
above.
(4)Amount of total Annual Variable Remuneration in cash. Of this remuneration,  40% shall be paid in 2022 (in equal parts in cash and BBVA shares),
while the remaining 60% (40% in cash and 60% in BBVA shares) has been deferred and is subject to the results of multi-year performance
indicators (see section 4.3. B).
(5)Results for incentive purposes (see Section 4.3 B a) “Link between the 2021 AVR with results”).
(6)In 2020, incentive-related targets for executive directors were not approved due to their waiver of all 2020 AVR in view of the exceptional
circumstances arising from the COVID-19 crisis. For comparative purposes, the level of achievement reached for the Group targets for the rest
of the workforce (60%) is included.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
150
Chief Executive Officer
2021
2020
2019
Annual Fixed Remuneration (EUR thousand)
2,179
2,179
2,179
Remuneration in kind (EUR thousand)
158
132
144
Other fixed allowances (EUR thousand)
1,254
1,254
1,160
Annual Variable Remuneration 1 (EUR thousand)
3,224
0
2,854
"Target" AVR (EUR thousand)
2,672
2,672
2,672
Level of achievement
121%
60%3
106.82%
Annual Performance Indicators
Wei.
Res.2
Tgt.
Ach.
Wei.
Res.
Tgt.3
Ach.
Wei.
Res.
Tgt.
Ach.
Attributable profit (excluding corporate transactions)
15%
5,028
mill.€
150
%
-
3,084
mill.€
0%
20%
4,830
mill.€
112%
Tangible Book Value per share
10%
6.55
97%
-
6.15
43%
10%
6.50
100%
RORC
10%
14.03
%
150
%
-
6.76%
0%
15%
8.79%
113%
Efficiency ratio
15%
45.51
%
123
%
-
46.82
%
119%
15%
48.50%
109%
Customer Satisfaction (NPS)
15%
101
101
%
-
107
107%
15%
97
97%
Mobilisation of sustainable financing
10%
30,615
mill. €
120
%
-
-
-
-
-
-
Digital sales
10%
99
99%
-
86
86%
10%
113
113%
Individual indicators
15%
120
120
%
-
-
-
15%
102
102%
TOTAL REMUNERATION (EUR thousand)
6,815
3,565
6,337
(1)Amount of total Annual Variable Remuneration in cash. Of  this remuneration,  40% shall be paid in 2022 (in equal parts in cash and BBVA shares),
while the remaining 60% (40% in cash and 60% in BBVA shares) has been deferred and is subject to the results of multi-year performance
indicators (see section 4.3. B).
(2)Results for incentive purposes (see Section 4.3 B a) “Link between the 2021 AVR with results”).
(3)In 2020, incentive-related targets for executive directors were not approved due to their waiver of all 2020 AVR in view of the exceptional
circumstances arising from the COVID-19 crisis. For comparative purposes, the level of achievement reached for the Group targets for the rest
of the workforce (60%) is included.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
151
Deferred remuneration from previous years payable in 2022
2018 Deferred AVR (EUR thousand and shares)
Executive
directors
Maximum amount of
2018 DAVR
Reduction (ex post
adjustments)
Final amount of 2018
DAVR
Amount of 2018 DAVR to
be paid in 20221
Amount of 2018 DAVR to
be paid each year in 2023
and 2024
Cash
Shares
Cash
Shares
Cash
Shares
Cash2
Shares
Cash
Shares
Chairman
574
180,785
-1%
-1%
569
178,977
341
107,386
114
35,795
Chief
Executive
Officer
302
61,901
-1%
-1%
299
61,282
299
61,282
-
-
(1)Relates to the first payment (60%) in the case of the Chairman (with 20% scheduled to be paid in 2023 and the remaining 20% scheduled to be
paid in 2024) and the entire payment in the case of the Chief Executive Officer, in view of the deferral periods and payment schedules
established in the remuneration policies applicable to each of them in 2018. The January 2022 closing exchange rate was used to calculate the
Chief Executive Officer's 2018 deferred AVR in euros (USD/EUR 1.1156).
(2)This amount will be updated through application of the CPI in the amount of EUR 23 thousand in the case of the Chairman and EUR 33 thousand
in the case of  the Chief Executive Officer.
The results obtained for each of the 2018 DAVR Multi-year Performance Indicators, and the threshold
for no reduction set for each of them, are detailed below:
2018 Deferred AVR (long-term measurement period 2019 - 2021)
2018 DAVR Multi-
year Performance
Indicators
Solvency
Liquidity
Profitability
Economic Adequacy
(Economic Equity/
ECR)
Fully
loaded
CET1
LtSCD (loan-to-stable
customer deposits)
LCR (Liquidity
Coverage
Ratio)
(Net Margin - Loan-Loss
Provisions)/Average
Total Assets
ROE
(Return
on
Equity)
TSR (Total
Shareholder
Return)
Weighting
20%
20%
10%
10%
10%
20%
10%
Threshold for no
reduction
≥ 100%
≥ 9.48%
≤ 140%
≥ 106%
≥ 0.20%
≥ 1.0%
1st to 8th
Result
152%
11.97%
104%
147%
1.18%
8.7%
9th
% reduction
0%
0%
0%
0%
0%
0%
1%
With respect to the TSR indicator, which tracks total returns for shareholders, BBVA's performance was compared to that of the peer
group approved by the Board of Directors in 2019 and set forth in Annex 2 over the three-year period from 1 January 2019 to 31
December 2021.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
152
Second payment of the 2017 Deferred AVR
The amount of this remuneration was determined in the 2021 financial year considering the result of the
Multi-year Performance Indicators approved in 2017, which was reported in the Annual Report on the
Remuneration of Directors corresponding to the 2020 financial year. In 2022 the second payment of this
deferred remuneration falls due to the Chairman, in the following terms:
Chairman’s 2017 Deferred AVR (EUR thousand and shares)
Maximum amount of 2017
DAVR
Amount of 2017 DAVR paid in
2021 (60%)
Amount of 2017 DAVR to be paid in
2022 (second payment 20%)
Amount of 2017 DAVR to be paid in
2023 (third payment 20%)
Cash
Shares
Cash1
Shares
Cash2
Shares
Cash
Shares
675
139,488
405
83,692
135
27,898
135
27,898
(1)Amount updated in 2021 through application of the CPI in the amount of EUR 6 thousand.
(2)Amount that will be updated in 2022 through application of the CPI in the amount of EUR 11 thousand.
2021 remuneration of non-executive directors
The remuneration accrued by non-executive directors in 2021 is the result of application of the Directors’ Remuneration
Policy approved by the General Meeting held on 20 April 2021. The amounts corresponding to the positions of member
of the Board, member and chair of the Board Committees, and Deputy Chair and Lead Director, albeit having been
reallocated, have not experienced any increases since 2007.
2021 Annual fixed allowance
(EUR thousand)
Non-executive directors
Board of
Directors
Executive
Committee
Audit
Committee
Risk and
Compliance
Committee
Remuneration
Committee
Appointments and
Corporate
Governance
Committee
Technology
and
Cybersecurity
Committee
Other
positions
1
Total
José Miguel Andrés Torrecillas
129
167
66
115
50
527
Jaime Caruana Lacorte
129
167
165
107
567
Raúl Galamba de Oliveira
129
107
43
278
Belén Garijo López
129
66
107
46
349
Sunir Kumar Kapoor
129
43
172
Lourdes Máiz Carro
129
66
43
238
José Maldonado Ramos
129
167
46
342
Ana Peralta Moreno
129
66
43
238
Juan Pi Llorens
129
214
46
43
80
512
Ana Revenga Shanklin
129
107
236
Susana Rodríguez Vidarte
129
167
107
46
449
Carlos Salazar Lomelín
129
43
172
Jan Verplancke
129
43
43
214
Total
1,673
667
431
642
278
301
171
130
4,293
(1)Amounts received in 2021 by José Miguel Andrés Torrecillas, as Deputy Chair of the Board of Directors, and by Juan Pi Llorens, as Lead Director.
In addition, non-executive directors received remuneration in kind amounting to a total of EUR 102 thousand in 2021.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
153
Fixed remuneration system with deferred delivery of BBVA shares
Through the implementation of this system, the number of "theoretical shares" allocated to each non-executive director
is equal to 20% of the total annual fixed allowance in cash received by each such director in 2020 based on the average
closing price of the BBVA share during the 60 trading sessions prior to the General Meeting of 20 April 2021, which was
EUR 4.44 per share. Pursuant to the Policy, BBVA shares will only be delivered after directors cease to hold such office,
given that this is not due to a serious dereliction of duties.
Non-executive directors
"Theoretical shares" allocated in 2021
"Theoretical  shares" accumulated as of 31/12/2021
José Miguel Andrés Torrecillas
22,860
98,772
Jaime Caruana Lacorte
25,585
56,972
Raúl Galamba de Oliveira
9,500
9,500
Belén Garijo López
15,722
77,848
Sunir Kumar Kapoor
7,737
30,652
Lourdes Máiz Carro
10,731
55,660
José Maldonado Ramos
15,416
123,984
Ana Peralta Moreno
10,731
26,396
Juan Pi Llorens
23,079
115,896
Ana Revenga Shanklin
7,568
7,568
Susana Rodríguez Vidarte
20,237
161,375
Carlos Salazar Lomelín
5,642
5,642
Jan Verplancke
9,024
21,416
Total
183,832
791,681
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
154
ANNUAL REPORT ON THE REMUNERATION OF DIRECTORS
COMPANY NAME: Banco Bilbao Vizcaya Argentaria, S.A.
REGISTERED OFFICE: Plaza de San Nicolás, número 4, 48005, Bilbao (Bizkaia)
Tax identification number (CIF): A-48265169.
1.Introduction
This report has been prepared in accordance with the provisions of Article 541 of the Consolidated text of the
Spanish Corporate Enterprises Act, approved by Royal Legislative Decree 1/2010, of 2 July, and in
accordance with the provisions of Spanish National Securities Market Commission (CNMV) Circular 4/20132.
The Board of Directors of Banco Bilbao Vizcaya Argentaria, S.A. (BBVA, the Institution, the Company or the
Bank), at its meeting held on 9 February 2022 and on the proposal of the Remuneration Committee, has
approved this Annual Report on the Remuneration of BBVA Directors (the Remunerations Report or the
Report), the purpose of which is to disclose complete, clear and comprehensible information on the
remuneration policy applicable to the members of the BBVA Board of Directors for the current financial year
(2022), together with a global summary of the application of the remuneration policy during the financial year
last ended (2021) and a breakdown of the individual remuneration of each type accrued by each director
during such financial year.
The BBVA Directors' Remuneration Policy applicable in 2021 and 2022 was that approved by the General
Meeting held on 20 April 2021 (the Directors’ Remuneration Policy or the Policy). This Policy is fully
compliant with the modifications introduced by Act 5/2021 to article 529 novodecies of the Consolidated text
of the Spanish Corporate Enterprises Act, approved by Royal Legislative Decree 1/2010, of 2 July3.
This Report also includes information on the BBVA Group General Remuneration Policy, which is based on the
same principles as those governing the BBVA Directors' Remuneration Policy and which also sets forth certain
special provisions applicable to the categories of staff whose professional activities have a material impact on
the risk profile of BBVA or its Group (the Identified Staff), including members of BBVA Senior Management.
This Report, together with the statistical appendix included in section 5, has been disclosed as other relevant
information simultaneously with the annual corporate governance report, and will be submitted for a
consultative vote as a separate item on the agenda of the Annual General Meeting for the 2022 financial year.
Likewise, this Report is included, in a separate section, in the management report of the individual financial
statements of BBVA and the consolidated financial statements of the BBVA Group for the 2022 financial year.
Annex 3, Alignment with the Format set out in Circular 4/2013, specifies the location in this Report of the
information set forth in each section of the standardised electronic format published by the CNMV.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
155
2 Circular 4/2013, of 12 June, of the National Securities Market Commission, which establishes the templates of the annual report on
the remuneration of directors of listed companies and of the members of the board of directors and of the control committee of savings
banks that issue securities admitted to trading on official securities markets, as amended by Circular 3/2021, of 28 September, of the
National Securities Market Commission, which amends Circular 4/2013, of 12 June, which establishes the templates for the annual
report on remuneration of directors of listed companies and members of the board of directors and of the control committee of savings
banks that issue securities admitted to trading on official securities markets; and Circular 5/2013, of 12 June, which establishes the
annual corporate governance report templates for listed public limited companies, savings banks and other entities that issue securities
admitted to trading on official securities markets.
3 Which governs the approval regime and the minimum content of the directors’ remuneration policy of listed companies.
This document should be read in conjunction with the BBVA Directors' Remuneration Policy and Note 54 of
the Annual Report of BBVA Group's consolidated Annual Financial Statements  for the 2021 financial year,
which includes, individually and by item, the remuneration of the directors for the 2021 financial year. These
documents, and this Report, are available on the Bank's website (www.bbva.com).
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
156
2.BBVA Group General Remuneration Policy
2.1. General principles
BBVA has a BBVA Group General Remuneration Policy that is generally applicable to all employees
and senior managers of BBVA and the companies that comprise its group (the BBVA Group or the
Group) and is directed towards the recurrent generation of value for the Group, the alignment of the
interests of the Group's employees and shareholders with prudent risk management and the
furtherance of the strategy defined by the Group (the BBVA Group General Remuneration Policy).
This policy is one of the elements devised by the Board of Directors, as part of the Bank's Corporate
Governance System, to promote proper management and oversight of the Institution and its Group,
and is based on the following principles:
■creating long-term value;
■achieving results through prudent and responsible risk-taking;
■attracting and retaining the best professionals;
■aligning one's remuneration with their level of responsibility and professional career;
■ensuring internal equity and external competitiveness;
■ ensuring equal pay for men and women; and
■ ensuring the transparency of the remuneration model.
BBVA has defined the Group General Remuneration Policy based on these principles, taking into account, in
addition to obligatory compliance with the legal requirements applicable to credit institutions and the
different sectors in which the Group operates, alignment with best market practices. As such, items have been
included in this Policy that are aimed at reducing exposure to excessive risks and aligning remuneration with
the Group's business strategy and its long-term objectives, values and interests.
Thus, the foregoing principles contribute to ensuring that the BBVA Group General Remuneration Policy:
✔contributes to the business strategy of BBVA and its Group and to the achievement of its objectives,
values, interests, value creation and long-term sustainability;
✔ is compatible with and promotes prudent and effective risk management and does not provide incentives
to assume risks that exceed the level tolerated by the Institution or the Group, in a manner that is
consistent with the BBVA Group's risk strategy and culture;
✔is clear, comprehensible and transparent, with simple wording that facilitates understanding of the
different components of remuneration and the conditions for the award, vesting and payment thereof.
To that end, it clearly distinguishes between the criteria for determining fixed remuneration and
variable remuneration;
✔is gender neutral, reflecting equal remuneration for the same duties or duties of equal value, and does
not differentiate or discriminate on the basis of gender;
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
157
✔includes measures to avoid conflicts of interest, promoting the independence of judgement of persons
involved in decision-making and in the oversight and control of management and the establishment of
remuneration systems; and
✔procures that remuneration is not based solely or primarily on quantitative criteria, taking into account
appropriate qualitative criteria that reflect compliance with applicable regulations, and corporate
culture and values.
2.2. Special provisions applicable to Identified Staff
The BBVA Group General Remuneration Policy includes a section that contains the specific rules applicable to
the Identified Staff of BBVA and its Group, which includes members of the Board of Directors4 and BBVA
Senior Management. These rules have been established in accordance with the regulations and
recommendations applicable to the remuneration schemes of such staff and, in particular, with the provisions
of Act 10/2014 of 26 June on the regulation, supervision and solvency of credit institutions (Act 10/2014)
and its implementing regulations.
These rules aim to further align BBVA's remuneration practices with applicable regulations, good governance
recommendations and best market practices.
The result is an incentive scheme that is particularly oriented towards aligning the remuneration of the
members of the Identified Staff with the Group's long-term objectives, values and interests, with the creation
of value, and with prudent risk management on the basis of, inter alia, the following key features:
•Balance between fixed and variable remuneration
The fixed and variable components of total remuneration must be appropriately balanced, ensuring that the
policy is fully flexible with regard to payment of the variable components such that these components may be
reduced in their entirety, where appropriate.
For these purposes, the Bank has defined certain "target" ratios between the main components of the fixed
and variable remuneration, taking into account both the duties carried out and the impact thereof on the risk
profile. In the case of control functions, in order to reinforce the independence and objectivity of such
functions, the fixed components of their remuneration have a greater weight than the variable components,
the latter being related, for the most part, to the function's own goals.
•Variable remuneration limit
The variable component of the remuneration for a financial year shall be limited to a maximum amount of
100% of the fixed component of total remuneration, unless the General Shareholders' Meeting resolves to
increase this percentage, up to a maximum of 200%.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
158
4 The remuneration of members of the BBVA Board of Directors is regulated by a specific remuneration policy, as described later in
this Report. Directors are expressly excluded from the scope of application of the BBVA Group's General Remuneration Policy,
although they are members of Identified Staff by virtue of the applicable regulations.
•Prohibition on hedging strategies
The use of personal hedging strategies and insurance relating to variable remuneration and liability that could
undermine the effects of alignment with prudent risk management is prohibited.
•Specific rules for the accrual, award, vesting and payment of Annual Variable Remuneration
•Accrual and award of Annual Variable Remuneration
In order to ensure alignment with results and long-term sustainability, the annual variable remuneration of the
Identified Staff (including executive directors and members of Senior Management) will not accrue, or will accrue
in a reduced amount, if certain profit and capital ratio levels, as determined by the Board of Directors, are not
achieved. These levels shall also be applicable to the rest of the staff.
Likewise, the annual variable remuneration will be reduced in the event that, at the time of each beneficiary's
performance evaluation, there has been a downturn in the Group's results or other parameters, such as the level
of achievement of budgeted targets.
