BBVA (NYSE: BBVA) details 2025 risks, capital and major share buybacks
Filing Impact
Filing Sentiment
Form Type
20-F
Rhea-AI Filing Summary
Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) has filed its Form 20-F annual report for the year ended December 31, 2025. The bank details its global listings, including American Depositary Shares on the New York Stock Exchange and multiple senior and Tier 1 notes.
BBVA reports 5,708,968,700 ordinary shares outstanding as of December 31, 2025 and prepares its consolidated financial statements under IFRS as issued by the IASB and EU-IFRS. The filing highlights significant asset exposure to Spain, Mexico and Turkey, with detailed macroeconomic and political risk discussions.
The report explains hyperinflation accounting for Turkey, Argentina and Venezuela, broad ESG and climate-related risks, and extensive legal and regulatory risk disclosures. BBVA also describes a completed €993 million share buyback (54,316,765 shares, about 0.93% of capital) and a new €3,960 million buyback program.
Positive
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F
OR
For the fiscal year ended December 31 , 2025
OR
For the transition period from ___ to ___
OR
Date of event requiring this shell company report
Commission file number: 1-10110
(Exact name of Registrant as specified in its charter)
BANK BILBAO VIZCAYA ARGENTARIA, S.A.
(Translation of Registrant’s name into English)
(Jurisdiction of incorporation or organization)
(Address of principal executive offices)
Telephone number +34 91 537 7000
(Name, Telephone, E-mail and /or Facsimile Number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of Each Class
Trading Symbol
Name of Each Exchange on which Registered
* The ordinary shares are not listed for trading, but are listed only in connection with the registration of the American Depositary Shares, pursuant to requirements of the New York Stock Exchange.
Securities registered or to be registered pursuant to Section 12(g) of the Act.
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
Title of Each Class | Name of Each Exchange on which Registered | |||||||
Series 6 Non-Step-Up Non-Cumulative Contingent Convertible Perpetual Preferred Tier 1 Securities | Irish Stock Exchange | |||||||
The number of outstanding shares of each class of stock of the Registrant as of December 31, 2025, was:
Ordinary shares, par value €0.49 per share—5,708,968,700
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Yes [ ] No [X]
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer”, “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. [X]
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. [ ]
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). [ ]
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP [ ]
Other [ ]
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
Item 17 [ ] Item 18 [ ]
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
TABLE OF CONTENTS
| PAGE | |||||
| PART I | |||||
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS | 7 | ||||
A. Director and Senior Management | 7 | ||||
B. Advisers | 7 | ||||
C. Auditors | 7 | ||||
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE | 7 | ||||
ITEM 3. KEY INFORMATION | 7 | ||||
A. Selected Consolidated Financial Data | 7 | ||||
B. Capitalization and Indebtedness | 7 | ||||
C. Reasons for the Offer and Use of Proceeds | 7 | ||||
D. Risk Factors | 8 | ||||
ITEM 4. INFORMATION ON THE COMPANY | 23 | ||||
A. History and Development of the Company | 23 | ||||
B. Business Overview | 23 | ||||
C. Organizational Structure | 58 | ||||
D. Property, Plants and Equipment | 58 | ||||
E. Selected Statistical Information | 59 | ||||
F. Competition | 76 | ||||
ITEM 4A. UNRESOLVED STAFF COMMENTS | 79 | ||||
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS | 79 | ||||
A. Operating Results | 84 | ||||
B. Liquidity and Capital Resources | 135 | ||||
C. Research and Development, Patents and Licenses, etc. | 138 | ||||
D. Trend Information | 138 | ||||
E. Critical Accounting Estimates | 139 | ||||
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES | 140 | ||||
A. Directors and Senior Management | 140 | ||||
B. Compensation | 149 | ||||
C. Board Practices | 161 | ||||
D. Employees | 173 | ||||
E. Share Ownership | 176 | ||||
F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation | 178 | ||||
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS | 178 | ||||
A. Major Shareholders | 179 | ||||
B. Related Party Transactions | 179 | ||||
C. Interests of Experts and Counsel | 179 | ||||
ITEM 8. FINANCIAL INFORMATION | 179 | ||||
A. Consolidated Statements and Other Financial Information | 179 | ||||
B. Significant Changes | 183 | ||||
ITEM 9. THE OFFER AND LISTING | 184 | ||||
A. Offer and Listing Details | 184 | ||||
B. Plan of Distribution | 190 | ||||
C. Markets | 190 | ||||
D. Selling Shareholders | 190 | ||||
E. Dilution | 190 | ||||
F. Expenses of the Issue | 190 | ||||
ITEM 10. ADDITIONAL INFORMATION | 191 | ||||
A. Share Capital | 191 | ||||
B. Memorandum and Articles of Association | 191 | ||||
C. Material Contracts | 194 | ||||
D. Exchange Controls | 195 | ||||
E. Taxation | 197 | ||||
F. Dividends and Paying Agents | 201 | ||||
G. Statement by Experts | 201 | ||||
| PAGE | |||||
H. Documents on Display | 201 | ||||
I. Subsidiary Information | 202 | ||||
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 202 | ||||
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES | 203 | ||||
A. Debt Securities | 203 | ||||
B. Warrants and Rights | 203 | ||||
C. Other Securities | 203 | ||||
D. American Depositary Shares | 203 | ||||
| PART II | |||||
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES | 205 | ||||
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 205 | ||||
ITEM 15. CONTROLS AND PROCEDURES | 205 | ||||
ITEM 16. [RESERVED] | 208 | ||||
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT | 208 | ||||
ITEM 16B. CODE OF ETHICS | 208 | ||||
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES | 208 | ||||
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES | 209 | ||||
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS | 209 | ||||
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT | 210 | ||||
ITEM 16G. CORPORATE GOVERNANCE | 210 | ||||
ITEM 16H. MINE SAFETY DISCLOSURE | 211 | ||||
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS | 212 | ||||
ITEM 16J. INSIDER TRADING POLICIES | 212 | ||||
ITEM 16K. CYBERSECURITY | 212 | ||||
| PART III | |||||
ITEM 17. FINANCIAL STATEMENTS | 214 | ||||
ITEM 18. FINANCIAL STATEMENTS | 214 | ||||
ITEM 19. EXHIBITS | 215 | ||||
CERTAIN TERMS AND CONVENTIONS
The terms below are used as follows throughout this report:
•“BBVA”, the “Bank”, the “Company”, the “Group”, the “BBVA Group” or first person personal pronouns, such as “we”, “us” or “our”, mean Banco Bilbao Vizcaya Argentaria, S.A. and its consolidated subsidiaries unless otherwise indicated or the context otherwise requires.
•“BBVA Mexico” means Grupo Financiero BBVA Bancomer, S.A. de C.V. and its consolidated subsidiaries, unless otherwise indicated or the context otherwise requires.
•“Consolidated Financial Statements” means our audited consolidated financial statements as of and for the years ended December 31, 2025, 2024 and 2023, presented in compliance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS-IASB”), as well as in accordance with the International Financial Reporting Standards endorsed by the European Union (“EU-IFRS”) applicable as of December 31, 2025, considering Bank of Spain Circular 4/2017, as well as its successive amendments, and any other legislation governing financial reporting which was, as of the date of preparation of such consolidated financial statements, applicable, and with the format and mark-up requirements established in the EU Delegated Regulation 2019/815 of the European Commission.
•“Garanti BBVA” means Türkiye Garanti Bankası A.Ş., and its consolidated subsidiaries, unless otherwise indicated or the context otherwise requires.
•“Latin America” refers to Mexico and the other countries in which we operate in South America and Central America.
In this report, “$”, “US$”,“USD”, “U.S. dollars”, and “dollars” refer to United States Dollars and “€” and “euro” refer to Euro.
1
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report contains statements that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of forward-looking terminology such as “believe”, “expect”, “estimate”, “forecast”, “project”, “anticipate”, “should”, “intend”, “probability”, “risk”, “VaR”, “target”, “goal”, “objective”, and “future” or by the use of similar expressions or variations on such expressions, or by the discussion of strategy or objectives. Forward-looking statements are based on current plans, estimates and projections, are not guarantees of future performance and are subject to inherent risks, uncertainties and other factors that could cause actual results to differ materially from the future results expressed or implied by such forward-looking statements. The accompanying information in this Annual Report, including, without limitation, the information under the items listed below, identifies important factors that could cause such differences:
•“Item 3. Key Information—Risk Factors”;
•“Item 4. Information on the Company”;
•“Item 5. Operating and Financial Review and Prospects”; and
•“Item 11. Quantitative and Qualitative Disclosures About Market Risk”.
