Contents

FINANCIAL STATEMENTS

Balance sheets ....................................................................................................................................................................	1
Income Statements ...........................................................................................................................................................	4
Statements of recognized income and expenses ........................................................................................................	5
Statements of changes in equity .....................................................................................................................................	6
Statements of cash flows .................................................................................................................................................	8

NOTES TO THE ACCOMPANYING FINANCIAL STATEMENTS

1. Introduction, basis for presentation of the Financial Statements, Internal Control over Financial Information and other information .............................................................................................................................	9
2. Accounting policies and valuation criteria applied ..................................................................................................	11
3. Shareholder remuneration system ............................................................................................................................	29
4. Earnings per share .........................................................................................................................................................	32
5. Risk management ..........................................................................................................................................................	32
6. Fair value of financial instruments ..............................................................................................................................	69
7. Cash, cash balances at central banks and other demand deposits ....................................................................	81
8. Financial assets and liabilities held for trading .........................................................................................................	81
9. Non-trading financial assets mandatorily at fair value through profit or loss ....................................................	82
10. Financial assets and liabilities designated at fair value through profit or loss .................................................	82
11. Financial assets at fair value through other comprehensive income ................................................................	83
12. Financial assets at amortized cost ...........................................................................................................................	86
13. Hedging derivatives and fair value changes of the hedged items in portfolio hedges of interest rate risk	88
14. Investments in joint ventures and associates ........................................................................................................	91
15. Tangible assets .............................................................................................................................................................	94
16. Intangible assets ..........................................................................................................................................................	96
17. Tax assets and liabilities .............................................................................................................................................	96
18. Other assets and liabilities .........................................................................................................................................	99
19. Non-current assets and disposal groups classified as held for sale and liabilities included in disposal groups classified as held for sale ................................................................................................................................	100
20. Financial liabilities at amortized cost ......................................................................................................................	101
21. Provisions ......................................................................................................................................................................	105
22. Post-employment and other employee benefit commitments .........................................................................	106
23. Common stock .............................................................................................................................................................	111
24. Share premium ............................................................................................................................................................	112
25. Retained earnings, Revaluation reserves and Other ............................................................................................	113
26. Treasury shares ...........................................................................................................................................................	114
27. Accumulated other comprehensive income (loss) ...............................................................................................	115
28. Capital base and capital management ...................................................................................................................	115
29. Commitments and guarantees given .....................................................................................................................	119
30. Other contingent assets and liabilities ....................................................................................................................	119
31. Purchase and sale commitments and future payment obligations ...................................................................	119
32. Transactions on behalf of third parties ...................................................................................................................	120

33. Net interest income .....................................................................................................................................................	120
34. Dividend income ..........................................................................................................................................................	121
35. Fee and commission income .....................................................................................................................................	121
36. Fee and commission expense ...................................................................................................................................	121
37. Gains (losses) on financial assets and liabilities, hedge accounting and exchange differences, net ..........	122
38. Other operating income and expense .....................................................................................................................	123
39. Administration cost .....................................................................................................................................................	123
40. Depreciation ................................................................................................................................................................	125
41. Provisions or (reversal) of provisions ......................................................................................................................	126
42. Impairment or (reversal) of impairment on financial assets not measured at fair value through profit or loss or net gains by modification ...........................................................................................................................	126
43. Impairment or (reversal) of impairment on investments in subsidiaries, joint ventures or associates. ....	126
44. Impairment or reversal of impairment on non-financial assets .........................................................................	126
45. Gain (losses) from non-current assets and disposal groups classified as held for sale not qualifying as discontinued operations ...............................................................................................................................................	127
46. Statements of cash flows ..........................................................................................................................................	127
47. Accountant fees and services ...................................................................................................................................	127
48. Related-party transactions ........................................................................................................................................	128
49. Remuneration and other benefits for the Board of Directors and members of the Bank's Senior Management ...................................................................................................................................................................	130
50. Other information ........................................................................................................................................................	138
51. Subsequent events ......................................................................................................................................................	140
52. Explanation added for translation into English ......................................................................................................	140

APPENDICES

APPENDIX I.  BBVA Group Consolidated Financial Statements ...............................................................................	142
APPENDIX II.  Additional information on subsidiaries and structured entities composing the BBVA Group .	152
APPENDIX III.  Additional information on investments and jointly controlled companies accounted for under the equity method of consolidation in the BBVA Group as of December 31, 2023 ...................................	158
APPENDIX IV.  Changes and notification of investments and divestments in the BBVA Group in 2023 ..........	159
APPENDIX V.  Fully consolidated subsidiaries with more than 10% owned by non-Group shareholders as of December 31, 2023 .......................................................................................................................................................	161
APPENDIX VI.  BBVA Group’s structured entities. Securitization funds as of December, 31 2023 ..................	163
APPENDIX VII. Details of the outstanding subordinated debt and preferred securities issued by the Bank or entities in the Group consolidated as of December 31, 2023 and 2022 ............................................................	163
APPENDIX VIII. Balance sheets held in foreign currency as of December 31, 2023 and 2022 ...........................	164
APPENDIX IX.  Income statement corresponding to the first and second half of 2023 and 2022 ....................	165
APPENDIX X. Risks related to the developer and real-estate sector in Spain........................................................	166
APPENDIX XI. Refinanced and restructured operations and other requirements under Bank of Spain Circular 6/2012 ..................................................................................................................................................................	169
Appendix XII Agency Network .........................................................................................................................................	174
Glossary ...............................................................................................................................................................................	177

MANAGEMENT REPORT

DISCLAIMER

BANCO BILBAO VIZCAYA ARGENTARIA, S.A.

Balance sheets as of December 31, 2023 and 2022

ASSETS (Millions of Euros)
	Notes	2023	2022 ⁽¹⁾
CASH, CASH BALANCES AT CENTRAL BANKS AND OTHER DEMAND DEPOSITS	7	49,213	52,973
FINANCIAL ASSETS HELD FOR TRADING	8	116,828	91,391
Derivatives		32,937	35,023
Equity instruments		3,339	3,361
Debt securities		11,018	11,318
Loans and advances to central banks		2,808	1,632
Loans and advances to credit institutions		52,441	23,969
Loans and advances to customers		14,285	16,089
NON-TRADING FINANCIAL ASSETS MANDATORILY AT FAIR VALUE THROUGH PROFIT OR LOSS	9	730	546
Equity instruments		507	438
Debt securities		223	107
Loans and advances to customers		—	—
FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS	10	—	—
FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME	11	19,426	24,854
Equity instruments		1,019	977
Debt securities		18,407	23,877
FINANCIAL ASSETS AT AMORTIZED COST	12	261,765	246,950
Debt securities		34,905	25,313
Loans and advances to central banks		—	10
Loans and advances to credit institutions		13,074	9,329
Loans and advances to customers		213,786	212,297
DERIVATIVES - HEDGE ACCOUNTING	13	780	1,169
FAIR VALUE CHANGES OF THE HEDGED ITEMS IN PORTFOLIO HEDGES OF INTEREST RATE RISK	13	(97)	(148)
INVESTMENTS IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES	14	23,019	21,960
Subsidiaries		22,637	21,644
Joint ventures		24	36
Associates		358	280
TANGIBLE ASSETS	15	3,373	3,531
Properties, plant and equipment		3,285	3,432
For own use		3,285	3,432
Other assets leased out under an operating lease		—	—
Investment properties		87	99
INTANGIBLE ASSETS	16	894	855
Goodwill		—	—
Other intangible assets		894	855
TAX ASSETS	17	12,416	12,479
Current tax assets		2,145	1,629
Deferred tax assets		10,271	10,850
OTHER ASSETS	18	2,023	1,677
Insurance contracts linked to pensions	22	1,321	1,337
Inventories		132	—
Other		569	340
NON-CURRENT ASSETS AND DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE	19	512	651
TOTAL ASSETS		490,883	458,888

(1) 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, 2023.

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, 2023 and 2022

LIABILITIES AND EQUITY (Millions of Euros)
	Notes	2023	2022 ⁽¹⁾
FINANCIAL LIABILITIES HELD FOR TRADING	8	108,349	80,853
Derivatives		28,615	30,954
Short positions		11,849	11,408
Deposits from central banks		4,698	2,161
Deposits from credit institutions		42,710	28,107
Customer deposits		20,476	8,224
Debt certificates		—	—
Other financial liabilities		—	—
FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS	10	2,361	1,859
Deposits from central banks		—	—
Deposits from credit institutions		—	—
Customer deposits		2,361	1,859
Debt certificates		—	—
Other financial liabilities		—	—
Subordinated liabilities		—	—
FINANCIAL LIABILITIES AT AMORTIZED COST	20	339,476	335,941
Deposits from central banks		10,962	32,517
Deposits from credit institutions		33,563	20,200
Customer deposits		234,754	234,797
Debt certificates		50,132	38,511
Other financial liabilities		10,065	9,915
Memorandum item: Subordinated liabilities		11,741	9,106
DERIVATIVES - HEDGE ACCOUNTING	13	2,075	2,599
FAIR VALUE CHANGES OF THE HEDGED ITEMS IN PORTFOLIO HEDGES OF INTEREST RATE RISK	13	—	—
PROVISIONS	21	3,131	3,385
Pensions and other post-employment defined benefit obligations		1,871	2,085
Other long term employee benefits		404	433
Provisions for taxes and other legal contingencies		396	388
Commitments and guarantees given		240	280
Other provisions		221	198
TAX LIABILITIES	17	992	943
Current tax liabilities		197	190
Deferred tax liabilities		795	753
OTHER LIABILITIES	18	2,808	2,552
LIABILITIES INCLUDED IN DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE		—	—
TOTAL LIABILITIES		459,192	428,133

(1) 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, 2023.

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, 2023 and 2022 (continued)

LIABILITIES AND EQUITY (Continued) (Millions of Euros)
	Notes	2023	2022 ⁽¹⁾
STOCKHOLDERS’ FUNDS		33,134	32,928
Capital	23	2,861	2,955
Paid up capital		2,861	2,955
Unpaid capital which has been called up		—	—
Share premium	24	19,769	20,856
Equity instruments issued other than capital		—	—
Equity component of compound financial instruments		—	—
Other equity instruments issued		—	—
Other equity		40	49
Retained earnings	25	7,416	5,453
Revaluation reserves	25	—	—
Other reserves	25	(804)	(474)
Less: treasury shares	26	(3)	(3)
Profit or loss attributable to owners of the parent		4,807	4,816
Less: interim dividends	3	(952)	(724)
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)	27	(1,443)	(2,172)
Items that will not be reclassified to profit or loss		(1,212)	(1,215)
Actuarial gains (losses) on defined benefit pension plans		(54)	(32)
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	(1,213)	(1,256)
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		55	72
Items that may be reclassified to profit or loss		(230)	(957)
Hedge of net investments in foreign operations (effective portion)		—	—
Foreign currency translation		—	—
Hedging derivatives. Cash flow hedges (effective portion)		45	(492)
Fair value changes of debt instruments measured at fair value through other comprehensive income	11	(275)	(464)
Hedging instruments (non-designated items)		—	—
Non-current assets and disposal groups classified as held for sale		—	—
TOTAL EQUITY		31,691	30,756
TOTAL EQUITY AND TOTAL LIABILITIES		490,883	458,888
MEMORANDUM  ITEM - OFF BALANCE SHEET EXPOSURES (Millions of Euros)
	Notes	2023	2022 ⁽¹⁾
Loan commitments given	29	98,667	95,948
Financial guarantees given	29	18,784	16,305
Other commitments given	29	30,013	26,850

(1) 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, 2023.

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, 2023 and 2022.

INCOME STATEMENTS (Millions of Euros)
	Notes	2023	2022 ⁽¹⁾
Interest income	33	14,569	5,903
Financial assets at fair value through other comprehensive income		399	498
Financial assets at amortized cost		11,653	5,416
Other interest income		2,517	(11)
Interest  expense	33	(9,005)	(2,083)
NET INTEREST INCOME		5,564	3,821
Dividend income	34	3,483	3,470
Fee and commission income	35	2,689	2,612
Fee and commission expense	36	(613)	(489)
Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net	37	24	1
Financial assets at amortized cost		—	—
Other financial assets and liabilities		24	1
Gains or (losses) on financial assets and liabilities held for trading, net	37	(12)	438
Reclassification of financial assets from fair value through other comprehensive income		—	—
Reclassification of financial assets from amortized cost		—	—
Other profit or loss		(12)	438
Gains (losses) on non-trading financial assets mandatorily at fair value through profit or loss, net	37	200	(51)
Reclassification of financial assets from fair value through other comprehensive income		—	—
Reclassification of financial assets from amortized cost		—	—
Other profit or loss		200	(51)
Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net	37	16	128
Gains (losses) from hedge accounting, net	37	(6)	—
Exchange differences, net	37	23	(122)
Other operating income	38	455	339
Other operating expense	38	(804)	(642)
GROSS INCOME		11,020	9,503
Administrative expense	39	(4,157)	(3,755)
Personnel expense		(2,425)	(2,217)
Other administrative expense		(1,733)	(1,538)
Depreciation and amortization	40	(651)	(638)
Provisions or reversal of provisions	41	(116)	(50)
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification	42	(677)	(521)
Financial assets measured at amortized cost		(682)	(504)
Financial assets at fair value through other comprehensive income		6	(16)
NET OPERATING INCOME		5,419	4,539
Impairment or reversal of impairment of investments in subsidiaries,  joint ventures and associates	43	118	642
Impairment or reversal of impairment on non-financial assets	44	5	7
Tangible assets		17	21
Intangible assets		(12)	(15)
Other assets		—	1
Gains (losses) on derecognition of non - financial assets and subsidiaries, net		3	—
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	2	(26)
PROFIT (LOSS) BEFORE TAX FROM CONTINUING OPERATIONS		5,547	5,163
Tax expense or income related to profit or loss from continuing operations	17	(740)	(347)
PROFIT (LOSS) AFTER TAX FROM CONTINUING OPERATIONS		4,807	4,816
Profit (loss) after tax from discontinued operations		—	—
PROFIT (LOSS) FOR THE YEAR		4,807	4,816

(1) 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, 2023.

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, 2023 and 2022.

STATEMENTS OF RECOGNIZED INCOME AND EXPENSE (Millions of Euros)
	2023	2022 ⁽¹⁾
PROFIT RECOGNIZED IN INCOME STATEMENT	4,807	4,816
OTHER RECOGNIZED INCOME (EXPENSE)	730	(713)
ITEMS NOT SUBJECT TO RECLASSIFICATION TO INCOME STATEMENT	3	(40)
Actuarial gains (losses) from defined benefit pension plans	(24)	32
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	43	(129)
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	(24)	100
Other valuation adjustments	—	—
Income tax related to items not subject to reclassification to income statement	9	(43)
ITEMS SUBJECT TO RECLASSIFICATION TO INCOME STATEMENT	727	(673)
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]	767	191
Valuation gains (losses) taken to equity	767	191
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	271	(1,152)
Valuation gains (losses) taken to equity	302	(1,148)
Transferred to profit or loss	(31)	(4)
Other reclassifications	—	—
Non-current assets and disposal groups held for sale	—	—
Income tax relating to items subject to reclassification to income statements	(311)	288
TOTAL RECOGNIZED INCOME/EXPENSE	5,537	4,102

(1) 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,

2023.

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, 2023 and 2022 .

STATEMENT OF CHANGES IN EQUITY (Millions of Euros)
2023	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, 2023	2,955	20,856	—	49	5,453	—	(474)	(3)	4,816	(724)	(2,172)	30,756
Total income/expense recognized	—	—	—	—	—	—	—	—	4,807	—	730	5,537
Other changes in equity	(94)	(1,087)	—	(9)	1,963	—	(330)	—	(4,816)	(228)	—	(4,602)
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	(94)	(1,087)	—	—	75	—	(316)	1,422	—	—	—	—
Dividend distribution	—	—	—	—	(1,860)	—	—	—	—	(952)	—	(2,812)
Purchase of treasury shares	—	—	—	—	—	—	—	(2,000)	—	—	—	(2,000)
Sale or cancellation of treasury shares	—	—	—	—	—	—	(12)	578	—	—	—	566
Reclassification of financial liabilities to other equity instruments	—	—	—	—	—	—	—	—	—	—	—	—
Reclassification of other equity instruments to financial liabilities	—	—	—	—	—	—	—	—	—	—	—	—
Transfers between total equity entries	—	—	—	2	4,092	—	(2)	—	(4,816)	724	—	—
Increase/Reduction of equity due to business combinations	—	—	—	—	—	—	—	—	—	—	—	—
Share based payments	—	—	—	(30)	—	—	—	—	—	—	—	(30)
Other increases or (-) decreases in equity	—	—	—	19	(345)	—	—	—	—	—	—	(325)
Balances as of December 31, 2023	2,861	19,769	—	40	7,416	—	(804)	(3)	4,807	(952)	(1,443)	31,691

The Notes and Appendices are an integral part of the statement of changes in equity for the year ended December 31, 2023.

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, 2023 and 2022 (continued)

STATEMENT OF CHANGES IN EQUITY (Millions of Euros)
2022 ⁽¹⁾	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, 2022	3,267	23,599	—	49	6,436	—	(1,026)	(574)	1,080	(533)	(1,461)	30,836
Total income/expense recognized	—	—	—	—	—	—	—	—	4,816	—	(713)	4,102
Other changes in equity	(313)	(2,743)	—	1	(983)	—	553	572	(1,080)	(190)	1	(4,182)
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	(313)	(2,743)	—	—	250	—	(355)	3,160	—	—	—	—
Dividend distribution	—	—	—	—	(1,467)	—	—	—	—	(724)	—	(2,190)
Purchase of treasury shares	—	—	—	—	—	—	—	(2,879)	—	—	—	(2,879)
Sale or cancellation of treasury shares	—	—	—	—	—	—	(6)	291	—	—	—	285
Reclassification of other equity instruments to financial liabilities	—	—	—	—	—	—	—	—	—	—	—	—
Reclassification of financial liabilities to other equity instruments	—	—	—	—	—	—	—	—	—	—	—	—
Transfers within total equity	—	—	—	1	547	—	(2)	—	(1,080)	533	1	—
Increase/Reduction of equity due to business combinations	—	—	—	—	—	—	—	—	—	—	—	—
Share based payments	—	—	—	—	—	—	—	—	—	—	—	—
Other increases or (-) decreases in equity	—	—	—	—	(313)	—	916	—	—	—	—	602
Balances as of December 31, 2022	2,955	20,856	—	49	5,453	—	(474)	(3)	4,816	(724)	(2,172)	30,756

(1) 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, 2023 .

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, 2023 and 2022.

CASH FLOWS STATEMENTS (Millions of Euros)
	Notes	2023	2022 ⁽¹⁾
A) CASH FLOWS FROM OPERATING ACTIVITIES (1+2+3+4+5)	46	(1,809)	23,057
1.Profit (loss) for the year		4,807	4,816
2.Adjustments to obtain the cash flow from operating activities:		1,766	(629)
Depreciation and amortization		651	638
Other adjustments		1,115	(1,268)
3.Net increase/decrease in operating assets		(35,004)	696
Financial assets held for trading		(25,437)	13,999
Non-trading financial assets mandatorily at fair value through profit or loss		(184)	(109)
Other financial assets designated at fair value through profit or loss		—	—
Financial assets at fair value through other comprehensive income		5,428	3,351
Financial assets at amortized cost		(14,875)	(15,757)
Other operating assets		65	(788)
4.Net increase/decrease in operating liabilities		27,697	18,825
Financial liabilities held for trading		27,495	2,995
Other financial liabilities designated at fair value through profit or loss		501	(379)
Financial liabilities at amortized cost		506	15,480
Other operating liabilities		(805)	729
5.Collection/payments for income tax		(1,076)	(651)
B) CASH FLOWS FROM INVESTING ACTIVITIES (1+2)	46	(140)	(2,753)
1.Investment		(906)	(3,937)
Tangible assets		(77)	(60)
Intangible assets		(382)	(360)
Investments in subsidiaries, joint ventures and associates		(447)	(3,516)
Other business units		—	—
Non-current assets and disposal groups classified as held for sale and associated liabilities		—	—
Held-to-maturity investments		—	—
Other settlements related to investing activities		—	—
2.Divestments		765	1,184
Tangible assets		2	6
Intangible assets		—	—
Investments in subsidiaries, joint ventures and associates		557	852
Other business units		—	—
Non-current assets classified as held for sale and associated liabilities		207	326
Other collections related to investing activities		—	—

C) CASH FLOWS FROM FINANCING ACTIVITIES (1 + 2)	46	(1,986)	(5,921)
1. Payments		(6,307)	(6,190)
Dividends (shareholders remuneration)		(2,812)	(2,190)
Subordinated liabilities		(1,495)	(881)
Treasury share amortization		(94)	(313)
Treasury share acquisition		(1,906)	(2,567)
Other items relating to financing activities		—	(240)
2. Collections		4,321	270
Subordinated liabilities		3,679	—
Common stock increase		—	—
Treasury share disposal		536	270
Other items relating to financing activities		106	—
D) EFFECT OF EXCHANGE RATE CHANGES		175	(231)
E) NET INCREASE/DECREASE IN CASH OR CASH EQUIVALENTS (A+B+C+D)		(3,760)	14,153
F) CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR		52,973	38,821
G) CASH AND CASH EQUIVALENTS AT END OF THE YEAR (E+F)	46	49,213	52,973

COMPONENTS OF CASH AND EQUIVALENTS AT END OF THE YEAR (Millions of Euros)
	Notes	2023	2022 ⁽¹⁾
Cash	7	990	972
Balance of cash equivalent in central banks	7	45,653	49,854
Other financial assets	7	2,570	2,147
Less: Bank overdraft refundable on demand		—	—
TOTAL CASH AND CASH EQUIVALENTS AT END OF THE YEAR		49,213	52,973

(1) 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.

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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, 2023.

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 web site (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 Consolidated

Financial Statements comprising all consolidated subsidiaries of the Group.

The Bank’s Financial Statements for the year ended December 31, 2022 were approved by the shareholders at the Annual General

Shareholders' Meeting (“AGM”) held on March 17, 2023.

The Bank’s Financial Statements for the year ended December 31, 2023 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 2023 are presented in compliance 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, 2023 were prepared by the Bank’s directors (at the Board of

Directors meeting held on February 6, 2024) 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, 2023, 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, 2022 which was

prepared in accordance with the standards in effect during those years, is presented only for purposes of comparison with the

information relating to the 2023 year.

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.

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.

1.5. 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, 11, 12 and 14).

– The assumptions used in to quantify certain provisions (see Note 21), and in 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, 11 and 13).

– The recoverability of deferred tax assets and the forecast of corporate tax expense (see Note 17).

In general, BBVA is working to consider and include in its financial analysis models how climate risk and other climate-related matters

can affect the financial statements, cash flows and financial performance of the entity. In the event that these risks are being

considered, their estimates and judgments, to the extent that they are material, are being considered when preparing the financial

statements of BBVA and the disclosures in the corresponding Notes to the Consolidated Financial Statements. The prevailing

geopolitical and economic uncertainties (see Note 5.1) entail a greater complexity in developing reliable estimates and applying

judgment. Estimates have been made on the basis of the best available information on the matters analyzed as of December 31, 2023.

However, it is possible that events may take place subsequent to such date, which could make it necessary to amend these

estimations (upward or downward), which would be carried out prospectively, recognizing the effects of the change in estimation in

the consolidated financial statements.

During 2023 there have been no significant changes in the estimates made as of December 31, 2022, other than those indicated in

these Financial Statements.

1.6. 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 2023.

1.7. 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 in 2023 and 2022 amounted to €262 and €246 million, respectively. These amounts are registered under the heading

"Other operating expenses" of the accompanying income statements (see Note 38).

On the other hand, the contributions made to the single European resolution fund in the years 2023 and 2022 have amounted to €187

and €251 million respectively (see Note 38).

1.8. Consolidated Financial Statements

The Consolidated Financial Statements of the BBVA Group for the year ended December 31, 2023 have been prepared by the Group's

Directors (at the Board of Directors meeting held on February 6, 2024) 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 2023, 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 2023 amounted to €775,558

million and €55,265 million, respectively, while the consolidated net profit attributed to the parent company of this period amounted

to €8,019 million.

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.

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:

2.1 Investments 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.

2.2 Financial 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 their management, which affect the performance of the business model;

– The way in which business model managers are remunerated; and

– The frequency, amount and timing of sales in previous years, the reasons for such sales and expectations regarding future

sales.

In this sense, the Bank has established policies and has developed procedures to determine when the sales of financial assets

classified in the amortized cost category are considered infrequent (even when significant), or are insignificant (even when frequent),

to ensure compliance with such business model.

Furthermore, it is considered that any sales that may occur because the financial asset is close to maturity, due to an increase in

credit risk, or if necessary for liquidity needs, are compatible with the amortized cost model.

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.

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 Group 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.

– 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.

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.

– 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.

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”

only if it eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise from recognizing

or measuring such financial assets 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 and foreign exchange differences) are recognized as their net value, when applicable, 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).

”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 accompanying 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” in the accompanying income statements (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, an irrevocable decision may be made 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.

“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. In the case of floating rate instruments, including inflation-linked bonds, periodic restatements of cash flows to reflect

interest rate movements and incurred inflation change the effective interest rate prospectively.

Net loss allowances of assets recorded under these headings arising in each period, calculated under Circular 4/2017 model, 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).

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.

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 or generate

results in the short term;

– 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.

“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".

Hedging financial derivatives are used to hedge changes in the value of assets and liabilities, changes in cash flows, or the net

investment in a foreign business. Fair value hedging is established for fixed rate financial instruments, and cash flow hedges are used

for variable rate financial instruments. The Bank also carries out exchange risk hedging operations.

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

Hedging accounting follows the standard, and the effectiveness of hedges is evaluated both retrospectively and prospectively, so that

they remain within a range between 80% and 125%. The ineffectiveness of hedges, defined as the difference between the change in

value of the hedging instrument and the hedged item in each period, attributable to the hedged risk, is recognized in the income

statement. This includes both the amount of the ineffectiveness of the hedges established to manage interest rate risk in the period,

as well as the ineffectiveness of the hedges established to manage exchange risk, which is mainly attributable to the temporary value

of hedges established to manage exchange rate risk (see Notes 13 and 37).

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.

– 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

accompanying 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 accompanying 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.

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

– 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 the Standard 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.

According to Circular 4/2017, 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, 2023, the

Group has not used terms exceeding 90 days past due.

2) 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.

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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 any case, a restructuring will be considered impaired when the reduction in the net present value of the financial obligation is

greater than 1%.

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 exposure 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 XI 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.

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):

– 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.

– 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:

a. More than 30 days past due: the 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, 2023, the Bank has not considered periods higher than 30

days.

b. 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.

c. 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 (Liquidity Coverage Ratio, hereinafter "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;

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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 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 grouped 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.

– 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

4/2017, 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.

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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 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).

Derecognition of the balance due to impairment on financial assets (write-offs)

Debt instruments are classified as written-off once, after being analyzed, it is reasonably considered that their recovery is remote due

to the notorious and irrecoverable deterioration of the solvency of the holder of the operation.

Based on their procedures and particularities, the Bank entities recognize operations as a write-off where, following their analysis,

there are no reasonable expectations of recovery of the debt, taking into account aspects such as: the time elapsed since the

classification as doubtful operations due to delinquency, the coverage levels achieved, type of portfolio or product, bankruptcy status

of the holder and the existence of guarantees, their valuation and execution capacity. In those cases where the guarantee is

significant, there is the possibility of making partial write-offs on the non-guaranteed portion.

The classification of an operation as written-off, entails the recognition of losses for the carrying amount of the related debt and

results in a derecognition in the same amount from the balance sheet (see Note 5.2.5).

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.

– 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.

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

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.

2.3 Financial 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.

2.4 Tangible assets

Tangible assets are classified according to their nature:

– 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 receivables from third parties which are expected to be held for continuing use.

– Investment properties

Includes the value of land, buildings and other structures that are held either for rental or for capital gain on sale, and which are not

expected to be used in the ordinary course of business and are not intended for own use.

– Assets leased out under an operating lease

Includes assets for which the Group has granted the right of use to another company through an operating lease contract.

In general, and as an accounting policy option, tangible assets are recorded in the balance sheets under the cost model, i.e., at

acquisition cost, less the related accumulated depreciation and, if applicable, the estimated impairment losses resulting from

comparing the net book value of each item with its corresponding recoverable value (see Note 15).

The Bank uses the straight-line method to calculate depreciation over the estimated useful life of the asset. The depreciation charge

for tangible assets is recorded under "Depreciation and amortization" in the income statement (see Note 40) and is basically

equivalent to the following depreciation rates:

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

General 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 indicators that a tangible asset may be impaired and, if any, adjusts the

carrying amount to its recoverable amount, modifying future depreciation charges in accordance with its revised remaining useful life.

Similarly, if there is indication that the value of a tangible asset that was previously impaired has been recovered, the Bank estimates

the recoverable amount of the asset and recognizes in the income statement the reversal of the impairment loss recognized in

previous years and thus, adjusts the future depreciation charges. Any impairment or reversal of impairment will be recognized

considering as counterpart the heading “Impairment or reversal of impairment of non-financial assets - Intangible assets” of the

consolidated income statement (see Note 44).

Operating and maintenance expenses relating to tangible assets for own use are recognized in the year in which they are incurred

under "Administrative expenses - Property, plant and equipment" in the income statement (see Note 39.2).

2.5 Leases

In general, the Bank will record assets and liabilities for lease contracts by recording a right of use (right to use the leased asset) under

''Tangible assets - Property, plant and equipment'' and ''Tangible assets - Investment property'' (see Note 15), and a lease liability (its

obligation to make lease payments) under ''Financial liabilities at amortized cost - Other financial liabilities'' (see Note 20.5). The Bank

applies two exceptions in the case of short-term leases and leases whose underlying asset is of low value. In these cases, lease

payments are recognized under "Other operating expenses" (see Note 38) in the consolidated income statement over the term of the

lease.

At the initial date of the lease, the lease liability is equal to the present value of all lease unpaid payments. Subsequently, it is valued at

amortized cost.

The right to use assets is initially recorded at cost and are subsequently reduced by accumulated amortization and accumulated

impairment. The Bank has decided to calculate depreciation using the straight-line method. Depreciation of tangible assets is

recorded under "Depreciation and amortization" in the consolidated statement of income (see Note 40).

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).

Operating lease and sublease incomes are recognized in the income statements under the headings “Other operating income” (see

Note 38).

On the other hand, when the Bank acts as a lessor, it classifies leases as finance or operating leases. In finance leases, the sum of the

present values of the amounts received plus the guaranteed residual value is recorded as financing provided to third parties and is

included under "Financial assets at amortized cost" in the consolidated balance sheet (see Note 12).

In operating leases, the acquisition cost of the leased assets is presented under "Tangible assets - Property, plant and equipment -

Assigned under operating leases" in the consolidated balance sheet (see Note 12). These assets are depreciated in accordance with

the policies adopted for similar tangible assets for own use and the income and expenses arising from the lease contracts are

recognized in the consolidated income statement on a straight-line basis under "other operating income" and "other operating

expenses", respectively (see Notes 38 and 39).

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).

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

2.6 Non-current assets and disposal groups classified as held for sale and liabilities included in

disposal groups classified as held for sale

This heading 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, it includes assets that were expected to be disposed of within one year, but for which disposal there is a delay caused by

events and circumstances beyond the Bank's control, and there is sufficient evidence that the entity remains committed to its plan for

sale (see Note 19), specifically, regarding real estate assets or other assets received to cancel, in whole or in part, the payment

obligations of debtors for credit operations. These assets are not amortized as long as they remain in this category.

With respect to valuation, in general, foreclosed real estate assets or assets received in payment of debts are recognized both at the

date of acquisition and subsequently, at the lower of their fair value less estimated costs to sell and their carrying amount, with the

possibility of recognizing an impairment or reversal of impairment for the difference, if applicable. When the amount of the sale less

estimated costs to sell exceeds the carrying amount, the gain is not recognized until the time of disposal and derecognition.

The applicable carrying value of the financial asset is updated at the time of foreclosure, treating the foreclosed property as collateral

and taking into account the corresponding credit risk hedges at the time prior to delivery. The fair value of foreclosed assets is based

mainly on appraisals or valuations performed by independent experts with a maximum age of one year, or less if there are indications

of impairment; in addition, by appraisal, evaluating the need to apply a discount on the asset based on its specific conditions or

market conditions for such type of assets is evaluated and in any case, the entity’s estimated sale costs are deducted.

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., Gesvalt,

Sociedad de Tasación; JLL Valoraciones, S.A., Sociedad de Tasación Tasvalor; Eurovaloraciones, S.A.

Gains/losses on disposal of these assets and impairment losses are recognized under "Gains (losses) on non-current assets and

disposal groups classified as held for sale not qualifying as discontinued operations" in the consolidated income statement (see Note

45). Other income and expenses are classified in the income statement items according to their nature, 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.

The income and expenses of discontinued operations generated in the year, even if they were generated prior to their classification as

discontinued operations, are presented, net of the tax effect, as a single amount under "Profit (loss) after tax from discontinued

operations" in the consolidated income statement. This caption also includes the results obtained on disposal (net of the tax effect).

2.7 Intangible 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).

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, in

general, of 5 years, also, internally developed software is recognized as an intangible asset when, among other requirements, it has

the capacity to be used or sold, it is identifiable and its capacity to generate economic benefits in the future can be demonstrated. The

amortization charge of these assets is recognized in the consolidated income statements under the heading "Depreciation and

amortization" (see Note 40).

The Bank will recognize 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.

2.8 Tax assets and liabilities

Expenses on corporate income tax applicable to the Bank are recognized expense for the period 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, the carryforward of unused tax losses and carryforward of unused

tax credits 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).

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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 "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 only 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 combinations), which also does not affect the fiscal outcome.

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.

2.9 Provisions, contingent assets and contingent liabilities

This 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 (see Note 30).

2.10 Treasury 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).

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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 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).

2.11 Equity-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.

2.12 Pensions and other post-employment 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.

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).

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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.

Other long-term employee benefits

In addition to the above commitments, the Bank provides long-term service awards to their employees, consisting mainly of monetary

amounts or periods of vacation granted upon completion of a number of years of qualifying service.

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, 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).

2.13 Termination 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.

2.14 Recognition 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 accrual using the

effective interest rate method. In the particular case of inflation-indexed bonds, interest income also includes the effect of

real inflation experienced in the period.

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.

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.

In the event that a debt instrument is considered impaired, interest income will be calculated by applying the effective

interest rate to the amortized cost (that is, adjusting for any impairment loss) of the financial asset.

– Income from dividends received:

Dividends shall be recognized within the consolidated 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 be added to 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.

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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. If the right to receive payment is received after the initial recognition, the dividends from the net equity

instruments will be recognized within the consolidated income statement at the time the right to receive them

arises, which is the time of the official announcement of receipt of the payment by the appropriate governing body

of the entity. 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.

– Income from commissions collected/paid:

Financial fees are an integral part of the actual performance of a financing transaction and are collected in advance. They

can be:

a. Fees charged for the origination or acquisition of financing transactions that are not measured at fair value

through profit or loss, such as those charged for the evaluation of the borrower's financial condition, for the

analysis and recording of various collateral, as well as those charged for negotiating the terms of transactions

or preparing and processing documentation and the closing of transactions, will be deferred and recognized

over the life of the transaction as an adjustment to the performance of the transaction. These fees, forming

part of the effective rate of the loans, will be deferred and recognized over the life of the transaction as an

adjustment to the performance of the transaction.

b. Fees agreed as compensation for the commitment to grant financing when it is not measured at fair value

through profit or loss and it is probable that the Bank will enter into a specific loan agreement, are deferred

and recognized over the life of the transaction as an adjustment to the performance of the transaction. If the

commitment expires before the entity makes the loan such fee is recognized as revenue at the time of

expiration.

Non-financial commissions derived from the provision of financial services other than financing transactions may be:

a. Related to the performance of a service rendered over time (e.g. account administration fees or fees collected

in advance for the issuance or renewal of credit cards), in which case they are recognized over time based on

the degree of progress in providing the service.

b. Related to the performance of a service rendered at a specific time (e.g. underwriting of securities, currency

exchange, advice or syndication of a loan), in which they are recognized in the income statement at the time of

collection.

– Non-financial income and expense:

As a general rule, they are recognized on an accrual basis, that is, as the contractually committed goods or services are

delivered or rendered and recognized as revenue over the life of the contract.

In the event that consideration is received or there is a right to receive consideration without delivery of the contractually

committed goods or services, a liability is recognized in the balance sheet until it is recognized in the income statement.

In the case of collections and payments deferred over time, they are recognized for accounting purposes at the amount

resulting from discounting the expected cash flows at market rates.

– 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 regard are:

a. Those relating to financial assets and liabilities measured at fair value through profit or loss, which are recognized

immediately in the income statement.

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 is carried out.

– Deferred collections and payments:

These are recognized for accounting purposes at the amount resulting from discounting the expected cash flows at market

rates.

2.15 Sales 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).

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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.

2.16 Foreign-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 derivatives

The assets and liabilities in foreign currencies, including those of branches abroad, are converted to euros at the average exchange

rates on the European spot currency market at the end of each period.

Non-monetary items measured at historical cost have been translated at the exchange rate at the date of acquisition, and non-

monetary items measured at fair value have been translated at the exchange rate at the date on which the fair value was determined.

The exchange differences produced when converting these balance in foreign-currency to Euro are 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, 2023 and 2022, 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 are financed in Euros, managing open currency risk through

derivatives. the future currency risk arising from these transactions. In the case of endowment funds for foreign branches, they are

financed in the same currency as the investment.

2.17 Entities 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, 2023 and 2022 it was not necessary to adjust the financial

statements of any branch to correct for the effect of inflation.

2.18 Statements 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”.

2.19 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 “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.

2.20 Statements 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.

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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.

– 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.

2.21 Recent pronouncements

During the year 2023, no modification to Circular 4/2017 has come into force with an impact on these individual Financial Statements.

On December 20, 2021, the OECD published an international tax initiative which sets forth a framework of rules (“GloBE -Global Anti-

Base Erosion Rules”) for the application of the “Pillar Two Model Rules”, establishing a supplementary tax system that makes the

effective rate of taxation, in those jurisdictions where certain multinational groups are present, reach the minimum rate of 15%.

On December 22, 2022, the Council of the European Union adopted Directive 2022/2523 (hereinafter "the Directive"), incorporating

the Model Standards into the European legal framework. The Directive incorporates, with some exceptions, the content of the

aforementioned Standards and sets December 31, 2023 as the deadline for their transposition by the Member States. It also

stipulates that the corresponding provisions must enter into force for financial years beginning on or after that date.

As a result, affected groups (those with consolidated net sales of EUR 750 million or more in two of the last four years) must calculate

their effective tax rate for Pillar Two purposes for each jurisdiction in which they operate. In those cases in which the effective rate,

calculated in accordance with the provisions of the Directive, is less than 15%, they will have to pay a Complementary Tax in order to

reach that 15%.

At the date of preparation of these financial statements, the process of transposition of the Directive into Spanish legislation is still in

progress. However, in line with the provisions of the Preliminary Draft Bill submitted for public information, it is expected to take effect

for tax periods beginning on or after December 31, 2023 and, therefore, with respect to the BBVA Group, from the next tax year

beginning on January 1, 2024.

3. Shareholder remuneration system

Amendment of Shareholder Remuneration Policy

BBVA's Board of Directors announced, on November 18, 2021, the amendment of the Bank's shareholder remuneration policy

(announced on February 1, 2017 by means of Relevant Information number 247679), establishing as a policy to distribute annually

between 40% and 50% of the consolidated ordinary profit for each year (excluding amounts and items of an extraordinary nature

included in the consolidated income statement), compared to the previous policy that established a distribution between 35% and

40%.

This policy is implemented through the distribution of an interim dividend for the year (which is expected to be paid in October of each

year) and a final dividend or final distribution (which is expected to be paid at the end of the year and once the application of the result

is approved, foreseeably in April of each year), with the possibility of combining cash distributions with share buybacks, all subject to

the corresponding authorizations and approvals applicable at any given time.

Shareholder remuneration during financial year 2022

Cash distributions

During the 2022 financial year, the Annual General Shareholders' Meeting and the Board of Directors approved the payment of the

following cash amounts:

– The Annual General Shareholders' Meeting of BBVA held on March 18, 2022, approved, under item 2 of the Agenda, a cash

distribution from the voluntary reserves account as additional shareholder remuneration for the 2021 fiscal year, for an

amount equal to €0.23 (€0.1863 net of withholding tax) per outstanding BBVA share entitled to participate in this

distribution, which was paid on April 8, 2022. The total amount paid amounted to €1,467 million.

– The Board of Directors communicated by means of an Inside Information on September 29, 2022 that the Board of

Directors of BBVA approved the payment of a cash interim dividend of €0.12 (€0.0972 net of withholding tax) per

outstanding BBVA share against 2022 results. The total amount paid to shareholders on October 11, 2022, amounted to

€724 million and is recognized under the heading “Total Equity- Interim Dividends” of the balance sheet as of December 31,

2022.

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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.

Shareholder remuneration during financial year 2023

Cash distributions

During the 2023 financial year, the Annual General Shareholders' Meeting and the Board of Directors approved the payment of the

following cash amounts:

– The Annual General Shareholder's Meeting of BBVA held on March 17, 2023, approved, under item 1.3 of the Agenda, a cash

distribution against the 2022 results as a final dividend for the 2022 fiscal year, for an amount equal to €0.31 (€0.2511 net

of withholding tax) per outstanding BBVA share entitled to participate in this distribution, which was paid on April 5, 2023.

The total amount paid, excluding dividends paid in respect of treasury shares held by the Group's companies, amounted to

€1,860 million.

– The Board of Directors, at its meeting held on September 27, 2023, resolved the payment of a cash interim dividend of

€0.16 (€0.1296 net of withholding tax) per outstanding share on account of the 2023 dividend, to be paid on October 11,

2023. The total amount paid, excluding dividends paid in respect of treasury shares held by the Group's companies,

amounted to €952 million.

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 by the Board of Directors of BBVA on September 27, 2023 was

the following:

Available amount for interim dividend payments (Millions of Euros)
	August 31, 2023
Profit of BBVA, S.A., after the provision for income tax	3,946
Maximum amount distributable	3,946
Amount of proposed interim dividend	954
BBVA cash balance available to the date	40,855

Other shareholder remuneration

On January 30, 2024, it was announced that a cash distribution in the amount of €0.39 gross per share to be paid in April as a final

dividend for the year 2023 and the execution of a share buyback program of BBVA for an amount of €781 million were planned to be

proposed to the corresponding corporate bodies for consideration as ordinary remuneration to shareholders for 2023, subject to

obtaining the corresponding regulatory authorizations and the communication of the specific terms and conditions of the program

before its execution.

Share buyback program

On October 26, 2021, BBVA obtained the pertinent authorization from the ECB to buy back up to 10% of its share capital for a

maximum of €3,500 million, 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 Shareholders' Meeting held

on March 16, 2018, at its meeting of October 28, 2021, BBVA Board of Directors resolved to carry out a share buyback program

scheme in compliance with Regulation (EU) no. 596/2014 of the European Parliament and the Council of April 16, 2014 on market

abuse and Commission Delegate Regulation (EU) no. 2016/1052 of the Commission, of March 8, 2016 (the “Regulations”), executed

in various tranches up to a maximum of €3,500 million, with the aim of reducing BBVA's share capital (the “Program Scheme”),

notwithstanding the possibility of terminating or cancelling the Program Scheme 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 scope of the

Program Scheme (the "First Tranche") for the purpose of reducing BBVA's share capital, which was notified by means of Inside

Information on October 29, 2021.

On November 19, 2021, BBVA notified by means of Inside Information that the First Tranche would be executed externally, starting on

November 22, 2021, through J.P. Morgan AG as lead manager, for a maximum amount of €1,500 million, for the purchase of a

maximum of 637,770,016 shares representing, approximately, 9.6% of BBVA's share capital. By means of Other Relevant Information

filing dated March 3, 2022, BBVA announced the completion of the execution of the First Tranche upon reaching the maximum

monetary amount of €1,500 million, having acquired 281,218,710 own shares representing, approximately, 4.22% of BBVA's share

capital as of that date. On June 15, 2022, BBVA notified the partial execution of the share capital reduction resolution adopted by the

Annual General Shareholders’ Meeting of BBVA held on 18 March 2022, through the reduction of BBVA’s share capital in a nominal

amount of €137,797,167.90 and the consequent redemption, charged to unrestricted reserves, of 281,218,710 own shares of €0.49

par value each acquired derivatively by the Bank in execution of the First Tranche and which were held in treasury shares (see Notes

23, 24, 25 and 26).

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 February 3, 2022, BBVA notified by means of Inside Information that its Board of Directors had agreed, within the scope of the

Program Scheme, to carry out a second buyback program for the repurchase of own shares (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.

As a continuation of the previous communication, on March 16, 2022 BBVA informed by means of Inside Information that it had

agreed to execute the Second Tranche: i) through the execution of a first segment for an amount of up to €1,000 million, and with a

maximum number of shares to be acquired of 356,551,306 shares (the "First Segment"), externally through Goldman Sachs

International as lead manager, who would execute the purchase transactions through the broker Kepler Cheuvreux, S.A.; and (ii) once

execution of the First Segment had been completed, through the execution of a second segment that would complete the Framework

Program (the "Second Segment").

By means of Other Relevant Information dated May 16, 2022, BBVA announced the completion of the execution of the First Segment

upon reaching the maximum monetary amount of €1,000 million, having acquired 206,554,498 shares representing, approximately,

3.1% of BBVA's share capital as of said date.

On June 28, 2022, BBVA communicated through Inside Information the agreement to complete the Program Scheme by executing

the Second Segment, for a maximum amount of €1,000 million and a maximum number of own shares to be acquired of

149,996,808. The execution of the Second Segment take place through Citigroup Global Markets Europe AG as lead manager, as

BBVA informed through Inside Information on June 29, 2022. By means of Other Relevant Information dated August 19, 2022, BBVA

announced the completion of the execution of the Second Segment upon reaching the maximum number of shares (149,996,808)

representing, approximately, 2.3% of BBVA's share capital as of said date (which amounted to approximately €660 million). On

September 30, 2022, BBVA notified through Other Relevant Information an additional partial execution of the share capital reduction

resolution adopted by the Annual General Shareholders’ Meeting of BBVA held on March 18, 2022, through the reduction of BBVA’s

share capital in a nominal amount of €174,710,139.94 and the consequent redemption, charged to unrestricted reserves, of

356,551,306 own shares of €0.49 par value each acquired derivatively by the Bank in execution of the First Segment and Second

Segment of the share buyback program scheme and which were held in treasury shares (see Notes 23, 24, 25 and 26).

The Program Scheme was considered as an extraordinary shareholder distribution and was therefore not included in the scope of the

shareholder remuneration policy described above.

Share buyback programs in 2023

On February 1, 2023, BBVA announced, among others, that it was planned to submit for the consideration of the corresponding BBVA

governing bodies the execution of a €422 million share buyback program as ordinary distribution in relation to the 2023 results,

subject to obtaining the corresponding regulatory authorizations and to the communication of the specific terms and conditions of

the share buy-back program before its execution, as an ordinary distribution of 2023. On March 17, 2023, after receiving the required

authorization from the ECB, BBVA announced through an Inside Information notice the execution of a time-scheduled buyback

program for the repurchase of own shares in accordance with the Regulations, aimed at reducing BBVA’s share capital by a maximum

monetary amount of €422 million. The execution was carried out internally by BBVA, executing the trades through BBVA.

By means of an Other Relevant Information notice dated April 21, 2023, BBVA announced the completion of the share buyback

program upon reaching the maximum monetary amount of €422 million, having acquired 64,643,559 own shares, between March 20

and April 20, 2023, representing, approximately, 1.07% of BBVA's share capital as of said date.

On June 2, 2023, BBVA notified through an Other Relevant Information notice a partial execution of the share capital reduction

resolution adopted by the Annual General Shareholders’ Meeting of BBVA held on March 17, 2023, under item 3 of the agenda

through the reduction of BBVA’s share capital in a nominal amount of €31,675,343.91 and the consequent redemption, charged to

unrestricted reserves, of 64,643,559 own shares of €0.49 par value each acquired derivatively by BBVA in execution of the share

buyback program scheme and which were held in treasury shares (see Notes 23, 24, 25 and 26).

On July 28, 2023, BBVA communicated through Inside information its request to the ECB for the correspondent supervisory

authorization in order to carry out a share buyback program up to €1,000 million, subject to the authorization requested being

granted, to the adoption of the corresponding corporate resolutions and to the communication of the specific terms and conditions of

the share buyback program before its execution. This share buy-back program was considered as an extraordinary shareholder

distribution. On October 2, 2023, after receiving the required authorization from the ECB, BBVA announced that it would implement a

buyback program for the repurchase of own shares in accordance with the Regulations, aimed at reducing BBVA’s share capital by a

maximum monetary amount of €1,000 million. The execution was carried out internally by BBVA, executing the trades through BBVA.

By means of an Other Relevant Information notice dated November 29, 2023, BBVA announced the completion of the share buyback

program upon reaching the maximum monetary amount of €1,000 million, having acquired 127,532,625 own shares, between

October 2 and November 29, 2023, representing, approximately, 2.14% of BBVA's share capital as of said later date.

On December 19, 2023, BBVA notified through an Other Relevant Information notice the second partial execution of the share capital

reduction resolution adopted by the Annual General Shareholders’ Meeting of BBVA held on March 17, 2023, under item 3 of the

agenda through the reduction of BBVA’s share capital in a nominal amount of €62,490,986 and the consequent redemption, charged

to unrestricted reserves, of 127,532,625 own shares of €0.49 par value each acquired derivatively by BBVA in execution of the share

buyback program scheme and which were held in treasury shares (see Notes 23, 24, 25 and 26).

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.

Proposal on allocation of earnings for 2023

Below is included a breakdown of the distribution of the Bank´s earnings for financial year 2023, which the Board of Directors will

submit to the Annual General Shareholders' Meeting for approval.

Allocation of earnings (Millions of Euros)
	2023
Profit (loss) for the year	4,807
Distribution
Interim dividends	952
Final dividend	2,277
Reserves / Accumulated gains	1,579

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.

The calculation of earnings per share of BBVA is as follows:

Basic and Diluted Earnings per Share
	2023	2022
Numerator for basic and diluted earnings per share (millions of euros)
Profit attributable to parent company	8,019	6,358
Adjustment: Additional Tier 1 securities (1)	(345)	(313)
Profit adjusted (millions of euros) (A)	7,675	6,045
Profit (loss) from continued operations (net of remuneration of Additional Tier 1 capital instruments)	7,675	6,045
Profit (loss) from discontinued operations (net of non-controlling interest) (B)	—	—
Denominator for basic earnings per share (number of shares outstanding)
Weighted average number of shares outstanding	5,988	6,424
Average treasury shares	(5)	(9)
Share buyback program (2)	(28)	(225)
Adjusted number of shares - Basic earnings per share (C)	5,954	6,189
Adjusted number of shares - diluted earnings per share (D)	5,954	6,189
Earnings (losses) per share	1.29	0.98
Basic earnings (losses) per share from continuing operations (Euros per share) A-B/C	1.29	0.98
Diluted earnings (losses) per share from continuing operations (Euros per share) A-B/D	1.29	0.98
Basic earnings (losses) per share from discontinued operations (Euros per share) B/C	—	—
Diluted earnings (losses) per share from discontinued operations (Euros per share) B/D	—	—

(1) Remuneration in the year related to perpetual contingent convertible securities, recognized in equity (see Note 20.4).

(2) For the calculation of earnings per share: (i) in 2023 the average number of shares is included, taking into account the two redemptions made corresponding to the programs

announced in that year; (ii) in 2022 the average number of shares was included, taking into account the two redemptions made corresponding to the program announced in that

2021. (see Note 3).

As of December 31, 2023 and 2022, 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

per share are the same.

5. Risk management

5.1 Risk factors

The BBVA Group has processes in place for identifying risks and analyzing scenarios in order to enable the Group to manage risks in a

dynamic and proactive way.

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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 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 analyses 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 (hereinafter "RAF") variables in stress scenarios is

conducted in order to identify possible deviations from the established thresholds. If any such deviations are detected, measures are

taken to seek 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 Group’s business, including the below:

– Macroeconomic and geopolitical risks

The Group is sensitive to the deterioration of economic conditions, the alteration of the institutional environment of the countries in

which it operates, and the Group is exposed to sovereign debt especially in Spain, Mexico and Turkey.

The global economy is currently facing a number of extraordinary challenges. The war in Ukraine and the sanctions imposed against

and by Russia have led to significant disruption, instability and volatility in global markets, as well as higher inflation and lower

economic growth, mostly due to higher energy prices, which have stabilized more recently.

Although oil and gas prices have reduced and financial volatility has eased, there is still a risk that geopolitical tensions lead to

additional increases in input prices and financial instability, particularly following the tensions triggered by the armed conflict in the

Middle East, including the recent disruptions to maritime trade routes in the Red Sea.

Another global macroeconomic risk is the possibility of a sharp growth slowdown in China, which could lead to lower GDP expansion

than currently expected in many geographies. Although it may be possible to offset part of the expected growth slowdown through

the adoption of certain fiscal, monetary and regulatory measures by the authorities, there are risks related to tensions in the real

estate markets and the possible effects of the United States economic sanctions, among others.

Geopolitical and economic risks have also increased in recent years as a result of trade tensions between the United States and China,

Brexit, and the rise of populism, among other factors. Growing tensions may lead, among other things, to a deglobalization of the

world economy, an increase in protectionism, a general reduction of international trade in goods and services and a reduction in the

integration of financial markets, any of which could materially and adversely affect the Group’s business, financial condition and

results.

Moreover, the world economy could be vulnerable to other factors, such as a restrictive monetary policy, in a context of relatively high

inflationary pressures, which could cause a significant growth slowdown - and, even, a sharp economic recession - as well as new

episodes of financial stress.

The Group’s results of operations have been particularly affected by the increases in interest rates adopted by central banks in an

attempt to tame inflation, contributing to the rise in both interest revenue and interest expenses. In addition, the persistence of high

interest rates could adversely affect the Group by reducing the demand for credit and leading to an increase in the default rate of its

borrowers and other counterparties. On the other hand, the process of reducing interest rates has already begun in many

geographies and could begin by mid-2024 in the United States and the Eurozone as well. Moreover, the Group’s results of operations

have been affected by the high inflation in all countries in which BBVA operates, especially Turkey and Argentina.

The Group is exposed, among others, to the following general risks with respect to the economic and institutional environment in the

countries in which it operates: a deterioration in economic activity in the countries in which it operates, including recession scenarios;

more persistent inflationary pressures, which could trigger a more severe tightening of monetary conditions; stagflation due to more

intense or prolonged supply crises; changes in exchange rates; an unfavorable evolution of the real estate market; a significant

increase in oil and gas prices, which would have a negative impact on disposable income levels in areas that are net energy importers,

such as Spain or Turkey, to which the Group is particularly exposed; changes in the institutional environment of the countries in which

the Group operates, which could give rise to sudden and sharp drops in GDP and/or changes in regulatory or government policy,

including in terms of exchange controls and restrictions on the distribution of dividends or the imposition of new taxes or charges;

growth in the public debt or in the external deficit could lead to a downward revision of the credit ratings of the sovereign debt and

even a possible default or restructuring of such debt; and episodes of volatility in the financial markets, which could cause significant

losses for the Group. In particular, in Argentina, the risk of economic and financial turbulence persists in a context of regulatory,

economic and political uncertainty, and in which the adjustments announced by the new government to correct the high economic

distortions, including a strong fiscal adjustment and a significant exchange rate depreciation, have further reinforced short-term

inflationary pressures. In Spain, political, regulatory and economic uncertainty has also increased since the July general elections;

there is a risk that policies could have an adverse impact on the economy. In Mexico, uncertainty is related mainly to the June 2024

elections and the possible policies of the new government. Finally, in Colombia and Peru, climatic factors and greater social conflict

could eventually have a negative impact on the economy.

Any of these factors may have a significant adverse impact on the Group’s business, financial condition and results of operations.

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.

– Risks relating to the political, economic and social conditions in Turkey

In May 2022, the Group increased its shareholding stake in Garanti BBVA (Turkey) from 49.85% to 85.97% following the completion

of a voluntary takeover bid.

There are increasing signs of normalization in economic policy in general, and monetary policy in particular, since the general

elections held in May 2023, which may lead to a gradual correction of the current distortions. Despite the gradual improvement of

macroeconomic conditions, the situation remains relatively unstable, characterized by a gradual depreciation of the Turkish lira, high

inflation, a significant trade deficit, low central bank’s foreign reserves and high external financing costs. The earthquakes of February

2023 deepened Turkey's economic struggles. In addition to the vast human losses caused by it, the earthquakes added pressure on

inflation as well as the external and fiscal balances. Continuing unfavorable economic conditions in Turkey may result in a potential

deterioration in the purchasing power and creditworthiness of the clients of the Group (both individuals and corporations). In addition,

the relatively low official interest rates (despite the recent upward adjustments) in a context of still high inflation, the regulatory and

macroprudential policies affecting the banking sector and currency depreciation have affected and may continue to affect the Group’s

results.

Additionally, certain geopolitical factors, such as the war in Ukraine and the armed conflict in the Middle East, and internal political

developments, generate uncertainty about the evolution of the economy and could trigger scenarios of greater instability.

There can be no assurance that these and other factors will not have an impact on Turkey and will not cause further deterioration of

the Turkish economy, which may have a material adverse effect on the Turkish banking sector and the Group’s business, financial

condition and results of operations in Turkey.

– Regulatory and reputational risks

Financial institutions are exposed to a complex and ever-changing regulatory environment defined by governments and regulators.

Regulatory activity in recent years has affected multiple areas, including changes in accounting standards; strict regulation of capital,

liquidity and remuneration; bank charges (such as the new tax for banks recently implemented in Spain, see Note 38) and taxes on

financial transactions; regulations affecting mortgages, banking products and consumers and users; recovery and resolution

measures; stress tests; prevention of money laundering and terrorist financing; market abuse; conduct in the financial markets; anti-

corruption; and requirements as to the periodic publication of information. Governments, regulatory authorities and other institutions

continually make proposals to strengthen the resistance of financial institutions to future crises. Further, there is an increasing focus

on the climate-related financial risk management capabilities of banks. Any change in the Group’s business that is necessary to

comply with any particular regulations at any given time, especially in Spain, Mexico or Turkey, could lead to a considerable loss of

income, limit the Group’s ability to identify business opportunities, affect the valuation of its assets, force the Group to increase its

prices and, therefore, reduce the demand for its products, impose additional costs on the Group or otherwise adversely affect its

business, financial condition and results of operations.

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 Group could arise and might affect the regular course of business.

– New business and 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. Any attack, failure

or deficiency in the Group’s systems could, among other things, lead to the misappropriation of funds of the Group’s clients or the

Group itself and the unauthorized disclosure, destruction or use of confidential information, as well as prevent the normal operation of

the Group and impair its ability to provide services and carry out its internal management. In addition, any attack, failure or deficiency

could result in the loss of customers and business opportunities, damage to computers and systems, violation of regulations

regarding data protection and/or other regulations, exposure to litigation, fines, sanctions or interventions, loss of confidence in the

Group’ s security measures, damage to its reputation, reimbursements and compensation, and additional regulatory compliance

expenses and could have a significant adverse impact on the Group’ s business, financial condition and results of operations.

Legal risks: The financial sector faces an environment of increasing regulatory and litigious pressure, and thus, the various Group

entities are frequently 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 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.

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.

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. 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, 2023, the Group had €696 million in provisions for the proceedings it is facing (included in the line "Provisions for

taxes and other legal contingencies" in the consolidated balance sheet), of which €539 million correspond to legal contingencies and

€158 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.

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 BBVA. On July 29, 2019, BBVA 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 constitute bribery, revelation of secrets and corruption. 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. Since the beginning of the investigation, BBVA has been proactively collaborating with the Spanish judicial

authorities, including sharing with the courts information obtained in the internal investigation hired by the entity in 2019 to contribute

to the clarification of the facts. As at the date of this Annual Report, no formal accusation against BBVA has been made.

By order of the Criminal Chamber of the National High Court, the pre-trial phase ended on January 29, 2024. It is not possible at this

time to predict the possible outcomes or implications for the Group of this matter, including any fines, damages or harm to the

Group’s reputation caused thereby.

– Risks in connection with climate change

Climate change, which is resulting in an increase in the intensity and frequency of extreme weather events and environmental

degradation, presents both short, medium and long-term risks to the Group and its customers and counterparties, with the risks

expected to increase over time. Risks posed by climate change may be classified into transition and physical risks.

Transition risks refer to changes in, among others, regulations, technologies and market preferences linked to the transition toward a

less carbon-dependent economy, including the following:

– Legal and regulatory risks: Legal and regulatory changes related to how banks are required to manage climate risk or

otherwise affecting banking practices or disclosure of climate-related information may result in higher compliance,

operational and credit risks and costs. Further, legal and regulatory changes may result in legal uncertainty and the

existence of overlapping or conflicting regulatory or other requirements. The Group or its customers or counterparties may

be unable to meet any new requirements on a timely basis or at all. Further, changes in law, including new product and

service specifications, may result in the sudden devaluation of certain assets. Any of these risks may affect the Group and

its customers and counterparties. In addition, in the case of banks, new regulation could include requirements related to

lending, investing, capital and liquidity adequacy and operational resilience. The incorporation of climate risks in the existing

prudential framework is still developing and may result in increased risk weighting of high-carbon-related assets. Moreover,

there are significant risks and uncertainties inherent in the development of adequate climate change-related risk

assessment and modelling capabilities and the collection of customer, third party and other data, which may result in the

Group’s systems or frameworks (or those of its customers and counterparties, where applicable) being inadequate,

inaccurate or susceptible to incorrect customer, third party or other data, any of which could adversely affect the Group’s

disclosure and financial reporting. Further, increased regulation arising from climate change could result in increased

litigation and regulatory investigations and actions.

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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.

– Technological risks: Certain of the Group’s customers and counterparties may be adversely affected by the progressive

transition to a low-carbon economy and/or risks and costs associated with new low-carbon technologies. If our customers

and counterparties fail to adapt to the transition to a low-carbon economy, or if the costs of doing so adversely affect their

creditworthiness, this could adversely affect the Group’s relevant loan portfolios.

– Market risks: The Group and certain of the Group’s customers and counterparties may be adversely affected by changes in

market preferences due to, among others, increasing climate change awareness. Further, the funding costs of businesses

that are perceived to be more exposed to climate change could increase. Any of this could result in the reduced

creditworthiness of such customers and counterparties, adversely affecting the Group’s relevant loan portfolios. The Group

and its customers and counterparties could also be adversely affected by changes in prices resulting from shifts in demand

or supply brought by climate change, including prices of energy and raw materials, or by their inability to foresee or hedge

any such changes.

– Reputational risks: The perception of climate change as a risk by society, shareholders, customers, governments and other

stakeholders continues to increase, including in relation to the financial sector’s activities. This may result in increased

scrutiny of the Group’s activities, as well as its climate change-related policies, goals and disclosure. The Group’s reputation

and ability to attract or retain customers may be harmed if its efforts to reduce environmental and social risks are deemed

to be insufficient or if a perception is generated among the different stakeholders that the Group's statements, actions or

disclosure do not fairly reflect the underlying sustainability profile of the Group, its products, services, goals and/or policies.

The Group may elect not to undertake lending or investing activities that would otherwise have been profitable in order to

avoid reputational harm. Further, divergent views on ESG policies may also have a negative impact on the Group’s

reputation. Increased scrutiny of the Group’s activities, as well as its climate change-related policies, goals and disclosure

may result in litigation and regulatory investigations and actions. The Group has disclosed certain aspirational climate-

related goals and such goals, which are being pursued over the long-term, may prove to be considerably more costly or

difficult than currently expected, or even impossible, to achieve, including as a result of changes in environmental and

energy regulation and policy, the pace of technological change and innovation and the actions of governments, Group’s

customers and competitors.

The physical risk arising from climate change could result from increased frequency and/or severity of adverse weather events or the

impact of climate change over the long term. The activities of the Group or those of its customers or counterparties could be

adversely affected by the physical risks arising from climate change. For example, extreme weather events may damage or destroy

the properties and other assets of the Group or those of its customers or counterparties, result in increased costs, or otherwise

disrupt their respective operations (for example, if supply chains are disrupted as a result), diminishing –in the case of the Group’s

customers or counterparties - their repayment capacity and, if applicable, the value of assets pledged as collateral to the Group. The

Group is also exposed to potential long-term risks arising from climate change, such as increases in credit-related costs due to

deteriorating macroeconomic conditions, which may be caused in part by an increase in infectious diseases or other ailments

resulting from climate change. The Group could also be adversely affected by declines in asset values as a result of climate change or

climate change-related risks, reduced availability of insurance and significant interruptions to business operations, and may be

required to change its business models in response to the foregoing.

Any of these factors may have a material adverse effect on the Group’s business, financial condition and results of operations.

5.2 Credit 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.

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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.

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.

Support measures

Since the beginning of the pandemic, the Group offered support measures to its customers in all the geographical areas where it

operates, consisting of both deferrals on existing loans and new public-guaranteed lending. Deferral support schemes have expired in

all geographical areas. The measures adopted in 2022 which remained in force in 2023 were limited to Spain. In Peru, the deadline for

requesting extensions of the Reactiva program ended on September 30, 2023 and to the date of the preparation of these

Consolidated Financial Statements no extension has been published.

In addition in Spain, in March 2022, the Council of Ministers (RDL 6/2022) approved a line of financing with public guarantees of 70%

and 80% of the principal amount of loans for self-employed and enterprises in order to alleviate the liquidity tensions due to increases

in energy prices and raw materials, available until December 2023.

Finally, the Code of Good Practices, regulated by Royal Decree Law 6/2012, as well as its successive amendments, establishes a Code

of Good Practices that eases the impact of interest rates hikes on mortgage loans related to primary residences and provides for

other structural measures aiming to ease access to lending. As of the date of the preparation of these Consolidated Financial

Statements, the number and amount of the transactions granted to clients in accordance with the Code of Good Practices have been

low.

5.2.1 Measurement 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.

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 Group’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.

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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.

– 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.

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.

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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 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.

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).

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

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 180% to 200% for the relative threshold and from 30 to 100 basis points for the absolute threshold. Specifically, in BBVA,

S.A.'s wholesale portfolio the relative threshold is from 180% to 200% and the absolute threshold ranges from 30 to 100 basis points;

in the retail portfolio the relative threshold is 200% while the absolute threshold ranges between 50 and 100 basis points.

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 the standard, 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.

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:

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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.

– 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 the 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 under Circular 4/2017

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.

BBVA Research produces forecasts of the macroeconomic variables under the baseline scenario, which are used in the rest of the

related processes of the Group, 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.

– 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.

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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 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 forward-looking information incorporated in the calculation of expected losses is in line with the macroeconomic perspectives

published by BBVA Research, which are quarterly updated.

BBVA Research forecasts a maximum of five years for the macroeconomic variables. The following forecasts (favorable, base and

unfavorable scenarios) of the Gross Domestic Product (GDP) growth, unemployment rate and House Price Index (HPI), carried out by

BBVA Research, were used for the calculation of the ECL as of December 31, 2023:

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
2023	2.21%	2.36%	2.52%	(2.28)%	(1.93)%	(1.61)%	12.40%	12.13%	11.84%
2024	0.86%	1.48%	2.12%	(2.54)%	(0.92)%	0.89%	13.23%	11.80%	10.32%
2025	2.25%	2.47%	2.70%	1.00%	1.94%	2.96%	12.77%	11.20%	9.58%
2026	2.48%	2.53%	2.55%	1.22%	1.74%	2.11%	11.98%	10.40%	8.81%
2027	2.30%	2.34%	2.34%	0.93%	1.69%	2.14%	11.34%	9.63%	8.22%
2028	2.09%	2.13%	2.13%	0.67%	1.43%	1.88%	10.57%	8.98%	7.67%

The estimate for the next five years of the following rates, used in the measurement of the expected loss as of December 31,

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
2022	4.33%	4.61%	4.90%	(4.13)%	(3.50)%	(2.96)%	13.26%	12.78%	12.27%
2023	0.58%	1.20%	1.85%	(4.02)%	(2.41)%	(0.61)%	14.26%	12.83%	11.35%
2024	3.15%	3.37%	3.60%	(0.40)%	0.55%	1.58%	12.95%	11.38%	9.75%
2025	2.93%	2.98%	3.00%	0.79%	1.30%	1.67%	11.53%	9.95%	8.36%
2026	2.91%	2.95%	2.95%	0.99%	1.74%	2.20%	10.14%	8.58%	7.02%
2027	2.89%	2.93%	2.93%	1.10%	1.86%	2.31%	8.77%	7.18%	5.87%

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. The variation in the expected loss and the main portfolios is shown

below:

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

Expected loss variation as of December 31, 2023
GDP	Total Portfolio	Companies	Retail
-100pb	61	14	47
+100pb	(58)	(13)	(45)
Housing price
-100pb		—	32
+100pb		—	(32)

Expected loss variation as of December 31, 2022
GDP	Total Portfolio	Companies	Retail
-100pb	118	54	62
+100pb	(95)	(42)	(52)
Housing price
-100pb		1	23
+100pb		(1)	(22)

Additional adjustments to expected loss measurement

The Bank periodically reviews its individual estimates and its models for the collective estimate of expected losses as well as the effect

of macroeconomic scenarios on them. In addition, the Bank may supplement the expected losses to account for the effects that may

not be included, either by considering additional risk factors, or by the incorporation of sectorial particularities or particularities that

may affect a set of operations or borrowers, following a formal internal approval process established for this purpose, including

among others the relevant Global Risk Management Committee (among the GRMC committees) as described in the general risk

management and control model chapter of the Management Report.

Thus, in Spain, during 2021 and 2022, the Loss Given Default (LGD) of certain specific operations considered unlikely to pay was

reviewed upwards, with a remaining adjustment as of December 31, 2023 of €227 million, with a €161 million variation compared with

the end of the year 2022 mainly as a result of the model review process.

On the other hand, as of December 31, 2023, the complementary adjustments pending allocation to specific operations or customers

disappear by utilization and/or release. Compared to December 31, 2022, the complementary adjustments pending allocation to

specific operations or customers amounted to €170 million.

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

5.2.2 Credit risk exposure

BBVA’s maximum credit risk exposure (see definition below) by headings in the balance sheets as of December 31, 2023 and 2022 is

provided below. It does not consider the loss allowances and the availability of collateral or other credit enhancements to ensure

compliance with payment obligations. The details are broken down by category of financial instruments:

Maximum credit risk exposure (Millions of Euros)
	Notes	December 2023	Stage 1	Stage 2	Stage 3
Financial assets held for trading		83,891
Equity instruments	8	3,339
Debt securities	8	11,018
Government		9,121
Credit institutions		739
Other sectors		1,158
Loans and advances	8	69,534
Non-trading financial assets mandatorily at fair value through profit or loss		730
Equity instruments	9	507
Debt securities	9	223
Government		130
Credit institutions		49
Other sectors		44
Loans and advances to customers	9	—
Financial assets designated at fair value through profit or loss	10	—
Derivatives (trading and hedging) (1)		39,987
Financial assets at fair value through other comprehensive income		19,426
Equity instruments	11.2	1,019
Debt securities	11.3	18,407	18,396	—	11
Government		12,069	12,069	—	—
Credit institutions		683	683	—	—
Other sectors		5,655	5,644	—	11
Financial assets at amortized cost		266,347	235,327	22,953	8,067
Debt securities		34,911	34,909	—	2
Loans and advances to central banks		—	—	—
Loans and advances to credit institutions		13,080	13,079	—	1
Loans and advances to customers		218,356	187,339	22,953	8,065
Total financial assets risk		410,381
Total loan commitments and financial guarantees		147,464	142,477	4,385	601
Loan commitments given	29	98,667	95,971	2,586	109
Financial guarantees given	29	18,784	18,120	526	137
Other commitments given	29	30,013	28,386	1,272	355
Total maximum credit exposure		557,845

(1) Without considering derivatives whose counterparty are BBVA Group companies.

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 2022	Stage 1	Stage 2	Stage 3
Financial assets held for trading		56,368
Equity instruments	8	3,361
Debt securities	8	11,318
Government		9,225
Credit institutions		759
Other sectors		1,333
Loans and advances	8	41,690
Non-trading financial assets mandatorily at fair value through profit or loss		546
Equity instruments	9	438
Debt securities	9	107
Government		20
Credit institutions		47
Other sectors		40
Loans and advances to customers	9	—
Financial assets designated at fair value through profit or loss	10	—
Derivatives (trading and hedging)  (1)		42,468
Financial assets at fair value through other comprehensive income		24,875
Equity instruments	11.2	977
Debt securities	11.3	23,898	23,872	—	26
Government		18,090	18,090	—	—
Credit institutions		995	995	—	—
Other sectors		4,813	4,787	—	26
Financial assets at amortized cost		251,786	224,645	19,678	7,464
Debt securities		25,320	25,317	—	3
Loans and advances to central banks		10	10	—	—
Loans and advances to credit institutions		9,335	9,277	58	—
Loans and advances to customers		217,121	190,040	19,620	7,461
Total financial assets risk		376,043
Total loan commitments and financial guarantees		139,104	133,635	4,732	738
Loan commitments given	29	95,948	92,853	2,972	123
Financial guarantees given	29	16,305	15,657	473	175
Other commitments given	29	26,850	25,124	1,286	439
Total maximum credit exposure		515,147

(1) 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").

As of December 31, 2023, there are no financial assets classified as purchased or originated credit impaired in the balance sheets of

BBVA S.A.