The annual variable remuneration of members of the Identified Staff, as well as that of the other employees of the
BBVA Group, consists of an annual incentive that reflects performance as measured through the achievement of
certain targets that are aligned with the risk incurred, and is calculated on the basis of:
(i) annual performance indicators (financial and non-financial), which take into account current and future
risks as well as the strategic priorities defined by the Group (Annual Performance Indicators);
(ii)  scales of achievement that may be established according to the weighting assigned to each indicator and
based on the targets set for each of them; and
(iii)  a “target” annual variable remuneration, representing the amount of the annual variable remuneration in
the event that 100% of the previously established targets are reached (the Target Annual Variable
Remuneration or Target Bonus).
The amount to be received as annual variable remuneration through application of the corresponding scales of
achievement may range from 0% - 150% of the “target” annual variable remuneration. The resulting amount will
constitute the annual variable remuneration of each beneficiary (the Annual Variable Remuneration or AVR).
The financial annual performance indicators will be aligned with the most relevant management metrics for the
Bank while the non-financial indicators will be related to the strategic targets defined at the Group level, the area
level and for each individual beneficiary.
In no event will variable remuneration limit the Group's capacity to strengthen its capital base in accordance with
regulatory requirements, and it will take into account current and future risks as well as the cost of the necessary
capital and liquidity, reflecting performance that is sustainable and adapted to risk.
•Upfront payment
Once granted, 60% of the Annual Variable Remuneration of the Identified Staff ー 40% in the case of members of
the Identified Staff with particularly high variable remuneration and members of BBVA Senior Management ー
will vest and be paid, if the applicable conditions are met, during the first quarter of the financial year as a general
rule (the Upfront Portion).
•Deferral rules
40% of the Annual Variable Remuneration ー 60% in the case of members of the Identified Staff with particularly
high variable remuneration and members of BBVA Senior Management ー will be deferred for a period of four
years (the Deferred Portion, the Deferred AVR or the DAVR). In the case of members of BBVA Senior
Management, the deferral period shall be five years.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
159
•Payment in shares or instruments
50% of the Annual Variable Remuneration, including both the Upfront Portion and the Deferred Portion, shall be
established in BBVA shares or in instruments linked to BBVA shares. For members of BBVA Senior Management,
50% of the Upfront Portion and 60% of the Deferred Portion shall be established in BBVA shares.
•Withholding period
The shares or instruments awarded as Annual Variable Remuneration, both for the Upfront Portion and the
Deferred Portion, shall be withheld for a one-year period following delivery. The foregoing shall not apply to those
shares or instruments the sale of which would be required to honour the payment of taxes accruing on delivery.
•Ex post adjustments to the Deferred Portion
In order to ensure that the assessment process of the results to which  the Annual Variable Remuneration is linked
falls within a multi-year framework that considers long-term results, and to ensure that the effective payment of
the Annual Variable Remuneration is made over a period that takes into account the economic cycle of the
Institution and its risks, the Annual Variable Remuneration of the Identified Staff will be subject to ex post
adjustments aligned with prudent risk management that are linked to the results of multi-year performance
indicators. In this way, the Deferred AVR of members of the Identified Staff may be reduced, but never increased,
based on the results of indicators that are aligned with the Group's core metrics for risk control and management,
related to solvency, liquidity, profitability and the value creation (the Multi-year Performance Indicators).
•Malus and clawback arrangements
The entirety of the Annual Variable Remuneration of members of the Identified Staff shall be subject to variable
remuneration malus and clawback arrangements during the whole deferral and withholding of shares period.
As a result of the foregoing, the BBVA Group has applied a solid and consistent remuneration policy over
time that contributes to its business strategy and sustainable performance and that is aligned with the long-
term interests of the Institution, the interests of its shareholders and prudent risk management.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
160
3.Directors' Remuneration Policy applicable in 2021
The remuneration policy applicable to members of the Board of Directors is based on the same principles
and, in the case of executive directors, is subject to the same scheme that inspires the BBVA Group General
Remuneration Policy described in the previous section5. This policy was approved by the General
Shareholders' Meeting held on 20 April 2021, is applicable during the 2021, 2022 and 2023 financial years,
and is available on the Bank's website (the Directors' Remuneration Policy or the Policy).6
The primary new developments in this Policy as compared to the previous policy are as follows:
•Explicit incorporation of the principle of equal pay for men and women.
•Incorporation of sustainability metrics into the variable remuneration scheme for executive directors.
•Transformation of the Chairman's pension system, resulting in a change in the remuneration amounts and
reduction of his total remuneration.
•Changes to the payment schedule for the Deferred Portion of the Annual Variable Remuneration of
executive directors.
•Changes to the malus and clawback arrangements of the Annual Variable Remuneration of executive
directors.
•Adaptation to new regulatory developments with entry into force in 20216 and to good governance
recommendations and other technical improvements in transparency and clarity of the remuneration
scheme.
The Directors' Remuneration Policy has been designed in accordance with corporate legislation and the
specific regulations applicable to credit institutions and in accordance with the provisions of the Bylaws, while
also taking into account best practices and recommendations on the field of remuneration at the local and
international levels.
The Policy distinguishes between the remuneration system applicable to the directors in their capacity as
such (non-executive directors) and that applicable to executive directors (those who perform management
duties in the Institution), and contains different measures to promote prudent management of excessive risks
and tailor remuneration to the long-term interests of the Institution, as described in section 2.
3.1. Decision-making process for approval of the Policy
In accordance with the Regulations of the Board of Directors, one of the Board's functions is to approve the
remuneration policy applicable to the directors for purposes of submitting it to the General Shareholders'
Meeting.
For its part, the Remuneration Committee is the body that assists the Board in matters of remuneration, and is
responsible for proposing to the Board of Directors (for its submission to the General Shareholders’ Meeting)
the remuneration policy applicable to the directors, together with its corresponding report.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
161
5 www.bbva.com
6 In particular, to the changes introduced by Act 5/2021, of 12 April, by which the Consolidated text of the Spanish Corporate
Enterprises Act, approved by Royal Legislative Decree 1/2010, of 2 July was amended.
In addition, as part of the decision-making process in remuneration matters, the Remuneration Committee
works with the Risk and Compliance Committee, which participates in the establishments of the remuneration
policy to ensure that it is consistent with sound and effective risk management and does not provide
incentives to take risks in excess of the level tolerated by the Institution.
The Remuneration Committee is charged with ensuring compliance with the remuneration policies
established by the Company and reviewing them periodically, proposing any modifications it may deem
necessary in order to ensure, among other things, that such policies are adequate for purposes of attracting
and retaining the best professionals, contribute to the creation of long-term value and the adequate control
and management of risks, and comply with the principle of equal pay.
In 2021, new regulations governing remuneration that took effect during the financial year, together with
developments in market practice, the outcome of dialogue between BBVA and its investors and the very
nature of the Bank's Corporate Governance System, led the Remuneration Committee to review the
directors’ remuneration policy  and the remuneration system as a whole.
To this end, the Remuneration Committee was assisted by the Bank's internal services, as well as with the
advice of two leading independent consulting firms on the remuneration of directors and senior managers:
Willis Towers Watson, for analyses and market comparisons, and J&A Garrigues, S.L.P., for legal analysis of
the Policy.
In the development of the Policy, the Remuneration Committee analysed the remuneration payable by the
main comparable financial institutions in BBVA's peer group for remuneration purposes to individuals holding
similar positions, as well as market practice in relation to variable remuneration models, including deferral
schemes, in the case of the Chairman and the Chief Executive Officer.
Finally, pursuant to the provisions of Articles 511 bis and 529 novodecies of the Spanish Corporate
Enterprises Act, the Directors' Remuneration Policy was submitted, as a separate item on the agenda, for the
approval of the Bank's General Shareholders' Meeting held on 20 April 2021, which approved it with a
majority voting in favour (93.59%) . Both the text of the Policy and the specific Remuneration Committee
report in respect thereof were made available to shareholders following the date on which the General
Meeting was called.
As part of the governance and supervision model applicable to the Policy, the Remuneration Committee is
empowered to propose to the Board of Directors for approval or, where applicable, submission to the General
Meeting where required by law, the implementation of all amendments or exceptions to the Policy that may be
necessary during its term.
Specifically, the Policy provides that the Board of Directors, following analysis by and on the proposal of the
Remuneration Committee, may agree to make temporary exceptions to the Policy in connection with the
award, vesting and/or payment of all components provided for in the Policy in the event this is necessary to
serve the long-term interests and sustainability of the Company as a whole or to ensure its viability. In no
event may any exceptions be applied that are based on gender considerations or other aspects that could be
considered discriminatory; they must be supported by a sound justification and comply with the provisions of
applicable regulations.
The BBVA Directors' Remuneration Policy is published on the Bank’s website: www.bbva.com .
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
162
3.2. Remuneration system for non-executive directors
In accordance with the provisions of Article 33º bis of the Bylaws, the remuneration system for non-executive
directors is based on the criteria of responsibility, dedication and incompatibilities inherent to the role that
they carry out, and consists of exclusively fixed remuneration comprised of the following components:
Concept
Payment
Other characteristics
A.Fixed annual
allocation
Monthly in cash for the position of Board member and
Committee member and for the performance of other
duties or responsibilities (such as the position of Lead
Director or Deputy Chair)
Overall limit approved by the
General Meeting:
EUR 6 million per year
See amounts received in 2021 in
section 4.2 A and B below
B.Remuneration in
kind
The Bank pays the corresponding premiums (healthcare
and accident insurance policies) that are allocated to the
directors as remuneration in kind
C.Fixed remuneration
system with
deferred delivery of
BBVA shares
Annual allocation of a number of "theoretical shares", with
effective delivery after the director ceases to hold such
office for any reason other than a serious dereliction of
duties.
Allocation equal to 20% of the
total annual fixed allowance in
cash allocation received during
the previous financial year
Amounts corresponding to the annual fixed allowance approved by the Board of Directors
Position
EUR thousand
Member of the Board of Directors
129
Member of the Executive Committee
167
Chair of the Audit Committee
165
Member of the Audit Committee
66
Chair of the Risk and Compliance Committee
214
Member of the Risk and Compliance Committee
107
Chair of the Remuneration Committee
107
Member of the Remuneration Committee
43
Chair of the Appointments and Corporate Governance Committee
115
Member of the Appointments and Corporate Governance Committee
46
Chair of the Technology and Cybersecurity Committee*
107
Member of the Technology and Cybersecurity Committee
43
Deputy Chair
50
Lead Director
80
*As of the date of this Report, the position of Chair of the Technology and Cybersecurity Committee is not remunerated as the
Chairman of the Board of Directors serves in this role.
These amounts were approved by the Board of Directors on 29 May 2019, on the proposal of the
Remuneration Committee, following analysis of the corresponding market comparisons, with no increases
since 2007 (although they have been reallocated to adapt them to the functions of each Committee).
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
163
3.3. Remuneration system for executive directors
The executive directors have their own remuneration system that is defined in accordance with best market
practices. Its items are set out in Article 50º bis of the Bylaws and are the same as those that are generally
applicable to Senior Management.
3.3.1. Elements of the remuneration system for executive directors
Concept
Allocation criteria
Payment
Reference / Amount
Adjustments /
Condition
A. Annual Fixed
Remuneration
("AFR")
•Assigned duties and level of
responsibility
•Competitive in the market
Monthly cash payments
Chairman:
EUR 2,924 thousand
Chief Executive Officer:
EUR 2,179 thousand
N/A
B. Benefits and
remuneration in
kind
In line with those granted to
Senior Management
Allowances and premiums
or payments made by the
Bank and charged as
remuneration in kind
See breakdown of amounts for
2021 in section 4.3. A. b).
N/A
C. Contribution to
pension and
insurance systems
As per contract and Policy
(contingencies of retirement,
death and disability)
At the time of the
contingency (in the form of
income or capital in the case
of the retirement pension)
Chairman:  Annual contribution
to the pension of EUR 439
thousand plus premiums for
death and disability coverage
See breakdown of amounts for
premiums in 2021 in section 4.3. A c).
Terms set forth in his
contract and, in any case,
provided that his
cessation of office is not
due to a serious
dereliction of duties
Chief Executive Officer: Does
not have a retirement pension..
The Bank only pays death and
disability coverage premiums.
See breakdown of amounts for
premiums in 2021 in section 4.3. A c)
N/A
D. Other fixed
allowances
As per contract and Policy
Monthly payment
Chief Executive Officer: cash in
lieu of pension (30% of AFR) and
annual international mobility
allowance of EUR 600 thousand
N/A
E. Annual Variable
Remuneration
("AVR")
Results of annual
performance indicators
(financial and non-financial),
based on pre-established
targets, scales of
achievement and weightings,
which will be equated to the
“target” AVR if 100% of the
targets set are achieved.
In cash and shares (more
than 50% in shares)
40% up front and 60%
deferred (DAVR) for 5
years.
Target bonus Chairman:
EUR 3,572 thousand
Target bonus Chief Executive
Officer:
EUR 2,672 thousand
•Scales of achievement
limited to 150% of Target
Bonus
•Maximum of 200% of fixed
remuneration, as resolved
by the General Meeting
•Ex post adjustments:
result of multi-year
performance
indicators (downward
Deferred AVR
adjustments only)
•Malus and clawback
arrangements for
100% of the AVR
•One-year withholding
of shares
F. Non-
competition
agreement
As per contract and Policy
Monthly payment during
the non-competition period,
after the executive director
ceases to hold such office
2 times the AFR (one for each
year of duration of the
agreement)
Terms set forth in their
contracts and provided
that cessation of office is
not due to retirement,
disability or serious
dereliction of duties
In addition, in the same way as for the other members of the Identified Staff, the Policy establishes that fixed
and variable components must be appropriately balanced in the total remuneration of executive directors.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
164
To this end, the Directors' Remuneration Policy establishes the theoretical relative proportion between the
main fixed and variable components of the remuneration of BBVA's executive directors (target ratios),
taking into account both the role carried out by executive directors and their impact on the risk profile of the
Group, and that this proportion is aligned with the proportions for this ratio generally established for the rest
of the members of the Identified Staff:
Executive director
Position
Annual Fixed
Remuneration
“Target” Annual Variable Remuneration
Carlos Torres Vila
Chairman
45%
55%
Onur Genç
Chief Executive Officer
45%
55%
The Annual Variable Remuneration that is ultimately awarded to each executive director in each financial
year shall be calculated in accordance with the rules for the award thereof established in the Policy and shall
be subject to the same vesting and payment rules applicable to the AVR of the Identified Staff described in
section 2.2. above, with certain specific terms due to their status as directors. Thus, in order to align
remuneration with effective risk management:
•The Upfront Portion (40%) of the AVR will vest and be paid, if the applicable conditions are met, during the first
quarter of the financial year, while the remaining 60% shall be deferred for a period of 5 years ーthe Deferred
Portion.
As a new development, the Policy approved in 2021 establishes that, if the applicable conditions are met, an amount equal to 20% of
the Deferred AVR will be paid at the end of each year for each of the 5 years of deferral.
•The Upfront Portion of the AVR will be paid in equal parts cash and BBVA shares, while 60% of the Deferred
Portion will be paid in BBVA shares and the other 40% will be paid in cash.
•The Deferred Portion of the AVR may be reduced, but never increased, based on the results of pre-established
Multi-year Performance Indicators.
The Multi-Year Performance Indicators, which relate to solvency, liquidity, profitability and the creation of value, help to ensure that
the remuneration system for executive directors is consistent with the Group's risk strategy and long-term performance. Following the
end of the third year of deferral, the results of the Multi-year Performance Indicators will determine whether any potential ex post
downward adjustments need to be made to the Deferred Portion of the AVR that remains outstanding.
•Moreover, the full amount of the Annual Variable Remuneration for executive directors will be subject to malus
and clawback arrangements on the same terms as those applicable to the rest of the Identified Staff.
The application of the malus and clawback arrangements will be tied to a downturn in financial performance of the Bank as a whole or 
of a particular unit or area thereof or of the exposures created by an executive director, when such downturn in financial performance
arises from a set of circumstances established in the Policy. In addition, as a new development, the Policy approved in 2021 provides
that such clauses may also be applied in the event that the referenced circumstances cause significant reputational damage to the
Bank, regardless of the financial impact caused.
•The BBVA shares delivered as Annual Variable Remuneration, both for the Upfront Portion and the Deferred
Portion, shall be withheld for a one-year period following delivery. The foregoing shall not apply to those shares
which sale would be required to honour the payment of taxes accruing on delivery.
•The use of personal hedging strategies and insurance relating to variable remuneration and liability that could
undermine the effects of alignment with prudent risk management is prohibited.
•The variable component of the remuneration for a financial year shall be limited to a maximum amount of 100%
of the fixed component of total remuneration, unless the BBVA General Shareholders' Meeting resolves to
increase this percentage, up to a maximum of 200%, all in accordance with the procedure and requirements set
forth in applicable regulations.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
165
In addition, the Policy includes additional restrictions on the transferability of shares received as variable
remuneration, which have also been modified in the Policy approved in 2021 for purposes of aligning them with the
provisions of Recommendation 62 of the CNMV Code of Good Governance of Listed Companies, revised in June 2020.
Thus, executive directors may not transfer shares derived from the settlement of variable remuneration until a
period of at least three years has elapsed unless the director in question maintains, at the time of the transfer,
through the ownership of shares, options or other financial instruments, a net economic exposure to the variation in the
prices of the shares for a market value equal to at least twice their Annual Fixed Remuneration. The foregoing shall
not apply to the shares that the director needs to dispose of in order to cover the costs associated with the acquisition
thereof or, upon favourable assessment of the Remuneration Committee, to address an extraordinary situation.
The rules for the award, vesting and payment of the Annual Variable Remuneration of executive
directors are represented in the graphic example below, using the 2021 financial year as a reference:
3.3.2. Main terms and conditions of the executive directors' contracts
The remunerations and economic rights and compensations of each executive director are determined based
on their level of responsibility and the duties they perform, and are competitive in comparison to those of
equivalent functions at the group of main peer institutions. These terms and conditions are reflected in their
respective contracts, which are approved by the Board of Directors on the proposal of the Remuneration
Committee.
Pursuant to the Policy, the main characteristics of the executive directors' contracts are as follows:
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
166
■They are indefinite in duration.
■They do not establish any notice periods, minimum contract term clauses or loyalty clauses.
■They include a post-contractual non-competition clause.