Other important factors that could cause actual results to differ materially from those expressed or implied by forward-looking statements include, among others:
•the deterioration of economic conditions or changes in the institutional environment in the countries in which we operate and/or to whose sovereign debt we are exposed, especially Spain, Mexico and Turkey, including any adverse developments, or the perception that such developments may occur, regarding credit quality, public debt sustainability, economic or fiscal policy and sovereign ratings, particularly Spain’s, Mexico’s and Turkey’s, among other factors. Financial and macroeconomic volatility may increase as a result of, among other factors, U.S. administration policies, including tariffs and fiscal and regulatory changes. The effects of, and uncertainty arising from, these policies and large fiscal deficits could further increase the U.S. risk premium, pushing up long-term sovereign yields and further weakening the U.S. dollar, and they may spark further market instability;
•the effects of geopolitical tensions and economic challenges in recent years including, among other factors, the ongoing conflicts in Ukraine and in the Middle East, the long-standing United States-China rivalry, including recent trade tariffs, the escalation of trade tariffs globally and changes in policies generally. Interventionist actions by the United States in South America could also constitute a significant source of risk. Overall, rising global geopolitical tensions increase uncertainty around the outlook for the world economy and the likelihood of economic and financial disruptions, including a sharp global growth slowdown;
•changes or volatility in interest rates, foreign exchange rates, asset prices, equity markets, commodity prices (including energy prices), inflation or deflation and, in particular, as of the date of this Annual Report, the depreciation of the currencies of the non-euro geographical areas in which we operate, high inflation, stagflation due to more intense or prolonged supply crises, high interest rates in most of the geographical areas where we operate (which may impact default rates) and low real interest rates in Turkey (which may affect our margins);
•adverse developments in emerging economies, in particular Latin America and Turkey, including unfavorable political and economic developments, social instability and changes in governmental policies, including expropriation, nationalization, exchange controls or other limitations on the distribution or repatriation of dividends, international ownership legislation, tax policies, interest rate caps, fee caps and other policies affecting the banking sector, including the “liraization” strategy in Turkey (which seeks to increase the weight of Turkish lira-denominated assets and liabilities of the banking system). Further, emerging economies generally face higher anti-money laundering and environmental, social and governance (“ESG”) risk levels;
•in Spain, political, regulatory and economic uncertainty may have a negative impact on economic activity, and there is a risk that public policies could be adopted that have an adverse impact on the economy or our business;
•downgrades in our credit ratings or in sovereign credit ratings, particularly Spain’s, Mexico’s and Turkey’s respective credit ratings;
2
•the monetary, interest rate and other policies of central banks, and the trade, economic and other policies of governments, in the EU, Spain, Mexico, Turkey, the United States and elsewhere, including the impact of the still-prevailing high interest rates and the escalation of trade tariffs globally on the Group’s results of operations (including potential mark-to-market losses on securities portfolios, reduced demand for credit, increased funding costs and higher default rates). Moreover, any interest rate reductions may result in higher inflation and adversely affect the Group’s results of operations;
•adjustments in the real estate markets in the geographical areas in which we operate, in particular in Spain, Mexico and Turkey;
•the success of our acquisitions and investments, divestitures, mergers, joint ventures and strategic alliances;
•the effects of competition in the markets in which we operate and the rise of neobanks (a new generation of financial institutions that operate exclusively online), which may be affected by regulation or deregulation affecting us or our competitors, and our ability to manage information technology obsolescence, implement technological advances on a timely basis or at all and effectively capture the benefits of emerging technologies, including cloud computing, artificial intelligence, big data analysis, crypto currencies and alternative payment systems;
•our ability to comply with various legal and regulatory regimes and the impact of applicable laws and regulations on our operations, including capital, resolution, liquidity, provision and consumer protection requirements, and the increasing tax burden;
•changes in consumer spending and savings habits, including changes in government policies which may influence spending, saving and investment decisions;
•our ability to continue to access sources of liquidity and funding and our ability to receive dividends and other funds from our subsidiaries;
•the effectiveness of our debt recovery policy, including our ability to recover aged non-performing loans;
•our ability to hedge certain risks economically, including exchange rate risk;
•our ability to address physical, regulatory, reputational, transition and business risks associated with climate change and emerging and developing ESG standards, including our ability to meet any ESG expectations, targets or obligations and the cost thereof;
•our ability to make payments on certain substantial unfunded amounts relating to commitments with personnel;
•the performance of our international operations and our ability to manage such operations;
•weaknesses or failures in the Group’s internal or outsourced processes, systems (including information technology systems) and security;
•weaknesses or failures of our anti-money laundering or anti-terrorism programs, or of our internal policies, procedures, systems and other mitigating measures designed to ensure compliance with applicable anti-corruption laws and sanctions regulations;
•security breaches, including cyber-attacks and identity theft;
•the outcome of legal and regulatory actions and proceedings, both those to which the Group is currently exposed and any others which may arise in the future, including actions and proceedings related to former subsidiaries of the Group or in respect of which the Group may have indemnification obligations, as well as legal and regulatory actions and proceedings against other financial institutions, especially if such actions or proceedings result in rulings that affect the industry generally or lead to changes in the Group’s practices;
•actions that are incompatible with our ethics and compliance standards, and our failure to timely detect or remedy any such actions;
•our success in managing the risks involved in the foregoing, which depends, among other things, on the adequacy of our internal risk models and our ability to anticipate events that are not captured or fully accounted for in the models we use or which otherwise requires us to successfully adjust our risk parameters, risk appetite framework and estimations to account for the foregoing and any changes in market conditions; and
•force majeure and other events beyond our control.
3
Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to release publicly the result of any revisions to these forward-looking statements to reflect events or circumstances after the date hereof, including, without limitation, changes in our business, strategy, targets or expectations, including as a result of the occurrence of unanticipated events.
4
PRESENTATION OF FINANCIAL INFORMATION
Under Regulation (EC) no. 1606/2002 of the European Parliament and of the Council of July 19, 2002, all companies governed by the law of an EU Member State and whose securities are admitted to trading on a regulated market of any Member State must prepare their consolidated financial statements for the years beginning on or after January 1, 2005 in conformity with EU-IFRS. The Bank of Spain issued Circular 4/2017 of November 27, 2017 (“Circular 4/2017”), on Public and Confidential Financial Reporting Rules and Formats, which requires Spanish credit institutions to adapt their accounting system to the principles derived from the adoption of EU-IFRS.
There are no differences between EU-IFRS required to be applied under the Bank of Spain’s Circular 4/2017 and IFRS-IASB as of and for the years ended December 31, 2025, 2024 and 2023. The Consolidated Financial Statements included in this Annual Report are presented in compliance with IFRS-IASB and in accordance with EU-IFRS required to be applied under the Bank of Spain’s Circular 4/2017.
For a description of our critical accounting policies, see “Item 5. Operating and Financial Review and Prospects—Critical Accounting Policies” and Note 2.2 to the Consolidated Financial Statements.
The financial information as of and for the years ended December 31, 2024 and 2023 included herein and in the Consolidated Financial Statements may differ from previously reported financial information as of such dates and for such periods in our respective annual reports on Form 20-F for certain prior years, as a result of certain of the modifications referred to in the section “—Changes in Intra-Group Adjustments” below.
Hyperinflationary Economies
The Turkish, Argentine and Venezuelan economies have been considered hyperinflationary, as defined by IAS 29 “Financial Reporting in Hyperinflationary Economies”, since 2022, 2018 and 2008, respectively. All the components of the financial statements (including income statement items) of entities located in such countries1 (in each case, for any period in which the relevant economy was considered to be hyperinflationary) have been converted at the relevant period-end exchange rate for inclusion in our consolidated financial statements, and the resulting conversion differences have been recorded within “Accumulated other comprehensive income (loss)” in accordance with IAS 21 “Effects of Changes in Foreign Exchange Rates”.
For information on the application of IAS 29 “Financial Reporting in Hyperinflationary Economies” and IAS 21 “Effects of Changes in Foreign Exchange Rates” to hyperinflationary economies, see Note 2.2.18 to the Consolidated Financial Statements.
Share Buyback Program
On January 30, 2025, BBVA announced a share buyback program for an amount of €993 million. The execution of the program was carried out externally by Citigroup Global Markets Europe AG.
On December 10, 2025, BBVA announced the completion of the share buyback program upon reaching the maximum monetary amount, having acquired a total of 54,316,765 BBVA shares, between October 31 and December 10, 2025, representing, approximately, 0.93% of BBVA’s share capital as of December 10, 2025.
On December 23, 2025, BBVA notified the partial execution of the share capital reduction resolution adopted by the Annual General Shareholders’ Meeting of BBVA held on March 21, 2025, reducing BBVA’s share capital in a nominal amount of €26,615,214.85 and the consequent redemption, charged to unrestricted reserves, of 54,316,765 BBVA shares of €0.49 par value each acquired derivatively by BBVA in execution of the program and which were held as treasury shares.
On December 19, 2025, BBVA announced a further share buyback program for an amount of €3,960 million. The execution is being implemented externally by the independent manager J.P. Morgan SE.