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, 2023 and 2022 is shown below:

December 2023 (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	13,261	13,199	37	25	(14)	(4)	(3)	(7)	13,247	13,195	34	18
Other financial corporations	11,671	11,495	168	8	(10)	(3)	(3)	(5)	11,660	11,492	165	3
Non-financial corporations	97,404	84,450	9,924	3,030	(1,808)	(205)	(282)	(1,321)	95,596	84,245	9,642	1,709
Households	96,020	78,194	12,825	5,002	(2,738)	(259)	(432)	(2,048)	93,282	77,936	12,393	2,954
Loans and advances to customers (1)	218,35 6	187,339	22,953	8,065	(4,571)	(470)	(719)	(3,381)	213,786	186,86 9	22,234	4,683
Of which: individual					(552)	—	(130)	(422)
Of which: collective					(4,018)	(470)	(589)	(2,959)

(1) 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, 2023, the

remained balance was €142 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 2022 (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	12,716	12,469	208	38	(18)	(3)	(4)	(11)	12,697	12,466	204	27
Other financial corporations	11,528	11,291	224	12	(20)	(2)	(11)	(7)	11,507	11,289	213	5
Non-financial corporations	96,725	84,941	8,573	3,210	(2,394)	(243)	(404)	(1,747)	94,332	84,699	8,169	1,464
Households	96,153	81,338	10,615	4,200	(2,392)	(227)	(344)	(1,821)	93,761	81,111	10,271	2,379
Loans and advances to customers (1)	217,121	190,040	19,620	7,461	(4,824)	(475)	(763)	(3,586)	212,297	189,565	18,858	3,875
Of which: individual					(751)	—	(181)	(570)
Of which: collective					(4,073)	(475)	(582)	(3,016)

(1) 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 €190 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, 2023 and 2022 is shown below:

December 2023 (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	—	—	—	27	128	30	186	247
Credit card debt	—	1	—	1	162	2,579	2,743	2,851
Commercial debtors	—	947	71	580	19,595	35	21,229	21,368
Finance leases	—	133	—	10	5,751	182	6,076	6,179
Reverse repurchase loans	—	—	4,181	92	—	—	4,273	4,273
Other term loans	—	12,051	3,616	8,740	69,313	90,307	184,027	188,192
Advances that are not loans	—	115	5,206	2,210	646	149	8,325	8,326
LOANS AND ADVANCES	—	13,247	13,074	11,660	95,596	93,282	226,860	231,436
By secured loans
Of which: mortgage loans collateralized by immovable property		240	—	483	8,887	70,879	80,489	82,238
Of which: other collateralized loans	—	—	4,080	137	1,453	369	6,039	6,101
By purpose of the loan
Of which: credit for consumption						15,174	15,174	16,163
Of which: lending for house purchase						71,184	71,184	72,389
By subordination
Of which: project finance loans					3,619		3,619	3,684

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 2022 (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	—	—	—	222	32	29	284	351
Credit card debt	—	1	—	1	144	2,529	2,674	2,775
Commercial debtors		1,018	23	363	20,194	29	21,627	21,806
Finance leases	—	96	—	11	5,179	205	5,491	5,609
Reverse repurchase loans	—	—	1,429	102	—	—	1,531	1,532
Other term loans	—	11,370	2,380	7,598	67,842	90,832	180,022	184,387
Advances that are not loans	10	212	5,498	3,210	940	137	10,007	10,007
Loans and advances	10	12,697	9,330	11,507	94,332	93,761	221,637	226,467
By secured loans
Of which: mortgage loans collateralized by immovable property		255	—	294	8,874	71,995	81,417	83,141
Of which: other collateralized loans	—	—	1,429	159	1,370	435	3,393	3,562
By purpose of the loan
Of which: credit for consumption						14,637	14,637	15,469
Of which: lending for house purchase						72,283	72,283	73,247
By subordination
Of which: project finance loans					3,675		3,675	3,723

5.2.3 Mitigation 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

– 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

BBVA  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).

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,

2023 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, 2023 and 2022 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, 2023 and 2022 , 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 2023	8,065	2,166	490	1	5	6
December 2022	7,461	1,664	609	1	3	6

The maximum credit risk exposure of impaired financial guarantees and other commitments as of December 31, 2023 and 2022

amounts to €601 and €738 million of euros (see Note 5.2.2).

5.2.4 Credit 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.

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.

– 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.

– 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, focus on the rating of customers: 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 Bank in order to facilitate a homogeneous classification of its different risk portfolios.

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.

The table below outlines the distribution of exposure, including derivatives, by default probability and internal ratings, to corporates,

financial entities and institutions (excluding sovereign risk), of the main BBVA Group entities as of December 31, 2023 and 2022:

Credit Risk Distribution by Internal Rating
		2023		2022
	PD	Amount (Millions of Euros)	%	Amount (Millions of Euros)	%
AAA/AA	0 to 5	137,186	27.20%	163,327	35.00%
A	5 to 11	173,710	34.40%	132,195	28.30%
BBB+	11 to 17	54,551	10.80%	53,141	11.40%
BBB	17 to 24	50,731	10.00%	39,854	8.50%
BBB-	24 to 39	38,914	7.70%	28,882	6.20%
BB+	39 to 67	14,700	2.90%	14,770	3.20%
BB	67 to 116	12,238	2.40%	10,968	2.30%
BB-	116 to 194	8,989	1.80%	7,778	1.70%
B+	194 to 335	4,786	0.90%	4,894	1.00%
B	335 to 581	2,985	0.60%	3,400	0.70%
B-	581 to 1061	1,750	0.30%	2,180	0.50%
C	1061 to 2121	1,761	0.30%	1,977	0.40%
D	>2121	2,528	0.50%	3,757	0.80%
Total		504,830	100%	467,123	100%

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.

5.2.5 Impaired loan risks

The breakdown of loans and advances within financial assets at amortized cost by counterparties, including their respective gross

carrying amount, impaired amount and accumulated impairment as of December 31, 2023 and 2022 is as follows:

December 2023 (Millions of Euros)
	Gross carrying amount	Impaired loans and advances	Accumulated impairment	Impaired loans and advances as a % of the total
Central banks	—	—	—	—%
General governments	13,261	25	(14)	0.2%
Credit institutions	13,080	1	(6)	—%
Other financial corporations	11,670	8	(10)	0.1%
Non-financial corporations	97,404	3,030	(1,808)	3.1%
Agriculture, forestry and fishing	1,737	72	(42)	4.2%
Mining and quarrying	2,506	10	(8)	0.4%
Manufacturing	24,842	502	(326)	2.0%
Electricity, gas, steam and air conditioning supply	10,026	116	(63)	1.2%
Water supply	835	12	(7)	1.5%
Construction	6,388	475	(276)	7.4%
Wholesale and retail trade	15,512	662	(354)	4.3%
Transport and storage	5,103	149	(74)	2.9%
Accommodation and food service activities	4,294	202	(106)	4.7%
Information and communications	5,266	55	(38)	1.0%
Financial and insurance activities	6,911	165	(98)	2.4%
Real estate activities	5,586	194	(125)	3.5%
Professional, scientific and technical activities	2,727	144	(94)	5.3%
Administrative and support service activities	2,928	73	(39)	2.5%
Public administration and defense, compulsory social security	156	1	(5)	0.6%
Education	233	21	(12)	9.2%
Human health services and social work activities	948	116	(33)	12.2%
Arts, entertainment and recreation	624	41	(21)	6.6%
Other services	783	17	(88)	2.2%
Households	96,020	5,002	(2,738)	5.2%
LOANS AND ADVANCES	231,436	8,065	(4,576)	3.5%

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 2022 (Millions of Euros)
	Gross carrying amount	Impaired loans and advances	Accumulated impairment	Impaired loans and advances as a % of the total
Central banks	10	—	—	—%
General governments	12,716	38	(18)	0.3%
Credit institutions	9,335	—	(6)	—%
Other financial corporations	11,528	12	(20)	—%
Non-financial corporations	96,725	3,210	(2,394)	3.0%
Agriculture, forestry and fishing	1,678	89	(54)	5.3%
Mining and quarrying	2,347	10	(7)	0.4%
Manufacturing	24,936	509	(349)	2.0%
Electricity, gas, steam and air conditioning supply	9,511	19	(52)	0.2%
Water supply	813	17	(11)	2.1%
Construction	6,354	527	(351)	8.3%
Wholesale and retail trade	15,287	620	(391)	4.1%
Transport and storage	5,691	120	(96)	2.1%
Accommodation and food service activities	4,249	300	(153)	7.1%
Information and communications	5,760	98	(34)	1.7%
Financial and insurance activities	6,612	150	(148)	2.3%
Real estate activities	5,459	301	(190)	5.5%
Professional, scientific and technical activities	2,910	131	(114)	4.5%
Administrative and support service activities	2,453	77	(47)	3.1%
Public administration and defense, compulsory social security	154	—	(5)	0.3%
Education	245	19	(11)	7.9%
Human health services and social work activities	942	131	(39)	13.9%
Arts, entertainment and recreation	658	55	(38)	8.4%
Other services	666	37	(303)	5.6%
Households	96,153	4,200	(2,392)	4.4%
LOANS AND ADVANCES	226,467	7,461	(4,830)	3.3%

The changes during the years 2023 and 2022 of impaired financial assets and guarantees given are as follows:

Changes in impaired financial assets and contingent risks (Millions of Euros)
	2023	2022
Balance at the beginning	8,075	8,700
Additions	3,759	2,737
Decreases (1)	(2,250)	(2,402)
Net additions	1,509	335
Amounts written-off	(541)	(539)
Exchange differences and other	(487)	(421)
Balance at the end	8,557	8,075
Recoveries on entries (%)	60%	88%

(1) 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).

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.

The changes during the years 2023 and 2022 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	2023	2022
Balance at the beginning		17,155	16,951
Increase		830	894
Assets of remote collectability		541	539
Past-due and not collected income		289	355
Decrease		(665)	(693)
Re-financing or restructuring		(1)	(1)
Cash recovery	42	(193)	(228)
Foreclosed assets		(3)	(22)
Sales (1)		(196)	(270)
Debt forgiveness		(221)	(151)
Time-barred debt and other causes		(51)	(19)
Net exchange differences		(3)	3
Balance at the end		17,316	17,155

(1) Includes principal and interest.

As indicated in Note 2.2.4, 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.

5.2.6 Loss allowances

Movements, measured over a 12-month period, in gross accounting balances and accumulated allowances for loan losses during

2023 and 2022 are recorded on the accompanying balance sheet as of December 31, 2023 and 2022, 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 2023  (Millions of Euros)
	Stage 1	Stage 2	Stage 3	Total
Balance at the beginning	199,328	19,678	7,461	226,467
Transfers of financial assets:	(7,880)	5,746	2,134	—
Transfers from stage 1 to Stage 2	(11,089)	11,089	—	—
Transfers from stage 2 to Stage 1	4,317	(4,317)	—	—
Transfers to Stage 3	(1,167)	(1,718)	2,885	—
Transfers from Stage 3	59	692	(751)	—
Net annual origination of financial assets	9,211	(2,469)	(989)	5,753
Becoming write-offs	—	—	(541)	(541)
Foreign exchange	(241)	(2)	—	(243)
Modifications that do not result in derecognition	—	—	—	—
Other	—	—	—	—
Balance at the end	200,418	22,953	8,065	231,436

Changes in allowances of  loans and advances at amortized cost. Year 2023 (Millions of Euros)
	Stage 1	Stage 2	Stage 3	Total
Balance at the beginning	479	765	3,586	4,830
Transfers of financial assets:	(10)	133	519	642
Transfers from stage 1 to stage 2	(19)	209	—	190
Transfers from stage 2 to stage 1	16	(114)	—	(98)
Transfers to stage 3	(7)	(20)	710	683
Transfers from stage 3	—	58	(191)	(133)
Net annual origination of allowances	47	(47)	(288)	(288)
Becoming write-offs	—	—	(469)	(469)
Other	(40)	(132)	33	(139)
Balance at the end	476	719	3,381	4,576

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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 year ended December 31,2023, 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 €677 million (€521 

million for the year ended December 31, 2022) (see Note 42).

Changes in gross accounting balances of  loans and advances at amortized cost. Year 2022 (Millions of Euros)
	Stage 1	stage 2	Stage 3	Total
Balance at the beginning	184,700	21,381	8,137	214,218
Transfers of financial assets:	(2,096)	1,184	912	—
Transfers from stage 1 to stage 2	(7,481)	7,481	—	—
Transfers from stage 2 to stage 1	5,958	(5,958)	—	—
Transfers to stage 3	(719)	(1,087)	1,806	—
Transfers from stage 3	146	748	(894)	—
Net annual origination of financial assets	16,241	(2,894)	(1,049)	12,298
Becoming write-offs	—	—	(539)	(539)
Foreign exchange	483	7	—	489
Modifications that do not result in derecognition	—	—	—	—
Other	—	—	—	—
Balance at the end	199,328	19,678	7,461	226,467

Changes in allowances of  loans and advances at amortized cost. Year 2022 (Millions of Euros)
	Stage 1	Stage 2	Stage 3	Total
Balance at the beginning	679	934	3,641	5,254
Transfers of financial assets:	(23)	(38)	371	310
Transfers from stage 1 to stage 2	(35)	142	—	107
Transfers from stage 2 to stage 1	18	(187)	—	(169)
Transfers to stage 3	(7)	(45)	524	472
Transfers from stage 3	1	52	(153)	(100)
Net annual origination of allowances	(124)	(29)	42	(111)
Becoming write-offs	—	—	(462)	(462)
Foreign exchange	1	—	—	1
Modifications that do not result in derecognition	—	—	—	—
Other	(54)	(102)	(6)	(162)
Balance at the end	479	765	3,586	4,830

The loss allowances recorded in the attached balance sheet to cover the impairment estimated in the debt securities amounted to

€21 and €27 million as of December 31, 2023 and 2022 respectively. The variation is mainly due to changes due to variation in credit

risk.

Additionally, the loss allowances recorded in the attached balance sheet to cover the impairment estimated in the commitments and

guarantees given amounted to €240 and €280 million as of December 31, 2023 and 2022 respectively (see Note 21).

5.3 Structural risk

The structural risks are defined, in general terms, as the possibility of suffering losses in the banking book due to adverse movements

in market risk factors.

In the BBVA, the following types of structural risks are defined, according to their nature: interest rate risk, credit spread risk,

exchange rate risk and equity risk.

The scope of structural risks in the Bank excludes market risks in the trading book that are clearly delimited and separated and make

up the type of 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.

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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 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 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 a broad 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.

5.3.1 Interest rate risk and credit spread in the banking book

The structural interest-rate risk (hereinafter, "IRRBB") is related to the potential impact that variations in market interest rates may

have on an entity's earnings, through the impact on net interest income and on the valuation of instruments accounted for at fair

value, as well as on the equity. In order to properly measure IRRBB, BBVA Group takes into account all the main sources of this risk:

repricing risk, yield curve risk, option risk and basis risk.

Furthermore, the credit spread risk in the banking book ("CSRBB") arises from the potential impact on the entity´s earnings and/or

the value of equity of the banking book produced by a variation in the level of market credit spreads that are not explained by default

or migration risk or by movements in market interest rates.

IRRBB and CSRBB management is carried out from a double perspective, the economic value of equity and earnings, including the

management of net interest income and the monitorization of banking book instruments accounted at fair value with an impact on the

income statement and/or on equity. In addition, the banking book instruments recorded based on their market value (fair value) are

subject to specific monitoring, due to their impact on risk and on capital, through other comprehensive income or the income

statement.

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.

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 maintain 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 Bank.

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 Bank, 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.

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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.

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.

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. Stress tests

incorporate extreme scenarios both in market interest rates and in behavioral assumptions, in addition to the assessment of market

scenarios by BBVA Research and the set of prescriptive scenarios defined according to EBA guidelines.

The internal measurement systems and models are subjected to a process of review and continuous improvement in order to keep

them aligned with EBA guidelines.

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.

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.

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.

In addition, the behavior modeling incorporates, where appropriate, the relationship between the evolution of the balance of deposits

and the levels of market interest rates, especially in low rate environments. Consequently, the effect of rate variations on the stability

of the deposits as well as the potential migration between the different types of products (on demand and time deposits) in each

interest rate scenario are incorporated.

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

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.

At an aggregate level, BBVA continues to maintain a moderate risk profile, in accordance with the established objective, having

positive sensitivity to interest rate hikes in the net interest income.

Regarding relevant events in the financial markets in 2023, the first quarters of the year were characterized by a persistent high level

of inflation in most of the countries where the Group operates and strong growth indicators. As a result thereof, both the ECB and the

Fed have consolidated their hawkish messages of high interest rates for a longer time. This positioning from the monetary authorities

contributed negatively to the sovereign curves to certain rises on the valuation of the Group's debt portfolios. However, in the last

quarter of the year, decreasing inflation data and expectancies converging towards central bank objectives, together with the

weakening of some macroeconomic indicators may mean that the rate hike cycle has come to an end in Europe and in the United

States and to the market discounting rate drops by mid-2024. This has triggered a fall in sovereign bond profitability and it has

caused a positive performance in most debt portfolios of the Group. Other peripheral rate curve spreads remain supported. In Mexico,

the rate hike cycle is also considered to be over, while in most countries of South America, interest rate cuts have started taking place.

For the contrary, the Central Bank of Turkey has continued the tightening of its monetary policy launched in June with significant rate

hikes.

Spain has a balance sheet characterized by a lending portfolio with high proportion of variable-rate loans (mortgages and corporate

lending) and liabilities composed mainly by customer demand deposits. The ALCO portfolio acts as a management lever and hedge

for the balance sheet, mitigating its sensitivity to interest rate fluctuations. In an environment of high rates, currently close to their

market-predicted terminal rates, the interest rate risk profile of the balance sheet has been reduced during the year.

On the other hand, the ECB left rates unchanged in the last quarter of the year, bringing the benchmark interest rate to 4.5%, the

marginal deposit facility rate at 4.0% and the marginal loan facility rate at 4.75% as of December 31, 2023. The market expects there

to be a first rate drop in the first half of 2024 and, in this environment, the Euribor 6 and 12 month reference rates fell in the fourth

quarter of 2023, starting to reflect these expectations, while shorter term benchmark rates remained broadly stable. All in all, the

customer spread benefited in 2023 from asset repricing and the containment in the cost of deposits, yet at a slower pace during the

last quarter of the year.

5.3.2 Equity risk in the banking book

Equity risk in the banking book 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 Group'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 main structural equity portfolios is a responsibility of the specialized units of

the corporate areas of Global ALM, Strategy & M&A and Client Solutions (Banking for Growth Companies). Their activity is subject to

the corporate structural equity risk management policy, 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.

Equity markets in Europe and the United States posted significant gains in 2023 due to higher economic growth than expected at the

beginning of the year and falling inflation, leading a process of gradual relaxation of monetary conditions approximately towards

mid-2024. In Europe, the banking sector was one of the best performers, managing to surpass pre-pandemic levels. The Spanish

stock market outperformed both European stock market indices and the local indices of the main European countries. Finally,

Telefónica, where the Group maintains a stake as equity in the banking book, rose slightly less than the indices but significantly more

than the European telecommunications sector.

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

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 amounted to €-24 million as of December 31, 2023 , same as of December 31, 2022. 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.

5.3.3    IBOR reform

The transition from IBOR to Risk Free Rate (hereinafter "RFR") was considered a complex initiative, which affected the Bank in

different geographical areas and business lines, as well as a multitude of products, systems and processes. The main risks to which

the Bank was exposed due to the transition were: (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, hedging, cancellation and recognition of financial instruments associated with

reference indices; (4) price risk, derived from how changes in the indices could impact the price determination mechanisms of certain

instruments; (5) operational risks, as the reform could require changes to the Bank's IT systems, business reporting infrastructure,

operational processes and controls, and (6) conduct risks arising from the potential impact of customer communications during the

transition period, which could lead to customer complaints, regulatory sanctions or reputational impact.

Thus, the Bank established a transition project, provided with a robust governance structure, taking into account the different

transition approaches and deadlines to the new RFR when evaluating the various risks associated with the transition, as well as

defining the lines of action in order to mitigate them.

BBVA actively collaborated in the IBOR transition, both through its support and participation in the sectorial working groups and for

its commitment to amend the contracts with its counterparties. In this sense, BBVA carried out a process of communication and

contact with counterparties to modify the terms of contractual relations in such a way that such 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 Bank.

In relation to the indices affected by the reform, the transition of the EONIA indices and LIBOR GBP, CHF, JPY and EUR has already

been completed satisfactorily in the Bank. In the case of the EURIBOR, the European authorities have promoted modifications in its

methodology so that it meets the requirements of the European Regulation of Reference Indices, for which reason the cessation of

this rate is not foreseen at the moment. Regarding USD LIBOR, the only rate to which BBVA has exposure as of December 31, 2023,

BBVA is actively working to modify all its contracts referenced to this rate to the corresponding RFR (SOFR, Secured Overnight

Financing Rate). The Financial Conduct Authority (FCA) has announced its decision to publish USD LIBOR under a "synthetic"

methodology not representative for the 1, 3 and 6 months tenors until September 30, 2024.The Bank's exposure to financial assets

and liabilities pending transition to the new RFR is no significant.

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.

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

– 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 Bank 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 (hereinafter “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. Additionally, for certain positions, other risks need to be considered, such as a credit

spread, base, volatility or 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 specific

metrics according to market activities, (VaR (Value at Risk), economic capital, 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.

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.

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– 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 2023

The Bank’s market risk related to its trading portfolio remained in 2023 at low levels compared to other risks managed by BBVA,

particularly credit risk. This is due to the nature of the business. In 2023, the market risk of trading book has decreased versus the

previous year and, in terms of VaR, stood at €15 million at the close of the period.

The average VaR for 2023 stood at €12 million, same as registered in 2022, with a high for the year on April 25, 2023 at €17 million.

By type of market risk assumed by the Bank’s trading portfolio, the main risk factor in BBVA at the end of 2023 is still linked to the

interest rates (this figure includes the spread risk) which represents a 60% of the total weight, increasing its relative weight compared

to the year end 2022 (44%). The weight associated with the exchange rate and variable income risk is 12% and 9% respectively, at

the end of the 2023 financial year, a decrease compared to the end of the 2022 financial year, where they represented 28% and 18%

respectively.

The risk related to volatility and correlation accounts represent 19% of the total weight at the end of 2023, increasing its proportion

with respect to the end of the 2022 (10%).

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

Market risk by risk factor (Millions of euros)
	2023	2022
Interest + credit spread	20	16
Exchange rate	4	10
Equity	3	7
Volatility	6	4
Diversification effect (1)	(19)	(23)
Total	15	14
Average VaR	12	12
Maximum VaR	17	18
Minimum VaR	8	8

(1) 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 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 2023 and 2022:

– "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.

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, 2022 and the year ended December 31, 2023,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 none 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 analysis

A number of stress tests are carried out on 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 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.

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

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, 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”) in ISDA and Appendix III in CMOF 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.

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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, 2023 and 2022:

Effect of offsetting for derivatives and securities operation (Millions of Euros)
	2023						2022
				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	42,583	8,866	33,717	25,851	8,353	(487)	46,746	10,554	36,192	26,276	9,491	424
Reverse repurchase, securities borrowing and similar agreements	73,343	—	73,343	74,270	956	(1,883)	42,666	—	42,666	42,735	970	(1,039)
Total assets	115,926	8,866	107,059	100,121	9,309	(2,370)	89,412	10,554	78,858	69,011	10,461	(615)
Trading and hedging derivatives	39,556	8,866	30,690	25,851	6,477	(1,638)	44,107	10,554	33,553	26,276	7,619	(342)
Repurchase, securities lending and similar agreements	88,768	—	88,768	89,844	2,002	(3,078)	42,477	—	42,477	40,798	586	1,093
Total liabilities	128,324	8,866	119,458	115,695	8,479	(4,716)	86,584	10,554	76,030	67,074	8,205	751

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.

5.5 Liquidity 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.

5.5.1 Liquidity 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.

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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 LMU composed of the parent company and the bank subsidiaries in each

geographical area, 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 liquidity and funding 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.

5.5.2 Governance, monitoring and mitigation measures

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%

as a mitigation measure.

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.

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

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.

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. 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, to ensure that each LMU 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.

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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 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 BBVA’s main source of funding

being customer deposits, which consist mainly of demand deposits, savings deposits and time deposits.

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, 2023 and 2022 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.
	2023	2022
Cash and withdrawable central bank reserves	43,931	48,271
Level 1 tradable assets	31,606	33,081
Level 2A tradable assets	919	3,450
Level 2B tradable assets	2,916	3,471
Other tradable assets	44,324	22,708
Non tradable assets eligible for central banks	—	—
Cumulated counterbalancing capacity	123,696	110,981

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, 2023, is 178%, 120%% and 100%%,, 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:

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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 2023. 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	3,732	42,715	—	—	—	—	—	—	—		46,446
Deposits in credit entities	—	502	251	446	497	450	570	114	—	399	3,229
Deposits in other financial institutions	—	1,191	480	859	270	539	1,803	733	520	2,888	9,283
Reverse repo, securities borrowing and margin lending	—	32,854	21,694	6,706	3,398	2,596	3,319	3,817	2,133	139	76,657
Loans and advances	—	14,474	12,325	12,732	7,858	10,177	23,648	19,555	25,470	71,673	197,913
Securities' portfolio settlement	—	330	3,359	1,316	893	8,649	3,376	9,988	14,629	29,119	71,658

December 2023. 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	—	530	3,051	7,030	3,986	3,390	7,624	5,353	7,791	15,420	54,173
Deposits in financial institutions	1,448	2,757	1,000	199	85	89	309	2	89	471	6,449
Deposits in other financial institutions and international agencies	6,967	3,809	2,863	769	774	707	1,456	1,210	1,255	3,755	23,566
Customer deposits	185,072	18,323	6,047	3,948	2,139	3,430	726	642	417	879	221,622
Security pledge funding	—	63,646	30,984	5,913	2,207	1,213	2,456	967	250	551	108,188
Derivatives, net	—	(115)	(193)	(63)	(171)	(412)	(192)	(81)	(272)	(2,569)	(4,069)

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December 2022. 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	3,675	46,987	—	—	—	—	—	—	—	—	50,662
Deposits in credit entities	—	343	161	189	302	307	200	171	35	353	2,062
Deposits in other financial institutions	—	1,842	481	455	372	221	718	724	493	2,580	7,887
Reverse repo, securities borrowing and margin lending	—	26,404	5,794	3,102	1,432	1,127	4,582	1,354	2,400	289	46,485
Loans and advances	—	13,377	13,903	12,303	7,656	9,891	24,146	21,003	26,777	67,946	197,001
Securities' portfolio settlement	—	333	668	5,860	1,274	2,765	11,904	3,669	13,579	28,055	68,107

December 2022. 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	—	1,343	3,250	675	2,629	1,249	4,448	7,679	9,513	13,011	43,798
Deposits in financial institutions	1,064	7,286	436	116	21	39	232	32	78	376	9,679
Deposits in other financial institutions and international agencies	6,715	4,645	1,299	220	359	1,145	1,140	847	1,418	3,540	21,327
Customer deposits	192,909	13,440	7,581	3,047	1,334	1,252	577	577	421	232	221,370
Security pledge funding	—	40,248	14,174	17,580	743	1,317	6,892	1,299	731	386	83,370
Derivatives, net	—	(91)	(72)	(1,229)	(137)	37	(130)	(311)	(555)	(3,712)	(6,200)

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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.

BBVA, S.A. has maintained a strong position, having repaid almost the entire TLTRO III program. During 2023, commercial activity

has not had a significant impact on the Bank's liquidity with a relatively flat evolution in lending, in line with customer deposits. The

latter fell in the first quarter, influenced by the seasonal component and by the transfer to off-balance sheet funds, it recovered during

the second quarter and it remained stable in the third quarter. On the other hand, in December 2022 the Bank started the repayment

of the TLTRO III program (see Note 20.1), maintaining at all times the regulatory liquidity metrics well above the established

minimums.

The main wholesale financing transactions carried out by BBVA S.A. during 2023 are listed below:

Type of issue	Date of issue	Nominal (millions)	Currency	Coupon	Early redemption	Maturity date
Senior non-preferred	Jan-23	1,000	EUR	4.625 %	Jan-30	Jan-31
Covered bonds	Jan-23	1,500	EUR	3.125 %	—	Jul-27
Senior preferred	May-23	1,000	EUR	4.125 %	May-25	May-26
Tier 2	Jun-23	750	EUR	5.750%	Jun-Sep 28	Sep-33
AT1	Jun-23	1,000	EUR	8.375%	Dec-28	Perpetual
Tier 2	Aug-23	300	GBP	8.250%	Aug-Nov 28	Nov-33
AT1	Sep-23	1,000	USD	9.375%	Sep-29	Perpetual
Tier 2	Nov-23	750	USD	7.883%	Nov-33	Nov-34

Additionally, in June 2023, BBVA, S.A. completed a securitization of a portfolio of car loans for an amount of €804 million.

5.5.3 Asset encumbrance

As of December 31, 2023 and 2022, 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
	2023	2022	2023	2022	2023	2022	2023	2022
Equity instruments	592	819	346	819	4,454	3,956	4,454	3,956
Debt securities	32,647	20,653	29,434	20,201	31,906	39,963	32,906	40,415
Loans and advances and other assets	21,496	52,135	—	—	399,820	341,362	—	—

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, to a lesser extent, 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, 2023 and 2022, 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
	2023	2022	2023	2022	2023	2022
Collateral received	70,988	38,717	8,297	6,879	996	1,278
Equity instruments	1,009	338	51	759	—	—
Debt securities	69,978	38,379	8,245	6,119	996	1,278
Own debt securities issued other than own covered bonds or ABSs	—	—	74	—	—	—

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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, 2023 and 2022, 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
	2023	2022	2023	2022
Book value of financial liabilities	124,125	102,157	125,204	108,585
Derivatives	11,034	11,911	10,684	11,700
Deposits	103,998	79,531	104,966	84,042
Outstanding subordinated debt	9,094	10,715	9,554	12,843
Other sources	237	236	519	3,739

6. Fair value of financial instruments

Framework and processes control

The process for determining the fair value established in the Bank seeks to ensure that financial assets and liabilities are properly

recorded following the fair value criteria, which defines fair value as 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 and/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.

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

– Level 3: Valuation of financial instruments with valuation techniques that use significant unobservable inputs in the market.

As of December 31, 2023, the affected instruments at fair value accounted for approximately 0.63% of financial assets and

0.23% of the Bank’s financial liabilities. Model selection and validation is undertaken by control areas outside the business

areas.

6.1. 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

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 considers 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.

The fair value of the Group's financial instruments recognized at fair value in the consolidated balance sheets is presented below,

broken down according to the valuation method used to determine their fair value, and their respective book value as of December 31,

2023 and 2022:

Fair value of financial instruments by levels. December 2023 (Millions of Euros)
	Notes	Fair value Book value
			Level 1	Level 2	Level 3
ASSETS
Financial assets held for trading	8	116,828	13,090	101,740	1,999
Derivatives		32,937	144	32,571	222
Equity instruments		3,339	3,321	—	18
Debt securities		11,018	9,625	1,304	89
Loans and advances		69,534	—	67,864	1,669
Non-trading financial assets mandatorily at fair value through profit or loss	9	730	160	143	427
Equity instruments		507	141	—	366
Debt securities		223	19	143	61
Loans and advances to customers		—	—	—	—
Financial assets designated at fair value through profit or loss	10	—	—	—	—
Debt securities		—	—	—	—
Financial assets at fair value through other comprehensive income	11	19,426	18,350	662	415
Equity instruments		1,019	987	—	32
Debt securities		18,407	17,362	662	383
Loans and advances to credit institutions		—	—	—	—
Derivatives – Hedge accounting	13	780	—	780	—
LIABILITIES
Financial liabilities held for trading	8	108,349	10,495	97,177	677
Trading derivatives		28,615	191	28,206	218
Short positions		11,849	10,305	1,501	44
Deposits		67,885	—	67,470	415
Financial liabilities designated at fair value through profit or loss	10	2,361	—	2,054	307
Deposits from credit institutions		—	—	—	—
Customer deposits		2,361	—	2,054	307
Debt certificates issued		—	—	—	—
Other financial liabilities		—	—	—	—
Derivatives – Hedge accounting	13	2,075	—	2,036	39

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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. December 2022 (Millions of Euros)
	Notes	Book value Fair value
			Level 1	Level 2	Level 3
ASSETS
Financial assets held for trading	8	91,391	15,140	74,084	2,168
Derivatives		35,023	778	33,334	911
Equity instruments		3,361	3,338	—	23
Debt securities		11,318	11,023	228	66
Loans and advances		41,690	—	40,521	1,169
Non-trading financial assets mandatorily at fair value through profit or loss	9	546	67	64	414
Equity instruments		438	67	4	367
Debt securities		107	—	60	47
Loans and advances to customers		—	—	—	—
Financial assets designated at fair value through profit or loss	10	—	—	—	—
Debt securities		—	—	—	—
Financial assets at fair value through other comprehensive income	11	24,854	24,221	463	170
Equity instruments		977	946	—	31
Debt securities		23,877	23,275	463	139
Loans and advances to credit institutions		—	—	—	—
Derivatives – Hedge accounting	13	1,169	—	1,169	—
LIABILITIES
Financial liabilities held for trading	8	80,853	12,134	68,005	715
Trading derivatives		30,954	726	29,640	588
Short positions		11,408	11,408	—	—
Deposits		38,492	—	38,364	127
Financial liabilities designated at fair value through profit or loss	10	1,859	—	1,457	402
Deposits from credit institutions		—	—	—	—
Customer deposits		1,859	—	1,457	402
Debt certificates issued		—	—	—	—
Other financial liabilities		—	—	—	—
Derivatives – Hedge accounting	13	2,599	—	2,574	25

The following table sets forth the main valuation techniques, hypothesis and inputs used in the estimation of fair value of the financial

instruments recorded at fair value classified under Levels 2 and 3, based on the type of financial asset and liability and the

corresponding balances as of December 31, 2023 and 2022:

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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
	Valuation techniques in Levels 2 and 3	Observable inputs in Levels 2 and 3	Unobservable inputs in Levels 2 and 3
ASSETS
Financial assets held for trading
Equity instruments	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	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	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
Interest rate	Interest rate products (Interest rate Swaps, call money Swaps y FRA): Discounted cash flows Caps/Floors: Black 76 y  SABR Bond Options: Black 76 Swaptions: Black 76, SABR y LGM Other Interest rate options: Black, SABR y Libor Market Model 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
Equity instruments	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	Present-value method (Discounted future cash flows)	- Issuer credit risk - Current market interest rates	Prepayment rates - Issuer credit risk - Recovery rates
Loans and advances	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
Equity instruments	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	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
Interest rate	Interest rate products (Interest rate Swaps, call money Swaps y FRA): Discounted cash flows Caps/Floors: Black 76 y  SABR Bond Options: Black 76 Swaptions: Black 76, SABR y LGM Other Interest rate options: Black, SABR y Libor Market Model 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

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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
	Valuation techniques in Levels 2 and 3	Observable inputs in Levels 2 and 3	Unobservable inputs in Levels 2 and 3
LIABILITIES
Financial liabilities held for trading
Deposits	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
Interest rate	Interest rate products (Interest rate Swaps, call money Swaps y FRA): Discounted cash flows Caps/Floors: Black 76 y  SABR Bond Options: Black 76 Swaptions: Black 76, SABR y LGM Other Interest rate options: Black, SABR y Libor Market Model 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	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	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
Interest rate	Interest rate products (Interest rate Swaps, call money Swaps y FRA): Discounted cash flows Caps/Floors: Black 76 y  SABR Bond Options: Black 76 Swaptions: Black 76, SABR y LGM Other Interest rate options: Black, SABR y Libor Market Model 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

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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 (Credit Default Swaps). 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.

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

Unobservable inputs

Quantitative information of unobservable inputs used to calculate level 3 valuations is presented below as of December 31, 2023 and

2022:

Unobservable inputs. December 2023
Financial instrument	Valuation technique(s)	Significant unobservable inputs	Min	Average	Max	Units
Debt Securities	Present value method	Credit spread	—	136	4,369	pb
		Recovery rate	0 %	39 %	40 %	%
	Comparable Pricing		0 %	99 %	237 %	%
Equity/Fund instruments (1)	Net Asset Value
	Comparable Pricing
Loans and advances	Present value method	Repo funding curve	2.26 %	3.74 %	5.76 %	Abs Repo rate
Credit Derivatives	Gaussian Copula	Correlation default	26 %	60 %	85 %	%
	Black 76	Price volatility				Vegas
Equity Derivatives	Option models on equities, baskets of equity, funds	Dividends (2)
		Correlations	(88 %)	52 %	99 %	%
		Volatility	8.47	29.41	70.94	Vegas
FX Derivatives	Option models on FX underlyings	Volatility	4.31	10.24	18.52	Vegas
IR Derivatives	Option models on IR underlyings	Beta	3.00 %	5.00 %	11.00 %	%
		Correlation rate/credit	(100 %)		100 %	%
		Correlation rate/inflation	52 %	60 %	74 %	%

(1) Due to the diversity of valuation models of equity valuations, we would not include all the unobservable inputs or the quantitative ranges of them.

(2) The range of unobservable dividends is too wide range to be relevant.

Unobservable inputs. December 2022
Financial instrument	Valuation technique(s)	Significant unobservable inputs	Min	Average	Max	Units
Debt Securities	Present value method	Credit spread	—	111	1,538	pb
		Recovery rate	0 %	39 %	40 %	%
	Comparable Pricing		2 %	94 %	139 %	%
Equity/Fund instruments (1)	Net Asset Value
	Comparable Pricing
Loans and advances	Present value method	Repo funding curve	0.71 %	3.48 %	5.52 %	Abs Repo rate
Credit Derivatives	Gaussian Copula	Correlation default	26 %	44 %	58 %	%
	Black 76	Price volatility	—	—	—	Vegas
Equity Derivatives	Option models on equities, baskets of equity, funds	Dividends (2)
		Correlations	(93 %)	59 %	99 %	%
		Volatility	7.81	32.62	98.71	Vegas
FX Derivatives	Option models on FX underlyings	Volatility	5.32	11.93	20.73	Vegas
IR Derivatives	Option models on IR underlyings	Beta	0.25 %	2.00 %	18.00 %	%
		Correlation rate/credit	(100 %)		100 %	%
		Correlation rate/inflation	51%	66%	76%	%

(1) Due to the diversity of valuation models of equity valuations, we would not include all the unobservable inputs or the quantitative ranges of them.

(2) The range of unobservable dividends is too wide range to be relevant.

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

Adjustments to the valuation

Under Circular 4/2017, 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 inherent and

counterparties´ default criteria, funding valuation risk and valuation risks due to valuation uncertainty and related to the prudent

valuation criteria aligned with the regulatory requirements and considers the 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 Bank 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 Bank 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 the standard.

The amounts recognized in the balance sheet as of December 31, 2023 and 2022 related to "OCA” were €406 million and €333

million respectively.

The amounts recognized in the balance sheet as of December 31, 2023 and 2022 related to the valuation adjustments to the credit

assessment of the derivative asset as “Credit Valuation Adjustments” (“CVA”) were €-111 million and €-147 million respectively, and

the valuation adjustments to the derivative liabilities as “Debit Valuation Adjustment” (DVA) were €64 million and €88 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, 2023 and 2022 corresponding to the mentioned adjustments were a net impact of €12

million and €-13 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

€78 million and €103 million as of December 31, 2023 and 2022, 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 Bank

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.

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.

Additionally, as of December 31, 2023 and 2022, €-16 million and €-16 million related to the “Funding Valuation Adjustments” (“FVA”)

in derivatives operations, the adjustment has remained stable in the year 2023.

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.

The adjustment to the valuation for liquidity incorporates an adjustment for Bid / Offer spreads in the valuation of positions that do

not meet the necessary conditions to be considered a Market Maker operation.

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, 2023 corresponding to the mentioned adjustments was a net impact of €-50 million

(€-43 million in 2022). An adjustment was also made as of December 31, 2023 on financial asset at fair value through other

comprehensive income for a total of €-7 million (€-11 million in 2022).

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)
	2023		2022
	Assets	Liabilities	Assets	Liabilities
Balance at the beginning	2,752	1,142	3,711	487
Changes in fair value recognized in profit and loss (1)	38	174	268	49
Changes in fair value not recognized in profit and loss	(18)	—	(23)	—
Acquisitions, disposals and liquidations	(132)	(97)	(599)	515
Net transfers to Level 3	200	(196)	(606)	91
Exchange differences and others	—	—	—	—
Balance at the end	2,840	1,023	2,752	1,142

(1) Profit or loss that is attributable to gains or losses relating to those financial assets and liabilities held as of December 31, 2023 and 2022. Valuation adjustments are recorded

under the heading “Gains (losses) on financial assets and liabilities (net)”.

In 2023, as a result of the implementation of the multifactor criteria in the classification, which considers all the risk factors of the

exposures, their observability and uncertainty, there is a reduction in exposure to derivatives in Level 3, offset by an increase in

exposure classified at level 3 in positions of repurchases agreements positions due to unobservability in the inputs applied in their

valuation.

In 2022, the net volume of exposures classified as level 3 has been reduced. This reduction was mainly concentrated in repurchase

agreements positions, derived from the rotation of the portfolio towards positions with better observability in the equity market of the

inputs applied at their fair value. Additionally, the reduction in the volume of level 3 exposures of repurchase agreement positions was

mitigated by the increase in the volume of level 3 exposures in derivatives, for which there was worse observability in the market of

the inputs applied in their fair value.

For the years ended December 31, 2023, and 2022, the profit/loss on sales of financial instruments classified as level 3 recognized in

the consolidated income statement was not material.

Transfers among levels

The Global Valuation Area 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, derivative positions, deposits, loans and advances from 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.

On a quarterly basis, the positions of equity instruments and debt securities are classified, following these criteria, by the local areas

in coordination with Global Markets Valuation.

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, 2023 and 2022:

Transfer among levels (Millions of Euros)
		2023						2022
	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		437	3	55	661	—	460	15	—	1,873	326	23	885
Non-trading financial assets mandatorily at fair value through profit or loss		—	1	—	33	—	14	—	—	—	—	—	2
Financial assets at fair value through other comprehensive income		85	21	29	11	—	56	103	—	112	—	—	22
Derivatives – Hedge accounting		—	—	—	—	—	—	—	—	—	—	—	—
Total		522	26	84	705	—	530	117	—	1,985	326	23	909
LIABILITIES
Financial liabilities held for trading		498	3	36	119	1	251	17	—	239	132	—	233
Financial liabilities designated at fair value through profit or loss		—	—	—	196	—	262	—	—	—	221	—	55
Derivatives – Hedge accounting		—	—	—	—	—	—	—	—	—	25	—	—
Total		498	3	36	315	1	513	17	—	239	378	—	287

The amount of the financial instruments in the fair value portfolio that were transferred among the different valuation levels during

2023 from Level 1 to Level 2 mainly correspond to the review of the classification among levels due to the implementation of a mark to

model valuation in the short-term maturities of the listed options, only for those positions for which it is guaranteed that the inputs

applied from real OTC market transactions are complied with the corroboration criteria. Additionally, there is a transfer of exposure

Level 1 to Level 2 in cash positions in debt securities and equities, partially netted by a transfer of exposure Level 2 to Level 1, all

directly related to the observability of the inputs. The volume of positions transferred from Level 2 to Level 3 is partly offset by

positions moving from Level 3 to Level 2, mainly in cash positions in debt securities, equities and loans and advances.

The amount of financial instruments that were transferred among levels of valuation during the year ended December 31, 2023

corresponds to the above changes in the classification among levels since such financial instruments modified some of their features.

Specifically, transfers among Levels 1 and 2 occurred mainly in derivatives and debt securities. Transfers from Level 2 to Level 3 were

mainly related to derivatives and deposits at fair value through profit or loss, and in relation to transfers from Level 3 to Level 2, this

generally affected derivatives and loans and advances held for trading.

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 based on the criteria defined by

the Global Valuation area in line with the official regulatory requirements for Prudent Valuation metrics, 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, 2023 , 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:

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
	2023	2022	2023	2022	2023	2022	2023	2022
ASSETS
Financial assets held for trading	18	33	(48)	(33)	—	—	—	—
Loans and advances	2	1	(2)	(1)	—	—	—	—
Debt securities	9	—	(22)	—	—	—	—	—
Equity instruments	—	25	(17)	(25)	—	—	—	—
Derivatives	6	6	(6)	(6)	—	—	—	—
Non-trading financial assets mandatorily at fair value through profit or loss	5	135	(114)	(136)	—	—	—	—
Loans and advances	—	—	—	—	—	—	—	—
Debt securities	3	17	(21)	(19)	—	—	—	—
Equity instruments	2	118	(92)	(118)	—	—	—	—
Financial assets at fair value through other comprehensive income	—	—	—	—	34	24	(89)	(25)
Total	23	168	(161)	(169)	34	24	(89)	(25)
LIABILITIES
Financial liabilities held for trading	12	7	(17)	(7)	—	—	—	—
Total	12	7	(17)	(7)	—	—	—	—

6.2. Fair value of financial instruments recognized at amortized cost according to valuation

method

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.). Therefore, their valuations will be conditioned by the interest rates and spreads of the portfolios and their

durations.

– 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.

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 tables present the fair value of the Bank's financial instruments from the attached balance sheets carried at amortized

cost broken down according to the valuation method used to estimate their fair value, and their corresponding book value , as well as

the main methods valuation, hypotheses and inputs used in level 2 and level 3 as of December 31, 2023 and 2022 :

Fair value of financial instruments recognized at amortized cost by levels. December 2023 (Millions of Euros)
	Notes	Book value	Fair value
			Total	Level 1	Level 2	Level 3	Valuation technique(s)	Main inputs used
ASSETS
Cash, cash balances at central banks and other demand deposits	7	49,213	49,213	49,213	—	—
Financial assets at amortized cost	12	261,765	258,572	29,771	9,749	219,052	Present-value method (Discounted future cash flows)
Debt securities		34,905	35,157	29,771	4,770	616		- Credit spread - Prepayment rates - Interest rate yield
Loans and advances to central banks		—	—	—	—	—
Loans and advances to credit institutions		13,074	13,100	—	4,217	8,883
Loans and advances to customers		213,786	210,315	—	762	209,553		- Credit spread - Interest rate yield
LIABILITIES
Financial liabilities at amortized cost	20	339,476	339,771	48,764	288,556	2,451	Present-value method (Discounted future cash flows)	- Issuer´s credit risk - Prepayment rates - Interest rate yield
Deposits from central banks		10,962	10,962	10,962	—	—
Deposits from credit institutions		33,563	33,626	—	33,626	—
Customer deposits		234,754	234,461	1,448	230,563	2,451
Debt certificates issued		50,132	50,657	36,354	14,303	—
Other financial liabilities		10,065	10,064	—	10,064	—

Fair value of financial Instruments recognized at amortized cost by levels. December 2022 (Millions of Euros)
	Notes	Book value	Fair value
			Total	Level 1	Level 2	Level 3	Valuation technique(s)	Main inputs used
ASSETS
Cash, cash balances at central banks and other demand deposits	7	52,973	52,973	52,973	—	—
Financial assets at amortized cost	12	246,950	244,293	16,767	7,877	219,649	Present-value method (Discounted future cash flows)
Debt securities		25,313	23,685	16,757	6,381	547		- Credit spread - Prepayment rates - Interest rate yield
Loans and advances to central banks		10	10	10	—	—
Loans and advances to credit institutions		9,329	9,326	—	80	9,247
Loans and advances to customers		212,297	211,272	—	1,416	209,856		- Credit spread - Interest rate yield
LIABILITIES
Financial liabilities at amortized cost	20	335,941	335,668	67,396	267,589	683	Present-value method (Discounted future cash flows)	- Issuer´s credit risk - Prepayment rates - Interest rate yield
Deposits from central banks		32,517	32,517	32,517	—	—
Deposits from credit institutions		20,200	20,210	—	20,210	—
Customer deposits		234,797	236,059	1,158	234,380	521
Debt certificates issued		38,511	36,967	33,721	3,084	162
Other financial liabilities		9,915	9,915	—	9,915	—

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	2023	2022
Cash on hand		990	972
Cash balances at central banks		45,653	49,854
Other demand deposits		2,570	2,147
Total	6.2	49,213	52,973

8. Financial assets and liabilities held for trading

8.1 Breakdown 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	2023	2022
ASSETS
Derivatives		32,937	35,023
Equity instruments	5.2.2	3,339	3,361
Credit institutions		282	286
Other sectors		2,293	2,536
Shares in the net assets of mutual funds		764	539
Debt securities	5.2.2	11,018	11,318
Issued by central banks		—	—
Issued by public administrations		9,121	9,225
Issued by financial institutions		739	759
Other debt securities		1,158	1,333
Loans and advances	5.2.2	69,534	41,690
Loans and advances to central banks		2,808	1,632
Reverse repurchase agreement		2,808	1,632
Loans and advances to credit institutions ⁽¹⁾		52,441	23,969
Reverse repurchase agreement		52,411	23,938
Loans and advances to customers		14,285	16,089
Reverse repurchase agreement		13,850	15,791
Total assets	6.1	116,828	91,391
LIABILITIES
Derivatives		28,615	30,954
Short positions		11,849	11,408
Deposits		67,885	38,492
Deposits from central banks		4,698	2,161
Repurchase agreement		4,698	2,161
Deposits from credit institutions ⁽¹⁾		42,710	28,107
Repurchase agreement		42,050	27,738
Customer deposits		20,476	8,224
Repurchase agreement		20,371	8,116
Total liabilities	6.1	108,349	80,853

(1) The variation is mainly due to the evolution of "Reverse repurchase agreement" partially compensated with the evolution of "Repurchase agreement".

As of December 31, 2023 and 2022 “Short positions” include €11,219 and €10,602 million, respectively, held with general

governments.

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.

8.2 Derivatives

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, 2023 and 2022, trading derivatives were mainly contracted in

over-the-counter (OTC) markets, with counterparties, consisting primarily of credit institutions and other financial corporations, and

are related to foreign-exchange, interest-rate and equity risk.

Below is a breakdown by type of risk and market, 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)
	2023			2022
	Assets	Liabilities	Notional amount - Total	Assets	Liabilities	Notional amount - Total
Interest rate	12,308	8,169	4,296,633	14,685	11,327	4,016,211
OTC	12,308	8,169	4,282,955	14,685	11,327	4,010,398
Organized market	—	—	13,678	—	—	5,814
Equity instruments	2,598	2,638	70,937	3,125	2,803	75,457
OTC	1,224	1,467	49,289	1,869	1,161	52,245
Organized market	1,374	1,172	21,649	1,256	1,642	23,211
Foreign exchange and gold	17,491	17,281	708,553	16,920	16,542	627,899
OTC	17,491	17,281	708,553	16,920	16,542	627,899
Organized market	—	—	—	—	—	—
Credit	540	527	29,790	293	282	41,704
Credit default swap	540	527	29,790	293	282	41,704
Commodities	—	—	136	—	—	—
Other	—	—	—	—	—	—
DERIVATIVES	32,937	28,615	5,106,049	35,023	30,954	4,761,271
Of which: OTC - credit institutions	22,289	22,122	1,156,636	23,370	22,269	1,041,648
Of which: OTC - other financial corporations	6,493	2,896	3,798,816	7,042	3,192	3,573,051
Of which: OTC - other	2,781	2,425	115,135	3,356	3,851	117,547

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	2023	2022
Equity instruments (1)	5.2.2	507	438
Debt securities	5.2.2	223	107
Loans and advances to customers	5.2.2	—	—
Total	6.1	730	546

(1) As of December 31, 2023, BBVA maintains a direct stake in Neon Payments Limited of 22.6% of its capital stock. In 2022 an agreement was announced with Neon Payments

Limited for the subscription of preferred shares by BBVA representing approximately 21.7% of its share capital. Despite owning more than 20% of the share capital, BBVA's ability

to influence the financial and operating policy decisions of this company is very limited, and therefore this shareholding has been recorded under this caption.

10. Financial assets and liabilities designated at fair value through profit or loss

As of December 31, 2023 and 2022 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, 2023 and 2022 the heading “Financial liabilities designated at fair value through profit or loss” included customer

deposits for an amount of €2,361 and €1,859 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.

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 designated at fair value through other comprehensive income (Millions of Euros)
	Notes	2023	2022
Equity instruments	5.2.2	1,019	977
Debt securities		18,407	23,877
Loans and advances to credit institutions	5.2.2	—	—
Total	6.1	19,426	24,854
Of which: loss allowances of debt securities		(15)	(21)

During financial years 2023 and 2022, there have been no other 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,

2023 and 2022, is as follows:

Financial assets at fair value through other comprehensive income. Equity instruments (Millions of Euros)
	2023	2022
Listed equity instruments
Spanish companies shares	987	946
Foreign companies shares	—	—
Subtotal listed equity instruments	987	946
Unlisted equity instruments
Spanish companies shares	11	11
Credit institutions	—	—
Other entities	11	11
Foreign companies shares	21	20
The United States	—
Other countries	21	20
Subtotal unlisted equity instruments	32	31
Total	1,019	977

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,

2023 and 2022, broken down by issuers, is as follows:

Financial assets at fair value through other comprehensive income. Debt securities (Millions of Euros)
	2023	2022
Domestic debt securities
Government and other government agency	6,050	10,254
Central banks	—	—
Credit institutions	194	224
Other issuers	170	147
Subtotal	6,414	10,625
Foreign debt securities
Mexico	103	160
Government and other government agency	—	—
Central banks	—	—
Credit institutions	—	—
Other issuers	103	160
The United States	3,837	3,258
Government and other government agency	1,389	1,414
Central banks	—	—
Credit institutions	55	56
Other issuers	2,393	1,788
Other countries	8,053	9,834
Other foreign governments and government agency	4,549	6,330
Central banks	80	89
Credit institutions	434	715
Other issuers	2,990	2,700
Subtotal	11,993	13,252
Total	18,407	23,877

The credit ratings of the issuers of debt securities as of December 31, 2023 and 2022, are as follows:

Debt securities by rating
	2023		2022
	Fair value (Millions of Euros)	%	Fair value (Millions of Euros)	%
AAA	337	1.8%	1,469	6.2%
AA+	1,417	7.7%	80	0.4%
AA	197	1.1%	289	1.2%
AA-	477	2.6%	220	0.9%
A+	1,302	7.1%	3,527	14.7%
A	1,130	6.1%	1,282	5.4%
A-	7,448	40.5%	11,437	47.9%
BBB+	1,621	8.8%	1,192	5.0%
BBB	4,171	22.7%	4,138	17.4%
BBB-	178	1.0%	117	0.5%
BB+ or below	22	0.1%	9	—%
Unclassified	106	0.6%	118	0.5%
Total	18,407	100.0%	23,877	100.0%

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.

11.4. Gains/losses

The changes in the gains/losses (net of taxes) in December 31, 2023 and 2022 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
		2023	2022	2023	2022
Balance at the beginning		(464)	342	(1,256)	(1,127)
Valuation gains and losses		302	(1,148)	43	(129)
Amounts transferred to income		(31)	(4)	—	—
Income tax and other		(82)	346	—	—
Balance at the end	27	(275)	(464)	(1,213)	(1,256)

In 2023 and 2022 , equity instruments presented an increase of €42 million and a decrease of €129 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 changes

in Telefonica’s share price. Likewise, the valuations of debt securities have been affected by the evolution of interest rates.

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 balance sheets, according to the nature of the financial instrument, is as

follows:

Financial assets at amortized cost (Millions of Euros)
	Notes	2023	2022
Debt securities		34,905	25,313
Government		31,514	24,016
Credit institutions		2,139	220
Other financial and non-financial corporations		1,251	1,077
Loans and advances to central banks		—	10
Loans and advances to credit institutions		13,074	9,329
Reverse repurchase agreements		4,181	1,429
Other loans and advances		8,893	7,900
Loans and advances to customers	5.2.2	213,786	212,297
Government		13,247	12,697
Other financial corporations		11,660	11,507
Non-financial corporations		95,596	94,332
Other		93,282	93,761
Total	6.2	261,765	246,950
Of which: impaired assets of loans and advances to customers	5.2.5	8,065	7,461
Of which: loss allowances of loans and advances	5.2.5	(4,576)	(4,830)
Of which: loss allowances of debt securities		(6)	(6)

During financial years 2023 and 2022, there have been no other 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 balance sheets, according to the issuer of the debt

securities, is as follows:

Financial assets at amortized cost. Debt securities (Millions of Euros)
	2023	2022
Domestic debt securities
Government and other government agencies	25,838	18,379
Credit institutions	1,027.715	—
Other issuers	230	144
Subtotal	27,095	18,523
Foreign debt securities
The United States	1,885	1,891
Government and other government agencies	1,855	1,860
Credit institutions	18	19
Other issuers	12	12
Other countries	5,925	4,899
Other foreign governments and government agencies	3,821	3,777
Central banks	—	—
Credit institutions	1,093	202
Other issuers	1,010	920
Subtotal	7,810	6,790
Total	34,905	25,313

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.

As of December 31, 2023 and 2022, 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
	2023		2022
	Carrying amount (Millions of Euros)	%	Carrying amount (Millions of Euros)	%
AAA	1,739	5.0%	2,634	10.0%
AA+	2,723	7.8%	172	1.0%
AA	62.899	0.2%	—	—%
AA-	—	—%	—	—%
A+	8	—%	—	—%
A	439	1.3%	501	2.0%
A-	24,720	70.8%	17,032	67.0%
BBB+	1,105	3.2%	1,006	4.0%
BBB	3,774	10.8%	3,556	12.0%
BBB-	99	0.3%	101	—%
BB+ or below	237	0.7%	233	3.0%
Unclassified	0	—%	79	—%
Total	34,905	100.0%	25,314	100.0%

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)
	2023	2022
On demand and short notice	186	284
Credit card debt	2,743	2,674
Trade receivables	21,158	21,604
Finance leases	6,076	5,491
Reverse repurchase agreements	92	102
Other term loans	180,411	177,642
Advances that are not loans	3,120	4,500
Total	213,786	212,297

As of December 31, 2023 and 2022, 43.3% and 41.2%, respectively, of "Loans and advances to customers" with maturity greater than

one year have fixed-interest rates and 56.7% and 58.8%, 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)
	2023	2022
Securitized mortgage assets	20,406	23,290
Other securitized assets	8,493	5,495
Total	28,899	28,784

Furthermore, this heading includes a deposit with the Bank of France associated with the contribution to the Single Resolution Fund

for the years 2018, 2017 and 2016, which was made in the form of an irrevocable payment commitment given its amount recoverable

as of 31 December 2023. The resolution of the appeal filed by a financial institution outside the Group against the dismissal decision of

the Court of Justice of the European Union in this regard is expected throughout 2024, which could lead to a claim by the Single

Resolution Board. In any case, BBVA Group balance of this deposit as of December 31, 2023 is not significant.

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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.

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)
	2023	2022
ASSETS
Derivatives – hedge accounting	780	1,169
Fair value changes of the hedged items in portfolio hedges of interest rate risk	(97)	(148)
LIABILITIES
Derivatives – hedge accounting	2,075	2,599
Fair value changes of the hedged items in portfolio hedges of interest rate risk	—	—

As of December 31, 2023 and 2022, 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).

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

amortized cost portfolio and 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 (see Note

27).

Note 5 analyzes the Bank’s main risks that are hedged using these financial instruments.

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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 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)
	Notes	2023		2022
		Assets	Liabilities	Assets	Liabilities
Interest rate		329	173	576	138
OTC		329	173	576	138
Organized market		—	—	—	—
Equity instruments		—	—	—	—
Foreign exchange and gold		—	—	—	—
Credit		—	—	—	—
Commodities		—	—	—	—
Other		—	—	—	—
FAIR VALUE HEDGES		329	173	576	138
Interest rate		421	1,761	373	2,426
OTC		421	1,761	373	2,426
Organized market				—	—
Equity instruments		—	—	—	—
Foreign exchange and gold		—	—	—	—
OTC		—	—	—	—
Organized market		—	—	—	—
Credit		—	—	—	—
Commodities		—	—	—	—
Other		—	—	—	—
CASH FLOW HEDGES		421	1,761	373	2,426
HEDGE OF NET INVESTMENTS IN A FOREIGN OPERATION		27	136	213	26
PORTFOLIO FAIR VALUE HEDGES OF INTEREST RATE RISK		3	5	7	8
PORTFOLIO CASH FLOW HEDGES OF INTEREST RATE RISK		—	—	—	—
DERIVATIVES-HEDGE ACCOUNTING	6.1	780	2,075	1,169	2,599
Of which: OTC - credit institutions		682	1,865	1,091	2,228
Of which: OTC - other financial corporations		98	211	78	371
Of which: OTC - other		—	—	415	—

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 ⁽¹⁾		Remaining adjustments for discontinued micro hedges including hedges of net positions ⁽¹⁾		Hedged items in portfolio hedge of interest rate risk		Recognized ineffectiveness in profit or loss
	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022
ASSETS
Financial assets measured at fair value through other comprehensive income	9,063	11,881	(646)	(1,007)	165	—	—	—	—	16
Debt securities	9,063	11,881	(646)	(1,007)	165	—	—	—
Interest rate	9,063	11,881	(646)	(1,007)	165	—	—	—
Foreign exchange and gold	—	—	—	—	—	—	—	—
Other	—	—	—	—	—	—	—	—
Loans and advances	—	—	—	—	—	—	—	—
Interest rate	—	—	—	—	—	—	—	—
Foreign exchange and gold	—	—	—	—	—	—	—	—
Other	—	—	—	—	—	—	—	—
Other	—	—	—	—	—	—	—	—
Financial assets measured at amortized cost	2,675	4,331	(119)	(384)	685	—	936	1,179	(8)	(12)
Debt securities	2,300	4,164	(119)	(397)	685	—	—	—
Interest rate	2,300	4,164	(119)	(397)	685	—	—	—
Foreign exchange and gold	—	—	—	—	—	—	—	—
Loans and advances	375	167	28	13	—	—	936	1,179
Interest rate	375	167	28	13	—	—	936	1,179
Foreign exchange and gold	—	—	—	—	—	—	—	—
LIABILITIES
Financial liabilities measured at amortized costs	42,396	(31,564)	517	1,314	—	—	—	—	3	(4)
Deposits	8,986	(1,163)	(83)	(58)	—	—	—	—
Interest rate	8,986	(1,163)	(83)	(58)	—	—	—	—
Foreign exchange and gold	—	—	—	—	—	—	—	—
Debt certificates	33,410	(30,401)	600	1,372	—	—	—	—
Interest rate	33,410	(30,401)	600	1,372	—	—	—	—
Foreign exchange and gold	—	—	—	—	—	—	—	—

(1) The balance of discontinued hedges is not significant.

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 following is the breakdown, by their notional maturities, of the hedging instruments as of December 31, 2023

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	4,950	13,643	24,989	12,024	55,606
Of which: Interest rate	4,937	13,642	24,989	12,024	55,592
CASH FLOW HEDGES	7,270	8,585	12,127	2,625	30,607
Of which: Interest rate	7,270	8,585	12,127	2,625	30,607
HEDGE OF NET INVESTMENTS IN A FOREIGN OPERATION	11,391	1,344	—	—	12,735
PORTFOLIO FAIR VALUE HEDGES OF INTEREST RATE RISK	250	597	1,828	747	3,422
PORTFOLIO CASH FLOW HEDGES OF INTEREST RATE RISK	—	—	—	—	—
DERIVATIVES-HEDGE ACCOUNTING	23,861	24,169	38,944	15,396	102,370

In 2023 and 2022, there was no reclassification in the accompanying 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 the years ended December 31,

2023 and 2022 were not material.

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)
	2023	2022
Subsidiaries
By currency	38,496	37,621
In euros	19,587	19,933
In foreign currencies	18,909	17,688
By share price	38,496	37,621
Listed	7,694	8,037
Unlisted	30,802	29,584
Loss allowances	(15,859)	(15,977)
Total	22,637	21,644

Garanti Bank

In accordance with the accounting standards applicable to the individual financial statements, the Bank maintains the interest in

Garanti BBVA A.S. valued at historical cost (weighted average price in euros of the various acquisitions made since 2011) and at each

closing the recoverability of the investment in euros is assessed in case of indications of impairment.

In 2023 and 2022, although the Turkish lira has continued to depreciate, the positive growth expectations of Garanti in Turkey

together with the positive effect of the hedges in 2023 (the shares acquired in the voluntary tender offer of May 18, 2022 at a price

below the average book cost of BBVA, together with the good performance and good growth expectations of Garanti in Turkey in the

case of 2022), led to a recovery of part of the impairment recorded in previous years. This recovery had a positive impact on the

Bank's individual result of €132 million in 2023 (€647 million in 2022). As of December 31, 2023, the total impairment of the stake in

Garanti is €2,445 million.

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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.

These impairments or recoveries of the interest in the Bank's individual financial statements had no impact on the consolidated

financial statements of the BBVA Group, since foreign currency translation differences are recorded under the heading "Other

accumulated comprehensive income" of the Group's Consolidated Net Equity, in accordance with the accounting standards

applicable to the consolidated financial statements, therefore the depreciation of the Turkish Lira was already recorded, reducing the

consolidated Total Equity of the Group.

Movements

The changes in 2023 and 2022 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)
	2023	2022
Balance at the beginning	37,621	33,970
Acquisitions and capital increases	373	3,444
Disposals and capital reductions ⁽¹⁾	(548)	(943)
Transfers	—	—
Exchange differences and others	1,050	1,150
Balance at the end	38,496	37,621

(1) In 2023 the movement corresponded mainly to a refund of contributions from Tree Inversiones Inmobiliarias, S.A.U. which resulted in a reduction of 500 million euros in the

carrying amount of this investment. In 2022, the movement corresponded mainly to refunds of contributions from Anida Grupo Inmobiliario, S.L. in the amount of €269 million,

PECRI Inversión, S.L. in the amount of €155 million, Catalunya Caixa Inmobiliaria, S.A. Unipersonal in the amount of 111 million euros, Unnim Sociedad para la Gestión de Activos

Inmobiliarios, S.A. Unipersonal in the amount of €87 million and BBV América S.L. in the amount of €79 million.

Changes in the holdings in Group entities

The most notable transactions performed in 2023 and 2022 are as follows:

Significant transactions in 2023

No significant transactions have been carried out during 2023.

Significant transactions in 2022

Investments

Purchase of Tree Inversiones Inmobiliarias SOCIMI, S.A. (Tree) to Merlin Properties SOCIMI, S.A

On June 15, 2022, BBVA acquired from Merlin Properties SOCIMI, S.A., the shares representing the entire share capital of Tree

Inversiones Inmobiliarias SOCIMI, S.A (hereinafter, “Tree”) for an amount of €1,988 million. This company has 662 properties leased

to BBVA S.A., which were part of the group of properties that BBVA sold between 2009 and 2010 under a sale and leaseback contract

and which are registered as “Rights of use” in the assets of the Balance of BBVA and, in liabilities, the payment obligation is reflected

in the heading "Financial liabilities at amortized cost - Other financial liabilities", in accordance with Regulation 33 of Bank of Spain

Circular 4/2017.

BBVA recorded the purchase of this company under the heading "Investments in Subsidiaries, Joint Ventures and Associates" in

Assets on the Balance Sheet for its cost, which amounted to €1,988 million.

Also, given that BBVA maintains the lease contract with Tree, it continues to reflect the right of use and the lease liability for the lease

contract it maintains with it, as it had been doing up to now.

Voluntary takeover bid for the entire share capital of Türkiye Garanti Bankası A.Ş (Garanti BBVA)

On November 15, 2021, BBVA announced a voluntary takeover bid (hereinafter "VTB") addressed to the 2,106,300,000 shares 1 not

controlled by BBVA, which represented 50.15% of the total share capital of Türkiye Garanti Bankası A.Ş (hereinafter "Garanti BBVA").

BBVA submitted for authorization an application of the VTB to the supervisor of the securities markets in Turkey (Capital Markets

Board, hereinafter "CMB") on November 18, 2021.

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

1 All references to “shares” or “share” shall be deemed made to lots of 100 shares, which is the trading unit in which Garanti BBVA shares are listed at Borsa Istanbul.

On March 31, 2022, CMB approved the offer information document and on the same day BBVA announced the commencement of the

VTB acceptance period on April 4, 2022. On April 25, 2022 BBVA informed of an increase of the cash offer price per Garanti BBVA

share from that initially announced (12.20 Turkish lira) to 15.00 Turkish lira.

On May 18, 2022, BBVA announced the finalization of the offer acceptance period, with the acquisition of 36.12% of Garanti BBVA’s

share capital. The total amount paid by BBVA was approximately 22,758 million Turkish lira (equivalent to approximately €1,390

million 2 including the expenses associated with the transaction and net of the collection of the dividends corresponding to the stake

acquired).

The percentage of total share capital of Garanti BBVA owned by BBVA (after the completion of the VTB on May 18, 2022) is 85.97%.

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)
	2023	2022
Associates
By currency	650	585
In euros	271	280
In foreign currencies	379	305
By share price	650	585
Listed	239	249
Unlisted	411	336
Loss allowances	(292)	(305)
Subtotal	358	280
Joint ventures
By currency	24	36
In euros	24	36
In foreign currencies	—	—
By share price	24	36
Listed	—	—
Unlisted	24	36
Loss allowances	—	—
Subtotal	24	36
Total	382	316

The investments in associates as of December 31, 2023 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 2023 and 2022 under this heading in the accompanying balance sheets:

Joint ventures and associates: changes in the year  (Millions of Euros)
	2023	2022
Balance at the beginning	621	591
Acquisitions and capital increases	75	72
Disposals and capital reductions	(22)	(42)
Balance at the end	674	621

During the years 2023 and 2022, the most significant changes under the heading "Investment in joint ventures and associates"

correspond to capital increases in Atom Holdco Limited. During the year 2022 Atom Holdco Limited, the owner of 100% of the shares

of Atom Bank PLC, was created. BBVA became a shareholder of Atom Holdco Limited under the same terms and conditions as those

previously applicable under the agreement with Atom Bank PLC.

14.3. Notifications about acquisition of holdings

Appendix IV provides notifications on acquisitions and disposals of holdings in subsidiaries, joint ventures and associates, in

compliance with Article 155 of the Corporations Act and Article 125 of the Securities Market Act 4/2015.

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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 Using the effective exchange rate of 16.14 Turkish lira per euro.

14.4. Impairment

The breakdown of the changes in loss allowances in 2023 and 2022 under this heading is as follows:

Impairment (Millions of Euros)
	Notes	2023	2022
Balance at the beginning		16,282	17,057
Increase in loss allowances charged to income	43	60	56
Decrease in loss allowances credited to income	43	(178)	(698)
Amount used		(13)	(133)
Balance at the end		16,151	16,282

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 2023 (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		1,028	—	2,601	3,323	213	12	7,177
Additions		1	—	76	169	10	—	256
Retirements		—	—	(15)	(135)	—	(1)	(150)
Transfers		(7)	—	—	(15)	14	—	(9)
Exchange difference and other		—	—	—	—	—	—	—
Balance at the end		1,022	—	2,662	3,342	237	11	7,274
Accrued depreciation
Balance at the beginning		187	—	2,136	758	69	2	3,152
Additions	40	13	—	84	202	21	—	320
Retirements		—	—	(14)	(19)	—	—	(33)
Transfers		(1)	—	—	(3)	3	—	(1)
Exchange difference and other		—	—	(1)	—	—	—	(1)
Balance at the end		199	—	2,205	938	93	2	3,437
Impairment
Balance at the beginning		70	—	—	369	50	5	494
Additions	44	—	—	1	5	11	—	17
Retirements	44	—	—	—	(34)	—	—	(34)
Transfers		—	—	—	—	—	—	—
Exchange difference and other		—	—	(1)	(11)	—	—	(12)
Balance at the end		70	—	—	328	61	5	464
Net tangible assets
Balance at the beginning		771	—	465	2,196	94	5	3,531
Balance at the end		753	—	456	2,077	83	4	3,373

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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 2022 (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		1,047	1	2,700	3,092	161	14	7,015
Additions		1	1	59	285	19	—	365
Retirements		—	(1)	(103)	(22)	—	—	(126)
Transfers		(20)	(1)	(55)	(32)	33	(2)	(77)
Exchange difference and other		—	—	—	—	—	—	—
Balance at the end		1,028	—	2,601	3,323	213	12	7,177
Accrued depreciation
Balance at the beginning		185	—	2,180	592	46	2	3,005
Additions	40	12	—	88	190	18	—	308
Retirements		—	—	(99)	(19)	—	—	(118)
Transfers		(10)	—	(35)	(5)	5	—	(45)
Exchange difference and other		—	—	2	—	—	—	2
Balance at the end		187	—	2,136	758	69	2	3,152
Impairment
Balance at the beginning		70	—	—	417	34	6	527
Additions	44	—	—	4	34	16	—	54
Retirements	44	—	—	—	(75)	—	—	(75)
Transfers		—	—	—	(7)	—	(1)	(8)
Exchange difference and other		—	—	(4)	—	—	—	(4)
Balance at the end		70	—	—	369	50	5	494
Net tangible assets
Balance at the beginning		792	1	520	2,083	81	6	3,482
Balance at the end		771	—	465	2,196	94	5	3,531

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.

As of December 31, 2023 and 2022, the cost of fully amortized tangible assets that remained in use were €1,705 million and € 1,619

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)
	2023	2022
Spain	1,882	1,886
Rest of the world	24	24
Total	1,906	1,910

95

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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, 2023 and 2022 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)
	2023	2022
Transactions in progress	875	824
Accruals	19	31
Total	894	855

The breakdown of the changes in 2023 and 2022 in the balance under this heading in the balance sheets is as follows:

Other intangible assets. Changes over the year (Millions of Euros)
		2023			2022
	Notes	Computer software	Other intangible assets	Total of intangible assets	Computer software	Other intangible assets	Total of intangible assets
Balance at the beginning		825	31	855	797	44	841
Additions		382	—	382	360	—	360
Amortization in the year	40	(319)	(12)	(331)	(317)	(13)	(330)
Net variation of impairment through profit or loss	44	(12)	—	(12)	(15)	—	(15)
Balance at the end		875	19	894	825	31	855

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.

17.1 Years open for review by the tax authorities

As December 31, 2023, the Bank was undergoing inspection in connection with the years 2018 to 2020, with respect to the taxes

applicable to it.

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.

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.

17.2 Reconciliation

The reconciliation of the corporation tax expense resulting from the application of the standard tax rate to the recognized corporation

tax expense in the attached income statement 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)
	2023	2022
Corporation tax	1,664	1,549
Increases due to permanent differences	130	60
Decreases due to permanent differences	(1,376)	(1,461)
Tax credits and tax relief at consolidated Companies	(58)	(48)
Other items net	86	87
Net increases (decreases) due to temporary differences	(94)	(174)
Charge for income tax and other taxes	—	—
Deferred tax assets and liabilities recorded (utilized)	94	174
Income tax and other taxes accrued in the period	447	186
Adjustments to prior years' income tax and other taxes	293	161
Income tax and other taxes	740	347

The heading “Decreases due to permanent differences” of the previous table in 2023 includes mainly the tax effect on dividends and

capital gains, which are exempt in order to avoid double taxation at 95%, for an amount of €3,871 million and available of non-

deductible impairments for an amount of €251 million. In 2022, the effect of those concept were €3,654 and €714 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.

17.3 Income tax recognized in equity

In addition to the income tax registered in the income statements, at the end of 2023 and 2022 the Bank recognized the following

amounts in equity:

Tax recognized in Total Equity (Millions of Euros)
	2023	2022
Charges to total equity
Debt securities	—	—
Equity instruments	(3)	(3)
Other	(10)	—
Subtotal	(13)	(3)
Credits to total equity
Debt securities	94	168
Equity instruments	—	—
Other	—	219
Subtotal	94	387
Total	81	384

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.

17.4 Current 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)
	2023	2022	Variation
Tax assets-
Current tax assets	2,145	1,629	516
Deferred tax assets	10,272	10,850	(578)
Pensions	123	158	(35)
Financial Instruments	161	456	(295)
Other assets	41	49	(8)
Impairment losses	242	237	5
Other	532	508	24
Secured tax assets (1)	8,534	8,689	(155)
Tax losses	639	753	(114)
Total	12,417	12,479	(62)
Tax Liabilities-
Current tax liabilities	197	190	7
Deferred tax liabilities	795	753	42
Charge for income tax and other taxes	795	753	42
Total	992	943	49

(1) 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 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 of Current tax assets is due to higher debtor Public Treasury due to the return of the 2023 Corporation Tax

payments made during the year.

– The decrease in assets for deferred tax assets related to financial instruments are mainly due to valuation adjustments in

Total Equity.

– The other changes in deferred tax assets and liabilities are mainly due to the adjustments on the corporate income tax

finally presented for year 2022 and the estimation for 2023.

– The decrease in guaranteed tax assets and tax losses are due to the estimation for 2023.