■They do not contain indemnification payment commitments.
■They contain a welfare portion in view of the individual circumstances of each executive director, including
appropriate insurance and pension systems.
Pension commitments assumed in favour of the executive directors
The Bank has assumed pension commitments to cover the contingency of retirement of the Chairman.
These commitments have the following main characteristics, in line with those of the commitments assumed in
favour of the other members of the Bank's Senior Management:
■They consist of defined-contribution systems under which the annual pension contributions made to cover the
contingency of retirement are established in advance (15% of Annual Fixed Remuneration).
■They do not provide for the possibility of receiving the retirement pension in advance.
■They stipulate that 15% of the agreed annual contributions be considered "discretionary pension benefits", as
set forth in applicable regulations, and therefore, they will be variable.
The Bank has not assumed any retirement commitments to the Chief Executive Officer, instead paying him
an annual sum in cash (cash in lieu of pension) equal to 30% of his Annual Fixed Remuneration.
In addition, the Bank has assumed commitments in favour of both the Chairman and the Chief Executive
Officer to cover the contingencies of disability and death on the terms set out below.
Commitments assumed in favour of the Chairman
The Directors' Remuneration Policy approved in 2021 has made significant changes to the Chairman's pension
system:
•A significant reduction in the annual contribution made to cover the contingency of retirement, which has gone from EUR 1,642 thousand to
EUR 439 thousand, thereby representing 15% of his Annual Fixed Remuneration.
•A reduction in coverage levels (% of AFR) for the contingencies of death and disability.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
167
Contingency of retirement
•The Chairman is entitled to a retirement pension when he reaches the retirement age established by law. The amount of this
pension will be equal to the sum of the contributions made by the Bank and their corresponding yields up to this date.
•The annual agreed contribution amounts to EUR 439 thousand (15% of his Annual Fixed Remuneration).
•On the other hand, 15% of the annual contribution will be based on variable components and considered “discretionary pension
benefits”. It will be subject to the conditions governing delivery in shares and the withholding and clawback requirements
established for this type of remuneration by applicable regulations.
•The benefit may be received in the form of income or capital.
•Receipt of the benefit is conditioned on his cessation of office not being due to a serious dereliction of duties.
•If the contractual relationship is terminated before he reaches retirement age for reasons other than a serious dereliction of
duties, he will remain entitled to the benefit, which will be calculated on the basis of all contributions made by the Bank up to that
date plus the corresponding accumulated yield, without the Bank being required to make any additional contributions as of that
date.
Contingency of disability or death
•Death while serving in his role will give rise to an entitlement to an annual widow's and orphan's pension for each of his children,
until they reach the age of 25, in an amount equal to 50% and 20% (40% in the case of full orphaning), respectively, of the Annual
Fixed Remuneration.
•These pensions would be paid from the total fund accumulated for the retirement pension at that time, with the Bank assuming
the amount of the corresponding annual insurance premiums to complete the benefit coverage. The cumulative benefits of the
widow's and orphan's pension may not exceed 150% of the Annual Fixed Remuneration.
•In the event of total or full permanent disability while serving in his role, he will be entitled to receive an annual pension equal to
60% of his Annual Fixed Remuneration.
•This pension would be paid, firstly, from the total fund accumulated for the retirement pension at that time, with the Bank
assuming the amount of the corresponding annual insurance premiums to complete the benefit coverage.
•Death while subject to disability will give rise to an entitlement to an annual widow's and orphan's pension for each of his
children, until they reach the age of 25, in an amount equal to 85% and 35% (40% in the case of full orphaning), respectively, of
the disability pension that he had been receiving, with such reversion being limited in all cases to 150% of the disability pension
itself.
In 2021, the Chairman's contract was amended to adapt it to the terms and conditions set forth in the Policy
approved by the General Meeting in 2021, which are described in sections 3 and 4 of this Report.
Commitments assumed in favour of the Chief Executive Officer
The Bank has not assumed any retirement commitments in favour of the Chief Executive Officer, although his
contract gives him the right to receive an annual sum in cash (cash in lieu of pension) in an amount equal to
30% of his Annual Fixed Remuneration.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
168
Contingency of disability or death
•Death while serving in his role will give rise to an entitlement to an annual widow's and orphan's pension for each of his children,
until they reach the age of 25, in an amount equal to 50% and 20% (30% in the case of full orphaning), respectively, of the Annual
Fixed Remuneration for the previous 12 months, with the Bank assuming the amount of the corresponding annual insurance
premiums to guarantee the benefit coverage. The cumulative benefits of the widow's and orphan's pension may not exceed
100% of the Annual Fixed Remuneration for the previous 12 months.
•In the event of total or full permanent disability while serving in his role, he will be entitled to receive an annual pension in an
amount equal to 62% of his Annual Fixed Remuneration for the previous 12 months. This pension will revert to his spouse and
children in the event of death in the percentages cited above but shall be limited in all cases to 100% of the disability pension,
with the Bank assuming the amount of the corresponding annual insurance premiums to guarantee the benefit coverage.
Other terms and conditions of the executive directors' contracts
•Supplemental allowances to the Chief Executive Officer's fixed remuneration
Moreover, in view of his status as an international executive, the Chief Executive Officer's contract
provides that he is entitled to an annual cash sum as a mobility allowance, in line with potential
commitments made in favour of other expatriate members of Senior Management, the amount of
which has been set at EUR 600 thousand per year.
•Post-contractual non-competition clauses
Finally, the executive directors' contracts also include a post-contractual non-competition clause with
a duration of two years following the cessation as BBVA executive directors, in respect of which they
will receive remuneration, payable monthly, in an amount equal to their Annual Fixed Remuneration
for each year in which the non-competition agreement remains in place, provided that their cessation
as executive director is not due to their retirement, disability or serious dereliction of duties.
•Termination of contractual relationship
The executive directors' contracts do not include a right to severance payments in the event of
termination of the contractual relationship.
4.Results of implementation of the Policy in 2021
The Directors' Remuneration Policy in effect during the financial year last ended (2021) was that approved by
the Bank's Annual General Shareholders' Meeting held on 20 April 2021. The outline and main characteristics
of the Policy are set forth in section 3 above.
The way in which the Policy was implemented in 2021 is detailed below, following the procedure established
for this purpose in the Policy itself and in the Regulations of the Board of Directors and the Remuneration
Committee. No deviations from the same occurred during the financial year. No temporary exceptions were
made to the Policy either in accordance with the procedure set forth therein, given the absence of any
circumstances that would justify or advise this.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
169
The process followed to implement the Directors' Remuneration Policy and to determine the individual
remuneration of directors was led and overseen directly by the Remuneration Committee. During the 2021
financial year, this Committee took the actions detailed below, among others, submitting to the Board of
Directors the corresponding  resolutions proposals where appropriate.
4.1. Activity carried out by the Corporate Bodies in 2021
BBVA Directors' Remuneration Policy
The Remuneration Committee analysed the approaches put forward as regards the approval of a new
Directors' Remuneration Policy in 2021, in view of, among other things, the regulatory developments that
were expected to enter into force in that same financial year and market practices.
Following this analysis, the Remuneration Committee submitted the new proposed Policy, together with its
corresponding report, to the Board of Directors, following verification by the Risk and Compliance
Committee.
Once approved by the Board of Directors, the Policy was submitted to the Annual General Shareholders'
Meeting held on 20 April 2021, which approved it with a majority voting in favour (93.59%) . This Policy is
fully compliant with the modifications introduced by Act 5/2021 to article 529 novodecies of the
Consolidated text of the Spanish Corporate Enterprises Act, approved by Royal Legislative Decree 1/2010, of
2 July.
Implementation, supervision and monitoring of the Directors' Remuneration Policy
During the 2021 financial year, the Remuneration Committee and the Board of Directors have carried out the
necessary actions to implement, supervise and monitor the provisions of the Directors' Remuneration Policy.
To this end, the Board of Directors has analysed the remuneration matters pertaining to directors, approving
the following resolutions, in accordance with the proposals submitted, in each case, by the Remuneration
Committee and based on the prior analysis work, discussion and interaction carried out by this Committee
with the executive level :
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
170
■Remuneration matters for non-executive directors
In accordance with the statutory framework and the Directors' Remuneration Policy, in application of the fixed
remuneration system with deferred delivery of shares applicable to non-executive directors, the Board of Directors
approved the allocation of a number of "theoretical shares" to each non-executive director beneficiary of the system,
with this allocation corresponding to 20% of the total annual fixed allowance in cash received in the previous financial
year.
■Remuneration matters for executive directors
With regard to the remuneration of executive directors, the Board of Directors, on the proposal of the Remuneration
Committee:
•Noted the waiver by the executive directors, members of Senior Management and certain members of the
Identified Staff of the accrual of 2020 Annual Variable Remuneration, in view of the exceptional circumstances
arising from the COVID-19 crisis, which, in the case of the executive directors, led to no AVR having been accrued
in 2020.
•Approved the amount of the executive directors' Deferred AVR from the 2017 financial year, in light of the
results of the pre-established Multi-year Performance Indicators and in application of the corresponding targets,
scales and weightings approved by the Board of Directors at the time, in addition to determining the amount
corresponding to the update of such AVR.
•Approved the payment of executive directors' Deferred AVR from the 2017 financial year scheduled for 2021,
once the Audit Committee and the Appointments and Corporate Governance Committee, within the scope of
their respective remits, and the Board itself, had verified that the malus and clawback clauses set out in the
remuneration policies applicable to those financial years did not have to be applied.
•Approved the amendment of the Chairman's contract to adapt its terms and conditions to the amendments
included in the new Directors' Remuneration Policy approved by the General Meeting held on 20 April 2021.
•Approved the minimum thresholds for Attributable Profit and the Capital Ratio to generate the 2021 AVR of
executive directors in line with those applied for the rest of the BBVA staff, including Senior Management
members.
•Approved the Annual Performance Indicators for the 2021 AVR and their respective weightings, as well as the
Multi-year Performance Indicators corresponding to the Deferred Portion of the 2021 AVR, with the prior
analysis of the Risk and Compliance Committee in the case of the latter, and with the Multi-year Performance
Indicators also being applicable to the rest of the Identified Staff, including Senior Management members.
•Approved the targets and scales of achievement associated with the Annual Performance Indicators for the
2021 AVR of executive directors.
Finally, the Board of Directors resolved to submit to the 2021 Annual General Shareholders' Meeting:
•The approval of a maximum level of variable remuneration of up to 200% of the fixed component of total
remuneration applicable to a maximum of 339 members of the Identified Staff, including executive directors and
Senior Management members; submitting also the corresponding report for the shareholders regarding this
resolution, in accordance with the text proposed by the Remuneration Committee.
•The consultative vote on the Annual Report on the Remuneration of BBVA Directors for the 2020 financial
year, based on the text proposed by the Remuneration Committee, prepared in accordance with the provisions of
CNMV Circular 4/2013 and in compliance with the provisions of Article 541 of the Spanish Corporate
Enterprises Act.
For further details on the activities carried out by the Remuneration Committee in 2021, the Committee's
2021 activity report, which is available to shareholders on the Bank's website, can be consulted.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
171
4.2. Remuneration accrued by non-executive directors in 2021
Set forth below is a breakdown of the individual remuneration accrued by non-executive directors in 2021
through implementation of the remuneration system described in section 3.2. above:
A.2021 Annual fixed allowance
(EUR thousand )
Non-executive
directors
Board of
Directors
Executive
Committee
Audit
Committee
Risk and
Compliance
Committee
Remuneratio
nCommittee
Appointments and
Corporate
Governance
Committee
Technology
and
Cybersecurity
Committee
Other
positions
1
Total
José Miguel Andrés
Torrecillas
129
167
66
115
50
527
Jaime Caruana Lacorte
129
167
165
107
567
Raúl Galamba de
Oliveira
129
107
43
278
Belén Garijo López
129
66
107
46
349
Sunir Kumar Kapoor
129
43
172
Lourdes Máiz Carro
129
66
43
238
José Maldonado
Ramos
129
167
46
342
Ana Peralta Moreno
129
66
43
238
Juan Pi Llorens
129
214
46
43
80
512
Ana Revenga Shanklin
129
107
236
Susana Rodríguez
Vidarte
129
167
107
46
449
Carlos Salazar Lomelín
129
43
172
Jan Verplancke
129
43
43
214
Total
1,673
667
431
642
278
301
171
130
4,293
(1)  Amounts received in 2021 by José Miguel Andrés Torrecillas, as Deputy Chair of the Board of Directors, and by Juan Pi Llorens, as Lead Director.
These amounts are reflected for each non-executive director in section C.1. a) i), "Fixed remuneration" and "Remuneration for
membership of board committees", of the CNMV Statistical appendix included as section 5 of this Report.
       
B.Remuneration in kind
During the 2021 financial year, the Bank has paid remuneration in kind totalling EUR 102 thousand
corresponding to healthcare and accident insurance premiums for non-executive directors.
These amounts are reflected for each non-executive director in section C.1. a) i), "Other items", of the CNMV Statistical appendix
included as section 5 of this Report.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
172
C.Fixed remuneration system with deferred delivery of BBVA shares
Non-executive directors
"Theoretical shares" allocated in 20211
"Theoretical shares" accumulated as of 31/12/2021
José Miguel Andrés
Torrecillas
22,860
98,772
Jaime Caruana Lacorte
25,585
56,972
Raúl Galamba de Oliveira
9,500
9,500
Belén Garijo López
15,722
77,848
Sunir Kumar Kapoor
7,737
30,652
Lourdes Máiz Carro
10,731
55,660
José Maldonado Ramos
15,416
123,984
Ana Peralta Moreno
10,731
26,396
Juan Pi Llorens
23,079
115,896
Ana Revenga Shanklin
7,568
7,568
Susana Rodríguez Vidarte
20,237
161,375
Carlos Salazar Lomelín
5,642
5,642
Jan Verplancke
9,024
21,416
Total
183,832
791,681
(1)Equal to 20% of the total annual fixed allowance in cash received by each non-executive director in the previous financial year, based on the
average closing price of the BBVA share during the 60 trading sessions prior to the General Meeting of 20 April 2021, which was EUR 4.44 per
share.
The effective delivery of a number of BBVA shares equal to the number of "theoretical shares" accumulated by each non-
executive director, after they cease to hold such office, will only happen provided that this does not occur due to a serious
dereliction of duties.
Without prejudice to the fact that this is not a share-based remuneration system, in order to comply with the instructions of the
CNMV for the filing of the CNMV Statistical appendix included in section 5 of this Report, the "theoretical shares" allocated to non-
executive directors each year have been equated to "shares", although they do not correspond to this instrument. The "theoretical
shares" allocated in 2021 are included in section C.1 a) ii), "Financial instruments granted during year", of the CNMV Statistical
appendix included as section 5 of this Report.
In accordance with the Policy, the Bank has not assumed any pension commitments in favour of its non-
executive directors.
Year-on-year changes in remuneration accrued by non-executive directors
Total Board remuneration
2021
2020
Change
Fixed Annual Allocation
4,923
4,078
+5.27%
In kind
102
95
+7.37%
The year-on-year changes in this remuneration are due to changes in the composition of the Board and the
Board committees. However, the amounts corresponding to the positions of Board member, Board committee
member and Board committee chair have not been increased since 2007 (although they have been reallocated
to adapt them to the functions of each Committee).
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
173
4.3. Remuneration accrued by executive directors in 2021
In accordance with the remuneration system described in section 3.3., the breakdown of the individual
remuneration accrued by the executive directors in 2021 is as follows:
A.FIXED REMUNERATION
a)2021 Annual Fixed Remuneration
Annual Fixed Remuneration (EUR thousand)
Chairman
2,924
Chief Executive Officer
2,179
These amounts are reflected for each executive director in section C.1. a) i), "Salary", of the CNMV Statistical appendix included as
section 5 of this Report.
b) 2021 Remuneration in kind and other benefits
Executive directors are beneficiaries under accident and healthcare insurance policies taken out by the Bank,
which pays the corresponding premiums, which are allocated to the directors as remuneration in kind.
The Bank also provides executive directors with other benefits that apply to the Bank's Senior Management.
Remuneration in kind and other benefits (EUR thousand)
Chairman
328
Chief Executive Officer
158
These amounts are reflected for each executive director in section C.1. a) i), "Other items", of the CNMV Statistical appendix included
as section 5 of this Report.
c)Pension system contributions in 2021
The pension-related commitments assumed in favour of the executive directors are reflected in their
respective contracts, which are approved by the Board of Directors. The main terms and conditions of these
contracts are outlined in section 3.3.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
174
During the 2021 financial year, the Bank made the following contributions to cover contingencies
contemplated by contract for these items:
EUR thousand
Director
Pension systems
Annual contribution for the contingency of
retirement 1
(15% of AFR)
Funds accumulated as of 31/12/2021
Chairman
340
24,546
Chief Executive Officer
–
-
(1)Agreed annual contribution to cover the retirement contingency reduced in an amount of EUR 98 thousand corresponding to the downward
adjustment of the “discretionary pension benefits” of 2020 financial year which had to be registered in the cumulative fund in 2021.
In accordance with the BBVA Directors’ Remuneration Policy, 15% of the agreed annual contribution to the
Chairman's retirement pension, is considered as "discretionary pension benefits", in accordance with the
regulations applicable to the Bank and, therefore, will be linked to variable components, being subject to the
conditions of delivery in shares, withholding and clawback provided for this kind of remuneration in the
applicable regulations.
From the agreed annual contribution to pension of 2020, which, in accordance with the Policy in force in that
financial year, was EUR 1,642 thousand, EUR 246 thousand were registered as "discretionary pension
benefits" (which was already reported by the Bank at the end of 2020). Following the end of the 2020 financial
year, this amount was adjusted using the result of the workforce’s 2020 AVR (as the Chairman waived its
accrual), which resulted in a downward adjustment to the pension, to be made in 2021 of EUR 98 thousand.
These amounts are reflected in section C.1. a) iii), "Savings schemes with non-vested economic rights", of the CNMV Statistical
appendix included as section 5 of this Report.