For more information on the share buyback programs, see “Item 8. Financial Information—Consolidated Statements and Other Financial Information—Dividends—Share Buyback Programs” and Notes 4, 26, 27, 28 and 29 to the Consolidated Financial Statements.
1 With respect to Turkey, IAS 29 does not apply to the operations outside Turkey of the Türkiye Garanti Bankası A.Ş. group of companies, and in particular to the financial statements of Garanti Bank S.A. in Romania and GarantiBank BBVA International N.V. in the Netherlands.
5
Changes in Intra-Group Adjustments
Following the publication of our consolidated financial statements as of and for the years ended December 31, 2024, 2023 and 2022 included in our annual report on Form 20-F for the year ended December 31, 2024, certain immaterial balance sheet amounts related to specific activities undertaken by the business units were reallocated between the operating segments and the Corporate Center. As a result, certain expenses were reallocated, in particular, between Spain, Rest of Business and the Corporate Center. In order to make the segment information as of and for the years ended December 31, 2024 and 2023 comparable with the segment information as of and for the year ended December 31, 2025, segment information as of and for the years ended December 31, 2024 and 2023 has been revised in conformity with these intra-group adjustments. These intra-group adjustments had no impact at the consolidated level.
See Note 6 to the Consolidated Financial Statements for information on our operating segments.
Statistical and Financial Information
The following principles should be noted in reviewing the statistical and financial information contained herein:
•Average balances, when used, are based on the beginning and the month-end balances during each year. We do not believe that such monthly averages present trends that are materially different from those that would be presented by daily averages.
•Unless otherwise stated, any reference to loans refers to both loans and advances.
•Financial information with respect to segments or subsidiaries may not reflect consolidation adjustments.
•Certain numerical information in this Annual Report may not compute due to rounding. In addition, information regarding period-to-period changes is based on numbers which have not been rounded.
6
PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
A. Director and Senior Management
Not Applicable.
B. Advisers
Not Applicable.
C. Auditors
Not Applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not Applicable.
ITEM 3. KEY INFORMATION
A. Selected Consolidated Financial Data
[Reserved]
B. Capitalization and Indebtedness
Not Applicable.
C. Reasons for the Offer and Use of Proceeds
Not Applicable.
7
D. Risk Factors
MACROECONOMIC AND GEOPOLITICAL RISKS
A deterioration in economic or political conditions in the countries where the Group operates could have a material adverse effect on the Group’s business, financial condition and results of operations
The Group is sensitive to the deterioration of economic conditions or the alteration of the institutional environment of the countries in which it operates, especially Spain, Mexico and Turkey, which respectively represented 53.1%, 21.2% and 10.6% of the Group’s assets as of December 31, 2025 (53.3%, 21.8% and 10.7% as of December 31, 2024, respectively, and 58.3% 22.4% and 8.8%, as of December 31, 2023, respectively). Additionally, the Group is exposed to sovereign debt, especially sovereign debt related to these countries. For summarized information on the macroeconomic conditions that these countries are currently facing, and which could significantly affect the Group, see “Item 5. Operating and Financial Review and Prospects—Operating Results—Operating Environment”.
The global economy is undergoing significant changes, driven in part by the policies of the U.S. administration. Uncertainty surrounding the consequences of such changes is exceptionally high, substantially increasing geopolitical, economic and financial risks. The increase in U.S. tariffs on imports from its trade partners has triggered financial market volatility, reinforcing risks to the global economic outlook. The final level and duration of these tariffs, and the high uncertainty in connection therewith, could negatively impact the world economy, worsening the prospects for the macroeconomic environment. As a result of adopted or announced tariffs, global growth could slow or decline significantly. While fiscal stimulus and monetary easing measures could partially offset the impact of trade protectionism, particularly in the Eurozone, where significant public spending increases have been announced, the impact of higher U.S. tariffs could be amplified by the adoption of retaliatory measures by other countries, sustained uncertainty, weakening confidence levels and financial deterioration, among other factors. Increased tariffs also raise the risk of inflation in the United States and the Eurozone, which could further slow private demand and, at the same time, constrain the Federal Reserve’s (“Fed”) and the ECB’s ability to lower rates if warranted by activity.
Beyond higher import tariffs, tighter U.S. controls on migration flows could also affect the labor market in the United States, add to inflationary pressures and weigh on economic growth. The U.S. administration’s fiscal, monetary, regulatory, industrial and foreign policies, among others, could likewise contribute to financial and macroeconomic volatility. This is compounded by concerns that the Fed’s independence in decision-making may be weakened by political considerations. Amid heightened uncertainty over U.S. policies and the prospect of large fiscal deficits, the U.S. risk premium has increased, and could rise further, pushing up long-term sovereign yields and further weakening the U.S. dollar. These developments could also spark episodes of volatility, especially given the high debt levels in both developed and emerging economies. The relatively high valuations of AI-related stocks are also a source of uncertainty and may lead to financial market volatility. Rising trade protectionism and the U.S.-China rivalry could further heighten geopolitical tensions, especially against the backdrop of ongoing conflicts in Ukraine and the Middle East, recent tensions in Latin America and Iran and the Greenland crisis. In response to these risks and the changes in the foreign policy of the U.S. administration, the European Union (EU) has adopted measures to increase military spending, which could support growth but, to some extent, add pressure on inflation and interest rates in the region.
Overall, rising global geopolitical tensions increase uncertainty around the outlook for the world economy and the likelihood of economic and financial disruptions, including an economic recession.
Further, the Group is exposed to, among other risks, the following general risks with respect to the economic and institutional environment in the countries where it operates: a deterioration in economic activity, including potential recession scenarios; inflationary pressures which could lead to tightening of monetary conditions; stagflation triggered by intense or prolonged supply shocks, including as a result of protectionist escalation or a sharp rise in oil and gas prices; exchange rate volatility; adverse developments in real estate markets; changes in the institutional environment of the countries where the Group operates, which could lead to sudden and pronounced GDP contractions and/or shifts in regulatory or government policy, including capital controls, dividend restrictions, or the imposition of new taxes or levies; high levels of public debt or external deficits, which could lead to sovereign credit rating downgrades or even defaults or debt restructurings; the impact of policies adopted by the U.S. administration, around which significant uncertainty remains; and episodes of volatility in the financial markets, such as those seen recently. Any of the above could result in significant losses for the Group.
Our results may also be adversely affected by factors specific to the countries where we operate. In Spain, political, regulatory, and economic uncertainty may have a negative impact on activity. In Mexico, there is considerable uncertainty regarding the impact of the recently approved constitutional reforms, as well as the policies of the U.S. administration and the outcome of the review of the United States-Mexico-Canada free trade agreement (USMCA).
8
In Turkey, despite the gradual recent improvement, macroeconomic conditions remain relatively unstable, marked by pressure on the Turkish lira, high inflation, a significant trade deficit, relatively low central bank foreign exchange reserves, and high external financing costs. Recent political and social tensions could also trigger new episodes of financial volatility and macroeconomic risks. Moreover, uncertainty remains over the impact on Turkey of the geopolitical situation in the Middle East. These factors could lead to a deterioration in the purchasing power and creditworthiness of the Group’s customers. In addition, official interest rates, regulatory and macroprudential policies affecting the banking sector, hyperinflation and currency depreciation in Turkey have impacted and may continue to impact the Group’s results. In South America, ongoing and potential interventionist actions by the United States in some of its countries constitute a significant source of risk. In Argentina, despite the improved prospects for the economy following significant fiscal, monetary and exchange rate adjustments, the risk of economic and financial turmoil persists. Lastly, in Colombia and Peru, meteorological events, political tensions, and a deterioration of public finances could weigh adversely on economic performance.
Given the significance of the Group’s exposure to each of Spain, Mexico and Turkey, any adverse change affecting political, economic and social conditions in any of such countries could have a material adverse effect on the Group’s business, financial condition and results of operations.
Any of these factors may have a material adverse effect on the Group’s business, financial condition and results of operations.
Political, economic and social conditions in any of Spain, Mexico and Turkey may have a material adverse effect on our business, financial condition and results of operations
The Group has historically carried out its lending activity mainly in Spain, which continues to be its primary business area. In addition, the Group is significantly exposed to Mexico and Turkey. As of December 31, 2025, total risk in financial assets in Spain, Mexico and Turkey (in each case calculated as set forth in Appendix IX (Additional information on risk concentration) of the Consolidated Financial Statements) amounted to €252,299 million, €163,059 million and €68,309 million, respectively, equivalent to 32.5%, 21.0% and 8.8%, respectively, of the Group’s total risk in financial assets. The Group’s gross exposure to loans and advances to customers in Spain, Mexico and Turkey totaled €261,536 million, €100,699 million and €55,756 million, respectively, as of December 31, 2025, representing 55.3%, 21.3% and 11.8%, respectively, of the Group’s total amount of loans and advances to customers.