On the deferred tax assets and liabilities contained in the table above, those included in Note 17.3 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)
	2023	2022
Pensions	1,622	1,622
Loss allowances	6,912	7,067
Total	8,534	8,689

On the other hand, BBVA, S.A., has not recognized for accounting purposes (or, as the case may be, has been subject to a valuation

adjustment) certain deferred taxes for an amount of €1,484 million in quota for which, in general, there is no legal period for

offsetting, which are mainly originated by Catalunya Banc.

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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 connection with the above, it should be noted that within the framework of the ongoing process of rationalization of the Group’s

corporate structure, which, among others, could provide for the future dissolution and liquidation of companies, the materialization of

the aforementioned deferred tax assets not recognized for accounting purposes may take place in the Entity, as a consequence of tax

adjustments made in the past, associated with the participation being liquidated, which most supposes the materialization of deferred

tax assets not recognized in accounting terms either in the entity itself that holds the status of partner, or in the company object of

dissolution and liquidation.

In addition, BBVA, S.A., in relation to the Branches abroad, has deferred taxes not recognized in accounting for amount of €8,046

thousand in Portugal, €2.897 thousand in Japan and €96 thousand in China, all amounts in quota.

17.5 Other Contributions

Temporary tax on credit institutions in Spain

On December 28, 2022, the Law for the establishment of the temporary tax on credit institutions and financial credit establishments

was published in the Official State Gazette.

This law establishes an obligation to pay a non-taxable equity benefit of public nature during the years 2023 and 2024 on those credit

institutions that operate in Spain whose aggregate interest income and fee and commission income in 2019 was €800 million or

more.

The amount of the non-taxable equity benefit to be paid is the result of applying the percentage of 4.8% to the sum of the net interest

income and fee and commission income and expense derived from the activity carried out in Spain, as shown in the income statement

of the tax consolidation group to which the credit institutions belongs, corresponding to the calendar year prior to the year in which

the obligation to make such a payment arose. The payment obligation arises on the first day of the calendar year of fiscal years 2023

and 2024.

The impact of the payment required to be made by BBVA on account of this benefit in 2023 amounted to €215 million and was

recorded under "Other operating expense" in the consolidated income statement (see Note 38). The estimated impact corresponding

to the year 2024 is €285 million and has been recorded on January 1, 2024 in such caption of the income statement.

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	2023	2022
ASSETS
Insurance contracts linked to pensions	22	1,321	1,337
Inventories		132	—
Rest of other assets		569	340
Transactions in progress		17	63
Accruals		392	265
Other items		161	12
Total		2,023	1,677
LIABILITIES
Transactions in progress		96	27
Accruals		1,012	949
Other items		1,700	1,576
Total		2,808	2,552

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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

The composition of the balances under the headings “Non-current assets and 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)
	2023	2022
Foreclosures and recoveries	558	728
Foreclosures	522	685
Recoveries from financial leases	37	43
Assets from tangible assets	422	460
Business sale - Assets	—	—
Accrued amortization (1)	(79)	(89)
Loss allowances	(389)	(449)
Total non-current assets and disposal groups classified as held for sale	512	651

(1) 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 2023 and 2022 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 (1)		Business sale - assets		Total
Cost  (1)		2023	2022	2023	2022	2023	2022	2023	2022
Balance at the beginning		728	920	371	447	—	—	1,099	1,367
Additions		80	118	—	—	—	—	80	118
Retirements (sales and other decreases)		(227)	(269)	(34)	(110)	—	—	(261)	(379)
Transfers, other movements and exchange differences		(23)	(41)	6	34	—	—	(17)	(7)
Balance at the end		558	728	343	371	—	—	901	1,099
Impairment  (2)
Balance at the beginning		214	216	234	266	—	—	448	482
Net variations through profit and loss	45	16	50	1	14	—	—	17	64
Retirements (sales and other decreases)		(51)	(46)	(22)	(46)	—	—	(73)	(92)
Transfers, other movements and exchange differences		(3)	(6)	—	—	—	—	(3)	(6)
Balance at the end		176	214	213	234	—	—	389	448
Balance at the end of Net carrying value (1)-(2)		382	514	130	137	—	—	512	651

(1) Net of accumulated amortizations until their classification as "Non-current assets and disposable groups of elements that have been classified as held for sale".

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, 2023

and 2022, practically all of the carrying amount of the assets recorded at fair value on a non-recurring basis coincides with their fair

value.

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)
	2023	2022
Residential assets	278	373
Industrial assets	94	127
Agricultural assets	8	11
Total	380	511

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.

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, 2023 and 2022 had been held:

Assets from foreclosures or recoveries. Period of ownership (Millions of Euros)
	2023	2022
Up to one year	27	22
From 1 to 3 years	72	103
From 3 to 5 years	91	184
Over 5 years	190	202
Total	380	511

In 2023 and 2022, 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 €11 and €14 million respectively, with a mean percentage financed of 79% and 82%, 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 € 1,393 and €1,395 million, as of December 31, 2023 and 2022, respectively.

As of December 31, 2023 and 2022, 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)
	2023	2022
Deposits	279,279	287,514
Deposits from central banks	10,962	32,517
Demand deposits	158	197
Time deposits and other	10,804	32,320
Deposits from Credit Institutions	33,563	20,200
Demand deposits	5,922	10,505
Time deposits and other	7,222	6,113
Repurchase agreements	20,419	3,583
Customer deposits	234,754	234,797
Demand deposits	195,004	203,235
Time deposits and other	38,519	30,683
Repurchase agreements	1,231	880
Debt certificates	50,132	38,511
Other financial liabilities	10,065	9,915
Total	339,476	335,941

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 €3,490 and €26,411 million euros as of December 31, 2023 and 2022 respectively after the start of the

refund in December 2022 (See Note 5.5.2).

The positive income generated by the drawdowns of the TLTRO III facilities has been recorded under the heading of "Interest and

other income – Other income" in the consolidated income statements (see Note 33.1), while the negative remuneration generated by

the drawdowns of the TLTRO III facilities has been recorded under "Interest expense" in the consolidated income statements.

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.

20.2. Deposits from credit institutions

The breakdown by geographical area and the nature of the related instruments of this heading in the balance sheets is as follows:

Deposits from credit institutions (Millions of Euros)
	Demand deposits	Time deposits and other	Repurchase agreements	Total
December 2023
Spain	1,270	1,611	899	3,779
Rest of Europe	2,945	2,087	19,260	24,292
Mexico	286	—	—	286
South America	302	451	—	753
Rest of the world	1,119	3,073	260	4,452
Total	5,922	7,222	20,419	33,563
December 2022
Spain	1,223	676	67	1,967
Rest of Europe	3,541	2,117	1,567	7,225
Mexico	215	—	—	215
South America	648	673	—	1,322
Rest of the world	4,876	2,646	1,949	9,471
Total	10,505	6,113	3,583	20,200

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 2023
Spain	182,485	16,664	—	199,149
Rest of Europe	10,197	16,892	1,231	28,320
Mexico	146	284	—	430
South America	932	960	—	1,892
Rest of the world	1,244	3,719	—	4,963
Total	195,004	38,519	1,231	234,754
December 2022
Spain	191,426	12,693	—	204,119
Rest of Europe	8,973	13,875	880	23,728
Mexico	187	411	—	598
South America	1,220	392	—	1,612
Rest of the world	1,428	3,312	—	4,740
Total	203,235	30,683	880	234,797

Previous table includes as of 31, December 2023 and 2022 deposits amounted to € 177 and €184 million, respectively, linked to issues

of subordinated debt made by BBVA Global Finance Ltd.

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

20.4. Debt certificates

The breakdown of the balance under this heading, by type of financial instrument and by currency, is as follows:

Debt certificates issued (Millions of Euros)
	2023	2022
In Euros	40,753	31,228
Promissory bills and notes	5,320	1,075
Non-convertible bonds and debentures	16,675	18,025
Mortgage Covered bonds	5,626	6,364
Other securities	6,182	339
Accrued interest and others (1)	(116)	(864)
Subordinated liabilities	7,066	6,289
Convertible perpetual securities	3,000	3,000
Other non- convertible subordinated liabilities	4,051	3,460
Valuation adjustments (1)	15	(171)
In Foreign Currency	9,379	7,283
Promissory bills and notes	145	111
Non-convertible bonds and debentures	3,125	4,290
Mortgage Covered bonds	98	105
Other securities	1,479	111
Accrued interest and others (1)	35	34
Subordinated liabilities	4,498	2,633
Convertible perpetual securities	2,715	1,875
Other non-convertible subordinated liabilities	1,768	750
Valuation adjustments (1)	14	8
Total	50,132	38,511

(1) Accrued interest but pending payment, valuation adjustments and issuance costs included.

As of December 31, 2023 and 2022, 73 % and 63% of “Debt certificates” have fixed-interest rates, and 27% and 37% have variable

interest rates, respectively.

The total cost of the accrued interest under “Debt securities issued” in 2023 and 2022 totaled €1123 million and €559 million,

respectively.

As of December 31, 2023 and 2022 the accrued interest pending payment from promissory notes and bills and bonds and debentures

amounted to € 500 million and €310 million, respectively.

The heading “Nonconvertible bonds and debentures” as of December 31, 2023 includes several issues, the latest maturing in 2039.

The heading “Mortgage Covered Bonds" as of December 31, 2023 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:

Perpetual Contingent Convertible Securities 

The Annual General Shareholders' Meeting of BBVA held on April 20, 2021, resolved, under agenda item five, to authorize the Board of

Directors of BBVA, with sub-delegation powers, to issue convertible securities, whose conversion is contingent and which are

intended to meet regulatory requirements for their eligibility as capital instruments (CoCos), in accordance with the solvency

regulations applicable from time to time, subject to the legal and statutory provisions that may be applicable at any time. The Board of

Directors may make issues on one or several times within the maximum term of five years from the date on which this resolution was

adopted, up to the maximum overall amount of €8 billion or its equivalent in any other currency. The Board of Directors may also

resolve to exclude, either fully or partially, the pre-emptive subscription rights of shareholders within the framework of a concrete

issuance, complying in all cases with the legal requirements and limitations established for this purpose at any given time.

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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 that delegation, BBVA has 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:

– On June 21, 2023, BBVA carried out an issuance of perpetual contingent convertible securities with exclusion of

shareholders' pre-emptive subscription rights, 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 or sold to any retail

clients.

– On September 19, 2023, BBVA carried out an issuance of perpetual contingent convertible securities with exclusion of

shareholders' pre-emptive subscription rights, for a total nominal amount of USD 1 billion. This issuance is listed on the New

York Stock Exchange and was targeted only at qualified investors, not being offered or sold to any retail clients.

These perpetual securities issued, where appropriate, must 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 type of issuances made by the Bank 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, throughout the

financial years 2022 and 2023:

– On May 24, 2022, the Bank early redeemed the contingently convertible preferred securities (which qualified as additional

tier 1 instruments) issued by the Bank on May 24, 2017, for an amount of €500 million on the First Reset Date and once the

prior consent from the Regulator was obtained.

– On September 24, 2023, the Bank early redeemed the issuance of contingently convertible preferred securities (which

qualified as additional tier 1 instruments) carried out by the Bank on September 24, 2018, for an amount of €1 billion on the

First Reset Date and once the prior consent from the Regulator was obtained.

Convertible Securities

The Annual General Shareholders' Meeting of BBVA held on March 18, 2022, resolved, under agenda item five, to confer authority on

the Board of Directors of BBVA, with sub-delegation powers, to issue securities convertible into new BBVA shares (other than

contingently convertible securities, envisaged to meet regulatory requirements for their eligibility as capital instruments (CoCos)

referred to in the resolutions adopted by BBVA's Annual General Shareholders' Meeting held on April 20, 2021, under agenda item

five), subject to provisions in the law and in BBVA's bylaws that may be applicable at any time, on one or several occasions within the

maximum term of five years to be counted as from the date on which the resolution was adopted, up to a maximum total amount of

€6 billion, or the equivalent in any other currency. The Board of Directors may also resolve to exclude, either fully or partially, the pre-

emptive subscription rights of shareholders within the framework of a specific issuance, limiting power limited to the extent that the

nominal amount of the capital increases agreed or executed in order to satisfy conversion of the issues carried out excluding the pre-

emptive subscription right by virtue of this power (without prejudice to anti-dilution adjustments) and any agreed or executed in use

of the power under the item 4 of the Agenda of the same General Meeting, described in Note 23, excluding the pre-emptive

subscription right, do not exceed a maximum aggregated nominal amount of 10% of BBVA's share capital at the time the resolution

was adopted.

As of the date hereof the Bank has not made use of the authority granted by the BBVA Annual General Shareholders' Meeting held on

March 18, 2022.

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)
	2023	2022
Lease liabilities	2,744	2,869
Creditors for other financial liabilities	2,860	2,928
Collection accounts	2,825	2,731
Creditors for other payment obligations	1,636	1,386
Total	10,065	9,915

A breakdown of the maturity of the lease liabilities, due after December 31, 2023 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	153	401	411	1,781	2,746

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.

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)
	2023		2022
	BBVA S.A.	BBVA GROUP IN SPAIN	BBVA S.A.	BBVA GROUP IN SPAIN
Average payment period to third parties (days)	23	23	26	26
Ratio of outstanding payment transactions (days) (1)	23	23	26	26
Ratio outstanding payment transactions (days) (1)	18	18	18	18
Total payments	3,058	3,053	2,590	2,584
Total outstanding payments	136	136	114	114
(1) To obtain these ratios, the total number of registered invoices is taken into account.

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.

As of December 31, 2023, according to Law 18/2022, of September 28, on creation and development of entities, BBVA paid a total of

127,360 invoices (representing 92.9% of the total invoices received) with a total amount of €2,461 million (representing 96.6% of the

volume invoiced) in a period less than or equal to the maximum established in the delinquency regulations.

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	2023	2022
Provisions for pensions and similar obligations	22	1,871	2,085
Other long term employee benefits	22	404	433
Provisions for taxes and other legal contingencies		396	388
Provisions for contingent risks and commitments		240	280
Other provisions (1)		221	198
Total		3,131	3,385

(1) Individually non-significant provisions, for various concepts.

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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 2023 and 2022 in the balances under this heading:

Provisions for pensions, similar obligations and other long term employee benefits. Changes over the year (Millions of Euros)
	2023	2022
Balance at the beginning	2,518	3,627
Charges to income for the year	42	21
Interest expense and similar charges	37	16
Personnel expense	3	4
Provision expense	1	1
Charges (Credits) to equity (1)	24	(39)
Transfers and other changes	—	—
Benefit payments	(262)	(420)
Employer contributions	(39)	(546)
Unused amounts reversed during the period	(8)	(125)
Balance at the end	2,275	2,518

(1) Corresponds to actuarial losses (gains) arising from certain post-employment defined-benefit commitments for pensions (see Note 2.12).

Provisions for taxes, legal contingencies, Provisions for contingent risks and commitments and other provisions. Changes over the year (Millions of Euros)
	2023	2022
Balance at beginning	866	861
Additions	328	469
Unused amounts reversed during the year	(207)	(296)
Amount used and other variations	(130)	(168)
Balance at the end	857	866

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 subject to lawsuits and 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, 2023, the provisions made in relation to

judicial proceedings and arbitrations, where so required, are adequate and reasonably cover the liabilities that might arise, if any, from

such proceedings and arbitrations. Furthermore, on the basis of the information available and with the exceptions indicated in Note

7.1 "Risk factors", BBVA considers that the liabilities that may arise from such proceedings will not have, individually, 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 2.12, 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.

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.

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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 shows a breakdown of recorded balance sheet liabilities relating to defined benefit plans as at December 31, 2023 and

2022 :

Net defined benefit  liability (asset) on the balance sheet (Millions of Euros)
	Notes	2023	2022
Pension commitments		2,108	2,227
Early retirement commitments		407	600
Other long-term employee benefits		404	433
Total commitments		2,919	3,260
Pension plan assets		644	742
Total plan assets		644	742
Total net liability/asset		2,275	2,518
Of which: provisions- provisions for pensions and similar obligations	21	1,871	2,085
Of which: provisions-other long-term employee benefits	21	404	433
Other net assets in pension plans		—	—
Of which: Insurance contracts linked to pensions	18	(1,321)	(1,337)

The following table shows defined benefit post-employment commitments recorded in the income statement for fiscal years 2023

and 2022:

Income Statement and equity impact (Millions of Euros)
	Notes	2023	2022
Interest and similar expense		37	16
Interest expense		37	16
Interest income		—	—
Personnel expense		58	43
Defined contribution plan expense	39	54	37
Defined benefit plan expense	39	1	2
Other benefit expense		3	4
Provisions or reversal of provisions	41	(5)	(123)
Early retirement expense		—	—
Past service cost expense		—	1
Remeasurements (1)		(7)	(125)
Other provision expense		2	1
Total effects in income statements: debit (credit)		90	(64)
Total effects on equity: debit (credit) (2)		24	(31)

(1) 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 2.12).

(2) Actuarial gains (losses) on remeasurement of the net defined benefit pension liability before income taxes (see Note 2.12).

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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.

22.1 Defined 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, the Bank pays the required premiums to fully insure the related liability. The change in these commitments

as of December 31, 2023 and 2022 is presented below:

Defined Benefit Plans (Millions of Euros)
	2023				2022
	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	2,827	742	2,085	1,337	4,075	1,058	3,017	1,882
Current service cost	4	—	4	—	5	—	5	—
Interest income or expense	100	26	74	51	58	15	43	32
Contributions by plan participants	—	—	—	—	—	—	—	—
Employer contributions	—	28	(28)	—	—	2	(2)	—
Past service costs (1)	3	—	3	—	3	—	3	—
Remeasurements:	60	(10)	70	54	(792)	(252)	(540)	(437)
Return on plan assets (2)	—	(10)	10	54	—	(252)	252	(437)
From changes in demographic assumptions	(2)	—	(2)	—	7	—	7	—
From changes in financial assumptions	67	—	67	—	(768)	—	(768)	—
Other actuarial gain and losses	(5)	—	(5)	—	(31)	—	(31)	—
Benefit payments	(412)	(75)	(337)	(121)	(519)	(78)	(441)	(140)
Settlement payments	(74)	(75)	1	—	(3)	(3)	—	—
Business combinations and disposals	—	—	—	—	—	—	—
Effect on changes in foreign exchange rates	2	2	—	—	(7)	(7)	—	—
Other effects	5	6	(1)	—	7	7	—	—
Balance at the end	2,515	644	1,871	1,321	2,827	742	2,085	1,337

(1) Including gains and losses arising from settlements.

(2) 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, 2023 includes €210 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 specific benefits committees.

These benefit committees include members from the different areas of the business 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 of December 31, 2023 and

2022:

Actuarial Assumptions. Commitments  in Spain
	2023	2022
Discount rate	3.43%	3.91%
Rate of salary increase	—	—
Mortality tables	PER 2020	PER 2020

The discount rate shown as of December 31, 2023, corresponds to the weighted average rate, the actual discount rates used are

3.25% and 4% 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.

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 €8 million net of tax.

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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 Bank has other less material long-term employee benefits. These

include leaves 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 services. Additionally, this heading included a

fund related to the collective layoff procedure that was carried out in the bank in 2021. As of December 31, 2023 and 2022 the value of

these commitments amounted to €404 and €433 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, 2023 and 2022 is as follows:

Pensions commitments (Millions of Euros)
	2023				2022
	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	2,227	742	1,485	1,337	3,132	1,058	2,074	1,882
Net commitments addition	—	—	—	—	—	—	—	—
Current service cost	4	—	4	—	5	—	5	—
Interest income or expense	83	26	57	51	51	15	36	32
Contributions by plan participants	—	—	—	—	—	—	—	—
Employer contributions	—	28	(28)	—	—	2	(2)	—
Past service costs (1)	3	—	3	—	3	—	3	—
Remeasurements:	67	(10)	77	54	(727)	(252)	(475)	(437)
Return on plan assets (2)	—	(10)	10	54	—	(252)	252	(437)
From changes in demographic assumptions	(2)	—	(2)	—	7	—	7	—
From changes in financial assumptions	64	—	64	—	(715)	—	(715)	—
Other actuarial gain and losses	5	—	5	—	(19)	—	(19)	—
Benefit payments	(209)	(75)	(134)	(121)	(234)	(78)	(156)	(140)
Settlement payments	(74)	(75)	1	—	(3)	(3)	—	—
Business combinations and disposals	—	—	—	—	—	—	—	—
Defined contribution transformation	—	—	—	—	—	—	—	—
Effect on changes in foreign exchange rates	2	2	—	—	(7)	(7)	—	—
Other  effects	5	6	(1)	—	7	7	—	—
Balance at the end	2,108	644	1,464	1,321	2,227	742	1,485	1,337
Of Which: Vested benefit obligation relating to current employees	1,998	—	—	—	2,122	—	—	—
Of Which: Vested benefit obligation relating to retired employees	110	—	—	—	105	—	—	—

(1) Including gains and losses arising from settlements.

(2) 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, 2023 and 2022, 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.

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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 addition, there are commitments with the Bank's early-retired personnel. These commitments to early retirees include the

compensation and indemnities and contributions to external pension funds payable during the period of early retirement. As of

December 31, 2023 and 2022, the value of these commitments amounted to €407 million and €600 million respectively.

The change in these commitments during financial years 2023 and 2022 is shown below:

Early retirement commitments (Millions of Euros)
	2023			2022
	Defined Benefit Obligation	Plan assets	Net liability (asset)	Defined benefit obligation	Plan assets	Net liability (asset)
Balance at the beginning	600	—	600	943	—	943
Current service cost	—	—	—	—	—	—
Interest income or expense	17	—	17	7	—	7
Contributions by plan participants	—	—	—	—	—	—
Employer contributions	—	—	—	—	—	—
Past service costs (1)	—	—	—	—	—	—
Remeasurements:	(7)	—	(7)	(65)	—	(65)
Return on plan assets (2)	—	—	—	—	—	—
From changes in demographic assumptions	—	—	—	—	—	—
From changes in financial assumptions	3	—	3	(53)	—	(53)
Other actuarial gain and losses	(10)	—	(10)	(12)	—	(12)
Benefit payments	(203)	—	(203)	(285)	—	(285)
Settlement payments	—	—	—	—	—	—
Business combinations and disposals	—	—	—	—	—	—
Defined contribution transformation	—	—	—	—	—	—
Effect on changes in foreign exchange rates	—	—	—	—	—	—
Other  effects	—	—	—	—	—	—
Balance at the end	407	—	407	600	—	600

(1) Including gains and losses arising from settlements.

(2) 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 2.12).

Estimated benefit payments

As of December 31, 2023 the estimated payments over the next ten years are as follows:

Estimated future payments (Millions of Euros)
	2024	2025	2026	2027	2028	2029 - 2033
Commitments in Spain	477	325	279	242	210	697
Of which: Early retirements	145	105	74	49	31	26

22.2 Defined contribution plans

The Bank sponsors defined contribution plans, in some cases with employees making contributions which are matched by the

employer.

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

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 2.12).

23. Common stock

As of December 31, 2023 and 2022 BBVA’s share capital amounted to €2,860,590,786.20 and €2,954,757,116.36 divided into

5,837,940,380 and 6,030,116,564 shares respectively, at €0.49 par value each one, in both periods. The shares were fully subscribed

and paid-up registered, all of the same class and series represented through book-entry accounts. The decrease was as of result of

the partial executions of the share capital reduction resolution adopted by the Ordinary Annual Shareholders' Meeting of BBVA held

on March 17, 2023, under item 3 of the agenda notified on June 2, 2023 and on December 19, 2023 (see Note 3). All of the Bank´s

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 capital.

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, 2023, 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, 2023, 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 15.73%, 1.81%, and 9.20% 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.

On November 8, 2023, Capital Research and Management Company reported to the Spanish Securities and Exchange Commission

(CNMV) that, it had an indirect holding of BBVA common stock totaling 3.010 %, of which 3.07% correspond to voting rights

attributed to shares and 0.003% correspond to voting rights held through financial instruments.

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

Shareholders' Meetings or restricting or placing conditions on the free transferability of BBVA shares. No agreement is known to

BBVA that could give rise to changes in the control of the Bank.

Resolutions adopted by the Annual General Shareholders' Meeting

Capital increase

BBVA's Annual General Shareholders' Meeting held on March 18, 2022 resolved, under agenda item four, to confer authority on the

Board of Directors of BBVA to increase BBVA's share capital, on one or several occasions, within the legal term of five years to be

counted as from the date on which this resolution was adopted, up to the maximum amount corresponding to 50% of BBVA's share

capital at the time of this authorization. Likewise, the Annual General Shareholders' Meeting resolved to confer on the Board of

Directors authority to totally or partially exclude shareholders' pre-emptive subscription rights within the framework of a specific

issue of shares that may be made thereunder.

However, the power to exclude pre-emptive subscription rights was limited, such that the nominal amount of any share capital

increases resolved or effectively carried out with the exclusion of pre-emptive subscription rights and those that may be resolved or

carried out to cover the conversion of convertible issuances that may equally be made with the exclusion of pre-emptive subscription

rights in use of the authority delegated to issue securities convertible (other than contingently convertible securities, envisaged to

meet regulatory requirements for their eligibility as capital instruments (CoCos)) as resolved by BBVA's Annual General

Shareholders' Meeting held on March 18, 2022 under agenda item five and which is described in Note 22.4.1 (without prejudice to

anti-dilution adjustments), may not exceed the nominal maximum overall amount of 10% of BBVA's share capital at the time of this

authorization. This authority repealed the authority conferred by the Annual General Shareholders' Meeting held on March 17, 2017

under its agenda item four, which BBVA did not use.

As of the date of this document, the Bank has not exercised the authority conferred by the General Shareholders' Meeting.

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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 Decrease

BBVA's Annual General Shareholders' Meeting held on March 18, 2022 resolved, under agenda item seven, to approve the share

capital reduction of BBVA by up to a maximum amount of 10% of the share capital on the date of this resolution, through the

redemption of own shares acquired derivatively by BBVA, both those acquired by virtue of the authorization granted by the BBVA

Annual General Shareholders' Meeting held on March 16, 2018 under item three of the agenda, and those that were acquired by virtue

of the authorization granted by the General Shareholders' Meeting held on March 18, 2022 under item six of the agenda, from that

date, through any mechanism whose objective or purpose is redemption. The implementation period of this resolution was

determined until the date of the following Annual General Shareholders' Meeting, being rendered null and void from that date in

respect of the amount not executed. The Annual General Shareholders' Meeting conferred authority on the Board of Directors of

BBVA, with sub-delegation powers, to totally or partially execute the aforementioned share capital reduction, on one or more

occasions, repealing the resolution adopted by the Annual General Shareholders' Meeting held on April 20, 2021 under agenda item

six, which BBVA did not use.

In the execution of said resolution, (see Note 3), BBVA has executed the following share capital reductions:

– On June 15, 2022, BBVA notified the partial execution of the resolution through the reduction of BBVA’s share capital in a

nominal amount of €137,797,167.90 and the consequent redemption, charged to unrestricted reserves, of 281,218,710 own

shares of €0.49 par value each acquired derivatively by the Bank in execution of the First Tranche of the Program Scheme

and which were held as treasury shares.

– On September 30, 2022, BBVA notified the second partial execution of the resolution through the reduction of BBVA’s

share capital in a nominal amount of €174,710,139.94 and the consequent redemption, charged to unrestricted reserves, of

356,551,306 own shares of €0.49 par value each acquired derivatively by the Bank in execution of the Second Tranche of

the Program Scheme and which were held as treasury shares.

BBVA's Annual General Shareholders' Meeting held on March 17, 2023 resolved, under agenda item three, to approve the share

capital reduction of BBVA by up to a maximum amount of 10% of the share capital on the date of this resolution, through the

redemption of own shares acquired derivatively by BBVA by virtue of the authorization granted by the General Shareholders' Meeting

held on March 18, 2022 under item six of the agenda, through any mechanism whose objective or purpose is redemption, The

implementation period of this resolution was determined until the date of the following Annual General Shareholders' Meeting, being

rendered null and void from that date in respect of the amount not executed. The Annual General Shareholders' Meeting conferred

authority on the Board of Directors of BBVA, with sub-delegation powers, to totally or partially execute the aforementioned share

capital reduction, on one or more occasions, repealing the resolution adopted by the Annual General Shareholders' Meeting held on

March 18, 2022, under agenda item seven, whose executions are described above.

In the execution of said resolution, (see Note 3), BBVA has executed the following share capital reductions:

– On June 2, 2023, BBVA notified the partial execution of the resolution through the reduction of BBVA’s share capital in a

nominal amount of €31,675,343.91 and the consequent redemption, charged to unrestricted reserves, of 64,643,559 own

shares of €0.49 par value each acquired derivatively by the Bank in execution of a the share buyback program and which

were held as treasury shares.

– On December 19, 2023, BBVA notified the second partial execution of the resolution through the reduction of BBVA’s share

capital in a nominal amount of €62,490,986.25 and the consequent redemption, charged to unrestricted reserves, of

127,532,625 own shares of €0.49 par value each acquired derivatively by the Bank in execution of a share buyback program

and which were held as treasury share.

Convertible and/or exchangeable securities:

Note 20.4 introduces the details of the convertible and/or exchangeable securities.

24. Share premium

As of December 31, 2023 and 2022, the balance under this heading in the accompanying balance sheets was €19,769 and €20,856

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).

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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. 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)
	2023	2022
Restricted reserves
Legal reserve	572	591
Restricted reserve for retired capital	561	482
Revaluation Royal Decree-Law 7/1996	—	—
Voluntary reserves
Voluntary and others	5,478	3,906
Total	6,612	4,979

25.2. Legal reserve

Under the amended Spanish 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, 2023 and 2022 , the Bank’s restricted reserves are as follows:

Restricted reserves. Breakdown by concepts (Millions of Euros)
	2023	2022
Restricted reserve for retired capital	495	400
Restricted reserve for Parent Company shares and loans for those shares	65	80
Restricted reserve for redenomination of capital in euros	2	2
Total	561	482

Until 2021, the restricted reserve for retired capital resulted from the reduction of the nominal par value of the BBVA shares made in

April 2000. In 2023 and 2022 the amount includes the partial executions of the capital reduction resolution adopted by BBVA's

General Shareholders' Meeting held on March 17, 2023 and March 18, 2022, respectively (see Note 23).

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. The balance of 2021 is mainly due to the share buyback program (see Note 4).

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 parent company common stock in euros.

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.

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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 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 2022 and 2023	—

26. Treasury shares

In 2023 and 2022 the Group companies performed the following transactions with shares issued by the Bank:

Treasury shares (Millions of Euros)
	2023		2022
	Number of Shares	Millions of Euros	Number of Shares	Millions of Euros
Balance at beginning	5,485,414	29	127,633,399	647
+ Purchases	301,882,728	2,166	598,457,024	2,966
- Sales and other changes	(302,981,517)	(2,161)	(720,605,009)	(3,583)
+/- Derivatives on BBVA shares	—	—	—	—
+/- Other changes	—	—	—	—
Balance at the end	4,386,625	34	5,485,414	29
Of which:
Held by BBVA, S.A.	—	3	—	3
Held by Corporación General Financiera, S.A.	4,354,004	31	5,454,516	26
Held by other subsidiaries	32,621	—	30,898	—
Average purchase price in Euros	7.18	—	4.96	—
Average selling price in Euros (including other changes)	7.14	—	4.99	—
Net gains or losses on transactions (Shareholders' funds-Reserves)		1		9

During the years 2023 and 2022, transactions were recorded for the share buyback program (see Note 3).

The percentages of treasury shares held by BBVA in the years ended 2023 and 2022 are as follows:

Treasury Stock	2023			2022
	Min	Max	Closing	Min	Max	Closing
% treasury stock	0.038%	2.214%	0.075%	0.078%	7.492%	0.094%

The number of BBVA shares accepted by the Bank in pledge of loans as of December 31, 2023 and 2022 is as follows:

Shares of BBVA accepted in pledge
	2023	2022
Number of shares in pledge	17,492,194	23,437,363
Nominal value (Euros)	0.49	0.49
% of share capital	0.29%	0.39%

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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 owned by third parties but under management of a company within the Group as of December 31, 2023

and 2022 is as follows:

Shares of BBVA Owned by Third Parties but Managed by the Group
	2023	2022
Number of shares owned by third parties	13,258,994	18,686,027
Nominal value (Euros)	0.49	0.49
% of share capital	0.23%	0.31%

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	2023	2022
Items that will not be reclassified to profit or loss		(1,212)	(1,215)
Actuarial gains (losses) on defined benefit pension plans		(54)	(32)
Fair value changes of equity instruments measured at fair value through other comprehensive income	11.4	(1,213)	(1,256)
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		55	72
Items that may be reclassified to profit or loss		(230)	(957)
Hedge of net investments in foreign operations (effective portion)		—	—
Foreign currency translation		—	—
Hedging derivatives. Cash flow hedges (effective portion)		45	(492)
Fair value changes of debt instruments measured at fair value through other comprehensive income	11.4	(275)	(464)
Hedging instruments (non-designated items)		—	—
Non-current assets and disposal groups classified as held for sale		—	—
Total		(1,443)	(2,172)

The balances recognized under these headings are presented net of tax.

28. Capital base and capital management

As of December 31, 2023 and 2022, 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.

After the latest SREP (Supervisory Review and Evaluation Process) decision, applicable as from January 1, 2024, the ECB has

informed the Bank that it must maintain a total capital ratio of 12.10% and a CET1 capital ratio of 7.94% and at the individual level,

including a Pillar 2 requirement of 1.50% (at least 0.84% must be CET1).

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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 reconciliation of the main figures between the accounting and regulatory own funds as of December 31, 2023 and 2022 is shown

below:

Eligible capital resources (Millions of Euros)
	Notes	2023 ⁽¹⁾	2022
Capital	23	2,861	2,955
Share premium	24	19,769	20,856
Retained earnings, revaluation reserves and other reserves	25.1	6,612	4,979
Other equity instruments, net		40	49
Treasury shares	26	(3)	(3)
Profit (loss) for the year		4,807	4,816
Attributable dividend		(952)	(724)
Total Equity		33,134	32,928
Accumulated other comprehensive income (loss)		(1,443)	(2,172)
Shareholders´ equity		31,691	30,756
Intangible assets		(318)	(328)
Fin. treasury shares		(51)	(67)
Deductions		(369)	(394)
Temporary CET 1 adjustments		—	160
Equity not eligible at solvency level		—	160
Other adjustments and deductions (2)		(4,810)	(4,188)
Common Equity Tier 1 (CET 1)		26,512	26,333
Additional Tier 1 before regulatory adjustments		5,715	4,875
Tier 1		32,227	31,208
Tier 2		5,461	3,730
Total Capital (Total Capital=Tier 1 + Tier 2)		37,688	34,938
Total Minimum equity required		26,244	24,773

(1) Provisional data.

(2) 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).

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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 own funds in accordance with the aforementioned applicable regulation as of December 31, 2023 and 2022 is shown

below:

Amount of capital CC1 (Millions of Euros)
	2023 ⁽¹⁾	2022 ⁽²⁾
Capital and share premium	22,629	23,810
Retained earnings and equity instruments	7,306	5,673
Other accumulated income and other reserves	(2,226)	(2,385)
Net interim attributable profit ⁽³⁾	1,579	2,222
Ordinary Tier 1 (CET 1) before other reglamentary adjustments	29,288	29,320
Goodwill and intangible assets	(318)	(328)
Direct and indirect holdings in equity	(329)	(353)
Deferred tax assets	(639)	(753)
Other deductions and filters ⁽⁴⁾	(1,491)	(1,553)
Total common equity Tier 1 reglamentary adjustments	(2,776)	(2,987)
Common equity TIER 1 (CET1)	26,512	26,333
Equity instruments and share premium classified as liabilities	5,715	4,875
Additional Tier 1 (CET 1) before regulatory adjustments	5,715	4,875
Transitional CET 1 adjustments	—	—
Total regulatory adjustments of additional equity l Tier 1	—	—
Additional equity Tier 1  (AT1)	5,715	4,875
Tier 1 (Common equity TIER 1+ additional TIER 1)	32,227	31,208
Equity instruments and share premium accounted as Tier 2	5,214	3,515
Credit risk adjustments	257	225
Tier 2 before regulatory adjustments	5,471	3,740
Tier 2 regulatory adjustments	(10)	(10)
Tier 2	5,461	3,730
Total capital (Total capital=Tier 1 + Tier 2)	37,688	34,938
Total RWA's	216,897	206,273
CET 1 (phased-in)	12.22%	12.77%
Tier 1 (phased-in)	14.86%	15.13%
Total capital (phased-in)	17.38%	16.94%

(1) Provisional data.

(2) In 2022, the difference between the phased-in and fully-loaded ratios arises from the transitional treatment of certain capital elements, mainly as a result of the impact of

IFRS9 to which the Bank has adhered (in accordance with article 473bis of the CRR and the subsequent amendments introduced by Regulation 2020/873 of the European Union).

In 2023 there are no differences between the phased-in and fully-loaded ratios due to the aforementioned transitional treatment.

(3) Includes the amounts of the share repurchase programs carried out. Also, for the year 2023, includes the maximum amount foreseen subject to approval at the General

Shareholders' Meeting.

(4) Includes the amounts of the share buy-back programs carried out. Also, for the year 2023, includes the maximum amount foreseen subject to approval at the General

Shareholders' Meeting. (see Note 3).

The Bank's CET1 ratio has decreased by -55 basis points mainly as a result of the Share-Buyback Program (SBB) and by the growth of

risk-weighted assets (RWAs), derived from the organic growth of activity. These are offset by the positive generation of earnings in

the year, net of remuneration to shareholders and payment of coupons on contingent convertible instruments (CoCos), and by the

positive evolution of the rest of the elements.

The Bank's fully-loaded additional Tier 1 capital ratio (AT1) stood at 2.63% as of December 31, 2023, 27 basis points more than in

2022, mainly due to the issuance of AT1 instruments for $1 billion in June. Additionally, another issue was carried out in September for

a value of €1,000 million replacing an AT1 instrument of equal value which was redeemed in the same month.

The Tier 2 fully-loaded ratio stood at 2.52%, which represents an increase of 67 basis points compared to 2022, mainly explained by

the subordinated issuances of 750 million euros in June, 300 million pounds in August and 750 million dollars in November.

As a consequence of the foregoing, the total fully-loaded equity ratio stands at 17.38% as of December 31, 2023.

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.

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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 Risk Appetite Framework (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 with respect to the regulations and procedures that ensure

adequate capital management.

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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	2023	2022
Loan commitments given		98,667	95,948
Of which: impaired		109	123
Central banks		—	—
General governments		2,765	2,919
Credit institutions		15,582	15,397
Other financial corporations		6,893	5,550
Non-financial corporations		60,670	58,998
Households		12,757	13,084
Financial guarantees given		18,784	16,305
Of which: impaired		137	175
Central banks		—	—
General governments		16	38
Credit institutions		462	476
Other financial corporations		9,806	7,722
Non-financial corporations		8,389	7,966
Households		111	104
Other commitments given		30,013	26,850
Of which: impaired		355	439
Central banks		—	—
General governments		81	85
Credit institutions		2,016	2,131
Other financial corporations		1,824	1,755
Non-financial corporations		25,974	22,769
Households		118	110
Total	5.2.2	147,464	139,103

The amount registered recorded in the balance sheet as of December 31, 2023, for loan commitments given, financial guarantees

given and other commitments given is €68 million, €52 million and €120 million, respectively. In 2022 it amounted to €80 million,

€56 million and €143 million respectively (see Note 21).

Since a significant portion of the amounts above will expire without any payment being made by the entities, 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 2023 and 2022, 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, 2023 and 2022, 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.

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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, 2023 and 2022 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)
	2023	2022
Financial instruments entrusted by third parties	333,653	288,532
Conditional bills and other securities received for collection	5,190	4,722
Securities lending	8,206	5,148
Total	347,049	298,402

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)
	2023	2022
Financial assets held for trading	2,628	518
Financial assets designated at fair value through profit or loss	54	15
Financial assets at fair value through other comprehensive income	399	498
Financial assets at amortized cost	11,653	5,416
Hedging derivatives	(192)	(941)
Cash flow hedges (effective portion)	(742)	(940)
Fair value hedges	549	—
Other assets	6	3
Liabilities interest income (1)	22	394
Total	14,569	5,903

(1) The balance Includes €176 million as of December 31, 2022, corresponding to the net import of the accrued interest following TLTRO III transactions (see Note 20.1).

The amounts recognized in equity in connection with hedging derivatives for the years ended December 31, 2023 and 2022 and the

amounts derecognized from the equity and taken to the 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)
	2023	2022
Financial liabilities held for trading	2,447	367
Financial liabilities designated at fair value through profit or loss	139	58
Financial liabilities at amortized cost	5,783	1,655
Hedging derivatives and interest rate risk (fair value hedges)	574	(264)
Other liabilities	40	20
Assets interest expense	21	246
Total	9,005	2,083

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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)
	2023	2022
Investments in associates	3	3
Investments in joint venture	6	22
Investments in subsidiaries	3,381	3,347
Other shares and dividend income	94	98
Total	3,483	3,470

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)
	2023	2022
Bills receivables	13	14
Demand accounts	212	308
Credit and debit cards and OPS	535	492
Checks	4	5
Transfers and other payment orders	212	205
Insurance product commissions	204	193
Loan commitments given	153	136
Other commitments and financial guarantees given	217	200
Asset management	185	134
Securities fees	36	44
Custody securities	106	104
Other fees and commissions	813	778
Total	2,689	2,612

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. Breakdown by origin (Millions of Euros)
	2023	2022
Credit and debit cards	236	216
Transfers and other payment orders	18	11
Custody securities	15	15
Other fees and commissions	345	248
Total	613	489

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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)
	2023	2022
Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net	24	1
Financial assets at amortized cost	—	—
Other financial assets and liabilities	24	1
Gains (losses) on financial assets and liabilities held for trading, net	(12)	438
Reclassification of financial assets from fair value through other comprehensive income	—	—
Reclassification of financial assets from amortized cost	—	—
Other gains (losses)	(12)	438
Gains (losses) on non-trading financial assets mandatorily at fair value through profit or loss, net	200	(51)
Reclassification of financial assets from fair value through other comprehensive income	—	—
Reclassification of financial assets from amortized cost	—	—
Other gains (losses)	200	(51)
Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net	16	128
Gains (losses) from hedge accounting, net	(6)	—
Subtotal gains (losses) on financial assets and liabilities and hedge accounting	222	516
Exchange Differences	23	(122)
Total	245	394

The breakdown of the balance (excluding exchange rate differences) under this heading in the income statements by the nature of the

financial instrument is as follows:

Gains (losses) on financial assets and liabilities. Breakdown by nature of the financial instrument (Millions of Euros)
	2023	2022
Debt instruments	84	(76)
Equity instruments	672	(1,227)
Loans and advances to customers	144	(241)
Derivatives	(595)	1,746
Derivatives held for trading	(590)	1,747
Interest rate agreements	377	294
Security agreements	(418)	1,504
Commodity agreements	9	—
Credit derivative agreements	(84)	(38)
Foreign-exchange agreements	(474)	(13)
Hedging Derivatives Ineffectiveness	(6)	—
Fair value hedges	(5)	—
Hedging derivative	(342)	224
Hedged item	337	(225)
Cash flow hedges	(1)	—
Customer deposits	(76)	316
Other	(7)	(3)
Total	222	516

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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)
	2023	2022
Real estate income	41	35
Financial income from non-financial services	358	290
Other operating income	56	14
Total	455	339

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	2023	2022
Contributions to guaranteed banks deposits funds	1.7	449	498
Real estate agencies		34	36
Other operating expense (1)		322	109
Total		804	642

(1) As of December 2023, it includes €215 million corresponding to the total annual amount of the temporary tax on credit institutions and financial credit establishments,

according to Law 38/2022 of December 27, 2022 (See Note 17.5).

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	2023	2022
Wages and salaries		1,867	1,705
Social security costs		378	337
Defined contribution plan expense	22	54	37
Defined benefit plan expense	22	1	2
Other personnel expense		125	136
Total		2,425	2,217

39.1.1Share-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, 2023 and 2022, corresponding to the remuneration plans based on equity instruments

in each year, amounted to €23 million and € 32 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 or instruments linked to

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.

Thus, according to the applicable remuneration policies, the variable remuneration for the variable remuneration for the Identified

Staff members is subject, principally, to the following rules:

– The Annual Variable Remuneration for Identified Staff members for each financial year will not accrue or will be reduced

upon accrual, if certain profit and capital ratio levels are not achieved.

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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 maximum of 40% of the Annual Variable Remuneration for those members of the Identified Staff who receive particularly

high amounts of variable remuneration and members of BBVA’s Senior Management and 60% for the rest of the Identified

Staff (the “Upfront Portion” of the Annual Variable Remuneration) shall vest and be paid, provided the relevant conditions

for payment are met, as a general rule, in the first quarter of the following financial year to which the Annual Variable

Remuneration corresponds.

– The remaining amount, and at least 60% of the Annual Variable Remuneration for those members of the Identified Staff

who receive particularly high amounts of variable remuneration and members of BBVA’s Senior Management, and 40% for

the rest of the Identified Staff, will be deferred over a period of 4 years (the “Deferred Portion” of the Annual Variable

Remuneration). However, for members of BBVA’s Senior Management the deferral period shall be 5 years. In both cases,

the Deferred Portion will be paid, provided the relevant conditions are met, once each of the years of deferral has elapsed. In

no event will this Deferred Portion be paid faster than in a proportionate way.

– Both the Upfront Portion and the Deferred Portion of the Annual Variable Remuneration of each member of the Identified

Staff will be paid 50% in cash and 50% in BBVA shares or in instruments linked to BBVA shares. For members of BBVA’s

Senior Management, the Deferred Portion will be paid 40% in cash and 60% in BBVA shares and/or in instruments linked to

BBVA shares.

– Shares or instruments received as Annual Variable Remuneration shall be withheld for one year running from date of

delivery. The foregoing shall not apply to those shares that are sold, where appropriate, in order to meet the payment of

taxes accruing on delivery of the shares and/or instruments.

– The Deferred Portion of the Annual Variable Remuneration may undergo certain ex post risk adjustments, meaning that it

will not vest, or may be reduced, if certain capital and liquidity thresholds are not met.

– Up to 100% of the Annual Variable Remuneration of each member of the Identified Staff corresponding to each financial

year, both in cash and in shares or instruments, will be subject to arrangements for the reduction of variable remuneration

(malus) and arrangements for the recovery of variable remuneration already paid (clawback), which will remain in effect

during the applicable deferral and retention period, and will be applicable in the event of the occurrence of any of the

circumstances expressly named in the remuneration policies.

– The cash amounts of the Deferred Portion of the Annual Variable Remuneration that ultimately vest will be updated by

applying the consumer price index (CPI) measured as the year-on-year change in prices, or any other criteria established for

that purpose by the Board of Directors.

– Identified Staff members may not use personal hedging strategies or insurance in connection with the Annual Variable

Remuneration and responsibility that may undermine the effects of alignment with prudent risk management.

– If the members of the Identified Staff are entitled to receive any variable remuneration other than the Annual Variable

Remuneration but which qualifies as variable remuneration, such variable remuneration shall be subject to the rules

regarding accrual, award, vesting and payment in accordance with the type and nature of the remuneration component

itself.

– The variable remuneration of the Identified Staff for a financial year (understood as the sum of all variable remuneration)

shall be limited to a maximum amount of 100% of the fixed component (understood as the sum of all fixed remuneration) of

the total remuneration, unless the BBVA General Shareholders’ Meeting resolves to increase this percentage up to a

maximum of 200%.

In this regard, the General Shareholders’ Meeting of BBVA held on March 17, 2023 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 February 9, 2023.

In 2023, this remuneration scheme is reflected in the following remuneration policies:

– BBVA Group General Remuneration Policy, approved by the Board of Directors on March 29, 2023, that applies to

employees and BBVA Senior Management (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 BBVA Senior Management.

– BBVA Directors’ Remuneration Policy, approved by the General Shareholders’ Meeting of BBVA held on March 17, 2023,

that is 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 delivery of shares in 2023 to the members of the Identified Staff is derived from the settlement of the Annual Variable

Remuneration for 2022 and deferred variable remuneration from previous years, which are subject to the vesting and payment rules

established in the remuneration policies applicable in the year to which they correspond.

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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 the remuneration policy applicable in 2022, during 2023 a total amount of 2,082,589 BBVA shares or instruments linked

to BBVA shares corresponding, mostly, to the Upfront Portion of 2022 Annual Variable Remuneration and other variable components

of remuneration, were delivered.

In addition, according to the remuneration policy applicable in 2017, during 2023 a total amount of 99,760 BBVA shares

corresponding to the third and last payment of the Deferred Portion of 2017 Annual Variable Remuneration of the Chair and other

members of BBVA's Senior Management were delivered.

Additionally, according to the remuneration policy applicable in 2018, during 2023 a total amount of 138,172 BBVA shares were

delivered, corresponding to the second payment of the Deferred Portion of 2018 Annual Variable Remuneration of the Chair and other

members of BBVA's Senior Management, were delivered.

Likewise, according to the remuneration policy applicable in 2019, during 2023 a total amount of 3,006,319 BBVA shares were

delivered, corresponding, mainly, to the first payment of the Deferred Portion of 2019 Annual Variable Remuneration of the executive

directors and the rest of the members of BBVA's Senior Management and to the entire of the Deferred Portion of 2019 Annual

Variable Remuneration of the rest of the Identified Staff, as well as to other variable components of remuneration

Lastly, according to the remuneration policy applicable in 2021, during 2023 a total amount of 523,095 BBVA shares were delivered,

corresponding, mainly, to the first payment of the Deferred Portion of 2021 Annual Variable Remuneration of the Identified Staff,

among which executive directors and the rest of the members of BBVA's Senior Management are included, as well as to other variable

components of remuneration.

Detailed information on the delivery of shares to executive directors and the rest of the members of BBVA's Senior Management who

held this position as of December 31, 2023, is included in Note 49.

39.2 Other 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)
	2023	2022
Technology and systems	802	721
Communications	55	51
Advertising	106	99
Property, fixtures and materials	119	110
Taxes	69	47
Surveillance and cash courier services	36	34
Other expense	546	475
Total	1,733	1,538

40. Amortization

The breakdown of the balance under this heading in the accompanying income statements is as follows:

Amortization (Millions of Euros)
	Notes	2023	2022
Tangible assets	15	320	308
For own use		97	101
Right-of-use assets		223	207
Intangible assets	16	331	330
Total		651	638

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

41. Provisions or reversal of provisions

For the years ended December 31, 2023 and 2022, the net provisions recognized in this income statement line item were as follows:

Provisions or reversal of provisions (Millions of Euros)
	Notes	2023	2022
Pensions and other post-employment defined benefit obligations	22	(5)	(123)
Commitments and guarantees given	21	(36)	(32)
Other Provisions	21	157	205
Total		116	50

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	2023	2022
Financial assets at fair value through other comprehensive income		(6)	16
Financial assets at amortized cost		682	504
Of which: Recovery of written-off assets by cash collection	5.2.5	(193)	(228)
Total		677	521

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)
	2023	2022
Investments in subsidiaries, joint ventures and associates (1)	(118)	(642)
Total	(118)	(642)

(1) Includes reversal of impairment recorded in 2022 and 2023 in Garanti BBVA (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	2023	2022
Tangible assets	15	(17)	(21)
Intangible assets	16	12	15
Other		—	(1)
Total		(5)	(7)

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

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 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	2023	2022
Gains on sale of real estate		19	43
Impairment of non-current assets held for sale	19	(17)	(64)
Gains (losses) on sale of investments classified as non-current assets held for sale		—	(4)
Total		2	(26)

46. Statements of cash flows

The table below shows the breakdown of the main cash flows related to financing activities as of December 31, 2023 and 2022 :

Main Cash Flows in financing activities 2023 (Millions of Euros)
	December 31, 2023	December 31, 2022	Net Cash Flows	Foreign Exchange movements and other
Subordinated deposits	177	184
Issuances of subordinated liabilities	11,564	8,922
Total	11,741	9,106	2,529	106

Main cash flows in financing activities 2022 (Millions of Euros)
	December 31, 2022	December 31, 2021	Net Cash Flows	Foreign Exchange movements and other
Subordinated deposits	184	173
Issuances of subordinated liabilities	8,922	9,739
Total	9,106	9,912	(568)	(238)

47. Accountant fees and services

The details of the fees for the services contracted by BBVA for the year ended December 31, 2023, with their respective auditors and

other audit entities are as follows:

Fees for Audits Conducted and other related services (Millions of Euros) (2)
	2023	2022
Audits of the companies audited by firms belonging to the EY worldwide organization and other reports related with the audit (1)	15.7	14.0
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 EY worldwide organization	0.3	0.3
Fees for audits conducted by other firms	0.1	—

(1) Including fees pertaining to annual legal audits ( € 12.5 million as of December 31, 2023)

(2) Regardless of the billed period.

In addition in 2023 the Bank contracted services (other than audits) as follows:

Other services rendered (Millions of Euros)
	2023	2022
Firms belonging to the EY worldwide organization	—	—

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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 total of contracted services includes the detail of the services provided by Ernst & Young, S.L. to BBVA, S.A. at the date of

preparation of these financial statements as follows:

Fees for Audits Conducted (1) (Millions of Euros)
	2023	2022
Legal audit of BBVA,S.A.	6.3	5.9
Other audit services of BBVA, S.A.	5.4	5.2
Limited Review of BBVA, S.A.	1.9	1.4
Reports related to issuances	1.0	0.4
Assurance services and other required by the regulator	0.6	0.5

(1) Services provided by Ernst & Young, S.L. to companies located in Spain, to the branch of BBVA in New York and to the branch of BBVA in London.

Information related to the services provided by Ernst & Young, S.L., to companies controlled by BBVA, S.A., during the year ended

December 31, 2023, is in the accompanying Consolidated financial statements as of December 31, 2023.

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).

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, 2023 and 2022 the following are the

transactions with related parties:

48.1. Transactions with significant shareholders

As of December 31, 2023 and 2022 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)
	2023	2022
Assets:
Debt securities	424	269
Loans and advances to credit institutions	836	586
Loans and advances to customers	4,379	4,356
Liabilities:
Deposits from credit institutions	1,070	1,053
Customer deposits	24,103	12,887
Memorandum accounts:
Financial guarantees given	8,472	7,034
Contingent commitments	767	704
Other commitments given	752	950

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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 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)
	2023	2022
Income statement:
Financial Incomes	366	125
Financial Costs	919	252
Fee and commission income	628	601
Fee and commission expense	155	102

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

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  (thousands of Euros)
	2023					2022
	Directors	Related parties of Directors	Senior Management ⁽¹⁾	Related parties of Senior Management		Directors	Related parties of Directors	Senior Management*	Related parties of Senior Management
Loans and credits	531	243	5,553	727		668	1,880	6,321	764
Bank guarantees	_	_	10	_		—	—	10	—
Business credit	_	_	_	_		—	—	—	—

1) 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.

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

49. Remuneration and other benefits for the Board of Directors and members of the

Bank's Senior Management

Remuneration of non-executive directors

The remuneration of the non-executive directors corresponding to the financial years 2023 and 2022 is as follows, individually and by

remuneration item:

Remuneration of non-executive directors (thousands of Euros) (1)
	Board of Directors	Executive Committee	Audit Committee	Risk and Compliance Committee	Remuneration Committee	Appointments and Corporate Governance Committee	Technology and Cybersecurity Committee	Other positions  (2)	Total
									2023	2022
José Miguel Andrés Torrecillas	129	167	132	─	─	115	─	50	593	527
Jaime Caruana Lacorte	129	167	99	107	─	─	─	─	502	567
Sonia Dulá (3)	107	─	44	71	─	─	─	─	223	─
Raúl Galamba de Oliveira	129	─	─	178	─	31	43	80	461	332
Belén Garijo López	129	111	22	─	107	46	─	─	416	349
Connie Hedegaard Koksbang	129	─	44	─	─	─	─	─	173	107
Lourdes Máiz Carro	129	─	66	─	43	─	─	─	238	238
José Maldonado Ramos	129	167	─	─	─	46	─	─	342	342
Ana Peralta Moreno	129	─	66	─	43	─	─	─	238	238
Juan Pi Llorens	129	─	─	143	─	46	43	─	361	458
Ana Revenga Shanklin	129	─	─	107	29	─	43	─	307	264
Susana Rodríguez Vidarte (4)	32	42	─	27	─	12	─	─	112	449
Carlos Salazar Lomelín  (5)	129	─	─	─	43	─	─	─	172	172
Jan Verplancke	129	─	─	─	43	─	43	─	214	214
Total	1,684	653	475	633	307	297	171	130	4,350	4,257

(1) Includes amounts corresponding to positions on the Board and its various Committees, the composition of which was modified on April 26, 2023, with effect from May 1, 2023.

(2) Amounts corresponding to the positions of Deputy Chair of the Board of Directors and Lead Director.

(3) Director appointed by the Annual General Shareholders' Meeting held on March 17, 2023. Remuneration in 2023 corresponding to the term of office in the financial year.

(4) Director who left office on March 17, 2023. Remuneration in 2023 corresponding to the term of office in the financial year.

(5) In addition, in financial years 2023 and 2022, the director Carlos Salazar Lomelín received €67 thousand and €90 thousand, as per diems for his membership of the

management body of BBVA México, S.A. de C.V. and Grupo Financiero BBVA México, S.A. de C.V. and the BBVA México, S.A. de C.V.  strategy forum.

Likewise, during financial years 2023 and 2022, €123 thousand and €110 thousand were paid out, respectively, in healthcare and

casualty insurance premiums for non-executive director.

Remuneration system with deferred delivery of shares for non-executive directors

BBVA has a fixed remuneration system with deferred delivery of shares for its non-executive directors, which was approved by the

Annual General Shareholders' Meeting held on March 18, 2006 and extended by resolutions of the Annual General Shareholders'

Meetings held on March 11, 2011 and March 11, 2016 for a further five-year period in each case, by the Annual General Shareholders'

Meeting held on April 20, 2021 for a further three-year period and by the Annual  General Shareholders' Meeting held on March 17,

2023 for a further four-year period.

This system consists 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 Shareholders' Meetings

approving the corresponding financial statements for each financial year.

The BBVA shares, in a number equivalent to the theoretical shares accumulated by each non-executive director, 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.

During the financial years 2023 and 2022, the following theoretical shares derived from the remuneration system with deferred

delivery of shares have been allocated to the non-executive directors, in an amount equivalent to 20% of the total annual fixed

allowance in cash received by each of them in the financial years 2022 and 2021, respectively:

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	2023			2022
	Theoretical shares allocated (1)	Theoretical shares accumulated as of December 31		Theoretical shares allocated (1)	Theoretical shares accumulated as of December 31
José Miguel Andrés Torrecillas	16,023	134,048		19,253	118,025
Jaime Caruana Lacorte	17,255	94,960		20,733	77,705
Sonia Dulá (2)	0	0		0	0
Raúl Galamba de Oliveira	10,091	29,768		10,177	19,677
Belén Garijo López	10,603	101,192		12,741	90,589
Connie Hedegaard Koksbang (3)	3,263	3,263		0	0
Lourdes Máiz Carro	7,237	71,593		8,696	64,356
José Maldonado Ramos	10,397	146,874		12,493	136,477
Ana Peralta Moreno	7,237	42,329		8,696	35,092
Juan Pi Llorens	13,943	148,542		18,703	134,599
Ana Revenga Shanklin	8,035	24,214		8,611	16,179
Susana Rodríguez Vidarte (4)	13,648	0		16,400	177,775
Carlos Salazar Lomelín	5,218	17,130		6,270	11,912
Jan Verplancke	6,521	35,772		7,835	29,251
Total	129,471	849,685		150,608	911,637

(1) The number of theoretical shares was calculated according to the average closing price of the BBVA share during the 60 trading sessions prior to the dates of the Annual

General Shareholders' Meetings of March 17, 2023 and March 18, 2022, which were € 6.58 and €5.47 per share, respectively.

(2) Director appointed by the Annual General Shareholders' Meeting held on March 17, 2023, therefore the allocation of theoretical shares is not due until 2024.

(3) Director appointed by the Annual General Shareholders' Meeting held on March 18, 2022, therefore the first allocation of theoretical shares was made in 2023.

(4) Director who left office on March 17, 2023. In application of the system, she received a total of 191,423 BBVA shares after leaving office, which is equivalent to the total of

theoretical shares accumulated up to that date.

Remuneration of executive directors

The remuneration of the executive directors corresponding to financial years 2023 and 2022 is the result of the application of the

remuneration policies approved by the Annual General Shareholders' Meeting on March 17, 2023 and April 20, 2021, respectively.

In accordance with said policies, the remuneration of executive directors corresponding to financial years 2023 and 2022 is indicated

below, individually and by remuneration item.

Annual Fixed Remuneration (thousands of Euros)
	2023	2022
Chair	2,924	2,924
Chief Executive Officer	2,179	2,179
Total	5,103	5,103

In addition, in accordance with the conditions established contractually and in the BBVA Directors' Remuneration Policy, during the

2023 and 2022 financial years, the Chief Executive Officer received €654 thousand each year as "cash in lieu of pension" (equivalent

to 30% of his Annual Fixed Remuneration) as he does not have a retirement pension (see the "Pension commitments with executive

directors" section of this Note), and €600 thousand as mobility allowance.

Remuneration in kind (thousands of Euros)

Likewise, during the financial years 2023 and 2022, executive directors received remuneration in kind, which includes insurance

premiums and others, for an amount of  €213 thousand and €283 thousand in the case of the Chair and €131 thousand and €155

thousand in the case of the Chief Executive Officer, respectively.

Variable remuneration

With regard to variable remuneration, the main change introduced by the new Directors’ Remuneration Policy approved by the Annual

General Shareholders' Meeting in 2023 is that it establishes a new model pursuant to which the Annual Variable Remuneration

("AVR") of the executive directors for financial year 2023, now consists of two components: a Short-Term Incentive (“STI”) and a

Long-Term Incentive (“LTI”). The award of both incentives is contingent upon the achievement of the minimum profit and capital ratio

thresholds approved by the Board of Directors for this purpose. The sum of the STI and the LTI constitutes the AVR for the year of

each executive director.

The STI will be awarded once the annual indicators’ measurement year is closed, and its amount will be determined based on its

result, taking into account the targets, scales of achievement and weightings established for each of them, and may range between

0% and 150% of the “Target STI” (which represents the amount of the STI if 100% of the pre-established targets for these indicators

are met).

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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 its part, once the aforementioned minimum profit and capital ratio thresholds are reached, the right to the LTI will arise, the final

amount of which, ranging between 0% and 150% of the “Target LTI” (which represents the amount of the LTI if 100% of the pre-

established targets for the long-term indicators approved for its calculation are met), will be determined, once the last financial year

for measuring long-term indicators is closed and based on its results, taking into account the targets, scales of achievement and

weightings established for each of them.

A percentage not exceeding 40% of the AVR will be vested and paid, provided that the required conditions are met, as a general rule,

in the first quarter of the year following the one to which it corresponds (the "Upfront Portion"), in equal parts in cash and BBVA

shares. The remaining amount, and at least 60% of the AVR, will be deferred over a period of 5 years and paid, if the required

conditions are met, once each of the 5 years of deferral has elapsed, 40% in cash and 60% in BBVA shares and/or instruments linked

to BBVA shares (the "Deferred Portion" or the "Deferred AVR"). 

Within said deferral period, the payment of the LTI payment will only begin after the expiration of the measurement period of the

targets set for the long term indicators, to the result of which its final amount is subject, thus, being part of the Deferred Portion of the

AVR of the executive directors.

In accordance with the above, in financial year 2023 the executive directors accrued a Short-Term Incentive in the amount of €2,871

thousand in the case of Chair and €2,147 thousand in the case of Chief Executive Officer.

Likewise, the executive directors have generated the right to a Long-Term Incentive for a maximum theoretical amount of €1,929

thousand in the case of Chair and €1,443 thousand in the case of Chief Executive Officer, which is equivalent, in both cases, to 150%

of their “Target LTI”. Upon expiration of the measurement period of the long-term indicators established for their calculation (once

2026 has ended), its final amount will be determined, which could range between 0% and 150% of the “Target LTI”. Therefore, if

100% of the pre-established objectives are achieved, the LTI will amount to €1,286 thousand in the case of Chair and €962 thousand

in the case of Chief Executive Officer.

Taking into account the above, the Upfront Portion of the AVR for the financial years 2023 and 2022 of the executive directors, due

for payment, respectively, once each of said years has ended, in equal parts in cash and BBVA shares, is indicated below.

Annual Variable Remuneration (AVR)
	2023 (1)			2022 (2)
	In cash (thousands of Euros)	In shares		In cash (thousands of Euros)	In shares
Chair	897	107,835		926	158,169
Chief Executive Officer	671	80,650		712	121,646
Total	1,568	188,485		1,639	279,815

(1) The Initial Portion of the Annual Variable Remuneration, which represents the first payment of the Short-Term Incentive for fiscal

year 2023 and will be paid during the first quarter of fiscal year 2024, in equal parts in cash and BBVA shares. The remaining amount

of the Annual Variable Remuneration for fiscal year 2023 (which includes the Long-Term Incentive for fiscal year 2023) will be

deferred (40% in cash and 60% in shares and/or share-linked instruments) over a five-year period.

The amount of the Deferred Portion will depend on the result of the long-term indicators that will be used to calculate the Long-Term

Incentive for fiscal year 2023. Likewise, and as an ex-post risk adjustment mechanism, the Deferred Portion may be reduced if the

capital and liquidity thresholds established to guarantee that payment only occurs if it is sustainable, taking into account the Bank's

payment capacity, are not reached.

In addition, the remaining rules applicable to the Annual Variable Remuneration of the executive directors established in the BBVA

Directors’ Remuneration Policy approved by the Annual General Shareholders' Meeting on March 17, 2023 will apply to the Annual

Variable Remuneration for fiscal year 2023, which include: (i) a withholding period of one year after delivery of the BBVA shares or

instruments linked to BBVA shares received; (ii) the prohibition of hedging strategies or insurance that may undermine the effects of

alignment with prudent risk management; (iii) update of the Deferred Portion in cash that finally vests in accordance with the CPI; (iv)

malus and clawback arrangements during the whole periods of deferral and withholding of shares or instruments ; 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 Annual General Shareholders' Meeting held on 2023.

(2) 40% of the Annual Variable Remuneration for fiscal year 2022 that was paid in 2023.  Annual Variable Remuneration for financial

year 2022 is subject to the rules on deferral, vesting and payment and to the remaining conditions established in the BBVA Directors'

Remuneration Policy approved by the Annual General Shareholders' Meeting of April 20, 2021.

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

Deferred Annual Variable Remuneration from previous financial years
			2023 (1)			2022 (2)
	Deferred AVR		In cash (thousands of Euros)	In shares		In cash (thousands of Euros)	In shares
Chair	2022		229	56,941		—	—
	2021		222	57,325		215	57,325
	2020		0	0		—	—
	2019		176	45,529		513	136,587
	2018		132	35,795		128	35,795
	2017		—	—		154	27,898
Subtotal			760	195,590		1,011	257,605
Chief Executive Officer	2022		176	43,793		—	—
	2021		169	43,552		164	43,552
	2020		0	0		—	—
	2019		158	40,858		460	122,572
	2018		—	—		—	—
	2017		—	—		—	—
Subtotal			503	128,203		624	166,124
Total			1,263	323,793		1,635	423,729

(1) Deferred remuneration to be paid after 2023 year-end. Payment thereof to the Chair and/or the Chief Executive Officer will be

made in 2024 in accordance with the vesting and payment rules established in the remuneration policies applicable in each financial

year:

• 2022 Deferred AVR:  first payment (20% of the Deferred Portion) is due to executive directors, including the update of its

cash portion. Thereafter, 80% of the 2022 Deferred AVR will be deferred for both executive directors, which, if the conditions

are met, will be paid in 2025, 2026, 2027 and 2028.

• 2021 Deferred AVR: second payment (20% of the Deferred Portion) is due to executive directors, including the update of its

cash portion. Thereafter, 60% of the 2021 Deferred AVR will be deferred for both executive directors, which, if the conditions

are met, will be paid in 2025, 2026, and 2027.

• 2020 Deferred AVR: given the exceptional circumstances arising from the COVID-19 crisis, executive directors voluntarily

waived the accrual of the whole of their AVR for  2020 financial year.

• 2019 Deferred AVR: second payment (20% of the Deferred Portion) is due to executive directors, including the update of its

cash portion. Thereafter, 20% of the 2019 Deferred AVR will be deferred for both executive directors, which, if the conditions

are met, will be paid in 2025.

• 2018 Deferred AVR: third and final payment (20% of the Deferred Portion) is due to the Chair, including the update of its cash

portion. Thereafter, the payment to the Chair of the 2018 Deferred AVR will be completed. This remuneration is associated

with his former position as Chief Executive Officer.

(2) Deferred remuneration to be paid after 2022 year-end. Payment thereof to the Chair and Chief Executive Officer was made in

2023 in accordance with the vesting and payment rules established in the remuneration policies applicable in each financial year:

• 2021 Deferred AVR: in 2023, the first payment (20% of the Deferred Portion) to the executive directors was made, including

the update of its cash portion.

• 2019 Deferred AVR: in 2023, the first payment (60% of the Deferred Portion) to the executive directors was made, including

the update of its cash portion.

• 2018 Deferred AVR: in 2023, the second payment (20% of the Deferred Portion) to the Chair was made, including the update

of its cash portion. This remuneration is associated with his former position as Chief Executive Officer.

• 2017 Deferred AVR: in 2023, the third and final payment (20% of the Deferred Portion) to the Chair was made, including the

update of its cash portion. After this, the payment to the Chair of the 2017 Deferred AVR was completed. This remuneration

was associated with his former position as Chief Executive Officer.

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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 commitments with executive directors

The Bank has not assumed any pension commitments with non-executive directors.

With regard to the executive directors, the BBVA Directors' Remuneration Policy establishes a pension framework whereby, in the

case of the Chair, he is entitled to receive a retirement pension, paid in either income or capital, when he reaches the legally

established retirement age, provided that he does not leave his position as a result of serious dereliction of his duties. 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 agreed annual contribution to cover the retirement contingency under the defined contribution system established for the Chair

in the BBVA Directors' Remuneration Policy is €439 thousand. The Board of Directors may update this amount during the term of the

Policy, in the same manner as it may update the Annual Fixed Remuneration, pursuant to the terms established therein.

15% of this 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 Chair's contractual relationship is terminated before he reaches retirement age for reasons other than serious

dereliction of duties, the retirement pension payable to the Chair upon him reaching the legally established retirement age will be

calculated based on the funds accumulated through the contributions made by the Bank up to that date, as per the terms set out, plus

the corresponding accumulated yield, with no additional contributions to be made by the Bank as of the time of termination.

With respect to the commitments assumed with the Chair to cover the death and disability contingencies, the Bank shall pay the

corresponding annual insurance premiums, in order to top up the coverages for these contingencies.

In accordance with the foregoing, in the financial year 2023, an amount of €458 thousand was registered, comprising the annual

contribution to cover the retirement contingency, which is €439 thousand, and an amount of €19 thousand corresponding to the

upward adjustment of the "discretionary pension benefits" for the financial year 2022, which were declared once that year had ended

and which had to be contributed to the accumulated fund in 2023. Likewise, an amount of €322 thousand has been paid in insurance

premiums for the death and disability contingencies.

As of December 31, 2023, the total accumulated fund to meet the retirement commitments with the Chair amounted to €24,759

thousand.

15% of the annual contribution for the retirement contingency corresponding to the 2023 financial year (€66 thousand) was

registered 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 Short-Term Incentive that is part of the Chair's Annual Variable Remuneration for

the 2023 financial year and was determined to amount to €83 thousand, which represents an upward adjustment of €17 thousand.

These “discretionary pension benefits” will be contributed to the accumulated fund in the 2024 financial year and will be subject to the

conditions established for them in the BBVA Directors' Remuneration Policy.

Regarding the Chief Executive Officer, in accordance with the provisions of the BBVA Directors' Remuneration Policy and those in his

contract, the Bank has not undertaken any retirement commitments, 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. In accordance with the above, in the

2023 financial year, the Bank paid the Chief Executive Officer the amount of fixed remuneration relating to "cash in lieu of pension", as

described in the "Remuneration of executive directors" section of this Note.

However, the Bank has undertaken commitments to cover the death and disability contingencies with the Chief Executive Officer, for

which the corresponding annual insurance premiums are paid. To this end, in 2023, €230 thousand have been recognized for this

concept.

Pension systems (thousands of Euros)
	Contributions (1)						Funds accumulated
	Retirement			Death and disability
	2023	2022		2023	2022		2023	2022
Chair	458	451		322	473		24,759	22,771
Chief Executive Officer	—	—		230	285		—	—
Total	458	451		552	758		24,759	22,771

(1) Contributions recognized to meet pension commitments to executive directors in financial years 2023 and 2022. In the case of the Chair, these correspond to the sum of the

annual retirement pension contribution and the adjustment made to the "discretionary pension benefits" for the financial years 2022 and 2021, the contribution to which was to be

made in the financial years 2023 and 2022, respectively, and with the death and disability premiums. In the case of the Chief Executive Officer, the contributions recognized

correspond exclusively to the insurance premiums paid by the Bank in 2023 and 2022 to cover the contingencies of death and disability, given that, in his case, the Bank has not

undertaken any commitments to cover the retirement contingency.

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.

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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 of Senior Management

The remuneration of all Senior Management, excluding executive directors, for the financial years 2023 and 2022 (15 and 16

members with such status at December 31, of each financial year, respectively, excluding executive directors), are the result of the

application of the remuneration policies approved by the Board of Directors (on June 30, 2021 and March 29, 2023, respectively).

In accordance with the provisions established in said policies, the remuneration of the entire Senior Management corresponding to

financial years 2023 and 2022 is indicated below, by remuneration item.

Fixed remuneration (thousands of Euros)
	2023	2022
Senior Management Total (1)	18,187	18,149

(1) 15 members at December 31, 2023 and 16 members at December 31, 2022, excluding executive directors in both cases.

Remuneration in kind (thousands of Euros)

During 2023 and 2022 financial years, all members of Senior Management (15 members as of December 31, 2023 and 16 members at

December 31, 2022, excluding executive directors in both cases) have received remuneration in kind, which includes insurance

premiums and others, for a total joint amount of  €904 thousand and €1,093 thousand, respectively.

Variable remuneration

Regarding variable remuneration, the main change of  the new BBVA Group General Remuneration Policy approved by the Board of

Directors in 2023, in line with the changes of the Directors’ Remuneration Policy approved by the Annual General Shareholders'

Meeting on March 17, 2023, is that it establishes a new model pursuant to which the Annual Variable Remuneration (AVR) of Senior

Management members for financial year 2023, as that of executive directors, now consists of two components: a Short-Term

Incentive (STI) and a Long-Term Incentive (LTI). The award of both incentives is contingent upon the achievement of the minimum

profit and capital ratio thresholds approved by the Board of Directors for this purpose. The sum of the STI and the LTI constitutes the

AVR for the year of each member of the Senior Management.

Pursuant to this model, and in the same terms applicable to executive directors set out above, in financial year 2023 all members of

the Senior Management, excluding executive directors, have accrued a Short-Term Incentive for a combined total of €7,122

thousand.

Likewise, members of the Senior Management, excluding the executive directors, have generated the right to a Long-Term Incentive

for a joint maximum theoretical amount of €4,711 thousand, which is equivalent to the sum of 150% of each beneficiary's “Target LTI”.