As a significant new development, in the 2021 financial year, in accordance with the new Policy approved by
the General Meeting, the annual contribution agreed to cover the contingency of retirement of the Chairman
was substantially reduced from EUR 1,642 thousand in 2020 to EUR 439 thousand in 2021, now
representing 15% of his Annual Fixed Remuneration.
Similarly, as specified in section 3.3.1., pursuant to the Policy approved by the General Meeting in 2021, the
coverage levels (% of AFR) for the contingencies of death and disability agreed with the Chairman were
reduced.
In accordance with the Policy, the Bank has paid in 2021 annual insurance premiums to cover death and
disability contingencies of an amount of EUR 574 thousand in the case of the Chairman and EUR 295
thousand in the case of the Chief Executive Officer.
d)Other fixed allowances of the Chief Executive Officer accrued in 2021
In accordance with the provisions of the Policy, the Chief Executive Officer received the following fixed
remuneration in 2021:
•An annual cash sum in lieu of a retirement pension (cash in lieu of pension) amounting to EUR 654
thousand; and
•An annual cash sum as a mobility allowance, amounting to EUR 600 thousand per year.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
175
These amounts are reflected in section C.1. a) (iv), "Details of other items", of the CNMV Statistical appendix included as section 5 of
this Report.
e)Post-contractual non-competition agreement
No amount has been paid for this item in 2021, insofar as no executive directors have ceased to hold such
office.
B.VARIABLE REMUNERATION
(a)Annual Variable Remuneration accrued in 2021 (2021 AVR)
The Directors' Remuneration Policy establishes rules for calculating the Annual Variable Remuneration that
preclude the exercise of discretion, thereby preventing conflicts of interest, and ensure the alignment thereof
with the Institution's business strategy and its long-term objectives, values and interests.
The Annual Variable Remuneration of each executive director, in line with the model applicable to the rest of
the Group's employees, is calculated on the basis of a “Target” Annual Variable Remuneration (or Target
Bonus) determined by the Board of Directors on the proposal of the Remuneration Committee, which
represents the amount of the Annual Variable Remuneration in the event that 100% of the previously
established targets are reached.
The Annual Performance Indicators established for purposes of calculating the Annual Variable
Remuneration for 2021 and their weightings, were approved by the Board of Directors on the proposal of the
Remuneration Committee at the beginning of 2021. These indicators are the following:
Type
2021 AVR Annual Performance Indicators
Chairman
Chief Executive
Officer
Weighting
Financial
indicators
Results
Attributable profit (excluding corporate
transactions)
10%
15%
(TBV) Tangible Book Value per share
15%
10%
Profitability
RORC
10%
10%
Efficiency
Efficiency ratio
10%
15%
Non-financial
indicators
Customer satisfaction
NPS
10%
15%
Sustainable development
Mobilisation of sustainable financing
10%
10%
Transformation
Digital sales
10%
10%
Individual indicators
25%
15%
As a new development, in 2021, a new sustainability-related indicator relating to "Mobilisation of sustainable
financing" was introduced. This indicator is linked to the Bank's strategic priority to "Help customers in the transition
to a sustainable future" and is directly related to the activity conducted by the Group to fulfil its market commitments
relating to climate change, with a specific weighting of 10% that reinforces the commitment of both the Chairman and
the Chief Executive Officer to furthering BBVA's sustainable development objectives.
This Mobilisation of sustainable financing indicator is also one of the indicators used to calculate the Annual Variable
Remuneration of all BBVA Group staff.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
176
In the case of individual indicators of the executive directors, the benchmarks selected to evaluate them
relate to the specific dimensions of executive directors' responsibilities and roles.
Performance is evaluated by the Board of Directors, on the proposal of the Remuneration Committee, based
on an overall assessment that takes into account both overall performance and the evolution of the indicators
used as reference. The Board of Directors also takes into account the outcome of the annual performance
evaluation of the executive directors, which, in the case of the Chairman, is conducted by the Lead Director
following a report from the Appointments and Corporate Governance Committee, and also incorporating the
opinion of the Executive Committee, in the case of the Chief Executive Officer.
The Chairman's individual indicators relate to the dimensions of Corporate Strategy and People and include the
following objectives:
•Strengthening BBVA's position with regard to ESG, facilitating the generation of opportunities and economic growth in the
communities in which it operates, driving equality and social inclusion, and encouraging the development of sustainable
production models.
•Promoting the development of advanced data analysis capabilities, along with secure, reliable technology to create high-
quality, differential solutions.
•Promoting strategic measures and partnerships that create value for shareholders.
•Developing a diverse, empowered team, guided by the purpose and values of the BBVA Group.
The Chief Executive Officer's individual indicators relate to the dimensions of Business Management, Operational
Excellence and People and include the following objectives:
•Promoting initiatives that ensure business growth, incorporating indicators that reflect the alignment with strategic priorities
and positive performance vis-à-vis competitors.
•Providing the best customer experience through the promotion of strategic programmes, with a focus on strengthening
processes, managing risks and allocating capital in an optimal manner.
•Advancing initiatives that give rise to team development opportunities across the various geographical and business areas.
Each Annual Performance Indicator7 has an associated target and scales of achievement for said target,
approved by the Board of Directors on the proposal of the Remuneration Committee, which, in the case of
financial indicators, take into account the degree of budgetary compliance .
The amount received as Annual Variable Remuneration through the application of the corresponding scales
of achievement ranges from 0% - 150% of the “Target” Annual Variable Remuneration, meaning that the
theoretical maximum potential AVR of each executive director is limited to 1.5 times their “Target”
Annual Variable Remuneration.
Link between 2021 AVR and results
As set out in section  2 above, the Annual Variable Remuneration of employees of the BBVA Group, consists of
an annual incentive that is calculated on the basis of:
(i) annual performance indicators (financial and non-financial), which take into account  the strategic
priorities defined by the Group , as well as current and future risks.
(ii)  targets established for each of the indicators with the scales of achievement that may be established
according to the weighting assigned to each indicator ; and
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
177
7 The only objectives that do not have associated scales of achievement are those established for the individual indicators as their
performance is measured via an overall assessment that takes into account both overall performance and the behaviour of certain
indicators used as references.
(iii) a “target” annual variable remuneration, representing the amount of the annual variable remuneration in
the event that 100% of the previously established targets are reached.
The amount to be received as Annual Variable Remuneration through application of the corresponding scales
of achievement may range from 0% - 150% of the “Target” Annual Variable Remuneration. The resulting
amount will constitute the Annual Variable Remuneration or Bonus of each employee.
The financial annual performance indicators are aligned with the most relevant management metrics for the
Bank while the non-financial indicators are related to the strategic targets defined at the Group level, the area
level and for each individual beneficiary.The targets and scales of achievement are applied to all the employees
of the Group, including executive directors.
In line with the variable remuneration model for the whole workforce previously described, the results of the
Annual Performance Indicators, financial and non-financial, which are also part of the remuneration scheme of
executive directors, have been the following:
•During the 2021 financial year, the BBVA Group has obtained a recurring attributable profit of EUR
5,069 million, without including the results generated, until June 2021, by BBVA USA and its
subsidiaries and the costs of the restructuring plan in Spain. The good performance,  which
represents an increase of 86% with respect to the 2020 financial year, is, mainly, due to a strong
revenue growth, supported by the recovery of activity after the crisis caused by the COVID-19
pandemic. The amount of profit considered for incentive purposes has been said recurring profit,
excluding, in addition, the cost savings not budgeted generated in the year by the restructuring plan in
Spain, which, thus, amounts to an attributable profit of EUR 5,028 million. This data of profit is the one
also considered for the calculation of the rest of the financial indicators for incentive purposes.
•The remaining financial Annual Performance Indicators ー TBV per share, RORC and the Efficiency
Ratio ー also performed better in 2021 than in the previous financial year, in line, in all cases, with the
established targets.
•With regard to the non-financial Annual Performance Indicators, a sustainability-related indicator ー
specifically, the Mobilisation of Sustainable Financing indicator ー was included in the variable
remuneration system for all employees, including executive directors, for the first time in the 2021
financial year. Thus, in 2021, the Bank mobilised a total of EUR 30,615 million for the financing of
sustainable projects in the field of climate change, which similarly places the result of the indicator
above the pre-established target.
•With regard to the other non-financial Annual Performance Indicators (NPS and Digital Sales,) their
levels of attainment have been aligned with the respective targets set by the Board for the calculation of
the 2021 AVR.
For the  purposes of determining the degree of achievement of these indicators, following the end of the 2021
financial year, the results of each of them were compared with the previously approved targets and, depending
on the degree of attainment of the same, measured against the previously established scales of achievement
and taking into account the weighting associated to each indicator over the total of the “Target”Variable
Remuneration, the amounts of the Annual Variable Remuneration accrued by each beneficiary during the
2021 financial year, were then determined.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
178
The level of achievement of the Group’s indicators, which are included in the variable remuneration scheme
of all employees, has been of 122% in 2021 financial year, based on the level of achievement of the financial
and non-financial indicators, including those which are detailed below:
2021 AVR (measurement period 2021)
Annual Performance Indicators
Results
Achievement  level
20211
20202
Target 20213
%
Attributable profit (excluding corporate transactions)
5,028 mill. €
3,084 mill. €
150
Tangible Book Value per share
6.55
6.15
97
RORC
14.03%
6.76%
150
Efficiency ratio
45.51%
46.82%
123
Customer Satisfaction (NPS)
101
107
101
Mobilisation of Sustainable Financing
30,615 mill. €
-
120
Digital sales
99
86
99
Individual indicators4
Chairman
120
-
120
Chief Executive Officer
120
-
120
(1)Results approved for incentive purposes (it does not include either the results generated, until June 2021, by BBVA USA and the rest of the
companies sold to PNC, nor the impact of the restructuring plan of BBVA in Spain).
(2)In 2020 executive directors waived the accrual of the year’s AVR. For comparative purposes, the result of the remuneration indicators for the
rest of the staff is included.
(3)2021 targets were approved at the beginning of 2021. At that time, notwithstanding the context marked by the high impact of the economic crisis
originated by COVID-19 and the high uncertainty regarding the prospects for recovery, the Corporate Bodies set targets for the calculation of
2021 AVR  which were over the analysts consensus, which, in the case of  Attributable Profit was set for 2021 in EUR 2,944 million.
(4)Global assessment taking into account the performance of the individual indicators mentioned above and their qualitative assessment, including,
inter alia, the results of the annual performance evaluation of the executive directors.
In the case of the executive directors, the result of individual indicators has been determined on the basis of
a global assessment, taking into account the benchmarks selected to that effect, which relate to the specific
dimensions of the executive directors’ responsibilities and roles. Likewise, the Board of Directors has taken
into consideration the result of their performance assessment in 2021, which has been very satisfactory and in
which the following issues, inter alia, have been positively assessed:
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
179
In the case of the Chairman:
•His leadership in the consolidation and acceleration of the Banks’ strategy and priorities, which were reinforced
by many of the global trends that were accelerated during the COVID-19 pandemic, which enables the Bank to be
ready to grasp the opportunities arising from the major disruptive changes associated with digitalization and
sustainability, which are impacting the financial industry and society in general.
•The promotion he has given to the strategic priority linked to sustainability, with the aim of integrating it into all
BBVA's activities and businesses and positioning the Group as a global benchmark in this area.
•The fostering of the remaining strategic priorities of the Bank, highlighting his drive to turn data and advanced
analytics into key levers of BBVA's transformation and his drive to accelerate digitalization across the Group.
•His leadership of the growth strategy, highlighting major strategic initiatives of the Bank led by the Chairman, as
corporate transactions, the BBVA share buyback program, or other initiatives aimed at the Institution profitable
growth in the long term.
•His fostering of the different initiatives to achieve the best and most engaged team and his leadership of the
Bank's cultural transformation and in integrating its Purpose, culture and values into all areas of the Bank's
operations, even in an especially difficult context created by the COVID-19 pandemic, in which transparency
towards employees has been increased, their engagement with the Bank has grown and progress has been made
on new ways of working and on a new organisational model. In this regard, it has been highlighted the good result
of the Employees’ Commitment Survey managed by Gallup, which has reached a mark of 4.26 points over 5 in
2021, which involves an improvement with respect to the previous year, in which the result was of 4,25 points.
In the case of the Chief Executive Officer:
•His role in the management of the Group's businesses and drive to accelerate the execution of the strategy,
in coordination with the Chairman, highlighting his orientation to results and his ability for following-through, and
monitoring in detail the Group's businesses, its core activity and results indicators, and  its main financial, risk and
strategic indicators, monitoring the compliance with the Bank’s strategic decisions.
•His leadership in the efforts of the Group and its executive team in managing the crisis caused by COVID-19 and
the high uncertainty it posed during the 2021 financial year, thus ensuring that the Bank's activities and
businesses were able to continue effectively, strengthening the monitoring and coordination of the Bank's
management with the executive teams, and ensuring that the execution of the strategy in the Group's businesses
could be implemented and driven forward, despite the tough environment.
•His leadership in the implementation at the Bank and the knowledge and execution by all employees of initiatives
related to values and cultural transformation, employee engagement (highlighting the good result of the
Employees’ Commitment Survey managed by Gallup) and transparency, styles of leadership and professional
development, diversity and inclusion, and the implementation of new ways of working.
Thus, with the 2021 Attributable Profit and Capital Ratio thresholds set by the Board (which constitute ex
ante adjustments to the accrual of Annual Variable Remuneration), having been met, in accordance with the
provisions of the Policy, and in view of the results of the indicators detailed above, the Board, on the proposal
of the Remuneration Committee, has determined the 2021 Annual Variable Remuneration for each
executive director, on the basis of the levels of achievement obtained for the Annual Performance Indicators
in aggregate which has been of 119% in the case of the Chairman and 121% in the case of the Chief Executive
Officer.
Result of 2021 AVR for executive directors
2021 AVR(EUR thousand)
Chairman
4,244
Chief Executive Officer
3,224
The "Target" Annual Variable Remuneration amounts approved for 2021 were as follows: Chairman EUR 3,572 thousand and Chief
Executive Officer EUR 2,672 thousand.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
180
Variation in 2021 AVR compared to previous years
In order to make a comparison between the 2021 AVR and the AVR for previous years, it is important to take
into consideration the following factors:
•In 2020, the Annual Variable Remuneration of the executive directors amounted to EUR 0, as they
voluntarily waived its accrual in view of the exceptional circumstances arising from the COVID-19 crisis.
•In addition, in the case of the Chairman, the Directors' Remuneration Policy approved by the General
Meeting in 2021, included the changes need to implement the transformation of his pension scheme, by
virtue of which the amount of the annual contribution agreed to cover the retirement contingency was
reduced from EUR 1,642 thousand (67% of Annual Fixed Remuneration) to EUR 439 thousand euros
(15% of Annual Fixed Remuneration). As a result of the foregoing, the remainder of the annual
contribution established in the previous policy was integrated, in part, in the Annual Fixed
Remuneration and, in part, in its "Target" Annual Variable Remuneration, abiding by, in each case, the
balance established in the Policy between these two components (45%-55%), with a reduction in the
total amount to be transferred to them of EUR 157 thousand. Thus, the Chairman's total remuneration
was reduced with respect to the figure stipulated in the previous policy, involving, in addition, an
increase of the Chairman’s pay at risk linked to the Institution’s results.
•Additionally, in 2021, the Bank proceeded to sell its franchise in the United States, which means that the
result of the "Attributable profit excluding corporate transactions" indicator obtained in 2021 is not
comparable with respect to those of previous years, since there has been a significant change in the
Group's scope of consolidation, as the results of BBVA USA obtained in the year are not considered in
2021 for incentive purposes.
Therefore, the result in 2021 and its effect on the AVR for this year is not comparable to that of previous
years.
In comparative terms, if the results of BBVA USA in 2019 and 2020 are excluded so that the attributable
result is comparable with that of 2021 and the "Target" Annual Variable Remuneration set for the Chairman in
the Policy approved in 2021 under the transformation of his pension scheme is assumed in 2019 to be
comparable with that of 2021, the variation would be as follows:
2021
2020
2019
2021 vs. 2019
Attributable profit (excluding corporate
transactions)1 (€ Mill.)
5,028
2,729
4,214
+19,3%
Chairman AVR (€ Thousand)
4,244
0
3,790
+12,0%
Chief Executive Officer AVR (€ Thousand)
3,224
0
2,854
+13,0%
(1)Results for incentive purposes (see Section 4.3 B a) “Link between the 2021 AVR with results”).
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
181
Vesting and payment rules applicable to 2021 AVR
In accordance with the rules described in section 3.3., once the amount of the Annual Variable Remuneration
corresponding to 2021 has been determined:
•The Upfront Portion (40% of the AVR) will vest and be paid, if the applicable conditions are met,
during the first quarter of 2022, while the Deferred Portion (60% of the AVR) will be deferred for a
period of 5 years and paid, if the applicable conditions are met, at the end of each year for each of the 5
years of deferral in an amount equal to 20% of the Deferred AVR (20% in 2023, 20% in 2024, 20% in
2025, 20% in 2026 and 20% in 2027), without prejudice to the implied or express adjustments that
may apply.
•The Upfront Portion will be paid in equal parts cash and BBVA shares, while 60% of the Deferred
Portion will be paid in BBVA shares and the other 40% will be paid in cash. In accordance with the
provisions of the Policy, the number of shares paid as part of both the Upfront Portion and the
Deferred Portion has been calculated based on the average closing price of the BBVA share between
15 December 2021 (the year to which the AVR pertains) and 15 January 2022 (the following year),
inclusive, which was EUR 5.33 per share.
As a result of the foregoing, the amounts corresponding to the Upfront Portion and the Deferred Portion of
the 2021 Annual Variable Remuneration for each executive director are as follows:
Executive
director
Upfront Portion: 40% 2021 AVR
Payment in 2022
Deferred Portion: Maximum 60% 2021 RVA
Cash
EUR thousand
(50%)
No. of shares
(50%)
Cash (40%), EUR thousand
Number of shares (60%)
2023
2024
2025
2026
2027
2023
2024
2025
2026
2027
Chairman
849
159,235
204
204
204
204
204
57,325
57,325
57,325
57,325
57,32
5
Chief Executive
Officer
645
120,977
155
155
155
155
155
43,552
43,552
43,552
43,552
43,55
2
The cash amounts of the Upfront Portion of the 2021 AVR are reflected for each executive director in section C.1. a) i), "Short-term
variable remuneration", of the CNMV Statistical appendix included as section 5 of this Report. The number of shares corresponding to
the Upfront Portion of the 2021 AVR, as well as the price used to calculate them and the gross profit taking into account the foregoing
data, is reflected for each executive director in section C.1. a) ii), "Financial instruments vested during the year":  "No. of shares",
"Price of vested shares" and "gross profit  from vested shares or financial instruments (EUR thousand)".