Given the significance of the Group’s exposure to each of Spain, Mexico and Turkey, any adverse change affecting political, economic and social conditions in any such country could have a material adverse effect on the Group’s business, financial condition and results of operations.
BUSINESS RISKS
The Group’s business is subject to inherent risks concerning counterparties’ credit quality and the value of collateral
The total maximum credit risk exposure of the Group (calculated as set forth in Note 7.2.2 to the Consolidated Financial Statements) as of December 31, 2025 was €1,104,820 million (€972,990 million and €904,889 million as of December 31, 2024 and 2023, respectively). The Group has exposures to many different products and counterparties, and the credit quality of its exposures can have a significant effect on the Group’s earnings. Adverse changes in the credit quality of the Group’s counterparties (including borrowers), or any adverse changes in the value of collateral they may have provided, may reduce the value of the Group’s assets, and materially increase the Group’s write-downs and loss allowances. Credit risk can be affected by a range of factors, including an adverse economic environment, a decrease in consumption or corporate or government spending, changes in the credit sovereign rating or in the rating of individual contractual counterparties, their debt levels and the environment in which they operate, increased unemployment, higher commodity prices (especially of energy commodities), reduced asset values (including as a result of natural disasters), increased retail or corporate insolvency levels, litigation and legal and regulatory developments. Credit risk may also be significantly affected by changes in interest rates (as well as the timing, magnitude and pace of these changes). While interest rates have decreased in certain countries, they remain relatively high, and the persistence of relatively high interest rates or any increase in interest rates in the future may lead to a deterioration of the Group’s non-performing loan (“NPL”) ratio and an increase in the Group’s risk-weighted assets (“RWAs”). See “—The Group’s business is particularly vulnerable to interest rates”.
The impact of an increase in default rates on the Group will depend on its magnitude, timing and pace, and could be significant. Furthermore, it is possible that the Group has incorrectly assessed the creditworthiness or willingness to pay of its counterparties, that it has underestimated the credit risks and potential losses inherent in its credit exposure, that it has made insufficient provisions for such risks in a timely manner and that it has overestimated the extent to which it may be able to recover certain debts, including aged non-performing loans.
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The processes involved in making such assessments, which have a crucial impact on the Group’s results and financial condition, require difficult, subjective and complex calculations, including forecasts of the impact that macroeconomic conditions could have on these counterparties. In particular, the Group’s estimates of losses derived from its exposure to credit risk may prove to be inadequate or insufficient in the current environment of economic uncertainty, which could affect the adequacy of the provisions for insolvencies provided by the Group. An increase in non-performing or low-quality loans could significantly and adversely affect the Group’s business, financial condition and results of operations.
Furthermore, a deterioration of economic conditions typically results in a decrease in the price of real estate assets. The Group remains significantly exposed to the real estate market, mainly in Spain and, to a lesser extent, Mexico, due to the fact that many of its loans are secured by real estate assets and due to the significant volume of real estate assets that it maintains on its balance sheet. A fall in the price of real estate assets in a particular region would reduce the value of any real estate securing loans granted by the Group in such region and, therefore, in the event of default, the amount of the expected losses related to such loans would increase. Further, a fall in real estate prices could have a material adverse effect on the default rates of the Group’s residential mortgage and real estate developer credit portfolios. The balance of the Group’s residential mortgage portfolio at a global level was €99,668 million as of December 31, 2025 (€94,577 million and €93,358 million as of December 31, 2024 and 2023, respectively), 69.8% of which related to Spain as of December 31, 2025. Further, the Group’s corporate credit portfolios include real estate developers and constructors. As of December 31, 2025, the Group’s exposure to the construction and real estate sectors (excluding the mortgage portfolio) in Spain was equivalent to €10,602 million, of which €2,314 million corresponded to loans for construction and development activities in Spain (representing 1.2% of the Group’s loans and advances to customers in Spain (excluding the public sector) and 0.3% of the Group’s consolidated assets as of December 31, 2025). The total real estate exposure (excluding the mortgage portfolio), including developer credit and foreclosed assets had a coverage ratio of 18.4% in Spain as of December 31, 2025. Any decrease in the value of collateral will adversely affect our potential losses upon an event of default.
In addition, the Group is directly and directly exposed to the private equity and private credit sectors. Private market funds, to which the Group provides credit, are playing an increasingly important role in financial intermediation. While the Group monitors its exposure to private market funds, it remains at risk both from direct exposure and contagion and systemic risk, which could materially increase its write-downs and allowances for impairment losses.
The Group’s business is particularly vulnerable to interest rates
The Group’s results of operations are substantially dependent upon the level of its net interest income, which is the difference between interest income from interest-earning assets and interest expense on interest-bearing liabilities. Changes in market interest rates often affect the Group’s interest-earning assets differently from the Group’s interest-bearing liabilities. This, in turn, may lead to a reduction in the Group’s net interest margin, which could have a material adverse effect on its results. Moreover, changes in interest rates may affect the Group’s credit risk exposure (see “—The Group’s business is subject to inherent risks concerning counterparties’ credit quality and the value of collateral, particularly in Spain, that strengthens its lending portfolio”).
Interest rates are highly sensitive to many factors beyond the Group’s control, including fiscal and monetary policies of governments and central banks, regulation of the financial sector, domestic and international economic and political conditions and other factors. The Group’s results of operations have been positively affected by the increases in interest rates adopted by central banks in recent years in an attempt to tame inflation, contributing to a rise in net interest income that exceeded the corresponding rise in funding costs. Interest rates have begun to decline in most of the regions in which BBVA is present (including the Eurozone and the United States) driven by the central banks’ monetary policies in response to easing inflationary pressures. However, interest rates remain relatively high compared to prior years. The continued prevalence of relatively high interest rates or any increase in interest rates in the future could adversely affect the Group by reducing the demand for credit, limiting its ability to generate credit for its clients and/or increasing the default rate of its counterparties (including borrowers). In particular, the repayment capacity of loans tied to variable interest rates is more sensitive to changes in interest rates. As of December 31, 2025, 2024 and 2023, 45.0%, 45.6% and 47.7%, respectively, of the Group’s gross exposure to loans and advances to customers with maturity greater than one year had floating-interest rates. Changes in interest rate policies may be implemented at a different pace across regions and it is possible that such policies could be accelerated or reversed based on various factors, such as inflation, economic growth or financial stability concerns among other considerations.
As a result of the foregoing, the evolution of interest rates could have a material adverse effect on the Group’s business, financial condition and results of operations.
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The Group faces increasing competition and is exposed to a changing business model
The markets in which the Group operates are highly competitive and it is expected that this trend will continue in the coming years with the increasing entry of non-bank competitors (some of which have large client portfolios and strong brand recognition) and the emergence of new business models (for example, neobanks, a new generation of financial institutions that operate exclusively online, without physical branch networks). In recent years, the financial services sector has undergone a significant transformation driven by the development of mobile technologies, data-driven innovation, and the entry of new players into activities previously controlled by financial institutions.
Although the Group is making efforts to adapt to these changes through its digital transformation, its competitive position is also affected by some regulatory asymmetries that benefit non-bank operators. For example, banking groups are subject to prudential regulations that have implications for most of their businesses, including those in which they compete with non-bank operators (such as FinTechs or BigTechs) that are subject only to regulations specific to the activity they develop or that benefit from loopholes in the regulatory environment. For instance, when banking entities such as the Group carry out financial activities through the use of new technologies, they are generally subject to additional regulations that place them at a competitive disadvantage.
Moreover, the widespread adoption of new technologies, including artificial intelligence, cloud computing, big data analysis, crypto currencies and alternative payment systems that do not use the banking system, could erode the Group’s business or require the Group to make substantial investments to modify or adapt existing products and services, including its mobile and internet banking capabilities. Likewise, the increasing use of these new technologies and mobile banking platforms could have an adverse impact on the Group’s investments in facilities, equipment and employees. A faster pace of transformation towards mobile and online banking models could require changes in the Group’s commercial banking strategy, including the closure or sale of certain branches and the restructuring of others, and a significant reduction in headcount. These changes could result in sizable expenses as the Group reconfigures and transforms its commercial network. In addition, the trend towards the consolidation in the banking industry has created larger banks with which the Group must compete. Any failure by the Group to adapt to its competitive environment or failure to implement any necessary changes to its business model efficiently or on a timely basis could have a material adverse impact on the Group’s competitive position or otherwise have a material adverse effect on the Group’s business, financial condition and results of operations.