Upon expiration of the measurement period of the long-term indicators established  for their calculation (once 2026 has ended), the

final amount of each beneficiary's LTI will be determined which could range between 0% and 150% of the “Target LTI”. Therefore, if

100% of the pre-established targets are met, the LTI will amount to a joint total of €3,141 thousand.

Taking into account the above, the total sum of the Upfront Portion of the AVR for the  financial years 2023 and 2022 of the members

of the Senior Management, excluding the executive directors, due for payment, respectively, once  each of said financial years has

ended, in equal parts in cash and BBVA shares, is indicated below.

Annual Variable Remuneration (AVR)
	2023 (1)			2022 (2)
	In cash (thousands of Euros)	In shares		In cash (thousands of Euros)	In shares
Senior Management Total (3)	2,226	267,550		2,158	365,746

(1) Initial Portion of the Annual Variable Remuneration, which represents the first payment of the Short-Term Incentive for fiscal year

2023 and will be paid during the first quarter of fiscal year 2024, in equal parts in cash and BBVA shares. The remaining amount of the

Annual Variable Remuneration for fiscal year 2023 (which includes the Long-Term Incentive for fiscal year 2023) will be deferred

(40% in cash and 60% in shares or share-linked instruments) over a five-year period (the Deferred Portion).

The amount of the Deferred Portion will depend on the result of the long-term indicators that will be used to calculate the Long-Term

Incentive for fiscal year 2023. Likewise, and as an ex-post risk adjustment mechanism, the Deferred Portion may be reduced if the

capital and liquidity thresholds established to guarantee that payment only occurs if it is sustainable, taking into account the Bank's

payment capacity, are not reached.

In addition, the remaining rules applicable to the Annual Variable Remuneration of the members of the Senior Management

established in the BBVA Group General Remuneration Policy approved by the Board of Directors on March 29, 2023 will apply to the

Annual Variable Remuneration for fiscal year 2023, which include: (i) a withholding period of one year after delivery of the BBVA

shares or instruments linked to BBVA shares received; (ii) the prohibition of hedging strategies or insurance that may undermine the

effects of alignment with prudent risk management; (iii) update of the Deferred Portion in cash that finally vests in accordance with

the CPI; (iv) malus and clawback arrangements during the whole periods of deferral and withholding of shares or instruments; 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 Annual General Shareholders' Meeting held on 2023.

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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) 40% of the Annual Variable Remuneration for fiscal year 2022 that was paid in 2023. Annual Variable Remuneration for fiscal year

2022 is subject to the rules on deferral, vesting and payment and to the remaining conditions established in the BBVA Group General

Remuneration Policy approved by the Board of Directors of June 30, 2021.

(3) 15 members at December 31, 2023 and 16 members at December 31, 2022, excluding executive directors in both cases.  .

Deferred Annual Variable Remuneration from previous financial years
			2023 (1)			2022 (2)
	Deferred AVR		In cash (thousands of Euros)	In shares		In cash (thousands of Euros)	In shares
Senior Management Total (3)	2022		493	122,566		—	—
	2021		456	116,528		477	124,602
	2020		1,484	289,020		—	—
	2019		302	77,447		1,364	320,172
	2018		138	36,454		155	41,442
	2017		—	—		171	29,267
Total			2,873	642,015		2,167	515,483

(1) Deferred remuneration to be paid after 2023 year-end. Payment thereof to the members of the Senior Management who are

beneficiaries will take place in 2024 in accordance with the vesting and payment rules established in the remuneration policies

applicable in each financial year:

• 2022 Deferred AVR: first payment (20% of the Deferred Portion), including the update of its cash portion. Thereafter, 80% of

the 2022 Deferred AVR will be deferred, and if the conditions are met, it will be paid in 2025, 2026, 2027 and 2028.

• 2021 Deferred AVR: second payment (20% of the Deferred Portion), including the update of its cash portion. Thereafter, 60%

of the 2021 Deferred AVR will be deferred, and if the conditions are met, it will be paid in 2025, 2026 and 2027.

• 2020 Deferred AVR: given the exceptional circumstances arising from the COVID-19 crisis, all members of Senior

Management voluntarily waived the accrual of the whole of their AVR for 2020 financial year. Without prejudice to the above,

two members of the Senior Management, executives of BBVA USA at that moment, are entitled to the payment of the

Deferred Portion of a Success Bonus on the sale of BBVA USA. Of this Deferred Portion, the whole of it is payable in one case

and the 60% of it in the other one, in accordance with the vesting and payment schedule applicable in each case pursuant to

the remuneration policy applicable in that financial year.

• 2019 Deferred AVR: second payment (20% of the Deferred Portion) to the members of Senior Management that are

beneficiaries, including the update of its cash portion. Thereafter, 20% of the 2019 Deferred AVR will be deferred, which, if the

conditions are met, will be paid in 2025. In addition, it includes the second payment (20%) of the Deferred Portion of a

retention plan  to be made to a member of Senior Management.

• 2018 Deferred AVR: third and final payment (20% of the Deferred Portion) to the members of Senior Management that are

beneficiaries, including the update of its cash portion. Thereafter, the payment of the 2018 Deferred AVR to its beneficiaries

will be completed.

(2) Deferred remuneration to be paid after 2022 year-end. Payment thereof to the members of Senior Management who were

beneficiaries was made in 2023 in accordance with the vesting and payment rules established in the remuneration policies in force in

each financial year:

• 2021 Deferred AVR: in 2023, the first payment (20% of the Deferred Portion) was made to the members of the Senior

Management, including the update of its cash portion.

• 2019 Deferred AVR: in 2023, the members of Senior Management who were beneficiaries were paid the amounts that

corresponded in each case (either 60% of the Deferred Portion or the whole of it) in accordance with the payment schedule

established in the remuneration policies applicable in 2019, including the update of its cash portion. In addition, two members

of the Senior Management were paid the Deferred Portion of a retention plan pursuant to the vesting and payment rules

established in the remuneration policy applicable to that financial year.

• 2018 Deferred AVR: in 2023, the second payment (20% of the Deferred Portion) was made to the members of the Senior

Management who were beneficiaries, including the update of its cash portion.

• 2017 Deferred AVR: in 2023, the third and final payment (20% of the Deferred Portion) was paid to the members of the Senior

Management who were beneficiaries, including the update of its cash portion. Thereafter, the payment of the 2017 Deferred

AVR to its beneficiaries was completed.

(3) 15 members as of December 31, 2023 and 16 members at December 31, 2022, excluding executive directors in both cases.

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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 commitments with members of Senior Management

In the 2023 financial year, an aggregate total amount of €3,829 thousand was registered  to cover pension commitments with

members of Senior Management (15 members with such status as of December 31, 2023, excluding executive directors), which

corresponds to the annual contribution agreed to cover the retirement contingency, increased by an amount of €144 thousand

corresponding to the upward adjustment of the "discretionary pension benefits" for the financial year 2022, which were declared once

that year had ended and which had to be contributed to the accumulated fund in 2023. Likewise, a total joint amount of €1,102

thousand  has been paid in insurance premiums for death and disability contingencies.

As of December 31, 2023, the total accumulated fund to meet the retirement commitments with members of Senior Management

amounted to €34,069 thousand.

As in the case of executive directors, 15% of the agreed  annual contributions to cover the contingency of retirement for members of

Senior Management, 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 to

any other conditions concerning variable remuneration as may be applicable to them in accordance with the remuneration policy

applicable to members of Senior Management.

For these purposes, of the annual contribution for the retirement contingency corresponding to the 2023 financial year, a total

combined amount of €551 thousand was registered in said financial year as "discretionary pension benefits". Following the end of  the

financial year, as in the case of the Chair, this amount was adjusted by applying the same criteria used to determine the Short-Term

Incentive that is part of the Annual Variable Remuneration of the members of Senior Management for  the 2023 financial year. As a

result, the "discretionary pension benefits" for the year, corresponding to all members of Senior Management, have been determined

at a total combined amount of €701 thousand, which represents an upward adjustment of €150 thousand. These “discretionary

pension benefits” will be contributed  to the accumulated fund in the 2024 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.

Pension systems (thousands of Euros)
	Contributions (1)						Funds accumulated
	Retirement			Death and disability
	2023	2022		2023	2022		2023	2022
Senior Management Total (2)	3,829	3,694		1,102	1,465		34,069	29,435

. (1) Contributions recognized to meet pension commitments with  all Senior Management in 2023 and 2022, which correspond to the sum of the annual retirement pension

contributions and the adjustments made to the "discretionary pension benefits" for 2022 and 2021 whose contribution was to be made in 2023 and 2022, respectively, and to the

insurance premiums paid by the Bank for death and disability contingencies.

(2) 15 members at December 31, 2023 and 16 members at December 31, 2022, excluding executive directors in both cases

Payments for the termination of the contractual relationship

Regarding Senior Management, excluding the executive directors, the Bank paid during the 2023 financial year a total of €2,802

thousand derived from the termination of the contractual relationship of a member of the Senior Management which corresponds to

the legal severance payment and notice payment in accordance with the provisions of this Senior Manager's contract. In this sense,

the Senior Management contracts include the right to receive the corresponding legal severance payment, provided that removal is

not pursuant to a willful decision, retirement, disability or serious dereliction of duties, the amount of which will be calculated in

accordance with the provisions in the applicable labor regulations, as well as a clause of notice. Likewise, the contract establishes a

post-contractual non-compete agreement for a one-year term from removal for any reason other than retirement, disability or serious

dereliction of duties. In compensation for this agreement, the aforementioned member of Senior Management received an amount of

€110 thousand during  2023.

These payments comply with the conditions set out in the regulations applicable to the group of employees with a material impact on

the risk profile of BBVA and its Group, to which members of BBVA's Senior Management belong.

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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. Other information

50.1. Environmental impact

Given the activities BBVA entities engage in, the Group has no environmental liabilities, expenses, assets, provisions or contingencies

that could have a significant effect on its consolidated equity, financial situation and profits. Consequently, as of December 31, 2023,

there is no item included in the Consolidated Financial Statements that requires disclosure in an environmental information report

pursuant to Ministry JUS/616/2022, of June 30, by which the new model for the presentation of consolidated annual accounts in the

Commercial Register 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 XII 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. Reporting requirements of the Spanish National Securities Market Commission (CNMV)

Dividends paid

The table below presents the dividends per share paid in cash in 2023 and 2022 (cash basis accounting, regardless of the year in

which they are accrued). For a complete analysis of all remuneration awarded to shareholders in 2023 and 2022 (see Note 3).

Paid Dividends
	2023			2022
	% Over nominal	Euros per share	Amount (Millions of Euros)	% Over nominal	Euros per share	Amount (Millions of Euros)
Ordinary shares	95.92%	0.47	2,812	71.43%	0.35	2,190
Rest of shares	—	—	—	—	—	—
Total dividends paid in cash	95.92%	0.47	2,812	71.43%	0.35	2,190
Dividends with charge to income	95.92%	0.47	2,812	24.49%	0.12	724
Dividends with charge to reserve or share premium	0.00%	—	—	46.94%	0.23	1,467
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	2023	2022
Domestic		12,461	5,086
Foreign		2,108	818
European Union		558	193
Eurozone		558	193
No Eurozone		—	—
Rest of countries		1,550	625
Total	33.1	14,569	5,903

138

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

Number of employees

The breakdown of the average number of employees in the Bank in 2023 and 2022, by gender, is as follows:

Average number of employees
	2023		2022
	Male	Female	Male	Female
Management team	1,181	541	1,070	440
Managers	5,166	4,417	4,812	4,050
Other line personnel and clerical staff	3,941	5,937	3,941	6,043
Branches abroad	664	467	601	440
Total	10,951	11,362	10,424	10,973

As of December 31, 2023 BBVA, S.A. in Spain, had 197 handicap employees among the workforce (139 in 2022).

The breakdown of the number of employees in the Bank as of December 31, 2023 and 2022, by category and gender, is as follows:

Number of employees at the end of year. Professional category and gender
	2023		2022
	Male	Female	Male	Female
Management team	1,207	587	1,155	486
Managers	5,336	4,656	4,999	4,307
Other line personnel and clerical staff	3,984	5,801	3,899	5,950
Branches abroad	691	479	632	455
Total	11,218	11,523	10,685	11,198

50.5. 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;

139

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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 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.

51. Subsequent events

On January 18, 2024, a press release from the Constitutional Court of Spain was published announcing the unanimous decision of the

Plenary Session of this jurisdictional body declaring unconstitutional certain measures related to Corporate Income Tax introduced by

the Royal Decree-Law 3/2016. On January 29, 2024, this ruling was published on the website of the Constitutional Court, although the

publication in the Official State Gazette (BOE), as of the date of preparation of these Consolidated Annual Financial Statements

remains pending.

The effects of this ruling will depend on the resolution of each of the claims filed in relation to the affected financial years, so the

calculation of its impact, both with regard to the quantification of the magnitudes affected, as well as regarding their timing, will 

depend on said execution process. It is expected that the impacts of the different execution processes could have a positive

aggregate impact on the Group's total equity, allowing an acceleration in the use of tax credits and a possible recovery of cash from

taxes paid in previous years, all subject to the decisions that, with respect to each financial year and as part of the execution process,

the Group may adopt in this regard and without, in any case, said impact expected to exceed approximately 0.4% of the Bank’s total

equity.

On January 30, 2024, it was announced that a cash distribution in the amount of €0.39 gross per share to be paid in April as a final

dividend for the year 2023 and the execution of a share buyback program of BBVA for an amount of €781 million were planned to be

proposed to the corresponding corporate bodies for consideration as ordinary remuneration to shareholders for 2023, subject to

obtaining the corresponding regulatory authorizations and the communication of the specific terms and conditions of the program

before its execution. (See Note 3)

From January 1, 2024 to the date of preparation of these financial statements, no other subsequent events not mentioned above in

these financial statements have taken place that could significantly affect the Bank’s earnings or its equity position.

52. Explanation added for translation into English

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.

140

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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

141

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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, 2023, 2022 and 2021

ASSETS (Millions of Euros)
	2023	2022 ⁽¹⁾	2021 ⁽¹⁾
CASH, CASH BALANCES AT CENTRAL BANKS AND OTHER DEMAND DEPOSITS	75,416	79,756	67,799
FINANCIAL ASSETS HELD FOR TRADING	141,042	110,671	123,493
Derivatives	34,293	39,908	30,933
Equity instruments	4,589	4,404	15,963
Debt securities	28,569	24,367	25,790
Loans and advances to central banks	2,809	1,632	3,467
Loans and advances to credit institutions	56,599	25,231	31,916
Loans and advances to customers	14,182	15,130	15,424
NON-TRADING FINANCIAL ASSETS MANDATORILY AT FAIR VALUE THROUGH PROFIT OR LOSS	8,737	6,888	6,086
Equity instruments	7,963	6,511	5,303
Debt securities	484	129	128
Loans and advances to customers	290	247	655
FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS	955	913	1,092
Debt securities	955	913	1,092
FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME	62,205	65,374	60,421
Equity instruments	1,217	1,198	1,320
Debt securities	60,963	64,150	59,074
Loans and advances to credit institutions	26	26	27
FINANCIAL ASSETS AT AMORTIZED COST	451,732	414,421	372,676
Debt securities	49,462	36,639	34,781
Loans and advances to central banks	7,151	4,401	5,681
Loans and advances to credit institutions	17,477	16,031	13,276
Loans and advances to customers	377,643	357,351	318,939
DERIVATIVES - HEDGE ACCOUNTING	1,482	1,891	1,805
FAIR VALUE CHANGES OF THE HEDGED ITEMS IN PORTFOLIO HEDGES OF INTEREST RATE RISK	(97)	(148)	5
JOINT VENTURES AND ASSOCIATES	976	916	900
Joint ventures	93	100	152
Associates	883	816	749
INSURANCE AND REINSURANCE ASSETS	211	183	269
TANGIBLE ASSETS	9,253	8,737	7,298
Properties, plant and equipment	9,046	8,441	7,107
For own use	8,295	7,911	6,874
Other assets leased out under an operating lease	751	530	233
Investment properties	207	296	191
INTANGIBLE ASSETS	2,363	2,156	2,197
Goodwill	795	707	818
Other intangible assets	1,568	1,449	1,379
TAX ASSETS	17,501	16,725	15,850
Current tax assets	2,860	1,978	932
Deferred tax assets	14,641	14,747	14,917
OTHER ASSETS	2,859	2,586	1,934
Insurance contracts linked to pensions	—	—	—
Inventories	276	325	424
Other	2,583	2,260	1,510
NON-CURRENT ASSETS AND DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE	923	1,022	1,061
TOTAL ASSETS	775,558	712,092	662,885

(1) Presented for comparison purposes only.

142

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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, 2023 , 2022 and 2021 (continued)

LIABILITIES AND EQUITY (Millions of Euros)
	2023	2022  ⁽¹⁾	2021 ⁽¹⁾
FINANCIAL LIABILITIES HELD FOR TRADING	121,715	95,611	91,135
Derivatives	33,045	37,909	31,705
Short positions	15,735	13,487	15,135
Deposits from central banks	6,397	3,950	11,248
Deposits from credit institutions	43,337	28,924	16,176
Customer deposits	23,201	11,341	16,870
FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS	13,299	10,580	9,683
Customer deposits	717	700	809
Debt certificates issued	3,977	3,288	3,396
Other financial liabilities	8,605	6,592	5,479
Memorandum item: Subordinated liabilities	—	—	—
FINANCIAL LIABILITIES AT AMORTIZED COST	557,589	529,172	487,893
Deposits from central banks	20,309	38,323	47,351
Deposits from credit institutions	40,039	26,935	19,834
Customer deposits	413,487	394,404	349,761
Debt certificates issued	68,707	55,429	55,763
Other financial liabilities	15,046	14,081	15,183
Memorandum item: Subordinated liabilities	15,867	12,509	14,808
DERIVATIVES - HEDGE ACCOUNTING	2,625	3,303	2,626
FAIR VALUE CHANGES OF THE HEDGED ITEMS IN PORTFOLIO HEDGES OF INTEREST RATE RISK	—	—	—
LIABILITIES UNDER INSURANCE AND REINSURANCE CONTRACTS	12,110	10,131	10,865
PROVISIONS	4,924	4,933	5,889
Pensions and other post-employment defined benefit obligations	2,571	2,632	3,576
Other long term employee benefits	435	466	632
Provisions for taxes and other legal contingencies	696	685	623
Commitments and guarantees given	770	770	691
Other provisions	452	380	366
TAX LIABILITIES	2,554	2,935	2,413
Current tax liabilities	878	1,415	644
Deferred tax liabilities	1,677	1,520	1,769
OTHER LIABILITIES	5,477	4,909	3,621
LIABILITIES INCLUDED IN DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE	—	—	—
TOTAL LIABILITIES	720,293	661,575	614,125

(1) Presented for comparison purposes only.

143

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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, 2023 , 2022 and 2021 (continued)

LIABILITIES AND EQUITY (Continued) (Millions of Euros)
	2023	2022 ⁽¹⁾	2021 ⁽¹⁾
SHAREHOLDERS’ FUNDS	67,955	64,535	60,383
Capital	2,861	2,955	3,267
Paid up capital	2,861	2,955	3,267
Unpaid capital which has been called up	—	—	—
Share premium	19,769	20,856	23,599
Equity instruments issued other than capital	—	—	—
Other equity	40	63	60
Retained earnings	36,237	32,711	31,841
Revaluation reserves	—	—	—
Other reserves	2,015	2,345	(1,857)
Reserves or accumulated losses of investments in joint ventures and associates	(237)	(221)	(247)
Other	2,252	2,566	(1,610.057)
Less: treasury shares	(34)	(29)	(647)
Profit or loss attributable to owners of the parent	8,019	6,358	4,653
Less: Interim dividends	(951)	(722)	(532)
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)	(16,254)	(17,642)	(16,476)
Items that will not be reclassified to profit or loss	(2,105)	(1,881)	(2,075)
Actuarial gains (losses) on defined benefit pension plans	(1,049)	(760)	(998)
Non-current assets and disposal groups classified as held for sale	—	—	—
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	(1,112)	(1,194)	(1,079)
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	55	72	2
Items that may be reclassified to profit or loss	(14,148)	(15,760)	(14,401)
Hedge of net investments in foreign operations (effective portion)	(2,498)	(1,408)	(146)
Foreign currency translation	(11,419)	(13,078)	(14,988)
Hedging derivatives. Cash flow hedges (effective portion)	133	(447)	(533)
Fair value changes of debt instruments measured at fair value through other comprehensive income	(357)	(809)	1,274
Hedging instruments (non-designated items)	—	—	—
Non-current assets and disposal groups classified as held for sale	—	—	—
Share of other recognized income and expense of investments in joint ventures and associates	(8)	(18)	(9)
MINORITY INTERESTS (NON-CONTROLLING INTERESTS)	3,564	3,623	4,853
Accumulated other comprehensive income (loss)	(3,321)	(3,109)	(8,414)
Other items	6,885	6,732	13,267
TOTAL EQUITY	55,265	50,517	48,760
TOTAL EQUITY AND TOTAL LIABILITIES	775,558	712,092	662,885
MEMORANDUM  ITEM (OFF-BALANCE SHEET EXPOSURES)  (Millions of Euros)
	2023	2022 ⁽¹⁾	2021 ⁽¹⁾
Loan commitments given	152,868	136,920	119,618
Financial guarantees given	18,839	16,511	11,720
Other commitments given	42,577	39,137	34,604

(1) Presented for comparison purposes only.

144

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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, 2023, 2022 and 2021

CONSOLIDATED INCOME STATEMENTS (Millions of Euros)
	2023	2022 ⁽¹⁾	2021 ⁽¹⁾
Interest and other income	47,850	31,432	23,015
Financial assets at fair value through other comprehensive income	3,098	3,110	1,880
Financial assets at amortized cost	38,328	25,258	18,364
Other interest income	6,424	3,064	2,770
Interest expense	(24,761)	(12,309)	(8,329)
NET INTEREST INCOME	23,089	19,124	14,686
Dividend income	118	123	176
Share of profit or loss of entities accounted for using the equity method	26	21	1
Fee and commission income	9,899	8,260	6,997
Fee and commission expense	(3,611)	(2,888)	(2,232)
Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net	76	64	134
Financial assets at amortized cost	41	8	27
Other financial assets and liabilities	35	56	106
Gains (losses) on financial assets and liabilities held for trading, net	1,352	562	341
Reclassification of financial assets from fair value through other comprehensive income	—	—	—
Reclassification of financial assets from amortized cost	—	—	—
Other gains (losses)	1,352	562	341
Gains (losses) on non-trading financial assets mandatorily at fair value through profit or loss, net	337	(67)	432
Reclassification of financial assets from fair value through other comprehensive income	—	—	—
Reclassification of financial assets from amortized cost	—	—	—
Other gains (losses)	337	(67)	432
Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net	96	150	335
Gains (losses) from hedge accounting, net	(17)	(45)	(214)
Exchange differences, net	339	1,275	883
Other operating income	619	528	661
Other operating expense	(4,042)	(3,438)	(2,041)
Income from insurance and reinsurance contracts	3,081	2,622	2,593
Expense from insurance and reinsurance contracts	(1,821)	(1,547)	(1,685)
GROSS INCOME	29,542	24,743	21,066
Administration costs	(10,905)	(9,373)	(8,296)
Personnel expense	(6,530)	(5,601)	(5,046)
Other administrative expense	(4,375)	(3,773)	(3,249)
Depreciation and amortization	(1,403)	(1,328)	(1,234)
Provisions or reversal of provisions	(373)	(291)	(1,018)
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification	(4,428)	(3,379)	(3,034)
Financial assets measured at amortized cost	(4,386)	(3,303)	(3,017)
Financial assets at fair value through other comprehensive income	(42)	(76)	(17)
NET OPERATING INCOME	12,432	10,372	7,484
Impairment or reversal of impairment of investments in joint ventures and associates	(9)	42	—
Impairment or reversal of impairment on non-financial assets	(54)	(27)	(221)
Tangible assets	(16)	53	(161)
Intangible assets	(26)	(25)	(19)
Other assets	(12)	(55)	(41)
Gains (losses) on derecognition of non-financial assets and subsidiaries, net	28	(11)	24
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	22	(108)	(40)
PROFIT (LOSS) BEFORE TAX FROM CONTINUING OPERATIONS	12,419	10,268	7,247
Tax expense or income related to profit or loss from continuing operations	(4,003)	(3,505)	(1,909)
PROFIT (LOSS) AFTER TAX FROM CONTINUING OPERATIONS	8,416	6,763	5,338
Profit (loss) after tax from discontinued operations	—	—	280
PROFIT (LOSS)	8,416	6,763	5,618
ATTRIBUTABLE TO MINORITY INTERESTS (NON-CONTROLLING INTERESTS)	397	405	965
ATTRIBUTABLE TO OWNERS OF THE PARENT	8,019	6,358	4,653

(1) Presented for comparison purposes only.

145

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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, 2023, 2022 and 2021

(continued)

EARNINGS (LOSSES) PER SHARE  (Euros)
	2023	2022 ⁽¹⁾	2021 ⁽¹⁾
EARNINGS (LOSSES) PER SHARE  (Euros)	1.29	0.98	0.67
Basic earnings (losses) per share from continuing operations	1.29	0.98	0.63
Diluted earnings (losses) per share from continuing operations	1.29	0.98	0.63
Basic earnings (losses) per share from discontinued operations	—	—	0.04
Diluted earnings (losses) per share from discontinued operations	—	—	0.04

146

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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, 2023, 2022 and 2021

CONSOLIDATED STATEMENTS OF RECOGNIZED INCOME AND EXPENSE (Millions of Euros)
	2023	2022 ⁽¹⁾	2021 ⁽¹⁾
PROFIT (LOSS) RECOGNIZED IN INCOME STATEMENT	8,416	6,763	5,618
OTHER RECOGNIZED INCOME (EXPENSE)	1,175	789	(3,977)
ITEMS NOT SUBJECT TO RECLASSIFICATION TO INCOME STATEMENT	(223)	190	358
Actuarial gains (losses) from defined benefit pension plans	(358)	354	218
Non-current assets and disposal groups held for sale	—	—	(3)
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	100	(121)	189
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	(24)	100	33
Income tax related to items not subject to reclassification to income statement	59	(143)	(80)
ITEMS SUBJECT TO RECLASSIFICATION TO INCOME STATEMENT	1,398	599	(4,335)
Hedge of net investments in foreign operations (effective portion)	(1,095)	(1,172)	(117)
Valuation gains (losses) taken to equity	(1,095)	(1,172)	(117)
Transferred to profit or loss	—	—	—
Other reclassifications	—	—	—
Foreign currency translation	1,379	3,413	(2,256)
Translation gains (losses) taken to equity	1,378	3,413	(2,239)
Transferred to profit or loss	1	—	(17)
Other reclassifications	—	—	—
Cash flow hedges (effective portion)	832	72	(691)
Valuation gains (losses) taken to equity	832	91	(553)
Transferred to profit or loss	—	(19)	(137)
Transferred to initial carrying amount of hedged items	—	—	—
Other reclassifications	—	—	—
Debt securities at fair value through other comprehensive income	752	(2,498)	(1,139)
Valuation gains (losses) taken to equity	757	(2,528)	(1,082)
Transferred to profit or loss	(5)	30	(57)
Other reclassifications	—	—	—
Non-current assets and disposal groups held for sale	—	—	(663)
Valuation gains (losses) taken to equity	—	—	(30)
Transferred to profit or loss	—	—	(633)
Other reclassifications	—	—	—
Entities accounted for using the equity method	12	(7)	8
Income tax relating to items subject to reclassification to income statements	(482)	791	523
TOTAL RECOGNIZED INCOME (EXPENSE)	9,591	7,552	1,640
Attributable to minority interests (non-controlling interests)	184	1,352	(500)
Attributable to the parent company	9,407	6,200	2,141

(1)Presented for comparison purposes only.

147

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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, 2023, 2022 and 2021

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Millions of Euros)
	Capital	Share Premium	Equity instruments issued other than capital	Other Equity	Retained earnings	Revaluation reserves	Other reserves	(-) Treasury shares	Profit or loss attributable to owners of the parent	(-) Interim dividends	Accumulated other comprehensive income (loss)	Minority interests		Total
2023												Accumulated other comprehensiv e income (loss)	Other
Balances as of January 1, 2023 ⁽¹⁾	2,955	20,856	—	63	32,536	—	2,345	(29)	6,420	(722)	(17,432)	(3,112)	6,736	50,615
Effect of changes in accounting policies	—	—	—	—	175	—	—	—	(62)	—	(210)	4	(4)	(98)
Adjusted initial balance	2,955	20,856	—	63	32,711	—	2,345	(29)	6,358	(722)	(17,642)	(3,109)	6,732	50,517
Total income/expense recognized	—	—	—	—	—	—	—	—	8,019	—	1,388	(213)	397	9,591
Other changes in equity	(94)	(1,087)	—	(22)	3,526	—	(331)	(5)	(6,358)	(228)	—	1	(244)	(4,842)
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	(94)	(1,087)	—	—	75	—	(316)	1,422	—	—	—	—	—	—
Dividend distribution	—	—	—	—	(1,857)	—	—	—	—	(951)	—	—	(263)	(3,071)
Purchase of treasury shares	—	—	—	—	—	—	—	(2,166)	—	—	—	—	—	(2,166)
Sale or cancellation of treasury shares	—	—	—	—	—	—	1	739	—	—	—	—	—	741
Reclassification of other equity instruments to financial liabilities	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Reclassification of financial liabilities to other equity instruments	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Transfers among components of equity	—	—	—	2	5,651	—	(17)	—	(6,358)	722	—	1	(1)	—
Increase/Reduction of equity due to business combinations	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Share based payments	—	—	—	(41)	—	—	—	—	—	—	—	—	—	(41)
Other increases or (-) decreases in equity	—	—	—	17	(344)	—	2	—	—	—	—	—	20	(305)
Balance as of December 31, 2023	2,861	19,769	—	40	36,237	—	2,015	(34)	8,019	(951)	(16,254)	(3,321)	6,885	55,265

(1) Balances as of December 31, 2022 as originally reported in the consolidated Financial Statements for the year 2022.

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.

Consolidated statements of changes in equity for the years ended December 31, 2023, 2022 and 2021 (continued)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Millions of Euros)
2022 ⁽¹⁾	Capital	Share Premium	Equity instruments issued other than capital	Other Equity	Retained earnings	Revaluation reserves	Other reserves	(-) Treasury shares	Profit or loss attributable to owners of the parent	(-) Interim dividends	Accumulated other comprehensive income (loss)	Minority interests		Total
												Accumulated other comprehensiv e income (loss)	Other
Balances as of January 1, 2022 ⁽²⁾	3,267	23,599	—	60	31,841	—	(1,857)	(647)	4,653	(532)	(16,476)	(8,414)	13,267	48,760
Effect of changes in accounting policies	—	—	—	—	178	—	—	—	—	—	(186)	1	(6)	(12)
Adjusted initial balance	3,267	23,599	—	60	32,019	—	(1,857)	(647)	4,653	(532)	(16,662)	(8,413)	13,261	48,748
Total income/expense recognized	—	—	—	—	—	—	—	—	6,358	—	(158)	947	405	7,552
Other changes in equity	(313)	(2,743)	—	3	692	—	4,202	617	(4,653)	(190)	(822)	4,358	(6,935)	(5,783)
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	(313)	(2,743)	—	—	250	—	(355)	3,160	—	—	—	—	—	—
Dividend distribution	—	—	—	—	(1,463)	—	—	—	—	(722)	—	—	(185)	(2,370)
Purchase of treasury shares	—	—	—	—	—	—	—	(2,966)	—	—	—	—	—	(2,966)
Sale or cancellation of treasury shares	—	—	—	—	—	—	9	423	—	—	—	—	—	432
Reclassification of other equity instruments to financial liabilities	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Reclassification of financial liabilities to other equity instruments	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Transfers among components of equity  (3)	—	—	—	—	2,231	—	2,712	—	(4,653)	532	(822)	4,358	(4,358)	—
Increase/Reduction of equity due to business combinations	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Share based payments	—	—	—	(22)	—	—	—	—	—	—	—	—	—	(22)
Other increases or (-) decreases in equity (3)	—	—	—	25	(326)	—	1,836	—	—	—	—	—	(2,392)	(857)
Balance as of December 31, 2022	2,955	20,856	—	63	32,711	—	2,345	(29)	6,358	(722)	(17,642)	(3,109)	6,732	50,517

(1) Presented for comparison purposes only.

(2) Balances as of December 31, 2021 as originally reported in the consolidated Financial Statements for the year 2021.

(3) The headings "Transfers among components of equity" and "Other increases or decreases in equity" include the effects of the application of IAS 29 "Financial Reporting in Hyperinflationary Economies" in the subsidiaries in Turkey (see Note 2.2.18 in the consolidated

Financial Statements) for amounts of €1,873 million in "Retained earnings", €1,862 million in "Accumulated other comprehensive income (loss)" and, under the heading of "Minority interests" include, €1,621 million in "Other" and €1,480 million in "Accumulated other

comprehensive income (loss)".

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.

Consolidated statements of changes in equity for the years ended December 31, 2023, 2022 and 2021 (continued)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Millions of Euros)
	Capital	Share Premium	Equity instruments issued other than capital	Other Equity	Retained earnings	Revaluation reserves	Other reserves	(-) Treasury shares	Profit or loss attributable to owners of the parent	(-) Interim dividends	Accumulated other comprehensive income (loss)	Minority interests		Total
2021 ⁽¹⁾												Accumulated other comprehensiv e income (loss)	Other
Balances as of January 1, 2021 ⁽²⁾	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 among components of 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)
Balance 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

(1)  Presented for comparison purposes only.

(2) Balances as of December 31, 2020 as originally reported in the consolidated Financial Statements for the year 2020.

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.

Consolidated statements of cash flows for the years ended December 31, 2023, 2022 and 2021

CONSOLIDATED STATEMENTS OF CASH FLOWS (Millions of Euros)
	2023	2022 ⁽¹⁾	2021 ⁽¹⁾
A) CASH FLOWS FROM OPERATING ACTIVITIES	(721)	23,718	(1,242)
Of which hyperinflation effect from operating activities	1,884	2,692	—
Profit for the year	8,416	6,763	5,618
Adjustments to obtain the cash flow from operating activities	12,150	11,746	7,688
Depreciation and amortization	1,403	1,328	1,234
Other adjustments	10,747	10,418	6,454
Net increase/decrease in operating assets	(77,408)	(42,900)	(38,267)
Financial assets held for trading	(27,884)	14,658	(17,031)
Non-trading financial assets mandatorily at fair value through profit or loss	(1,288)	(421)	(908)
Other financial assets designated at fair value through profit or loss	(42)	179	25
Financial assets at fair value through other comprehensive income	2,512	(1,014)	7,116
Financial assets at amortized cost	(51,182)	(55,754)	(28,062)
Other operating assets	476	(548)	592
Net increase/decrease in operating liabilities	61,473	51,343	25,266
Financial liabilities held for trading	24,435	2,907	6,479
Other financial liabilities designated at fair value through profit or loss	2,003	293	(837)
Financial liabilities at amortized cost	36,127	48,161	19,682
Other operating liabilities	(1,092)	(17)	(58)
Collection/payments for income tax	(5,353)	(3,234)	(1,546)
B) CASH FLOWS FROM INVESTING ACTIVITIES	(1,419)	(3,911)	(1,634)
Of which hyperinflation effect from investing activities	772	759	—
Investment	(1,912)	(4,506)	(12,472)
Tangible assets	(1,129)	(1,812)	(396)
Intangible assets	(690)	(630)	(550)
Investments in joint ventures and associates	(93)	(81)	(50)
Subsidiaries and other business units	—	(1,389)	—
Non-current assets classified as held for sale and associated liabilities	—	(594)	(11,476)
Other settlements related to investing activities	—	—	—
Divestments	492	596	10,838
Tangible assets	92	29	78
Intangible assets	—	—	—
Investments in joint ventures and associates	58	127	80
Subsidiaries and other business units	21	—	10
Non-current assets classified as held for sale and associated liabilities	321	440	10,670
Other collections related to investing activities	—	—	—
C) CASH FLOWS FROM FINANCING ACTIVITIES	(1,842)	(7,563)	(4,349)
Of which hyperinflation effect from financing activities	—	—	—
Payments	(7,224)	(7,996)	(4,786)
Dividend distribution (shareholders remuneration)	(2,808)	(2,185)	(926)
Subordinated liabilities	(1,629)	(2,258)	(2,301)
Treasury share amortization	(94)	(313)	—
Treasury share acquisition	(2,072)	(2,670)	(1,022)
Other items relating to financing activities	(622)	(571)	(538)
Collections	5,383	434	438
Subordinated liabilities	4,672	—	—
Treasury shares increase	—	—	—
Treasury shares disposal	711	434	438
Other items relating to financing activities	—	—	—
D) EFFECT OF EXCHANGE RATE CHANGES	(357)	(288)	(1,864)
E) NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS (A+B+C+D)	(4,339)	11,957	(9,089)
F) CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR (2)	79,756	67,799	76,888
G) CASH AND CASH EQUIVALENTS AT END OF THE YEAR (E+F)	75,416	79,756	67,799
COMPONENTS OF CASH AND EQUIVALENTS AT END OF THE YEAR (Millions of Euros)
	2023	2022 ⁽¹⁾	2021 ⁽¹⁾
Cash	7,751	6,533	6,877
Balance of cash equivalent in central banks	60,750	67,314	55,004
Other financial assets	6,916	5,909	5,918
Less: Bank overdraft refundable on demand	—	—	—
TOTAL CASH AND CASH EQUIVALENTS AT END OF THE YEAR	75,416	79,756	67,799

(1) Presented for comparison purposes only.

(2) In fiscal year 2021, the balance of Group companies in the United States included in the sale to PNC is included.

This Appendix is an integral part of Note 1.8 of the financial statements for the year ended December 31, 2023.

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.

APPENDIX II. Additional information on subsidiaries and structured entities composing

the BBVA Group as of December 31, 2023

			% share of participation (1)			Millions of Euros (2)
						Affiliate entity data
Company	Location	Activity	Direct	Indirect	Total	Net carrying amount	Equity excluding profit (loss) 31.12.2023	Profit (loss) 31.12.2023
ACTIVOS MACORP SL	SPAIN	REAL ESTATE	50.64	49.36	100.00	3	3	—
ADQUIRA MEXICO SA DE CV	MEXICO	SERVICES	—	100.00	100.00	11	8	3
ALCALA 120 PROMOC. Y GEST.IMMOB. S.L.	SPAIN	REAL ESTATE	—	100.00	100.00	19	18	1
ANIDA GRUPO INMOBILIARIO SL	SPAIN	INVESTMENT COMPANY	100.00	—	100.00	1,188	1,198	—
ANIDA INMOBILIARIA, S.A. DE C.V.	MEXICO	INVESTMENT COMPANY	—	100.00	100.00	23	23	—
ANIDA OPERACIONES SINGULARES, S.A.	SPAIN	REAL ESTATE	—	100.00	100.00	1,136	1,142	-6
ANIDA PROYECTOS INMOBILIARIOS, S.A. DE C.V.	MEXICO	REAL ESTATE	—	100.00	100.00	21	21	—
ANIDAPORT INVESTIMENTOS IMOBILIARIOS, UNIPESSOAL, LTDA	PORTUGAL	REAL ESTATE	—	100.00	100.00	24	15	-2
ANTHEMIS BBVA VENTURE PARTNERSHIP LLP	UNITED KINGDOM	INVESTMENT COMPANY	—	100.00	100.00	11	16	-3
APLICA NEXTGEN OPERADORA S.A. DE C.V.	MEXICO	SERVICES	—	100.00	100.00	—	—	—
APLICA NEXTGEN SERVICIOS S.A. DE C.V	MEXICO	SERVICES	—	100.00	100.00	1	1	—
ARRAHONA IMMO, S.L.	SPAIN	REAL ESTATE	—	100.00	100.00	53	114	-2
ARRAHONA NEXUS, S.L.	SPAIN	REAL ESTATE	—	100.00	100.00	56	62	—
ARRELS CT FINSOL, S.A.	SPAIN	REAL ESTATE	—	100.00	100.00	59	75	—
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	17	24	—
BANCO BBVA ARGENTINA S.A.	ARGENTINA	BANKING	39.97	26.59	66.56	158	494	820
BANCO BBVA PERÚ SA ⁽³⁾	PERU	BANKING	—	46.12	46.12	1,390	2,551	463
BANCO BILBAO VIZCAYA ARGENTARIA URUGUAY SA	URUGUAY	BANKING	100.00	—	100.00	110	242	76
BANCO OCCIDENTAL SA	SPAIN	BANKING	49.43	50.57	100.00	17	18	1
BANCO PROVINCIAL OVERSEAS NV	CURAÇAO	BANKING	—	100.00	100.00	51	45	6
BANCO PROVINCIAL SA - BANCO UNIVERSAL	VENEZUELA	BANKING	1.46	53.75	55.21	48	175	45
BBV AMERICA SL	SPAIN	INVESTMENT COMPANY	99.80	0.20	100.00	—	609	56
BBVA (SUIZA) SA	SWITZERLAND	BANKING	100.00	—	100.00	118	152	7
BBVA AGENCIA DE SEGUROS COLOMBIA LTDA	COLOMBIA	INSURANCES SERVICES	—	100.00	100.00	—	—	—
BBVA AI FACTORY SL	SPAIN	SERVICES	—	100.00	100.00	5	5	—
BBVA ASSET MANAGEMENT ARGENTINA SAU SOCIEDAD GERENTE DE FONDOS COMUNES DE INVERSIÓN	ARGENTINA	INVESTMENT FUND MANAGEMENT	—	100.00	100.00	13	—	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	48	25	22
BBVA ASSET MANAGEMENT SA SAF	PERU	INVESTMENT FUND MANAGEMENT	—	100.00	100.00	7	6	1
BBVA ASSET MANAGEMENT SA SGIIC	SPAIN	INVESTMENT FUND MANAGEMENT	100.00	—	100.00	36	-73	136
BBVA ASSET MANAGEMENT SA SOCIEDAD FIDUCIARIA (BBVA FIDUCIARIA)	COLOMBIA	INVESTMENT FUND MANAGEMENT	—	100.00	100.00	28	20	8
BBVA AXIAL TECH SA DE CV	MEXICO	SERVICES	100.00	—	100.00	231	281	3
BBVA BOLSA SOCIEDAD AGENTE DE BOLSA S.A.	PERU	SECURITIES DEALER	—	100.00	100.00	3	3	—
BBVA BRASIL BANCO DE INVESTIMENTO SA	BRAZIL	BANKING	100.00	—	100.00	16	21	1
BBVA BROKER ARGENTINA SA	ARGENTINA	INSURANCES SERVICES	—	99.96	99.96	—	2	10
BBVA BROKER CORREDURIA DE SEGUROS Y REASEGUROS SA	SPAIN	FINANCIAL SERVICES	99.94	0.06	100.00	—	3	6
BBVA COLOMBIA SA	COLOMBIA	BANKING	77.41	18.06	95.47	521	1,463	89

(1) 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.

(2) Amount without considering the interim dividends of the year, according to the provisional financial statements of each company, generally as of December 31, 2023. 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 individual companies and foreign companies at exchange rate as of December 31, 2023 . The data of the companies in Turkey and Argentina are prior to the

application of hyperinflation accounting.

(3) Full consolidation method is used according to accounting rules (see Glossary).

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 as of

December 31, 2023 (Continued)

			% share of participation (1)			Millions of Euros (2)
						Affiliate entity data
Company	Location	Activity	Direct	Indirect	Total	Net carrying amount	Equity excluding profit (loss) 31.12.2023	Profit (loss) 31.12.2023
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	4	4	—
BBVA DISTRIBUIDORA DE SEGUROS S.R.L.	URUGUAY	FINANCIAL SERVICES	—	100.00	100.00	7	3	4
BBVA FUNDOS S.GESTORA FUNDOS PENSOES SA	PORTUGAL	PENSION FUND MANAGEMENT	100.00	—	100.00	9	8	1
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 GLOBAL WEALTH ADVISORS INC	UNITED STATES	FINANCIAL SERVICES	100.00	—	100.00	6	7	(1)
BBVA HOLDING CHILE SA	CHILE	INVESTMENT COMPANY	61.22	38.78	100.00	158	291	19
BBVA INSTITUIÇAO FINANCEIRA DE CREDITO SA	PORTUGAL	FINANCIAL SERVICES	49.90	50.10	100.00	39	62	1
BBVA LEASING MEXICO SA DE CV	MEXICO	FINANCIAL SERVICES	—	100.00	100.00	51	258	40
BBVA MEDIACION OPERADOR DE BANCA-SEGUROS VINCULADO, S.A.	SPAIN	FINANCIAL SERVICES	99.99	0.01	100.00	11	(14)	28
BBVA MEXICO SA INSTITUCION DE BANCA MULTIPLE GRUPO FINANCIERO BBVA MEXICO	MEXICO	BANKING	—	100.00	100.00	17,545	12,979	4,566
BBVA NEXT TECHNOLOGIES OPERADORA, S.A. DE C.V.	MEXICO	SERVICES	—	100.00	100.00	—	—	—
BBVA NEXT TECHNOLOGIES SLU	SPAIN	SERVICES	100.00	—	100.00	44	40	6
BBVA NEXT TECHNOLOGIES, S.A. DE C.V.	MEXICO	SERVICES	—	100.00	100.00	1	1	—
BBVA OP3N S.L.	SPAIN	SERVICES	—	100.00	100.00	2	2	—
BBVA OPERADORA MEXICO SA DE CV	MEXICO	SERVICES	—	100.00	100.00	79	73	6
BBVA PENSIONES MEXICO, S.A. DE C.V., GRUPO FINANCIERO BBVA MEXICO	MEXICO	INSURANCES SERVICES	—	100.00	100.00	397	318	79
BBVA PENSIONES SA ENTIDAD GESTORA DE FONDOS DE PENSIONES	SPAIN	PENSION FUND MANAGEMENT	100.00	—	100.00	13	16	10
BBVA PERU HOLDING SAC	PERU	INVESTMENT COMPANY	100.00	—	100.00	112	1,184	214
BBVA PREVISION AFP SA ADM.DE FONDOS DE PENSIONES	BOLIVIA	PENSION FUND MANAGEMENT	75.00	5.00	80.00	2	5	—
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	63	61	(1)
BBVA SECURITIES INC	UNITED STATES	FINANCIAL SERVICES	100.00	—	100.00	233	244	(16)
BBVA SEGUROS ARGENTINA SA	ARGENTINA	INSURANCES SERVICES	87.78	12.22	100.00	10	11	32
BBVA SEGUROS COLOMBIA SA	COLOMBIA	INSURANCES SERVICES	94.00	6.00	100.00	10	31	11
BBVA SEGUROS DE VIDA COLOMBIA SA	COLOMBIA	INSURANCES SERVICES	94.00	6.00	100.00	14	123	52
BBVA SEGUROS MÉXICO SA DE CV GRUPO FINANCIERO BBVA MEXICO	MEXICO	INSURANCES SERVICES	—	100.00	100.00	687	185	502
BBVA SEGUROS SA DE SEGUROS Y REASEGUROS	SPAIN	INSURANCES SERVICES	99.96	—	99.96	713	704	224
BBVA SEGUROS SALUD MEXICO SA DE CV GRUPO FRO. BBVA MEXICO.	MEXICO	INSURANCES SERVICES	—	100.00	100.00	26	14	11
BBVA SERVICIOS ADMINISTRATIVOS MEXICO, S.A. DE C.V.	MEXICO	SERVICES	—	100.00	100.00	8	6	2
BBVA SERVICIOS CORPORATIVOS MEXICO, S.A. DE C.V.	MEXICO	SERVICES	—	100.00	100.00	5	5	1
BBVA SERVICIOS, S.A.	SPAIN	COMMERCIAL	—	100.00	100.00	—	—	—
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	9	9	—
BBVA VALORES COLOMBIA SA COMISIONISTA DE BOLSA	COLOMBIA	SECURITIES DEALER	—	100.00	100.00	13	11	2
BILBAO VIZCAYA HOLDING SAU	SPAIN	INVESTMENT COMPANY	100.00	—	100.00	265	387	(61)

(1) 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.

(2) Amount without considering the interim dividends of the year, according to the provisional financial statements of each company, generally as of December 31, 2023. 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 individual companies and foreign companies at exchange rate as of December 31, 2023. The data of the companies in Turkey and Argentina are prior to the

application of hyperinflation accounting.

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 as of

December 31, 2023 (Continued)

			% share of participation (1)			Millions of Euros (2)
						Affiliate entity data
Company	Location	Activity	Direct	Indirect	Total	Net carrying amount	Equity excluding profit (loss) 31.12.2023	Profit (loss) 31.12.2023
CAIXA MANRESA IMMOBILIARIA ON CASA SL	SPAIN	REAL ESTATE	100.00	—	100.00	2	2	—
CARTERA E INVERSIONES SA	SPAIN	INVESTMENT COMPANY	100.00	—	100.00	92	136	1
CASA DE BOLSA BBVA MEXICO SA DE CV	MEXICO	SECURITIES DEALER	—	100.00	100.00	89	52	37
CATALONIA PROMODIS 4, S.A.	SPAIN	REAL ESTATE	—	100.00	100.00	1	1	—
CATALUNYACAIXA IMMOBILIARIA SA	SPAIN	REAL ESTATE	100.00	—	100.00	186	185	1
CATALUNYACAIXA SERVEIS SA	SPAIN	SERVICES	100.00	—	100.00	2	2	—
CIDESSA DOS, S.L.	SPAIN	INVESTMENT COMPANY	—	100.00	100.00	17	17	—
CIERVANA SL	SPAIN	INVESTMENT COMPANY	100.00	—	100.00	53	54	29
COMERCIALIZADORA CORPORATIVA SAC	PERU	FINANCIAL SERVICES	—	50.00	50.00	—	—	—
COMERCIALIZADORA DE SERVICIOS FINANCIEROS, S.A.	COLOMBIA	SERVICES	—	100.00	100.00	5	5	—
COMPAÑIA CHILENA DE INVERSIONES SL	SPAIN	INVESTMENT COMPANY	99.97	0.03	100.00	221	282	(14)
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	5	5	—
CONTINENTAL DPR FINANCE COMPANY BV	NETHERLANDS	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	904	35
CREA MADRID NUEVO NORTE SA	SPAIN	REAL ESTATE	—	75.54	75.54	143	193	(4)
DATA ARCHITECTURE AND TECHNOLOGY MEXICO SA DE CV	MEXICO	SERVICES	—	100.00	100.00	—	2	(1)
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	—	—	—
ECASA, S.A.	CHILE	FINANCIAL SERVICES	—	100.00	100.00	37	32	4
EMPRENDIMIENTOS DE VALOR S.A.	URUGUAY	FINANCIAL SERVICES	—	100.00	100.00	3	5	(2)
EUROPEA DE TITULIZACION SA SGFT .	SPAIN	FINANCIAL SERVICES	88.24	—	88.24	2	19	2
F/11395 FIDEICOMISO IRREVOCABLE DE ADMINISTRACION CON DERECHO DE REVERSION ⁽³⁾	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	5	3	—
FIDEICOMISO F/29764-8 SOCIO LIQUIDADOR DE OPERACIONES FINANCIERAS DERIVADAS	MEXICO	FINANCIAL SERVICES	—	100.00	100.00	57	46	11
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	—
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	5	2	2
FINANCIERA AYUDAMOS S.A. DE C.V., SOFOMER	MEXICO	IN LIQUIDATION	—	100.00	100.00	7	6	—
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	1	—
FORUM DISTRIBUIDORA DEL PERU SA	PERU	FINANCIAL SERVICES	—	100.00	100.00	8	7	1

(1) 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.

(2) Amount without considering the interim dividends of the year, according to the provisional financial statements of each company, generally as of December 31, 2023. 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 individual companies and foreign companies at exchange rate as of December 31, 2023. The data of the companies in Turkey and Argentina are prior to the

application of hyperinflation accounting.

(3) Full consolidation method is used according to accounting rules (see Glossary).

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.

Additional information on subsidiaries and structured entities composing the BBVA Group as of

December 31, 2023 (Continued)

			% share of participation (1)			Millions of Euros (2)
						Affiliate entity data
Company	Location	Activity	Direct	Indirect	Total	Net carrying amount	Equity excluding profit (loss) 31.12.2023	Profit (loss) 31.12.2023
FORUM DISTRIBUIDORA, S.A.	CHILE	FINANCIAL SERVICES	—	100.00	100.00	51	39	10
FORUM SERVICIOS FINANCIEROS, S.A.	CHILE	FINANCIAL SERVICES	—	100.00	100.00	234	215	10
G NETHERLANDS BV	NETHERLANDS	INVESTMENT COMPANY	—	100.00	100.00	393	323	—
GARANTI BANK SA	ROMANIA	BANKING	—	100.00	100.00	252	363	33
GARANTI BBVA AS	TURKEY	BANKING	85.97	—	85.97	5,038	5,090	2,671
GARANTI BBVA DIJITAL VARLIKLAR ANONIM SIRKETI	TURKEY	FINANCIAL SERVICES	—	100.00	100.00	14	14	(3)
GARANTI BBVA EMEKLILIK AS	TURKEY	INSURANCES SERVICES	—	84.91	84.91	93	46	65
GARANTI BBVA FACTORING AS	TURKEY	FINANCIAL SERVICES	—	81.84	81.84	43	21	32
GARANTI BBVA FILO AS	TURKEY	SERVICES	—	100.00	100.00	169	66	102
GARANTI BBVA FINANSAL TEKNOLOJI ANONIM SIRKETI	TURKEY	FINANCIAL SERVICES	—	100.00	100.00	11	14	—
GARANTI BBVA LEASING AS	TURKEY	FINANCIAL SERVICES	—	100.00	100.00	253	121	132
GARANTI BBVA PORTFOY YONETIMI AS	TURKEY	INVESTMENT FUND MANAGEMENT	—	100.00	100.00	22	10	13
GARANTI BBVA YATIRIM AS	TURKEY	FINANCIAL SERVICES	—	100.00	100.00	167	68	99
GARANTI DIVERSIFIED PAYMENT RIGHTS FINANCE COMPANY	CAYMAN ISLANDS	OTHER ISSUANCE COMPANIES	—	100.00	100.00	—	(3)	(8)
GARANTI FILO SIGORTA ARACILIK HIZMETLERI A.S.	TURKEY	FINANCIAL SERVICES	—	100.00	100.00	—	—	1
GARANTI HOLDING BV	NETHERLANDS	INVESTMENT COMPANY	—	100.00	100.00	615	393	—
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	10	6	5
GARANTI ODEME VE ELEKTRONIK PARA HIZMETLERI ANONIM SIRKETI	TURKEY	PAYMENT ENTITIES	—	100.00	100.00	7	8	(1)
GARANTI YATIRIM ORTAKLIGI AS ⁽³⁾ ⁽⁴⁾	TURKEY	INVESTMENT COMPANY	—	3.61	3.61	—	2	1
GARANTIBANK BBVA INTERNATIONAL N.V.	NETHERLANDS	BANKING	—	100.00	100.00	833	647	101
GESCAT GESTIO DE SOL SL	SPAIN	REAL ESTATE	100.00	—	100.00	8	8	—
GESCAT LLEVANT, S.L.	SPAIN	REAL ESTATE	—	100.00	100.00	1	1	—
GESCAT LLOGUERS SL	SPAIN	REAL ESTATE	100.00	—	100.00	3	3	—
GESCAT VIVENDES EN COMERCIALITZACIO SL	SPAIN	REAL ESTATE	100.00	—	100.00	34	35	(2)
GESTION DE PREVISION Y PENSIONES SA	SPAIN	PENSION FUND MANAGEMENT	60.00	—	60.00	9	17	5
GESTION Y ADMINISTRACION DE RECIBOS, S.A. - GARSA	SPAIN	SERVICES	—	100.00	100.00	1	2	—
GRAN JORGE JUAN SA	SPAIN	REAL ESTATE	100.00	—	100.00	424	446	15
GRUPO FINANCIERO BBVA MEXICO SA DE CV	MEXICO	FINANCIAL SERVICES	99.98	—	99.98	9,826	15,950	5,225
INMUEBLES Y RECUPERACIONES BBVA SA	PERU	REAL ESTATE	—	100.00	100.00	37	36	1
INVERAHORRO SL	SPAIN	INVESTMENT COMPANY	100.00	—	100.00	130	134	(3)
INVERSIONES ALDAMA, C.A.	VENEZUELA	IN LIQUIDATION	—	100.00	100.00	—	—	—
INVERSIONES BANPRO INTERNATIONAL INC NV ⁽³⁾	CURAÇAO	INVESTMENT COMPANY	48.00	—	48.00	16	47	6
INVERSIONES BAPROBA CA	VENEZUELA	FINANCIAL SERVICES	100.00	—	100.00	—	—	—
INVERSIONES P.H.R.4, C.A.	VENEZUELA	INACTIVE	—	60.46	60.46	—	—	—
MADIVA SOLUCIONES, S.L.	SPAIN	SERVICES	—	100.00	100.00	4	3	1

(1) 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.

(2) Amount without considering the interim dividends of the year, according to the provisional financial statements of each company, generally as of December 31, 2023. 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 individual companies and foreign companies at exchange rate as of December 31, 2023 . The data of the companies in Turkey and Argentina are prior to the

application of hyperinflation accounting.(3) Full consolidation method is used according to accounting rules (see Glossary).

(4) The percentage of voting rights owned by the Group entities in this company is 99.97%.

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.

Additional information on subsidiaries and structured entities composing the BBVA Group as of

December 31, 2023 (Continued)

			% share of participation (1)			Millions of Euros (2)
						Affiliate entity data
Company	Location	Activity	Direct	Indirect	Total	Net carrying amount	Equity excluding profit (loss) 31.12.2023	Profit (loss) 31.12.2023
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	34	35	4
MOTORACTIVE MULTISERVICES SRL	ROMANIA	SERVICES	—	100.00	100.00	—	4	1
MOVISTAR CONSUMER FINANCE COLOMBIA SAS	COLOMBIA	IN LIQUIDATION	—	50.00	50.00	—	42	(26)
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	101	76	25
OPCION VOLCAN, S.A.	MEXICO	REAL ESTATE	—	100.00	100.00	3	3	—
OPENPAY ARGENTINA SA	ARGENTINA	PAYMENT ENTITIES	—	100.00	100.00	6	2	1
OPENPAY COLOMBIA SAS	COLOMBIA	PAYMENT ENTITIES	—	100.00	100.00	7	3	(2)
OPENPAY PERÚ SA	PERU	PAYMENT ENTITIES	—	100.00	100.00	13	6	(5)
OPENPAY SA DE CV	MEXICO	PAYMENT ENTITIES	—	100.00	100.00	44	23	(10)
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	33	9
PECRI INVERSION SL	SPAIN	INVESTMENT COMPANY	100.00	—	100.00	119	111	7
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	15	20	—
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 LP	UNITED STATES	INVESTMENT COMPANY	—	99.50	99.50	31	28	2
PROPEL EXPLORER FUND II LP	UNITED STATES	INVESTMENT COMPANY	—	99.50	99.50	—	—	—
PROPEL VENTURE PARTNERS BRAZIL US LP	UNITED STATES	INVESTMENT COMPANY	—	99.80	99.80	12	21	—
PROPEL VENTURE PARTNERS GLOBAL US, LP	UNITED STATES	INVESTMENT COMPANY	—	99.50	99.50	114	171	41
PROPEL VENTURE PARTNERS US FUND I, L.P.	UNITED STATES	VENTURE CAPITAL	99.50	—	99.50	163	249	(31)
PROPEL XYZ I LP	UNITED STATES	INVESTMENT COMPANY	—	99.40	99.40	11	13	(2)
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	—
PSA FINANCE ARGENTINA COMPAÑIA FINANCIERA SA	ARGENTINA	BANKING	—	50.00	50.00	7	6	8
RALFI IFN SA	ROMANIA	FINANCIAL SERVICES	—	100.00	100.00	36	17	(7)
RPV COMPANY	CAYMAN ISLANDS	OTHER ISSUANCE COMPANIES	—	100.00	100.00	—	—	—
SATICEM GESTIO SL	SPAIN	REAL ESTATE	100.00	—	100.00	2	2	—
SATICEM HOLDING SL	SPAIN	REAL ESTATE	100.00	—	100.00	5	5	—
SATICEM IMMOBLES EN ARRENDAMENT SL	SPAIN	REAL ESTATE	100.00	—	100.00	2	2	—

(1) 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.

(2) Amount without considering the interim dividends of the year, according to the provisional financial statements of each company, generally as of December 31, 2023. 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 individual companies and foreign companies at exchange rate as of December 31, 2023. . The data of the companies in Turkey and Argentina are prior to the

application of hyperinflation accounting.

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.

Additional information on subsidiaries and structured entities composing the BBVA Group as of

December 31, 2023 (Continued)

			% share of participation (1)			Millions of Euros (2)
						Affiliate entity data
Company	Location	Activity	Direct	Indirect	Total	Net carrying amount	Equity excluding profit (loss) 31.12.2023	Profit (loss) 31.12.2023
SEGUROS PROVINCIAL CA	VENEZUELA	INSURANCES SERVICES	—	100.00	100.00	10	9	1
SERVICIOS CORPORATIVOS DE SEGUROS, S.A. DE C.V.	MEXICO	SERVICES	—	100.00	100.00	1	1	—
SERVICIOS EXTERNOS DE APOYO EMPRESARIAL, S.A DE C.V.	MEXICO	SERVICES	—	100.00	100.00	8	8	(1)
SOCIEDAD DE ESTUDIOS Y ANALISIS FINANCIERO SA	SPAIN	SERVICES	100.00	—	100.00	64	66	(2)
SOCIEDAD PERUANA DE FINANCIAMIENTO SAC	PERU	FINANCIAL SERVICES	—	50.00	50.00	2	3	(1)
SPORT CLUB 18 SA	SPAIN	INVESTMENT COMPANY	100.00	—	100.00	11	11	—
TREE INVERSIONES INMOBILIARIAS SA	SPAIN	REAL ESTATE	100.00	—	100.00	1,488	277	59
TRIFOI REAL ESTATE SRL	ROMANIA	REAL ESTATE	—	100.00	100.00	1	1	—
UNNIM SOCIEDAD PARA LA GESTION DE ACTIVOS INMOBILIARIOS SA	SPAIN	REAL ESTATE	100.00	—	100.00	529	437	—
URBANIZADORA SANT LLORENC SA	SPAIN	INACTIVE	60.60	—	60.60	—	—	—
VOLKSWAGEN FINANCIAL SERVICES COMPAÑIA FINANCIERA SA	ARGENTINA	BANKING	—	51.00	51.00	13	8	17

(1) 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.

(2) Amount without considering the interim dividends of the year, according to the provisional financial statements of each company, generally as of December 31, 2023. 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 individual companies and foreign companies at exchange rate as of December 31, 2023. The data of the companies in Turkey and Argentina are prior to the

application of hyperinflation accounting.

This Appendix is an integral part of Note 14.1 of the financial statements for the year ended December 31, 2023.

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.

APPENDIX III.  Additional information on investments joint ventures and associates in the

BBVA Group as of December 31, 2023

Most significant companies are included, which together represent 99.5% of the total investment in this group.

			% Legal share of participation			Millions of Euros (1)
						Affiliate entity data
Company	Location	Activity	Direct	Indirect	Total	Consolid ated Net carrying amount	Assets 31.12.20 23	Liabilitie s 31.12.20 23	Equity excluding profit (loss) 31.12.202 3	Profit (loss) 31.12.20 23
ASSOCIATES
ADQUIRA ESPAÑA, S.A.	SPAIN	SERVICES	—	44.44	44.44	4	23	13	9	1
ATOM HOLDCO LIMITED	UNITED KINGDOM	INVESTMENT COMPANY	49.51	—	49.51	211	9,222	8,756	444	22
AUREA, S.A. (CUBA)	CUBA	REAL ESTATE	—	49.00	49.00	5	11	1	9	1
BBVA ALLIANZ SEGUROS Y REASEGUROS, S.A.	SPAIN	INSURANCES SERVICES	—	50.00	50.00	251	917	377	530	10
COMPAÑIA ESPAÑOLA DE FINANCIACION DEL DESARROLLO SA	SPAIN	PUBLIC COMPANIES AND INSTITUTIONS	16.67	—	16.67	35	218	10	187	22
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	PERU	ELECTRONIC MONEY ENTITIES	—	28.50	28.50	1	4	—	3	1
FRAUDFENSE SL	SPAIN	REAL ESTATE	—	33.33	33.33	2	6	1	7	(2)
METROVACESA SA	ARGENTINA	PAYMENT ENTITIES	9.44	11.41	20.85	259	2,482	801	1,706	(24)
REDSYS SERVICIOS DE PROCESAMIENTO SL	SPAIN	FINANCIAL SERVICES	24.90	—	24.90	22	134	48	80	7
ROMBO COMPAÑIA FINANCIERA SA	ARGENTINA	BANKING	—	40.00	40.00	3	39	30	2	7
SBD CREIXENT, S.A.	SPAIN	REAL ESTATE	—	23.05	23.05	1	6	1	5	—
SEGURIDAD Y PROTECCION BANCARIAS SA DE CV	MEXICO	SERVICES	—	26.14	26.14	1	5	—	4	1
SERVICIOS ELECTRONICOS GLOBALES SA DE CV	MEXICO	SERVICES	—	46.14	46.14	36	77	—	58	19
SERVIRED SOCIEDAD ESPAÑOLA DE MEDIOS DE PAGO SA	SPAIN	FINANCIAL SERVICES	28.72	—	28.72	8	56	29	27	—
SISTEMAS DE TARJETAS Y MEDIOS DE PAGO SA	SPAIN	PAYMENT ENTITIES	20.61	—	20.61	2	487	478	5	4
SOLARIS SE ⁽²⁾	GERMANY	BANKING	—	15.53	15.53	34	2,013	1,795	240	(21)
TELEFONICA FACTORING ESPAÑA SA ⁽³⁾	SPAIN	FINANCIAL SERVICES	30.00	—	30.00	5	120	103	7	10
TF PERU SAC	PERU	FINANCIAL SERVICES	—	24.30	24.30	1	6	1	4	2
VERIDAS DIGITAL AUTHENTICATION SOLUTIONS S.L.	SPAIN	SERVICES	—	32.05	32.05	1	17	13	14	(10)
JOINT VENTURES
ALTURA MARKETS SOCIEDAD DE VALORES SA	SPAIN	SECURITIES DEALER	50.00	—	50.00	31	1,808	1,745	48	14
COMPAÑIA MEXICANA DE PROCESAMIENTO SA DE CV	MEXICO	SERVICES	—	50.00	50.00	7	15	—	23	(8)
CORPORACION IBV PARTICIPACIONES EMPRESARIALES, S.A. ⁽⁴⁾	SPAIN	INVESTMENT COMPANY	—	50.00	50.00	29	62	4	58	—
F/ 5356 FIDEICOMISO IRREVOCABLE DE ADM. INMOBILIARIA CON DERECHO DE REVERSIÓN- FIDEICOMISO SELVA	MEXICO	REAL ESTATE	—	42.40	42.40	8	19	—	19	—
FIDEICOMISO 1729 INVEX ENAJENACION DE CARTERA ⁽⁴⁾	MEXICO	REAL ESTATE	—	44.09	44.09	12	206	—	206	—
INVERSIONES PLATCO CA	VENEZUELA	FINANCIAL SERVICES	—	50.00	50.00	5	11	1	12	(1)
PROMOCIONS TERRES CAVADES, S.A.	SPAIN	REAL ESTATE	—	39.11	39.11	1	3	—	3	—
RCI COLOMBIA SA COMPAÑIA DE FINANCIAMIENTO	COLOMBIA	FINANCIAL SERVICES	—	49.00	49.00	40	1,000	919	80	1

(1) In foreign companies the exchange rate of December 31, 2023 is applied.

(2) The percentage of voting rights owned by the Group entities in this company is 22.22%.

(3) Financial Statements as of December 31, 2022.

(4) Classified as Non-current asset held for sale.

This Appendix is an integral part of Note 14.2 of the financial statements for the year ended December 31, 2023.

158

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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 2023

Acquisitions or increases of interest ownership in consolidated subsidiaries

Company (1)	Type of transaction	Total voting rights controlled after the disposal	Effective date for the last transaction (or notification Date)
BBVA GLOBAL WEALTH ADVISORS INC	FOUNDING	100.00	01-Jun-23
GARANTI BBVA DIJITAL VARLIKLAR ANONIM SIRKETI	FOUNDING	100.00	05-May-23
GARANTI BBVA FINANSAL TEKNOLOJI ANONIM SIRKETI	FOUNDING	100.00	30-Apr-23

(1) Variations of less than 0.1% have not been considered due to immateriality.

Disposals or reduction of interest ownership in consolidated subsidiaries

Company (1)	Type of transaction	Total voting rights controlled after the disposal	Effective date for the last transaction (or notification Date)
BAHIA SUR RESORT S.C.	LIQUIDATION	—	16-May-23
BBVA DISCOVERY INC	LIQUIDATION	—	01-Nov-23
BBVA INFORMATION TECHNOLOGY ESPAÑA SLU	MERGER	—	01-Dec-23
CDD GESTIONI S.R.L. IN LIQUIDAZIONE	LIQUIDATION	—	12-Jan-23
DATA ARCHITECTURE AND TECHNOLOGY S.L.	MERGER	—	01-Dec-23
FUTURO FAMILIAR, S.A. DE C.V.	LIQUIDATION	—	01-Nov-23
VERIDAS DIGITAL AUTHENTICATION SOLUTIONS MEXICO SACV	DILUTION PARTIC.	—	06-Jun-23
VERIDAS DIGITAL AUTHENTICATION SOLUTIONS USA LLC	DILUTION PARTIC.	—	06-Jun-23

(1) Variations of less than 0.1% have not been considered due to immateriality.

Changes and notifications of participations in the BBVA Group in 2023

Business combinations and other acquisitions or increases of interest ownership in associates and

joint-ventures accounted for under the equity method

Company (1)	Type of transaction	Total voting rights controlled after the disposal	Effective date for the last transaction (or notification Date)
F/ 5356 FIDEICOMISO IRREVOCABLE DE ADM. INMOBILIARIA CON DERECHO DE REVERSIÓN- FIDEICOMISO SELVA	FOUNDING	42.40	01-Oct-23
NUEVO MARKETPLACE, S.L. ( EN LIQUIDACIÓN)	CAPITAL INCREASE	30.23	22-Nov-23
PLAY DIGITAL SA	CAPITAL INCREASE	11.06	31-Mar-23
FRAUDFENSE SL	FOUNDING	33.33	27-Jul-23
ATOM HOLDCO LIMITED	CAPITAL INCREASE	49.51	10-Nov-23

(1) Variations of less than 0.1% have not been considered due to immateriality.

159

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

Disposal or reduction of interest ownership in associates and joint-ventures companies accounted

for under the equity method

Company (1)	Type of transaction	Total voting rights controlled after the disposal	Effective date for the last transaction (or notification Date)
CABAL URUGUAY, S.A.	DISPOSAL	—	03-Jan-23
VERIDAS DIGITAL AUTHENTICATION SOLUTIONS S.L.	DILUTION PARTIC.	32.05	06-Jun-23
COMPAÑIA PERUANA DE MEDIOS DE PAGO SAC (VISANET PERU)	DISPOSAL	20.20	01-Oct-23

(1) Variations of less than 0.1% have not been considered due to immateriality.

This Appendix is an integral part of Note 14.3 of the financial statements for the year ended December 31, 2023.

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 V. Fully consolidated subsidiaries with more than 10% owned by non-Group

shareholders as of December 31, 2023

		% of voting rights controlled by the Bank
Company	Activity	Direct	Indirect	Total
BANCO BBVA PERÚ 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	—	48.00
PRO-SALUD, C.A.	NO ACTIVITY	—	58.86	58.86
INVERSIONES P.H.R.4, C.A.	NO ACTIVITY	—	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
CREA MADRID NUEVO NORTE SA	REAL ESTATE	—	75.54	75.54
GESTION DE PREVISION Y PENSIONES SA	PENSION FUND MANAGEMENT	60.00	—	60.00
SOCIEDAD PERUANA DE FINANCIAMIENTO SAC	FINANCIAL SERVICES	—	50.00	50.00
F/253863 EL DESEO RESIDENCIAL	REAL ESTATE	—	65.00	65.00
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
MOVISTAR CONSUMER FINANCE COLOMBIA SAS	IN LIQUIDATION	—	50.00	50.00
GARANTI BBVA EMEKLILIK AS	INSURANCES	—	84.91	84.91
FOMENTO Y DESARROLLO DE CONJUNTOS RESIDENCIALES S.L. EN LIQUIDACION	IN LIQUIDATION	—	60.00	60.00
PSA FINANCE ARGENTINA COMPAÑIA FINANCIERA SA	BANKING	—	50.00	50.00

161

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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, 2023. 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, 2023
TDA 19	BANCO BILBAO VIZCAYA ARGENTARIA SA	27-Feb-04	600	29
TDA 22	BANCO BILBAO VIZCAYA ARGENTARIA SA	09-Dec-04	592	37
Hipocat 9	BANCO BILBAO VIZCAYA ARGENTARIA SA	25-Nov-05	1,016	94
Hipocat 10	BANCO BILBAO VIZCAYA ARGENTARIA SA	05-Jul-06	1,526	140
AYT HIP MIXTO V	BANCO BILBAO VIZCAYA ARGENTARIA SA	21-Jul-06	120	74
TDA 27	BANCO BILBAO VIZCAYA ARGENTARIA SA	22-Dec-06	275	122
TDA 28	BANCO BILBAO VIZCAYA ARGENTARIA SA	23-Jul-07	250	87
BBVA  RMBS 1 FT	BANCO BILBAO VIZCAYA ARGENTARIA SA	19-Feb-07	2,500	523
Hipocat 11	BANCO BILBAO VIZCAYA ARGENTARIA SA	09-Mar-07	1,628	157
BBVA  RMBS 2 FT	BANCO BILBAO VIZCAYA ARGENTARIA SA	26-Mar-07	5,000	982
BBVA  Leasing 1 FT	BANCO BILBAO VIZCAYA ARGENTARIA SA	24-Jun-07	2,500	87
BBVA  RMBS 3 FT	BANCO BILBAO VIZCAYA ARGENTARIA SA	22-Jul-07	3,000	921
TDA Tarragona 1	BANCO BILBAO VIZCAYA ARGENTARIA SA	30-Nov-07	397	50
BBVA  RMBS 5 FT	BANCO BILBAO VIZCAYA ARGENTARIA SA	24-May-08	5,000	1,526
GAT ICO-FTVPO1	BANCO BILBAO VIZCAYA ARGENTARIA SA	25-Jun-09	780	15
BBVA  RMBS 9 FT	BANCO BILBAO VIZCAYA ARGENTARIA SA	18-Apr-10	1,295	537
BBVA  RMBS 14 FT	BANCO BILBAO VIZCAYA ARGENTARIA SA	24-Nov-14	700	278
BBVA  RMBS 17 FT	BANCO BILBAO VIZCAYA ARGENTARIA SA	21-Nov-16	1,800	868
BBVA  Consumer Auto 2020-1	BANCO BILBAO VIZCAYA ARGENTARIA SA	15-Jun-20	1,100	521
BBVA Consumo 11	BANCO BILBAO VIZCAYA ARGENTARIA SA	12-Mar-21	2,500	845
BBVA RMBS 20 FT	BANCO BILBAO VIZCAYA ARGENTARIA SA	14-Jun-21	2,500	1,929
BBVA RMBS 21 FT	BANCO BILBAO VIZCAYA ARGENTARIA SA	17-Mar-22	12,400	9,975
BBVA Consumer Auto 2022-1	BANCO BILBAO VIZCAYA ARGENTARIA SA	13-Jun-22	1,200	765
BBVA RMBS 22 FT	BANCO BILBAO VIZCAYA ARGENTARIA SA	28-Nov-22	1,400	1,281
BBVA Consumo 12	BANCO BILBAO VIZCAYA ARGENTARIA SA	13-Mar-23	3,000	2,357
BBVA Consumer Auto 2023-1	BANCO BILBAO VIZCAYA ARGENTARIA SA	08-Jun-23	804	718
BBVA Leasing 3 FT	BANCO BILBAO VIZCAYA ARGENTARIA SA	27-Nov-23	2,400	2,313

162

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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. Details of the outstanding subordinated debt and preferred securities

issued by the Bank or entities in the Group consolidated as of December 31, 2023 and

2022

Issue Type and data (Millions of Euros)
	2023	2022	Interest rate in force in 2023	Fix (F) or variable (V)	Maturity date
Non-convertible
March-07	74	74	5.28%	V	Perpetual
March-08	125	125	6.03%	V	March-33
May-08	—	50	—%	V	May-23
July-08	—	100	—%	F	July-23
February-17	1,000	1,000	3.50%	F	February-27
February-17	99	99	4.00%	F	February-32
March-17	65	65	4.00%	F	February-32
March-17	53	53	4.33%	V	March-27
March-17	109	113	5.70%	F	March-32
May-17	22	20	1.60%	F	May-27
May-17	150	150	2.54%	F	May-27
May-18	269	279	5.25%	F	May-33
February-19	750	750	2.58%	V	February-29
January-20	994	994	1.00%	V	January-30
July-20	345	338	3.10%	V	July-31
June-23	741	—	5.75%	V	September-33
August-23	345	—	8.25%	V	November-33
November-23	679	—	7.88%	V	November-34
Subordinated debt - convertible
November-17	905	938	6.13%	V	Perpetual
September-18	—	1,000	—%	V	September-23
March-19	1,000	1,000	6.00%	V	Perpetual
September-19	905	938	6.50%	V	Perpetual
jul-20	1,000	1,000	6.00%	V	Perpetual
June-23	1,000	—	8.38%	V	Perpetual
September-23	905	—	9.38%	V	Perpetual
Subtotal	11,535	9,086
Subordinated deposits	177	184
Total	11,712	9,270

This Appendix is an integral part of Note 20.4 of the financial statements for the year ended December 31, 2023.