The 2021 Deferred AVR is subject to explicit ex post adjustments based on the results of the 2021 DAVR
Multi-year Performance Indicators, which have been approved by the Board of Directors on the proposal of
the Remuneration Committee and following analysis by the Risk and Compliance Committee:
Multi-year Performance Indicators Deferred Portion of 2021 AVR
Weighting
Capital
Common Equity Tier 1 (CET1) Fully Loaded
40%
Liquidity
Liquidity Coverage Ratio (LCR)
20%
Profitability
Return On Tangible Equity (ROTE)
30%
Creation of Value
Total Shareholder Return (TSR)
10%
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
182
These indicators are aligned with the Group's core risk management and control metrics and relate to
capital, liquidity, profitability and the creation of value for the Group. They have associated scales of
achievement such that, if the thresholds established for each of them are not met during the measurement
period spanning the first three years of deferral (2022 - 2024), the Deferred Portion of the 2021 Annual
Variable Remuneration that remains outstanding may be reduced, but never increased.
The performance of the TSR indicator will be measured and compared against that of the peer group
approved by the Board of Directors on the proposal of the Remuneration Committee (Annex 1) over the
referred three-year measurement period from 1 January 2022 to 31 December 2024. 
The scale defined for the TSR indicator will determine any reduction, as the case may be, of the deferred
amounts associated therewith. This will occur where, following the three-year measurement period, the
result of this indicator places BBVA below the median of the peer group.
In addition, the amount of the 2021 Deferred AVR paid in shares that ultimately vests will, in any event,
incorporate the implied adjustments inherent to the fluctuations in the BBVA share price.
In addition, the remaining vesting and payment rules for Annual Variable Remuneration for executive
directors set forth in the Policy will apply to the 2021 Annual Variable Remuneration, which include: (i) the
withholding of shares received for one year; (ii) insurance or hedging prohibitions; (iii) criteria for updating the
cash portion; (iv) malus and clawback clauses for 100% of the AVR; and (v) limitation of the variable
remuneration to 100% of the fixed component of the total remuneration amount, unless the General Meeting
resolves to increase it up to a maximum of 200%.
(b)“Discretionary pension benefits” registered in 2021 to be contributed in 2022
Also in 2021, pursuant to the Policy, 15% of the annual contribution to cover the contingency of
retirement of the Chairman, i.e. EUR 66 thousand, was recorded in this financial year as "discretionary
pension benefits". Following the end of the financial year, in 2022, this amount was adjusted in view of the
result of the Chairman's 2021 Annual Variable Remuneration, yielding a figure of EUR 78 thousand, which
represents an upwards adjustment of EUR 12 thousand with respect to the initial amount. These
"discretionary pension benefits", once adjusted, will be contributed to the cumulative fund in the 2022
financial year, and will be subject to the conditions established for them in the BBVA Directors' Remuneration
Policy.
(c)Deferred Annual Variable Remuneration from previous financial payable in 2022
In accordance with the remuneration policies applicable to executive directors during the 2018 and 20178
financial years, in order to align remuneration with risks and long-term results, 60% of the Annual Variable
Remuneration corresponding to those financial years and associated with the positions held at that time was
deferred for a period of 5 years (in the case of the Chairman) and 3 years (in the case of the Chief Executive
Officer) (the 2018 Deferred AVR or 2018 DAVR and the 2017 Deferred AVR or 2017 DAVR, respectively).
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
183
8  In 2018 and 2017, the applicable policies were the BBVA Directors' Remuneration Policy approved by the the General Shareholders’
Meeting held on 17 March 2017, in the case of the Chairman, and the BBVA Group Remuneration Policy, approved by the Board of
Directors on 29 November 2017, in the case of the Chief Executive Officer.
2018 Deferred AVR
60% of the 2018 Annual Variable Remuneration of the Chairman and the Chief Executive Officer was
deferred for a period of 5 years and 3 years, respectively, in accordance with the settlement and payment
system provided for in the applicable remuneration policies:
Executive directors
Maximum amount of 2018 DAVR1
Cash (EUR thousand)
Shares
Chairman
574
180,785
Chief Executive Officer
302
61,901
(1)DAVR originally deferred. Amounts associated with previous roles as Chief Executive Officer of BBVA and Chairman & CEO of BBVA Compass,
respectively. The exchange rate at the end of January 2021 (1.1156 USD/EUR) has been used to calculate the 2018 DAVR of the Chief Executive
Officer.
Link between 2018 Deferred AVR and results
These amounts were similarly subject to ex post adjustments based on the results of the following Multi-year
Performance Indicators, approved by the Board of Directors in 2018, and which would be calculated over a
three-year period (2019 - 2021). The Multi-year Performance Indicators have associated scales of
achievement (approved in 2019), such that a failure to effectively meet the thresholds set for each of them
could cause the maximum amount of the 2018 Deferred AVR to be reduced, but never increased.
The results obtained for each of the 2018 DAVR Multi-year Performance Indicators, and the threshold
for no reduction set for each of them, are detailed below:
2018 Deferred AVR (long-term measurement period 2019 - 2021)
2018 DAVR Multi-
year Performance
Indicators
Solvency
Liquidity
Profitability
Economic Adequacy
(Economic Equity/
ECR)
Fully
loaded
CET1
LtSCD (loan-to-stable
customer deposits)
LCR (Liquidity
Coverage
Ratio)
(Net Margin - Loan-Loss
Provisions)/Average
Total Assets
ROE
(Return
on
Equity)
TSR (Total
Shareholder
Return)
Weighting
20%
20%
10%
10%
10%
20%
10%
Threshold for no
reduction
≥ 100%
≥ 9.48%
≤ 140%
≥ 106%
≥ 0.20%
≥ 1.0%
1st to 8th
Result
152%
11.97%
104%
147%
1.18%
8.7%
9th
% reduction
0%
0%
0%
0%
0%
0%
1%
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
184
With respect to the TSR indicator, which tracks total returns for shareholders, BBVA's performance was
compared to that of the peer group approved by the Board of Directors in 2019 and set forth in Annex 2 over
the three-year period from 1 January 2019 to 31 December 2021, with BBVA placing 9th.
BBVA's position in ranking
Percentage reduction of deferred amounts
1st to 8th
0%
9th
10%
10th
20%
11th
30%
12th
40%
13th
50%
14th
60%
15th
80%
16th
100%
In view of the results of the Multi-year Performance Indicators for the 2018 Deferred AVR measured from
2019 - 2021, the amount of the 2018 DAVR has been reduced by 1%.
2018 Deferred AVR payable in 2022
2018 Deferred AVR (EUR thousand and shares)
Executive
directors
Maximum amount of
2018 DAVR
Reduction (ex post
adjustments)
Final amount of 2018
DAVR
Amount of 2018 DAVR to
be paid in 20221
Amount of 2018 DAVR to
be paid each year in 2023
and 2024
Cash
Shares
Cash
Shares
Cash
Shares
Cash2
Shares
Cash
Shares
Chairman
574
180,785
-1%
-1%
569
178,977
341
107,386
114
35,795
Chief
Executive
Officer
302
61,901
-1%
-1%
299
61,282
299
61,282
-
-
(1)Relates to the first payment (60%) in the case of the Chairman (with 20% scheduled to be paid in 2023 and the remaining 20% scheduled to be
paid in 2024) and the entire payment in the case of the Chief Executive Officer, in view of the deferral periods and payment schedules
established in the remuneration policies applicable to each of them in 2018. The January 2022 closing exchange rate was used to calculate the
Chief Executive Officer`s 2018 deferred AVR in euros (USD/EUR 1.1156).
(2)This amount will be updated through application of the year-on-year CPI in the amount of EUR 23 thousand in the case of the Chairman and EUR
33 thousand in the case of the Chief Executive Officer.
In accordance with the CNMV instructions to complete the CNMV Statistical appendix included in section 5 of this Report, the cash
amount of the 2018 DAVR to be paid in 2022 is reflected in section C.1. a) i), "Long-term variable remuneration", of the said CNMV
Statistical appendix. Likewise, the number of shares corresponding to the 2018 DAVR to be delivered in 2022 is reflected in section
C.1. a) ii), "Financial instruments vested during the year": "No. of shares". The foregoing, also pursuant to the CNMV instructions for
completion of this Report.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
185
In addition, the portion in shares of the 2018 Deferred AVR due for delivery in 2022 incorporates alignment
with shareholder interests and share value. Thus, the price used to determine the number of shares of the
Deferred Portion of the 2018 AVR which, in accordance with the policies applicable during that year, was the
average closing price of the BBVA share corresponding to the trading sessions between 15 December 2018
and 15 January 2019, which was EUR 4.77 per share. However, the executive directors will receive the
shares at market price on the date of delivery of this remuneration. For information purposes (as these shares
have not yet been delivered to their beneficiaries), the price used to estimate the gross profit of the shares
corresponding to the Deferred Portion of the 2018 DAVR whose delivery corresponds in 20229 was the
average closing price of the BBVA share corresponding to the stock exchange sessions between 15 December
2021 and 15 January 2022, which was EUR 5.33 per share.
2017 Deferred AVR
In accordance with the provisions of the remuneration policies applicable to executive directors, the 2017
Deferred AVR was subject to ex post adjustments based on the result of a series of Multi-Year Performance
Indicators, approved by the Board of Directors in 2017, whose result was calculated at the beginning of
2021 over a 3-year measurement period (2018-2020), verifying that, as all of them had reached their
respective thresholds, it was not appropriate to apply any reduction to the 2017 Deferred AVR:
2017 Deferred AVR (long-term measurement period: 2018 - 2020)
2017 DAVR Multi-
year Performance
Indicators
Solvency
Liquidity
Profitability
Economic Adequacy
(Economic Equity/
ECR)
Fully
loaded
CET1
LtSCD (loan-to-stable
customer deposits)
LCR (Liquidity
Coverage
Ratio)
(Net Margin/Average
Total Assets) - (Cost of
Risk/Average Total
Assets)
ROE
(Return
on
Equity)
TSR (Total
Shareholder
Return)
Weighting
20%
20%
10%
10%
10%
20%
10%
Threshold for no
reduction
≥100%
≥9.35%
≤145.0%
≥99.50%
≥0.25%
≥2.5%
1st to 8th
Result
149.6%
11.32%
105.3%
135%
1.10%
7.3%
7th
% reduction
0%
0%
0%
0%
0%
0%
0%
The foregoing was disclosed in the Annual Report on the Remuneration of Directors corresponding to the
2020 financial year, which is available to shareholders on the Bank's website10.
In the case of the Chairman, the payment of 40% of the Deferred AVR 2017 is pending; of which the second
payment (20%), in cash and in shares, falls due in 2022, and the third one in 2023 (remaining 20%).
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
186
9 This is indicated in the CNMV Statistical appendix included in section 5 of this Report.
10 www.bbva.com
2017 Deferred AVR payable in 2022
Chairman’s 2017 Deferred AVR,  (EUR thousand and shares)
Maximum amount of 2017
DAVR
Amount of 2017 DAVR paid in
2021 (60%)
Amount of 2017 DAVR to be
paid in 2022 (second payment
20%)
Amount of 2017 DAVR to
be paid in 2023 (third
payment 20%)
Cash
Shares
Cash1
Shares
Cash2
Shares
Cash
Shares
675
139,488
405
83,692
135
27,898
135
27,898
(1)Amount updated in 2021 through application of the  CPI in the amount of EUR 6 thousand.
(2)Amount that will be updated in 2022  through application of the CPI in the amount of EUR 11 thousand.
In accordance with the CNMV instructions to complete the CNMV Statistical appendix included in section 5 of this Report, the cash
amount of the 2017 DAVR to be paid in 2022 is reflected in section C.1. a) i), "Long-term variable remuneration", of the CNMV
Statistical appendix. Likewise, the number of shares corresponding to the 2017 DAVR to be delivered in 2022 is reflected in section
C.1. a) ii), "Financial instruments vested during the year": "No. of shares''. The foregoing, also pursuant to the CNMV instructions for
completion of this Report.
Likewise, the share portion of the 2017 Deferred AVR whose delivery falls due in 2022, incorporates
alignment with the interests of the shareholders and with the value of the share, since the price used to
determine the number of shares of the 2017 Deferred AVR Portion (in 2018) was the average closing price of
the BBVA share corresponding to the stock market sessions between December 15, 2017 and January 15,
2018, which was EUR 7.25 per share. However, the Chairman will receive the shares at market price on the
date of delivery of this remuneration. For information purposes, (as these have not yet been delivered) the
price used to estimate the gross profit of the shares corresponding to the Deferred Part of the 2017 DAVR
whose delivery corresponds in 202211  was the average closing price of the BBVA share corresponding to the
stock exchange sessions between 15 December 2021 and 15 January 2022, which was EUR 5.33 per share.
Summary of Deferred AVR from previous financial years pending payment as of the end of 2021
Director
DAVR 2017
DAVR 2018
DAVR 2019
Chairman
2022
(20%)
2023
(20%)
2022
(60%)
2023
(20%)
2024
(20%)
2023
(60%)
2024
(20%)
2025
(20%)
Chief Executive Officer
-
-
2022
(100%)
-
-
2023
(60%)
2024
(20%)
2025
(20%)
There are no deferred amounts corresponding to the 2020 AVR given that its amount was EUR 0 as a result of the executive directors' waiver of its
accrual in view of the exceptional circumstances arising from the COVID-19 crisis.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
187
11 This is indicated in the CNMV statistical appendix included in section 5 of this Report.
4.4. Change over time of directors' remuneration, average employee
remuneration and the Institution’s results
Circular 3/2021, of 28 September, of the CNMV, which modifies Circular 4/2013 of the CNMV, in line with
the change introduced by Act 5/2021, of 12 April, in article 541 of the Corporate Enterprises Act, includes, as
a new development, the inclusion in this Report of the table included in section C.2 of the CNMV Statistical
Appendix (section 5 of this Report), which reflects the evolution over the last 5 years of the remuneration
earned by each BBVA director, as well as the results and average remuneration of the Group's workforce.
For the purposes of the table included in section C.2 of the CNMV Statistical Appendix, for greater
transparency and a better understanding, the data on the average remuneration of BBVA, S.A. employees in
Spain, which is where the Bank has its registered office and headquarters, are also provided below. The BBVA
Group is an international financial group with a broad geographical diversification, with a presence in many
emerging countries, mainly in Latin America and South America, where remuneration is adapted to the local
cost of living and, therefore, is lower than that received in Spain, which is the place where the directors of
BBVA, S.A. perform their duties and carry out their functions.
The comparison between the remuneration of the directors of BBVA, S.A. which is the subject of this Report,
and the average remuneration of the workforce, is therefore distorted if the average remuneration of the
employees of the BBVA Group (at the consolidated level) is taken into account, since these are not comparable
figures due to the geographical diversification of the Group.
For the purposes of this table, the executive directors remunerations include all fixed remuneration paid and all variable remuneration vested in the
financial year. In particular, in 2021, the amount specified includes, on one hand, the Annual Fixed Remuneration and the remuneration in kind paid to
executive directors, as well as the amounts corresponding to the commitments assumed in favour of the Chief Executive Officer, and, on the other hand,
Annual Variable Remuneration vested as at the date of this Report, which includes: (i) 2021 AVR Upfront Portion (40% of total 2021 AVR); (ii) Deferred
2018 AVR payable in 2022 (60% of 2018 DAVR in the case of the Chairman and the entire 2018 DAVR in the case of the Chief Executive Officer), as
well as the update of its amounts in cash pursuant to CPI; and (iii) the second payment of 2017 Deferred AVR payable to the Chairman in 2022 (20% of
2017 DVAR), as well as the update of portion  in cash pursuant to CPI.
Total amounts accrued (EUR thousand) and % annual variation
2021
% Var
2021/2020
2020
% Var
2020/20
19
2019
% Var
2019/2018
2018
% Var
2018/2017
2017
Director remuneration (EUR thousand)
Executive directors
Carlos Torres Vila
6,181
79.84
3,437
-31.44
5,013
18.99
4,213
-13.95
4,896
Onur Genç
5,540
37.26
4,036
-19.04
4,985
0.00
0
0.00
0
External directors
José Miguel Andrés Torrecillas
535
3.88
515
5.10
490
-0.61
493
6.71
462
Jaime Caruana Lacorte
568
0.00
568
7.78
527
122.36
237
0.00
0
Raúl Galamba de Oliveira
279
32.86
210
0.00
0
0.00
0
0.00
0
Belén Garijo López
363
0.55
361
-0.28
362
6.47
340
16.44
292
Sunir Kumar Kapoor
172
0.00
172
0.00
172
0.00
172
0.00
172
Lourdes Máiz Carro
257
0.39
256
-4.12
267
-10.40
298
6.81
279
José Maldonado Ramos
358
0.28
357
0.85
354
-12.38
404
-1.94
412
Ana Peralta Moreno
246
0.00
246
-0.40
247
68.03
147
0.00
0
Juan Pi Llorens
531
0.76
527
3.94
507
7.64
471
10.56
426
Ana Revenga Shanklin
236
40.48
168
0.00
0
0.00
0
0.00
0
Susana Rodríguez Vidarte
465
0.22
464
0.65
461
0.88
457
0.22
456
Carlos Salazar Lomelín
273
3.41
264
0.00
0
0.00
0
0.00
0
Jan Verplancke
215
6.97
201
16.86
172
30.30
132
0.00
0
Consolidated results (EUR thousand)1
7,246,568
38.09
5,247,609
-17.99
6,398,491
-24.24
8,446,248
21.86
6,930,961
BBVA average  remuneration of employees
(EUR thousand)
73
12.31
65
-7.14
70
2.94
68
0,00
68
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
188
(1)Profit before tax of the consolidated financial statements for each year.