The future success of the Group depends, in part, on its ability to use technology to provide suitable products and services for customers and adequately manage information technology obsolescence. While the Group has focused on developing its technological capabilities in recent years and is committed to digitization, its ability to capture the benefits of emerging technologies and otherwise compete successfully is likely to be adversely affected by, on the one hand, the existing uneven playing field between banks and non-bank players, and on the other hand, the increasing relevance of access to digital data and interactions for customer relationship management, which places digital platforms at an advantage. Digital platforms (such as those maintained by large technology or social media companies, and FinTechs) increasingly dominate access to data and control over digital interactions, and are already eroding the Group’s results in highly relevant markets such as payments. These platforms can leverage their advantage in access to data to compete with the Group in other markets and could reduce the Group’s operations and margins in its core businesses such as lending or wealth management. Some of the Group’s competitors have created alliances with BigTechs that may affect the Group’s ability to compete successfully and could adversely affect the Group. In the event that the Group is not successful in addressing increasing competition, its business, financial condition and results of operations could be materially and adversely affected.
The Group faces risks derived from its international geographic diversification and its significant presence in emerging countries, which exposes it to heightened political risks
The Group is made up of commercial banks, insurance companies and other financial services companies in various countries and its performance as a global business depends on its ability to manage its different businesses under various economic, social and political conditions, as well as different legal and regulatory requirements (including, among others, different supervisory regimes and different tax and legal regimes related to the repatriation of funds or the nationalization or expropriation of assets). In addition, the Group’s international operations may be exposed to risks and challenges to which its local competitors may not be exposed, such as currency risk, the difficulty of managing or supervising a local entity from abroad, political risks (which could affect only foreign investors) or limitations on the distribution or repatriation of dividends, thus worsening its position compared to that of local competitors.
There can be no guarantee that the Group will be successful in developing and implementing policies and strategies in all of the countries in which it operates, some of which have experienced significant economic, political and social volatility in recent decades. In particular, the Group has a significant presence in several emerging countries, particularly in Mexico and in Turkey (see “—Political, economic and social conditions in any of Spain, Mexico and Turkey may have a material adverse effect on our business, financial condition and results of operations”), and is therefore vulnerable to any deterioration in economic, social or political conditions in these countries.
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Further, the Group has significant operations in South America.
Generally, emerging economies face higher anti-money laundering and other compliance risks as a result of greater political instability, higher levels of corruption, weaker governance structures and fewer financial and technical resources dedicated to enforcement. Further, emerging markets are generally affected by the conditions of other related markets and by the evolution of global financial markets in general (they may be affected, for example, by the evolution of GDP and interest rates in the United States and the exchange rate of the U.S. dollar), as well as by fluctuations in the prices of commodities.
The risks associated with investing in emerging economies, in general, or in emerging markets where the Group operates, in particular, could trigger capital outflows from those economies and adversely affect such economies and therefore the Group. Moreover, emerging countries are more prone to experiencing significant changes in inflation and volatility in exchange rates, which may have a material impact on the Group’s results of operations, assets (including RWAs) and liabilities. In Turkey, for example, inflation was 30.9% for the year ended December 31, 2025 (according to the Turkish Statistical Institute, TUIK) and the Turkish lira depreciated 27.2% against the euro as of December 31, 2025 compared to December 31, 2024.
The Group’s operations in emerging countries are also exposed to heightened political risks, such as changes in governmental policies, expropriation, nationalization, interest rate limits, exchange controls, capital controls, government restrictions on dividends or bank fees and adverse tax policies. For example, the repatriation of dividends from BBVA’s Venezuelan, Argentinian and Turkish subsidiaries is subject to certain restrictions and there is no assurance that these restrictions will be lifted in the future, or that further restrictions will not be imposed. Since BBVA’s ability to pay dividends depends, in part, on the receipt of dividends from its subsidiaries, such restrictions may affect, in turn, BBVA’s ability to pay dividends. ESG risks (see “—Environmental, social and governance (ESG) risks may adversely impact the Group”) may also be higher in the emerging markets where the Group operates as a result of, among other things, more limited resources and capital for ESG investment, lack of comprehensive and reliable data on ESG practices, resource dependency that may lead to unsustainable practices that are at odds with ESG initiatives and underdeveloped or inconsistently enforced regulatory frameworks.
If the Group failed to adopt effective and timely policies and strategies in response to the risks and challenges it faces in each of the regions where it operates, particularly in emerging countries, the Group’s business, financial condition and results of operations could be materially and adversely affected.
Environmental, social and governance (ESG) risks may adversely impact the Group
ESG factors present risks associated with (i) climate change, including physical risks and transition risks (linked, among others, to changes in regulations, technologies, and market preferences associated with the transition to a less carbon-dependent economy); (ii) other environmental factors, such as biodiversity loss, water stress and other nature-related factors; (iii) social factors, such as human rights, inclusion, diversity and workplace safety; and (iv) corporate governance matters, such as the governance of environmental and social risks.
ESG risks include short, medium and long-term risks that may adversely affect the Group and its customers or counterparties. ESG is an area of significant public debate and focus for governments and regulators, investors, the Group’s customers and counterparties, and other stakeholders, and, as a result, ESG risks are expected to continue to evolve, and may increase over time.
Among others, ESG risks include the following:
Physical risks: The activities of the Group or those of its customers or counterparties could be adversely affected by the physical risks (including acute and chronic) arising from climate change or other environmental challenges. For example, extreme weather events and chronic shifts in the climate may damage or destroy properties and other assets of the Group or those of its customers or counterparties, make the insurance against certain risks more expensive or unfeasible, 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 granted as collateral to the Group. The Group is also exposed to potential long-term physical risks arising from climate change and other environmental challenges, such as any ensuing deterioration in economic conditions that results in credit-related costs, or potential impacts on the Group’s assets and operations. The Group could also be required to change its business models in response to the foregoing.
Legal and regulatory risks: The ESG legal and regulatory landscape is increasingly fragmented. While legislatures and regulatory authorities in many jurisdictions continue to impose extensive requirements for financial institutions to integrate ESG considerations into their risk management and reporting frameworks, others are taking a different approach, with regulatory developments moving in the opposite direction, and a reduced emphasis on climate-related risk supervision, adding further complexity and uncertainty to the compliance environment.
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Legal and regulatory changes related to how banks consider and manage climate and other ESG risks or otherwise affecting banking practices or disclosure of information have resulted, and may continue to result, in higher compliance, operational and credit risks and costs. The Group’s customers and counterparties may be exposed to similar legal and regulatory changes, increasing their own compliance and operational risks and costs. Further, legal and regulatory changes have resulted, and may continue to result, in legal uncertainty and the existence of overlapping or conflicting regulatory or other requirements. They may also give rise to regulatory asymmetries whereby some persons, including the Group and its customers and counterparties, are more heavily regulated than others, placing such persons at a disadvantage.
The Group or its customers or counterparties may be unable to meet any new requirements on a timely basis or at all, including new product and service specifications, governance frameworks and practices and disclosure requirements and standards. We expect ESG-related legal and regulatory requirements to continue to evolve in the coming years. In the case of banks in particular, such evolving laws and regulations could include further requirements or restrictions related to lending, investing, capital and liquidity adequacy and operational resilience. The incorporation of ESG risks in the existing prudential framework is still developing and may result in increased risk weighting of certain assets. Moreover, there are significant risks and uncertainties inherent in the development of adequate risk assessment and modeling capabilities with respect to ESG-related matters and the collection and use 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 based on incorrect or insufficient customer, third-party or other data, any of which could adversely affect the Group’s disclosure and financial reporting. Further, increased and/or divergent regulation arising from climate change and other ESG-related challenges could result in increased litigation by different stakeholders (including non-governmental organizations (NGOs)) 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 the Group’s 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 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 other things, increased ESG concern, on the one hand, or an opposing sentiment, on the other. These changes could impact the demand for our products and services, as well as for those of our customers and counterparties, and investor interest in our securities. Further, the funding costs of businesses that are perceived to be more exposed to climate change or to other ESG-related risks 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 or other ESG-related factors, 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 and other ESG-related matters as a risk and an appropriate consideration in business and investment decisions, by society, shareholders, customers, governments and other stakeholders (including NGOs), continues to evolve, including in relation to the financial sector’s activities. This may result in increased scrutiny of the Group’s activities, as well as its ESG-related policies, goals, decisions, disclosures or communications. The Group’s reputation and ability to attract or retain customers may be harmed if its response to concerns regarding ESG-related matters is deemed to be insufficient or inappropriate 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. At the same time, the Group may refrain from undertaking lending or investing activities or other services that would otherwise have been profitable in order to fulfill its ESG obligations or goals or to avoid reputational harm. 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 ESG-related policies, goals, decisions, disclosures and communications, may result in litigation and investigations and supervisory actions (including potential greenwashing or greenhushing claims). The Group has disclosed certain aspirational ESG-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 regulation and policy, the pace of technological change and innovation and the actions of governments and the Group’s customers and competitors. Potential greenwashing claims arising from ESG-related statements, disclosure and/or actions of the Group may also give rise to reputational risks.