163

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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, 2023 and

2022

2023 (Millions of Euros)
	USD	Pounds sterling	Other currencies	Total
Assets
Financial assets held for trading	22,542	2,077	611	25,230
Non-trading financial assets mandatorily at fair value through profit or loss	401	5	176	582
Financial assets designated at fair value through other comprehensive income	5,243	211	987	6,441
Financial assets at amortized cost	28,919	2,914	3,205	35,038
Investments in subsidiaries, joint ventures and associates	—	—	16,617	16,617
Tangible assets	62	13	7	82
Other Assets	5,065	116	1,016	6,197
Total	62,232	5,336	22,619	90,187
Liabilities
Financial assets held for trading	22,566	890	590	24,046
Other financial liabilities designated at fair value through profit or loss	1,633	102	503	2,238
Financial liabilities at amortized cost	38,686	3,709	3,708	46,103
Other Liabilities	319	34	93	446
Total	63,204	4,735	4,894	72,833

2022 (Millions of Euros)
	USD	Pounds sterling	Other currencies	Total
Assets
Financial assets held for trading	11,592	1,497	515	13,604
Non-trading financial assets mandatorily at fair value through profit or loss	373	—	61	434
Financial assets designated at fair value through other comprehensive income	4,923	197	3,065	8,185
Financial assets at amortized cost	28,645	2,385	3,618	34,648
Investments in subsidiaries, joint ventures and associates	—	—	15,189	15,189
Tangible assets	7	13	3	23
Other Assets	4,216	44	834	5,094
Total	49,756	4,136	23,285	77,177
Liabilities
Financial assets held for trading	10,527	333	399	11,259
Other financial liabilities designated at fair value through profit or loss	1,467	109	284	1,860
Financial liabilities at amortized cost	35,186	4,519	3,022	42,727
Other Liabilities	333	37	86	456
Total	47,513	4,998	3,791	56,302

This Appendix is an integral part of Note 2.16 of the financial statements for the year ended December 31, 2023.

164

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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 2023 and

2022

INCOME STATEMENTS (Millions of Euros)
	Six months ended June 30, 2023	Six months ended June 30, 2022	Six months ended December 31, 2023	Six months ended December 31, 2022
Interest income	6,304	2,326	8,265	3,577
Financial assets and liabilities at fair value through other comprehensive income	179	182	220	316
Financial assets at amortized cost	5,246	1,801	6,406	3,615
Other interest income	879	343	1,639	(354)
Interest  expense	(3,743)	(561)	(5,262)	(1,521)
NET INTEREST INCOME	2,561	1,765	3,003	2,056
Dividend income	3,195	1,485	289	1,984
Fee and commission income	1,345	1,323	1,344	1,289
Fee and commission expense	(274)	(234)	(339)	(255)
Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net	(51)	(1)	75	2
Financial assets at amortized cost	—	—	—	—
Other financial assets and liabilities	(51)	(1)	75	2
Gains (losses) on financial assets and liabilities held for trading, net	(171)	215	159	223
Reclassification of financial assets from fair value through other comprehensive income	—	—	—	—
Reclassification of financial assets from amortized cost	—	—	—	—
Other gains or losses	(171)	215	159	223
Gains (losses) on non-trading financial assets mandatorily at fair value through profit or loss, net	22	(48)	178	(3)
Reclassification of financial assets from fair value through other comprehensive income	—	—	—	—
Reclassification of financial assets from amortized cost	—	—	—	—
Other gains or losses	22	(48)	178	(3)
Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net	(2)	81	18	47
Gains (losses) from hedge accounting, net	73	3	(79)	(3)
Exchange differences, net	40	59	(17)	(182)
Other operating income	244	165	211	174
Other operating expense	(486)	(325)	(318)	(318)
GROSS INCOME	6,495	4,489	4,525	5,014
Administrative expense	(2,005)	(1,808)	(2,153)	(1,947)
Personnel expense	(1,161)	(1,040)	(1,263)	(1,177)
Other administrative expense	(844)	(767)	(889)	(771)
Depreciation and amortization	(320)	(317)	(331)	(322)
Provisions or reversal of provisions	(43)	(11)	(73)	(39)
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification	(259)	(183)	(418)	(337)
Financial assets at amortized cost	(262)	(166)	(420)	(338)
Financial assets at fair value through other comprehensive income	4	(17)	2	1
NET OPERATING INCOME	3,869	2,170	1,550	2,369
Impairment or reversal of impairment of investments in subsidiaries,  joint ventures and associates	31	634	87	8
Impairment or reversal of impairment on non-financial assets	8	47	(2)	(41)
Tangible assets	13	47	5	(26)
Intangible assets	(5)	(1)	(7)	(15)
Other assets	—	1	—	—
Gains (losses) on derecognition of non - financial assets and subsidiaries, net	(1)	1	4	(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	3	(10)	(1)	(16)
PROFIT (LOSS) BEFORE TAX FROM CONTINUING OPERATIONS	3,910	2,843	1,637	2,320
Tax expense or income related to profit or loss from continuing operations	(337)	(240)	(403)	(107)
PROFIT (LOSS) AFTER TAX FROM CONTINUING OPERATIONS	3,574	2,603	1,234	2,212
Profit (loss) after tax from discontinued operations	—	—	—	—
PROFIT(LOSS) FOR THE YEAR	3,574	2,603	1,234	2,212

165

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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. 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 (Appendix XI). 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, 2023 and 2022 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
	2023	2022	2023	2022	2023	2022
Financing to construction and real estate development (including land) (Business in Spain)	2,105	1,861	482	350	(126)	(171)
Of which: Impaired assets	183	239	53	82	(105)	(132)
Memorandum item:
Write-offs	2,097	2,086
Memorandum item:
Total loans and advances to customers, excluding the Public Sector (Business in Spain)	174,280	176,853
Total consolidated assets (total business)	490,883	458,888
Impairment and provisions for normal exposures	(1,344)	(1,407)

166

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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)
	2023	2022
Without secured loan	359	232
With secured loan	1,746	1,629
Terminated buildings	857	898
Homes	685	710
Other	172	188
Buildings under construction	749	556
Homes	731	536
Other	18	21
Land	139	175
Urbanized land	92	119
Rest of land	47	56
Total	2,105	1,861

As of December 31, 2023 and 2022, 40,7% and 48.3% of loans to developers were guaranteed with buildings (79,9% and 79.1%, are

homes), and only 6.6% and 9.3% by land, of which 66.2% and 68.0% are in urban locations, respectively.

The table below provides the breakdown of the financial guarantees given as of December 31, 2023 and 2022:

Financial guarantees given (Millions of Euros)
	2023	2022
Houses purchase loans	36	54
Without mortgage	3	3

The information on the retail mortgage portfolio risk (housing mortgage) as of December 31, 2023 and 2022 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
	2023	2022	2023	2022
Houses purchase loans	71,144	71,799	3,267	2,486
Without mortgage	1,415	1,539	10	8
With mortgage	69,730	70,260	3,257	2,477

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 2023
Gross amount	17,201	20,302	22,850	5,856	3,519	69,729
of which: Impaired loans	307	464	642	617	1,227	3,257
December 2022
Gross amount	16,981	20,060	22,255	6,794	4,171	70,260
of which: Impaired loans	248	341	438	450	999	2,477

Outstanding home mortgage loans for house purchase as of December 31, 2023 and 2022 had an average LTV of 42% and 43%

respectively.

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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
	2023	2022	2023	2022	2023	2022	2023	2022
Real estate assets from loans to the construction and real estate development sectors in Spain.	16	23	(15)	(18)	(2)	(3)	2	5
Terminated buildings	1	3	—	(1)	—	—	—	2
Homes	—	2	—	—	—	—	—	2
Other	1	1	—	(1)	—	—	—	—
Buildings under construction	—	—	—	—	—	—	—	—
Homes	—	—	—	—	—	—	—	—
Other	—	—	—	—	—	—	—	—
Land	16	20	(14)	(17)	(2)	(3)	1	3
Urbanized land	16	20	(14)	(17)	(2)	(3)	1	3
Rest of land	—	—	—	—	—	—	—	—
Real estate assets from mortgage financing for households for the purchase of a home	528	716	(289)	(397)	(90)	(124)	239	318
Rest of foreclosed real estate assets	364	449	(231)	(270)	(76)	(79)	133	179
Equity instruments, investments and financing to non-consolidated companies holding said assets	—	410	—	(293)	—	(254)	—	117
Total	909	1,598	(535)	(977)	(169)	(460)	374	620

The gross book value of real-estate assets from mortgage lending to households for home purchase as of December 31, 2023 and

2022 amounted to €527 and €716 million, respectively, with an average coverage ratio of 54.6 % and 55.4%, respectively.

As of December 31, 2023 and 2022, the gross book value total real-estate assets (business in Spain), including other real-estate

assets received as debt payment, was €908 and €1,188 million, respectively. The coverage ratio was 58.8% and 57.7%, respectively.

This Appendix is an integral part of Note 5 of the financial statements for the year ended December 31, 2023.

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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. 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 transactions (see definition in the Glossary) are carried out with customers who have requested such a

transaction 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 transaction 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 transaction, 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 transactions do not in general increase the amount of the customer’s loan, except for the

expense inherent to the transaction itself.

– The capacity to refinance and restructure a 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 a loan is

to avoid default arising from a customer’s temporary liquidity problems by implementing structural solutions that do not increase the

balance of the 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 transactions based on the customer’s willingness and ability to pay, which may be reduced, but

should nevertheless be present. Therefore, in all cases the customer shall at least make interest payments, in addition to

certain limited exceptions where grace periods are afforded in respect of both principal and interest payments.

– Refinancing and restructuring of transactions is only allowed on those loans in which the BBVA Group originally entered

into.

– Customers subject to refinancing and restructuring transactions 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 transaction does not mean the loan is

reclassified from "impaired" or "significant increase in credit risk" to normal risk. The reclassification to "significant increase in credit

risk" or normal risk categories must be based on the analysis mentioned earlier of the viability, upon completion of the probationary

periods described below.

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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 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 unlikely to pay when there

are significant doubts that the terms of their refinancing may not be met; or

– "Significant increase in credit risk" until the conditions established for their consideration as normal risk are met.

The assets classified as "Impaired assets" should comply with the following conditions in order to be reclassified to "Significant

increase in credit risk":

– The customer has to have paid a significant part of the pending exposure.

– At least one year must have elapsed since the later of: i) the time at which the restructuring measures were extended,

– The customer does not have past due payments and objective criteria, demonstrating the borrower´s ability to pay, have

been verified.

The conditions established for assets classified as “Significant increase in credit risk” 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; none of its exposures

is more than 30 days past-due.

– At least two years must have elapsed since completion of the renegotiation or restructuring of the loan or, if later, the date

of reclassification from the deteriorated category. Regular payments must have been made during at least half of this

probation period; and

– 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.

Renewals and renegotiations are classified as normal risk, provided that there is no significant increase in risk. This classification is

applicable initially, and in the event of any deterioration, the criteria established in the existing policy are followed. In this sense, the

aforementioned conditions are considered, including, among others, the requirement that the facility is not more than 30 days past

due and that it has not been identified as 'unlikely to pay'.

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 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 restructuring will be considered impaired when the reduction in the present net value of the financial obligation is

greater than 1%.

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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
	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022
Credit institutions		—		—		—		—		—		—		—
General Governments	49	55	31	37	24	24	7	9	5	6	—	—	6	9
Other financial corporations and individual entrepreneurs (financial business)	259	267	16	9	20	18	6	1	5	1	—	—	4	5
Non-financial corporations and individual entrepreneurs (corporate non-financial activities)	35,691	38,236	2,228	2,707	4,451	5,380	1,283	1,674	712	911	59	71	1,093	1,471
Of which: financing the construction and property (including land)	85	96	12	14	474	585	194	264	101	137	—	—	98	123
Rest homes	53,064	57,386	789	856	36,511	36,956	3,947	3,842	2,817	2,834	2	3	1,254	1,129
Total	89,063	95,944	3,064	3,609	41,006	42,378	5,243	5,526	3,539	3,752	61	74	2,357	2,614

	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
	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022
Credit institutions		—		—		—		—		—		—		—
General Governments	25	26	14	20	4	23	2	9	1	5	—	—	4	8
Other financial corporations and individual entrepreneurs (financial business)	183	206	5	8	14	14	1	1	1	1	—	—	2	4
Non-financial corporations and individual entrepreneurs (corporate non-financial activities)	27,869	30,100	1,275	1,299	3,308	3,910	781	1,075	335	455	6	6	947	1,298
Of which: financing the construction and property (including land)	81	89	12	14	370	436	134	185	49	73	—	—	90	111
Rest homes	38,088	39,196	586	611	23,689	19,756	2,622	2,037	1,721	1,331	1	1	1,141	1,008
Total	66,165	69,528	1,880	1,938	27,015	23,703	3,406	3,122	2,058	1,792	7	7	2,094	2,318

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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 2023 (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%
	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022
General governments	13,304	12,485	240	255	172	—	129	92	86	118	21	44	173	1	2	—
Other financial institutions and  financial individual entrepreneurs	22,697	23,895	487	298	14,285	16,078	123	142	351	107	48	127	10,101	3,707	4,148	12,293
Non-financial institutions and non-financial individual entrepreneurs	99,406	97,716	9,620	9,702	2,030	1,703	4,674	4,508	3,304	3,270	1,743	1,481	833	865	1,098	1,282
Construction and property development	1,759	1,484	1,598	1,374	6	3	917	807	480	388	125	126	25	26	57	29
Construction of civil works	5,071	5,202	482	514	218	257	217	244	185	165	75	85	22	32	200	245
Other purposes	92,576	91,031	7,541	7,814	1,806	1,443	3,540	3,457	2,639	2,717	1,543	1,269	785	806	840	1,008
Large companies	68,012	65,221	2,828	2,701	1,256	941	1,445	1,268	814	808	724	397	594	641	507	527
SMEs (2) and individual entrepreneurs	24,564	25,810	4,713	5,113	550	503	2,096	2,188	1,825	1,909	819	872	191	165	333	481
Rest of households and NPISHs (***)	89,545	89,790	70,141	71,156	257	321	18,175	17,961	20,905	20,691	22,902	22,516	5,555	6,652	2,861	3,657
Housing	71,184	72,283	69,325	70,303	88	104	17,898	17,702	20,701	20,446	22,767	22,339	5,442	6,496	2,605	3,424
Consumption	15,174	14,637	78	80	104	134	54	57	57	55	26	51	16	22	29	30
Other purposes	3,187	2,871	739	773	66	83	224	203	147	190	109	126	97	134	228	203
TOTAL	224,952	223,887	80,488	81,411	16,743	18,102	23,101	22,703	24,645	24,186	24,715	24,167	16,662	11,224	8,108	17,232
MEMORANDUM:
Forbearance operations (4)	5,950	6,521	3,970	4,200	64	78	872	920	887	839	792	756	608	631	875	1,131

(1) The amounts included in this table are net of loss allowances.

(2) Small and medium enterprises

(3) Nonprofit institutions serving households.

(4) Net of provisions.

d) Concentration of risks by activity and geographical area (carrying amount)

Concentration of exposures by activity and geographical area
	TOTAL (1)		Spain		Rest of the European Union		America		Rest of the world
	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022
Credit institutions	152,727	123,167	51,219	54,616	56,130	30,904	19,386	16,053	25,992	21,594
General governments	66,512	64,214	50,853	44,905	9,827	11,506	4,029	3,897	1,802	3,906
Central Administration	51,224	49,251	36,920	31,535	9,167	10,727	3,798	3,572	1,338	3,418
Other	15,288	14,963	13,933	13,370	660	779	232	325	464	488
Other financial institutions and  financial individual entrepreneurs	61,221	59,130	11,216	11,885	27,195	26,013	16,810	14,908	6,000	6,324
Non-financial institutions and non-financial individual entrepreneurs	148,032	145,087	84,753	86,078	22,953	22,617	23,327	20,426	16,999	15,966
Construction and property development	2,621	2,371	2,621	2,371	—	—	—	—	—	—
Construction of civil works	8,798	8,352	6,230	6,254	842	1,056	748	263	978	780
Other purposes	136,613	134,365	75,902	77,454	22,111	21,561	22,579	20,163	16,020	15,186
Large companies	110,076	106,495	50,293	50,424	21,571	21,037	22,428	19,989	15,784	15,045
SMEs and individual entrepreneurs	26,537	27,869	25,609	27,029	540	525	152	174	236	141
Other households and NPISHs	89,850	90,066	88,513	88,500	1,027	1,180	78	91	233	295
Housing	71,184	72,284	70,073	70,901	839	1,044	65	78	207	261
Consumer	15,174	14,637	15,111	14,595	43	20	12	11	9	10
Other purposes	3,492	3,146	3,329	3,004	145	116	1	2	17	24
TOTAL	518,343	481,665	286,554	285,985	117,132	92,219	63,631	55,375	51,026	48,085

(1) 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”. The amounts included in this table are net of loss allowances.

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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 2023 - Spain (Millions of euros)
	TOTAL (1)		Andalucia		Aragon		Asturias		Baleares		Canarias		Cantabria		Castilla La Mancha		Castilla y León		Cataluña
	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022
Credit institutions	51,219	54,616	1,006	717	688	40	—	—	28	45	—	—	1,558	687	1	3	—	—	241	401
Government agencies	50,853	44,905	1,655	964	404	466	393	236	408	526	905	678	7	9	331	408	1,221	1,039	1,707	1,656
Central Administration	36,920	31,535	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Other	13,933	13,370	1,655	964	404	466	393	236	408	526	905	678	7	9	331	408	1,221	1,039	1,707	1,656
Other financial institutions and  financial individual entrepreneurs	11,216	11,885	92	114	56	50	16	6	18	16	3	3	—	—	2	1	6	11	365	383
Non-financial institutions and non- financial individual entrepreneurs	84,753	86,078	7,650	7,660	1,974	2,109	1,268	1,628	2,371	2,436	2,397	2,301	526	572	1,663	1,544	1,589	1,637	14,553	15,001
Construction and property development	2,621	2,371	380	320	27	17	32	21	24	15	91	98	10	9	62	45	23	25	584	622
Construction of civil works	6,230	6,254	572	566	113	130	48	50	137	144	114	136	49	52	216	151	95	91	1,008	1,023
Other purposes	75,902	77,454	6,698	6,775	1,834	1,962	1,188	1,557	2,210	2,277	2,192	2,066	468	511	1,385	1,348	1,471	1,522	12,961	13,356
Large companies	50,293	50,424	2,483	2,579	1,109	1,139	881	1,248	1,493	1,449	1,056	843	270	303	534	489	653	658	7,113	7,196
SMEs and individual entrepreneurs	25,609	27,029	4,215	4,195	725	823	307	309	717	828	1,137	1,223	197	208	851	859	818	864	5,848	6,160
Other households and NPISHs	88,514	88,500	13,593	13,402	1,377	1,404	1,231	1,229	1,961	1,980	3,896	3,885	858	863	2,539	2,546	2,932	2,938	26,577	26,810
Housing	70,073	70,901	10,647	10,592	1,078	1,116	890	887	1,588	1,636	2,739	2,789	698	706	1,880	1,923	2,238	2,259	21,912	22,259
Consumer	15,111	14,595	2,596	2,472	266	256	279	283	347	318	1,061	1,004	131	126	601	567	577	568	3,610	3,547
Other purposes	3,329	3,004	350	339	33	32	61	59	27	26	96	92	30	31	57	55	116	111	1,055	1,004
TOTAL	286,554	285,985	23,995	22,857	4,500	4,069	2,908	3,099	4,786	5,002	7,201	6,867	2,949	2,131	4,534	4,502	5,748	5,626	43,443	44,251

(1) 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”. The amounts included in this table are net of loss allowances.

December 2023 - Spain (Millions of euros)
	Extremadura		Galicia		Madrid		Murcia		Navarra		Comunidad Valenciana		País Vasco		La Rioja		Ceuta y Melilla
	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022
Credit institutions	—	—	393	375	44,610	51,010	—	—	—	6	2,400	1,095	293	238	—	—	—	—
Government agencies	267	312	755	730	3,277	3,446	95	129	303	313	696	746	1,362	1,560	82	84	67	67
Central Administration	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Other	267	312	755	730	3,277	3,446	95	129	303	313	696	746	1,362	1,560	82	84	67	67
Other financial institutions and  financial individual entrepreneurs	1	1	28	30	9,936	10,710	2	2	—	—	5	4	684	552	—	—	—	—
Non-financial institutions and non-financial individual entrepreneurs	989	955	2,802	2,608	30,474	30,343	1,718	1,767	1,041	1,112	5,908	6,010	7,372	7,936	342	352	116	106
Construction and property development	10	12	59	71	994	825	47	41	3	4	146	143	122	99	4	2	2	3
Construction of civil works	53	48	333	225	2,795	2,941	109	88	55	56	302	291	209	236	10	12	14	12
Other purposes	926	894	2,410	2,311	26,685	26,577	1,562	1,638	984	1,052	5,460	5,577	7,041	7,601	328	338	100	91
Large companies	403	354	1,448	1,322	22,366	22,148	806	806	686	711	3,010	2,727	5,826	6,309	139	139	17	5
SMEs and individual entrepreneurs	524	540	963	989	4,319	4,429	755	832	297	341	2,451	2,850	1,214	1,292	189	199	83	86
Other households and NPISHs	1,474	1,447	3,270	3,194	14,240	14,126	1,979	1,969	487	496	8,075	8,192	2,937	2,917	333	336	755	766
Housing	1,084	1,073	2,378	2,361	11,494	11,628	1,502	1,511	380	389	6,318	6,526	2,374	2,349	261	266	613	629
Consumer	352	337	688	669	1,928	1,874	442	422	92	91	1,552	1,470	397	404	60	59	130	128
Other purposes	38	37	204	164	818	624	34	35	15	15	206	197	165	164	12	12	11	10
TOTAL	2,732	2,716	7,248	6,937	102,538	109,634	3,794	3,867	1,831	1,928	17,084	16,048	12,648	13,204	757	773	937	940

173

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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 Agency Network

ISABEL ALVAREZ CALDERON	MONTSERRAT COSTA CALAF	RAMON LINARES LOPEZ
DIEGO TORRES PARRA	ESTHER MONTOYA CARRASCO	TANIA FERNANDEZ NOGALES
ANA GAROZ DURO	GERARD MARTINEZ ALCAÑIZ	DIEGO HERNANDEZ QUERO
MARIA ROSARIO SANCHEZ PALACIOS	JOSEFA FOLCRA MARTIN	EVA MARIA FERNANDEZ CAMPO
JAVIER CANALES FUENTE	EDUARD RECASENS BLANCH	MARIA JOSE RODRIGUEZ PEREZ
RAQUEL SANCHEZ MUÑOZ	MARCOS GIL TEJADA	BELEN FIRVIDA PLAZA
ANTONIO DAVILA RUEDA	ANNA MARIA CESARI MORA	DARIO ALFONSO GINES LAHERA
JESUS CARRASCO MORA	MARIA BELEN SOLE RODRIGUEZ	JOSE MANUEL LOPEZ IRIARTE
ANGEL GARCIA DESCALZO	LLUIS CERVERA SABALLS	LLUIS CASAS CASTELLA
FERNANDO PEGUERO LANZOS	ISAAC OLIVA RUIZ	SANDRA BERRAL PLATERO
RUFINO NIETO GONZALEZ	MIGUEL BELLO NAVARRO	JUAN LOPEZ MARTINEZ
JOSE ANTONIO SANCHEZ SANCHEZ	MARIA PILAR CALVET REVERTE	ISABEL SOTO DE PRADO
JAVIER ANTONIO GONZALEZ GOMEZ	MARIANO PELLICER BARBERA	BEATRIZ MARIN ROBLES
JAVIER ALOSETE MINGUEZ	MARIA DOLORES SUBIRATS ESPUNY	PAU CASAS AMBLAS
ARTURO MARIA GOMEZ JUEZ	JOAN POMAR GUILLEN	SALVADOR CASELLAS GASSO
JOSE ANTONIO PAREDES GOMEZ	JUAN FRANCISCO DIAZ FLORES	VICENC COMAS VICENS
JOSE MARIA GOMEZ CIDONCHA	CATALINA MARIA RAMIS BOYERAS	MARIA ANGELS MIRO SALA
JUAN CARLOS RODRIGUEZ HERNANDEZ	ANNA DURAN VIDAL	MARIA CISTERO BOFARULL
JUAN CARLOS DUQUE MEDRANO	DAVID PERUCHET GARNICA	NURIA NOGUERON MATAMOROS
JOSE LUIS GARCIA PRIETO	JOSE LUIS ORTUÑO CAMARA	MARIA LOPEZ GALINDO
BEATRIZ INMACULADA JUNQUERA FRESCO	ESTIBALIZ REBOLLO GARCIA	NOELIA TORRELLAS GRAMAJE
ALBERTO GOMEZ MARTINEZ	JAVIER GARCIA LORENZO	EMILIO GUSTAVO GONZALEZ GUTIERREZ
MIGUEL ANGEL LANERO PEREZ	SERGIO GONZALEZ RUIZ	SERGIO DIENTE ALONSO
MARBELLA CASADO RODRIGUEZ	MARIA ISABEL ARCOS PEIXOTO	DAVID REYES HERNANDO
ESTHER SIERRA SIERRA	MARIA TERESA DE ZAYAS CAMPOS	LUCIA MARTINEZ FERNANDEZ
ARMANDO GRANDA RODRIGUEZ DE LA FLOR	JOSE MARIA GUILLAMON CAMARERO	PEDRO CRUCERA GARCIA
ALEJANDRO NUEVO DIAZ	ENRIQUE MATA SANTIN	ALZO CAPITAL S.L.
MARIA ENCARNACION MARTINEZ MEZQUITA	LUIS DURO DOMENE	MEDINA FINANZAS S.L.
IVAN CALLES VAQUERO	FATIMA ROMERO FORMOSO	CORCUERA ABOGADOS Y ASESORES DE PATRIMONIO S.L.
MIGUEL JOSE FERNANDEZ MARDOMINGO BARRIUSO	PAULA REY FERRIN	LEONILA PLUS S.L.
VIRGINIA GARCIA DEL HOYO	ALEJANDRO PEREZ ANDREU	BENALWIND S.L.
REBECA GUTIERREZ FERNANDEZ	JAVIER ALAYON FUMERO	ROLO GESTION E INVERSION SOCIEDAD LTDA.
MARIA GUTIERREZ FERNANDEZ	GONZALO CAMPOS BRAVO	ASESORES FINANCIEROS R V SABIO S L U
BEGOÑA MONICA FERNANDEZ QUILEZ	MARIANO DOMINGO BALTA	GESTION Y SERVICIOS SAN ROMAN DURAN S.L.
JESUS ANGEL ZUECO GIL	JOSEP GIBERT GATELL	AFIN 7 BAGES S.L.
FRANCISCO JAVIER SMITH BASTERRA	DAVID SOTERAS MORERA	AF ABELENDA S.L.
FERNANDO MARIA ORTEGA ALTUNA	JESUS MARTOS LOPEZ	CLUSTER CAPITAL S.L.
LEIRE TERRADILLOS PEREZ	CATARINA PARDIÑAS SUAREZ	GESTION FINANCIERA MIGUELTURRA S.L.
DANIEL FERNANDEZ ONTAÑON	LAURA SOTOCA SANCHEZ	A E S T E S.L.
ANA CAÑAS BLANCO	RAUL ANTELO JALLAS	GESTORA PAMASA SL
PEDRO RAFAEL MARTINEZ GARCIA	LETICIA GARCIA CAMAFREITA	NANOBOLSA S.L.
FERNANDO MARIA ARTAJO JARQUE	ESPERANZA MACARENA POZO GONZALEZ	SERVICIOS FINANCIEROS AZMU S.L.
VICENTE MONTESINOS CONTRERAS	DAVID LLOPIS GINESTRA	JUAN LORENZO S.L.
IGNACIO VALLS BENAVIDES	TERESA VERNET VILLAGRASA	CREACIONES CARLINA S.L.
MIGUEL IZQUIERDO DOLS	ELISENDA FERNANDEZ RAMON	FRANCISCO JOSE PEÑUELA SANCHEZ S.L.

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.

BENJAMIN MONFORT GUILLAMON	CRISTINA MODOL RUIZ	ESTUDIOS FISCALES Y FINANCIEROS RIOJANOS S.L.
MONICA MIGUEL MOLINA	MARIA TERESA SEGURA MASSOT	GALARRETA Y PROVEDO S.L.
CARLOS GOMEZ EBRI	CRISTINA FARRE BOSCH	FRESNO CAPITAL S.L.
FRANCISCO EULOGIO ORTIZ MARTIN	ALBA ASENSIO REIG	ESCRIVA DE ROMANI S.L.
ANTONIO RUIZ SORIA	LAURA RIERA GARCIA	ACOFI S.L.
JUAN JOSE GARRIDO RODRIGUEZ	CARLES BOSOM MORA	ALERCIA INTERNATIONAL WEALTH MANAGEMENT S.L.
FRANCISCO JOSE DIEGO MARTI	LUIS ALBERTO LARA GARCIA	GESTION ESTUDIO Y AUDITORIA DE EMPRESAS GEA S.R.L.
RAFAEL CLAVER GIMENO	ANGEL ENRIQUE EUGENIO CUBEROS	INVERSIONES IZARRA 2000, S.L.
JUAN LUIS CU AT ALVAREZ OSSORIO	DOLORES MARIA RAMIREZ PEREA	ZARIZA CONSULTORES S.L.
PEDRO PRIGMAN RUIZ	JOSE RAMON MORSO PELAEZ	AGENTES TRIBUTARIOS Y FINANCIEROS S.L.
MARIA JESUS LOPEZ RASCON	REGINA MARIA ARESTI MUGICA	MSJN FINANCIAL ADVISORS S.L.
EDUARDO BALLESTER GOMILA	ANTONIO FERMIN LUNA GARCIA MINA	STRAFY 4 ASSET MANAGEMENT S.L.
HECTOR JAVIER LAGIER MATEOS	LUIS FELIPE ALVAREZ BURON	FAMILYSF SALUFER S.L.
MANUEL LUIS DEL BARCO ASENCIO	CECILIA PEREZ PIQUERAS GOMEZ	OKAPI SES SALINES S.L.
FRANCISCO JAVIER SANCHEZ PARRA	PATRICIA LOPEZ SANCHEZ	CAPAFONS Y CIA S.L.
JORGE LUIS RAMOS ROMAN	JORGE SANZ ARIÑO	PROELIA S.L.
JERONIMO ESTEBAN VERA RIOS	PEDRO JOSE GARCIA LOPEZ	MIQUEL VALLS ECONOMISTES ASSOCIATS S.L.
ANTONIO LOPEZ GARCIA	ALFONSO MARTINEZ PUJANTE	MEDONE SERVEIS S.L.
MARIA ISABEL MORENO SILVERIA	ANGEL MAYA MONTERO	PUENTE B GESTION INTEGRAL S.L.
LUIS ALBERTO GRAÑON LOPEZ	ROCIO ARCONES GARCIA	TIO CODINA ASSESSORS D INVERSIONS S.L.
TERESA BARRENENGOA MENENDEZ	PABLO GAGO COMES	TRUC PEBE SALLENT S.L.
JON MIKEL LEJONA DE SOLA	JOSE ANDRES RAMOS SOBRIDO	MALGOFRE S.L.
MARTA MARIA GOMEZ DE MAINTENANT	ALEXIA MARIA GONZALEZ LANZA	ARAN PALLARS ASSESSORS S.L.
SIRA ASUNCION ORUE BARASOAIN	NATALIA FERNANDEZ DEL VISO GARCIA	FINFORYOU ADVISORS S.L.
JOSE IGNACIO DE PRADO MANEIRO	BEATRIZ MARIA PACHA PRIOR	PAZGRANDIO S.L.
ASIER LARREA ORCOYEN	ANA MARIA CARO MARTIN	ASESORIA LEMA Y GARCIA S.L.
VIRGINIA FENOY CRUZ	CRISTINA ACEBES PEREZ	DEBCO ESTRUCTURA PROFESIONAL S L P
MARIA DEL PILAR FERNANDEZ VERGARA	JOSE DEL OLMO LOZANO	CHILCO GESTION S.L.
JULIAN CALVO FERNANDEZ	MANUEL ANTONIO DE LAS MORENAS LOPEZ ASTILLERO	SERFINESPO S.L.
PAULA BARCIA PEREZ	MARIA ISABEL CALVO SANCHEZ	DACEZA SOLUCIONES S L U
GONZALO CASTEJON DE LA ENCINA	DIEGO LOPEZ PRO	INVERSIONES SUAREZ IBAÑEZ S.L.
MIGUEL DIAZ GARCIA FUENTES	IVAN PELAYO MARTIN	LAFUENTE SERVICIOS EXTERNOS S.L.
FRANCISCO JAVIER REZA MONTES	JOSE IGNACIO ARIAS HERREROS	ARRILUCEA 2017 S.L.
MARIA CRISTINA FERREIRO GARCIA	ALVARO FUENTE VILLARAN	MITJAVILA Y ASOCIADOS ESTUDIO JURIDICO FISCAL S.L.
IGNACIO JORDAN CHIVELI	RUBEN SANTOS MAYORDOMO	AULES ASESORES SL
JOSE JUAN LAFUENTE ALMELA	BERNARDO ANDRES GIRALDO CHALARCA	Q INVEST FAMILY OFFICE S.L.
ANABEL VARELA PAZ	JULIO MARCO MORERA CELDRAN	PERALTA Y ARENSE ASESORES Y CONSULTORES S.L.
MARIA CARMEN OJEDA OSA	SARA ROBLES ALONSO	MONTE AZUL CASAS S.L.
MARIA ISABEL GONZALEZ ALVAREZ	CRISTINA CEBALLOS URCELAY	ENDOR INVERSIONES S.L.
MARIA LOPEZ PEREZ	LAURA GISTAU LATRE	ALPHALYNX CAPITAL S.L.
DORLETA LOPEZ LOPEZ	NURIA VAZQUEZ CARRASCO	JARAIZ SELECCION S.L.
SILVIA ATANES GONZALEZ	MARIA ESMERALDA RUIZ ALMIRON	VALDELASIERRA ASESORES S.L.
FRANCISCO MANUEL GOMEZ RODRIGUEZ	IVAN RODRIGUEZ CIFUENTES	EMPRENDE SERVICIOS FINANCIEROS S.L.

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.

FRANCISCO JAVIER GOMEZ CARRILLO	ASEFINSO SC	URBANSUR GLOBAL S.L.
MARIA ISABEL PIÑERO MARTINEZ	PERUCHET GRUP CONSULTOR D ENGINYERIA SCP	XESCONTA ASESORIA DE EMPRESAS SOCIEDAD LTDA.
JULIAN FERREIRA FRAGA	EASY MODE S C	SAENZ DE TEJADA ASESORES SL
MANUEL SALGADO FEIJOO	FEM AGENTS SCP	INVAL 02 S.L.
JUAN ANTONIO ASTORGA SANCHEZ	ASESORES FINANCIEROS PADRON	EMASFA S.L.
MARTIN GUERRERO ARPI	LINA CAYUELA	FRANCIAMAR S L U
JOAN ALBERT ROS	NURIA ROIG MARTORELL	J RETA ASOCIADOS S.L.
LAURA BARBAZAN DURAN	BLANMED ASESORES SOCIEDAD COOP.	TELEMEDIDA Y GAS S.L.
AITOR HOYOS HUERGA	NOCOC INVESTMENTS S C	MUÑOZ VIÑOLES S.L.
LEOPOLDO MARTINEZ BERMUDEZ	JUAN DIOS COBLER FERNANDEZ	EZEQUIEL AND SANCHEZ CONSULTORES S.L.
MORILLO-MUÑOZ CB

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.

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.
Building Block Approach (BBA)	This is one of the three measurement models for the valuation of technical provisions for insurance contracts. This model is used by default and is mandatory except when the conditions are met to apply the other two methods: Variable Fee Approach or Premium Allocation Approach.
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.

177

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

Credit Valuation Adjustment (CVA)	An adjustment to the valuation of OTC derivative contracts to reflect the creditworthiness of OTC derivative counterparties.
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.

178

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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 instruments issued other than capital	Includes equity instruments that are financial instruments other than “Capital” and “Equity component of compound financial instruments”.
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”).
Immunized portfolios	This is considered to be the portfolios on which "cash flow matching" is carried out, that is, balance sheet management with the aim of trying to mitigate the risk derived from the different maturities and interest rates between assets and liabilities.

179

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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 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.
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.

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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-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.
Premium Allocation Approach (PAA)	This is one of the three measurement models for the valuation of technical provisions for insurance contracts. This model is mandatory for contracts with direct participation of the policyholder
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.
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.

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

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).
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.

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

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.
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.

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which adapts the EU-IFRS for banks (see notes 1 to 51). In the event of a discrepancy, the original Spanish-language version prevails.

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.
Variable Fee Approach (VFA)	This is one of the three measurement models for the valuation of technical provisions for insurance contracts. This model is optional and is used for short-term insurance contracts or those contracts whose results are similar to those of the Building Block Approach.
Yield curve risk	Risks arising from changes in the slope and the shape of the yield curve.

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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

1. BBVA in brief	2
2. Non-financial information report	3
2.1 Information on strategy and business model	3
2.2 Information on customers	5
2.3 Information on employees	13
2.4 Information on social matters	27
2.5 Information on suppliers	34
2.6 Report on climate change and other environmental and social issues	36
2.7 Additional information	44
3. Financial information	91
3.1 Balance sheet, business activity and earnings	91
3.2 Capital base and solvency	91
4. Risk management	92
4.1 General risk management and control model	92
4.2 Risks associated with climate change	100
4.3 Operational risk	100
4.4 Reputational risk	104
4.5 Risk factors	104
Subsequent events	109
Annual Corporate Governance Report	110
Annual Report on Directors' Remuneration	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.

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 (hereafter, the Group or the Bank), 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.

During its 165-year history, BBVA has stood out for its leadership in the transformation of the financial industry, which is clearly

reflected in the Group's Purpose: “To bring the age of opportunity to everyone”. BBVA wants to help people, families,

entrepreneurs, the self-employed, businessmen, employees and society in general to take advantage of the opportunities provided by

innovation and technology.

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.

	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), last

modified in December 2021, has been followed as an international information framework for some selected GRI, as well as on

European Commission Guidelines on non-financial reporting, the regulation relating to European Taxonomy (Regulation (EU)

2020/852 and Commission delegated regulations 2021/2139 and 2021/2178 as amended by Delegated Regulations (EU) 2022/1214,

2023/2485 and 2023/2486). 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” within the chapter “ Additional information” of this report.

The information included in the non-financial information report is verified by Ernst & Young 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. The current environment continues to be

marked by uncertainty with significant repercussions on geopolitics and the global economy, The Russia-Ukraine war, the Israeli-

Palestinian conflict and increasing polarization between blocs are slowing economic growth and increasing risk aversion.

The fight against inflation through the tightening of monetary policies is also not helping to boost economic activity in general,

reducing credit demand and putting pressure on risk indicators.

The uncertainty of the short-term environment has in no way slowed down the consolidation of the long-term global trends on which

BBVA´s strategy is based and which play a critical role in the transformation of the economy: digitalization, innovation and

sustainability, both from a decarbonization and inclusive growth perspective:

– Digitalization continues to consolidate with an increasing presence in all economic sectors. The growth potential is evolving

towards a value proposition and personalized advice with a positive impact on the customer´s life beyond a pure digital

offering.

– Major trends in innovation, such as artificial intelligence, will make a difference:

◦ 2023 has been the year in which generative artificial intelligence has shown in a very preliminary way its great

potential for disruption in multiple economic sectors, revolutionizing the relationship with the customer,

automating processes and changing the ways of working to increase productivity.

◦ Other technologies such as blockchain quantum computing, cloud processing, continue to advance and generate

a real era of opportunities for society at large.

– The decarbonization of the economy is consolidated as the greatest economic opportunity and disruption of the last

century and one of the main challenges facing humanity, where the banking sector has a key role in achieving zero

emissions objectives.

◦ The fight against climate change is already having a strong impact on the competitive dynamics of a multitude of

sectors, which is expected to increase even more in the future.

◦ The decarbonization of the economy is consolidated as the greatest economic disruption of the last century and

one of the main challenges facing humanity, where the banking sector has a key role in achieving zero emissions

objectives. It must be a joint effort and involve the entire society, both large and small companies and the end

consumer.

◦ Innovation and new technologies play a key role in achieving decarbonization objectives. Financing the transition

and new technologies represent both a challenge and an opportunity for the banking sector.

◦ On our path towards sustainability, decarbonization is just one of the drivers to recover our ecosystems and

protect biodiversity. It is key to continue working to preserve and expand natural capital.

◦ Climate change has an effect on the lives of thousands of people who are exposed to its consequences (natural

disasters, droughts, epidemics), which cause an increase in inequality. Along with plans to decarbonize the

economy, robust plans are necessary that promote a just climate transition and guarantee economic and social

inclusion for all.

BBVA's strategy encompasses these trends that are transforming the world. A strategy that revolves around a single Purpose: “To

make the opportunities of this new era available to everyone” , always with the customer at the center of the BBVA Group's activity.

Likewise, the Group is based on solid values: the customer comes first, we think big and we are a single team.

	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.

BBVA's values, and their associated behaviors, are integrated into the key models and levers that promote the Group's

transformation, as well as in the global processes of people management: from the selection of new employees, role assignment

processes, evaluation, people development and training to incentives for meeting annual objectives.

These values, along with the Purpose and the strategic priorities, guide all decisions and are in the DNA of all the people who form part

of the BBVA Group.For more information on values, see section “2.3.2 Employees - Culture and values”, in chapter “2.3 Social” of this

report.

Guided by its Purpose and values, BBVA's strategy is structured around six strategic priorities:

The information regarding progress in the execution of the strategy and objectives is broken down in chapter “1.2 BBVA Group

Strategy” of the BBVA Group Consolidated Management Report

	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

Within the framework of its "Customer First" value, which is part of BBVA's culture, the Group places customers at the center of its

activities. The relationship with customers goes beyond the provision of services and is aimed at assisting them in their transition to

sustainability, improving their financial health and, ultimately, meeting their life goals.

To respond to the needs of its customers and maintain responsible conduct with them, BBVA has developed a differential value

proposition to promote a transparent, clear and accessible customer experience, while strengthening and reinforcing security in the

existing interactions between the customer and the Group.

Responsible conduct with the customers is developed through the following topics:

Conduct with customers

BBVA has an internal regulatory framework for customer protection. In addition to the Code of Conduct, which establishes guidelines

for behavior with customers in line with the Group's values, BBVA has governance policies and procedures in place that establish the

principles to be observed when evaluating the characteristics and risks of products and services, as well as when defining their

distribution conditions in such a way that, based on customer insight, their interests must be taken into account at all times and they

must be offered products and services in line with their financial needs.

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.

Finally, BBVA has conduct indicators with customers in order to ensure management of the sources of risk and to facilitate the

monitoring of their performance and/or the effectiveness of the control models applied in this area.

During 2023, BBVA evolved and strengthened internal regulation, as well as mitigation, control and monitoring frameworks in the area

of customer protection, while also considering the priorities of regulators and supervisors. The main lines of action include the

updating of Group-wide standards in the area of customer protection, including the approval of the Product Governance Standard,

which develops the product governance provisions that BBVA must comply with throughout the entire life cycle of the product or

service, i.e., from the very moment they are conceived or designed, as well as during their distribution or marketing, and in the post-

contract phase (follow-up and after-sales service). Also noteworthy is the approval of the Standard on Fees and Commissions, which

establishes the reference framework applicable to the Group in matters concerning fees and commissions. It establishes guidelines in

relation to the internal governance model for setting fees and commissions, the minimum obligations that must be met in relation to

this matter throughout the life cycle of the products and services offered by BBVA, as well as guidelines to ensure their adequate

parameterization in the automated processes. Both rules develop the General Policy on Customer Conduct and Product Governance

approved in 2022, which encompasses and updates several internal policies in this area, reinforcing and harmonizing in a single

general policy the principles and provisions that BBVA will take into account to adequately address the interests of customers during

the offer, provision and, where appropriate, recommendation of products and services, thus providing the Group with a single

framework of reference in terms of conduct with customers.

During 2023, the customer protection training plan was also enhanced with the launch of a course on the General Policy on Customer

Conduct and Product Governance, aimed at raising awareness of the general principles on which the relationship with customers is

based when providing them with services or offering or recommending products, whatever the distribution channels, and also

considering the life cycle of the product or service. Also noteworthy is the updated course on Conflicts of Interest, which provides

information on how to recognize and manage situations in which conflicts of interest may arise in the marketing of products and

provision of services to customers, as well as the measures to be taken into account to resolve them. Both courses are available at the

training model of BBVA, Campus BBVA.

	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.

Furthermore, the Group has continued working to embed the customer-protection vision in the development of marketing protocols,

digital and advertising content and the design of digital contract formation processes, as well as in the development of new products

and businesses, both retail and wholesale, from the outset of their design or creation, including modifications arising from regulatory

developments in the field of sustainability.

Security and protection

Digital transformation and new emerging technologies mean an increase in potential threats and exposure to risk and new challenges

affecting security, privacy and, in general, digital trust, which are key aspects for the better development and survival of the digital

economy.

For BBVA, information security is not only a fundamental part of ensuring operational resilience, but also one of the main elements

within its strategy. Information security is organized into four fundamental pillars: (I) Cybersecurity, (II) Data Security, (III) Physical

Security and (IV) Business Process Security and Fraud. 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 consider the best practices established in internationally recognized

security standards, are reviewed periodically to assess progress and effective impact in mitigating the aforementioned risks.

In 2023, the measures adopted have been further strengthened to guarantee effective protection of the information and assets which

support the Group'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 that are being implemented globally or in specific geographic areas of the Group to improve the

security and protection of customers:

– Enabling of global technical capabilities that allow autonomous, remote, agile and secure onboarding or digital activation of

customers in the bank, using cutting-edge technologies in the market such as intelligent document recognition, facial

recognition and capture of customer proofs of life (videos) in certain geographies and ensuring compliance with applicable

legal requirements.

– Possibility of activating biometrics in BBVA's mobile applications, so that fingerprint or facial biometrics can be used to

connect to BBVA (authentication method that reinforces security).

– 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.

– Reinforcement of behavior biometrics and malware protection to enhance analytical and fraud detection capabilities on

mobile channels.

– Use of advanced analytics models to protect the funds of BBVA customers.

– Enhancement of the contents on 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 help protect BBVA customers, alongside the use of robust customer authentication mechanisms in e-

commerce, the possibility of turning cards on and off from the BBVA app, the sending of real-time notifications on payments or

transfers made and the reinforcement of card security to prevent possible fraudulent use of card data, such as the use of the Aqua,

which  is the first card using a dynamic CCV (without numbering and without a printed CVV).

Additionally, BBVA has continued performing the training and awareness initiatives related to security and privacy, performing

training actions and awareness campaigns for BBVA’s employees, customers and society in general.

Among the main campaigns, awareness-raising actions carried out and recommendations included in the application, in BBVA's

online channels and in social networks in recent years, those related to information protection, secure password management,

detection of social engineering (phishing 3, smishing 4, vishing 5), protection of devices (computers, cell phones, etc.), secure

connections, detection of malware and other computer attacks, detection of cyber scams, security in online shopping and action in

the event of a security incident could be highlighted. The subject matter of the different awareness campaigns is selected on the basis

of a risk analysis focused on identifying the behaviors that imply a higher cybersecurity risk for the Entity, using sources such as

ENISA's Threat Landscape.

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.

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3 Social engineering technique consisting of sending fraudulent emails in which the cybercriminal impersonates the identity of legitimate companies and requests confidential

information from the recipients.

4   Sending text messages with fraudulent links in which cybercriminals impersonate the identity of a public entity or body so that users access an illegitimate web page and provide

confidential information.

5 Telephone scam in which cybercriminals pose as technical support teams or financial institutions to get the victim to reveal private information, or install malware on their

device.

Cybersecurity

In recent years there has been a rise in the number of cyber-attacks, accentuated by the presence of organized crime groups that

specialize in the banking sector.

In addition, the acceleration of digitization in the world has led to the emergence of new risks and new challenges for businesses,

including those related to security in work-from-home arrangements, security in cloud environments, the increase in the risk

exposure surface and the management of risks associated with service providers.

Moreover, and especially since the onset of the COVID-19 pandemic, the scope of social engineering attacks carried out via email,

SMS messages, instant messaging systems and social networks has increased.

As cyber attacks evolve and become more sophisticated, the group has strengthened its prevention and monitoring efforts to ensure

effective protection of its assets and customer information.

The 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 hours 7 days a week and provides services in all countries where BBVA operates, under a

scheme of managed security services, with operation lines dedicated to fraud and cybersecurity.

During 2023 the Bank has increased its system monitoring capabilities, paying special attention to critical assets that 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.

The 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,

while reducing the possible negative impact and, if necessary, reporting in a timely manner to the corresponding supervisory or

regulatory authorities.

A communication protocol has been established for those cases in which relevant incidents affecting BBVA customers occur. This

protocol contemplates both the groups to be informed (employees, customers, media, etc.) and the communication channels to be

used (social networks, call center, App messages, website, etc.) and the procedure for coordinating the messages to be transmitted,

in order to ensure that communication is proactive and uniform and that it responds to the principles of honesty and transparency.

In addition, in order to ensure that security is integrated into business processes, the security management model has been

reinforced both in the software development life cycle and in the management of infrastructure, architecture and operations, which

has strengthened the security culture in BBVA.

The Threat Intelligence area has also been strengthened, adopting measures aimed at transforming detailed technical information

into intelligence that can be used as a driver in decision-making related to risk management. The Threat Intelligence area continuously

monitors the threats affecting the financial sector and analyzes risk trends in order to implement measures to minimize the security

risks to which BBVA is exposed. In addition, together with the incident detection and response teams, it analyzes the attacks that

have occurred and their origin, in order to adopt the necessary action plans. The analyses carried out consider both security trends

and the type, frequency and origin of attacks on systems and information.

In addition, in the search for excellence in the operating model, BBVA has taken measures in recent years to promote operational

efficiency and automation, as well as to strengthen safety competencies, in order to ensure that the company has a team with the

necessary knowledge and skills in a constantly changing environment.

BBVA 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 security technical tests in order to detect and correct

possible security vulnerabilities. These tests include both technical testing of the technology platforms and simulation of real attacks

by malicious users (using the same techniques, tactics and procedures). The outcome of these exercises is essential to continuous

improvement of the Group's safety strategy.

BBVA's security strategy is based on internationally recognized security standards. It considers best practices and security measures

established in standards such as ISO/IEC 27002 and the ISO 2700 family, COBIT 5 and NIST Cybersecurity Framework.

BBVA has also obtained several certifications (TIER IV certification, ISAE 3402, etc.) in different countries. To maintain these

certifications, external providers carry out external audits regularly, considering the specific requirements of each certification. The

external auditors who perform these audits are selected from among the most recognized auditing firms in the specific areas of

expertise applicable in each case. Additionally, the annual financial audit includes the review of several areas related to information

security and cybersecurity in BBVA's internal platforms.

Furthermore, and given that one of the main risks faced by organizations today are risks derived from third parties, during the year

2023 controls have continued to be strengthened to ensure adequate protection of information by third parties. BBVA requires that

the service providers it works with have internationally recognized security certifications.

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In addition, security clauses are included in the contracts signed with service providers, in order to guarantee both an adequate level

of security in relation to the services rendered and compliance with  applicable legal requirements (with particular attention to current

legislation on the protection of personal data). The effective implementation of these measures by the suppliers providing the most

critical services is routinely verified.

Security in business processes and fraud

Cybersecurity initiatives are always carried out in close coordination with fraud prevention initiatives, so that there are considerable

interactions and synergies between the teams involved. The measures in place enable us to actively monitor fraud risks and

mitigation plans, assess the impact of fraud risks on the Group's businesses and customers, and monitor relevant fraud facts, events

and trends.

As part of the efforts to actively support the deployment of appropriate anti-fraud policies and measures, and in an environment of

increasing sophistication and regulatory focus on financial crime, the Financial Crime Prevention Unit has been created to perform a

joint analysis of fraud and money laundering operations, as the former is often an underlying crime of the latter. This has made it

possible to improve operational processes, increase Advanced Analytics, Artificial Intelligence and Machine Learning capabilities and,

in short, strengthen fraud analytical capabilities by providing them with a more holistic vision.

Both the Bank and the rest of the Group's subsidiaries have cybersecurity and fraud insurance, subject to certain loss limits,

deductions and exclusions applicable, as the case may be.

Business Continuity

In recent years, Business Continuity has continued to be strengthened from a comprehensive perspective, paying special attention to

the Group's digital operational resilience. This consolidates the performance from a model fundamentally aimed at ensuring the

uninterrupted delivery of products and services, in infrequent but plausible situations of great impact, towards a model that provides

the organization with the ability to absorb and adapt to situations with operational impact due to disruptions of various kinds (such as

pandemics, cybersecurity incidents, natural disasters or technological failures), which has resulted in an intense activity of the

Business Continuity functions.

Information 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 the related processes and controlling access to them, considering the security guidelines

established by the Group. All the initiatives are performed guaranteeing compliance of the security and privacy regulatory

requirements applicable, especially those related to personal data protection.

For more information about personal data protection, see the section “Data protection” in the "Compliance" chapter of this report.

Information security governance

BBVA has implemented an information security governance model to achieve its security objectives.

The Corporate Security unit is organized as a system of committees and working groups to manage the different areas related to

information security: security in operations, security related to technology, physical security, security in business processes,

personnel-related security, etc. These working groups are responsible for supervising the execution of the information security

strategy and effective implementation of the programs designed for each of its four constituent pillars.

The main body of this governance model is the Technology and Cybersecurity Committee, whose functions include monitoring of the

technology and cybersecurity strategy and cybersecurity risk management. This Committee assists the Board of Directors in

monitoring the technological risks to which BBVA is exposed, current cybersecurity and technology trends, and any relevant

technological security event that could affect the Group.

During the year 2023, the security governance, legal compliance and corporate assurance models were updated in order to ensure

their adaptation to an increasingly demanding and constantly evolving regulatory environment.

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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 differential value proposition, leveraged on an omnichannel strategy, with cell phones as the reference channel, bore fruit in 2023,

a record year in customer acquisition and leadership in individual NPS, underpinned by a simplified and transparent catalog of

services, with proactive and personalized proposals or solutions.

The internationally recognized Net Promoter Score (NPS) methodology measures customers’ willingness to recommend a company

and therefore, the level of satisfaction of BBVA’s customers with its products, channels and services. 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. For years, the NPS has therefore been part of the strategic

indicators that are monitored on a monthly basis by senior management, both at local and Group level.

The Bank’s consolidation and application of this methodology over the last twelve 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 outset. This translates into a constant increase in the trust of customers who recognize BBVA as one of the safest and most

recommended banking entities in each of the countries in which it is present. Thus, in Spain in 2023 it reached the best historical

figure of 18,9% for retail NPS.

As of December 31, 2023, BBVA has maintained leadership in the retail NPS indicator in Spain. In the NPS SMEs, BBVA has

maintained second position. In the NPS of the enterprises segment, for its part, BBVA has finished in third position.

Accessibility

In order to generate a positive impact on society, the accessibility and universal design of digital channels is fundamental to achieve

this purpose, favoring financial inclusion.

Noteworthy is the participation in the protocol to guarantee the financial autonomy of people with disabilities in Spain within the

framework of a collaborative agreement with the Spanish Banking Association (AEB) and other representative institutions.

In addition, in response to the social demand related to senior citizens and with the aim of contributing to accelerating progress

towards an inclusive economy in Spain, the Strategic Protocol for Social and Sustainable Commitment in Banking, which was

reinforced in 2022 by the banking associations AEB (Spanish Banking Association), CECA (Spanish Confederation of Savings Banks)

and UNACC (National Union of Credit Cooperatives), remains in force, and within its framework BBVA has established a series of

measures to ensure that senior citizens receive personalized and satisfactory attention.

Finally, it is important to highlight the sectoral agreement reached in Spain to ensure face-to-face access to banking services in all

Spanish municipalities. The measures included in the "Roadmap to Ensure Financial Inclusion" will make it possible to cover 100% of

the territory, by offering a physical access point to banking services even in municipalities that have never had one.

Customer care

Complaints and claims

BBVA has a claims model based on two key aspects: the agile resolution of claims and, most importantly, the analysis and eradication

of the origin of the causes that give rise to them. This model integrates at country level all the policies and guidelines set by the

regulatory bodies, in compliance with the local regulations issued by them in relation to the attention, processing and resolution of

claims (Ministerial Order ECO/734/2004, of March 11, of the Ministry of Economy in Spain; regulation PUSF - Protection of Financial

Services Users, of 04/17/2023, of the BCRA in Argentina; Law for the Transparency and Regulation of Financial Services, of

03/9/2018, in Mexico; etc.). This model is considered to add value when it comes to improving the customer experience, generating

peace of mind and strengthening the trust of customers, providing a quick resolution to their problems, through a simple and agile

experience, and with a clear and personalized response.

In compliance with the above, the customer service teams in each of the countries attend to and resolve the complaints and claims

received from customers in relation to the products and services marketed and contracted in the local BBVA financial entity,

recording all the information in this regard, which subsequently allows identifying improvements both at the level of the management

model itself and specific improvements in the response process, root cause analysis, etc.

This information (evolution of the volume of claims, response times, main reasons and root causes, etc.) is periodically reported to

the Senior Management of the geographic area for follow-up and action, as well as made available to the regulator. It is also integrated

at Group level in half-yearly reports to the supervisors of the Bank of Spain and the European Central Bank, as well as in the annual

report submitted to the BBVA Group Board of Directors.

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In 2023, the different claims units worked to keep up the response times achieved in 2022 and proactively identify potential new

problems and eradicate the root causes of the most common types of complaints. The security measures and communication and

awareness-raising campaigns for customers have made it possible to reduce or contain these cases (as is the case in Spain, with 32%

fewer cases than in 2022).

The number of complaints filed with the financial authority in Spain was 2,377 in 2023, 27% less compared to the 2022 figure, due

largely to the reduction in cases of fraud (the main reason for complaints to the supervisory bodies, with 50% less than in 2022).

There have been no substantiated complaints regarding breaches of privacy and loss of customer data filed with the supra-bank

authorities, thanks to policies and measures to prevent and control risks that could lead to leakage of customer data.

Customer Care Service and Customer Ombudsman in Spain

The activities of the Customer Care Service and Customer Ombudsman in 2023 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). This regulation establishes in

article 5 that the SAC and the Customer Ombudsman present,to the BBVA Board of Directors within the first quarter of each year, a

joint or separate explanatory report of all BBVA Group entities included in the scope of this regulation, containing statistical

summaries, the general criteria contained in the resolution of complaints regarding the most complained about matters and

recommendations and suggestions to improve the service provided to customers and to avoid bad banking practices.

Based on the aforementioned regulations, the SAC is entrusted with the function of attending to and resolving claims and complaints

received from customers in relation to the 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 claims and complaints 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. In the second instance, it hears

and resolves claims and complaints, within the quantitative limits established by the Regulations, which the customers decided to

submit for its consideration after having obtained a rejection by the Customer Care Service.

Activity report on the Customer Care Service in Spain

At BBVA, customer protection is considered a top priority. It is recognized that, as in any human activity, banking can be affected by

errors. Therefore, it is essential to anticipate the possibility of such errors occurring and proactively correct them. To this end, the

pertinent protocols and delegations should be implemented to ensure that this process is as quick as possible without the need to file

a claim.

To this end, the SAC is responsible for internally transferring the criteria and recommendations made by regulators in their reports,

promoting compliance with regulations on transparency and customer protection. The service also ensures compliance with good

banking practices and usages applied at BBVA. To this end, it participates in the various internal communication channels aimed at

the commercial network or in the committees that authorize the creation of new products and services, among many other forums.

In addition, the SAC is entrusted with the task of attending to and resolving complaints from customers of the BBVA Group in Spain in

a timely and appropriate manner. As such, it serves as an early warning mechanism for problems arising from the marketing of

products or services and/or the relationship between the entity and its customers.

The management of these complaints results in actions aimed not only at solving the particular case, but also at detecting the causes

that give rise to the specific case of the claim. The SAC analyzes complaints management data on an ongoing basis to identify and

address recurring or systemic issues, and potential legal, operational and behavioral risks.

As a result of this analysis and evaluation work, the SAC coordinates and heads various committees and working groups in which

recurring, systemic or potential problems of the entity are highlighted and in which solutions are studied, assessed and promoted with

a view to the continuous improvement of the service provided by BBVA.

The SAC, in line with BBVA's values, provides coherence and meaning to all operations, playing an essential role in the relationship

that BBVA establishes with its customers.

User complaints received at the BBVA Group Customer Service in Spain in 2023 amounted to 162,861 (147,476 in 2022) of which

135,302 were admitted for processing (135,377 in 2022).In that same period, 27,967 files were not admitted for processing because

they did not comply with the requirements set forth in OM ECO/734 (including claims pending management at the end of 2022).

Throughout 2023, 129,652 were resolved by the Customer Service (including claims pending management at the end of 2022),

leaving 11,154 pending management as of December 31, 2023.

The average resolution time for claims in 2023 was 13 days 6, well below the legal term required.

The main types of claims received in 2023 were those related to checking accounts and mortgage loans.

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6 The claims considered for the calculation of the average resolution time include the claims resolved during the 2023 financial year, including claims pending resolution at the end

of 2022.

Additional complaints data points as of December 31, 2023 and 2022 are provided below:

COMPLAINTS HANDLED BY THE CUSTOMER CARE SERVICE BY COMPLAINT TYPE (BBVA, S.A. PERCENTAGE)
Type	2023	2022
Resources	25	32
Credit cards	21	23
Fraud	11	16
Assets products	24	12
Financial counselling and quality service	6	7
Collection and other services	4	4
Insurances	2	—
Securities and equity portfolios	1	1
Other	6	5
Total	100	100

COMPLAINTS HANDLED BY THE CUSTOMER CARE SERVICE ACCORDING TO RESOLUTION (BBVA, S.A. NUMBER)
	2023	2022
In favor of the person submitting the complaint	42,774	44,672
Partially in favor of the person submitting the complaint	6,545	6,376
In favor of the BBVA Group	80,333	82,026
Total	129,652	133,074

Activity report of the Customer Ombudsman in Spain

Once again this year, the Customer Ombudsman maintained the common objective with the BBVA Group of unifying criteria and

favoring the defense and security of customers, in order to make progress in promoting compliance with transparency and customer

protection regulations. In order to effectively convey his/her thoughts and criteria on the matters submitted for his/her

consideration, the Ombudsman organized several meetings with the Group's areas and units.

In the 2023 financial year, 1,233 customer complaints were filed with the Customer Ombudsman's Office (1,017 in 2022). Of these, 18

were not admitted to processing due to a failure to comply with the requirements of OM ECO/734/2004 and 43 were pending as of

December 31, 2023.

The 31.7% of customers who brought complaints before the Customer Ombudsman during the course of 2023 obtained some type of

satisfaction, total or partial, by resolution of the Customer Ombudsman Office in 2023 (57.7% in 2022). 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). 124 complaints were filed by customers to supervisory bodies in 2023 (94 in

2022).

BBVA 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 2023, due to the type of complaints received, the Ombudsman's suggestions focused on the need for

measures to be taken to improve customer service protocols, especially in matters such as pension plans and blocking, and, as in

previous years, to reinforce and improve the measures the Bank is taking to prevent and raise awareness among customers about

cyber fraud.

The data on complaints handled by the Customer Ombudsman by type, at the close of 2023 and 2022, are set out below:

COMPLAINTS HANDLED BY THE CUSTOMER OMBUDSMAN OFFICE BY COMPLAINT TYPE (BBVA, S.A. NUMBER)
Type	2023	2022
Insurance and welfare products	—	—
Assets operations	72	85
Investment services	24	36
Liabilities operations	73	38
Other banking products (credit card, ATMs, etc.)	482	582
Collection and payment services	362	174
Other	220	102
Total	1,233	1,017

The categorization of the complaints handled in the above table follows the criteria established by the Complaints Department of the

Bank of Spain, in its requests for information.

The data on complaints handled by the Customer Ombudsman by outcome, at the close of 2023 and 2022, are as follows:

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COMPLAINTS HANDLED BY THE CUSTOMER OMBUDSMAN OFFICE ACCORDING TO RESOLUTION (BBVA, S.A. NUMBER)
	2023	2022
Formal resolution	—	—
Estimate (in whole or in part)	402	419
Dismissed	865	572
Processing suspended	1	—
Total	1,268	991

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2.3 Information on employees

Culture & Values

BBVA’s values and behaviors are the action guidelines for the employees in their day-to-day decision-making and help them

accomplish the Groups' purpose "to bring the age of opportunity to everyone." Values and behaviors are the hallmark of all those who

work in the Group and define BBVA's actions.

BBVA's values are embedded in the key models and levers that promote the Bank's transformation. They are also included in the

global people management processes: from the selection of new employees to the procedures for allocating roles, assessment,

people development, training, and even incentives for achieving annual goals.

BBVA conducts an annual Employee Engagement Survey, managed externally by Gallup. In 2023, the seventh listening process was

carried out, in which almost 96% of employees participated. BBVA shows an outstanding performance in employee engagement with

an overall rating of 4.43 (on a scale of 5), up 6 basis points from 2022, entering the top quartile of Gallup's customer base with 86.6%

of employees showing an engagement rating equal to or higher than 4.

Likewise, in 2023, the sixth edition of Values Day was held, a day on which employees celebrate BBVA's culture and delve into the

positive impact that the daily application of values has on stakeholders. This edition, with the motto "Connected by our purpose",

worked on BBVA's purpose through the connection with the personal purpose of each of BBVA's employees, that which gives

meaning to their lives. Aligning personal and professional purpose strengthens employee engagement. It was conducted in a mixed

format of face-to-face and online activities in all of the Group's geographies and involved more than 100,000 employees globally.

BBVA continues to promote a corporate culture of social and environmental commitment to help customers in the transition to a

sustainable future, with a focus on climate change and inclusive and sustainable social development. Within this program, other

actions include among other facilitating employees' access to community service activities. For more information on volunteer

actions, see the “Volunteering” section in chapter “2.4 Information on social aspects”, section “Contribution to society”.

Professional development

In 2023, BBVA consolidated its professional development model that makes employees the owners of their development and is

structured in three modules: 1. know themselves better, 2. improve to grow and 3. explore new paths. This model is equipped with an

ecosystem of tools that allows employees to make decisions about their professional career and take advantage of  the opportunities

that best align with their interests. The employee has also a team of Advisors dedicated to supporting and advising them throughout

the entire process, as part of the framework of the T&C Relationship Model.

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Talent attraction

BBVA seeks to offer a unique value proposition through a common brand, in line with a global and digital entity.BBVA has a global

reference model for attracting talent, with clear policies that strengthen transparency, trust and flexibility for all stakeholders involved

in the process

Innovation and technology are the fundamental levers of BBVA's transformation. The Group has therefore reinforced its efforts to

attract talent in strategic profiles with high demand through segmented measures and initiatives (differentiated and specific

attraction measures depending on the profiles).

In 2023, BBVA rolled out a new global organizational model in the area of talent attraction, which aims to change the approach to the

market, significantly increasing proactive searches for the passive candidate and the presence in specialized niches, especially in

technology and investment banking. Likewise, a profound technological and process transformation is underway to provide recruiting

teams with tools that enhance this approach to the market, giving maximum relevance to the experience of candidates and the

knowledge that the teams must have of the supply and demand of an increasingly dynamic and competitive market. With this

transformation, BBVA aims to be at the forefront of talent acquisition, also incorporating attraction and branding capabilities that

make the most of such a well-positioned brand.

As shown in the following table, in 2023, 1,308 professionals joined the Bank (1,211 in 2022).

SIGNED CONTRACTS BY GENDER (BBVA S.A. NUMBER)
	2023			2022
	Total	Male	Female	Total	Male	Female
Total	1,779	979	800	1,607	852	755
Of which new hires are (1):	1,308	767	541	1,211	693	518
(1) Including hires through consolidations.

Development

BBVA's talent development and growth model is centered on the employee. It is a model based on the principles of trust,

empowerment and transparency that govern the relationship between BBVA and people. Employees are responsible for their own

professional development and rely on their manager as their main support in the bank to accompany and guide them throughout their

career at BBVA.

In 2023, BBVA continued to promote the figure of the manager as a key player in BBVA's transformation, defining the characteristics

of a good manager and the key competencies he/she should have in order to evaluate them periodically and prepare and implement

personalized growth plans that allow BBVA managers to continue to grow professionally.

The role of the manager takes on a differential role, with three key factors at BBVA: someone who lives the Group's values, impacts

the achievement of results and the development of people. It requires, therefore, skills, attitudes and behaviors to achieve it.

A good manager impacts the development of teams by accompanying them as a reference, being a daily example on a daily basis

from a professional point of view: setting objectives, promoting the achievement of results, participating in people's assessment

processes and ensuring their well-being. professional development. But also from a personal perspective, promoting the culture of

'feedback', promoting people's well-being, motivation and commitment.

BBVA has a growth model based on meritocracy and transparency. This model makes it possible to evaluate all employees with an

established periodicity and objective and common criteria throughout the group, to determine the individual performance of each

employee.

The Bank's development model has different tools and specific communication moments throughout the year that allow for

development and performance conversations with employees. The opportunity to give and receive feedback is generated in an agile

way through specific processes and initiatives such as the annual people assessment process, the quarterly Project Review process

or in an ad hoc fashion, through the Hot Feedback initiative.

BBVA continues to evolve the global ecosystem of tools that are part of its development model, expanding its scope and impact and

focusing on the personalization of the service offering.

Training 7

BBVA's training model provides employees with resources that make them the central players in their learning experience, using

methodologies that are recognized as benchmarks in the market. Technological innovation also facilitates guided learning

accompanied by personalized advice, enabling them to make the best career decisions.

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7 The quantitative data in the "Training" section correspond to BBVA, S.A. employees. in Spain.

The advances in the implementation of the training model, BBVA Campus, and its solidity allow BBVA to anticipate and adapt with

agility to the increasingly changing training needs in the midst of the transformation challenges in which the Bank is immersed to

shape its future. Campus BBVA makes it possible to respond to the needs of the Group, areas and people, supporting the

achievement of strategic business objectives.

The basic training data for 2023 and 2022 are shown below:

BASIC TRAINING DATA (BBVA, S.A.)
	2023	2022
Total investment in training (millions of euros)	23.0	20.7
Investment in training per employee (euros) (1)	1011	944
Employees who received training (%) (2)	99.0	98.5
Satisfaction with the training (rating out of 10)	9.7	9.7
Amounts received from FORCEM for training in Spain (millions of euros)	1.5	1.3
(1) Ratio calculated considering the BBVA´s workforce at the end of each year (22,741 in 2023 and 21,883 in 2022).
(2) Ratio calculated by dividing the total training hours for the entire year by the Group's total workforce at closing, with access to the training platform.

BBVA offers employees a global learning platform with a training catalog that incorporates, on an ongoing basis, a selection of specific

resources for professionals to acquire the knowledge and skills necessary for their development. It highlights the variety of formats

that, due to their dynamism and flexibility, adapt to the employee's way of learning: MOOCs (Massive Open Online Courses),

podcasts, videos, blogs, practical communities, portals structured by areas of knowledge or simulators, etc. In addition, for

specialized technical profiles, access to external training platforms of recognized worldwide prestige and courses from leading

educational institutions is offered.

All of this has contributed to consolidating a culture of unparalleled continuous learning that employees integrate naturally into their

daily routines. It enables employees to be trained when they need it and in the formats that suit them best to help them meet their

business challenges. Online training has established itself as the employee's preferred learning methodology, as over the last 4 years,

more than 94% of training has been conducted online (in 2023 it was 92%) with an average satisfaction index of 9,71 (out of 10), in

2023.

As part of the Bank's training offerings at Campus BBVA, "The Camp" is a gamified and digital experience that allows employees to

boost and accelerate the development of the Group's strategic capabilities, both for their current and future roles.

The BBVA Group's training catalog (also applicable to BBVA, S.A.), is organized into 4 major content groups: 1) business accelerators,

2) facilitating skills, 3) human skills and 4) technological capabilities. This structure seeks to facilitate the assimilation of knowledge at

different levels of depth and to guarantee a positive impact on the personal and professional development of employees.

TRAINING DATA BY PROFESSIONAL CATEGORY AND GENDER (1) (BBVA, S.A. 2023)
	Number of employees with training			Training hours (thousands)
	Total	Male	Female	Total	Male	Female
Management team (2)	2,056	1,400	656	65.17	41.14	24.03
Managers	10,371	5,585	4,786	589.61	299.94	289.67
Rest of employees	10,099	4,140	5,959	684.48	293.91	390.58
Total	22,526	11,125	11,401	1339.27	634.99	704.28
(1) Data including the Bank's total workforce at closing
(2) The management team includes the highest range of the Bank´s management.