(2)Ratio between the figure for remuneration accrued by staff for each financial year (excluding the remuneration of directors) and the weighted
average number of employees (excluding the directors) calculated on a full-time equivalent basis. In calculating this ratio, employees who had
been employees of BBVA, S.A. at some time during the year were included.
4.5. Other matters relating to the 2021 financial year
A.Payments for the termination of the contractual relationship
The Bank has undertaken no commitments to pay indemnities to its directors for the termination of the
contractual relationship, nor has the Bank made any other commitments to make payments resulting from the
early cessation of their positions, other than the provisions of this Report.
The directors did not accrue or receive any payment of this kind during the financial year last ended.
B.Loans, advances and guarantees
The directors have not accrued any remuneration in the form of or resulting from advances, loans or
guarantees in 2021.
C.Application of malus and clawback arrangements in 2021
The Policy establishes mechanisms to reduce or recover up to 100% of the Annual Variable Remuneration of
each executive director, through malus and clawback clauses, on the same terms as those applicable to the rest
of the Identified Staff. These clauses are set out in the BBVA Directors' Remuneration Policy published on the
website.
In the 2021 financial year, the variable remuneration of executive directors was not reduced or clawed back.
D.Remuneration paid by other Group companies
In 2021, the non-executive director Carlos Salazar Lomelín has accrued an amount of EUR 101 thousand in
per diems for his membership of the management body of BBVA Bancomer, S.A. de C.V.  (“BBVA México”) and
Grupo Financiero BBVA México, S.A. de C.V. (“GFBBVA México”) and for his membership to the strategy
forum of BBVA México.
This amount is reflected in section C.1. b) i) "Remuneration of directors of the listed company for seats on the boards of other
subsidiary companies i) Remuneration accrued in cash ", of the CNMV Statistical appendix included as section 5 of this Report.
In addition, in 2021, the Board of Directors of BBVA authorised the granting by BBVA México of a credit risk
transaction in favour of the non-executive director Carlos Salazar Lomelín, of an amount of EUR 909
thousand12, which does not constitute remuneration to the director given that it was granted under market
conditions and no preferential treatment as a result of his status as a director was given. For this reason, it is
not included in the CNMV statistical appendix included in section 5 of this Report.
There are no remuneration items other than those described in the preceding paragraphs, nor have any
directors accrued any additional, supplementary or different remuneration in the financial year last ended
other than those indicated in this Report.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
189
12 For the calculation in euros the closing exchange rate of December 2021 has been used (23.1438 PMX/€).
5.CNMV Statistical appendix
B. Overall summary of how the Remuneration Policy was applied during the year last ended
B.4 Report on the result of the consultative vote at the General Meeting on the annual report on remuneration in the previous year, indicating the number
of votes in favour, votes against, abstentions and blank ballots:
Number
% of total
Votes cast
4,514,702,907
100
Number
% of votes cast
Votes against
304,177,486
6.73
Votes in favour
4,136,049,257
91.61
Blank ballots
0
0.00
Abstentions
74,476,164
1.64
Repeatedly, a very significant proportion of BBVA shareholders have shown support as
regards the remuneration matters submitted by the Board of Directors on the proposal of
the Remuneration Committee. In particular, at the General Shareholders' Meeting held on
20 April 2021, 91.61% of votes were in favour of the Annual Report on the Remuneration
of Directors for the 2020 financial year.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
190
C. Itemised individual remuneration accrued by each director
Executive directors
Type
Period of accrual in year 2021
Carlos Torres Vila
Executive Chairman
01/01/2021 to 31/12/2021
Onur Genç
Chief Executive Officer
01/01/2021 to 31/12/2021
José Miguel Andrés Torrecillas
Independent Deputy Chair
01/01/2021 to 31/12/2021
Jaime Félix Caruana Lacorte
Independent director
01/01/2021 to 31/12/2021
Raúl Catarino Galamba de Oliveira
Independent director
01/01/2021 to 31/12/2021
Belén Garijo López
Independent director
01/01/2021 to 31/12/2021
Sunir Kumar Kapoor
Independent director
01/01/2021 to 31/12/2021
Lourdes Máiz Carro
Independent director
01/01/2021 to 31/12/2021
José Maldonado Ramos
Other external director
01/01/2021 to 31/12/2021
Ana Cristina Peralta Moreno
Independent director
01/01/2021 to 31/12/2021
Juan Pi Llorens
Lead Director
01/01/2021 to 31/12/2021
Ana Leonor Revenga Shanklin
Independent director
01/01/2021 to 31/12/2021
Susana Rodríguez Vidarte
Other external director
01/01/2021 to 31/12/2021
Carlos Vicente Salazar Lomelín
Other external director
01/01/2021 to 31/12/2021
Jan Paul Marie Francis Verplancke
Independent director
01/01/2021 to 31/12/2021
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
191
C.1 Complete the following tables regarding the individual remuneration of each director (including remuneration received for performing executive
duties) accrued during the year.
a) Remuneration of the company that is the subject of this report:
i) Remuneration accrued in cash (thousands of euros)
Name
Fixed
remuneration
Attendance
fees
Remuneration for
membership of
board committees
Salary
Short-term variable
remuneration
Long-term variable
remuneration
Indemnification
Other items
Total year
2021
Total year
2020
Carlos Torres Vila
2,924
849
510
328
4,611
3,092
Onur Genç
2,179
645
332
158
3,314
2,618
José Miguel Andrés Torrecillas
179
348
8
535
515
Jaime Félix Caruana Lacorte
129
439
568
568
Raúl Catarino Galamba de Oliveira
129
150
279
210
Belén Garijo López
129
220
14
363
361
Sunir Kumar Kapoor
129
43
172
172
Lourdes Máiz Carro
129
109
19
257
256
José Maldonado Ramos
129
213
16
358
357
Ana Cristina Peralta Moreno
129
109
8
246
246
Juan Pi Llorens
209
303
19
531
527
Ana Leonor Revenga Shanklin
129
107
236
168
Susana Rodríguez Vidarte
129
320
16
465
464
Carlos Vicente Salazar Lomelín
129
43
172
126
Jan Paul Marie Francis Verplancke
129
86
215
201
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
192
The figures included in this table may reflect insignificant variations with respect to other public documents containing information on the remuneration of BBVA directors due to the need to
complete this Report using figures in thousands of euros.
In accordance with the CNMV's instructions for completing this Report, the amounts included in the "Short-term variable remuneration" and "Long-term variable remuneration" cells for executive
directors correspond to:
•Short-term variable remuneration: Upfront Portion of the 2021 AVR (40%) in cash, the payment of which is due in 2022.
•Long-term variable remuneration: (i) in the case of the Chairman and Chief Executive Officer, the Deferred Portion of the 2018 DAVR in cash, the payment of which is due in 2022 (60% of
the 2018 DAVR in the case of the Chairman and all 2018 DAVR in the case of the Chief Executive Officer), including its update in accordance with the year-on-year CPI; (ii) in the case of the
Chairman, the second payment of the Deferred Portion of the 2017 DAVR in cash, which falls due in 2022 (20% of 2017 DAVR), including its update in accordance with the year-on-year CPI.
ii) Table of changes in share-based remuneration schemes and gross profit from vested shares or financial instruments
Name
Name of plan
Financial instruments at
start of year 2021
Financial instruments
granted during year
2021
Financial instruments vested during the year
Instruments
expired but
not
exercised
Financial instruments at
end of year 2021
No. of
instruments
No. of
equivalent
shares
No. of
instruments
No. of
equivalent
shares
No. of
instruments
No. of
equivalent/
vested
shares
Price of
vested
shares
Gross profit  from
vested shares or
financial
instruments (EUR
thousand)
No. of
instruments
No. of
instruments
No. of
equivalent
shares
Carlos Torres Vila
Upfront Portion of 2021 AVR in shares
159,235
159,235
5.33
849
159,235
159,235
2018 DAVR in shares
107,386
107,386
5.33
572
107,386
107,386
2017 DAVR in shares
27,898
27,898
5.33
149
27,898
27,898
Onur Genç
Upfront Portion of 2021 AVR in shares
120,977
120,977
5.33
645
120,977
120,977
2018 DAVR in shares
61,282
61,282
5.33
327
61,282
61,282
José Miguel Andrés
Torrecillas
Fixed remuneration system with
deferred delivery of shares
75,912
75,912
22,860
22,860
0,00
Jaime Félix Caruana
Lacorte
Fixed remuneration system with
deferred delivery of shares
31,387
31,387
25,585
25,585
0,00
Raúl Catarino
Galamba de Oliveira
Fixed remuneration system with
deferred delivery of shares
9,500
9,500
0,00
Belén Garijo López
Fixed remuneration system with
deferred delivery of shares
62,126
62,126
15,722
15,722
0,00
Sunir Kumar Kapoor
Fixed remuneration system with
deferred delivery of shares
22,915
22,915
7,737
7,737
0,00
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
193
Lourdes Máiz Carro
Fixed remuneration system with
deferred delivery of shares
44,929
44,929
10,731
10,731
0,00
José Maldonado
Ramos
Fixed remuneration system with
deferred delivery of shares
108,568
108,568
15,416
15,416
0,00
Ana Cristina Peralta
Moreno
Fixed remuneration system with
deferred delivery of shares
15,665
15,665
10,731
10,731
0,00
Juan Pi Llorens
Fixed remuneration system with
deferred delivery of shares
92,817
92,817
23,079
23,079
0,00
Ana Leonor Revenga
Shanklin
Fixed remuneration system with
deferred delivery of shares
7,568
7,568
0,00
Susana Rodríguez
Vidarte
Fixed remuneration system with
deferred delivery of shares
141,138
141,138
20,237
20,237
0,00
Carlos Vicente
Salazar Lomelín
Fixed remuneration system with
deferred delivery of shares
5,642
5,642
0,00
Jan Paul Marie
Francis Verplancke
Fixed remuneration system with
deferred delivery of shares
12,392
12,392
9,024
9,024
0,00
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
194
In accordance with the CNMV's instructions for completing this Report, the amounts included in the "Financial instruments vested during the year" cell for the executive directors correspond to:
•Short-term variable remuneration: Upfront Portion of the 2021 AVR (40%) in shares (monetised), the payment of which is due in 2022.
Since these shares have not been delivered to their beneficiaries, for the purpose of calculating their cash value,  the same average price has been used as the one used to calculate the share
portion of the 2021 AVR. Thus, the average closing price of the BBVA share corresponding to the trading sessions between 15 December 2021 and 15 January 2022 has been taken as a
reference, which has been EUR 5.33 per share.
•Long-term variable remuneration: (i) in the case of the Chairman and the Chief Executive Officer, the Deferred Portion of the 2018 DAVR in shares (monetised), the payment of which is due
in 2022 (60% of the 2018 DAVR in the case of the Chairman and all 2018 DAVR in the case of the Chief Executive Officer); and (ii) in the case of the Chairman, the second payment of the
Deferred Portion of the 2017 DAVR in shares (monetised), which is due in 2022 (20% of the 2017 DAVR).
Since these shares have not been delivered to their beneficiaries, for the purpose of calculating their cash value, the same average price has been used as the one used to calculate the share
portion of the 2021 AVR. Thus, the average closing price of the BBVA share corresponding to the trading sessions between 15 December 2021 and 15 January 2022 has been taken as a
reference, which has been EUR 5.33 per share.
The price initially used to determine the number of shares corresponding to the Deferred Portion of the 2018 and 2017 AVR, in accordance with the policies applicable in those financial
years, was the average closing price of the BBVA share from the trading sessions between 15 December 2018 and 15 January 2019 and  between 15 December 2017 and 15 January 2018 ,
respectively. In the case of 2018 DAVR, this was EUR 4.77 per share, and in the case of 2017 DAVR, this was EUR 7.25 per share.
In relation to non-executive directors, the figures included in the "Financial instruments at start of year 2021" cell correspond to the "theoretical shares" which, in accordance with the Fixed
remuneration system with deferred delivery of BBVA shares, as set out in sections 3.1. and 4.2. of this Report, were accumulated at the beginning of the 2021 financial year. However, these
"theoretical shares" do not constitute a financial instrument, they are not listed on any market, and they are not available to directors.
The "Financial instruments granted during year 2021" cell includes the "theoretical shares" allocated to each of them in that financial year (equivalent to 20% of the total annual fixed allowance in
cash received by each of them in 2020). These "theoretical shares" have not been delivered since, in accordance with the provisions of the Policy, they will only be delivered following cessation as
director for any reason other than a serious dereliction of duties.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
195
iii) Long-term savings schemes
Remuneration from vesting of rights to savings schemes
No data
Contribution for the year by the company (EUR thousand)
Amount of accumulated funds (EUR thousand)
Name
Savings schemes with vested economic rights
Savings schemes with non-vested economic
rights
Year 2021
Year 2020
Year 2021
Year 2020
Year 2021
Year 2020
Schemes with vested
economic rights
Schemes with non-
vested economic
rights
Schemes with vested
economic rights
Schemes with non-
vested economic
rights
Carlos Torres Vila
914
2,034
24,546
23,057
Onur Genç
295
253
Contributions registered to fulfil pension-related commitments assumed in favour of executive directors in 2021 are included. For the Chairman, these contributions correspond to the sum of the
annual contribution to the retirement pension, once deducted the adjustment made to the "discretionary pension benefits" for the 2020 financial year to be registered in the 2021 financial year
(following the close of the 2020 financial year) and the premiums to cover the contingencies of death and disability. For the Chief Executive Officer, the contributions registered correspond
exclusively to the premiums to cover the contingencies of death and disability, given that, in his case, the Bank has not undertaken any commitments to cover the contingency of retirement.
iv) Details of other items (
Name
Concept
Amount of remuneration
Onur Genç
Mobility allowance
600
Onur Genç
Fixed "cash in lieu of pension" allowance
654
This remuneration corresponds to the commitments undertaken with the Chief Executive Officer as set out in the Policy, concerning the payment of an annual cash sum in lieu of the provision of a
contribution to cover the contingency of retirement (cash in lieu of pension), of an  amount equivalent to 30% of the Annual Fixed Remuneration in force at any given time; and an annual cash amount
for the mobility allowance.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
196
b) Remuneration of directors of the listed company for seats on the boards of other subsidiary companies:
i) Remuneration accrued in cash (thousands of euros)
Name
Fixed
remuneration
Attendance
fees
Remuneration for
membership of board
committees
Salary
Short-term variable
remuneration
Long-term variable
remuneration
Indemnification
Other items
Total year
2021
Total year
2020
Carlos Salazar Lomelín
101
101
138
These remunerations correspond to attendance fees to the meetings of the board of directors of BBVA Bancomer, S.A. de C.V. and Grupo Financiero BBVA México, S.A. de C.V., as well to the strategic
forum of BBVA Bancomer, S.A. de C.V.  during 2020 and 2021 financial years. For its conversion to euros the average exchange rate (PMX/EUR) of 2020 (0.04076) and 2021 (0.04169), respectively,
has been applied.
ii) Table of changes in share-based remuneration schemes and gross profit from vested shares or financial instruments
Name
Name of plan
Financial instruments at
start of year 2021
Financial instruments
granted during year
2021
Financial instruments vested during the year
Instruments
expired but
not
exercised
Financial instruments at
end of year 2021
No. of
instruments
No. of
equivalent
shares
No. of
instruments
No. of
equivalent
shares
No. of
instruments
No. of
equivalent/
vested
shares
Price of
vested
shares
Gross profit from
vested shares or
financial
instruments (EUR
thousand)
No. of
instruments
No. of
instruments
No. of
equivalent
shares
No data
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
197
iii) Long-term savings schemes
Remuneration from vesting of rights to savings schemes
No data
0
Contribution for the year by the company (EUR thousand)
Amount of accumulated funds (EUR thousand)
Name
Savings schemes with vested economic
rights
Savings schemes with non-vested economic rights
Year 2021
Year 2020
Year 2021
Year 2020
Year 2021
Year 2020
Schemes with vested
economic rights
Schemes with non-
vested economic rights
Schemes with vested
economic rights
Schemes with non-
vested economic
rights
No data
iv)  Details of other items
Name
Concept
Amount of remuneration
No data
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
198
c) Summary of remuneration (EUR thousand):
The summary of amounts corresponding to all remuneration items  accrued by the director included in this report should be included, in EUR thousand.
Remuneration accrued in the Company
Remuneration accrued in group companies
Name
Total cash
remuneration
Gross profit  from
vested shares or
financial instruments
Remuneratio
n by way of
savings
systems
Other items
of
remuneratio
n
Total in
year 2021
company
Total cash
remuneration
Gross profit from
vested shares or
financial instruments
Remunerati
on by way
of savings
systems
Other items of
remuneration
Total in
year
2021
group
Total in year
2021 company
+ group
Carlos Torres Vila
4,611
1,570
6,181
6,181
Onur Genç
3,314
972
1,254
5,540
5,540
José Miguel Andrés Torrecillas
535
535
535
Jaime Félix Caruana Lacorte
568
568
568
Raúl Catarino Galamba de
Oliveira
279
279
279
Belén Garijo López
363
363
363
Sunir Kumar Kapoor
172
172
172
Lourdes Máiz Carro
257
257
257
José Maldonado Ramos
358
358
358
Ana Cristina Peralta Moreno
246
246
246
Juan Pi Llorens
531
531
531
Ana Leonor Revenga Shanklin
236
236
236
Susana Rodríguez Vidarte
465
465
465
Carlos Vicente Salazar Lomelín
172
172
101
101
273
Jan Paul Marie Francis
Verplancke
215
215
215
Total
12,322
2,542
1,254
16,118
101
101
16,219
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
199
C.2 Indicate the evolution in the last five years of the amount and percentage variation of the remuneration accrued by each of the directors of the listed
company who have held this position during the year, the consolidated results of the company and the average remuneration on an equivalent basis with
regard to full-time employees of the company and its subsidiaries that are not directors of the listed company.