Any of these factors may have a material adverse effect on the Group’s business, financial condition and results of operations.
The outbreak and spread of a pandemic and other large-scale public health events could have a material adverse effect on the Group’s business, financial condition and results of operations
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Economic conditions in the countries in which the Group operates may be adversely affected by an outbreak of a contagious disease, which develops into a regional or global pandemic and other large scale public health events. The outbreak of a pandemic or another large-scale public health event may have an adverse material impact on our business, financial condition and results of operations, including as a result of the exacerbation of any of the other risks described in this section. Furthermore, the measures that may be taken by governments, regulators and businesses to respond to any such pandemic or event may lead to slower or negative economic growth, supply disruptions, inflationary pressures and significant increases in public debt, and may also adversely affect the Group’s counterparties (including borrowers), which may lead to increased loan losses. Such measures could also impact the business and operations of third parties that provide critical services to the Group, which may have an adverse material impact on our business, financial condition and results of operations.
The Group faces risks related to its acquisitions and divestitures activity
The Group has acquired and sold several companies, assets and/or businesses over the past few years, and may acquire or sell additional companies, assets and/or businesses in the future. The Group may not complete any ongoing or future transactions in a timely manner, on a cost-effective basis or at all and, if completed, they may not have the expected results.
If any acquisitions or divestitures are completed, the Group’s results of operations could be adversely affected by such acquisition or divestiture-related charges and contingencies. The Group may be subject to litigation in connection with, or as a result of, acquisitions or divestitures, including claims from terminated employees, customers or third parties. In the case of an acquisition, the Group may be liable for potential or existing litigation and claims related to an acquired business, including because either the Group is not indemnified for such claims, or the indemnification is insufficient. Further, in the case of a divestiture, the Group may be required to indemnify the buyer in respect of similar or other matters, including claims against the divested entity or business.
In the case of an acquisition, even though the Group reviews the companies it plans to acquire, it is often not possible for these reviews to be complete in all respects and there may be risks associated with unforeseen events or liabilities relating to the acquired companies, assets or businesses that may not have been revealed or properly assessed during the due diligence processes, resulting in the Group assuming unforeseen liabilities or an acquisition not performing as expected. In addition, acquisitions are inherently risky because of the difficulties that may arise in integrating people, operations and technologies. There can be no assurance that any of the companies, assets or businesses the Group acquires can be successfully integrated or that they will perform well once integrated. Furthermore, completion of any acquisition may constitute a breach or default under agreements or instruments of the company that is being acquired, or otherwise result in the acceleration of obligations (including, without limitation, payment obligations) or changes to rights thereunder or the termination thereof.
In addition, BBVA may not be able to anticipate all losses, costs and other liabilities that may be incurred in connection with a transaction that is completed or may fail to accurately analyze or estimate the consequences of completing such a transaction, either of which could have an adverse effect on the Group’s business, financial condition and results of operations after completion of the transaction. Acquisitions may also lead to potential write-downs that adversely affect the Group’s results of operations.
If an announced transaction is not completed, the market prices of BBVA’s securities may decline or otherwise be subject to fluctuations to the extent the market prices of BBVA’s securities reflect a market assumption that such a transaction would be completed. In addition, the failure to complete a transaction may result in negative publicity or otherwise adversely affect BBVA’s reputation in the investment community and BBVA’s relationship with its employees, clients and other partners in the business community. Following completion of a transaction, BBVA may be exposed to other risk factors specific to the company, asset or business being acquired or otherwise arising from such transaction. Furthermore, completion of a transaction may adversely affect the capital, leverage, liquidity, MREL (as defined below) or resolution profile of BBVA or the Group. Relevant regulators could also impose additional capital, leverage, liquidity, MREL or resolution requirements on the Group as a result of a transaction, which might require the Group to issue additional capital instruments or MREL and/or incur additional costs.
Any of the foregoing may cause the Group to incur significant unexpected expenses, may divert significant resources and management attention from the Group’s other business concerns, or may otherwise have a material adverse effect on the Group’s business, financial condition and results of operations.
FINANCIAL RISKS
The Group has a continuous demand for liquidity to finance its activities and the withdrawal of deposits or other sources of liquidity could significantly affect it
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Traditionally, one of the Group’s main sources of financing has been savings accounts and demand deposits. As of December 31, 2025, the balance of customer deposits represented 76.3% of the Group’s total financial liabilities at amortized cost. However, the volume of wholesale and retail deposits can fluctuate significantly, including as a result of factors beyond the Group’s control, such as general economic conditions, changes in economic policy or administrative decisions that diminish their attractiveness as savings instruments (for example, as a consequence of changes in taxation, coverage by guarantee funds for deposits or expropriations) or competition from other savings or investment instruments (including deposits from other banks). In the last years, competition for deposits has increased in various of the regions where the Group operates as interest rates have increased and competitors (including neobanks) have offered remuneration on customer deposits. The vast majority of the Group’s deposits are demand deposits, which may be freely withdrawn by depositors at any time. The methods for withdrawing or transferring deposits, and the speed with which such transactions may be realized, continue to increase, which could affect the stickiness of the Group’s deposit base.
Changes in interest rates and credit spreads may significantly affect the cost of the Group’s short- and long-term wholesale financing. Changes in credit spreads are driven by market factors and are also influenced by the market’s perception of the Group’s solvency. As of December 31, 2025, debt securities issued by the Group represented 12.4% of the total financial liabilities at amortized cost of the Group. In addition, while the Group’s current use of public sources of liquidity is limited, the Group has historically made significant use of public sources of liquidity, such as the ECB’s extraordinary measures taken in response to the financial crisis since 2008 or those taken in connection with the crisis caused by the COVID-19 pandemic.
In the event of a withdrawal of deposits or other sources of liquidity, especially if it is sudden or unexpected, the Group may not be able to finance its financial obligations or meet the minimum liquidity requirements that apply to it, and may be forced to incur higher financial costs, liquidate assets and take additional measures to reduce leverage. Furthermore, the Group could be subject to the adoption of early intervention measures or, ultimately, to the adoption of a resolution measure by the Relevant Spanish Resolution Authority (see “Item 4. Information on the Company—Business Overview—Supervision and Regulation—Capital Requirements, MREL and Resolution”). Any of the above could have a material adverse effect on the Group’s business, financial condition and results of operations.
The Group depends on its credit ratings and sovereign credit ratings, especially Spain’s and Mexico’s credit ratings
Rating agencies periodically review the Group’s debt credit ratings. Any reduction, effective or anticipated, in any such ratings of the Group, whether below investment grade or otherwise, could limit or impair the Group’s access to capital markets and other possible sources of liquidity and increase the Group’s financing cost, and entail the breach or early termination of certain contracts or give rise to additional obligations under those contracts, such as the need to grant additional guarantees. Furthermore, if the Group were required to cancel its derivative contracts with some of its counterparties and were unable to replace them, its market risk would worsen. Likewise, a reduction in the credit rating could affect the Group’s ability to sell or market some of its products or to participate in certain transactions, and could lead to the loss of customer deposits and make third parties less willing to carry out commercial transactions with the Group (especially those that require a minimum credit rating), having a material adverse effect on the Group’s business, financial condition and results of operations.
Furthermore, the Group’s credit ratings could be affected by variations in sovereign credit ratings, particularly the rating of Spanish and Mexican sovereign debt. The Group holds a significant portfolio of debt issued by Spain, Spanish autonomous communities, Mexico and other Spanish and Mexican issuers. As of December 31, 2025 and 2024, the Group’s exposure (per European Banking Authority (“EBA”) criteria) to Spain’s public debt portfolio was €58,760 million and €51,833 million, respectively, representing 6.8% and 6.7% of the consolidated total assets of the Group, respectively. As of December 31, 2025 and 2024, the Group’s exposure (per EBA criteria) to Mexico’s public debt portfolio was €31,025 million and €31,681 million, respectively, representing 3.6% and 4.1% of the consolidated total assets of the Group, respectively.
Any decrease in the credit rating of Spain or Mexico could adversely affect the valuation of the respective debt portfolios held by the Group and lead to a reduction in the Group’s credit ratings. Additionally, counterparties to many of the credit agreements signed with the Group could also be affected by a decrease in the credit rating of these countries, which could limit their ability to attract additional resources or otherwise affect their ability to pay their outstanding obligations to the Group. It is possible that current or future economic and geopolitical conditions or other factors could lead to ratings actions and changes to BBVA’s credit ratings, any of which could have a material adverse effect on the Group’s business, financial condition and results of operations.
The trading market for securities issued by BBVA depends in part on the research reports of third-party securities analysts
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The trading market for securities issued by BBVA depends in part on the research reports that third-party securities analysts publish about BBVA and the industry and the countries in which it operates. The publication by one or more of these analysts of a negative recommendation or unfavorable outlook with respect to BBVA or the industry and countries in which it operates could cause the trading price of any such securities to decline.