TRAINING DATA BY PROFESSIONAL CATEGORY AND GENDER (1) (BBVA, S.A. 2022)
	Number of employees with training			Training hours (thousands)
	Total	Male	Female	Total	Male	Female
Management team (2)	1,843	1,309	534	61	42	19
Managers	9,652	5,214	4,438	629	333	296
Rest of employees	10,067	4,009	6,058	655	256	400
Total	21,562	10,532	11,030	1,345	631	714
(1) Data including the Bank's total workforce at closing, with access to the training platform.
(2) The management team includes the highest range of the Bank´s management.

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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.

Diversity and inclusion

BBVA understands that diversity and inclusion are firmly aligned with its purpose and values, and works to ensure that its workforce is

a true reflection and representative of the society in which it operates. BBVA's focus on diversity issues allows us not only to attract

and retain the best talent, but also to better understand and meet the needs of our customers. In 2023, efforts were intensified in

gender diversity, LGTBIQ+ inclusion, generational diversity, ethnic diversity and the integration of people with disabilities, recognizing

that each individual brings unique perspectives that enrich the organization and society at large.

BBVA works together with the Employee Resource Groups (hereinafter ERGs), which are internal working groups created and

managed at the employees' own initiative. Their function is to promote diversity and foster professional relationships among people

with common interests. Several ERGs have been established in different geographic areas, with which we cooperate in identifying the

needs of our employees and implementing impact initiatives.

In order to be a true reflection of the society in which it operates, BBVA is focusing on different types of diversity: gender, LGTBIQ+,

people with disabilities, intergenerational and ethnic-cultural.

In terms of gender diversity, in 2022, and after reaching the target of 40% women on the Board of Directors, BBVA took a further step

towards gender equality and set a target of 35% women in management positions at the end of 2024, as a sign of its commitment to

promoting equal opportunities. In 2023, work continued on defining and launching initiatives at a global level to achieve the target set.

For instance, the "Yo Soy Talento Femenino" (I am Female Talent) program has been launched, an initiative through which a group of

high-potential female BBVA employees has been identified and provided with various tools to help them develop to their full potential.

These tools include:

– Specialized training: preferential access to management development programs (MDP) and scholarships in external

training programs such as "Yo Soy Promociona" or "Yo Soy Progresa".

– Mentoring: includes the "Top Mentoring" program through which they are mentored by the top managers of their areas,

including members of BBVA's Global Leadership.

– Coaching: prioritization in obtaining a place in internally organized coaching programs.

– Networking activities: participation in both internal and external activities with women from other companies, with the aim

of establishing professional ties that will help them  advance in their professional career.

In Spain, BBVA signed a new Equality Plan with 97.4% of union representatives, which aims to achieve real and effective equality of

opportunities between men and women. The new Plan reinforces the Bank's current policy of ensuring equality and integrating the

gender perspective in all areas. It also incorporates measures to move towards a balanced presence of women and men at all

organizational levels. The agreement also addresses other important aspects, such as remuneration policy, culture and leadership,

health from a gender perspective and inclusive communication.

The agreement also includes BBVA's commitment to increase support for victims of gender-based violence and includes a protocol

against sexual and gender-based harassment. The different reporting channels are noted, prevention and victim protection measures

are implemented, and a catalog of best practices is included, including dissemination and awareness-raising among the workforce.

The Bank has protocols for preventing and dealing with sexual harassment, expressly stating BBVA's rejection of any behavior of a

sexual nature or connotation that has the intention or has the effect of violating a person's dignity, and is committed to the application

of said agreement as a solution to prevent, detect, correct and punish this type of conduct within the company. Likewise, BBVA's

Code of Conduct, which is applicable to the entire Group, expressly mentions the Group's non-acceptance of this type of conduct and

its efforts to eradicate it.

In the area of LGTBIQ+ diversity, the Agreement on measures to achieve equality for LGTBIQ+ people and the protocol on harassment

due to sexual orientation, sexual identity and gender expression was signed in Spain with 100% of the legal representation of

employees. This agreement reinforces the Bank's current policy of promoting plurality in the work environment and ensuring equal

and inclusive treatment of all people. In addition, it includes a protocol for reporting cases of harassment motivated by sexual

orientation, sexual identity and gender expression.

Likewise, in Spain, BBVA holds the presidency of the Business Network for LGTBI Diversity and Inclusion (REDI), the first business

association in Spain created to promote an inclusive and respectful environment in organizations, and globally celebrates LGTBIQ+

Pride Day. In Argentina, BBVA continues with its initiative for the insertion of trans and non-binary people in the labor market.

In terms of diversity for people with disabilities, BBVA reaffirms its commitment to the labor integration of this group with the

launching of different specific initiatives:

– In Spain, BBVA, together with the Adecco Foundation, has the Family Plan in place, which provides support to family

members of employees with disabilities. Various volunteer activities have also been carried out with the NGO Special

Olympics or with the ConectTEA Foundation

As of December 31, 2023, BBVA, S.A.had 147 8 people with disabilities on the staff (139 in 2022).

BBVA in Spain also favors inclusion and diversity by engaging services through "special employment centers" (CEEs, for its acronym

in Spanish). These are sheltered employment companies where the labor integration of people with disabilities is promoted. During

the 2023 financial year, the turnover of CEEs to the Bank amounted to approximately 2.5 million euros (as of December 31, 2022,

turnover amounted to 1.9 million euros).

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8 This is the data from BBVA, S.A. (without the branches of the foreign network or Portugal).

In relation to generational diversity, BBVA co-organized, together with the Transforma Foundation, the second edition of the Added

Value Awards. The aim is to recognize those people who have contributed with their work and merits in the educational, scientific,

technical, cultural, social and business areas to enhance the value of senior talent in Spain, especially if their greatest achievement

has been attained during their senior years.

Likewise, at BBVA, diversity has an important milestone, which is the annual celebration of "Diversity Days", internal days to promote

diversity, inclusion and equity in the workforce through activities, conferences and events over the course of a week, which also aims

to further explore projects promoted by the Group around the world in this area.The fourth edition of the event was held in 2023 with

Peru as the host country.

Over the course of these conferences, BBVA signed a declaration of principles against discrimination and harassment in the

workplace that protects its employees against discriminatory behavior, as well as any unfavorable treatment related to nationality,

race, ethnic origin, religion, gender, sexual orientation, sexual identity or gender expression, marital status, age, economic status,

disability or family responsibility. The document dedicates a point to highlighting support for the LGTBIQ+ collective to make itself

visible and identify itself, to the decisive promotion of a corporate culture that embraces differences, to the generation of an inclusive

and safe work environment, and to committing to prevent, detect, correct and sanction any type of discriminatory conduct.

In Spain, BBVA once again holds the Distinction for Equality in the Company awarded by the Ministry of Equality for a period of 3

years. This recognizes the Bank's commitment to Equal Opportunities between men and women, with measures that promote

productivity and the reconciliation of work and leisure time, dissemination and awareness-raising measures in the Bank and in society

as a whole, including actions to give greater visibility to women who hold positions of responsibility in the organization, as well as

initiatives that promote female vocations in careers in STEM.

Main employee metrics

EMPLOYEES BY COUNTRIES AND GENDER (BBVA, S.A. NUMBER)
	2023			2022
	Number of employees	Male	Female	Number of employees	Male	Female
Spain	21,571	10,527	11,044	20,796	10,053	10,743
The United States	288	193	95	266	175	91
France	75	53	22	68	45	23
United Kingdom	154	103	51	128	86	42
Italy	65	35	30	52	29	23
Germany	47	32	15	43	28	15
Belgium	19	11	8	21	13	8
Portugal	350	181	169	349	177	172
Hong Kong	104	60	44	93	56	37
China	27	6	21	27	6	21
Japan	6	5	1	4	3	1
Singapore	16	4	12	15	5	10
United Arab Emirates	1	1	—	2	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	12	4	8	12	4	8
Cuba	—	—	—	1	1	—
Total	22,741	11,218	11,523	21,883	10,685	11,198

EMPLOYEES AVERAGE AGE AND DISTRIBUTION BY AGE STAGES (BBVA, S.A. YEARS AND PERCENTAGE)
	2023					2022
	Average age	<30	30-39	40-49	≥50	Average age	<30	30-39	40-49	≥50
Total	45.4	6.5	13.0	48.1	32.4	45.3	4.8	14.1	52.3	28.8

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EMPLOYEES DISTRIBUTION BY PROFESSIONAL CATEGORY AND GENDER (BBVA, S.A. PERCENTAGE)
	2023			2022
	Total	Male	Female	Total	Male	Female
Management team (1)	9.1	68.2	31.8	8.6	71.1	28.9
Managers	45.8	53.8	46.2	44.4	54.0	46.0
Rest of employees	45.1	41.0	59.0	47.1	39.9	60.1
Total	100.0	49.3	50.7	100.0	48.8	51.2
(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)
	2023			2022 (1)
	Total	Male	Female	Total	Male	Female
Permanent employee full-time	99.9	49.3	50.7	100.0	48.8	51.2
Permanent employee part-time	—	—	—	—	—	—
Temporary employee	0.1	53.9	46.2	—	57.1	42.9
Total	100.0	49.3	50.7	100.0	48.8	51.2
(1) 2022 data differ from those published in the 2022 Statement of Non-Financial Information due to additional updates and checks.

EMPLOYEE DISTRIBUTION BY TYPE OF CONTRACT AND AGE STAGES (BBVA , S.A. PERCENTAGE)
	2023					2022 (1)
	Total	<30	30-39	40-49	≥50	Total	<30	30-39	40-49	≥50
Permanent employee full-time	99.9	6.4	13.0	48.1	32.4	100.0	4.8	14.0	52.3	28.9
Permanent employee part-time	—	—	50.0	25.0	25.0	—	—	66.7	33.3	—
Temporary employee	0.1	88.5	11.5	—	—	—	71.4	28.6	—	—
Total	100.0	6.5	13.0	48.1	32.4	100.0	4.8	14.1	52.3	28.8
(1) 2022 data differ from those published in the 2022 Statement of Non-Financial Information due to additional updates and checks.

EMPLOYEE DISTRIBUTION BY PROFESSIONAL CATEGORY AND TYPE OF CONTRACT (BBVA, S.A. PERCENTAGE)
	2023			2022 (1)
	Permanent employee full- time	Permanent employee part- time	Temporary employee	Permanent employee full- time	Permanent employee part- time	Temporary employee
Management team (2)	100.0	—	0.1	100.0	—	—
Managers	100.0	—	—	100.0	—	—
Rest of employees	99.8	—	0.2	100.0	—	—
Media BBVA	99.9	—	0.1	100.0	—	—
(1) 2022 data differ from those published in the 2022 Statement of Non-Financial Information due to additional updates and checks.
(2) The management team includes the highest range of the Bank´s management.

In 2023, the annual average of full-time permanent contract, part-time permanent contract and temporary contract was 99.9%, —%

and 0.1%%, respectively (in 2022, 100.0%, —% and —%, respectively).

DISCHARGE OF EMPLOYEES BY DISCHARGE TYPE AND GENDER (BBVA S.A. NUMBER)
	2023			2022
	Total	Male	Female	Total	Male	Female
Retirement and early retirement	179	104	75	213	131	82
Voluntary redundancies	30	18	12	11	7	4
Resignations	331	178	153	277	177	100
Dismissals	62	43	19	33	24	9
Others (1)	348	118	230	433	189	244
Total	950	461	489	967	528	439
(1) Others include permanent termination and death.

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DISCHARGE OF EMPLOYEES BY DISCHARGE TYPE AND AGE (BBVA S.A. NUMBER)
	2023					2022
	Total	<30	30-39	40-49	≥50	Total	<30	30-39	40-49	≥50
Retirement and early retirement	179	—	—	4	175	213	—	—	5	208
Voluntary redundancies	30	—	—	8	22	11	1	3	3	4
Resignations	331	119	100	85	27	277	91	102	66	18
Dismissals	62	2	13	21	26	33	1	5	7	20
Others (1)	348	63	93	121	71	433	54	126	154	99
Total	950	184	206	239	321	967	147	236	235	349
(1) Others include permanent termination and death.

DISMISSALS BY PROFESSIONAL CATEGORY AND AGE STAGES (BBVA S.A. PERCENTAGE)
	2023					2022
	Total	<30	30-39	40-49	≥50	Total	<30	30-39	40-49	≥50
Management team (1)	22.6	—	14.3	7.1	78.6	33.3	—	—	18.2	81.8
Managers	48.4	3.3	16.7	56.7	23.3	18.2	—	16.7	33.3	50.0
Rest of employees	29.0	5.6	33.3	16.7	44.4	48.5	6.3	25.0	18.8	50.0
Total	100.0	3.2	21.0	33.9	41.9	100.0	3.0	15.2	21.2	60.6
(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 that the Group has in

place in the area of working conditions and employee rights, work/life balance and occupational health and safety.

Work organization

In 2023, and with the aim of continuing to drive the Agile transformation in the Group, BBVA developed the organizational and

operational model around 3 areas:

– Development of the organizational model, promoting autonomy and end-to-end empowerment in the execution of

processes.

– Promotion of multidisciplinary teams, advancing in the configuration of transversal teams and the Agile work methodology.

– Development of the project prioritization model.

BBVA consolidated the flexible work model implemented in 2022 in those functions in which it is feasible, with a general model that

consists of working a minimum of 60% of the working day in person and a maximum of 40% remotely, although there are adaptations

to this model motivated, among other issues, by the local legislation of each country or by the type of function performed.

In 2023, BBVA promoted the remote work model in certain groups of the network, such as the Zona Contigo for remote management

of customers in Spain.

This voluntary work model, which is generally reversible for both BBVA and the employee, is based on flexibility, responsibility and

trust in people. Respecting the flexibility to specify the days of remote work, it promotes the coordination of the people who make up

the work teams to coincide in person, in the belief that the proximity between people is key to having solid and cohesive teams.

Digital disconnection

The right to digital disconnection is included in the internal regulations and policies of each country unit, 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.

To promote disconnection, initiatives have been carried out such as not sending e-mails or not calling meetings after certain hours in

the evening or during weekends and holidays, or not calling meetings one afternoon a week in order to dedicate that time to planning

tasks and individual work.

Maternity and paternity leave

BBVA is committed to the welfare of its employees, complementing and expanding the benefits established at local level in the main

geographical areas where it operates.

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In Spain, in order to safeguard the period of pregnancy and the care of the child, during pregnancy it is permitted to shorten working

hours by reducing the midday break or by reducing the working day by one hour. The use of time off for infant care is improved, so

that if it is taken in the form of a reduction of the working day, the time of the reduction is extended from half an hour to one hour; and

if it is taken in the form of accumulated leave, the period for taking the leave is extended to twelve months of the child's life instead of

nine months. During maternity or paternity leave, BBVA complements the economic benefits up to 100% of the usual salary and upon

reincorporation, both the mother and the non-pregnant parent may convert the split workday into a continuous workday for up to

twelve months of the child's life, a possibility that is also extended to cases of adoption of a child up to the age of five. The period

during which a reduced working day may be taken is extended from the child's twelfth birthday until the end of the school year. Y in

the event of the birth or adoption of a disabled child, employees may be granted a leave of twenty-two days, reduced working hours or

additional flexibility in addition to the general working hours.

In addition, BBVA offers its employees the possibility of taking certain leaves of absence to care for family members for health

reasons, with varying degrees of coverage depending on the particularities of local legislation and public systems. For example, in the

case of Spain there is a range of licenses/exemptions that can be used for this purpose with different levels of remuneration, as well

as specific financial support.

Freedom of association and representation

In accordance with the different regulations in force in the countries in which BBVA operates, the labor conditions and rights of

employees, such as freedom of association and union representation, are set forth in regulations, collective bargaining agreements

and agreements entered into, where applicable, with the corresponding workers' representatives. Dialogue and negotiation are part of

the Group's way of dealing with any differences or conflicts, for which there are specific procedures for consultation with union

representatives in the different countries, including occupational health and safety aspects.

In Spain, employee representatives are elected every four years by personal, free, direct and secret suffrage and are informed of any

relevant changes that may occur in the organization of work in the Bank under the terms provided for in the legislation in force. The

banking industry collective agreement is applied to the 100% of the workforce (except for members of senior management),

supplemented by employer-specific collective agreements which build upon and improve the provisions of the sector-wide

agreement, and which are entered into with union representatives. All persons have the right to freely join trade unions and to engage

in trade union activity, and any rule or decision that entails any type of discrimination on the grounds of membership or not of a trade

union, or the exercise of trade union activities in general, is null.

Occupational safety and health

BBVA considers the promotion of occupational health and safety as a basic principle that is addressed through the continuous

improvement of working conditions.

Prevention of occupational hazards

The Bank's occupational risk prevention model is regulated by local regulations, conventions and agreements in Spain. In all cases,

employees have the right to consultation and participation in these areas, which is exercised and developed through union

representation or interest groups in the different existing committees.

BBVA's Occupational Risk Prevention Management System identifies and evaluates risks, establishes the criteria, methods and

resources that ensure the effectiveness of the management system, analyzes the results obtained and implements actions that allow

the processes and system to be improved. This Occupational Risk Prevention Management System complies with the requirements

of the OSHAS 18001:200 standard.

As a cornerstone of this system, BBVA has an occupational risk prevention plan that integrates the company's preventive activity into

its general management system and establishes its occupational risk prevention policy, which is implemented in an annual plan with

specific objectives for action in this area. The actions by BBVA include: occupational risk assessments; specific evaluations of

psychosocial risks; evaluations of particularly sensitive personnel and pregnant women; specific technical reports; training and

information for workers; preparation and implementation of self-protection plans and emergency manuals; safety inspections,

investigation and reporting of accidents; actions for the coordination of business activities in construction works and services; health

surveillance through medical check-ups; preventive health campaigns as well as health examination satisfaction surveys.

Likewise, there is an emergency Action Plan that includes guidelines for dealing with possible emergencies, determines the people

who are- organized and trained- to guarantee speed and efficiency in the actions to be taken, and provides information to all users of

the facilities on how to act in the event of an emergency, and can also guarantee the necessary relations for coordination with external

services.

The prevention service is divided into two lines of action:

– Technical-preventive, in which the Bank carries out systematic evaluations of occupational risks and psychosocial

evaluations from which the corresponding action plans are derived, detailing those responsible and deadlines, and ensuring

their implementation. BBVA  is also responsible for preparing and implementing emergency and evacuation plans, as well as

safety training. In addition, BBVA also carries out continuous coordination of business activities (CAE for its acronym in

Spanish) with the companies and their external personnel that work in the Group's work centers with the support of a

document exchange platform, establishing different procedures for works and another for services.

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– Occupational medicine, through which the Bank has the following objectives: monitor the health of workers by carrying out

medical examinations; protect especially sensitive employees; evaluate medical records; adapt workplaces with specific

ergonomic material; develop health and well-being programs with the aim of promoting healthy lifestyle habits and a

preventive culture within BBVA.

In Spain, BBVA is governed by the Occupational Risk Prevention Act or the collective bargaining agreement on occupational health for

the consultation and participation of workers in matters of occupational risk prevention. There are preventive policies that affect the

100% of the workforce of all the companies and which are carried out by the Occupational Risk Prevention Service, as well as a

collective bargaining agreement that defines the instruments for employee participation in this matter. Likewise, the corresponding

governing bodies are in place for its proper management: a State Health and Safety Committee, Health and Safety Committees of

Large Centers and Territorial Prevention Delegates, which meet on a quarterly basis.

The Prevention Service of BBVA, S.A. in Spain monitors the measures implemented. At the same time, and with the objective that

prevention is integrated into the set of activities and at all hierarchical levels, the Bank has a periodic verification of the system,

carried out by an independent auditor, in which a systematic, documented evaluation is carried out. and objective evaluation of the

effectiveness of the occupational risk prevention system, with the results being favorable and highly qualified.

Employee training in occupational safety and health

In coordination with the Training area, the Group plans different training actions in the area of Occupational Risk Prevention to raise

awareness and provide employees with the necessary knowledge they need to perform their work. Online courses are available for all

the workforce through the E-Campus platform and on-site courses are given by trainers from external entities who are highly

specialized, with specialists from the Prevention Service also taking part in the training of some groups.

The BBVA Occupational Risk Prevention Training Plan includes courses such as: training in safety, health and well-being at work; first

aid courses; defibrillator handling courses in centers that have them, psychosocial courses (Personal Risk Situations for new

employees, initial support and hold-up protocol); specific emergency training courses for emergency teams; Contingency exercises

for emergency management and practical fire courses for Personal Protective Equipment (PPE) and emergency management; road

safety courses; CAE training for supervisors of external personnel.¨

In addition, a wide range of health and wellness training is available to all Group employees, both online and in person, including

workshops and courses on sleep hygiene, emotional management, musculoskeletal prevention and healthy eating, among others.

Occupational health

Health check-ups

The BBVA Group carries out medical check-ups for its employees to ensure their health and well-being, in accordance with local

regulations in force.

In 2023, for BBVA, S.A., more than 10,000 people were scheduled for medical examinations. In addition,ergonomic procedures have

been carried out to adapt the workplace to the worker's pathology and more than 150 requests made by pregnant employees have

been medically and ergonomically assessed.

Medical and nursing care appointments are managed online to accommodate new flexible ways of working and allow for a more

efficient management of services.

Health and well-being program

BBVA's Health and Well-being program is made up of two main lines of action: Work Better and Enjoy life, and under the motto "You

Move Us",  where a set of initiatives  are coordinated aimed at caring for the people who are part of BBVA, with the focus on

empowering them to be the protagonists of their own health.

The "Work Better" axis fosters a culture based on commitment, trust and respect for the time of others to achieve the best

productivity and efficiency and optimal use of working time. Digital disconnection, work flexibility, active listening and efficient

meetings are promoted.

The "Enjoy Life" axis focuses on the integral health and well-being of the workforce, in line with the 2030 Agenda of the United Nations

and the WHO, and has been implemented through two main pillars:

– Mind (mental health / stress management): informative conferences have been held with the participation of more than

10,000 employees, workshops and courses on emotional management, and a psychological support program has been

implemented for employees and their family members, and were well received by the employees. Workshops have been

held for anxiety management, support for digital disconnection, on positive psychology, mindfulness, book club, knitting,

etc. In addition, adequate sleep hygiene has been promoted among employees through conferences, courses, workshops

and sleep studies.

– Body: awareness campaigns have been carried out with renowned speakers on cancer prevention, food and nutrition,

prevention of neurodegenerative diseases, migraine in the workplace, diabetes prevention, flu and covid vaccination, etc.,

with special emphasis on the celebration of World Health Days.

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In Spain the following initiatives have been carried out: genetic study of hereditary cardiovascular diseases, detecting four cases of

positive cardiovascular mutation; colon cancer prevention program, detecting one cancer at an incipient stage and six premalignant

lesions; and skin cancer prevention through a dermatoscopic study, detecting five malignant lesions and two premalignant lesions. In

addition, permanent preventive campaigns on the control of modifiable cardiovascular risk factors ( stopping smoking, controlling

high blood pressure, diabetes, obesity, etc.), stroke prevention, donation campaigns and flu vaccination are maintained.

Training and Information Platforms available to employees

There are two platforms available to all employees for the dissemination of content related to health and well-being, demonstrating

BBVA's commitment to promoting health and safety at work:

– On the Work Better / Enjoy life portal where you can find the latest news on health and well-being: current campaigns,

conferences and workshops given, upcoming events, most visited resources, etc.

– The Occupational Health Portal that is structured into eight main blocks: 1) healthy work environment (including remote

working); 2) healthy life with information on nutrition, physical exercise, sleep hygiene, etc., to lead a healthy life; 3)

prevention of pathologies, such as cardiovascular risk, diabetes, eye pathologies, cancer, etc.; 4) procedures to follow in

work accidents, medical check-ups, pregnancy, etc.; 5) road safety; 6) "Women, your health is your best gift", with specific

preventive information for women at all stage; 7) health conferences; 8) risk assessment and emergency measures. The

portal also contains information on first aid and emergency procedures, as well as information on the specific risks

associated with remote working and their prevention.

Cardioprotected spaces

BBVA has semiautomatic defibrillators (DESA) in the main work centers in different geographical areas to assist in cardiopulmonary

resuscitation in the event of cardiorespiratory arrest, thus forming part of the Cardioprotected spaces. Defibrillator operation and

basic life support skills are part of the first aid training integrated into the emergency measures course.

Below are the basic data on occupational health and safety of BBVA, S.A.:

OCCUPATIONAL HEALTH MAIN DATA (BBVA, S.A. NUMBER)
	2023	2022
Number of technical preventive actions	40,966	56,159
Number of preventive actions to improve working conditions	41,594	56,668
Employees represented in health and safety committees (%)	100	100
Number of withdrawn	6,264	8,369
Total number of absenteeism hours(1)	1,336,526	1,461,015
Number of accidents with medical withdrawn	99	27
Absenteeism rate (%)	3.6	4.1
General note: BBVA, S.A. data is included (without the branches of the foreign network or Portugal).
(1) Total withdrawn hours by medical leave or accident during the year.

Work-related injuries

WORK-RELARED INJURIES BY GENDER (BBVA S.A.)
	2023			2022
	Total	Male	Female	Total
Work-related accidents (number)	266	91	175	89
Severity index for labor accidents (%)	0.12	0.08	0.16	0.04
Frequency rate (%)	2.7	1.79	3.57	0.76
General note: BBVA, S.A. data is included (without the branches of the foreign network or Portugal).

At BBVA S.A. In Spain, a total of 266 work accidents were recorded in 2023 (89 in 2022), of which 99 27 were with medical leave (27

in 2022) and 167 without medical leave 62 in 2022), of which none were fatal ( as in 2022), data that represents a low workplace

accident rate, with rates below the sector. The main types of injuries in accidents with sick leave are sprains and strains, superficial

injuries and foreign bodies in the eyes and closed fractures. The majority of accidents among internal staff are in itinere (that is, when

going to or returning from work), with the rest being due to falls.

At BBVA S.A. No case of occupational disease was recorded among internal staff.

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Remuneration

BBVA has a General Remuneration Policy, which applies to all Group employees, including BBVA's Senior Management - with the

exception of BBVA's executive directors - (the "BBVA Group General Remuneration Policy") and a BBVA Directors' Remuneration

Policy (which applies to both non-executive and executive directors), both designed within the framework of the specific regulations

applicable to credit institutions, considering the best practices and recommendations in remuneration matters both locally and

internationally (the "Remuneration Policies").

The Remuneration Policy for BBVA Directors applicable during the years 2023, 2024, 2025 and 2026 was approved by the General

Shareholders' Meeting held on March 17, 2023. For its part, the Board of Directors, at the proposal of the Commission of

Remuneration, also approved in March 2023, a new update of the General Remuneration Policy of the BBVA Group that is applicable

to remuneration for the 2023 financial year and onwards. Both policies are the result of the reflection carried out in 2022 on the

Remuneration Policies, with special focus on the variable remuneration model of executive directors and the rest of the employees

whose professional activities significantly affect the risk profile (the “Identified Group”), with the fundamental objective of

strengthening the alignment of the remuneration of this group with the creation of value, long-term sustainable performance and

adequate and effective risk management.

These Policies incorporate, as the main novelty, a change in the Annual Variable Remuneration scheme associated with the corporate

model of the executive directors and the rest of the Identified Group, which, as of fiscal year 2023, has become composed of an  

Short-Term Incentive and a Long-Term Incentive.

Both Remuneration Policies are based on the same principles and are oriented toward the recurrent generation of value for the Group,

the alignment of the interests of its employees and shareholders with prudent risk management and the implementation of the

strategy defined by the Group. They are part of the elements devised by the Board of Directors as part of BBVA's Corporate

Governance System to foster proper management and supervision in the Group and are based on the following principles: long-term

value creation; the achievement of results based on prudent and responsible risk-taking; attracting and retaining the best

professionals; rewarding the level of responsibility and professional career; ensuring internal equity and external competitiveness and

equal pay for men and women; encouraging responsible conduct and fair treatment of customers, as well as avoiding conflicts of

interest; and ensuring the transparency of the remuneration model.

These principles are specified in that the Policies:

– They contribute to the BBVA Group's business strategy, and to the achievement of its objectives, values and interests, as

well as to the creation of value and long-term sustainability.

– They are compatible with and promote prudent and effective risk management, and do not offer incentives to assume risks

that exceed the level tolerated by the Group, in a manner consistent with the BBVA Group's risk strategy and culture.

– They are clear, comprehensible, transparent and simply drafted, allowing easy understanding of the different elements that

make up the remuneration and conditions for its concession, vesting and payment. To this end, they clearly distinguish

between the criteria for establishing fixed and variable remuneration and are transparent as regards the setting of

objectives and parameters for their calculation.

– They include a competitive remuneration system, with the aim of attracting and retaining the best professionals and

adequately rewarding the functions performed.

– They are impartial in terms of gender, reflecting an equal remuneration for the same functions or functions of equal value,

and does not establish any difference or discrimination for reasons of gender.

– They include measures to avoid conflicts of interest, promoting the independence of criteria of the persons involved in

decision making, in the supervision and control of management and in the establishment of remuneration systems,

incorporating predetermined calculation rules that avoid discretion in their application.

– They seek to ensure that remuneration is not based exclusively or primarily on quantitative criteria, taking into account

adequate qualitative criteria, which reflect compliance with applicable rules.

The remuneration system generally applicable to all BBVA Group staff comprises the following:

– A fixed remuneration takes into account the level of responsibility, the functions performed and the professional trajectory

of each employee, the principles of internal equity and the value of the function in the market, constituting a relevant part of

the total remuneration. The vesting and the amount of the fixed remuneration are based on objective predetermined and

non-discretionary criteria.

– A variable remuneration constituted by those payments or benefits additional to the fixed remuneration, whether monetary

or not, that are based on variable parameters. This remuneration shall be linked, in general, to the achievement of

previously established objectives and shall include both the annual variable remuneration corresponding to the corporate

model (defined below) and, if applicable, other variable incentive schemes and any other variable component that the BBVA

Group may grant to its personnel or to certain groups of employees at any given time.

As established in the Group's General Remuneration Policy, BBVA has a corporate model of variable remuneration which, in general,

is applicable to the entire workforce, depending on their functions, consisting of the award of an incentive that reflects performance

measured through the fulfillment of objectives associated with Group, Area and Individual financial and non-financial indicators,

measured on an annual basis. These indicators take into account the strategic priorities defined by the Group as well as current and

future risks and serve as management parameters to determine the payment of annual variable remuneration based on the degree of

compliance with BBVA's strategy.

In 2023, the level of achievement of the Group's annual scope indicators (short-term component of Annual Variable Remuneration)

was 126% (129% in 2022), based on the results obtained from each of the financial and non-financial indicators. The level of

achievement of the Group's annual financial indicators for incentive purposes is detailed below:

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ANNUAL VARIABLE REMUNERATION (MEASUREMENT PERIOD 2023) (BBVA GROUP) - ANNUAL FINANCIAL INDICATORS
Annual Financial Indicators	2023				2022
	Weight (1)	Goal	Result (2)	Level of attainment	Weight (3)	Goal (4)	Result (2)	Level of attainment
Attributed result	—	7.124 mill. €	8.019 mill. €	1.38	0.1	4.661 mill. €	6.381 mill. €	1.5
RORC	—	—	0.1806	1.23	0.1	0.1256	0.1526	1.5
Efficiency ratio	—	—	0.4166	1.37	0.1	0.4533	0.4323	1.31
Tangible book value per share (TBV per share) (5)	n.a.	n.a.	n.a.	n.a.	0.1	7,28 €	7,64 €	1.15
Gross margin	n.a.	n.a.	n.a.	n.a.	0.1	20.182 mill €	24.890 mill. €	1.5
n.a.: not applicable.
(1) Weights set for the 2023 Annual Variable Remuneration of the BBVA Group staff, including executive directors.
(2) Results approved for incentive purposes. In the case of AVR 2022, they do not include the impact generated by the Turkish takeover bid or by the BBVA office repurchase operation in Spain.
(3) Weights set for the 2022 Annual Variable Remuneration of the BBVA Group staff, excluding executive directors.
(4) The 2022 targets were set above the analyst consensus at the time and were in line with the existing economic outlook.
(5) In the case of TBV per share, there are two objectives: one linked to growth (budget target) and the other linked to value creation, which is the one used for incentive purposes (shown in the table). In 2022, the budget target was EUR 6.80 per share.

For the annual non-financial indicators, the Group's level of achievement for incentive purposes is detailed below:

ANNUAL VARIABLE REMUNERATION (MEASUREMENT PERIOD 2023) (BBVA GROUP) - ANNUAL NON-FINANCIAL INDICATORS
Annual Non-financial Indicators	2023				2022
	Weight (1)	Goal (2)	Result	Level of attainment	Weight (3)	Goal (2)	Result	Level of attainment
Net Recommendation Score (NRS)	15%	100%	1	1.09	10%	100%	108%	108%
Mobilization of sustainable financing (4)	10%	55,004 mill. €	68,218 mill. €	1.5	10%	32,146 mill. €	40,643 mill. €	150%
Target customers	15%	100%	98%	98%	10%	100%	111%	111%
Digital sales	n.a.	n.a.	n.a.	n.a.	10%	100%	110%	110%
Transactional engagement of corporate clients	n.a.	n.a.	n.a.	n.a.	10%	100%	112%	112%
n.a.: not applicable.
(1) Weights set for the 2023 Annual Variable Remuneration of the BBVA Group staff, including executive directors.
(2) For the indicators IReNe, Target Customers and Digital Sales, objectives have been established at the country level. The Group achievement for these indicators is calculated as the average weighted by the net margin of the achievements obtained by the countries.
(3) Weights set for the 2022 Annual Variable Remuneration of the BBVA Group staff, excluding executive directors.
(4) In 2023, this indicator incorporates the sustainable business channeling related to inclusive growth, which in 2022 was not included for incentive purposes. On the other hand, the result of the "2025 Goal" announced by the Bank for channeling sustainable business does not coincide with the result for incentive purposes, since the latter does not take into account the activity of the BBVA Microfinance Foundation.

As indicated previously, in the case of the members of the identified staff, including executive directors and the rest of BBVA's senior

management, their annual variable remuneration includes a short-term incentive, calculated on the basis of the same annual Group-

wide indicators described above, and in addition a long-term incentive. The long-term incentive will be calculated on the basis of the

result of a series of multi-year indicators, both financial and non-financial, which will prioritize the creation of value and profitability for

the shareholder and for the Group in the long term, as well as the progressive achievement of the goals and objectives assumed by the

Bank in terms of sustainability.

The indicators for calculating the long-term incentive include a portfolio decarbonization indicator that will measure the degree of

compliance with the decarbonization goals of a series of sectors for which the Bank publishes specific goals, and will therefore be

directly related to the BBVA Group's strategic priority of helping customers in the transition to a sustainable future and to the Bank's

climate action goals. Additionally, a social indicator is included that will measure the performance of the percentage of women in

management positions in the BBVA Group, which is fully aligned with the strategic priority of having the best, most engaged and

diverse team, guided by the Bank's purpose and its values and behaviors, and with a talent development model that provides growth

opportunities for all.

In particular, the approved indicators for the calculation of the long-term incentive for this group for the 2023 financial year are as

follows:

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LONG-TERM INDICATORS AVR 2023 (1) (BBVA GROUP, PERCENTAGE)
		Peso
Financial Indicators	Tangible Book Value per share (TBV per share)	40%
	Relative Total Shareholder Return (Relative TSR)	40%
Non-financial Indicators	Decarbonization of the portfolio	15%
	Percentage of women in Management positions	5%
(1) Measurement as of December 31, 2026, taking into account the evolution of these indicators since January 1, 2023.

Average remunerations

Below is the table with the average remuneration of BBVA employees:

AVERAGE REMUNERATION (1) BY PROFESSIONAL CATEGORY, AGE STAGES AND GENDER (BBVA, S.A. EUROS)
	2023			2022
	Management team (2)	Managers	Rest of employees	Management team (2)	Managers	Rest of employees
< 30 years
Male (3)	—	51,010	33,761	—	52,345	33,396
Female	—	44,426	31,980	—	50,834	30,090
30-39 years
Male	125,701	59,661	40,679	131,248	56,060	39,677
Female	127,589	52,288	37,496	122,418	48,998	36,045
40-49 years
Male	140,859	56,569	43,291	130,201	54,476	41,955
Female	112,022	51,657	41,526	108,114	50,164	40,148
≥ 50 years
Male	174,338	64,930	50,411	169,988	63,187	48,943
Female	138,617	59,120	47,305	141,540	58,587	46,196
General note: The data of 2022 differs from that published in the 2022 Consolidated Non-Financial Information Report due to a change in the fixed remuneration considered. As from 2023, additionally to fixed remuneration, it is considered the salary allowances, except mobility, housing and expatriation allowances, which are not considered. This represents a 99% of total fixed remuneration. The data of 2022 has been restated following this criteria.
(1) Considering fixed remuneration and salary allowances (except mobility, housing and expatriation allowances).
(2) This Group does not include the BBVA Top Management.
(3) The value of the remuneration of the only person in the professional category of management team was not included because of confidentiality reasons.

The differences observed in the average remuneration of some professional categories derive from their varied composition and

other factors such as seniority in the entity or in the position. The average remuneration of each category is influenced by aspects

such as the different distribution of men and women in the highest paid positions or the higher proportion of women in countries with

lower average remuneration.

In the case of executive directors and other members of BBVA Senior Management who held their positions on December 31, 2023,

the information on their remuneration is included in Note 49 of the accompanying consolidated financial statements. The

remuneration paid to executive directors is individualized and itemized, while for the other members of Senior Management the

amounts are presented as an aggregate. The average total compensation of BBVA's senior management (excluding executive

directors) in 2023 was 2.437 thousand euros for men (2,034 thousand euros in 2022) and 1,981 thousand euros for women (1,841

thousand euros in 2022).

Wage gap

Remuneration Policies are gender neutral, reflecting equal remuneration for the same functions or functions of equal value, and do

not differentiate or discriminate on the basis 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.

This model defines a number of positions on which remuneration is based. Each of these positions has a unique theoretical value

depending on different factors, such as the level of responsibility, the complexity of the function, the impact on results, and so on.

Each position has a unique value linked to the achievement of previously established objectives.

The adjusted salary gap compares the total remuneration received by men and women in equal positions in the Group.

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For each of the positions described above, BBVA calculates the average total remuneration received by all the men and women who

occupy these positions. BBVA calculates the job-adjusted salary gap as the percentage resulting from dividing the difference of the

average of men's salaries minus the average of women's salaries by the average of men's salaries. BBVA Group's adjusted salary gap

is calculated as the weighted average of the gaps obtained in each of the positions.

Total remuneration includes fixed remuneration and target annual variable remuneration (target bonus) linked to objectives. BBVA

does not include in its calculation elements such as per diems, social benefits, etc., the amount of which is very unrepresentative of

total employee remuneration, and whose award criteria and amounts are clearly defined and do not discriminate between men and

women.

Based on 2023 and 2022 data, the adjusted 9 pay gap is 2.1% and 3,6% respectively. The calculation of the adjusted gap includes

87.7% of BBVA, S.A. employees. The rest of the employees cannot be incorporated into the calculation because they are associated

with positions in which there is no representation of both sexes.

Additional information about remuneration

Annual total compensation ratio

BBVA calculates the annual total remuneration ratio for BBVA, S.A. employees located in Spain, as well as for employees located in

Mexico, Turkey, Peru, Colombia, Argentina, Uruguay and Chile. located in Spain, and for employees located in Mexico, Turkey, Peru,

Colombia, Argentina, Uruguay and Chile, as the ratio of the annual total remuneration (fixed remuneration plus accrued variable

remuneration and pension contributions) of the highest paid person in each of the geographic areas to the average annual total

compensation (fixed remuneration plus accrued variable remuneration and pension contributions) of all employees in the same

geographic area, taking the annualized full-time remuneration and excluding the highest paid person.

The annual total compensation ratios for the 2023 and 2022 financial years are 126.0  and 130,9 respectively.

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 each of the geographic areas which each employee has a right to be remunerated for services rendered.BBVA

calculates the standard entry level wage ratio as the quotient of the entry level wage between the minimum wage.

In 2023 the entry remuneration of BBVA, S.A. In Spain it was 1.3 times higher than the legal minimum wage for both men and women

(in 2022, 1.3 times higher).

Pensions and other benefits

BBVA has social welfare systems that are differentiated according to geographical areas and coverage offered to different groups of

employees, with no differences based on gender or any other type of personal circumstances. 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 security systems of the Bank's employees are made within the framework of labor regulations and

individual or collective agreements applicable to each entity, sector or geographical area. The calculation bases on which the benefits

revolve (commitments for retirement, death and disability) reflect fixed annual amounts, with no temporary fluctuations derived from

variable components or individual results.

As for the rest of the benefits, the Bank has a benefits package for employees within its specific remuneration scheme, without

applying differences based on gender or personal differences of any other type.

In 2023, in Spain the Bank made a payment of €23.08million euros (21.2 million euros in 2022) for savings contributions to pension

plans and life and accident insurance premiums, of which 11,95 million euros related to contributions to men and 11,13 million euros to

that of women (in 2022, 11.3 million euros and 9.8 million, respectively). On average, the contribution received by each employee is

1.095 euros in the year (1,179 euros for men and 1,017 euros for women) compared to 1,032 euros in 2022 (1,143 euros for men and

927 euros for women).

Additionally, in Spain, the Bank has launched a new voluntary pension system for employees. Based on the members, a payment of

14.2 million euros has been made in 2023, of which 8.8 million euros correspond to men and 5.5 to women. On average, for this

voluntary system, the contribution received by each employee is 1,374 euros per year.

These payments account for more than 95% of pension spending in Spain, excluding individual systems.

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9 For this calculation, the median is used, 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.

2.4 Information on social matters

Contribution to the Community

In the area of contributing to the inclusive growth of the societies in which the Group is present, BBVA has the Community Investment

Goal 2025, whereby it will allocate 550 million euros between 2021 and 2025 to social initiatives to support the inclusive growth of

these societies. The objective of this plan is for these initiatives to reach 100 million people by 2025. Specifically, it will support five

million entrepreneurs, contribute to the financial literacy training of two million people and help more than three million people gain

access to quality education. This plan is structured around three main areas of action and aims to contribute to the achievement of

certain Sustainable Development Goals (SDGs):

– Reduce inequality and promote entrepreneurship (SDGs 8 and 10): it includes initiatives that provide access to basic goods

and services needed to improve people's social well-being; financial literacy training and digital training to empower the

population, improve their financial resilience and promote financial inclusion, employability and digital security. It also

includes support for vulnerable entrepreneurs through the activities of the BBVA Microfinance Foundation and other

support programs for SMEs and entrepreneurs.

– Create opportunities for all through education (SDG 4): includes programs to reduce the digital education gap, scholarships

to support access to quality education, programs for the development of values and competencies, programs to support

higher education and vocational training. It also includes collaboration initiatives with public education systems and the

creation of free, quality content that is disseminated through the Group's various channels, and

– Support research and culture (SDGs 9 and 11): includes initiatives to support researchers and creators in the fields of

science, culture or economics, support for leading cultural institutions and scientific dissemination.

Additionally, in 2023, BBVA launched a social response plan after the earthquake, which took place in Turkey and Syria on February 7,

in order to help alleviate the effects of the humanitarian emergency. Among the measures stand out: the donation of 650 million

Turkish Liras (approximately 20 million euros) in favor of the AFAD (Presidency of Disaster and Emergency Management of the

Ministry of the Interior of the Government of Turkey) and the launch of a donation campaign in favor of the Red Cross that has

channeled donations from employees, customers and non-customers in Spain worth 1.66 million euros through Bizum.

In 2023, BBVA S.A. allocated 28.14 million euros 10 to investment in the community (29.3 million euros in 2022). Through this

contribution, 32.42 million people 11 have been reached (38.2 million in 2022). In particular, among the direct beneficiaries, 1,341

entrepreneurs have been supported, 3,796 people have been trained in financial education and 72,412 people have participated in

educational programs (in 2022 1,760, 3,769 and 92,419, respectively).

Additionally, in the area of contribution to the community, BBVA develops other relevant initiatives such as volunteer activities,

alliances with environmental organizations, support for non-profit organizations, the promotion of corporate responsibility through its

participation in different working groups and participation in initiatives (SDG 17)

Below, the investment and people reached (in percentage) of the Commitment to the Community in 2023 are broken down by focus

of action, which have been described at the beginning of this section:

CONTRIBUTION TO THE COMMUNITY (INVESTMENT) BY FOCUS. 2023

CONTRIBUTION TO THE COMMUNITY (PEOPLE REACHED) BY FOCUS. 2023

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10 The total figure is an estimated figure, of which 84% is the actual investment figure as of October 31, 2023 and 16% is an estimate of the investment made in the months of

November and December 2023.

11 The people reached data is estimated, 84.8% of the figure is the actual number of people reached as of October 31, 2023 and 15.2% corresponds to the estimate of people

reached in the months of November and December 2023.

Below is a breakdown by type of people reached of the Community Contribution in 2023 and 2022 by focus of action:

PEOPLE REACHED BREAKDOWN BY TYPE AND FOCUS AREAS (MILLIONS OF PEOPLE) (1)
	Direct beneficiaries (2)		Indirect beneficiaries (3)		Unique users (4)
Focus area/Type of people reached	2023	2022	2023	2022	2023	2022
Reduce inequalities and promote entrepreneurship	0.07	1.37	0	—	—	—
Create opportunities for all through education	0.10	0.09	—	—	32.20	36.70
Support research and culture	0.03	0.02	—	—	0.02	0.01
(1) The data on people reached are estimates, 84.8% of the figure is the actual data of people reached as of October 31, 2023 and 15.2% corresponds to the estimate of people reached in the months of November and December 2023. (2) People who directly participate in the programs and initiatives developed or promoted by BBVA and who therefore receive a direct benefit. (3) People who are related to the participate in the initiatives and programs promoted and developed by BBVA and who receive an indirect benefit. (4) People who access free and quality content on various BBVA platforms.

Other contributions to society

With regard to contributions to foundations and non-profit entities, the figure for BBVA S.A in 2023 stood at 11.1 million euros (8.6

million euros in 2022). In 2023, BBVA made:

– 52 contributions to foundations and other non-profit social entities with social purpose in the amount of 3.5 million euros,

which include both one-time contributions and those contributing to social programs (in 2022, 19 donations in the amount

of 1.7 million euros).

– 74 contributions (not donations) to foundations and other non-profit social entities in the amount of 1.5 million euros (in

2022, 53 contributions in the amount of 2 million euros), including association and sponsorship actions.

– 293 contributions, of a non-social nature (dues, institutional contributions and commercial sponsorships), to foundations,

business associations, lobbies, think-tanks and other non-profit entities in the amount of 6.1 million euros (in 2022, 207

contributions, of a non-social nature in the amount of 4.9 million euros).

Volunteer work

In the General Sustainability Policy, BBVA states its willingness to promote a corporate culture of social and environmental support by

facilitating the conditions for its employees to carry out volunteer actions. This policy is applied in all countries in which the Group is

present.

BBVA's corporate volunteering initiatives encourage employee collaboration to generate a relevant social impact, increase their sense

of pride in belonging, satisfaction and productivity, and position BBVA as a benchmark company in corporate volunteering, thus

increasing its attractiveness to both existing and potential employees.

Volunteering is a key element in developing the approaches and lines of work of the Community Investment Goal 2025 (explained

above in the section "Contribution to the community"). In fact, 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.

In addition, volunteering activities are aligned with BBVA's Purpose and values.

Overall, 1,988 BBVA employees participated in volunteer initiatives during 2023 (8,637 in 2022), having dedicated more than 8,475

hours (65% during working hours and 35% outside working hours). The time spent by employees in 2023 is equivalent to a

contribution of 265,053 euros (429,044 euros in 2022).

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 "Governance" of BBVA Group’s Consolidated Management Report and are developed in

the Bank through local functions in Spain.

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Prevention of money laundering and terrorist financing

Anti-money laundering and financing of terrorism (AML/FT) is an indispensable requirement for preserving corporate integrity and

one of its main assets: the trust of the people and institutions with which the Group interacts (mainly customers, employees,

shareholders and suppliers) in the different jurisdictions where it operates.

BBVA pays special attention to compliance with AML/FT regulations and those relating to restrictions imposed by national and

international bodies for operating with certain jurisdictions and individuals or corporations. The BBVA Code of Conduct establishes

the basic guidelines for action in this area.

As a consequence of the above, as a global financial group with branches and subsidiaries that operate in numerous countries, BBVA

applies the Compliance model described above for AML/FT risk management in all entities that make up the Group. This model also

incorporates the local regulations of the jurisdictions in which BBVA is present, the best practices of the international financial

industry in this matter and the recommendations issued by international organizations, such as the International Financial Action

Group (FATF).

The Group is continuously developing this risk management model. Thus, the risk analysis carried out annually make it possible to

reinforce controls and establish, if necessary, additional mitigating measures to strengthen it. In 2023, the Group's affected

counterparties carried out this AML/FT risk assessment exercise, under a common methodology and the supervision of the corporate

AML/FT function.

As part of the AML/FT Function’s Strategic Plan, in 2023, BBVA has created a global financial crime prevention unit,  a pioneer in the

Spanish banking industry. With a holistic vision, focused on prevention and the protection of its customers, the objective of this new

unit is to reinforce the prevention of financial crime, integrating fraud responsibilities and AML/FT processes related to the

identification, alert management and analysis of suspicious transactions, which must be managed by the first line of defense.

In the belief that technology and data are essential to implement an effective AML/FT program and for the proactive protection of

customers, the entity itself and society, the improvement of the technological infrastructure and the use of advanced analytical

techniques and models constitute fundamental lines of work in the aforementioned Strategic Plan.

With regard to technological infrastructure, in 2023, following the creation of the global financial crime prevention unit, a Strategic

Plan was defined for the transformation of fraud prevention, money laundering and terrorism financing. As regards AML/FT, the

monitoring tool implemented in Spain, Mexico and Turkey will be deployed  in  Argentina, Colombia and Peru in the short term. For the

medium term, work has begun in two lines: to seek tools with even more advanced monitoring capabilities and to implement

advanced analytics capabilities and artificial intelligence .

In terms of data exploitation, the Group continues to develop different applications of new data-based technologies (artificial

intelligence, business analytics, etc.) to complement the AML/FT processes in order to (I) enhance risk detection capabilities; (II)

increase the efficiency of these processes; and (III) enhance analysis and investigation capabilities. Additionally, and leveraged on the

creation of a global Compliance data model, during 2023 progress has been made in the creation of a global supervision model, which

allows centralized analysis over the AML/FT processes.

During 2023, BBVA continued to tighten internal corporate regulations (including financial sanctions, risk assessment, customer

admission and due diligence measures, Customer Risk Rating (allocation of AML risk to customers), cross-border correspondent

banking or admission and maintenance of relationships with publicly accountable persons).

The Internal Control Body, which BBVA has at the corporate level, meets periodically and supervises the implementation and

effectiveness of the AML/TF risk management model in the Group. This supervision scheme is also replicated at the local level

through the corresponding committees in each geographic area. Likewise, the assignment of greater powers to the Global Internal

Control body and the creation of an Operational Internal Control Body, which globally manages more operational aspects, represent

progress in improving governance and the traceability of the decisions adopted for the day-to-day AML/FT risk management.

In 2023, the BBVA, S.A. resolved 4,127 investigation files that resulted in 1,452 suspicious transaction reports sent to the

corresponding authorities in Spain.

In terms of training related to AML/FT, each of the BBVA Group entities offers an annual training plan for 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 on staff. Likewise, the content of each training action is adapted to the target group, including

general concepts derived from the regulation of applicable AML/FT standards, both internal and external, as well as specific issues

that affect the functions performed by the target group of the training. In 2023, 2,563 attendees participated in AML/FT training

activities. This figure includes 1,875 employees belonging to the most sensitive groups from the perspective of AML/FT, who received

an enhanced level of training.

In addition to the reviews performed by the Compliance Testing teams, the AML/FT risk management model is subject to continuous

independent review. This review is complemented by internal and external audits and those carried out by local supervisory bodies,

both in Spain and in other jurisdictions. In accordance with Spanish regulations, an external expert conducts an annual review of the

AML&FT program implemented in Spain. In 2023, this external expert concluded that "in general terms and taking into account the

type of deficiencies detected, the BBVA Group's procedures in Spain are in line with current legislation and best market practices".

The Internal Control Body, which BBVA has at corporate level, meets periodically and supervises the implementation and

effectiveness of the Group's AML&FT risk management model. This supervision scheme is also replicated at the local level, through

the committees corresponding to each geographical area.

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It should be noted that BBVA cooperates with the different government agencies and international organizations in this field:

participation in various committees of the European Banking Federation (Executive Committee Financial Crime Strategy Group, Anti-

Money Laundering & Financial Crime Committee and Financial Sanctions Expert Group), member of the KYC/RBA (Know Your

Customer / Risk-based Approach) and Information Sharing working groups of the European Banking Federation, member of the AML

Working Group of the Institute of International Finance (IIF), participation in initiatives and forums aimed at increasing and improving

exchanges of information for AML&FT purposes, such as the Europol Financial Intelligence Public Private Partnership (EFIPPP),

participation in the "UNODC (United Nations Office on Drugs and Crime) private sector dialogue on disruption of financial crimes

related to forestry crimes" as well as contributions to public consultations issued by national and international bodies (Committee,

European Commission, European Banking Authority and FATF-FATF (Financial Action Task Force), among others)

Anti-corruption information

A key element in the management of Conduct risk at BBVA is the Group's General Anti-Corruption Policy (whose update was

approved by the Bank's Board in 2023), which is the standard on which the Corruption Prevention Program is based and develops the

principles and guidelines set out, mainly, in section 5.3 of the Code of Conduct. The Policy is in line with the spirit of national and

international standards on the matter, taking into consideration the recommendations of international organizations for the

prevention of corruption and those established by the International Organization for Standardization (ISO). This Policy has been

communicated again to 100% of the employees and to all members of the governing bodies of the main subsidiaries of the Group.

Regarding the communication of the Anti-Corruption Policy to third parties, BBVA released a public statement summarizing its

contents through the shareholders' and investors' website. Additionally, BBVA makes the Code of Conduct available to its suppliers

on the supplier portal, which in section 5.3 includes information on BBVA’s Anti-Corruption Policy.

The Group's General Anti-Corruption Policy is developed through various specific internal regulations that establish guidelines for

action and precautions in cases in which the risk of corruption could eventually materialize (i.e. Standard for the Acquisition of Goods

and Contracting of Services, Corporate Standard for Gifts and Events, regulations regarding the granting of donations and

commercial sponsorships, for example).

In line with the above, BBVA generally has a clause in its contracts in which suppliers undertake to comply with applicable anti-

corruption legislation.

BBVA anti-corruption framework is composed of the aforementioned regulatory body, and, in compliance with the crime prevention

model, has a program that includes the following elements: (i) a risk map; (ii) a specific governance model; (iii) a set of mitigation

measures aimed at reducing these risks; (iv) procedures for action in the event of the emergence of risk situations; (v) training and

communication programs and plans; (vi) indicators aimed at understanding the situation of risks and their mitigation and control

framework; (vii) a whistleblower channel; and (viii) a disciplinary regime.

In relation to the evaluation of corruption risk in the Group, several types of transactions were evaluated: (i) 4,127 operations out of a

total of 5,389 (76.58%) in relation to AML&FT risk (for the number of communications made to the corresponding authorities, see

previous section on " Anti-Money Laundering and Financing of Terrorism"); (ii) with respect to internal fraud risk, a total of 59 (100%)

operations have been analyzed; and (iii) from the AML&FT and Corruption risk side, 1,301 out of a total of 1,301 third parties evaluated

in the Group's procurement processes (100%) have been evaluated.

In addition, in recent years, anti-corruption risk assessments were conducted on banks in the main geographical areas in which the

BBVA Group operates. According to the overall result of this analysis, it was concluded that the control framework for corruption risk

in the BBVA Group is adequate.

In relation to the training program on the prevention of corruption, BBVA has a corporate online course in most of the jurisdictions in

which BBVA is present, which is mandatory and recurrent for all BBVA employees. At the close of the 2023 financial year, this course

had been taken by a total of 21,073 (97.1%) employees in Spain.

Data protection

BBVA has privacy policies or notices in accordance with current legislation. These policies or notices explain how BBVA collects and

treats the personal data of its customers, suppliers, and employees, as well as other individuals whose personal data is processed,

and how they can exercise their rights in this area. These privacy policies or notices are subject to periodic review and updating, based

on the applicable regulations, as well as the BBVA Group's General Privacy and Data Protection Policy and the Corporate Standard on

Personal Data Protection.

During the year 2023, the Personal Data Protection unit, integrated in the Compliance area and led by the Data Protection Officer

(DPO), has continued to promote supervision and control processes to ascertain the degree of application of data protection

regulations and, where appropriate, to promote the necessary actions for their proper application.

This has been implemented through (I) the reinforcement of the global regulatory framework, as well as  rules and procedures of local

application, and the review of personal data protection governance, (II) the development and adaptation of tools to help implement

control and compliance processes in Spain and other countries (III) the review of relevant processes, as well as (IV) the follow-up and

resolution of the recommendations resulting from the audit and Compliance Testing activities (carried out by specially dedicated

teams in the Compliance units) carried out in this area.

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Tax contribution

The principles that guide BBVA's tax actions are not removed 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.

As such, the principles that guide its action are:

– Integrity. in the tax 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 tax 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 we operate.

– 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.

– Achievement of a profitable and sustainable business in the long term. The tax function will provide proactive support to the

Group's business areas, taking into account our explicit commitment to the payment of taxes, respect for human rights,

prudence in risk management, and a horizon of generating recurring and sustainable results over time.

– Long-term value creation for its stakeholders. The tax function is aware of the impact of its decisions not only for the BBVA

Group, but also for society as a whole, and will therefore take into consideration, from a tax perspective, the interests of its

different stakeholders.

– Compliance with applicable legislation at all times. This compliance extends not only to the letter but also to the spirit of the

rule, refraining from any kind of abuse of the law or any unreasonable interpretation.

In addition, the Board establishes in this General Policy the guidelines for monitoring compliance.

BBVA is committed to transparency in paying taxes and this is the reason why, for yet another year, the it voluntarily breaks down the

total tax contribution in countries in which it has a significant presence.

The total tax contribution of BBVA, S.A. (Total Tax Contribution - TTC Report) includes both own and third-party payments made by

BBVA, S.A. and its branches abroad for corporate income tax, VAT, local taxes and rates, personal income tax withholdings, social

security taxes, as well as payments made during the year for tax litigation relating to the aforementioned taxes.

GLOBAL TAX CONTRIBUTION (BBVA SPAIN. MILLIONS OF EUROS)
	2023	2022
Own taxes	2,118	1,395
Third-party taxes	1,378	1,312
Total tax contribution	3,496	2,707

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.

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Other tax information by countries

TAX INFORMATION BY COUNTRIES (BBVA, S.A. MILLIONS OF EUROS)
	2023				2022
	CIT payments cash basis	CIT expense consol	Profit (loss) before CIT	Subsidies	CIT payments cash basis	CIT expense consol	Profit (loss) before CIT	Subsidies
Germany	21	4	25	—	19	10	30	—
Argentina	4	—	—
Belgium	1	1	5	—	—	—	2	—
Chile	2	—	—	—	2	—	—	—
China (1)	16	6	30	1	1	6	35	1
Colombia	4	—	—	—	2	—	—	—
Spain (2)(3)	828	600	4,918	—	534	255	4,694	—
Of which:
Tax Group		6	370	—	—	6	393	—
Subsidiaries		78	2,984	—	—	55	2,930	—
Impairment of Garanti			132	—	—	—	647	—
The United States	66	53	191	—	22	21	122	—
France	27	17	79	—	25	13	51	—
Italy	50	32	95	—	11	33	110	—
Japan		—	(3)	—	—	—	(1)	—
Netherlands	2	—	—	—	3	—	—	—
Paraguay	—	—	—	—	—	—	—	—
Peru	5	—	—	—	4	—	—	—
Portugal	7	1	66	—	4	(1)	45	—
The United Kingdom	19	23	101	—	15	7	55	—
Switzerland	4	—	—	—	4	—	—	—
Singapur	2	4	26	—	3	3	20	—
Taiwan		—	13	—	—	1	1	—
Turkey	18	—	—	—	3	—	—	—
Total	1,076	740	5,547	—	651	347	5,163	—
(1) Includes Hong Kong and Shanghai branches
(2) Including dividends from foreign subsidiaries which are taxed in their home country. See Note 4 of Dividends of the Financial Statements.
(3) 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 amounts of "Corporate income tax cash payments" are highly conditioned and derive fundamentally from the methodology for

calculating the installment payments provided for in the regulations governing corporate income tax in the different geographical

areas, producing differences between the installment payments made in the current year and the refund of installment payments

from previous years that may result once the definitive 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 income tax cash payments" and "Corporate income tax

expense", since 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 the profits obtained in previous years, as well as the installment payments made

in the current year and the withholding of input taxes. However, the "Corporate income tax expense" for the current year is more

directly related to the pre-tax profit for a given year.

In 2023, the Bank, as well as BBVA Group, has not received any public aid directed to the financial sector aimed at promoting the

development of the banking activity and which is significant, as mentioned in Annex XII - Annual Banking Report of the Consolidated

Financial Statements of BBVA Group.

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Commitment to human rights

BBVA supports respect for internationally recognized human rights and this is reflected in the relationships that it establishes with its

customers, suppliers, employees and the communities in which it conducts its business and activities.

This support is framed within the Group's General Sustainability Policy and is aligned with its Code of Conduct. It also takes the United

Nations Guiding Principles on Business and Human Rights as a point of reference.

Since 2022, BBVA has adopted an active role within the ambit of future EU legal initiatives. Within the framework of its participation in

the Working Groups on Sustainable Finance of the European Banking Federation (EBF), in the European Financial Markets Association

and in the European Financial Services Roundtable, BBVA contributes to the development of sectorial positions on various

community initiatives. We played an important role of dialogue and accompaniment with the European regulator in relation to the

proposed directive on corporate due diligence in sustainability matters. 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 additional information on the Equator Principles, see section  “Management of indirect

environmental and social impacts” of this report.

On the other hand, the methodology for evaluating BBVA's reputational risk, which is mentioned in the "Reputational risk" section of

the "Risk management" chapter of the BBVA Group's Consolidated Management Report, is an essential complement to this

management.

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2.5 Information on suppliers

BBVA provides complete and transparent information to its suppliers in the procurement processes, ensuring compliance with the

legal framework in force in all areas, including: tax, labor and environmental matters, human rights, and stimulating the demand for

socially responsible products and services.

As a part of the procurement process, BBVA suitably manages the impacts, both real and potential, that may be generated by its

activity through a series of mechanisms and rules: the General Procurement Principles, a supplier evaluation process and the

Corporate Rules for the Acquisition of Goods and the Contracting of Services. These impacts may be: environmental; caused by labor

practices carried out in supplier companies; a result of the absence of freedom of association; or related to human rights.

The General Procurement Principles and the BBVA Code of Ethics for Suppliers establish the fundamental guidelines that must be

followed by all suppliers with which any company or entity of the Group has dealings.

– The General Procurement Principles establish, among other aspects, that it is necessary to ensure compliance with all

applicable legal requirements throughout the provisioning process regarding human, labor, association and environmental

rights by all parties involved in this process, as well becoming involved in the Group's efforts aimed at preventing corruption.

It also ensures that the selection of suppliers remains in compliance with existing internal regulations at all times and, in

particular, with the values of the Group's Code of Conduct, based on respect for legality (among other matters, those

related to anti-corruption), commitment to integrity, competition, objectivity, transparency, value creation, confidentiality,

continuous improvement and segregation of duties.

– Through the implementation of the Supplier Code of Ethics in the purchasing units of all countries in which the Group is

present, minimum standards of conduct in terms of ethical, social and environmental matters were established which

suppliers are expected to follow when providing products and services. The clauses of the contracts include the supplier's

obligation to comply with the provisions of the BBVA Group's Code of Conduct and Code of Ethics for Suppliers in force at

any given time.

BBVA understands that integrating ethical, social and environmental factors into its supply chain is part of its responsibility. The

purchasing function is based on three core pillars of the procurement model:

– Service, maximizing the quality and experience of the internal customer, who is accompanied throughout the process.

– Risk, limiting the Group's operational risk in contracts with suppliers, thus ensuring compliance with regulations and

processes and incorporating sustainability in the Group's procurement processes.

– Efficiency, contributing to the Group's efficiency by the proactive managing costs and suppliers.

The following is the basic data on suppliers at the end of 2023 and 2022:

ESSENTIAL DATA ABOUT SUPPLIERS (BBVA SPAIN)
	2023	2022
Number of third parties (1)	1,058	1,033
Volume provided by suppliers (millions of euros) (1)	2,674	2,408
Suppliers satisfaction index (2)	82	n.a
Number of approved suppliers (3)	1,301	1,425
General note: Third party is that natural or legal person with whom there is a payment obligation. Supplier is the third party with whom  the BBVA Group maintains a contractual relationship for the supply of goods and services.
n.a.: not applicable.
(1) Payments to third parties. Suppliers lower than €100.000 are not included.
(2) Suppliers Net Promoter Score. Obtained based on the results of a satisfaction survey that is carried out every 2 years among Group suppliers that have more than €10,000 in awards and €100,000 in billing. It is calculated as the difference between the average number of promoters, who have answered 9 and 10 out of a maximum of 10, to the question whether they would recommend working with the Purchasing area, and the average number of detractors whose answers have gone from 1 to 6 on the question. same question.
(3) In 2022 and 2021, the figure includes suppliers with materiality of more than 10,000 euros (in 2020, suppliers of 100,000 euros) evaluated in GPS from Spain. Of a total of 1,446 suppliers evaluated: 1,425, 99%, were suitable and 21, 1%, were not suitable, with whom work is stopped immediately or an exit plan is established, whenever possible, with a period migration to stop working with the provider.

The average payment period to suppliers in Spain during the financial year 2023 is 23 days 12 below the legal maximum term of 60

days established in Law 15/2010 of July 5, which establishes measures to combat late payment in commercial transactions. The

calculation of the average payment has been made in accordance with the provisions of said law.

BBVA has technological platforms that support all phases of the Group's procurement process, from budgeting to recording and

accounting for invoices. Moreover, BBVA has a supplier portal that facilitates the Group's online relationship with its suppliers.

The BBVA's supplier evaluation process covers the review of several key aspects including financial, legal, labor, reputational, anti-

corruption and anti-money laundering measures, concentration and country risks, sustainability, data protection and customer

protection. The analysis of these aspects is aimed at mitigating potential risks in contracting with third parties, as well as verifying that

they comply with their legal obligations, in turn allowing them to promote their civic responsibilities and validate that they share the

same values as the Group in terms of social responsibility.

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12 The ratio is calculated as the arithmetic mean of the days of payment of invoices paid to suppliers.

In 2023, BBVA implemented a sustainability module as part of the supplier evaluation process. The module covers a broad spectrum

of sustainability aspects evaluated: (I) compliance with environmental and social regulations, (II) management and measurement of

environmental impacts, (III) human rights, (IV) control structures, (V) sustainability reporting, and (VI) ESG assessment of the

supplier's own supply chain. During 2023, the model has been calibrated to adjust it to the different types of suppliers that the Group

has.

Supplier evaluation is reviewed periodically and is subject to continuous monitoring. As of December 31, 2023, the percentage of

contract awards made to evaluated suppliers reached 98.6%.

As of December 31, 2023, 98.6% of the total number of BBVA third parties (representing 91.3% of total revenue) corresponds to local

third parties, thus contributing to economic and social development. The Bank defines a local third party as one whose tax

identification coincides with the country of the company receiving the good or service.

Finally, it is worth noting that in fiscal year 2022, the Internal Audit area conducted evaluations of suppliers regarding the

procurement processes for goods and services in different areas and the service provided by certain suppliers, generally outsourcing

suppliers. These are risk-based assessments, and reviews are carried out according to a defined internal methodology. The supplier

evaluation process was audited with a favorable result and the recommendations fully implemented in 2022.

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2.6 Report on climate change and other environmental

and social issues

Sustainability is governed by the principle of ensuring the needs of the present without compromising the needs of future generations,

always without sacrificing environmental protection, economic growth and social development.

In accordance with its General Sustainability Policy, BBVA faces the challenge of "sustainable development" (or "sustainability" in

general) from a holistic perspective, taking into account environmental, social and governance (hereinafter "ESG") aspects.

BBVA aims to generate a positive impact through the activities of its customers, its own activity, as well as its relationship and support

to society, to make its Purpose of "Making the opportunities of this new era available to all" and deliver on its strategic priority

"Helping our customers in the transition to a sustainable future".

Environmental

The fight against climate change represents one of the greatest disruptions in history, with extraordinary economic consequences, to

which all actors in our environment (governments, regulators, companies, consumers and society in general) must adapt.  BBVA

understands the environmental dimension of sustainability as the management of the impacts, risks and opportunities linked to the

fight against climate change, the transition to a low-carbon economy and the protection and regeneration of natural capital.

Social

Companies are key players in the development and progress of societies. BBVA understands the social dimension of sustainability as

the management of impacts, risks and opportunities in relation to its customers, employees, suppliers, communities affected by its

activity and society in general.

In accordance with the provisions of Law 7/2021, of May 20, on climate change and energy transition (hereinafter, Law 7/2021),

BBVA incorporates its Climate Change Report into the Group's Management Report, which accompanies the Consolidated Annual

Accounts corresponding to the financial year 2023 and includes, among others, the content provided for in article 32 of Law 7/2021

and its implementing regulations

This Report on climate change and other environmental and social issues of Banco Bilbao Vizcaya Argentaria, S.A., which forms part

of its Individual Management Report, includes by reference the sections of the Consolidated Climate Change Report that appears in

the Consolidated Management Report of BBVA Group, since 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:

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.	5. Other information/5.2 Organizational Chart NFIS/2.1.6 Governance model
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/2.1.1 ESG strategy and objectives
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/2.1 Sustainability in BBVA Group NFIS/2.2 Environmental
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/2.2.2 Management of risks associated with climate change and environmental factors
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/2.1 Sustainability in BBVA Group NFIS/2.2 Environmental

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” below.

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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.

Management of direct and indirect impacts

As a financial institution, BBVA has a direct impact on the environment and society through its use of natural resources and its

relationship with its stakeholders.

Management of direct environmental impacts

BBVA has a clear commitment to society and the environment. Thus, the global strategy for managing direct environmental impacts

is structured around three main axes:

– (I) Calculation of the environmental footprint, including the expansion of the scope of carbon footprint calculation with new

categories 13 reported by 2023:

– 3.1: Goods and services acquired, including credit card transportation and distribution, cash management services,

and storage and logistics services.

– 3.2: Capital goods.

– 3.3: Activities related to the consumption of fuels and energy not accounted for in scope 1 or 2.

– 3.13: Downstream leased assets. Includes emissions from buildings owned by BBVA rented to third parties.

The remaining Scope 3 categories not included in the footprint calculation (except for 3.15, corresponding to financed

emissions) are considered either not material or not applicable due to the nature of the BBVA Group's business.

– (II) Reduction of environmental impact, including: the reduction of consumption through energy efficiency initiatives and

water and paper consumption, the use of electricity from renewable sources, and the awareness and involvement of

employees and other stakeholders on the path towards a low-carbon economy.

– (III) Purchase and retirement of carbon credits for an amount equivalent to Scope 1, 2 and part of Scope 3 emissions

(category 5 waste, category 6 emissions from business travel and category 7 employee commuting to work) 14 in quality

projects. In addition, BBVA collaborates in the development of Voluntary Carbon Markets through its participation in

initiatives with regulators and other stakeholders.

Likewise, BBVA also contributes to the development of new and innovative low-carbon technologies through investments in climate

capital funds focused on decarbonization, investing in technologies with enormous potential impact (more details in the section

"Investment in climate funds" in the section "2.1.1 ESG Strategy and Objectives" of the BBVA Group's Statement of Non-Financial

Information 2023).

I. Calculation of the environmental footprint

1. Carbon footprint

In terms of its own carbon footprint, BBVA's emissions are made up of:

– Scope 1 greenhouse gas emissions, comprising direct emissions from the combustion installations of the company's own

buildings (including data centers), fuel for the vehicle fleet and refrigerant gases.

– Scope 2 greenhouse gas emissions, including indirect emissions related to the production of electricity purchased and

consumed by buildings (including data centers) and branches.

– Scope 3 greenhouse gas emissions, which include other indirect emissions. In previous years it included emissions from

business travels (by plane and train), emissions from waste management and emissions from employee commuting to the

workplace. This year, BBVA has expanded the calculation of its footprint, reporting the rest of the material and applicable

categories due to the nature of the Group's business.

Both Scope 1 and 2 emissions and Scope 3 emissions are calculated taking into consideration the GHG Protocol standard established

by the WRI (World Resources Institute) and the WBCSD (World Business Council for Sustainable Development). The process of

measuring and calculating the additional Scope 3 categories has been carried out with an external supplier, which follows the

guidelines of the GHG Protocol Corporate Accounting and Reporting Standard and the Corporate Value Chain (Scope 3) Accounting

and Reporting Standard.

BBVA's environmental performance data obtained in 2023 and the evolution with respect to 2022 15 are shown in the following table:

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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.

13 In the calculation of Scope 1, Scope 2 and Scope 3 emissions (categories 5 waste management, category 6 business travel and category 7 commuting), certain BBVA Group

companies in Spain and BBVA S.A. branches outside Spain, which represent 3.6% of total employees, are not included in the perimeter.

The data for Scope 3 emissions corresponding to purchased goods and services (3.1) and capital goods (3.2) are calculated based on BBVA's annual turnover in Spain and include

those companies whose turnover is recorded through the global technology platform that supports all phases of the procurement process in the BBVA Group in Spain, including

the companies BBVA, S.A., Gran Jorge Juan, S.A. and Banco Occidental, S.A.

14 No carbon credits are purchased for an amount equivalent to the following Scope 3 categories defined in the GHG Protocol: Category 1 purchase of goods and services;

Category 2 capital goods; Category 3 fuel and energy-related activities (not included in Scope 1 or 2); Category 4 upstream transportation and distribution; Category 8 upstream

leased assets; Category 9 downstream transportation and distribution; Category 10 processing of products sold; Category 11 use of products sold; Category 12 end-of-life

treatment of products sold; Category 13 downstream leased assets; Category 14 franchising; Category 15 investments.

15 Consumption associated with the first months of 2022 was affected by low attendance at corporate buildings as a result of the COVID19 pandemic.