Total amounts accrued (EUR thousand) and % annual variation
Year 2021
% variation
2021/2020
Year 2020
% variation
2020/2019
Year 2019
% variation
2019/2018
Year 2018
% variation
2018/2017
Year 2017
Executive directors
Carlos Torres Vila
6,181
79.84
3,437
-31.44
5,013
18.99
4,213
-13.95
4,896
Onur Genç
5,540
37.26
4,036
-19.04
4,985
0.00
0
0.00
0
External directors
José Miguel Andrés Torrecillas
535
3.88
515
5.10
490
-0.61
493
6.71
462
Jaime Félix Caruana Lacorte
568
0.00
568
7.78
527
122.36
237
0.00
0
Raúl Catarino Galamba de Oliveira
279
32.86
210
0.00
0
0.00
0
000
0
Belén Garijo López
363
0.55
361
-0.28
362
6.47
340
16.44
292
Sunir Kumar Kapoor
172
0.00
172
0.00
172
0.00
172
0.00
172
Lourdes Máiz Carro
257
0.39
256
-4.12
267
-10.40
298
6.81
279
José Maldonado Ramos
358
0.28
357
0.85
354
-12.38
404
-1.94
412
Ana Cristina Peralta Moreno
246
0.00
246
-0.40
247
68.03
147
0.00
0
Juan Pi Llorens
531
0.76
527
3.94
507
7.64
471
10.56
426
Ana Leonor Revenga Shanklin
236
40.48
168
0.00
0
0.00
0
0.00
0
Susana Rodríguez Vidarte
465
0.22
464
0.65
461
0.88
457
0.22
456
Carlos Vicente Salazar Lomelín
273
3.41
264
0.00
0
0.00
0
0.00
0
Jan Paul Marie Francis Verplancke
215
6.97
201
16.86
172
30.30
132
0.00
0
Company consolidated results
7,246,568
38.09
5,247,609
-17.99
6,398,491
-24.24
8,446,248
21.86
6,930,961
Average  remuneration of employees
34
17.24
29
-25.64
39
5.41
37
-5.13
39
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
200
In accordance with the CNMV's instructions for completion of this Report, the following is included:
•In the "Director remuneration" cells, the total remuneration received from the Company has been recorded for each financial year, together with that received from its subsidiary companies,
i.e. the total in table C.1. c) of this section. This leads to a difference, in terms of comparability, between the remuneration of executive directors and the average remuneration of employees. The
average remuneration of employees has been calculated, in accordance with the CNMV Instructions for the completion of this Report, taking into consideration the full amount of the AVR for
each year (without considering the deferral of a portion of that remuneration, in the case of some employees), while the remuneration of executive directors has been calculated taking into
consideration the amount of the vested AVR for each year (only the Upfront Portion of the AVR for the last year ended, the payment of which falls due the following year) and the vested
deferred AVR for previous years.
•Significant variations in the remuneration of directors arise from the following factors:
–In the case of the increase in the remuneration of executive directors between 2020 and 2021, the variation is due to the fact that in 2020 the executive directors did not accrue AVR as a
result of their voluntary waiver due to the exceptional circumstances arising from the COVID-19 crisis. Moreover, in the case of the Chairman, the variation reflects the transformation of
his pension scheme by virtue of the new Directors' Remuneration Policy, which implied the reduction of the pension contribution and the redistribution of the corresponding amount
between Annual Fixed Remuneration and “Target” Annual Variable Remuneration items.
–In the case of the variation in the remuneration of executive directors between 2020 and 2019, the variation is also due to the waiver in 2020 of the 2020 AVR.
–In the case of the change in the remuneration of non-executive directors between the 2019 and 2018 financial years, the variation arises from the changes introduced to the Bank's
Corporate Governance System in 2019, coming as a result of the establishment of a fixed remuneration for the roles of Deputy Chair and Lead Director and the reorganisation of the
functions of some of the Board Committees, as well as changes in their composition. In particular, in the case of the non-executive director Jaime Caruana Lacorte, the change is due to his
appointment as Chair of the Audit Committee in 2019.
–In the case of the variations in the remuneration of the non-executive directors Raul Galamba de Oliveira, Ana Revenga Shanklin and Carlos Salazar Lomelín between 2020 and 2021,
these are due to the fact that they were appointed at the General Meeting in 2020 and, consequently, in that year, they did not hold office for the full year.
•The "Company  results" cell includes profit before tax in the drafted and audited consolidated annual financial statements for each financial year.
•In the "Average employee remuneration" cell, the average remuneration of employees calculated as the ratio between the figure for remuneration accrued by staff for each financial year
(excluding the remuneration of directors) and the weighted average number of employees (excluding the directors) calculated on a full-time equivalent basis. All employees who have been
employees of the Company or any of its subsidiary companies (BBVA Group) at any time during each financial year have been included in the calculation of this ratio.
For greater transparency and a better understanding, Section 4.4.of this Report also provides data on the average remuneration of BBVA, S.A. employees in Spain (which in 2021 was of EUR 73
thousand), which is where the Company has its registered office and headquarters.  The BBVA Group is an international financial group with a broad geographical diversification, with a presence in
many emerging countries, mainly in Latin America and South America, where remuneration is adapted to the local cost of living and, therefore, is lower than that received in Spain, where the directors
of BBVA, S.A. perform their duties and carry out their functions. The comparison between the remuneration of the directors of BBVA, S.A., which is the subject of this Report, and the average
remuneration of the workforce, is therefore distorted if the average at the consolidated level of the BBVA Group is taken into account, since these are not comparable figures due to the geographical
diversification of the Group.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
201
This Annual Remuneration Report has been approved by the Board of Directors of the company in its meeting of 9 February 2022.
Indicate whether any director voted against or abstained from approving this Report: NO
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
202
6.Directors' Remuneration Policy applicable in 2022
The remuneration policy applicable to BBVA directors in 2022 is the Directors' Remuneration Policy
approved by the General Meeting held on 20 April 2021 (applicable during the 2021, 2022 and 2023
financial years), the outline and main characteristics of which have already been set out in section 3 of this
Report, with no changes having been resolved for the 2022 financial year.
This Policy is available on the Bank's website13.
In accordance with the remuneration system applicable to BBVA directors, as set out in this Report and
contained in the Directors' Remuneration Policy, the specific conditions applicable to the current financial
year are detailed below. 13
6.1. 2022 Remuneration of non-executive directors
A.Fixed annual allocation
The Board of Directors has not approved changes for 2022 with respect to the remuneration amounts for
non-executive directors approved at its meeting of 29 May 2019, at the proposal of the Remuneration
Committee. These amounts will be maintained until a new resolution is adopted by the Board:
Position
EUR thousand
Member of the Board of Directors
129
Member of the Executive Committee
167
Chair of the Audit Committee
165
Member of the Audit Committee
66
Chair of the Risk and Compliance Committee
214
Member of the Risk and Compliance Committee
107
Chair of the Remuneration Committee
107
Member of the Remuneration Committee
43
Chair of the Appointments and Corporate Governance Committee
115
Member of the Appointments and Corporate Governance Committee
46
Chair of the Technology and Cybersecurity Committee*
107
Member of the Technology and Cybersecurity Committee
43
Deputy Chair
50
Lead Director
80
*At the date of this Report, the position of Chair of the Technology and Cybersecurity Committee is not remunerated as the Chairman
of the Board of Directors serves in this role.
The details of the amounts paid for this item during the current financial year will be included in the Annual
Report on the Remuneration of Directors to be submitted to the General Meeting to be held next financial
year.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
203
13 www.bbva.com
B.Remuneration in kind
Under the Policy, the Bank will pay the corresponding insurance premiums in 2022 that will be allocated to
directors as remuneration in kind.
The details of the amounts paid in kind during the current financial year will be included in the Annual Report
on the Remuneration of Directors to be submitted to the General Meeting to be held next financial year.
C.Fixed remuneration system with deferred delivery of BBVA shares
In accordance with the fixed remuneration system with deferred delivery of BBVA shares to non-executive
directors, the number of "theoretical shares" to be allocated to each non-executive director in 2022 will be
equivalent to 20% of the total annual fixed allowance in cash received in 2021. The average closing price of the
BBVA share during the 60 trading sessions prior to the date of the Annual General Shareholders' Meeting that
approves the financial statements for the 2021 financial year will be used to calculate the number of
"theoretical shares".
Detail regarding the "theoretical shares" allocated during the current financial year will be included in the
Annual Report on the Remuneration of Directors to be submitted to the General Meeting to be held next
financial year.
6.2. 2022 Remuneration of executive directors
A.FIXED REMUNERATION
a)Annual Fixed Remuneration
The Annual Fixed Remuneration of individual executive directors is determined by the Remuneration
Committee and submitted to the Board for approval. In accordance with the Policy, to determine this, and any
possible updates to it, the Remuneration Committee takes into account the duties assigned to, and the level of
responsibility of, each executive director. In addition, it takes into account market analyses prepared by
leading independent consultancy firms for the purpose of establishing remuneration that is commensurate to
the duties that they perform, that is competitive in the market and that is aligned with that of comparable
institutions, as well as considering other factors, such as the average increases in the annual fixed
remuneration of members of the Bank's Senior Management.
Pursuant to the foregoing, the Board of Directors has not adopted any resolution to amend the amounts of
Annual Fixed Remuneration for executive directors in 2022. Therefore, as set out in the Policy, these
amounts are as follows:
2022 Annual Fixed Remuneration (EUR thousand)
Chairman
2,924
Chief Executive Officer
2,179
These amounts will be maintained until a new resolution is adopted by the Board of Directors.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
204
The theoretical relative proportion between the main fixed and variable components of the
remuneration of executive directors for 2022 is, equally, that set out in the Policy and detailed in section 3.3
of this Report:
Executive director
Position
Annual Fixed
Remuneration
“Target” Annual Variable
Remuneration
Carlos Torres Vila
Chairman
45%
55%
Onur Genç
Chief Executive Officer
45%
55%
In any event, the variable component of the remuneration for 2022 shall be limited to a maximum amount of
100% of the fixed component of total remuneration, unless the next BBVA Annual General Shareholders'
Meeting approves the proposed resolution corresponding to item eight of the Agenda attached of notice of
meeting and increases this percentage, up to a maximum of 200%.
b)Remuneration in kind and other benefits
Executive directors are beneficiaries under accident and healthcare insurance policies taken out by the Bank,
which pays the corresponding premiums, which are allocated to the directors as remuneration in kind. The
Bank also provides executive directors with benefits that apply to the Bank's Senior Management.
The details of the amounts paid in 2022 for the aforementioned items will be included in the Annual Report on
the Remuneration of Directors to be submitted to the General Meeting to be held next financial year.
c)Pension system contributions
In accordance with the Policy, the Bank has not assumed any pension commitments in favour of the non-
executive directors.
With regard to executive directors, the remuneration and economic rights and compensations of each
executive director are included in their respective contracts, which are approved by the Board of Directors.
The main terms and conditions of the executive directors’ contracts are outlined in section 3.3.2 of this
Report.
As of the date of this Report, these contracts have not been modified, meaning that the same conditions as
those applicable in 2021 remain in force regarding pension contributions.
The amounts of contributions and insurance premiums paid in 2022 under these systems will be detailed in
the Annual Report on the Remuneration of Directors for said financial year. 
d)Other fixed allowances of the Chief Executive Officer
As indicated in section 3.3.2. above, in accordance with the provisions of the Policy, the Chief Executive
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
205
Officer is entitled under his contract to the following fixed remuneration:
•An annual cash amount, in lieu of a retirement benefit ("cash in lieu of pension"), equal to 30% of the
Annual Fixed Remuneration.
•An annual cash sum as a mobility allowance, in line with potential commitments made in favour of other
expatriate members of Senior Management, the amount of which has been set at EUR 600 thousand
per year.
The amount paid for this in 2022 will be detailed in the Annual Report on the Remuneration of Directors for
said financial year.
B. VARIABLE REMUNERATION
(a)2022 Annual Variable Remuneration
As specified in sections 3.3. and 4.3., the Annual Variable Remuneration of executive directors, in line with the
model applicable to the rest of the Group's employees, consists of a variable incentive awarded on an annual
basis and which reflects their performance. This is measured through the achievement of a set of targets
established to evaluate the results obtained in each financial year for a series of Annual Performance
Indicators that take into account the strategic priorities established by the Group and the risk incurred.
The Annual Variable Remuneration of each executive director is calculated on the basis of a “Target” Annual
Variable Remuneration determined by the Board of Directors on the proposal of the Remuneration
Committee, which represents the amount of the Annual Variable Remuneration in the event that 100% of the
previously established targets are reached.
For 2022, the amounts of the “Target” Annual Variable Remuneration are the same as for 2021:
2022 “Target” Annual Variable Remuneration (EUR thousand)
Chairman
3,572
Chief Executive Officer
2,672
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
206
2022 AVR Annual Performance Indicators
No changes have been approved for the Annual Performance Indicators for the calculation of the 2022
AVR, with respect to those approved in 2021.
The Annual Performance Indicators established for the purpose of calculating the Annual Variable
Remuneration for 2022, approved by the Board of Directors on the proposal of the Remuneration Committee,
are as follows:
Type
2022 AVR Annual Performance Indicators
Chairman
Chief Executive
Officer
Weighting
Financial
indicators
Results
Attributable profit (excluding corporate
transactions)
10%
15%
(TBV) Tangible Book Value per share
15%
10%
Profitability
RORC
10%
10%
Efficiency
Efficiency ratio
10%
15%
Non-financial
indicators
Customer satisfaction
NPS
10%
15%
Sustainable development
Mobilisation of sustainable financing
10%
10%
Transformation
Digital sales
10%
10%
Individual indicators
25%
15%
The financial indicators are aligned with the Group's most relevant management metrics, which correspond to the
strategic priorities defined by the Institution, with their weighting being adjusted based on each executive director's
respective duties. These relate, inter alia, to the capacity to generate profits, efficiency, return on capital, value creation
and current and future risks implicit in results.
In turn, the non-financial indicators relate to the degree of customer satisfaction, sustainable development and
the rest of the Group's strategic priorities. With regard to individual indicators, which will be approved by the Board
of Directors on the proposal of the Remuneration Committee, these will relate to the duties and responsibilities of each
executive director and, therefore, will be related to the specific dimensions associated therewith.
The financial and non-financial annual performance indicators, including individual indicators, are directly
related to the Bank's strategic priorities:
Improving our clients' financial health
NPS
Driving operational excellence
Efficiency ratio, RORC, TBV, Attributable profit
and Digital Sales
Helping our clients transition toward a
sustainable future
Mobilisation of sustainable financing
The best and most engaged team
Individual indicators
Reaching more clients
Individual indicators
Data and Technology
Individual indicators
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
207
Each Annual Performance Indicator will have an associated target and scales of achievement for said
target14, approved by the Board of Directors on the proposal of the Remuneration Committee, which, in the
case of financial indicators, will take into account budgetary compliance. The scales of achievement are based
on the “Target” Annual Variable Remuneration, which, as indicated above, represents the amount of the
Annual Variable Remuneration in the event that 100% of the previously established targets are reached.
The amount received as Annual Variable Remuneration through the application of the corresponding scales
of achievement ranges from 0% - 150% of the “Target” Annual Variable Remuneration, meaning that the
theoretical maximum potential AVR of each executive director is limited to 1.5 times their “Target”
Annual Variable Remuneration.
The 2022 Annual Variable Remuneration shall be subject to the rules on its award, vesting and payment
established in the Policy and described in sections 3.3. and 4.3. of this Report.
As such, the Deferred Portion (60% of the AVR) will be deferred for a period of 5 years and paid, if the
applicable conditions are met (and following any implied or express adjustments that may apply), at the end of
each year for each of the 5 years of deferral in an amount equal to 20% (20% in 2024, 20% in 2025, 20% in
2026, 20% in 2027 and 20% in 2028).
The Deferred Portion may be reduced, but never increased, based on the results of the pre-established Multi-
year Performance Indicators, which will be measured over a 3-year period (2023 - 2025). As such, once the
third year of deferral has ended, the result of the Multi-year Performance Indicators shall determine the
application of the explicit ex post adjustments that, if appropriate, should be made on the outstanding amount
of the Deferred Portion of the Annual Variable Remuneration.
2022 AVR Multi-year Performance Indicators
The Multi-year Performance Indicators for the Deferred Portion of the 2022 Annual Variable Remuneration
of the executive directors, approved by the Board of Directors on the proposal of the Remuneration
Committee and following analysis of the Risk and Compliance Committee, remain without changes with
respect to those approved in 2021:
Multi-year Performance Indicators, Deferred Portion of 2021 AVR
Weighting
Capital
Common Equity Tier 1 (CET1) Fully Loaded
40%
Liquidity
Liquidity Coverage Ratio (LCR)
20%
Profitability
Return On Tangible Equity (ROTE)
30%
Creation of Value
Total Shareholder Return (TSR)
10%
The Multi-year Performance Indicators are aligned with the Group's core risk management and control metrics and
relate to capital, liquidity, profitability and the creation of value for the Group. They have associated scales of
achievement such that, if the thresholds established for each of them during the measurement period spanning the
first three years of deferral (2023 - 2025) are not met, the Deferred Portion of the 2022 Annual Variable
Remuneration that remains outstanding may be decreased, but never increased.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
208
14 The only objectives that do not have associated scales of achievement are those specified for the Individual Indicators, because
performance is measured via an overall assessment that takes into account both overall performance and the performance of certain
indicators used as benchmarks.
The performance of the TSR indicator will be measured and compared against that of the peer group approved by the
Board of Directors on the proposal of the Remuneration Committee (Annex 1) over the referred three-year
measurement period from 1 January 2023 to 31 December 2025. 
The scale defined for the TSR indicator will determine any reduction, as the case may be, of the deferred amounts
associated therewith. This will occur where, following the three-year measurement period, the result of this indicator
places BBVA below the median of the peer group.
In addition, the amount of the 2022 Deferred AVR paid in shares that ultimately vests will, in any event,
incorporate the implied adjustments inherent to the fluctuations of the BBVA share price.
In addition, the remaining vesting and payment rules for the Annual Variable Remuneration for executive
directors set forth in the Policy will apply to the 2022 Annual Variable Remuneration, which include: (i) the
withholding of shares received for one year; (ii) insurance or hedging prohibitions; (iii) criteria for updating the
cash portion; (iv) malus and clawback clauses for 100% of the AVR; and (v) limitation of the variable
remuneration to 100% of the fixed component of the total remuneration amount, unless the General Meeting
resolves to increase the same up to a maximum of 200%.