The Group’s earnings and financial condition have been, and its future earnings and financial condition may continue to be, materially affected by asset impairment
Regulatory, business, economic or political changes and other factors could lead to asset impairment. In recent years, severe market events such as the past sovereign debt crisis, rising risk premiums and falls in share market prices, have resulted in the Group recording large write-downs on its credit market exposures. Doubts regarding the asset quality of European banks have also affected their evolution in the market in recent years.
Several ongoing factors could depress the valuation of the Group’s assets or otherwise lead to the impairment of such assets (including goodwill and deferred tax assets). These include a deteriorating macroeconomic and geopolitical environment, including the risk of a sharp global growth slowdown. Any asset impairments resulting from these or other factors could have a material adverse effect on the Group’s business, financial condition and results of operations.
The Group has a substantial amount of commitments with personnel considered wholly unfunded due to the absence of qualifying plan assets
The Group faces liquidity risk in connection with its ability to make payments on its unfunded commitments with personnel (which are recognized under the heading “Provisions—Provisions for pensions and similar obligations” in the Group’s consolidated balance sheet), which it seeks to mitigate, with respect to post-employment benefits, by maintaining insurance contracts which were contracted with insurance companies owned by the Group. The insurance companies have recorded in their balance sheets specific assets (fixed interest deposit and bonds) assigned to the funding of these commitments. The Group’s Assets and Liabilities Committee (“ALCO”) and the insurance companies also manage derivatives (primarily swaps) to mitigate the interest rate risk in connection with the payments of these commitments.
The Group seeks to mitigate liquidity risk with respect to early retirements and post-employment welfare benefits through oversight by the ALCO of the Group. The Group’s ALCO manages a specific asset portfolio to mitigate the liquidity risk resulting from the payments of these commitments. These assets are government and covered bonds which are issued at fixed interest rates with maturities matching the aforementioned commitments. Should BBVA fail to adequately manage liquidity risk and interest rate risk either as described above or otherwise, it could have a material adverse effect on the Group’s business, financial condition and results of operations.
LEGAL RISKS
The Group is party to a number of legal and regulatory actions and proceedings
The financial sector faces an environment of increasing regulatory and litigation pressure. The Group is party to government procedures and investigations, such as those carried out by the antitrust authorities 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.
The various Group entities are also frequently party to individual or collective judicial proceedings (including class actions) resulting from their activity and operations, as well as arbitration proceedings. For example, in April 2017, the Mexican Federal Economic Competition Commission (Comisión Federal de Competencia Económica) launched an antitrust investigation relating to alleged monopolistic practices of certain financial institutions, including BBVA’s subsidiary BBVA Mexico, in connection with transactions in Mexican government bonds. This investigation concluded with the Commission imposing fines on all financial institutions involved, including a fine insignificant in amount imposed on BBVA Mexico, which BBVA Mexico has challenged. In March 2018, BBVA Mexico and certain other affiliates of the Group were named as defendants in a putative class action lawsuit filed in the United States District Court for the Southern District of New York, alleging that the defendant banks and their named subsidiaries engaged in collusion with respect to the purchase and sale of Mexican government bonds. In December 2019, following a decision from the judge assigned to hear the proceedings, the plaintiffs withdrew their claims against BBVA Mexico’s affiliates.
In November 2020, the judge granted the remaining defendants’ motion to dismiss for lack of personal jurisdiction. The plaintiffs filed a motion for reconsideration of that decision in May 2021, which the judge denied in March 2022. Final judgment dismissing the plaintiffs’ claims was entered in August 2022. In September 2022 the plaintiffs appealed the district court’s decisions to the United States Court of Appeals for the Second Circuit.
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On February 9, 2024, the United States Court of Appeals for the Second Circuit vacated the district court’s decisions, and in June 2024, the plaintiffs filed an amended complaint in the United States District Court for the Southern District of New York. In July 2024, the defendants moved to dismiss the amended complaint. On January 15, 2025, the judge denied the defendants’ motion to dismiss. The case is ongoing. More generally, in recent years, regulators have increased their supervisory focus on consumer protection and corporate behavior, which has resulted in an increased number of regulatory actions.
In Spain and in other jurisdictions where the Group operates, legal and regulatory actions and proceedings against financial institutions, prompted in part by certain national and supranational rulings in favor of consumers (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. See “Item 4. Information on the Company—Business Overview—Supervision and Regulation—Principal Markets” for information on certain additional legal and regulatory actions and initiatives. There are also claims before the Spanish courts challenging the validity of certain revolving credit card agreements. Rulings in these types of proceedings, whether against the Bank or other financial institutions, could negatively affect the Group.
All of the above may result in a significant increase in operating and compliance costs and/or a reduction in revenues, and it is possible that an adverse outcome in any proceedings (depending on the amount thereof, the penalties imposed or the resulting procedural or management costs for the Group) could materially and adversely affect the Group, including by damaging its reputation.
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 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 draw resources away from the Group and may require significant attention on the part of the Group’s management and employees. As of December 31, 2025, the Group had €805 million in provisions for the proceedings it is facing. See Note 24 to the Consolidated Financial Statements.
However, the uncertainty arising from these proceedings (including those for which no provisions have been made, either because the probability of an unfavorable outcome for the Group is estimated to be remote, because it is not possible to estimate such provisions or for other reasons) makes it impossible to guarantee that the possible losses arising from the resolution of these proceedings will not exceed, where applicable, the amounts that the Group currently has provisioned and, therefore, could affect the Group’s consolidated results.
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 which may otherwise affect the Group, whether 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.
The Spanish judicial authorities are carrying out a criminal investigation relating to possible bribery and revelation of secrets by BBVA
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 employees of the Group, as well as former directors and officers, 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. By order of the Criminal Chamber of the National High Court, the pre-trial phase ended on January 29, 2024. On June 20, 2024, the Judge issued an order authorizing the continuation of abbreviated criminal proceedings against BBVA and certain current and former employees of BBVA, as well as against some former directors and officers, for alleged facts which could constitute bribery and revelation of secrets. 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.
REGULATORY, TAX, COMPLIANCE AND REPORTING RISKS
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The financial services sector is one of the most regulated sectors in the world. The Group is subject to a broad regulatory and supervisory framework, which has increased significantly in the last decade. Regulatory activity in recent years has affected multiple areas, including changes in accounting standards; strict regulation of capital, liquidity and remuneration; bank charges 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; conduct with clients; the protection of personal data; antitrust; 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. Furthermore, the international nature of the Group’s operations means that the Group is subject to a wide and complex range of local and international regulations in these matters, sometimes with overlapping scopes and areas regulated. This complexity, which can be exacerbated by differences and changes in the interpretation or application of these standards by local authorities, makes compliance risk management difficult and costly, requiring highly sophisticated monitoring, qualified personnel and general training and awareness of employees.
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, damage to the Group’s reputation, 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 Group is subject to a comprehensive regulatory and supervisory framework, including resolution regulations, which could have a material adverse effect on its business, financial condition and results of operations
The Group is subject to a comprehensive regulatory and supervisory framework, the complexity and scope of which has increased significantly following the 2008 financial crisis and the crisis caused by the COVID-19 pandemic. In particular, the banking sector is subject to continuous scrutiny at the political level and by the supervisory bodies, and it is foreseeable that in the future there will continue to be political intervention in regulatory and supervisory processes, as well as in the governance of the main financial entities.
For these reasons, the laws, regulations and policies to which the Group is subject, as well as their interpretation and application, may change at any time. In addition, supervisors and regulators have significant discretion in carrying out their duties, which gives rise to uncertainty regarding the interpretation and implementation of the regulatory framework. Moreover, regulatory fragmentation and the implementation by some countries of more flexible or stricter rules or regulations could also negatively affect the Group’s ability to compete with financial institutions that may or may not have to comply with any such rules or regulations, as applicable.
Regulatory changes over the last decade, as well as those currently being proposed (including changes in the interpretation or application of existing regulations), have increased and may continue to substantially increase the Group’s operating expenses and adversely affect its business model. For example, the imposition of prudential capital standards has limited and is expected to continue to limit the ability of subsidiaries to distribute capital to the Group, while liquidity standards may lead the Group to hold a higher proportion of financial instruments with higher liquidity and lower performance, which can adversely affect its net interest margin. The Group’s regulatory and supervisory authorities may also require the Group to increase its loan loss allowances and record asset impairments, which could have an adverse effect on its financial condition. Any legislative or regulatory measure, any necessary change in the Group’s business operations as a consequence of such measures, as well as any failure to comply with them, could result in a significant loss of income or reputation, represent a limitation on the ability of the Group to take advantage of business opportunities and offer certain products and services, affect the value of the Group’s assets, force the Group to increase prices (which could reduce the demand for its products), impose additional compliance costs or result in other possible adverse effects for the Group.