CARBON FOOTPRINT (BBVA SPAIN) (1)
	2023	2022 (2)	∆ 23-22
Scope 1 emissions (tons CO2e)(3)	3,611	3,311	9%
Emissions from fuels in facilities (t CO2e)	1,883	2,325	(19)%
Emissions from vehicle fleet fuels (t CO2e)	590	612	(4)%
Emissions from refrigerant gases (t CO2e)	1,139	373	205%
Scope 2 emissions (tons CO2e) market-based method (4)	—	—	n/a
Scope 2 emissions (tons CO2e) location-based method (5)	22,710	25,107	(10)%
Scope 1&2 emissions (tons CO2 e) market-based method	3,611	3,311	9%
Scope 1&2 emissions (tons CO2 e) location-based method	26,322	28,417	(7)%
Scope 3 emissions (t CO2e) (6)	325,349	14,198	n/a
3.1 Emissions from purchased goods and services (t CO2e) (7)	238,535	*	n/a
3.2 Emissions from capital goods (t CO2e)	27,355	*	n/a
3.3 Emissions from fuel and energy related activities (t CO2e)	12,684	*	n/a
3.5 Emissions from waste management (t CO2e) (8)	75	107	(30)%
3.6 Emissions from business travel (t CO2e) (9)	14,190	6,752	110%
3.7 Emissions from employees commuting (t CO2e) (10)	28,883	7,339	294%
3.13 Emissions from downstream leased assets	3,627	*	n/a
Total CO2e emissions (t CO2e) market-based method	328,960	17,509	n/a
Total CO2e emissions (t CO2e) location-based method	351,671	42,615	n/a
Impact of emissions (Scope 1&2) (€) (11)	167,254	152,175	10%
n/a: not applicable
*: Data reported for the first time in 2023.
General note: The data indicated in this table includes data from the following entities: BBVA S.A., BBVA Asset Management S.A., SGIIC, BBVA Broker Correduría de Seguros Y Reaseguros S.A., BBVA IT España, BBVA Mediación Operador de Banca-Seguros Vinculado, S.A., BBVA Next Technologies SLU, BBVA Pensiones, BBVA RE Inhouse Compañía De Reaseguros, S.E., BBVA Seguros S.A. De Seguros Y Reaseguros, BBVA Servicios, S.A., Contents Area, S.L., Gestión de Previsión y pensiones, S.A., Gestión Y Administración de recibos S.A., GARSA, Gran Jorge Juan, S.A. and OPPLUS operaciones y servicios S.A., as well as Fundación BBVA and Fundación Microfinanzas BBVA.
(1) Some of the data for 2023 are estimates since complete information for the year was not yet available at the close of the report. In the calculation of Scope 1, 2 and Scope 3 emissions corresponding to activities related to fuel and energy (3.3), waste management (3.5), business travel (3.6) and employee commuting (3.7), BBVA branches outside Spain and certain BBVA Group companies in Spain, which represent 3.6% of total employees in Spain, are not included in the perimeter. The data for Scope 3 issues corresponding to purchased goods and services (3.1) and capital goods (3.2) are calculated based on BBVA's annual turnover in Spain and include those companies whose turnover is recorded through the global technology platform that supports all phases of the procurement process in the BBVA Group in Spain, including the companies BBVA, S.A., Gran Jorge Juan, S.A. and Banco Occidental, S.A..
(2)  The 2022 data differ from those published in the previous Non-Financial Information Statement because the estimates included at the end of the 2022 financial year have been replaced by the actual consumption available after the publication of said report and have been modified. certain values according to the new data.
(3) Emissions derived from direct energy consumption (fossil fuels) and calculated based on the emission factors of the 2006 IPCC Guidelines for National Greenhouse Gas Inventories. For its conversion to CO2e, the IPCC Fifth Assessment Report and the IEA have been used as sources. Starting in 2021, emissions derived from the use of the vehicle fleet and refrigerant gas leaks at facilities were included in this scope, applying DEFRA emission factors to calculate CO2e emissions.
(4) Refrigerant gas emissions in 2023 have increased significantly compared to those registered in 2022 due to the implementation of improvements in consumption measurement processes.
(5) Emissions derived from electricity consumption and calculated based on contractual data and, failing that, on the latest available emission factors from the IEA for each country.
(6) Emissions derived from electricity consumption and calculated based on the energy mix of each geographic area. The emission factors are the latest available according to IEA for each country.
(7) Indirect emissions derived from business travel (plane and train), waste management and employee travel, using the emission factors published by DEFRA in 2023.
(8) Purchased goods and services issues include credit card transportation and distribution, cash management services and warehousing and logistics services.
(9) The implementation of the hybrid work model has meant a significant decrease in the generation of organic waste in work centers, which in turn translates into a decrease in the footprint generated by waste management.
(10) The annual increase in emissions derived from business trips is due to the effect of the COVID-19 pandemic on fiscal year 2022.
(11) The annual increase in emissions derived from the displacement of employees is due to the incorporation of emissions caused by the displacement of network employees in 2023 (in 2022 only the displacement of Central Services employees was taken into account).
(12) The impact of greenhouse gas emissions for 2023 is calculated using only Scope 1 and 2 emissions and using the social cost of CO2 factor based on a proportional estimate of the EPA's social cost of carbon for 2020 ( 51 $/tCO2) and for 2025 ($56/tCO2), (discount rate of 3%, with exchange rate 1.166€/$).

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2.    Other consumption

CONSUMPTION (BBVA S.A.)
	2023	2022 (1)	∆ 23-22
Total water consumption (cubic meters)	211,944	187,248	13%
Public water supply (cubic meters)	195,250	174,226	12%
Recycled water (cubic meters)	16,694	13,022	28%
Paper (tons)	743	1,486	(49)%
Total Energy (Megawatt hour) (2)	160,755	175,195	(8)%
Energy from renewable sources (%)	93.8%	93.0%	1%
Energy from non renewable sources (%)	6.2%	7.0%	(12)%
General note: The data indicated in this table includes data from the following entities: BBVA S.A., BBVA Asset Management S.A., SGIIC, BBVA Broker Correduría de Seguros Y Reaseguros S.A., BBVA IT España, BBVA Mediación Operador de Banca-Seguros Vinculado, S.A., BBVA Next Technologies SLU, BBVA Pensiones, BBVA RE Inhouse Compañía De Reaseguros, S.E., BBVA Seguros S.A. De Seguros Y Reaseguros, BBVA Servicios, S.A., Contents Area, S.L., Gestión de Previsión y pensiones, S.A., Gestión Y Administración de recibos S.A., GARSA, Gran Jorge Juan, S.A. and OPPLUS operaciones y servicios S.A., as well as Fundación BBVA and Fundación Microfinanzas BBVA.
(1) The data for 2022 differs from that published in the previous Non-Financial Information Report because the estimates included at the end of the 2022 financial year have been replaced by the actual consumption available after the publication of said report and certain values have been modified according to to the corrected data.
(2) Includes the consumption of electricity and fossil fuels (diesel, natural gas and LP gas), except fuels consumed in fleets.

Given the business activities in which the BBVA Group engages, it has no environmental liabilities, expenses, assets, provisions or

contingencies that might be material with respect to its equity, financial position and results. For this reason, at December 31, 2023,

the consolidated financial statements did not present any item that should be included in the environmental information document

provided for in Order JUS/616/2022, of June 30, approving the new model for the filing with the Commercial Registry of the

consolidated financial statements of the entities obliged to publish them.

II. Reduction of environmental impact

In its objective to reduce environmental impacts within the framework of Goal 2025 (Goal), BBVA set two targets: (a) to reduce 68%

of scope 1 and 2 CO2 emissions compared to 2015 and (b) to consume 70% of electricity from renewable sources by 2025, both

already achieved in 2023.

In addition, BBVA has been a member since 2018 of the RE100 initiative, through which the world's most influential companies are

committed to ensuring that their electricity is 100% renewable by 2050, although BBVA has set a more ambitious internal target of

reaching that goal by 2030.

In order to promote the reduction of direct impacts and the achievement of Goal 2025, in 2021 BBVA established a new Global Eco-

efficiency Plan (PGE) for the period 2021-2025, defining more ambitious objectives, aligned with its climate strategy.

With regard to the evolution of these indicators of the eco-efficiency plan, BBVA's environmental footprint in Spain presents very

positive data with respect to the base year 2019, exceeding the defined objectives in all areas, with reductions of (18%) in electricity

consumption, (18%) in energy consumption, (22%) in water consumption, (63%) in paper, (56%) in net waste (all per employee) and

(17%) in scope 1 and 2 emissions (according to the market based method). The percentage of renewable electricity consumption

reached 100%, and the percentage of environmentally certified surface area reached 96%.

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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.

EVOLUTION OF THE INDICATORS OF THE GLOBAL ECO-EFFICIENCY PLAN(1) (BBVA SPAIN)
	Values 2023	Achievement 23 (∆ 23-19)	2023 interannual GEP target	Target GEP 2025
Renewable electricity	100%	+0 p.p.	100%	100%
Electricity consumption per employee (MWh/ Employee) (2)	5.67	(18)%	(11)%	(15)%
Energy consumption per employee (MWh/Employee) (3)	6.04	(18)%	(4)%	(6)%
Water consumption per employee (m3/Employee)	7.97	(22)%	(17)%	(21)%
Paper consumption per employee (kg/Employee)	27.93	(64)%	(4)%	(4)%
Net waste per employee (t/Employee)(4)	0.01	(57)%	(13)%	(14)%
Scope 1&2 carbon emissions (tCO2 e)(5)	3,611.45	(17)%	(6)%	(6)%
Environmentally certified area (%)(6)	96%	+60 p.p.	40%	43%
(1) Data corresponding to the last months of 2023 are estimates. The 2023 Achievement indicators for Renewable Electricity and Environmentally Certified Area are expressed as a percentage point change over the 2019 value (100% and 36% respectively).
(2) Includes the sum of renewable and non-renewable electricity (per employee).
(3) Includes consumption of electricity and fossil fuels (natural gas, liquefied petroleum gas (LPG), diesel and coal), except fuels consumed in fleets.
(4) Net waste is total waste generated minus waste that is recycled. To obtain the 2023 achievement, the 2019 baseline data for net waste was subtracted in 2022, including the estimate of recycled waste, since its measurement was not incorporated until 2020.
(5) Includes scope 1 (fuels in facilities and vehicle fleet and refrigerant gases), scope 2 market-based. In 2022 the 2015 and 2019 Scope 1 emissions baseline was subtracted, including the estimate of emissions from Refrigerant Gases and Fleet Fuels as their measurement was incorporated in 2021.
(6) Includes IS0 14001, ISO 50001, LEED, Edge, WWF Green Office and Zero Waste certifications.

The achievement of these indicators has been possible thanks to the following 4 action vectors:

1. Consumption

With the aim of reducing BBVA's environmental footprint 16 , the following lines of actions will be implemented:

– Electricity consumption: BBVA's strategy is focused on the use of renewable energy as it is the most important lever to

contribute to the decarbonization of the energy markets where the Group is present. To this end, the strategy consists of

reaching Power Purchase Agreements such as those already in place in Spain, Mexico, Turkey and Argentina, as well as

acquiring renewable energy certificates such as Guarantees of Origin in Spain and Portugal, or International Renewable

Energy Certificates (iREC) in Mexico, Turkey, Peru, Colombia and Argentina. We will also focus on the self-generation of

renewable energy through the installation of solar photovoltaic and solar thermal panels at the Group's facilities, as is

already happening in several of our subsidiaries in Spain, Turkey, Argentina and Uruguay.

– Implementation of energy saving measures (ESM) in property management, with the aim of controlling and reducing

consumption.

– Initiatives to reduce water consumption, such as gray water recycling systems and the reuse of rainwater for irrigation at

the headquarters in Spain and Mexico, and the installation of dry urinals in some of the buildings in Spain

– Finally, digitalization and printing centralization measures to reduce the consumption of paper which, in the case of Spain, is

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 of transitioning linear consumption practices towards circular consumption. Thus, BBVA has been working for many years to

reduce this impact through sustainable construction standards or with the implementation of Environmental Management Systems

certified with ISO 14001 and additionally with the implementation of Aenor's Zero Waste certification in Ciudad BBVA, headquarters of

BBVA in Spain. The objective is to minimize the waste that is sent to landfills, which is why its facilities have clearly differentiated and

signposted areas that allow to carry out a correct segregation and subsequent recycling of waste.

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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.

16 Certain BBVA Group companies in Spain and BBVA S.A. branches outside Spain, which represent 3.6% of the total number of employees, are not included in the perimeter.

WASTE - CIRCULAR ECONOMY (BBVA S.A.)
	2023	2022 (1)
Hazardous waste (tons)	166	126
Recycled hazardous waste (tons)	123	97
Disposed hazardous waste (tons)	43	29
Non-hazardous waste (tons) (2)	684	1,204
Non-hazardous waste (%)	564	1,030
Disposed non-hazardous waste (tons)	120	174
General note: The data indicated in this table includes data from the following entities: BBVA S.A., BBVA Asset Management S.A., SGIIC, BBVA Broker Correduría de Seguros Y Reaseguros S.A., BBVA IT España, BBVA Mediación Operador de Banca-Seguros Vinculado, S.A., BBVA Next Technologies SLU, BBVA Pensiones, BBVA RE Inhouse Compañía De Reaseguros, S.E., BBVA Seguros S.A. De Seguros Y Reaseguros, BBVA Servicios, S.A., Contents Area, S.L., Gestión de Previsión y pensiones, S.A., Gestión Y Administración de recibos S.A., GARSA, Gran Jorge Juan, S.A. and OPPLUS operaciones y servicios S.A., as well as Fundación BBVA and Fundación Microfinanzas BBVA.
(1) Hazardous waste disposed data for 2022 differs from that published in the Statement of Non-Financial Information 2022 due to a refinement of the data due to improvements in the waste measurement methodology.
(2) In 2023 there is a significant decrease in the amount of non-hazardous waste due to a major waste removal in 2022 caused by the completion of construction work on a building in Spain.

3. Sustainable construction

Another objective is to guarantee the implementation of the best standards, both environmental and energy, in BBVA buildings, with

the aim of achieving a large percentage of environmentally certified surface area. In this sense, BBVA facilities have several

construction and management certifications.

Among the construction certifications, there are 5 BBVA buildings in Spain with the prestigious LEED (Leadership in Energy and

Environmental Design) standard for sustainable construction.

In terms of 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. Through this certification, the environmental

performance in the operations of some of its buildings is monitored and evaluated. This system is implemented in 21 buildings and 13

branches in Spain. Finally, during 2023, BBVA in Spain achieved certification for 30 buildings and 1,905 branches with an Energy

Management System also certified by an independent third party and meeting the ISO 50.001:2018 standard.

4. Carbon footprint

The reduction of the carbon footprint is one of the objectives established within Objective 2025, for which BBVA has implemented the

following initiatives:

– With regard to Scope 1 and 2 CO2 emissions, the reduction of emissions comes from the strategies for reducing energy

consumption and sustainable construction described in the previous sections, the replacement of fleets with traditional

fuels by hybrid and electric fleets, and reaching Power Purchase Agreements, as well as the acquisition of renewable energy

certificates such as Guarantees of Origin or International Renewable Energy Certificates (iRECs)..

– Regarding Scope 3 CO2 emissions, BBVA is working on a series of measures not included in the Eco-efficiency Plan to

reduce carbon emissions:

– Waste: Through the implementation of certifications such as ISO 14,001:2015 and Zero Waste.

– Employee commuting: BBVA has 284 recharging points for 100% electric and plug-in hybrid vehicles (PHEV) in its

buildings in Spain available to its employees.

– Business travels: an awareness initiative has begun to be deployed, communicating to different areas of BBVA the

footprint generated monthly for this reason and identifying levers and alternatives to reduce emissions, thus

promoting employee awareness when it comes to planning your work trips.

– Suppliers: in 2023 BBVA implemented a sustainability module in the supplier evaluation process, which includes,

among others, the management and measurement of their environmental impact. For more information on this

module, see section "2.5 Information on suppliers" of this report.

III. Purchase of carbon credits

BBVA purchases and retires carbon credits in an amount equivalent to its CO2 emissions from the categories over which it has direct

management capacity (i.e., scopes 1, 2 and categories 5, 6 and 7 of scope 3) 17.

In order to ensure the quality of these carbon credits, BBVA has established some requirements that the selected projects must meet,

among which are the obligation that theyhave to be certified under the highest quality standards such as VCS (Verified Carbon

Standard by Verra), Gold Standard, American Carbon Registry (ARC), Climate Action Reserve (CAR) and Plan Vivo; and that they are

CO2 absorption or capture projects. Additionally, in 2023, BBVA developed an internal Voluntary Carbon Market standard, based on

best practices, to evaluate high-quality carbon credit programs and types of credits that generate a real, additional and verifiable

climate impact.

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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 Carbon credits are not purchased in an amount equivalent to the following Scope 3 categories defined in the GHG Protocol: Category 1 purchase of goods and services; Category

2 capital goods; Category 3 fuel and energy-related activities (not included in scope 1 or 2); Category 4 upstream transportation and distribution; Category 8 upstream leased

assets; Category 9 downstream transportation and distribution; Category 10 processing of products sold; Category 11 use of products sold; Category 12 end-of-life treatment of

products sold; Category 13 downstream leased assets; Category 14 franchises; Category 15 investments.

The projects selected in 2023 have been a reforestation/afforestation project in Colombia (Cumare) and a set of improved forest

management projects in Mexico developed by Bioforestal Innovación Sustentable S.C. (Ejido Atopixco, Ejido La Selva and Ejido

Zacualtipán).

Other actions

In addition to the purchase of carbon credits, BBVA is contributing to the development of carbon markets through the following

initiatives:

– In regulated markets, BBVA participates in government auctions in the EU ETS and futures markets since January 2023.

Additionally, in June 2023, BBVA inaugurated its trading desk for regulated carbon markets, allowing its customers to

access the purchase and sale of credits.

– In the voluntary markets, BBVA carried out a first operation on its own account to purchase carbon credits through its

trading desk at the end of 2023. In addition, BBVA is one of the investors in Carbonplace, a carbon credit trading platform.

– BBVA is also involved in activities and initiatives such as participation in the development of reports such as the World

Economic Forum's playbook on Voluntary Carbon Markets or participation in panels and forums such as the European

Roundtable on Climate Change and Sustainable Transition. In addition, BBVA is present in the Advisory Board of EEX Global

Carbon Index Family and LIFE COASE, a project co-founded by the EU Life Programme of the European Commission.

Likewise, BBVA also contributes to the development of new and innovative low-carbon technologies through investments in climate

capital funds focused on decarbonization, investing in technologies with enormous potential impact (more details in the section

"Investment in climate funds" in the section "2.1.1 ESG Strategy and Objectives" of the BBVA Group's Statement of Non-Financial

Information 2023).

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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.

Management of indirect environmental and social impacts

BBVA addresses environmental, natural capital and social risks from the perspective of prevention and mitigation of impacts. To do

this, it uses tools such as its Environmental and Social Framework or the Equator Principles, which have an environmental and social

focus..

Environmental and social framework

The Framework (originally approved in 2020) is prepared and coordinated within the Global Sustainability Area and is approved by its

manager.

Equator Principles

Although financing projects in sectors such as energy, transportation and social services drives economic development and creates

jobs, it also carries potential environmental and social impacts. Therefore, BBVA implements environmental and social risk

assessment processes in this area to mitigate and prevent negative impacts, reinforcing the economic, social and environmental

value of these financings.

In 2004, BBVA adhered to the Equator Principles (hereinafter, EP), which establish standards for environmental and social risk

management in project financing. Currently, in their fourth version (EP4), these principles are applied globally in all industrial sectors

and cover five financial products related to projects: (I) financing advice; (II) financing; (III) corporate loans; (IV) bridge loans; and (V)

refinancing and acquisition.

In accordance with the EP, BBVA subjects each project under the scope of EP4 to an environmental and social due diligence analysis,

considering impacts on climate change and human rights. This analysis is integrated into BBVA's internal operations structuring,

admission and monitoring processes, aligning with its Environmental and Social Framework. Each operation is classified according to

its risk level (categories A, B or C) and the documentation provided by the customer and independent advisors is reviewed. A

specialized team at BBVA supervises and evaluates these projects, contributing to committee decisions and risk approvals. In

addition, BBVA financing contracts include specific environmental and social obligations for the proper management of the project by

the customer.

Regarding the evaluation of human rights and according to the EP, BBVA requires due diligence on projects that may impact

indigenous communities. In cases where this circumstance occurs, the free, prior and informed consent of these communities must

be obtained, regardless of the geographical location of the project. It also requires, in accordance with the projects, liaison with the

communities impacted by the projects. If potential risks are detected, the operation must include effective management of these risks

as well as operational mechanisms for managing claims. Regarding climate impacts, in accordance with the EP, the impacts of the

projects are evaluated considering scenarios as well as mitigation and management measures adopted.

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2.7 Additional information

Contents index of the Law 11/2018 18

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 2-6 GRI 2-7	2
	Geographical presence and Organization and Sturcture	BBVA in brief NFIS/Additional information/Organizational Chart	GRI 2-1 GRI 2-6	2 53
	Objectives and strategies of the organization	NFIS/Information on strategy and objectives	GRI 2-22	3-4
	Main factors and trends that may affect your future evolution	NFIS/Information on strategy and objectives	GRI 2-16	3-4
General	Reporting framework	Non-financial information report	GRI 1	3
	Principle of materiality	Non-financial information report NFIS/Additional information/Materiality analysis	GRI 3-1 GRI 3-2	3 50-51
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 3-3 GRI 2-25	3-43
	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 3-3 GRI 2-25	3-43
	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 2-16	3-43
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 2-16	37-43
	Environmental assessment or certification procedures	NFIS/Report on climate change and other environmental and social issues/Management of direct and indirect impacts	GRI 3-3 GRI 2-25	37-43
	Resources dedicated to the prevention of environmental risks	NFIS/Report on climate change and other environmental and social issues	GRI 3-3 GRI 2-25	36-43
	Application of the precautionary principle	NFIS/Report on climate change and other environmental and social issues	GRI 2-23 GRI 3-3 GRI 2-25	36-43
	Amount of provisions and guarantees for environmental risks	NFIS/Report on climate change and other environmental and social issues	GRI 3-3 GRI 2-25	36-43

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18   Law 5/2021 once again modifies article 49 of the Commercial Code on social and personnel issues. Those modifications are included in this content index.

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 3-3 GRI 2-25	37-43
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 3-3 GRI 2-25 GRI 306-2 with respect to recycling and reusing	37-43
	Actions to combat food waste	BBVA Group considers this indicator not to be material	GRI 3-3 GRI 2-25
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 total water consumption	37-43
	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 respect to renewable materials used	37-43
	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	37-43
	Measures taken to improve energy efficiency	NFIS/Report on climate change and other environmental and social issues/Management of direct and indirect impacts	GRI 3-3 GRI 2-25 GRI 302-4	37-43
	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	37-43
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	37-43
	Measures taken to adapt to the consequences of climate change	NFIS/Report on climate change and other environmental and social issues	GRI 3-3 GRI 2-25 GRI 201-2	36-43
	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	36-43

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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
Employees	Total number and distribution of employees according to country, gender, age, country and professional classification	NFIS/Information on employees/Professional development/Main employee metrics	GRI 2-7 GRI 2-8 GRI 405-1	17-19
	Total number and distribution of work contract modalities	NFIS/Information on employees/Professional development/Main employee metrics	GRI 2-7 GRI 2-8	17-19
	Annual average of work contract modalities (permanent, temporary and part-time) by sex, age, and professional classification	NFIS/Information on employees/Professional development/Main employee metrics	GRI 2-7 GRI 2-8	17-19
	Number of dismissals by sex, age, and professional classification	NFIS/Information on employees/Professional development/Main employee metrics	GRI 3-3 GRI 2-25 GRI 401-1 with respect to staff turn-over by sex, age and country	17-19
	The average remunerations and their evolution disaggregated by sex, age, and professional classification or equal value	NFIS/Information on employees/Remuneration	GRI 3-3 GRI 2-25 GRI 405-2 with respect to women remuneration compared to men's by professional category	23-26
	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 3-3 GRI 2-25 GRI 405-2 with respect to women remuneration compared to men's by professional category	23-26
	Salary gap	NFIS/Information on employees/Remuneration	GRI 3-3 GRI 2-25 GRI 405-2 with respect to women remuneration compared to men's by professional category	23-26
	Implementation of employment termination policies	NFIS/Information on employees/ Work environment /Work organization	GRI 3-3 GRI 2-25	19-20
	Employees with disabilities	NFIS/Information on employees/Professional development/Diversity, inclusion and different capacities	GRI 405-1	16-17

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Work organization	Work schedule organization	NFIS/Information on employees/ Work environment /Work organization	GRI 3-3 GRI 2-25	19-20
	Number of hours of absenteeism	NFIS/Information on employees/ Work environment/Occupational safety and health	GRI 403-9	20-22
	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 3-3 GRI 2-25	19-20
Health and safety	Work health and safety conditions	NFIS/Information on employees/ Work environment/Occupational safety and health	GRI 3-3 GRI 2-25 GRI 403-1 GRI 403-2 GRI 403-3 GRI 403-7 (2018)	20-22
	Work accidents, in particular their frequency and severity, disaggregated by gender	NFIS/Information on employees/ Work environment/Occupational safety and health	GRI 403-9 (2018) with respect to labor accident injuries	20-22
	Occupational diseases, disaggregated by gender	NFIS/Information on employees/ Work environment/Occupational safety and health	GRI 403-10 (2018)with respect to recordable labor injuries	20-22
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 3-3 GRI 2-25	20
	Mechanisms and procedures that the company has to promote the involvement of workers in the management of the company, in terms of information, consultation and participation	NFIS/Information on employees/ Culture & Values NFIS/Information on employees/ Work environment/Freedom of association and representation	GRI 3 -3 GRI 2-25	13 20
	Percentage of employees covered by collective agreement by country	NFIS/Information on employees/ Work environment/Freedom of association and representation	GRI 2-30	20
	The balance of collective agreements, particularly in the field of health and safety at work	NFIS/Information on employees/ Work environment/Occupational safety and health	GRI 403-4 ( 2018)	20-22
Training	Policies implemented for training activities	NFIS/Information on employees/ Professional development/Training	GRI 3-3 GRI 2-25 GRI 404-2	14-15
	The total amount of training hours by professional category	NFIS/Information on employees/ Professional development/Training	GRI 404-1	14-15
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 3-3 GRI 2-25	16-17
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 3-3 GRI 2-25	16-17
	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 3-3 GRI 2-25	16-17
	Measures adopted to promote employment, protocols against sexual and sex-based harassment.	NFIS/Information on employees/Professional development/Diversity, inclusion and different capacities	GRI 3-3 GRI 2-25	16-17
	Policy against any type of discrimination and, where appropriate, diversity management	NFIS/Information on employees/Professional development/Diversity, inclusion and different capacities	GRI 3-3 GRI 2-25	16-17
Information about the respect for human rights

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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 2-23 GRI 2-26	33
	Claims regarding cases of human rights violations	NFIS/Information on social matters/Commitment to human rights BBVA has a whistleblowing channel that allows any interest group to report confidentially and anonymously if they wish, any behavior that is directly or indirectly linked to human rights. In the complaints received through this channel in 2023 and 2022, there are no human rights violations attributable to Banco Bilbao Vizcaya Argentaria, S.A.	GRI 3-3 GRI 2-25 GRI 406-1	33
	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 BBVA has not identified work centers or suppliers likely to have significant risks in relation to forced labor or child exploitation.	GRI 3-3 GRI 2-25 GRI 407-1 GRI 408-1 GRI 409-1	20 33
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 3-3 GRI 2-25 GRI 2-23 GRI 2-26 GRI 205-2 GRI 205-3	28-30
	Measures adopted to fight against antimoney laundering	NFIS/Information on social matters/Compliance	GRI 3-3 GRI 2-25 GRI 2-23 GRI 2-26 GRI 205-3	28-30
	Contributions to foundations and non-profit-making bodies	NFIS/Information on social matters/Contribution to the Community	GRI 2-28 GRI 201-1 with respect to community investment	27-28
Information about the society

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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 the Community	GRI 3-3 GRI 2-25 GRI 203-2 with respect to significant indirect economic impacts GRI 204-1	27-28
	The impact of company activity on local populations and on the territory	NFIS/Information on social matters/Contribution to the Community	GRI 413-1 GRI 413-2	27-28
	The relationships maintained with representatives of the local communities and the modalities of dialog with these	NFIS/Information on social matters/Contribution to the Community	GRI 2-29 GRI 413-1	27-28
	Actions of association or sponsorship	NFIS/Information on social matters/Contribution to the Community	GRI 3-3 GRI 2-25 GRI 201-1 with respect to investments in the community	27-28
Subcontractors and suppliers	The inclusion of social, gender equality and environmental issues in the purchasing policy	NFIS/Information on suppliers	GRI 3-3 GRI 2-25	34-35
	Consideration of social and environmental responsibility in relations with suppliers and subcontractors	NFIS/Information on suppliers	GRI 2-6 GRI 308-1 GRI 414-1	34-35
	Supervision systems and audits, and their results	NFIS/Information on suppliers	GRI 2-6 GRI 308-1 GRI 308-2 GRI 414-2	34-35
Consumers	Customer health and safety measures	NFIS/Information on customers/Security and protection	GRI 3-3 GRI 2-25 GRI 416-1	6-8
	Claims systems, complaints received and their resolution	NFIS/Information on social matters/Customer care	GRI 3-3 GRI 2-25 GRI 418-1	9-12
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	31-32
	Taxes on paid benefits	NFIS/Information on social matters/Tax contribution	GRI 201-1 GRI 207-4 (2019) with respect to corporate income tax paid and corporate income tax accrued on profit/loss.	31-32
	Public subsidies received	NFIS/Information on social matters/Tax contribution	GRI 201-4	31-32
Requirements of the Taxonomy regulation		NFIS/Additional information/Information related to article 8 of the European Taxonomy		53-90

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Materiality analysis

The materiality analysis has been carried out at the BBVA Group level, and therefore also applies to the Bank:

BBVA carries out a qualitative materiality analysis to identify those environmental, social and governance issues that are significant

for the Group and its stakeholders, taking into account in the analysis the double perspective of materiality, which underlies the NFRD

and Law 11/2018, as well as in the GRI guide (December 2021 version). BBVA, based on this double perspective on materiality,

identifies issues related to its business that could be currently or potentially affected by sustainability issues (“outside-in” perspective

also known as “financial materiality”), as well as the way in which its activities could currently or potentially affect society and the

environment (“inside-out” perspective also known as “impact materiality”).

There are considered material those topics that could have a high probability of generating a significant current or potential effect on

both the performance of BBVA and its stakeholders and its broader environment.

The results of this analysis are aligned with both the six strategic priorities and BBVA's Purpose and allow the identification and

prioritization of BBVA's most significant internal and external issues for adequate monitoring and follow-up. The scope of this analysis

includes the main geographic areas in which BBVA operates (Spain, Mexico, Turkey, Argentina, Colombia and Peru) and short,

medium and long-term time horizons have been taken into account.

Materiality Matrix

As a result of this analysis, the issues with the most significant impact for BBVA's stakeholders and for BBVA are those that appear in

the following matrix:

(1) Based on qualitative analysis conducted to recognize both the “outside-in” perspective also known as “financial materiality,” as well as the “inside-out” perspective also known

as “impact materiality.”

Main results

The materiality analysis carried out in 2023 had as its starting point the year carried out in 2022 and represents an evolution of it.

The most notable material issues in 2023 are the following:

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– Climate change: adequate management of measures aimed at adapting to the consequences of climate change through the

establishment of policies, as well as the identification and management of climate risks and opportunities. To this end,

decarbonization goals have been defined for the company's footprint and portfolio in line with the objectives of the Paris

Agreement and work is being done on the inclusion of sustainability criteria and specifically climate change criteria within

the credit analysis of the companies. operations with customers.

– Inclusive growth: adequate management to promote access to financing sources for vulnerable or low-income people and

small businesses/professionals with fewer resources, accompanied by financial and digital education actions to promote

responsible banking and informed decision-making. To achieve this, products are developed with the help of new

technologies, which allow access to new, previously inaccessible markets. Additionally, BBVA seeks to support

governments and companies to promote employment and local development of the territory and communities, as well as to

promote the development of society through philanthropic activities.

– Customers: adequate management of the simplicity, agility, speed and self-service of commercial channels, innovation and

digitalization of the service. Likewise, BBVA works to offer solutions that promote the financial health of customers, taking

care of their finances and offering proposals or solutions for issues that are more complex or that require greater

specialization.

– Integrity and ethical behavior in business: appropriate management to establish an environment of business integrity and

ethics, ensuring compliance with regulations and the establishment of internal policies, standards and procedures and other

control measures to prevent and manage risks linked to anti-competitiveness and monopolistic practices, market abuse,

corruption and bribery and money laundering, among others. In addition, BBVA works to prevent and manage conflicts of

interest, adequately address the interests of customers through transparent communication and the prevention and

detection of bad sales practices, among others.

– Cybersecurity: adequate management of measures aimed at guaranteeing the security of the entity at the software and

information security level that prevent theft, attacks or alterations of any type, compromising the credibility and good work

of the company..

Additionally, the analysis has identified four other issues that do not have the same relevance as the previous ones because it is

considered, as a result of the analysis carried out, that they would have a lesser effect on the environment and BBVA's interest

groups, or that the effect that the environment and its interest groups could have on BBVA's activity would be more limited:

– Natural capital: appropriate management of dependencies, impacts, risks and opportunities related to natural capital,

including the development of products and services that support customers in the responsible use of resources, in the

preservation or restoration of biodiversity and the ecosystems; sustainable use and protection of water and marine

resources, prevention and control of pollution and transition to a circular economy. In relation to the Group's direct impact,

improve efficiency in the use of resources (paper, water and energy) and the prevention and management of waste and

pollution in order to reduce the environmental footprint.

– Defense of the human rights: adequate management of employment conditions including fair hiring and remuneration,

occupational health and safety, forced labor, child labor, freedom of association and collective bargaining, equal pay or

discrimination. Responsible supply chain of suppliers (environmental footprint, fair hiring, working conditions of its workers,

discrimination, etc.). In terms of projects and products, the impact on human rights derived from credit activity is measured

(with a focus on large corporate customers in sectors with great environmental or social impact) and the well-being of

customers (accessibility, security, etc.) as well as respect for communities, environmental protection and inclusive

businesses. Process management to prevent, mitigate and remedy potential violations.

– Employees: adequate management and integration of individual differences through the implementation of policies on

discrimination, equality and diversity, as well as conciliation, work disconnection, well-being, prevention of occupational

risks, safety and health of employees (physical and mental ), freedom of association, relationship with unions. etc It

additionally includes talent management, attraction, retention and development measures, with remuneration policies,

competitive salaries, training, career plan, etc.

– Responsible use of data: appropriate management to protect the privacy and security of personal data from personal data

leaks that pose a risk to the rights and freedoms of data subjects.

It should be noted that, with respect to the materiality analysis published in 2022, the number of issues has been reduced to a total of

nine, with the issues “Solvency and financial results” and “Corporate governance and adequate management of all risks” being

deleted as they are cross-cutting aspects included in each and every one of the issues identified.

Additionally, two 2022 customer issues “Simplicity, agility and self-service” and “Financial health and personalized customer advice”

have been grouped into a single more holistic matter “Customers: Accessibility of commercial channels and financial health” and the

two issues from 2022, related to employees “Commitment to employees” and “Diversity and conciliation” – have been included in a

single issue “Employees” that encompasses issues related to measures aimed at properly managing people.

For more details on the sources used, the methodology used, as well as the objectives and degree of progress of these material

matters for the BBVA Group and its stakeholders, see the section “Additional information on the materiality analysis” within chapter

“Additional information” of the BBVA Group Consolidated Management Report.

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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 BBVA. On July 29, 2019, BBVA 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 constitute bribery, revelation of secrets and corruption. 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. Since the beginning of the investigation, BBVA has been proactively collaborating with the Spanish judicial

authorities, including sharing with the courts information obtained in the internal investigation hired by the entity in 2019 to contribute

to the clarification of the facts. As at the date of this Annual Report, no formal accusation against BBVA has been made.

By order of the Criminal Chamber of the National High Court, the pre-trial phase ended on January 29, 2024. It is not possible at this

time to predict the possible outcomes or implications for the Group of this matter, including any fines, damages or harm to the

Group’s reputation caused thereby.

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Organizational Chart

In 2023, the Group's organizational structure remains in line with the one approved by the BBVA Board of Directors at the end of

2018, a structure that meets the objective of continuing to promote the transformation and businesses of the Group, while advancing

in the delimitation of executive functions.

The main aspects of the organizational structure are:

– The Chair is responsible for the management and proper functioning of the Board of Directors, for the functions of

management supervision, for the institutional representation of the entity, as well as for the leadership and promotion of the

group's strategy and its transformation process.

The areas that report to the Chair are those related to the key levers of transformation: Engineering, Talent & Culture and

Data; those related to strategy: Strategy & M&A, Communications and the figure of the Senior Advisor to the Chair; and

those related to the legal field and the Council: Legal and General Secretary.

– The Chief Executive Officer is responsible for the day-to-day management of the Group's businesses, reporting directly to

the Board of Directors on his duties.

The areas that report to the Chief Executive Officer are the business units in the different countries, Corporate & Investment

Banking, Sustainability and Client Solutions, as well as the following global functions: Finance, which integrates accounting

and tax functions, and Global Risk Management.

– Lastly, certain areas of control have a direct report of those responsible to the Board of Directors through the

corresponding committees. These control areas are Internal Audit and Regulation & Internal Control, the area in charge of

the relationship with supervisors and regulators, the monitoring and analysis of regulatory trends and the development of

the Group's regulatory agenda, and the management of derived risks of regulatory compliance issues.

Information related to article 8 of the European Taxonomy

Regulation (EU) 2020/852 of the European Parliament and of the Council, of June 18, 2020 (hereinafter, the Taxonomy Regulation),

regarding the establishment of a framework to facilitate sustainable investments, has as its objective to establish the criteria to

determine whether an economic activity is considered environmentally sustainable, in line with the objective of keeping global

warming below 1.5 ºC compared to pre-industrial levels and with the European Green Deal.

Article 8 additionally establishes certain obligations of disclosure of non-financial information to companies subject to the Non-

Financial Reporting Directive (hereinafter NFRD).

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Based on this, financial institutions must include in their Non-Financial Information Report certain indicators relating to sustainable

economic activities according to the EU taxonomy.

The Taxonomy Regulation identifies six environmental objectives:

1. Climate change mitigation;

2. Climate change adaptation;

3. Sustainable use and protection of water and marine resources;

4. Transition to a circular economy;

5. Pollution prevention and control;

6. Protection and restoration of biodiversity and ecosystems

Based on these objectives, the regulation has also developed technical criteria to evaluate whether an activity is environmentally

sustainable.

The first step is to determine if an activity falls within those detailed as eligible by the EU taxonomy, which are those that can

potentially contribute to one or more of the environmental objectives. An economic activity, to be considered eligible, must be

included in the delegated acts that develop the European taxonomy, regardless of whether that economic activity does not meet any

or all of the technical screening criteria established in those delegated acts and ultimately cannot be classified. as environmentally

sustainable.

Subsequently, once eligibility has been determined, it has to  be checked whether the activity is aligned according to the EU

taxonomy, to this end, it should be verified that the following technical screening criteria are met:

– The activity contributes substantially to one or more of the six environmental objectives.

– The activity does not significantly harm any of the other environmental objectives (hereinafter  DNSH).

– The activity is carried out in accordance with the minimum social and human rights safeguards (hereinafter MSS). OECD

Guidelines for Multinational Enterprises and the United Nations Guiding Principles on Business and Human Rights, including

the principles and rights set out in the eight fundamental Conventions referred to in the International Labor Organization

Declaration on fundamental principles and rights at work and the International Bill of Human Rights.

The requirements to disclose information based on the EU taxonomy and the technical screening criteria, have been specified in

successive regulatory developments and in notices on the interpretation and application of EU taxonomy delegated acts. These

obligations establish a progressive calendar for the disclosure.

In this regard, as of December 31, 2023, the disclosure obligations for financial entities are the following:

– Economic activities aligned with the environmental objectives of Mitigation and Adaptation to Climate Change. In the recent

publication of Delegated Regulation (EU) 2023/2485 that complements the Taxonomy Regulation of mitigation and

adaptation objectives, new economic activities have been included, for which BBVA has no exposure to eligible activities.

– Specific breakdowns on the alignment of some activities related to Nuclear energy and Gas

– Eligible Economic Activities for the environmental objectives of Sustainable use and protection of water and marine

resources; Transition to a circular economy; Pollution prevention and control; and Protection and restoration of biodiversity

and ecosystems.

It should be noted that those economic activities that are not included within the Taxonomy framework or that do not comply with all

of their requirements should not be considered to be harmful or to have a negative impact on the environment, but only that they do

not meet all the conditions to be part of this classification

Aligned Economic Activities for the environmental objectives of

climate change Mitigation and Adaptation

The economic activities of credit institutions are reflected in the different products and services they offer to customers as well as in

the investments they make to manage their equity and liquidity. These activities are considered aligned in accordance with the EU

taxonomy to the extent that the activities that carry out certain counterparties of those products or investments are aligned

considering the regulations.

To calculate the alignment of their activity,  credit institutions shall consider whether the lending granted to a counterparty has a

general purpose, or whether it responds to a specific purpose.

General Purpose Lending

Non-financial companies that are subject to the NFRD Directive should have published for the first time, in their management reports

as of end of the 2022 financial year, their indicators (KPIs) 19 related to the objectives of mitigation and adaptation to climate change: i)

turnover and ii) its investments in fixed assets (CapEx) and operating expenses (OpEx). From 2024 onwards, the indicators

corresponding to the rest of the environmental objectives will be added to these publications.

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19 The template in Annex VI of the Delegated Disclosure Act of Article 8 is the reference for GAR disclosures: i) Covered assets (GAR, off-balance sheet), ii) GAR: information by

sector, iii) Stock of GAR KPIs, iv) GAR KPI flow, v) Financial guarantees, assets and management. The original EU taxonomy tables and the necessary notes with details on the

perimeter and methodology are found in section “5.3 Tables relating to Article 8 of the European Taxonomy” of this report.

The information published by non-financial companies subject to the NFRD is necessary so that financial institutions can calculate the

eligibility and alignment of certain exposures recorded in their assets. In this way, the information published by these counterparties is

used to calculate the proportion of the general purpose exposure aligned with the EU taxonomy. The Group has obtained the data

published by certain companies through an external provider and uses it to calculate the alignment of the general purpose financing

granted to them. Likewise, public customer information has been used to more accurately reflect eligible activities, which represents

an evolution of the granular information of the main EU customers.

The indicators (KPIs) established by the regulation for credit institutions offer an exhaustive breakdown of the bank's exposures to

activities covered (eligible) by the EU taxonomy, and additionally those that are not only eligible, but that meet all the requirements. of

the taxonomy to be considered sustainable (aligned).

Specific Purpose Lending

The alignment with the EU taxonomy of the financing that is granted for a purpose or destination that the entity knows, must be

analyzed taking into account all the requirements established by the aforementioned technical screening criteria (i) substantial

contribution, ii) do significant harm and iii) minimum social safeguards.

In order to determine if a specific lending does not cause significant harm (DNSH), it must be demonstrated, based on requirements 

established by the regulation. that it does not harm the remaining environmental objectives. Thus, the financing granted to a company

that contributes substantially to the climate change mitigation objective must also guarantee compliance with the DNSH criteria on

the rest of the objectives. For example, in relation to the activity “generation of electricity using solar photovoltaic technology”, which

is a key technology for the transition towards renewable energies in the EU, under the criterion of non-significant damage to the

circular economy objective, the expectation is that availability is evaluated and, when feasible, equipment and components with high

durability and recyclability are used, as well as being easy to disassemble and restore," according to the taxonomy regulation.

BBVA considers the substantial contribution criteria of the specific purpose lending, however, the degree of maturity regarding the

implementation and usability of the EU taxonomy in the banking industry makes it currently complex to establish a similar process to

guarantee compliance with DNSH and MSS. Therefore, a portion of the specific financing granted by BBVA that substantially

contributes to an environmental objective is not included in the alignment metrics. BBVA has identified specific financing with a

substantial contribution to other specific products such as project financing, cars or other products or activities included in the EU

taxonomy that have not been included in the alignment metrics for the reasons described above. As an exception, loans granted to

families (households) intended for the purchase of newly built, highly energy efficient homes 20, under the assumption that they have

followed the technical building standards in force for this type of property that include requirements to implement practical more

sustainable construction methods, which reduce the risks of environmental deterioration as well as mitigate the consequences of

certain adverse atmospheric impacts.

Green Asset Ratio

The Green Asset Ratio (GAR) is an indicator to reflect the extent to which certain assets on the bank balance sheet are aligned with

the EU taxonomy. This indicator has been prepared following the regulatory definitions of the European Commission. Currently, the

EU taxonomy methodology does not allow financial institutions to include in the numerator of sustainability ratios those exposures to

companies not subject to the Non-Financial Reporting Directive (NFRD). Therefore, exposures on companies domiciled in a third

country outside the EU and those on EU companies that are not subject to said Directive, for example, the vast majority of SMEs are

excluded from the numerator although they are part of the denominator. This implies, in In practice, any eligible economic activity

that is being financed outside the EU will not be counted in the ratio (with limited exceptions). This structural characteristic of the GAR

leads to large differences depending on each bank's business model, its customer base and its geographical footprint. This structural

characteristic of the GAR leads to large differences depending on each bank's business model, its customer base and its geographical

footprint.

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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.

20 In accordance with a conservative approach, only properties that meet the criterion of substantial contribution to climate change mitigation described in section 7.7 are

included. “Acquisition and ownership of buildings” and that a non-inferred energy efficiency certificate is available.

			Climate Change (CCM) + (CCA)
			TURNOVER				CAPEX
	Total [gross] carrying amount		Of which towards taxonomy relevant sectors (Taxonomy- eligible)		Of which environmentally sustainable (Taxonomy- aligned)		Of which towards taxonomy relevant sectors (Taxonomy- eligible)		Of which environmentally sustainable (Taxonomy-aligned)
	Million €	%	Million €	%	Million €	%	Million €	%	Million €	%
GAR - Covered assets in both numerator and denominator	173,663	35.38%	90,826	33.10%	2,131	0.78%	91,651	33.40%	3,253	1.19%
Financial undertakings	51,483		5,292		0		5,277		0
Non-financial undertakings	22,230		6,504		1,474		7,344		2,595
Households	96,020		78,480		657		78,480		657
Of which loans collateralised by residential immovable property	70,392		70,392		657		70,392		657
Other assets (local administrations, foreclosed assets)	3,930		550		1		550		1
Assets excluded from the numerator for GAR calculation (covered in the denominator)	100,721	20.52%
Non-financial undertakings	82,806
SMEs and NFCs (other than SMEs) not subject to NFRD disclosure obligations	55,045
Non-EU country counterparties not subject to NFRD disclosure obligations	27,761
Derivatives	780
On demand interbank loans	2,570
Cash and cash-related assets	990
Other categories of assets (e.g. Goodwill, commodities etc.)	13,575
Total GAR assets	274,384	55.89%
Assets not covered for GAR calculation	216,531	44.11%
Central governments and Supranational issuers	53,965
Central banks exposure	45,738
Trading book	116,828
Total assets	490,915	100.00%
Financial guarantees	18,784		1,045		365		1,655		1,030
Assets under management	19,047		37		16		50		33
Of which debt securities	1,075		13		4		17		8
Of which equity instruments	237		24		12		33		25
General note: this table does not include all the sections of Annex VI (1.Covered assets (GAR,off-bal)) of the EU Taxonomy disclosure delegated regulation 2021/2178. The original EU taxonomy tables and the necessary detailed notes on perimeter and methodology are provided below.

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Transition activities included in EU taxonomy (Nuclear and Gas)

Commission Delegated Regulation (EU) 2022/1214 of March 9, 2022 establishes the requirements that are necessary for the

economic activities of energy generation with natural gas and nuclear power plants to be included within the taxonomy of the EU,

since they are considered transition activities. Nuclear energy, which is described as "low carbon" and "subject to strict environmental

and safety conditions that ensure respect for the principle of do no significant harm, it can play a role in the transition towards climate

neutrality." Regarding electricity generation with natural gas, it is considered less polluting than other alternatives, such as coal.

The activities included in the Nuclear and Gas delegated act (European Union Taxonomy (EUT) Activity) are the following:

– Nuclear Energy:

– Pre-commercial phases of advanced technologies to produce energy from nuclear processes with minimal waste

from the fuel cycle

– Construction and safe operation of new nuclear power plants for the generation of electricity or heat, including the

production of hydrogen, using the best available technologies.

– Generation of electricity from nuclear energy in existing facilities

– Energy from gaseous fossil fuels:

– Generation of electricity from gaseous fossil fuels

– High-efficiency cogeneration of heat/cooling and electricity from gaseous fossil fuels

– Production of heat/cooling from gaseous fossil fuels in an efficient urban heating and cooling system

The BBVA Group's exposure to gas and nuclear power generation activities of NFRD customers (subject to EU non-financial reporting

directive) amounts to 176 million euros, of which only 8 million are considered aligned in accordance with the taxonomy according to

the turnover information, and 10 million in the case of investments in fixed assets (CapEx).

RATIOS (BBVA S.A., MILLION EUROS) - TURNOVER BASED
	2023
Eligible activities according to the EU Taxonomy for energy generation with gas and nuclear from NFRD clients	176
Aligned activities with the EU Taxonomy for energy generation with gas and nuclear from NFRD clients	8

New environmental objectives included in EU taxonomy

Commission Delegated Regulation (EU) 2023/2486 of 27 June 2023 completes the EU taxonomy, establishing the technical selection

criteria to determine economic activities that contribute to environmental objectives that had not already been included in the

taxonomy: i) the sustainable use and protection of water and marine resources, ii) the transition to a circular economy, iii) the

prevention and control of pollution, iv) the protection and recovery of biodiversity and ecosystems, and establishes new requirements

for the disclosure of specific public information about these economic activities.

In fiscal year 2023, credit institutions must publish the exposure to eligible economic activities included in the aforementioned

delegated regulation. When an economic activity contributes substantially to multiple environmental objectives, for the purposes of

the calculation, it is assigned to the most significant environmental objective (generally Climate Change Mitigation (CCM)), avoiding

double counting at the same time.

BBVA’s exposure ratio to activities included in the delegated regulation of the 4 environmental objectives recently covered in the

taxonomy is 0.70% and the exposure to non-eligible activities is 29.49%, taking into account all the environmental objectives

published to date. To estimate eligibility, given that the delegated regulation is recently published and there has been no time for

NFRD customers to publish their degree of eligibility, the customer's economic activity information that is used for internal risk

management has been used. and which is based on the Statistical Nomenclature of Economic Activities of the European Community

(NACE).

Trading portfolio

Global Markets is the area that manages BBVA's trading portfolio, and is part of the CIB business area which, as already mentioned,

has developed a Sustainable Products framework

The trading portfolio mainly responds to two different activities. The first consists of promoting that customers have products to

manage their own risks or make their investments and, the second, managing the risks inherent to the trading portfolio.

The main activity carried out considering some ESG factor comes from facilitating the issuance of bonds (DCM) 21 with some ESG

characteristics by clients. Client demand for other types of trading book products to manage their own ESG risks has proven to be still

limited and sporadic.

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21 Debt Capital Markets

Regarding the management of the risks inherent to the trading portfolio, this is carried out under a strict risk-reward angle, where ESG

factors do not currently represent a key factor (unless market dynamics or profitability are turn towards them).

The exposure on the trading portfolio amounts to 24% of the total assets. In accordance with the deadlines established by Regulation

(EU) 2020/852 and its delegated regulations, BBVA will disclose quantitative information on trading exposures that comply with the

EU taxonomy, including the general composition, observed trends, objectives and politics for the first time at the end of the 2025

financial year.

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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.

SUMMARY OF THE KPIs TO BE DISCLOSED BY CREDIT INSTITUTIONS
	Total environmentally sustainable assets (1)	KPI (2)	KPI (3)	% coverage (over total assets)(4)
Green asset ratio (GAR) stock	2,131	0.78%	1.19%	55.89%
	Total environmentally sustainable activities	KPI	KPI	% coverage (over total assets)
GAR (flow)
Trading book
Financial guarantees	365	1.95%	5.48%
Assets under management	16	0.09%	0.17%
Fees and commissions income (5)
(1) The figure corresponding to the total environmentally sustainable assets (turnover), in line with the Pillar III ESG summary.
(2) based on the Turnover KPI of the counterparty.
(3) based on the CapEx KPI of the counterparty, except for lending activities where for general lending Turnover KPI is used.
(4) % of assets covered by the KPI over banks´ total assets.
(5) Fees and commissions income from services other than lending and AuM.

ASSETS FOR THE CALCULATION OF GAR - TURNOVER
Million EUR	Disclosure reference date T
	Total [gross] carrying amount	Climate Change Mitigation (CCM)					Climate Change Adaptation (CCA)					TOTAL (CCM + CCA)
		Of which towards taxonomy relevant sectors (Taxonomy-eligible)					Of which towards taxonomy relevant sectors (Taxonomy-eligible)					Of which towards taxonomy relevant sectors (Taxonomy-eligible)
			Of which environmentally sustainable (Taxonomy-aligned)					Of which environmentally sustainable (Taxonomy-aligned)					Of which environmentally sustainable (Taxonomy-aligned)
				Of which specialised lending	Of which transitional	Of which enabling			Of which specialised lending	Of which adaptation	Of which enabling			Of which specialised lending	Of which transitional	Of which enabling
GAR - Covered assets in both numerator and denominator
Loans and advances, debt securities and equity instruments not HfT eligible for GAR calculation	173,663	89,982	2,012	—	119	682	844	119	—	—	9	90,826	2,131	—	119	691
Financial corporations	51,483	4,940	—	—	—	—	352	—	—	—	—	5,292	—	—	—	—
Credit institutions	21,630	2,252	—	—	—	—	252	—	—	—	—	2,504	—	—	—	—
Loans and advances	13,080	1,626	—	—	—	—	151	—	—	—	—	1,777	—	—	—	—
Debt securities, including UoP	2,870	627	—	—	—	—	100	—	—	—	—	727	—	—	—	—
Equity instruments	5,681	—	—		—	—	—	—			—	—	—		—	—
Other financial corporations	29,852	2,688	—	—	—	—	100	—	—	—	—	2,789	—	—	—	—
of which investment firms	925	222	—	—	—	—	—	—	—	—	—	222	—	—	—	—

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Loans and advances	859	222	—	—	—	—	—	—	—	—	—	222	—	—	—	—
Debt securities, including UoP	66	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Equity instruments	—	—	—		—	—	—	—			—	—	—		—	—
of which  management companies	426	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Loans and advances	322	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Debt securities, including UoP	19	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Equity instruments	85	—	—		—	—	—	—			—	—	—		—	—
of which insurance undertakings	1,881	21	—	—	—	—	30	—	—	—	—	51	—	—	—	—
Loans and advances	723	21	—	—	—	—	—	—	—	—	—	21	—	—	—	—
Debt securities, including UoP	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Equity instruments	1,158	—	—		—	—	30	—			—	30	—		—	—
Non-financial corporations	22,230	6,012	1,354	—	119	682	492	119	—	—	9	6,504	1,474	—	119	691
NFCs subject to NFRD disclosure obligations
Loans and advances	18,320	5,807	1,272	—	113	630	466	117	—	—	7	6,273	1,389	—	113	637
Debt securities, including UoP	1,266	131	67	—	6	38	3	3	—	—	2	134	69	—	6	40
Equity instruments	2,644	74	15		—	14	23	—			—	97	15		—	14
Households	96,020	78,480	657	—	—	—	—	—	—	—	—	78,480	657	—	—	—
of which loans collateralised by residential immovable property	70,392	70,392	657	—	—	—	—	—	—	—	—	70,392	657	—	—	—
of which building renovation loans	2,923	2,923	—	—	—	—	—	—	—	—	—	2,923	—	—	—	—
of which motor vehicle loans	5,165	5,165	—	—	—	—	—	—	—	—	—	5,165	—	—	—	—
Local governments financing	3,380	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Collateral obtained by taking possession: residential and commercial immovable properties	550	550	1	—	—	—	—	—	—	—	—	550	1	—	—	—
Other local government financing	3,380	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Other assets excluded from the numerator for GAR calculation (covered in the denominator)	100,721	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Non-financial corporations	82,806
SMEs and NFCs (other than SMEs) not subject to NFRD disclosure obligations	55,045
Loans and advances	54,451
of which loans collateralised by commercial immovable property	8,875
of which building renovation loans	367

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Debt securities	452
Equity instruments	142
Non-EU country counterparties not subject to NFRD disclosure obligations	27,761
Loans and advances	24,633
Debt securities	2,856
Equity instruments	271
Derivatives	780
On demand interbank loans	2,570
Cash and cash-related assets	990
Other assets (e.g. Goodwill, commodities etc.)	13,575
Total GAR assets	274,384	89,982	2,012	—	119	682	844	119	—	—	9	90,826	2,131	—	119	691
Other assets not covered for GAR calculation	216,531
Sovereigns	53,965
Central banks exposure	45,738
Trading book	116,828
Total assets	490,915	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Off-balance sheet exposures - Corporates subject to NFRD disclosure obligations
Financial guarantees	18,784	938	364	0	17	178	107	2	0	0	0	1,045	365	0	17	178
Assets under management	19,047	35	15	0	0	12	2	1	0	0	0	37	16	0	0	12
Of which debt securities	1,075	13	4	0	0	3	0	0	0	0	0	13	4	0	0	3
Of which equity instruments	237	22	11	0	0	10	2	1	0	0	0	24	12	0	0	10
1. The present information has been prepared in accordance with Commission Delegated Regulation (EU) 2021/2178, of July 6, 2021, which supplements Regulation (EU) 2020/852 of the European Parliament and of the Council by specifying the content and the presentation of information on environmentally sustainable economic activities
2. Customers' economic activities are classified as eligible or aligned in accordance with the Delegated Acts supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council. Specifically, the economic activities covered by Delegated Regulations (EU) 2021/2139 on mitigation and adaptation to climate change have been taken into consideration.
3. Customers'  economic activities are classified as eligible or aligned taking into account the modifications implemented by Commission Delegated Regulation (EU) 2022/1214 of March 9, 2022, which includes economic activities in certain energy sectors, and Commission Delegated Regulation (EU) 2023/2485 of 27 June 2023 establishing additional technical criteria.
4. The data includes the most significant BBVA Group entities that correspond to 96.5% of the total assets and represent in the best possible way the Group information required by current regulations. 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 result
5. NFRD counterparties are those subject to Directive 2014/95/EU (the Non-Financial Reporting Directive or NFRD), such as large listed companies, banks and insurance companies, with more than 500 employees. BBVA identifies NFRD counterparties mainly in two ways: i) review of the registered office in a country of the European Union and ii) more than 500 employees. In the event that the previous criterion is not met and if the client belongs to a business group, the same review is carried out at the parent company level.
6. Eligibility information for NFRD counterparties is obtained through an external reference provider in the sector, which obtains EU taxonomy KPI information directly from their corporate reports, EINF or equivalent. In the case of NFRD clients for whom the information has not been provided through the previous means, the information from their corporate reports is captured by BBVA or the client's main activity is analyzed to establish their eligibility.
7. Exposure to individuals includes self-employed workers, in which case the activity code (NACE) is reviewed to determine eligibility. The rest of the exposure corresponding to the individual segment is reviewed for the use of funds to be considered eligible, for example, in the case of housing loans. EU Taxonomy activity 7.7 Acquisition and ownership of buildings, EU Taxonomy activity 7.2 Renovation of independently existing buildings, or Cars: EUT 6.5 Transport by motorcycles, passenger cars and light commercial vehicles)
8. While exposures to governments and central banks are excluded from the GAR calculation symmetrically, from the numerator and denominator, financing to small and medium-sized enterprises that do not fall within the scope of the NFRD or financing outside EU (even if they meet the taxonomy criteria requirements) cannot qualify as aligned with the taxonomy. Furthermore, activities not covered by the EU taxonomy will be excluded from the numerator, but not from the denominator of GAR.

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ASSETS FOR THE CALCULATION OF GAR - CAPEX
Million EUR	Disclosure reference date T
	Total [gross] carrying amount	Climate Change Mitigation (CCM)					Climate Change Adaptation (CCA)					TOTAL (CCM + CCA)
		Of which towards taxonomy relevant sectors (Taxonomy-eligible)					Of which towards taxonomy relevant sectors (Taxonomy-eligible)					Of which towards taxonomy relevant sectors (Taxonomy-eligible)
			Of which environmentally sustainable (Taxonomy-aligned)					Of which environmentally sustainable (Taxonomy-aligned)					Of which environmentally sustainable (Taxonomy-aligned)
				Of which specialised lending	Of which transitional	Of which enabling			Of which specialised lending	Of which adaptation	Of which enabling			Of which specialised lending	Of which transitional	Of which enabling
GAR - Covered assets in both numerator and denominator
Loans and advances, debt securities and equity instruments not HfT eligible for GAR calculation	173,663	90,790	3,136	—	120	1,212	861	117	—	—	17	91,651	3,253	—	120	1,229
Financial corporations	51,483	4,923	—	—	—	—	354	—	—	—	—	5,277	—	—	—	—
Credit institutions	21,630	2,185	—	—	—	—	252	—	—	—	—	2,437	—	—	—	—
Loans and advances	13,080	1,588	—	—	—	—	151	—	—	—	—	1,739	—	—	—	—
Debt securities, including UoP	2,870	597	—	—	—	—	100	—	—	—	—	698	—	—	—	—
Equity instruments	5,681	—	—		—	—	—	—			—	—	—		—	—
Other financial corporations	29,852	2,738	—	—	—	—	102	—	—	—	—	2,840	—	—	—	—
of which investment firms	925	220	—	—	—	—	—	—	—	—	—	220	—	—	—	—
Loans and advances	859	220	—	—	—	—	—	—	—	—	—	220	—	—	—	—
Debt securities, including UoP	66	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Equity instruments	—	—	—		—	—	—	—			—	—	—		—	—
of which  management companies	426	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Loans and advances	322	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Debt securities, including UoP	19	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Equity instruments	85	—	—		—	—	—	—			—	—	—		—	—
of which insurance undertakings	1,881	10	—	—	—	—	30	—	—	—	—	40	—	—	—	—
Loans and advances	723	10	—	—	—	—	—	—	—	—	—	10	—	—	—	—
Debt securities, including UoP	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Equity instruments	1,158	—	—		—	—	30	—			—	30	—		—	—
Non-financial corporations	22,230	6,837	2,478	—	120	1,212	507	117	—	—	17	7,344	2,595	—	120	1,229
NFCs subject to NFRD disclosure obligations
Loans and advances	18,320	6,489	2,227	—	110	1,141	488	114	—	—	14	6,977	2,341	—	110	1,154
Debt securities, including UoP	1,266	311	230	—	10	58	4	3	—	—	3	315	234	—	10	62
Equity instruments	2,644	37	21		—	13	15	—			—	52	21		—	13
Households	96,020	78,480	657	—	—	—	—	—	—	—	—	78,480	657	—	—	—

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of which loans collateralised by residential immovable property	70,392	70,392	657	—	—	—	—	—	—	—	—	70,392	657	—	—	—
of which building renovation loans	2,923	2,923	—	—	—	—	—	—	—	—	—	2,923	—	—	—	—
of which motor vehicle loans	5,165	5,165	—	—	—	—	—	—	—	—	—	5,165	—	—	—	—
Local governments financing	3,380	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Collateral obtained by taking possession: residential and commercial immovable properties	550	550	1	—	—	—	—	—	—	—	—	550	1	—	—	—
Other local government financing	3,380	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Other assets excluded from the numerator for GAR calculation (covered in the denominator)	100,721	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Non-financial corporations	82,806
SMEs and NFCs (other than SMEs) not subject to NFRD disclosure obligations	55,045
Loans and advances	54,451
of which loans collateralised by commercial immovable property	8,875
of which building renovation loans	367
Debt securities	452
Equity instruments	142
Non-EU country counterparties not subject to NFRD disclosure obligations	27,761
Loans and advances	24,633
Debt securities	2,856
Equity instruments	271
Derivatives	780
On demand interbank loans	2,570
Cash and cash-related assets	990
Other assets (e.g. Goodwill, commodities etc.)	13,575
Total GAR assets	274,384	90,790	3,136	—	120	1,212	861	117	—	—	17	91,651	3,253	—	120	1,229
Other assets not covered for GAR calculation	216,531
Sovereigns	53,965
Central banks exposure	45,738
Trading book	116,828

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Total assets	490,915	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Off-balance sheet exposures - Corporates subject to NFRD disclosure obligations
Financial guarantees	18,784	1,541	1,028	—	32	272	114	2	—	—	—	1,655	1,030	—	32	272
Assets under management	19,047	48	32	—	1	25	2	1	—	—	—	50	33	—	1	25
Of which debt securities	1,075	17	8	—	1	4	—	—	—	—	—	17	8	—	1	4
Of which equity instruments	237	31	24	—	—	21	2	1	—	—	—	33	25	—	—	21
1. The present information has been prepared in accordance with Commission Delegated Regulation (EU) 2021/2178, of July 6, 2021, which supplements Regulation (EU) 2020/852 of the European Parliament and of the Council by specifying the content and the presentation of information on environmentally sustainable economic activities
2. Customers' economic activities are classified as eligible or aligned in accordance with the Delegated Acts supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council. Specifically, the economic activities covered by Delegated Regulations (EU) 2021/2139 on mitigation and adaptation to climate change have been taken into consideration.
3. Customers'  economic activities are classified as eligible or aligned taking into account the modifications implemented by Commission Delegated Regulation (EU) 2022/1214 of March 9, 2022, which includes economic activities in certain energy sectors, and Commission Delegated Regulation (EU) 2023/2485 of 27 June 2023 establishing additional technical criteria.
4. 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 result
5. NFRD counterparties are those subject to Directive 2014/95/EU (the Non-Financial Reporting Directive or NFRD), such as large listed companies, banks and insurance companies, with more than 500 employees. BBVA identifies NFRD counterparties mainly in two ways: i) review of the registered office in a country of the European Union and ii) more than 500 employees. In the event that the previous criterion is not met and if the client belongs to a business group, the same review is carried out at the parent company level.
6. Eligibility information for NFRD counterparties is obtained through an external reference provider in the sector, which obtains EU taxonomy KPI information directly from their corporate reports, EINF or equivalent. In the case of NFRD clients for whom the information has not been provided through the previous means, the information from their corporate reports is captured by BBVA or the client's main activity is analyzed to establish their eligibility.
7. Exposure to individuals includes self-employed workers, in which case the activity code (NACE) is reviewed to determine eligibility. The rest of the exposure corresponding to the individual segment is reviewed for the use of funds to be considered eligible, for example, in the case of housing loans. EU Taxonomy activity 7.7 Acquisition and ownership of buildings, EU Taxonomy activity 7.2 Renovation of independently existing buildings, or Cars: EUT 6.5 Transport by motorcycles, passenger cars and light commercial vehicles)
8. While exposures to governments and central banks are excluded from the GAR calculation symmetrically, from the numerator and denominator, financing to small and medium-sized enterprises that do not fall within the scope of the NFRD or financing outside EU (even if they meet the taxonomy criteria requirements) cannot qualify as aligned with the taxonomy. Furthermore, activities not covered by the EU taxonomy will be excluded from the numerator, but not from the denominator of GAR.

	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.

GAR SECTOR INFORMATION - TURNOVER
Breakdown by sector - NACE 4 digits level (code and label)	Climate Change Mitigation (CCM)				Climate Change Adaptation (CCA)				TOTAL (CCM + CCA)
	Non-Financial corporates (Subject to NFRD)		SMEs and other NFC not subject to NFRD		Non-Financial corporates (Subject to NFRD)		SMEs and other NFC not subject to NFRD		Non-Financial corporates (Subject to NFRD)		SMEs and other NFC not subject to NFRD
	[Gross] carrying amount		[Gross] carrying amount		[Gross] carrying amount		[Gross] carrying amount		[Gross] carrying amount		[Gross] carrying amount
	Mn EUR	Of which environmentally sustainable (CCM)	Mn EUR	Of which environmentally sustainable (CCM)	Mn EUR	Of which environmentally sustainable (CCA)	Mn EUR	Of which environmentally sustainable (CCA)	Mn EUR	Of which environmentally sustainable (CCM + CCA)	Mn EUR	Of which environmentally sustainable (CCM + CCA)
A.02.10 Silviculture and other forestry activities	1	0	1	1	0	0	0	0	1	1
B.05.10 Mining of hard coal	0	0	0	0	0	0	0	0	0	0
C.16.29 Manufacture of other products of wood; manufacture of articles of cork, straw and plaiting materials	10	0	10	0	0	0	0	0	10	0
C.17.11 Manufacture of pulp	0	0	0	0	0	0	0	0	0	0
C.17.12 Manufacture of paper and paperboard	6	0	6	0	0	0	0	0	6	0
C.17.21 Manufacture of corrugated paper and paperboard and of containers of paper and paperboard	0	0	0	0	0	0	0	0	0	0
C.17.23 Manufacture of paper stationery	0	0	0	0	0	0	0	0	0	0
C.17.29 Manufacture of other articles of paper and paperboard	0	0	0	0	0	0	0	0	0	0
C.20.11 Manufacture of industrial gases	0	0	0	0	0	0	0	0	0	0
C.20.13 Manufacture of other inorganic basic chemicals	11	2	12	2	1	1	0	0	12	2
C.20.14 Manufacture of other organic basic chemicals	107	0	107	0	0	0	0	0	107	0
C.20.15 Manufacture of fertilisers and nitrogen compounds	0	0	0	0	0	0	0	0	0	0
C.20.16 Manufacture of plastics in primary forms	40	0	40	0	0	0	0	0	40	0
C.20.52 Manufacture of glues	0	0	0	0	0	0	0	0	0	0
C.22.11 Manufacture of rubber tyres and tubes; retreading and rebuilding of rubber tyres	0	0	0	0	0	0	0	0	0	0
C.22.22 Manufacture of plastic packing goods	71	0	71	0	0	0	0	0	71	0
C.22.29 Manufacture of other plastic products	6	0	6	0	0	0	0	0	6	0

	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.

C.23.11 Manufacture of flat glass	1	0	1	0	0	0	0	0	1	0
C.23.12 Shaping and processing of flat glass	0	0	0	0	0	0	0	0	0	0
C.23.13 Manufacture of hollow glass	1	0	1	0	0	0	0	0	1	0
C.23.14 Manufacture of glass fibres	4	0	4	0	0	0	0	0	4	0
C.23.31 Manufacture of ceramic tiles and flags	6	0	6	0	0	0	0	0	6	0
C.23.43 Manufacture of ceramic insulators and insulating fittings	10	4	11	5	1	1	0	0	11	5
C.23.51 Manufacture of cement	37	0	37	0	0	0	0	0	37	0
C.23.61 Manufacture of concrete products for construction purposes	0	0	0	0	0	0	0	0	0	0
C.23.63 Manufacture of ready-mixed concrete	4	0	4	0	0	0	0	0	4	0
C.23.64 Manufacture of mortars	1	0	1	0	0	0	0	0	1	0
C.23.91 Production of abrasive products	1	0	1	0	0	0	0	0	1	0
C.23.99 Manufacture of other non-metallic mineral products n.e.c.	0	0	0	0	0	0	0	0	0	0
C.24.10 Manufacture of basic iron and steel and of ferro-alloys	141	98	185	143	45	45	0	0	185	143
C.24.20 Manufacture of tubes, pipes, hollow profiles and related fittings, of steel	0	0	0	0	0	0	0	0	0	0
C.24.32 Cold rolling of narrow strip	1	0	1	0	0	0	0	0	1	0
C.24.42 Aluminium production	4	0	4	0	0	0	0	0	4	0
C.24.51 Casting of iron	9	0	9	0	0	0	0	0	9	0
C.24.52 Casting of steel	0	0	0	0	0	0	0	0	0	0
C.25.11 Manufacture of metal structures and parts of structures	0	0	0	0	0	0	0	0	0	0
C.25.12 Manufacture of doors and windows of metal	0	0	0	0	0	0	0	0	0	0
C.25.50 Forging, pressing, stamping and roll-forming of metal; powder metallurgy	19	0	19	0	0	0	0	0	19	0
C.25.72 Manufacture of locks and hinges	1	0	1	0	0	0	0	0	1	0
C.25.73 Manufacture of tools	1	0	1	0	0	0	0	0	1	0
C.25.92 Manufacture of light metal packaging	0	0	0	0	0	0	0	0	0	0
C.25.99 Manufacture of other fabricated metal products n.e.c.	5	0	5	0	0	0	0	0	5	0
C.26.11 Manufacture of electronic components	0	0	0	0	0	0	0	0	0	0
C.26.30 Manufacture of communication equipment	3	0	3	0	0	0	0	0	3	0

	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.

C.26.51 Manufacture of instruments and appliances for measuring, testing and navigation	0	0	0	0	0	0	0	0	0	0
C.26.60 Manufacture of irradiation, electromedical and electrotherapeutic equipment	140	0	140	0	0	0	0	0	140	0
C.27.11 Manufacture of electric motors, generators and transformers	142	8	143	9	0	0	0	0	143	9
C.27.12 Manufacture of electricity distribution and control apparatus	0	0	0	0	0	0	0	0	0	0
C.27.20 Manufacture of batteries and accumulators	2	1	2	1	0	0	0	0	2	1
C.27.51 Manufacture of electric domestic appliances	0	0	0	0	0	0	0	0	0	0
C.27.90 Manufacture of other electrical equipment	4	0	4	0	0	0	0	0	4	0
C.28.11 Manufacture of engines and turbines, except aircraft, vehicle and cycle engines	13	0	13	0	0	0	0	0	13	0
C.28.15 Manufacture of bearings, gears, gearing and driving elements	0	0	0	0	0	0	0	0	0	0
C.28.22 Manufacture of lifting and handling equipment	3	0	3	0	0	0	0	0	3	0
C.28.29 Manufacture of other general- purpose machinery n.e.c.	16	0	16	0	0	0	0	0	16	0
C.28.91 Manufacture of machinery for metallurgy	6	0	6	0	0	0	0	0	6	0
C.28.99 Manufacture of other special- purpose machinery n.e.c.	88	0	88	0	0	0	0	0	88	0
C.29.10 Manufacture of motor vehicles	543	89	547	93	4	4	0	0	547	93
C.29.31 Manufacture of electrical and electronic equipment for motor vehicles	0	0	0	0	0	0	0	0	0	0
C.29.32 Manufacture of other parts and accessories for motor vehicles	72	0	72	0	0	0	0	0	72	0
C.30.20 Manufacture of railway locomotives and rolling stock	36	36	71	71	36	36	0	0	71	71
C.33.12 Repair of machinery	74	9	74	9	0	0	0	0	74	9
C.33.17 Repair and maintenance of other transport equipment	0	0	0	0	0	0	0	0	0	0
C.33.20 Installation of industrial machinery and equipment	0	0	0	0	0	0	0	0	0	0
D.35.11 Production of electricity	1,055	307	1,076	324	21	17	0	0	1076	324

	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.