As such, the Policy includes different measures to reduce exposure to excessive risk and adjust remuneration
to the Institution's long-term interests, as outlined in sections 2 and 3 of this Report, as part of the description
of the variable remuneration system applicable to Identified Staff and to executive directors, including the
specific rules on the vesting and payment of Annual Variable Remuneration.
6.3. Other matters relating to the 2022 financial year
A.Payments for the termination of the contractual relationship
The Bank has undertaken no commitments to pay remuneration to its directors for the termination of the
contractual relationship, nor has the Bank made any other payment commitments resulting from the early
cessation of their positions, other than what is set forth in this Report.
B.Post-contractual non-competition agreement
As indicated in section 3.3.2., the contracts of executive directors establish post-contractual non-competition
agreements, the details of which are reflected in the Directors' Remuneration Policy.
C.Loans, advances and guarantees
Directors are not awarded any remuneration in the form of or resulting from advances, loans or guarantees.
D.Remuneration paid by other Group companies
The breakdown of the amounts, if any, that are paid in this regard will be included in the Annual Report on the
Remuneration of Directors that will be submitted to the General Meeting to be held next financial year.
At the date of this Report, there are no remuneration items other than those previously described. No
additional remuneration, or remuneration other than that indicated in this Report is expected to be accrued by
directors during the current financial year.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
209
ANNEX 1
Peer group for remuneration purposes
Banco Santander
Spain
CaixaBank
Spain
BNP Paribas
France
Société Générale
France
Barclays
United Kingdom
HSBC
United Kingdom
Lloyds Banking Group
United Kingdom
Deutsche Bank
Germany
Commerzbank
Germany
Unicredito Italiano
Italy
Intesa San Paolo
Italy
ING Group
Netherlands
Scotiabank
Canada
Banorte
Mexico
This group of peer entities, approved by the Board of Directors, on the proposal of the Remuneration
Committee, in 2021, is used for the purpose of establishing remuneration that is commensurate to the role
performed by the directors and that is competitive with the remuneration received for equivalent roles across
the Bank's main peer institutions. It is also the group that will be used for the purpose of the TSR Multi-year
Performance Indicator corresponding to the 2021 Deferred Annual Variable Remuneration.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
210
ANNEX 2
Peer group for the purpose of the TSR indicator for the 2018 Deferred
AVR
Banco Santander
Spain
BNP Paribas
France
Société Générale
France
Barclays
United Kingdom
HSBC
United Kingdom
Lloyds Banking Group
United Kingdom
Deutsche Bank
Germany
Commerzbank
Germany
Unicredito Italiano
Italy
Intesa San Paolo
Italy
Bank of America
U. S.
Citigroup
U. S.
Wells Fargo
U. S.
Scotiabank
Canada
ING Group
Netherlands
This group of peer entities is the group used for the purposes of the TSR Multi-year Performance Indicator
corresponding to the 2018 Deferred Annual Variable Remuneration of executive directors, in accordance
with that approved by the Board of Directors at its meeting of 11 February 2019.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
211
ANNEX 3
Alignment with the Format set out in Circular 4/2013
Below is a table of equivalences detailing the location in this Report of the contents set forth in the Model of
the Annual Report on Remuneration of Directors of Listed Companies contained in Annex I of CNMV Circular
4/2013 as modified by CNMV Circular 3/2021.
Sections of the template set out in CNMV Circular 4/2013 Annex I
Report on the Remuneration of BBVA
Directors
A.REMUNERATION POLICY OF THE COMPANY FOR THE CURRENT FINANCIAL YEAR
A.1.1 Explain the current director remuneration policy applicable to the year in progress. To the extent
that it is relevant, certain information may be included in relation to the remuneration policy approved
by the General Shareholders' Meeting, provided that these references are clear, specific and concrete.
Such specific determinations for the current year as the board may have made in accordance with the
contracts signed with the executive directors and with the remuneration policy approved by the
General Shareholders' Meeting must be described, as regards directors' remuneration both in their
capacity as such and for executive duties carried out.
In any case, the following aspects must be reported, as a minimum:
a) Description of the procedures and company bodies involved in determining, approving and applying
the remuneration policy and its terms and conditions.
b) Indicate and, where applicable, explain whether comparable companies have been taken into
account in order to establish the company's remuneration policy.
c) Information on whether any external advisors took part in this process and, if so, their identity.
d) Procedures set forth in the current remuneration policy for directors in order to apply temporary
exceptions to the policy, conditions under which those exceptions can be used and components that
may be subject to exceptions according to the policy.
A1.2 Relative importance of variable remuneration items vis-à-vis fixed remuneration (remuneration
mix) and the criteria and objectives taken into consideration in their determination and to ensure an
appropriate balance between the fixed and variable components of the remuneration.
In particular, indicate the actions taken by the company in relation to the remuneration system to
reduce exposure to excessive risks and to align it with the long-term objectives, values and interests of
the company, which will include, as the case may be, mention of the measures taken to ensure that the
long-term results of the company are taken into account in the remuneration policy, the measures
adopted in relation to those categories of personnel whose professional activities have a material
impact on the risk profile of the company and measures in place to avoid conflicts of interest.
Furthermore, indicate whether the company has established any period for the accrual or vesting of
certain variable remuneration items, in cash, shares or other financial instruments, any deferral period
in the payment of amounts or delivery of accrued and vested financial instruments, or whether any
clause has been agreed reducing the deferred remuneration not yet vested or obliging the director to
return remuneration received, when such remuneration has been based on figures that have since been
clearly shown to be inaccurate.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
212
A.1.3 Amount and nature of fixed components that are due to be accrued during the year by directors
in their capacity as such.
Section 6.1. 2022 Remuneration
reference, Section 4.2.
A.1.4 Amount and nature of fixed components that are due to be accrued during the year for the
performance of senior management functions of executive directors.
Section 6.2. 2022 Remuneration
of executive directors, and by reference,
Section 4.3. Remuneration
A.1.5 Amount and nature of any component of remuneration in kind that will accrue during the year,
including, but not limited to, insurance premiums paid in favour of the director.
Section 6.1. 2022 Remuneration
reference 4.2. Remuneration
2021, and Section 6.2. 2022
and by reference, Section  4.3.
A.1.6 Amount and nature of variable components, differentiating between those established in the
short and long terms.
Financial and non-financial, including social, environmental and climate change parameters selected to
determine variable remuneration for the current year, explaining the extent to which these parameters
are related to performance, both of the director and of the company, and to its risk profile, and the
methodology, necessary period and techniques envisaged to be able to determine the effective degree
of compliance, at the end of the year, with the parameters used in the design of the variable
remuneration, explaining the criteria and factors applied in regard to the time required and methods of
verifying that the performance or any other conditions linked to the accrual and vesting of each
component of variable remuneration have effectively been met.
Section 6.2. 2022 Remuneration
of executive directors, subsection B. a)
(Annual Variable Remuneration) and, by
reference, Section 4.3.
directors in 2021 subsection B. b.)
(Annual Variable Remuneration)
Indicate the range, in monetary terms, of the different variable components according to the degree of
fulfilment of the objectives and parameters established, and whether any maximum monetary amounts
exist in absolute terms.
Section 6.2. 2022 Remuneration
of executive directors, sub-section B. a)
(Annual Variable Remuneration).
A.1.7 Main characteristics of long-term savings schemes. Among other information, indicate the
contingencies covered by the scheme, whether it is a defined contribution or a defined benefit scheme,
the annual contribution that has to be made to defined contribution schemes, the benefits to which
directors are entitled in the case of defined benefit schemes, the vesting conditions of the economic
rights of directors and their compatibility with any other type of payment or indemnification for early
termination or dismissal, or deriving from the termination of the contractual relationship, in the terms
provided, between the company and the director.
Indicate whether the accrual or vesting of any of the long-term savings plans is linked to the attainment
of certain objectives or parameters relating to the director's short- or long-term performance.
Section 6.2. 2022 Remuneration
of executive directors , subsection A. c)
(Pension system contributions) and by
reference, Section 3.3.2. Main terms and
A.1.8 Any type of payment or indemnification for early termination or dismissal, or deriving from the
termination of the contractual relationship, in the terms provided, between the company and the
director, whether at the company's or the director's initiative, as well as any type of agreement
reached, such as exclusivity, post-contractual non competition, minimum contract term or loyalty, that
entitles the director to any kind of remuneration.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
213
A.1.9 Indicate the conditions that the contracts of executive directors performing senior management
functions should contain. Among other things, information must be provided on the duration, limits on
amounts of indemnification, minimum contract term clauses, notice periods and payment in lieu of
these notice periods, and any other clauses relating to signing bonuses, as well as remuneration or
golden parachute clauses for early termination of the contractual relationship between the company
and the executive director. Include, among others, the pacts or agreement on noncompetition,
exclusivity, minimum contract terms and loyalty, and post-contractual non-competition, unless these
have been explained in the previous section.
A.1.10 The nature and estimated amount of any other supplementary remuneration that will be
accrued by directors in the current year in consideration for services rendered other than those
inherent in their position.
A.1.11 Other items of remuneration such as any deriving from the company's granting the director
advances, loans or guarantees or any other remuneration.
A.1.12 The nature and estimated amount of any other planned supplementary remuneration to be
accrued by directors in the current year that is not included in the foregoing sections, whether paid by
the company or by another group company.
Section 6.3. Other matters
As of the date of this Report, there are
no remuneration items other than those
described.
A.2 Explain any significant change in the remuneration policy applicable in the current year resulting
from:
a) A new policy or an amendment to a policy already approved by the General Meeting.
b) Significant changes in the specific determinations established by the board for the current year
regarding the remuneration policy in force with respect to those applied in the previous year.
c) Proposals that the Board of Directors has agreed to submit to the general shareholders' meeting to
which this annual report will be submitted and for which it is proposed that they be applicable to the
current year.
have been resolved for the 2022
financial year with regard to the Policy
applicable in 2021, which was approved
by the General Meeting on 20 April
2021.
A.3 Identify the direct link to the document containing the company's current remuneration policy,
which must be available on the company's website.
A.4 Explain, taking into account the data provided in Section B.4, how account has been taken of the
voting of shareholders at the General Shareholders' Meeting to which the annual report on
remuneration for the previous year was submitted on a consultative basis.
A.OVERALL SUMMARY OF HOW THE REMUNERATION POLICY WAS APPLIED DURING THE YEAR LAST ENDED
B.1.1 Explain the process followed to apply the remuneration policy and determine the individual
remuneration contained in Section C of this report.
This information will include the role played by the remuneration committee, the decisions taken by
the Board of Directors and the identity and role of any external advisors whose services may have been
used in the process of applying the remuneration policy in the year last ended.
Section 4.1. Activity carried out
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
214
B.1.2 Explain any deviation from the procedure established for the application of the remuneration
policy that has occurred during the year.
There was no deviation from the
procedure for the application of the
Policy in the financial year last ended.
B.1.3.
B.1.3 Indicate whether any temporary exception has been applied to the remuneration policy and, if so,
explain the exceptional circumstances that have led to the application of these exceptions, the specific
components of the remuneration policy affected and the reasons why the entity believes that these
exceptions have been necessary to serve the long-term interests and sustainability of the company as a
whole or ensure its viability.
Similarly, quantify the impact that the application of these exceptions has had on the remuneration of
each director over the year.
No temporary exception to the Policy
was applied during the financial year last
ended.
B.2 Explain the different actions taken by the company in relation to the remuneration system and how
they have contributed to reducing exposure to excessive risks, aligning it with the long-term objectives,
values and interests of the company, including a reference to the measures adopted to ensure that the
long-term results of the company have been taken into consideration in the remuneration accrued.
Ensure that an appropriate balance has been attained between the fixed and variable components of
the remuneration, the measures adopted in relation to those categories of personnel whose
professional activities have a material effect on the company's risk profile and the measures in place to
avoid any possible conflicts of interest.
B.3 Explain how the remuneration accrued and consolidated over the financial year complies with the
provisions of the current remuneration policy and, in particular, how it contributes to the company's
long-term and sustainable performance.
Furthermore, report on the relationship between the remuneration obtained by the directors and the
results or other performance measures of the company in the short and long term, explaining, if
applicable, how variations in the company's performance have influenced changes in directors'
remuneration, including any accrued remuneration payment of which has been deferred, and how such
remuneration contributes to the short- and long-term results of the company.
the Policy in 2021, in particular, section
4.3. Remuneration accrued by
C (Annual Variable Remuneration) and,
in particular, the Sections entitled
"Relationship between 2021 AVR and
results", "Vesting and payment rules
applicable to the 2021 AVR" and
"Relationship between 2018 Deferred
AVR and results".
B.4 Report on the result of the consultative vote at the General Shareholders' Meeting on the annual
report on remuneration in the previous year, indicating the number of votes in favour, votes against,
abstentions and blank ballots:
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
215
B.5 Explain how the fixed components accrued and vested during the year by the directors in their
capacity as such were determined, their relative proportion with regard to each director and how they
changed with respect to the previous year.
B.6 Explain how the salaries accrued and vested by each of the executive directors over the past
financial year for the performance of management duties were determined, and how they changed with
respect to the previous year.
Section 4.3. Remuneration
in particular, sub-section a) (2021
Annual Fixed Remuneration).
B.7 Explain the nature and the main characteristics of the variable components of the remuneration
systems accrued and vested in the year last ended.
In particular:
a) Identify each of the remuneration plans that determined the different types of variable
remuneration accrued by each of the directors in the year last ended, including information on their
scope, date of approval, date of implementation, any vesting conditions that apply, periods of accrual
and validity, criteria used to evaluate performance and how this affected the establishment of the
variable amount accrued, as well as the measurement criteria used and the time needed to be able to
adequately measure all the conditions and criteria stipulated, explaining the criteria and factors applied
in regard to the time required and the methods of verifying that the performance or any other kind of
conditions linked to the accrual and vesting of each component of variable remuneration have
effectively been met.
b) In the case of share options and other financial instruments, the general characteristics of each plan
must include information on the conditions both for acquiring unconditional ownership (vesting) of
these options or financial instruments and for exercising them, including the exercise price and period.
c) Each director that is a beneficiary of remunerations systems or plans that include variable
remuneration, and his or her category (executive director, external proprietary director, external
independent director or other external director).
d) Information is to be provided on any periods for accrual, vesting or deferment of payment of vested
amounts applied and/or the periods for retention/unavailability of shares or other financial
instruments, if any.
–Explain the short-term variable components of the remuneration systems
–Explain the long-term variable components of the remuneration systems
directors; and Section 4.3.
directors in 2021 and, in particular,
subsection B (Variable remuneration)
B.8 Indicate whether certain variable components have been reduced or clawed back when, in the
former case, payment of non-vested amounts has been deferred or, in the latter case, they have vested
and been paid, on the basis of data that have subsequently been clearly shown to be inaccurate.
Describe the amounts reduced or clawed back through the application of the "malus" (reduction) or
clawback clauses, why they were implemented and the years to which they refer.
Section 4.5. Other matters
In the 2021 financial year, the variable
remuneration of executive directors was
not reduced or clawed back.
B.9 Explain the main characteristics of the long-term savings schemes where the amount or equivalent
annual cost appears in the tables in Section C, including retirement and any other survivor benefit,
whether financed in whole or in part by the company or through internal or external contributions,
indicating the type of plan, whether it is a defined contribution or defined benefit plan, the
contingencies covered, the conditions on which the economic rights vest in favour of the directors and
their compatibility with any type of indemnification for early termination or cessation of the
contractual relationship between the company and the director.
Section 4.3. Remuneration
subsection A. c) (Contribution to pension
schemes 2021)
B.10 Explain, where applicable, the indemnification or any other type of payment deriving from the
early cessation, whether at the company's or the director's initiative, or from the termination of the
contract in the terms provided therein, accrued and/or received by directors during the year last
ended.
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
216
B.11 Indicate whether there have been any significant changes in the contracts of persons exercising
senior management functions, such as executive directors, and, if so, explain them. In addition, explain
the main conditions of the new contracts signed with executive directors during the year, unless these
have already been explained in Section A.1
B.12 Explain any supplementary remuneration accrued by directors in consideration of the provision of
services other than those inherent in their position.
Section 4.5. Other matters
As of the date of this Report, there are
no remuneration items other than those
described.
B.13 Explain any remuneration deriving from advances, loans or guarantees granted, indicating the
interest rate, their key characteristics and any amounts returned, as well as the obligations assumed on
their behalf by way of guarantee.
Section 4.5. Other matters
B.14 Itemise the remuneration in kind accrued by the directors during the year, briefly explaining the
nature of the various salary components.
Section 4.2. Remuneration
2021 subsection B (Remuneration in
kind); and Section 4.3.
directors in 2021 subsection A. b)
(Remuneration in kind and other
benefits 2021).
B.15 Explain the remuneration accrued by the director by virtue of payments made by the listed
company to a third company in which the director provides services when these payments seek to
remunerate the director's services to the company.
Section 4.5. Other matters
As of the date of this Report, there are
no remuneration items other than those
described.
B.16 Explain and detail the amounts accrued in the year in relation to any other remuneration concept
other than that set forth above, whatever its nature or the group entity that pays it, including all
benefits in any form, such as when it is considered a related-party transaction or, especially, when it
significantly affects the true image of the total remuneration accrued by the director. Explain the
amount granted or pending payment, the nature of the consideration received and the reasons for
those that it would have been considered, if applicable, that it does not constitute remuneration to the
director in their capacity as such or in consideration for the performance of their executive functions
and whether or not it has been considered appropriate to be included among the amounts accrued
under the "Other concepts" heading in Section C.
Section 4.5. Other matters
As of the date of this Report, there are
no remuneration items other than those
described.
C.ITEMISED INDIVIDUAL REMUNERATION ACCRUED BY EACH DIRECTOR
This English version is a translation of the original in Spanish for information purposes only. In case of discrepancy, the Spanish original shall prevail.
Annual Report on the Remuneration of BBVA Directors - 2021
217