D.35.12 Transmission of electricity	378	298	378	298	0	0	0	0	378	298
D.35.13 Distribution of electricity	28	9	28	9	0	0	0	0	28	9
D.35.21 Manufacture of gas	5	0	5	0	0	0	0	0	5	0
D.35.22 Distribution of gaseous fuels through mains	2	0	2	0	0	0	0	0	2	0
D.35.30 Steam and air conditioning supply	9	3	9	3	0	0	0	0	9	3
E.36.00 Water collection, treatment and supply	55	16	56	17	1	1	0	0	56	17
E.37.00 Sewerage	31	16	33	17	1	1	0	0	33	17
E.38.11 Collection of non-hazardous waste	9	5	9	5	0	0	0	0	9	5
E.38.21 Treatment and disposal of non- hazardous waste	1	1	1	1	0	0	0	0	1	1
E.38.32 Recovery of sorted materials	19	3	19	3	0	0	0	0	19	3
F.41.10 Development of building projects	433	0	433	0	0	0	0	0	433	0
F.41.20 Construction of residential and non- residential buildings	698	41	698	42	1	1	0	0	698	42
F.42.11 Construction of roads and motorways	143	52	144	53	1	1	0	0	144	53
F.42.12 Construction of railways and underground railways	217	119	217	120	0	0	0	0	217	120
F.42.91 Construction of water projects	4	2	4	2	0	0	0	0	4	2
F.42.99 Construction of other civil engineering projects n.e.c.	29	17	29	17	0	0	0	0	29	17
F.43.21 Electrical installation	19	7	19	7	0	0	0	0	19	7
F.43.22 Plumbing, heat and air conditioning installation	2	0	2	0	0	0	0	0	2	0
F.43.29 Other construction installation	0	0	0	0	0	0	0	0	0	0
F.43.32 Joinery installation	1	0	1	0	0	0	0	0	1	0
F.43.99 Other specialised construction activities n.e.c.	2	0	2	0	0	0	0	0	2	0
G.46.19 Agents involved in the sale of a variety of goods	0	0	0	0	0	0	0	0	0	0
G.46.69 Wholesale of other machinery and equipment	0	0	0	0	0	0	0	0	0	0
G.46.72 Wholesale of metals and metal ores	0	0	0	0	0	0	0	0	0	0
G.46.90 Non-specialised wholesale trade	4	3	4	3	0	0	0	0	4	3

	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.

G.47.19 Other retail sale in non-specialised stores	0	0	0	0	0	0	0	0	0	0
H.49.10 Passenger rail transport, interurban	245	1	245	1	0	0	0	0	245	1
H.49.20 Freight rail transport	0	0	0	0	0	0	0	0	0	0
H.49.31 Urban and suburban passenger land transport	74	0	74	0	0	0	0	0	74	0
H.49.32 Taxi operation	61	2	61	2	0	0	0	0	61	2
H.49.39 Other passenger land transport n.e.c.	3	0	3	0	0	0	0	0	3	0
H.49.41 Freight transport by road	73	0	73	0	0	0	0	0	73	0
H.49.50 Transport via pipeline	0	0	0	0	0	0	0	0	0	0
H.50.20 Sea and coastal freight water transport	7	7	7	7	0	0	0	0	7	7
H.50.30 Inland passenger water transport	0	0	0	0	0	0	0	0	0	0
H.51.10 Passenger air transport	0	0	0	0	0	0	0	0	0	0
H.51.21 Freight air transport	0	0	0	0	0	0	0	0	0	0
H.52.21 Service activities incidental to land transportation	7	0	7	0	0	0	0	0	7	0
H.52.22 Service activities incidental to water transportation	0	0	0	0	0	0	0	0	0	0
H.52.23 Service activities incidental to air transportation	0	0	0	0	0	0	0	0	0	0
H.52.24 Cargo handling	0	0	0	0	0	0	0	0	0	0
H.52.29 Other transportation support activities	72	54	72	54	0	0	0	0	72	54
H.53.20 Other postal and courier activities	24	0	24	0	0	0	0	0	24	0
I.55.10 Hotels and similar accommodation	0	0	0	0	0	0	0	0	0	0
J.59.11 Motion picture, video and television programme production activities	0	0	37	0	37	0	0	0	37	0
J.60.20 Television programming and broadcasting activities	0	0	8	1	8	1	0	0	8	1
J.61.90 Other telecommunications activities	0	0	8	8	8	8	0	0	8	8
J.62.01 Computer programming activities	0	0	0	0	0	0	0	0	0	0
J.62.02 Computer consultancy activities	123	0	123	0	0	0	0	0	123	0
J.62.09 Other information technology and computer service activities	61	22	63	25	2	2	0	0	63	25
J.63.11 Data processing, hosting and related activities	97	0	97	0	0	0	0	0	97	0

	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.

K.64.99 Other financial service activities, except insurance and pension funding n.e.c.	1	0	1	0	0	0	0	0	1	0
K.65.12 Non-life insurance	0	0	0	0	0	0	0	0	0	0
L.68.10 Buying and selling of own real estate	228	101	228	101	0	0	0	0	228	101
L.68.20 Renting and operating of own or leased real estate	0	0	0	0	0	0	0	0	0	0
M.70.22 Business and other management consultancy activities	0	0	0	0	0	0	0	0	0	0
M.71.12 Engineering activities and related technical consultancy	87	13	87	13	0	0	0	0	87	13
M.71.20 Technical testing and analysis	0	0	0	0	0	0	0	0	0	0
M.72.11 Research and experimental development on biotechnology	0	0	0	0	0	0	0	0	0	0
M.72.19 Other research and experimental development on natural sciences and engineering	0	0	0	0	0	0	0	0	0	0
M.74.90 Other professional, scientific and technical activities n.e.c.	0	0	57	0	57	0	0	0	57	0
N.77.11 Renting and leasing of cars and light motor vehicles	62	2	62	2	0	0	0	0	62	2
N.77.12 Renting and leasing of trucks	0	0	0	0	0	0	0	0	0	0
N.77.39 Renting and leasing of other machinery, equipment and tangible goods n.e.c.	2	0	2	0	0	0	0	0	2	0
N.79.11 Travel agency activities	0	0	0	0	0	0	0	0	0	0
N.80.20 Security systems service activities	0	0	129	0	129	0	0	0	129	0
N.81.21 General cleaning of buildings	0	0	0	0	0	0	0	0	0	0
N.81.29 Other cleaning activities	0	0	0	0	0	0	0	0	0	0
N.82.99 Other business support service activities n.e.c.	0	0	0	0	0	0	0	0	0	0
O.84.11 General public administration activities	0	0	105	0	105	0	0	0	105	0
P.85.20 Primary education	0	0	0	0	0	0	0	0	0	0
P.85.59 Other education n.e.c.	0	0	0	0	0	0	0	0	0	0
Q.86.10 Hospital activities	0	0	10	0	10	0	0	0	10	0
Q.86.90 Other human health activities	0	0	5	0	5	0	0	0	5	0
Q.87.10 Residential nursing care activities	0	0	2	0	2	0	0	0	2	0

	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.

Q.87.20 Residential care activities for mental retardation, mental health and substance abuse	0	0	1	0	1	0	0	0	1	0
Q.87.30 Residential care activities for the elderly and disabled	0	0	3	0	3	0	0	0	3	0
Q.87.90 Other residential care activities	0	0	13	0	13	0	0	0	13	0
R.90.03 Artistic creation	0	0	2	0	2	0	0	0	2	0
R.91.04 Botanical and zoological gardens and nature reserves activities	0	0	0	0	0	0	0	0	0	0
1. Exposures of the banking book to sectors covered (eligible) by the taxonomy (NACE sectors at the fourth level of detail), using the relevant NACE codes according to the economic activities of the counterparty.
2. The present information has been prepared in accordance with Commission Delegated Regulation (EU) 2021/2178, of July 6, 2021, which supplements Regulation (EU) 2020/852 of the European Parliament and of the Council by specifying the content and the presentation of information on environmentally sustainable economic activities
3. Customers' economic activities are classified as eligible or aligned in accordance with the Delegated Acts supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council. Specifically, the economic activities covered by Delegated Regulations (EU) 2021/2139 on mitigation and adaptation to climate change have been taken into consideration.
4. Customers' economic activities are classified as eligible or aligned taking into account the modifications implemented by Commission Delegated Regulation (EU) 2022/1214 of March 9, 2022, which includes economic activities in certain energy sectors, and Commission Delegated Regulation (EU) 2023/2485 of 27 June 2023 establishing additional technical criteria.
5. 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 result
6. NFRD counterparties are those subject to Directive 2014/95/EU (the Non-Financial Reporting Directive or NFRD), such as large listed companies, banks and insurance companies, with more than 500 employees. BBVA identifies NFRD counterparties mainly in two ways: i) review of the registered office in a country of the European Union and ii) more than 500 employees. In the event that the previous criterion is not met and if the client belongs to a business group, the same review is carried out at the parent company level.
7. Eligibility information for NFRD counterparties is obtained through an external reference provider in the sector, which obtains EU taxonomy KPI information directly from their corporate reports, EINF or equivalent. In the case of NFRD clients for whom the information has not been provided through the previous means, the information from their corporate reports is captured by BBVA or the client's main activity is analyzed to establish their eligibility.
8. While exposures to governments and central banks are excluded from the GAR calculation symmetrically, from the numerator and denominator, financing to small and medium-sized enterprises that do not fall within the scope of the NFRD or financing outside EU (even if they meet the taxonomy criteria requirements) cannot qualify as aligned with the taxonomy. Furthermore, activities not covered by the EU taxonomy will be excluded from the numerator, but not from the denominator of GAR.

GAR SECTOR INFORMATION - CAPEX
Breakdown by sector - NACE 4 digits level (code and label)	Climate Change Mitigation (CCM)				Climate Change Adaptation (CCA)				TOTAL (CCM + CCA)
	Non-Financial corporates (Subject to NFRD)		SMEs and other NFC not subject to NFRD		Non-Financial corporates (Subject to NFRD)		SMEs and other NFC not subject to NFRD		Non-Financial corporates (Subject to NFRD)		SMEs and other NFC not subject to NFRD
	[Gross] carrying amount		[Gross] carrying amount		[Gross] carrying amount		[Gross] carrying amount		[Gross] carrying amount		[Gross] carrying amount
	Mn EUR	Of which environmentally sustainable (CCM)	Mn EUR	Of which environmenta lly sustainable (CCM)	Mn EUR	Of which environmentally sustainable (CCA)	Mn EUR	Of which environmenta lly sustainable (CCA)	Mn EUR	Of which environmentally sustainable (CCM + CCA)	Mn EUR	Of which environmenta lly sustainable (CCM + CCA)
A.02.10 Silviculture and other forestry activities	19	19			11	11			30	30
B.05.10 Mining of hard coal	0	0			0	0			0	0
B.09.10 Support activities for petroleum and natural gas extraction	0	0			0	0			0	0
C.11.01 Distilling, rectifying and blending of spirits	0	0			0	0			0	0
C.11.02 Manufacture of wine from grape	2	0			0	0			2	0

	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.

C.16.29 Manufacture of other products of wood; manufacture of articles of cork, straw and plaiting materials	10	0			0	0			10	0
C.17.11 Manufacture of pulp	0	0			0	0			0	0
C.17.12 Manufacture of paper and paperboard	6	0			0	0			6	0
C.17.21 Manufacture of corrugated paper and paperboard and of containers of paper and paperboard	0	0			0	0			0	0
C.17.23 Manufacture of paper stationery	0	0			0	0			0	0
C.17.29 Manufacture of other articles of paper and paperboard	0	0			0	0			0	0
C.19.20 Manufacture of refined petroleum products	0	0			0	0			0	0
C.20.11 Manufacture of industrial gases	0	0			0	0			0	0
C.20.13 Manufacture of other inorganic basic chemicals	8	3			1	1			10	4
C.20.14 Manufacture of other organic basic chemicals	134	1			0	0			135	1
C.20.15 Manufacture of fertilisers and nitrogen compounds	0	0			0	0			0	0
C.20.16 Manufacture of plastics in primary forms	18	2			0	0			18	2
C.20.52 Manufacture of glues	0	0			0	0			0	0
C.22.11 Manufacture of rubber tyres and tubes; retreading and rebuilding of rubber tyres	0	0			0	0			0	0
C.22.22 Manufacture of plastic packing goods	71	0			0	0			71	0
C.22.29 Manufacture of other plastic products	6	0			0	0			6	0
C.23.11 Manufacture of flat glass	1	0			0	0			1	0
C.23.12 Shaping and processing of flat glass	0	0			0	0			0	0
C.23.13 Manufacture of hollow glass	1	0			0	0			1	0
C.23.14 Manufacture of glass fibres	4	0			0	0			4	0
C.23.31 Manufacture of ceramic tiles and flags	6	0			0	0			6	0
C.23.43 Manufacture of ceramic insulators and insulating fittings	7	2			1	1			7	3
C.23.51 Manufacture of cement	29	0			0	0			29	0
C.23.61 Manufacture of concrete products for construction purposes	0	0			0	0			0	0
C.23.63 Manufacture of ready-mixed concrete	4	0			0	0			4	0

	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.

C.23.64 Manufacture of mortars	1	0			0	0			1	0
C.23.91 Production of abrasive products	1	0			0	0			1	0
C.23.99 Manufacture of other non-metallic mineral products n.e.c.	0	0			0	0			0	0
C.24.10 Manufacture of basic iron and steel and of ferro-alloys	118	83			45	45			163	128
C.24.20 Manufacture of tubes, pipes, hollow profiles and related fittings, of steel	0	0			0	0			0	0
C.24.32 Cold rolling of narrow strip	1	0			0	0			1	0
C.24.42 Aluminium production	4	0			0	0			4	0
C.24.51 Casting of iron	9	0			0	0			9	0
C.24.52 Casting of steel	0	0			0	0			0	0
C.25.11 Manufacture of metal structures and parts of structures	0	0			0	0			0	0
C.25.12 Manufacture of doors and windows of metal	0	0			0	0			0	0
C.25.50 Forging, pressing, stamping and roll-forming of metal; powder metallurgy	19	0			0	0			19	0
C.25.72 Manufacture of locks and hinges	1	0			0	0			1	0
C.25.73 Manufacture of tools	1	0			0	0			1	0
C.25.92 Manufacture of light metal packaging	0	0			0	0			0	0
C.25.99 Manufacture of other fabricated metal products n.e.c.	5	0			0	0			5	0
C.26.11 Manufacture of electronic components	0	0			0	0			0	0
C.26.30 Manufacture of communication equipment	3	0			0	0			3	0
C.26.51 Manufacture of instruments and appliances for measuring, testing and navigation	0	0			0	0			0	0
C.26.60 Manufacture of irradiation, electromedical and electrotherapeutic equipment	140	0			0	0			140	0
C.27.11 Manufacture of electric motors, generators and transformers	163	28			2	2			165	30
C.27.12 Manufacture of electricity distribution and control apparatus	0	0			0	0			0	0
C.27.20 Manufacture of batteries and accumulators	6	3			0	0			6	3
C.27.51 Manufacture of electric domestic appliances	0	0			0	0			0	0
C.27.90 Manufacture of other electrical equipment	4	0			0	0			4	0

	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.

C.28.11 Manufacture of engines and turbines, except aircraft, vehicle and cycle engines	13	0			0	0			13	0
C.28.15 Manufacture of bearings, gears, gearing and driving elements	0	0			0	0			0	0
C.28.22 Manufacture of lifting and handling equipment	3	0			0	0			3	0
C.28.29 Manufacture of other general- purpose machinery n.e.c.	30	0			0	0			30	0
C.28.91 Manufacture of machinery for metallurgy	6	0			0	0			6	0
C.28.99 Manufacture of other special- purpose machinery n.e.c.	88	0			0	0			88	0
C.29.10 Manufacture of motor vehicles	398	133			12	12			410	145
C.29.31 Manufacture of electrical and electronic equipment for motor vehicles	0	0			0	0			0	0
C.29.32 Manufacture of other parts and accessories for motor vehicles	72	0			0	0			72	0
C.30.20 Manufacture of railway locomotives and rolling stock	36	32			36	32			71	64
C.33.12 Repair of machinery	117	17			0	0			117	17
C.33.17 Repair and maintenance of other transport equipment	0	0			0	0			0	0
C.33.20 Installation of industrial machinery and equipment	0	0			0	0			0	0
D.35.11 Production of electricity	1919	1347			8	7			1927	1354
D.35.12 Transmission of electricity	506	469			0	0			506	469
D.35.13 Distribution of electricity	14	1			0	0			14	1
D.35.21 Manufacture of gas	23	18			0	0			23	18
D.35.22 Distribution of gaseous fuels through mains	11	8			0	0			11	8
D.35.23 Trade of gas through mains	0	0			0	0			0	0
D.35.30 Steam and air conditioning supply	9	7			0	0			9	7
E.36.00 Water collection, treatment and supply	36	9			2	2			37	10
E.37.00 Sewerage	14	10			2	2			16	12
E.38.11 Collection of non-hazardous waste	4	3			0	0			4	3
E.38.21 Treatment and disposal of non- hazardous waste	7	7			0	0			7	7
E.38.32 Recovery of sorted materials	20	3			0	0			20	3
E.39.00 Remediation activities and other waste management services	0	0			0	0			0	0
F.41.10 Development of building projects	433	0			0	0			433	0

	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.

F.41.20 Construction of residential and non- residential buildings	465	16			0	0			465	16
F.42.11 Construction of roads and motorways	138	33			0	0			138	33
F.42.12 Construction of railways and underground railways	84	18			1	1			84	19
F.42.22 Construction of utility projects for electricity and telecommunications	1	1			0	0			1	1
F.42.91 Construction of water projects	2	0			0	0			2	0
F.42.99 Construction of other civil engineering projects n.e.c.	25	18			0	0			25	18
F.43.12 Site preparation	14	3			0	0			14	3
F.43.21 Electrical installation	46	33			0	0			46	33
F.43.22 Plumbing, heat and air conditioning installation	1	0			0	0			1	0
F.43.29 Other construction installation	0	0			0	0			0	0
F.43.32 Joinery installation	1	0			0	0			1	0
F.43.99 Other specialised construction activities n.e.c.	1	0			0	0			1	0
G.46.19 Agents involved in the sale of a variety of goods	0	0			0	0			0	0
G.46.31 Wholesale of fruit and vegetables	0	0			0	0			0	0
G.46.69 Wholesale of other machinery and equipment	0	0			0	0			0	0
G.46.72 Wholesale of metals and metal ores	0	0			0	0			0	0
G.46.76 Wholesale of other intermediate products	0	0			0	0			0	0
G.46.90 Non-specialised wholesale trade	0	0			0	0			0	0
G.47.19 Other retail sale in non-specialised stores	3	0			0	0			3	0
H.49.10 Passenger rail transport, interurban	237	2			0	0			237	2
H.49.20 Freight rail transport	0	0			0	0			0	0
H.49.31 Urban and suburban passenger land transport	74	0			0	0			74	0
H.49.32 Taxi operation	127	10			0	0			127	10
H.49.39 Other passenger land transport n.e.c.	3	0			0	0			3	0
H.49.41 Freight transport by road	60	1			0	0			60	1
H.49.50 Transport via pipeline	1	1			0	0			1	1
H.50.20 Sea and coastal freight water transport	7	7			0	0			7	7
H.50.30 Inland passenger water transport	0	0			0	0			0	0
H.51.10 Passenger air transport	0	0			0	0			0	0

	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.

H.51.21 Freight air transport	0	0			0	0			0	0
H.52.21 Service activities incidental to land transportation	7	0			0	0			7	0
H.52.22 Service activities incidental to water transportation	3	0			0	0			3	0
H.52.23 Service activities incidental to air transportation	0	0			0	0			0	0
H.52.24 Cargo handling	0	0			0	0			0	0
H.52.29 Other transportation support activities	94	13			0	0			94	13
H.53.20 Other postal and courier activities	24	0			0	0			24	0
I.55.10 Hotels and similar accommodation	0	0			0	0			0	0
I.56.21 Event catering activities	1	0			0	0			1	0
I.56.29 Other food service activities	0	0			0	0			0	0
J.59.11 Motion picture, video and television programme production activities	0	0			9	0			9	0
J.60.20 Television programming and broadcasting activities	0	0			22	0			22	0
J.62.01 Computer programming activities	0	0			0	0			0	0
J.62.02 Computer consultancy activities	123	0			0	0			123	0
J.62.09 Other information technology and computer service activities	49	12			1	1			51	13
J.63.11 Data processing, hosting and related activities	40	0			0	0			40	0
K.64.99 Other financial service activities, except insurance and pension funding n.e.c.	0	0			0	0			0	0
K.65.12 Non-life insurance	0	0			0	0			0	0
L.68.10 Buying and selling of own real estate	482	80			0	0			482	80
L.68.20 Renting and operating of own or leased real estate	0	0			0	0			0	0
M.71.12 Engineering activities and related technical consultancy	98	24			0	0			98	24
M.71.20 Technical testing and analysis	0	0			0	0			0	0
M.72.11 Research and experimental development on biotechnology	0	0			0	0			0	0
M.72.19 Other research and experimental development on natural sciences and engineering	0	0			0	0			0	0
M.74.90 Other professional, scientific and technical activities n.e.c.	0	0			57	0			57	0
N.77.11 Renting and leasing of cars and light motor vehicles	61	1			0	0			61	1
N.77.12 Renting and leasing of trucks	0	0			0	0			0	0

	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.

N.77.39 Renting and leasing of other machinery, equipment and tangible goods n.e.c.	2	0			0	0			2	0
N.79.11 Travel agency activities	0	0			0	0			0	0
N.80.20 Security systems service activities	0	0			129	0			129	0
N.81.10 Combined facilities support activities	0	0			0	0			0	0
N.81.21 General cleaning of buildings	0	0			0	0			0	0
N.81.29 Other cleaning activities	0	0			0	0			0	0
N.82.99 Other business support service activities n.e.c.	0	0			0	0			0	0
O.84.11 General public administration activities	0	0			105	0			105	0
P.85.20 Primary education	0	0			0	0			0	0
P.85.59 Other education n.e.c.	0	0			0	0			0	0
Q.86.10 Hospital activities	0	0			10	0			10	0
Q.86.90 Other human health activities	0	0			5	0			5	0
Q.87.10 Residential nursing care activities	0	0			33	0			33	0
Q.87.20 Residential care activities for mental retardation, mental health and substance abuse	0	0			1	0			1	0
Q.87.30 Residential care activities for the elderly and disabled	0	0			3	0			3	0
Q.87.90 Other residential care activities	0	0			13	0			13	0
R.90.03 Artistic creation	0	0			0	0			0	0
1. Exposures of the banking book to sectors covered (eligible) by the taxonomy (NACE sectors at the fourth level of detail), using the relevant NACE codes according to the economic activities of the counterparty.
2. The present information has been prepared in accordance with Commission Delegated Regulation (EU) 2021/2178, of July 6, 2021, which supplements Regulation (EU) 2020/852 of the European Parliament and of the Council by specifying the content and the presentation of information on environmentally sustainable economic activities
3. Customers' economic activities are classified as eligible or aligned in accordance with the Delegated Acts supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council. Specifically, the economic activities covered by Delegated Regulations (EU) 2021/2139 on mitigation and adaptation to climate change have been taken into consideration.
4. Customers' economic activities are classified as eligible or aligned taking into account the modifications implemented by Commission Delegated Regulation (EU) 2022/1214 of March 9, 2022, which includes economic activities in certain energy sectors, and Commission Delegated Regulation (EU) 2023/2485 of 27 June 2023 establishing additional technical criteria.
5. 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 result
6. NFRD counterparties are those subject to Directive 2014/95/EU (the Non-Financial Reporting Directive or NFRD), such as large listed companies, banks and insurance companies, with more than 500 employees. BBVA identifies NFRD counterparties mainly in two ways: i) review of the registered office in a country of the European Union and ii) more than 500 employees. In the event that the previous criterion is not met and if the client belongs to a business group, the same review is carried out at the parent company level.
7. Eligibility information for NFRD counterparties is obtained through an external reference provider in the sector, which obtains EU taxonomy KPI information directly from their corporate reports, EINF or equivalent. In the case of NFRD clients for whom the information has not been provided through the previous means, the information from their corporate reports is captured by BBVA or the client's main activity is analyzed to establish their eligibility.
8. While exposures to governments and central banks are excluded from the GAR calculation symmetrically, from the numerator and denominator, financing to small and medium-sized enterprises that do not fall within the scope of the NFRD or financing outside EU (even if they meet the taxonomy criteria requirements) cannot qualify as aligned with the taxonomy. Furthermore, activities not covered by the EU taxonomy will be excluded from the numerator, but not from the denominator of GAR.

	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.

GAR KPI STOCK - TURNOVER
% (compared to total covered assets in the denominator)	Disclosure reference date T
	Climate Change Mitigation (CCM)					Climate Change Adaptation (CCA)					TOTAL (CCM + CCA)
	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)					Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)					Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)					Proporti on of total assets covered
		Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)					Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)					Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)
			Of which specialised lending	Of which transitional	Of which enabling			Of which specialised lending	Of which transitional	Of which enabling			Of which specialised lending	Of which transitional	Of which enabling
GAR - Covered assets in both numerator and denominator
Loans and advances, debt securities and equity instruments not HfT eligible for GAR calculation	51.81	1.16	—	0.07	0.39	0.49	0.07	—	—	0.01	52.30	1.23	—	0.07	0.40	35.38
Financial corporations	9.6	—	—	—	—	0.68	—	—	—	—	10.28	—	—	—	—	10.49
Credit institutions	10.41	—	—	—	—	1.16	—	—	—	—	11.58	—	—	—	—	4.41
Loans and advances	12.43	—	—	—	—	1.16	—	—	—	—	13.58	—	—	—	—	2.66
Debt securities, including UoP	21.83	—	—	—	—	3.50	—	—	—	—	25.33	—	—	—	—	0.58
Equity instruments	—	—	—		—	—	—	—		—	—	—	—		—	1.16
Other financial corporations	9.01	—	—	—	—	0.34	—	—	—	—	9.34	—	—	—	—	6.08
of which investment firms	23.95	—	—	—	—	—	—	—	—	—	23.95	—	—	—	—	0.19
Loans and advances	25.8	—	—	—	—	—	—	—	—	—	25.8	—	—	—	—	0.17
Debt securities, including UoP	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	0.01
Equity instruments	—	—	—		—	—	—	—		—	—	—	—		—	—
of which  management companies	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	0.09
Loans and advances	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	0.07
Debt securities, including UoP	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Equity instruments	—	—	—		—	—	—	—		—	—	—	—		—	0.02
of which insurance undertakings	1.13	—	—	—	—	1.59	—	—	—	—	2.73	—	—	—	—	0.38
Loans and advances	2.95	—	—	—	—	—	—	—	—	—	2.95	—	—	—	—	0.15
Debt securities, including UoP
Equity instruments	—	—	—		—	2.59	—	—		—	2.59	—	—		—	0.24
Non-financial corporations	27.04	6.09	—	0.53	3.07	2.21	0.54	—	—	0.04	29.26	6.63	—	0.53	3.11	4.53
NFCs subject to NFRD disclosure obligations	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Loans and advances	31.7	6.94	—	0.62	3.44	2.54	0.64	—	—	0.04	34.24	7.58	—	0.62	3.48	3.73
Debt securities, including UoP	10.33	5.28	—	0.44	3.02	0.24	0.20	—	—	0.13	10.57	5.49	—	0.44	3.15	0.26
Equity instruments	2.81	0.58	—		0.54	0.86	—	—		—	3.67	0.58	—		0.54	0.54
Households	81.73	0.68	—	—	—	—	—	—	—	—	81.73	0.68	—	—	—	19.56
of which loans collateralised by residential immovable property	100	0.93	—	—	—	—	—	—	—	—	100	0.93	—	—	—	14.34
of which building renovation loans	100	—	—	—	—	—	—	—	—	—	100	—	—	—	—	0.6
of which motor vehicle loans	100	—	—	—	—	—	—	—	—	—	100		—	—	—	1.05

	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.

Local governments financing	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	0.69
Collateral obtained by taking possession: residential and commercial immovable properties	100	0.10	—	—	—	—	—	—	—	—	100	0.10	—	—	—	0.11
Other local government financing	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	0.69
Total GAR assets	33	0.73	—	0.04	0.25	0.31	0.04	—	—	—	33	0.78	—	0.04	0.25	56
1. The present information has been prepared in accordance with Commission Delegated Regulation (EU) 2021/2178, of July 6, 2021, which supplements Regulation (EU) 2020/852 of the European Parliament and of the Council by specifying the content and the presentation of information on environmentally sustainable economic activities
2. Customers' economic activities are classified as eligible or aligned in accordance with the Delegated Acts supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council. Specifically, the economic activities covered by Delegated Regulations (EU) 2021/2139 on mitigation and adaptation to climate change have been taken into consideration.
3. Clients' economic activities are classified as eligible or aligned taking into account the modifications implemented by Commission Delegated Regulation (EU) 2022/1214 of March 9, 2022, which includes economic activities in certain energy sectors, and Commission Delegated Regulation (EU) 2023/2485 of 27 June 2023 establishing additional technical criteria.
4. 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 result
5. NFRD counterparties are those subject to Directive 2014/95/EU (the Non-Financial Reporting Directive or NFRD), such as large listed companies, banks and insurance companies, with more than 500 employees. BBVA identifies NFRD counterparties mainly in two ways: i) review of the registered office in a country of the European Union and ii) more than 500 employees. In the event that the previous criterion is not met and if the client belongs to a business group, the same review is carried out at the parent company level.
6. Eligibility information for NFRD counterparties is obtained through an external reference provider in the sector, which obtains EU taxonomy KPI information directly from their corporate reports, EINF or equivalent. In the case of NFRD clients for whom the information has not been provided through the previous means, the information from their corporate reports is captured by BBVA or the client's main activity is analyzed to establish their eligibility.
7. Exposure to individuals includes self-employed workers, in which case the activity code (NACE) is reviewed to determine eligibility. The rest of the exposure corresponding to the individual segment is reviewed for the use of funds to be considered eligible, for example, in the case of housing loans. EU Taxonomy activity 7.7 Acquisition and ownership of buildings, EU Taxonomy activity 7.2 Renovation of independently existing buildings, or Cars: EUT 6.5 Transport by motorcycles, passenger cars and light commercial vehicles)
8. While exposures to governments and central banks are excluded from the GAR calculation symmetrically, from the numerator and denominator, financing to small and medium-sized enterprises that do not fall within the scope of the NFRD or financing outside EU (even if they meet the taxonomy criteria requirements) cannot qualify as aligned with the taxonomy. Furthermore, activities not covered by the EU taxonomy will be excluded from the numerator, but not from the denominator of GAR.

GAR KPI STOCK - CAPEX
% (compared to total covered assets in the denominator)	Disclosure reference date T
	Climate Change Mitigation (CCM)					Climate Change Adaptation (CCA)					TOTAL (CCM + CCA)
	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)					Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)					Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)					Proporti on of total assets covered
		Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)					Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)					Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)
			Of which specialised lending	Of which transitional	Of which enabling			Of which specialised lending	Of which transitional	Of which enabling			Of which specialised lending	Of which transitional	Of which enabling
GAR - Covered assets in both numerator and denominator
Loans and advances, debt securities and equity instruments not HfT eligible for GAR calculation	52.28	1.81	—	0.07	0.70	0.50	0.07	—	—	0.01	52.78	1.87	—	0.07	0.71	35.38
Financial corporations	9.56	—	—	—	—	0.69	—	—	—	—	10.25	—	—	—	—	10.49
Credit institutions	10.1	—	—	—	—	1.16	—	—	—	—	11.27	—	—	—	—	4.41
Loans and advances	12.14	—	—	—	—	1.16	—	—	—	—	13.3	—	—	—	—	2.66
Debt securities, including UoP	20.8	—	—	—	—	3.50	—	—	—	—	24.31	—	—	—	—	0.58
Equity instruments	—	—	—		—	—	—	—		—	—	—	—		—	1.16
Other financial corporations	9.17	—	—	—	—	0.34	—	—	—	—	9.51	—	—	—	—	6.08
of which investment firms	23.79	—	—	—	—	—	—	—	—	—	23.79	—	—	—	—	0.19
Loans and advances	25.62	—	—	—	—	—	—	—	—	—	25.62	—	—	—	—	0.17

	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.

Debt securities, including UoP	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	0.01
Equity instruments	—	—	—		—	—	—	—		—	—	—	—		—	—
of which  management companies	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	0.09
Loans and advances	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	0.07
Debt securities, including UoP	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Equity instruments	—	—	—		—	—	—	—		—	—	—	—		—	0.02
of which insurance undertakings	0.53	—	—	—	—	1.59	—	—	—	—	2.13	—	—	—	—	0.38
Loans and advances	1.39	—	—	—	—	—	—	—	—	—	1.39	—	—	—	—	0.15
Debt securities, including UoP	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Equity instruments	—	—	—		—	2.59	—	—		—	2.59	—	—		—	0.24
Non-financial corporations	30.75	11.15	—	0.54	5.45	2.28	0.53	—	—	0.08	33.04	11.68	—	0.54	5.53	4.53
NFCs subject to NFRD disclosure obligations	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Loans and advances	35.42	12.16	—	0.60	6.23	2.67	0.62	—	—	0.08	38.09	12.78	—	0.60	6.30	3.73
Debt securities, including UoP	24.53	18.20	—	0.83	4.62	0.31	0.26	—	—	0.26	24.84	18.46	—	0.83	4.88	0.26
Equity instruments	1.41	0.80	—		0.50	0.56	—	—		—	1.98	0.80	—		0.50	0.54
Households	81.73	0.68	—	—	—	—	—	—	—	—	81.73	0.68	—	—	—	19.56
of which loans collateralised by residential immovable property	100.00	0.93	—	—	—	—	—	—	—	—	100.00	0.93	—	—	—	14.34
of which building renovation loans	100.00	—	—	—	—	—	—	—	—	—	100.00	—	—	—	—	0.60
of which motor vehicle loans	100.00	—	—	—	—	—	—	—	—	—	100.00		—	—	—	1.05
Local governments financing	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	0.69
Collateral obtained by taking possession: residential and commercial immovable properties	100.00	0.10	—	—	—	—	—	—	—	—	100.00	0.10	—	—	—	0.11
Other local government financing	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	0.69
Total GAR assets	33.09	1.14	—	0.04	0.44	0.31	0.04	—	—	0.01	33.40	1.19	—	0.04	0.45	55.89
1. The present information has been prepared in accordance with Commission Delegated Regulation (EU) 2021/2178, of July 6, 2021, which supplements Regulation (EU) 2020/852 of the European Parliament and of the Council by specifying the content and the presentation of information on environmentally sustainable economic activities
2. Customers' economic activities are classified as eligible or aligned in accordance with the Delegated Acts supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council. Specifically, the economic activities covered by Delegated Regulations (EU) 2021/2139 on mitigation and adaptation to climate change have been taken into consideration.
3. Clients' economic activities are classified as eligible or aligned taking into account the modifications implemented by Commission Delegated Regulation (EU) 2022/1214 of March 9, 2022, which includes economic activities in certain energy sectors, and Commission Delegated Regulation (EU) 2023/2485 of 27 June 2023 establishing additional technical criteria.
4. 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 result
5. NFRD counterparties are those subject to Directive 2014/95/EU (the Non-Financial Reporting Directive or NFRD), such as large listed companies, banks and insurance companies, with more than 500 employees. BBVA identifies NFRD counterparties mainly in two ways: i) review of the registered office in a country of the European Union and ii) more than 500 employees. In the event that the previous criterion is not met and if the client belongs to a business group, the same review is carried out at the parent company level.
6. Eligibility information for NFRD counterparties is obtained through an external reference provider in the sector, which obtains EU taxonomy KPI information directly from their corporate reports, EINF or equivalent. In the case of NFRD clients for whom the information has not been provided through the previous means, the information from their corporate reports is captured by BBVA or the client's main activity is analyzed to establish their eligibility.
7. Exposure to individuals includes self-employed workers, in which case the activity code (NACE) is reviewed to determine eligibility. The rest of the exposure corresponding to the individual segment is reviewed for the use of funds to be considered eligible, for example, in the case of housing loans. EU Taxonomy activity 7.7 Acquisition and ownership of buildings, EU Taxonomy activity 7.2 Renovation of independently existing buildings, or Cars: EUT 6.5 Transport by motorcycles, passenger cars and light commercial vehicles)
8. While exposures to governments and central banks are excluded from the GAR calculation symmetrically, from the numerator and denominator, financing to small and medium-sized enterprises that do not fall within the scope of the NFRD or financing outside EU (even if they meet the taxonomy criteria requirements) cannot qualify as aligned with the taxonomy. Furthermore, activities not covered by the EU taxonomy will be excluded from the numerator, but not from the denominator of GAR.

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KPI OFF-BALANCE SHEET EXPOSURES - TURNOVER
% (compared to total eligible off- balance sheet assets)	Disclosure reference date T
	Climate Change Mitigation (CCM)					Climate Change Adaptation (CCA)				TOTAL (CCM + CCA)
	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)					Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)				Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)
		Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)					Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)				Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)
			Of which specialised lending	Of which transitional	Of which enabling			Of which specialised lending	Of which enabling			Of which specialised lending	Of which transitional	Of which enabling
Financial guarantees (FinGuar KPI)	4.99%	1.94%	—%	0.09%	0.95%	0.57%	0.01%	—%	—%	5.56%	1.95%	—%	0.09%	0.95%
Assets under management (AuM KPI)	0.18%	0.08%	—%	—%	0.06%	0.01%	0.01%	—%	—%	0.19%	0.09%	—%	—%	0.06%
1. Off-balance sheet exposures (financial guarantees and AuM) calculated based on the data disclosed in template 1, on covered assets, and by applying the formulas proposed in this template

KPI OFF-BALANCE SHEET EXPOSURES - CAPEX
% (compared to total eligible off- balance sheet assets)	Disclosure reference date T
	Climate Change Mitigation (CCM)					Climate Change Adaptation (CCA)				TOTAL (CCM + CCA)
	Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)					Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)				Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible)
		Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)					Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)				Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned)
			Of which specialised lending	Of which transitional	Of which enabling			Of which specialised lending	Of which enabling			Of which specialised lending	Of which transitional	Of which enabling
Financial guarantees (FinGuar KPI)	8.20%	5.47%	—%	0.17%	1.45%	0.61%	0.01%	—%	—%	8.81%	5.48%	—%	0.17%	1.45%
Assets under management (AuM KPI)	0.25%	0.17%	—%	—%	0.13%	0.01%	0.01%	—%	—%	0.26%	0.17%	—%	—%	0.13%
1. Off-balance sheet exposures (financial guarantees and AuM) calculated based on the data disclosed in template 1, on covered assets, and by applying the formulas proposed in this template

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NUCLEAR AND FOSSIL GAS RELATED ACTIVITIES
Nuclear energy related activities
The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle.	NO
The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies.	YES
The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades.	YES
Fossil gas related activities
The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels.	YES
The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels.	YES
The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels.	YES

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TAXONOMY-ALIGNED ECONOMIC ACTIVITIES (DENOMINATOR) - TURNOVER
	Amount and proportion (the information is to be presented in monetary amounts and as percentages)
Economic Activities	CCM+CCA		Climate Change mitigation (CCM)		Climate change Adaption (CCA)
	Amount	%	Amount	%	Amount	%
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—	—	—	—	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—	—	—	—	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	6	—	6	—	—	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—	—	—	—	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	2	—	—	—	2	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—	—	—	—	—
Amount and proportion of other taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI	2,123	0.77	2,006	0.73	118	0.04
Total applicable KPI	274,384	0.78	274,384	0.73	274,384	0.04

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TAXONOMY-ALIGNED ECONOMIC ACTIVITIES (DENOMINATOR) - CAPEX
	Amount and proportion (the information is to be presented in monetary amounts and as percentages)
Economic Activities	CCM+CCA		Climate Change mitigation (CCM)		Climate change Adaption (CCA)
	Amount	%	Amount	%	Amount	%
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	0	—	0	—	0	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	1	—	1	—	0	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	9	—	9	—	0	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	0	—	0	—	0	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	0	—	0	—	0	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	0	—	0	—	0	—
Amount and proportion of other taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI	3,243	1.18	3,126	1.14	117	0.04
Total applicable KPI	274,384	1.19	274,384	1.14	274,384	0.04

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TAXONOMY-ALIGNED ECONOMIC ACTIVITIES (NUMERATOR) - TURNOVER
	Amount and proportion (the information is to be presented in monetary amounts and as percentages)
Economic Activities	CCM+CCA		Climate Change mitigation (CCM)		Climate change Adaption (CCA)
	Amount	%	Amount	%	Amount	%
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—	—	—	—	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—	—	—	—	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	6	0.29	6	0.29	—	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—	—	—	—	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	2	0.08	—	—	2	0.08
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—	—	—	—	—
Amount and proportion of other taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the numerator of the applicable KPI	2,123	99.63	2,006	94.11	118	5.52
Total amount and proportion of taxonomy-aligned economic activities in the numerator of the applicable KPI	2,131	100.00	2,012	94.40	119	5.60

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TAXONOMY-ALIGNED ECONOMIC ACTIVITIES (NUMERATOR) - CAPEX
	Amount and proportion (the information is to be presented in monetary amounts and as percentages)
Economic Activities	CCM+CCA		Climate Change mitigation (CCM)		Climate change Adaption (CCA)
	Amount	%	Amount	%	Amount	%
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—	—	—	—	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	1	0.03	1	0.03	—	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	9	0.26	9	0.26	—	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—	—	—	—	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—	—	—	—	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—	—	—	—	—
Amount and proportion of other taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the numerator of the applicable KPI	3,243	99.7	3,126	96.10	117	3.59
Total amount and proportion of taxonomy-aligned economic activities in the numerator of the applicable KPI	3,253	100.00	3,136	96.41	117	3.59

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TAXONOMY-ELIGIBLE BUT NOT TAXONOMY-ALIGNED ECONOMIC ACTIVITIES - TURNOVER
	Amount and proportion (the information is to be presented in monetary amounts and as percentages)
Economic Activities	CCM+CCA		Climate Change mitigation (CCM)		Climate change Adaption (CCA)
	Amount	%	Amount	%	Amount	%
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—	—	—	—	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—	—	—	—	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—	—	—	—	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	161	0.06	161	0.06	—	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	15	0.01	15	0.01	—	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—	—	—	—	—
Amount and proportion of other taxonomy-eligible but not taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI	88,519	32.26	87,795	32.00	725	0.26
Total amount and proportion of taxonomy eligible but not taxonomy- aligned economic activities in the denominator of the applicable KPI	88,695	32.33	87,971	32.06	725	0.26

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TAXONOMY-ELIGIBLE BUT NOT TAXONOMY-ALIGNED ECONOMIC ACTIVITIES - CAPEX
	Amount and proportion (the information is to be presented in monetary amounts and as percentages)
Economic Activities	CCM+CCA		Climate Change mitigation (CCM)		Climate change Adaption (CCA)
	Amount	%	Amount	%	Amount	%
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—	—	—	—	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—	—	—	—	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—	—	—	—	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	31	0.01	31	0.01	—	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	5	—	5	—	—	—
Amount and proportion of taxonomy- aligned economic activity referred to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—	—	—	—	—
Amount and proportion of other taxonomy-eligible but not taxonomy-aligned economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI	88,362	32.20	87,617	31.93	744	0.27
Total amount and proportion of taxonomy eligible but not taxonomy- aligned economic activities in the denominator of the applicable KPI	88,398	32.22	87,654	31.95	744	0.27

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TAXONOMY NON-ELIGIBLE ECONOMIC ACTIVITIES - TURNOVER
Economic Activities	Amount	%
Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—
Amount and proportion of economic activity referred to in row 2 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—
Amount and proportion of economic activity referred to in row 3 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—
Amount and proportion of economic activity referred to in row 4 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—
Amount and proportion of economic activity referred to in row 5 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—
Amount and proportion of economic activity referred to in row 6 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—
Amount and proportion of other taxonomy-non-eligible economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI	183,558	66.90
Total amount and proportion of taxonomy-non-eligible economic activities in the denominator of the applicable KPI	183,558	66.90

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TAXONOMY NON-ELIGIBLE ECONOMIC ACTIVITIES - CAPEX
Economic Activities	Amount	%
Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—
Amount and proportion of economic activity referred to in row 2 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—
Amount and proportion of economic activity referred to in row 3 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—
Amount and proportion of economic activity referred to in row 4 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—
Amount and proportion of economic activity referred to in row 5 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—
Amount and proportion of economic activity referred to in row 6 of Template 1 that is taxonomy-non-eligible in accordance with Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the denominator of the applicable KPI	—	—
Amount and proportion of other taxonomy-non-eligible economic activities not referred to in rows 1 to 6 above in the denominator of the applicable KPI	182,733	66.60
Total amount and proportion of taxonomy-non-eligible economic activities in the denominator of the applicable KPI	182,733	66.60

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3. Financial information

3.1 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:

On the one hand, as of December 31, 2023, the Bank’s total assets increased compared to December 2022 to €490,883m from

€458,888m, mainly due to an increase “Financial assets held for trading” (€116,828m as of December 31, 2023 vs. €91,391m as of

the same date of the prior year) and “Financial assets at amortized cost” which showed an increase from €246,950m as of December

31, 2022 to €261,765m as of December 31, 2023. The increases in these headings were partially offset by the lower balances of

“Financial assets at fair value through other comprehensive income” (€19,426m at the end of 2023 compared to €24,854m as of the

same date of the prior year) and “Cash, cash balances at central banks and other demand deposits” (€49,213m at the end of 2023

compared to €52,973m at December 31, 2022).

On the other hand, as of December 31, 2023, Total Liabilities recorded increases, especially in the headings "Financial liabilities held

for trading" (€108,349m as of December 31, 2022 against €80,853m as of December 31, 2022) and "Financial liabilities at amortized

cost", amounting to €339,476m at the end of 2023 against € 335,941m at the same date last year.

In 2023, the Bank obtained a profit for the year of €4,807 m, compared to €4,816 m of the previous year and the result of the following

factors:

– Net interest income rose during the year, from €3,821m at December 31, 2022 to €5,564m at December 31, 2023, mainly

due to the increase in interest income partially offset by interest expense.

– Gross margin in 2023 stood at €11,020m, compared to €9,503m obtained in 2022, thanks mainly to net interest income,

dividend income and fee and commission income.

– Compared to the previous year, the environment was marked by inflationary pressure, where administrative expenses

increased (€-4,157m in fiscal year 2023 against €-3,755m in fiscal year 2022), mainly due to personal expense.

– The impairment of financial assets remained in line with the previous year while the heading "Impairment or reversal of

impairment of investments in subsidiaries, joint ventures or associates" compares very negatively with the year 2022, due

to a lower reversal in the impairment of Garanti BBVA.

3.2 Capital and solvency

3.2.1 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.

Information about the share buyback program and the shareholder remuneration system is detailed in Note 3 of the accompanying

Financial Statements.

3.2.2 Capital ratios

BBVA's solvency and capital ratios required by the regulation in force in 2022 are outlined in Note 28 of the accompanying Financial

Statements.

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4. Risk management

The Bank's general risk management and control model is integrated into the BBVA Group's general model.

4.1 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 where

sustainability is specifically considered, and the alignment 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 business areas.

The head of the financial risks function at an executive level,  is the Group's Chief Risk Officer, 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, the models and

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 parent-subsidiary relationship model in this area 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.

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In addition, and to ensure 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 committees. 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

(CRC), on the issues detailed below, and by the Executive Committee (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. Additionally, and in a coordinated manner with the

general supervision of financial and non-financial risks carried out by the Risk and Compliance Committee, the Audit Committee and

the Technology and Cybersecurity Committee also assist the Board in the management and control of non-financial risks of an

accounting, tax and reporting nature, and those of a technological nature, respectively.

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. They contain

the basic lines for a consistent  management and control of risks throughoutt the Group, and consistent with the Model and

Risk Appetite Framework;

– and the General risk management and control model described above.

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.

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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 2023, the CRC has held 22 meetings.

Executive Committee

In order to have a comprehensive and complete vision of the progress of the Group's business 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.

IBBVA has an internal control model that is structured into three differentiated levels (“lines of defense”), which constitute the

organizational structure of the Group's internal control model, whose objective is the integral management of the risk life cycle; all

this, in accordance with the best practices developed both in the "Enterprise Risk Management - Integrated Framework" of COSO

(Committee of Sponsoring Organizations of the Treadway Commission) and in the "Framework for Internal Control Systems in

Banking Organizations" prepared by the Bank Basel International Settlements (BIS):

– First line of defense, made up of the Business and Support Areas in charge of managing operational risks in their products,

activities, processes and systems, including those present in activities that could have been outsourced. The Areas must

integrate operational risk management into their day-to-day activities, identifying and evaluating operational risks, carrying

out controls, assessing the sufficiency of their control environment and executing mitigation plans for those risks in which

control weaknesses are identified.

– Second line of defense, made up of: (i) the Non-Financial Risk Units, which are responsible for designing and maintaining the

Group's Operational Risk management model, and assessing the degree of application within the different Areas; and (ii) the

Specialist Control Units in different risk areas, which define the General Framework of Mitigation, Control and Monitoring in

the risks of their respective areas, and carry out an independent comparison on the sufficiency of the control environment

implemented by the first defense line. The Non-Financial Risk Units and the Specialist Units are located in the Regulation

and Internal Control area in order to ensure coordinated action by the second line of defense and to preserve their

independence from the first line of defense.

– Third line of defense, performed by the Internal Audit Area, which: (i) carries out an independent review of the control

model, verifying compliance and the effectiveness of the established general policies; and (ii) provides independent

information on the control environment to the Corporate Assurance Committees.

The Board, with the support of its Committees, supervises the effectiveness of the internal control model through periodic reports

from those responsible for the different lines of defence. In particular, the heads of the Internal Regulation and Control and Internal

Audit areas report at least quarterly to the Board of Directors on the most relevant issues of their control activity; and, in addition,

they report monthly to the Risk and Compliance Committee and the Audit Committee, respectively, and with a greater level of detail,

on the operation of the internal control model and on the independent reviews carried out of the different Bank processes. All of this is

based on the annual plans for each of these functions, which are approved by the respective Board Committees and where the review

of processes related to climate change risk and other sustainability issues is expressly incorporated.

Parent-subsidiary risk relationship model

In accordance with the provisions of the BBVA Group's General Corporate Governance Policy, for integrated management and

supervision in the Group, the Group has a common management and control framework, consisting of basic guidelines (including

strategic-prospective decisions) and General Policies, established by BBVA's corporate bodies for the Group.

For the purpose of transferring the risk strategy and its management and control model to the different subsidiaries of the BBVA

Group and their corresponding specific risk units, a parent-subsidiary relationship model has been designed within the scope of risk

management and control in the BBVA Group.

This relationship model implies a minimum catalog of decisions that must be adopted by the corporate bodies of the subsidiaries in

terms of risks in order to provide them with an adequate governance model coordinated with the parent company. It will be the

responsibility of the head of the Risk function (GRM) of each subsidiary to formulate the proposals that proceed to the corresponding

corporate body for its consideration and, where appropriate, approval, according to the scope of functions that apply.

The approval of these decisions by the corporate bodies of the subsidiaries obliges the risk units of the geographical areas to carry out

a risk monitoring and control plan before their corporate bodies.

Notwithstanding the foregoing, it is considered necessary that certain decisions regarding risks reserved for the consideration of the

corresponding corporate bodies of the subsidiary for their approval, are also subject to the approval of the corporate bodies of BBVA,

in accordance with what is established regulations at all times.

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In the specific case of BBVA, S.A., what is described in this document regarding the coordination of the local risk management

function with the risk function of the parent company BBVA, S.A. is applicable (as in any subsidiary of the Group). And with regard to

the decisions that the corporate bodies of the subsidiaries must adopt, in this case it is the responsibility of the head of the Risk

function of BBVA, S.A. (GRM) formulate the proposals that proceed to the corresponding corporate body for its consideration and,

where appropriate, approval, according to the scope of functions that apply.

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 Core Services and Cross Services in the Corporate Area ofGRM, of the Front for “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.

– Work Out Committee: Its purpose is to analyze and make decisions regarding the admission of wholesale credit risks of

customers classified in Watch List, doubtful risk or write-offs in accordance with the criteria established in the Group, as

well as to be informed of the decisions adopted by the person in charge of the Work Out process in its area of responsibility;

it will also include the approval of proposals on entries, exits and modifications in Watch List, entries and exits in doubtful,

unlikely to pay and pass to write-offs; as well as the approval of other proposals that must be seen in this Committee

according to the established thresholds and criteria.

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– Global Portfolio Management Committee : The executive authority responsible for managing the limits by asset class for

credit risk, equities and real estate not for own use, structural risks, insurance and pension risk and asset management; and

by business area and at group level established in the risk limits planning exercise, which aims to achieve an optimal

combination and composition of portfolios under the restrictions imposed by the Risk Appetite Framework, 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

the BBVA Group.

– 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 and Counterparty Risk Committee: 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 of the Market and

Counterparty Risk activity. It is also responsible for the analysis and decision making (opinion on the risk profile of the

proposal, the mitigants and the risk-return ratio) with respect to the most relevant transactions in the different geographies

in which Global Markets is present.

– 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.

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 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, the 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 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 the rest of the internal regulations, 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.

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.

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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 general mitigation and control frameworks for its risk area and contrasts them with

those actually implemented.

– 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 GRM  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.

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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 seeks to obtain a sound risk-adjusted profitability throughout the cycle through the development of a

responsible universal banking business model, based on values, centered on our customers' needs, focused on

sustainability as an opportunity, 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

sustaining a robust financial position, and facilitating its commitment with sustainable development, as the best way to face

adverse environments without jeopardizing its strategy.

Risk managementat BBVA Group is based on prudent management, an integral and anticipatory view of all risks, that allows

us to adapt to the disruptive risk inherent in the banking business and includes the climate driver, portfolio diversification by

geography, asset classes and client segment, anti-money laundering and financing of terrorism prevention, and

accompanying our clients in achieving their goals and in  the transition towards a sustainable future, to promote profitable

growth and recurrent value creation."

– 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 order to ensure

that the early management of risks complies 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.

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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 income recurrence.

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 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. Identification of the material risks to which BBVA is exposed (risk assessment), which includes the identification of the main

risk events as well as the identification of the main vulnerabilities, both in absolute terms and in relative terms in relation to

the income generation capacity of the Group and its geographical and/or business areas.

2. Monitoring the Group's risk profile and the identified risk factors, through internal, competitor and market indicators,

among others, to anticipate their future development.

3. 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.

4. 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.

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.

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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, within proportionality, 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.

4.2 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.

4.3 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 BBVA.

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

BBVA 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 BBVA 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.

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– Anticipate the potential operational risk to which BBVA 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 BBVA 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 BBVA 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 BBVA and establish means to prevent the same, provided that the

cost/benefit analysis so recommends. To this end, there are procedures in place to evaluate operational events and

mechanisms that allow recording 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 BBVA.

– 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 BBVA and includes three types of metrics and limits:

– Economic capital calculated with the operational losses database of BBVA, considering the corresponding intra-

geographical diversification effects and the additional estimation of potential and emerging risks through stress scenarios.

The economic capital is regularly calculated 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.

– Indicators by risk type: a more granular scheme of metrics (indicators and limits) covering the main types of operational risk

is being implemented. 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 BBVA may be exposed due to the release of new, or modification of

businesses, products, activities, processes or systems or in relations with third parties (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

Operational Risk Admission and Product Governance Committees, both at a corporate and Business Area level, that follow a

delegation structure based on the risk level of proposed initiatives.

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Operational risk monitoring

The purpose of this phase is to check that the target operational risk profile of BBVA 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.

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 BBVA as individual entity, in  the other 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 operational risks map. To that end, a corporate tool of

the Group is used in BBVA S.A.

BBVA 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

BBVA promotes the proactive mitigation of the non-financial risks to which it is exposed and which are identified in the monitoring

activities.

In order to rollout monitoring and anticipated mitigation practices, several cross-sectional plans are being promoted related to

focuses from events, lived by BBVA 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.

Assurance of Operational Risk

Assurance is one of the possible options for managing the operational risk to which BBVA 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.

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BBVA 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’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.

BBVA in Spain, as in other geographical area has a Corporate Assurance Committee chaired by the Country Manager and whose main

functions are:

– Facilitate agile and anticipatory decision-making for the mitigation or assumption of the main risks.

– 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

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 to the Board's Risk

and Compliance Committee.

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4.4 Reputational risk

Reputational risk assessment of the activity in progress

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. As a result of the assessment carried out in

2021, in 2022, 29 mitigation action plans were identified. The 17 plans identified in 2021 as a result of the evaluation of the 2021

financial year have already been concluded.

Reputational risk in new initiatives

The Reputation 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 mitigation controls are proposed.,

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.

4.5 Risk factors

The BBVA Group has processes in place for identifying risks and analyzing scenarios in order to enable the Group 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 analyses 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 (hereinafter "RAF") variables in stress scenarios is

conducted in order to identify possible deviations from the established thresholds. If any such deviations are detected, measures are

taken to seek 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 Group’s business, including the below:

Macroeconomic and geopolitical risks

The Group is sensitive to the deterioration of economic conditions, the alteration of the institutional environment of the countries in

which it operates, and the Group is exposed to sovereign debt especially in Spain, Mexico and Turkey.

The global economy is currently facing a number of extraordinary challenges. The war in Ukraine and the sanctions imposed against

and by Russia have led to significant disruption, instability and volatility in global markets, as well as higher inflation and lower

economic growth, mostly due to higher energy prices, which have stabilized more recently.

Although oil and gas prices have reduced and financial volatility has eased, there is still a risk that geopolitical tensions lead to

additional increases in input prices and financial instability, particularly following the tensions triggered by the armed conflict in the

Middle East, including the recent disruptions to maritime trade routes in the Red Sea.

Another global macroeconomic risk is the possibility of a sharp growth slowdown in China, which could lead to lower GDP expansion

than currently expected in many geographies. Although it may be possible to offset part of the expected growth slowdown through

the adoption of certain fiscal, monetary and regulatory measures by the authorities, there are risks related to tensions in the real

estate markets and the possible effects of the United States economic sanctions, among others.

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Geopolitical and economic risks have also increased in recent years as a result of trade tensions between the United States and China,

Brexit, and the rise of populism, among other factors. Growing tensions may lead, among other things, to a deglobalization of the

world economy, an increase in protectionism, a general reduction of international trade in goods and services and a reduction in the

integration of financial markets, any of which could materially and adversely affect the Group’s business, financial condition and

results.

Moreover, the world economy could be vulnerable to other factors, such as a restrictive monetary policy, in a context of relatively high

inflationary pressures, which could cause a significant growth slowdown - and, even, a sharp economic recession - as well as new

episodes of financial stress.

The Group’s results of operations have been particularly affected by the increases in interest rates adopted by central banks in an

attempt to tame inflation, contributing to the rise in both interest revenue and interest expenses. In addition, the persistence of high

interest rates could adversely affect the Group by reducing the demand for credit and leading to an increase in the default rate of its

borrowers and other counterparties. On the other hand, the process of reducing interest rates has already begun in many

geographies and could begin by mid-2024 in the United States and the Eurozone as well. Moreover, the Group’s results of operations

have been affected by the high inflation in all countries in which BBVA operates, especially Turkey and Argentina.

The Group is exposed, among others, to the following general risks with respect to the economic and institutional environment in the

countries in which it operates: a deterioration in economic activity in the countries in which it operates, including recession scenarios;

more persistent inflationary pressures, which could trigger a more severe tightening of monetary conditions; stagflation due to more

intense or prolonged supply crises; changes in exchange rates; an unfavorable evolution of the real estate market; a significant

increase in oil and gas prices, which would have a negative impact on disposable income levels in areas that are net energy importers,

such as Spain or Turkey, to which the Group is particularly exposed; changes in the institutional environment of the countries in which

the Group operates, which could give rise to sudden and sharp drops in GDP and/or changes in regulatory or government policy,

including in terms of exchange controls and restrictions on the distribution of dividends or the imposition of new taxes or charges;

growth in the public debt or in the external deficit could lead to a downward revision of the credit ratings of the sovereign debt and

even a possible default or restructuring of such debt; and episodes of volatility in the financial markets, which could cause significant

losses for the Group. In particular, in Argentina, the risk of economic and financial turbulence persists in a context of regulatory,

economic and political uncertainty, and in which the adjustments announced by the new government to correct the high economic

distortions, including a strong fiscal adjustment and a significant exchange rate depreciation, have further reinforced short-term

inflationary pressures. In Spain, political, regulatory and economic uncertainty has also increased since the July general elections;

there is a risk that policies could have an adverse impact on the economy. In Mexico, uncertainty is related mainly to the June 2024

elections and the possible policies of the new government. Finally, in Colombia and Peru, climatic factors and greater social conflict

could eventually have a negative impact on the economy..

Any of these factors may have a significant adverse impact on the Group’s business, financial condition and results of operations.

Risks relating to the political, economic and social conditions in

Turkey

In May 2022, the Group increased its shareholding stake in Garanti BBVA (Turkey) from 49.85% to 85.97% following the completion

of a voluntary takeover bid (see Note 3).

There are increasing signs of normalization in economic policy in general, and monetary policy in particular, since the general

elections held in May 2023, which may lead to a gradual correction of the current distortions. Despite the gradual improvement of

macroeconomic conditions, the situation remains relatively unstable, characterized by a gradual depreciation of the Turkish lira, high

inflation, a significant trade deficit, low central bank’s foreign reserves and high external financing costs. The earthquakes of February

2023 deepened Turkey's economic struggles. In addition to the vast human losses caused by it, the earthquakes added pressure on

inflation as well as the external and fiscal balances. Continuing unfavorable economic conditions in Turkey may result in a potential

deterioration in the purchasing power and creditworthiness of the clients of the Group (both individuals and corporations). In addition,

the relatively low official interest rates (despite the recent upward adjustments) in a context of still high inflation, the regulatory and

macroprudential policies affecting the banking sector and currency depreciation have affected and may continue to affect the Group’s

results.

Additionally, certain geopolitical factors, such as the war in Ukraine and the armed conflict in the Middle East, and internal political

developments, generate uncertainty about the evolution of the economy and could trigger scenarios of greater instability.

There can be no assurance that these and other factors will not have an impact on Turkey and will not cause further deterioration of

the Turkish economy, which may have a material adverse effect on the Turkish banking sector and the Group’s business, financial

condition and results of operations in Turkey.

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Regulatory and reputational risks

Financial institutions are exposed to a complex and ever-changing regulatory environment defined by governments and regulators.

Regulatory activity in recent years has affected multiple areas, including changes in accounting standards; strict regulation of capital,

liquidity and remuneration; bank charges (such as the new tax for banks recently implemented in Spain, see Note 38) and taxes on

financial transactions; regulations affecting mortgages, banking products and consumers and users; recovery and resolution

measures; stress tests; prevention of money laundering and terrorist financing; market abuse; conduct in the financial markets; anti-

corruption; and requirements as to the periodic publication of information. Governments, regulatory authorities and other institutions

continually make proposals to strengthen the resistance of financial institutions to future crises. Further, there is an increasing focus

on the climate-related financial risk management capabilities of banks. Any change in the Group’s business that is necessary to

comply with any particular regulations at any given time, especially in Spain, Mexico or Turkey, could lead to a considerable loss of

income, limit the Group’s ability to identify business opportunities, affect the valuation of its assets, force the Group to increase its

prices and, therefore, reduce the demand for its products, impose additional costs on the Group or otherwise adversely affect its

business, financial condition and results of operations.

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 Group could arise and might affect the regular course of business.

New business and 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. Any attack, failure

or deficiency in the Group’s systems could, among other things, lead to the misappropriation of funds of the Group’s clients or the

Group itself and the unauthorized disclosure, destruction or use of confidential information, as well as prevent the normal operation of

the Group and impair its ability to provide services and carry out its internal management. In addition, any attack, failure or deficiency

could result in the loss of customers and business opportunities, damage to computers and systems, violation of regulations

regarding data protection and/or other regulations, exposure to litigation, fines, sanctions or interventions, loss of confidence in the

Group’ s security measures, damage to its reputation, reimbursements and compensation, and additional regulatory compliance

expenses and could have a significant adverse impact on the Group’ s business, financial condition and results of operations.

Legal risks: The financial sector faces an environment of increasing regulatory and litigious pressure, and thus, the various Group

entities are frequently 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 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. 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, 2023 , the Group had €696 million in provisions for the proceedings it is facing (included in the line "Provisions for

taxes and other legal contingencies" in the consolidated balance sheet), of which €539 million correspond to legal contingencies and

€158 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.

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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 BBVA. On July 29, 2019, BBVA 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 constitute bribery, revelation of secrets and corruption. 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. Since the beginning of the investigation, BBVA has been proactively collaborating with the Spanish judicial

authorities, including sharing with the courts information obtained in the internal investigation hired by the entity in 2019 to contribute

to the clarification of the facts. As at the date of this Annual Report, no formal accusation against BBVA has been made.

By order of the Criminal Chamber of the National High Court, the pre-trial phase ended on January 29, 2024. It is not possible at this

time to predict the possible outcomes or implications for the Group of this matter, including any fines, damages or harm to the

Group’s reputation caused thereby.

Risks in connection with climate change

Climate change, which is resulting in an increase in the intensity and frequency of extreme weather events and environmental

degradation, presents both short, medium and long-term risks to the Group and its customers and counterparties, with the risks

expected to increase over time. Risks posed by climate change may be classified into transition and physical risks.

Transition risks refer to changes in, among others, regulations, technologies and market preferences linked to the transition toward a

less carbon-dependent economy, including the following:

– Legal and regulatory risks: Legal and regulatory changes related to how banks are required to manage climate risk or

otherwise affecting banking practices or disclosure of climate-related information may result in higher compliance,

operational and credit risks and costs. Further, legal and regulatory changes may result in legal uncertainty and the existence

of overlapping or conflicting regulatory or other requirements. The Group or its customers or counterparties may be unable

to meet any new requirements on a timely basis or at all. Further, changes in law, including new product and service

specifications, may result in the sudden devaluation of certain assets. Any of these risks may affect the Group and its

customers and counterparties. In addition, in the case of banks, new regulation could include requirements related to

lending, investing, capital and liquidity adequacy and operational resilience. The incorporation of climate risks in the existing

prudential framework is still developing and may result in increased risk weighting of high-carbon-related assets. Moreover,

there are significant risks and uncertainties inherent in the development of adequate climate change-related risk assessment

and modelling capabilities and the collection of customer, third party and other data, which may result in the Group’s

systems or frameworks (or those of its customers and counterparties, where applicable) being inadequate, inaccurate or

susceptible to incorrect customer, third party or other data, any of which could adversely affect the Group’s disclosure and

financial reporting. Further, increased regulation arising from climate change could result in increased litigation and

regulatory investigations and actions.

– Technological risks: Certain of the Group’s customers and counterparties may be adversely affected by the progressive

transition to a low-carbon economy and/or risks and costs associated with new low-carbon technologies. If our customers

and counterparties fail to adapt to the transition to a low-carbon economy, or if the costs of doing so adversely affect their

creditworthiness, this could adversely affect the Group’s relevant loan portfolios.

– Market risks: The Group and certain of the Group’s customers and counterparties may be adversely affected by changes in

market preferences due to, among others, increasing climate change awareness. Further, the funding costs of businesses

that are perceived to be more exposed to climate change could increase. Any of this could result in the reduced

creditworthiness of such customers and counterparties, adversely affecting the Group’s relevant loan portfolios. The Group

and its customers and counterparties could also be adversely affected by changes in prices resulting from shifts in demand

or supply brought by climate change, including prices of energy and raw materials, or by their inability to foresee or hedge

any such changes.

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– Reputational risks: The perception of climate change as a risk by society, shareholders, customers, governments and other

stakeholders continues to increase, including in relation to the financial sector’s activities. This may result in increased

scrutiny of the Group’s activities, as well as its climate change-related policies, goals and disclosure. The Group’s reputation

and ability to attract or retain customers may be harmed if its efforts to reduce environmental and social risks are deemed to

be insufficient or if a perception is generated among the different stakeholders that the Group's statements, actions or

disclosure do not fairly reflect the underlying sustainability profile of the Group, its products, services, goals and/or policies.

The Group may elect not to undertake lending or investing activities that would otherwise have been profitable in order to

avoid reputational harm. Further, divergent views on ESG policies may also have a negative impact on the Group’s reputation.

Increased scrutiny of the Group’s activities, as well as its climate change-related policies, goals and disclosure may result in

litigation and regulatory investigations and actions. The Group has disclosed certain aspirational climate-related goals and

such goals, which are being pursued over the long-term, may prove to be considerably more costly or difficult than currently

expected, or even impossible, to achieve, including as a result of changes in environmental and energy regulation and policy,

the pace of technological change and innovation and the actions of governments, Group’s customers and competitors.

The physical risk arising from climate change could result from increased frequency and/or severity of adverse weather events or the

impact of climate change over the long term. The activities of the Group or those of its customers or counterparties could be

adversely affected by the physical risks arising from climate change. For example, extreme weather events may damage or destroy

the properties and other assets of the Group or those of its customers or counterparties, result in increased costs, or otherwise

disrupt their respective operations (for example, if supply chains are disrupted as a result), diminishing –in the case of the Group’s

customers or counterparties - their repayment capacity and, if applicable, the value of assets pledged as collateral to the Group. The

Group is also exposed to potential long-term risks arising from climate change, such as increases in credit-related costs due to

deteriorating macroeconomic conditions, which may be caused in part by an increase in infectious diseases or other ailments

resulting from climate change. The Group could also be adversely affected by declines in asset values as a result of climate change or

climate change-related risks, reduced availability of insurance and significant interruptions to business operations, and may be

required to change its business models in response to the foregoing.

Any of these factors may have a material adverse effect on the Group’s business, financial condition and results of operations.

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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

On January 18, 2024, a press release from the Constitutional Court of Spain was published announcing the unanimous decision of the

Plenary Session of this jurisdictional body declaring unconstitutional certain measures related to Corporate Income Tax introduced by

the Royal Decree-Law 3/2016. On January 29, 2024, this ruling was published on the website of the Constitutional Court, although the

publication in the Official State Gazette (BOE), as of the date of preparation of these Consolidated Annual Financial Statements

remains pending.

The effects of this ruling will depend on the resolution of each of the claims filed in relation to the affected financial years, so the

calculation of its impact, both with regard to the quantification of the magnitudes affected, as well as regarding their timing, will 

depend on said execution process. It is expected that the impacts of the different execution processes could have a positive

aggregate impact on the Group's total equity, allowing an acceleration in the use of tax credits and a possible recovery of cash from

taxes paid in previous years, all subject to the decisions that, with respect to each financial year and as part of the execution process,

the Group may adopt in this regard and without, in any case, said impact expected to exceed approximately 0.4% of the Bank’s total

equity.

On January 30, 2024, it was announced that a cash distribution in the amount of €0.39 gross per share to be paid in April as a final

dividend for the year 2023 and the execution of a share buyback program of BBVA for an amount of €781 million were planned to be

proposed to the corresponding corporate bodies for consideration as ordinary remuneration to shareholders for 2023, subject to

obtaining the corresponding regulatory authorizations and the communication of the specific terms and conditions of the program

before its execution.

From January 1, 2024 to the date of preparation of these financial statements, no other subsequent events not mentioned above in

these financial statements have taken place that could significantly affect the Bank’s earnings or its equity position.

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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, the Board of Directors of BBVA, on the

occasion of the preparation of the financial statements for 2022, approved the Annual Corporate Governance Report for that year

(which is an integral part of the Management Report) in accordance with 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. The Annual Corporate Governance Report is incorporated by reference in the Management

Report and is published in CNMV´s website (www.cnmv.es) and in the Company´s corporate website (www.bbva.com).

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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, the Board of Directors of BBVA, on the

proposal of the Remuneration Committee, and on the occasion of the preparation of the financial statements for 2022, approved the

Annual Report on the Remuneration of BBVA Directors for that year (which is an integral part of the Management Report) in

accordance with 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. The Annual

Report on the Remuneration of BBVA Directors is incorporated by reference in the Management Report and is published in CNMV´s

website (www.cnmv.com) and in the Company's corporate website (www.bbva.com).

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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.

Disclaimer

This document is for informative purposes only and is not intended to provide financial advice and, therefore, does not constitute, nor

should it be interpreted as, an offer to sell, exchange or acquire, or an invitation for offers to acquire securities issued by any of the

aforementioned companies, or to contract any financial product. Any decision to purchase or invest in securities or contract any

financial product must be made solely and exclusively on the basis of the information made available to such effects by the company

in relation to each specific matter. The information contained in this document is subject to and should be read in conjunction with all

other publicly available information of the issuer.

This document contains forward-looking statements that constitute or may constitute “forward-looking statements” (within the

meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995) with respect to

intentions, objectives, expectations or estimates as of the date hereof, including those relating to future targets of both a financial and

non-financial nature (such as environmental, social or governance (“ESG”) performance targets).

Forward-looking statements may be identified by the fact that they do not refer to historical or current facts and include words such

as “believe”, “expect”, “estimate”, “project”, “anticipate”, “duty”, “intend”, “likelihood”, “risk”, “VaR”, “purpose”, “commitment”,

“goal”, “target” and similar expressions or variations of those expressions. They include, for example, statements regarding future

growth rates or the achievement of future targets, including those relating to ESG performance.

The information contained in this document reflects our current expectations and targets, which are based on various assumptions

and projections, including non-financial considerations such as those related to sustainability. Forward-looking statements are not

guarantees of future results, and actual results may differ materially from those anticipated in the forward-looking statements as a

result of certain risks, uncertainties and other factors. These factors include, but are not limited to, (1) market conditions,

macroeconomic factors, domestic and international stock market movements, exchange rates, inflation and interest rates; (2)

regulatory and oversight factors, political and governmental guidelines, social and demographic factors; (3) changes in the financial

condition, creditworthiness or solvency of our clients, debtors or counterparties, such as changes in default rates, as well as changes

in consumer spending, savings and investment behavior, and changes in our credit ratings; (4) competitive pressures and actions we

take in response thereto; (5) performance of our IT, operations and control systems and our ability to adapt to technological changes;

(6) climate change and the occurrence of natural or man-made disasters, such as an outbreak or escalation of hostilities; and (7) our

ability to appropriately address any ESG expectations or obligations (related to our business, management, corporate governance,

disclosure or otherwise), and the cost thereof. In the particular case of certain targets related to our ESG performance, such as,

decarbonization targets or alignment of our portfolios, the achievement and progress towards such targets will depend to a large

extent on the actions of third parties, such as clients, governments and other stakeholders, and may therefore be materially affected

by such actions, or lack thereof, as well as by other exogenous factors that do not depend on BBVA (including, but not limited to, new

technological developments, regulatory developments, military conflicts, the evolution of climate and energy crises, etc.). Therefore,

these targets may be subject to future revisions.

The factors mentioned in the preceding paragraphs could cause actual future results to differ substantially from those set forth in the

forecasts, intentions, objectives, targets or other forward-looking statements included in this document or in other past or future

documents. Accordingly, results, including those related to ESG performance targets, among others, may differ materially from the

statements contained in the forward-looking statements.

Recipients of this document are cautioned not to place undue reliance on such forward-looking statements.

Past performance or growth rates are not indicative of future performance, results or share price (including earnings per share).

Nothing in this document should be construed as a forecast of results or future earnings.

This document contains in addition to financial information, non-financial information ("NFI") at the individual and consolidated level

of BBVA Group in order to comply with the requirements of Law 11/2018 of 28 December ("Law 11/2018"). The INF has been verified

with a limited scope by a third party and therefore has not been audited by the external auditors of the entity. In its preparation, a

number of estimates and assumptions have been made in various areas and have used measurement, data collection and verification

practices and methodologies, both external and internal, which are substantially different from those applied to financial reporting

and which, in many cases, are under development.

BBVA does not intend, and undertakes no obligation, to update or revise the contents of this or any other document if there are any

changes in the information contained therein, or including the forward-looking statements contained in any such document, as a

result of events or circumstances after the date of such document or otherwise except as required by applicable law.

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.