One of the most significant regulatory changes resulting from the 2008 financial crisis was the introduction of resolution regulations (see “Item 4. Information on the Company—Business Overview—Supervision and Regulation—Capital Requirements, MREL and Resolution”). In the event that the Relevant Spanish Resolution Authority (as defined herein) considers that the Group is in a situation where conditions for early intervention or resolution are met, it may adopt the measures provided for in the applicable resolution regulations, including without prior notice. Such measures could include, among others, the write down and/or conversion into equity (or other securities or obligations) of the Group’s unsecured debt.
Likewise, the Relevant Spanish Resolution Authority may apply Non-Viability Loss Absorption (as defined herein) in the event that it determines that the entity meets the conditions for its resolution or that it will no longer be viable unless capital instruments are written down or converted into equity or extraordinary public support is provided.
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Any such determination, or the mere possibility that such determination could be made, could materially and adversely affect the Group’s business, financial condition and results of operations, as well as the market price and behavior of certain securities issued by the Group or their terms, if amended following any exercise of the Spanish Bail-in Power (as defined herein)).
Increasingly onerous capital and liquidity requirements may have a material adverse effect on the Group’s business, financial condition and results of operations
The Group is subject to various minimum capital, liquidity and funding requirements, among others. For example, in its capacity as a Spanish credit institution, the Group is subject to compliance with a “Pillar 1” solvency requirement, a “Pillar 2” solvency requirement and a “combined buffer requirement”, at both the individual and consolidated levels. For additional information on such requirements, see “Item 4. Information on the Company—Business Overview—Supervision and Regulation—Capital Requirements, MREL and Resolution” and, with respect to the Group’s requirements in particular, “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Capital” and Note 32.1 to the Consolidated Financial Statements. While the Group believes it meets its current requirements (as applicable to BBVA and the Group as a whole, respectively), the capital requirements, the minimum requirement for own funds and eligible liabilities (“MREL”) and the calculation of the own funds and the eligible liabilities available for MREL purposes are subject to interpretation and change and, therefore, no assurance can be given that the Group’s interpretation is the appropriate one or that BBVA and/or the Group will not be subject to more stringent requirements at any future time. Likewise, no assurance can be given that BBVA and/or the Group will be able to fulfil whatever future requirements may be imposed, even if such requirements were to be equal or lower than those currently in force, or that BBVA and/or the Group will be able to comply with any capital target that may have been announced to the market.
Any such failure could be adversely perceived by investors and/or supervisors who could interpret that a lack of capital-generating capacity for BBVA and/or the Group exists or that the capital structure has deteriorated, either of which could adversely affect the market value or behavior of securities issued by BBVA and/or the Group (in particular, any of its capital instruments and eligible liabilities). Further, BBVA and/or the Group may report amounts different from consensus estimates, which may also affect market perceptions of BBVA and the Group.
If BBVA or the Group failed to comply with its “combined buffer requirement”, BBVA would have to calculate the Maximum Distributable Amount (“MDA”) and, until such calculation has been undertaken and reported to the Bank of Spain, BBVA would not be able to make any (i) distributions relating to CET1 capital; (ii) payments related to variable remuneration or discretionary pension benefits; and (iii) distributions linked to additional tier 1 (AT1) instruments (collectively, “discretionary payments”). Once the MDA has been calculated and reported, such discretionary payments would be limited to the calculated MDA. Likewise, should BBVA or the Group not meet the applicable combined buffer requirement, it could result in the imposition of additional requirements of “Pillar 2”. Regarding MREL, failure by BBVA to meet its respective “combined buffer requirement” for these purposes, taken together with its MREL requirements could result in the imposition of restrictions or prohibitions on discretionary payments (the MREL-MDA). Additionally, failure to comply with the capital requirements may result in the implementation of early intervention measures or, ultimately, resolution measures by the resolution authorities. For additional information on such requirements, see “Item 4. Information on the Company—Business Overview—Supervision and Regulation—Capital Requirements, MREL and Resolution”.
Regulation (EU) No. 575/2013 of the European Parliament and of the Council of June 26, 2013 on the prudential requirements for credit institutions establishes a binding requirement for the leverage ratio effective from June 28, 2021 of 3.00% of Tier 1 capital (as of December 31, 2025 the phased-in and the fully loaded leverage ratios of the Group were 6.15 %). Any failure to comply with this leverage ratio buffer may also result in the need to calculate and report the MDA, and restrictions on discretionary payments.
Additionally, the implementation of the ECB expectations regarding prudential provisions for NPLs (published on May 15, 2018) and the ECB’s review of internal models being used by banks subject to its supervision for the calculation of their RWAs (“TRIM”), as well as complementary regulatory initiatives like the EBA’s roadmap to repair internal models used to calculate own funds requirements for credit risk under the Internal Ratings Based (IRB) approach, could result in the need to increase provisions for future NPLs and increases in the Group’s capital needs. Furthermore, the implementation of the Basel III reforms (informally referred to as Basel IV) described in “Item 4. Information on the Company—Business Overview—Supervision and Regulation—Capital Requirements, MREL and Resolution” (including changes to the calculation of the Group’s operational risk) could result in an increase of BBVA’s and the Group’s total RWAs and, therefore, could also result in a decrease of BBVA’s and the Group’s capital ratios. Likewise, the lack of uniformity in the implementation of the Basel III reforms across jurisdictions in terms of timing and applicable regulations could give rise to inequalities and competition distortions. Moreover, the lack of regulatory coordination, with some countries bringing forward the application of Basel III requirements or increasing such requirements, could adversely affect an entity with global operations such as the Group and could affect its profitability.
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Additionally, should the Total Loss Absorbing Capacity (TLAC) requirements, currently only imposed upon financial institutions of global systemic importance (“G-SIBs”), be imposed on non-G-SIBs entities or should the Group once again be classified as a G-SIB, additional minimum requirements similar to MREL could in the future be imposed upon the Group.
There can be no assurance that the capital or MREL requirements will not adversely affect BBVA’s or its subsidiaries’ ability to make discretionary payments, or result in the cancellation of such payments (in whole or in part), or require BBVA or such subsidiaries to issue additional securities that qualify as eligible liabilities or regulatory capital, to liquidate assets, to curtail business or to take any other actions, any of which may have adverse effects on the Group’s business, financial condition and results of operations. Furthermore, an increase in capital or MREL requirements could adversely affect the return on equity and other of the Group’s financial results indicators. Moreover, BBVA’s or the Group’s failure to comply with their capital or MREL requirements could have a material adverse effect on the Group’s business, financial condition and results of operations.
Lastly, the Group must also comply with liquidity and funding ratios. Several elements of the liquidity coverage ratio (“LCR”) and net stable financing ratio (“NSFR”), as introduced by national banking regulators, have required implementing changes in some of the Group’s commercial practices, which have exposed the Group to additional expenses (including an increase in compliance expenses) and affected the profitability of its activities and could result in a material adverse effect on the Group’s business, financial condition and results of operations. For information on the Group’s requirements, see “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources”.
The Group is exposed to tax risks that may adversely affect it
The size, geographic diversity and complexity of the Group and its commercial and financial relationships with both third parties and related parties result in the need to consider, evaluate and interpret a considerable number of tax laws and regulations, as well as any relevant interpretative materials, which in turn involve the use of estimates, the interpretation of indeterminate legal concepts and the determination of appropriate valuations in order to comply with the tax obligations of the Group. In particular, the preparation of the Group’s tax returns and the process for establishing tax provisions involve the use of estimates and interpretations of tax laws and regulations, which are complex and subject to review by the tax authorities. Any error or discrepancy with tax authorities in any of the jurisdictions in which the Group operates may give rise to prolonged administrative or judicial proceedings that may have a material adverse effect on the Group’s results of operations.
In addition, governments in different jurisdictions, including Spain, have sought to identify new funding sources, and they have recently focused on the financial sector, including in response to the demands of various political forces. The Group’s presence in various jurisdictions increases its exposure to regulatory and interpretative changes, which may include (i) increases in the tax rates to which the Group is subject, such as the introduction in Spain of a minimum effective tax rate for purposes of the Spanish Corporate Income Tax and the Non-Residents Income Tax introduced by Law 22/2021, of December 28, with effect as of January 1, 2022 (in particular, the minimum net tax liability for credit institutions is 18% of their tax base), and the introduction of a global minimum effective tax rate of corporate taxation (15%) for multinational enterprises and large-scale domestic groups in the EU introduced by the EU Council Directive 2022/2523 of December 14, 2022 that has already been transposed into Spanish law, or (ii) the creation of new taxes and/or levies, like the common financial transaction tax (“FTT”) in the proposed Tax Directive of the European Commission for the Financial Transactions Tax (which would tax the acquisitions of certain securities negotiated in markets where the Group operates) and the Spanish FTT which came into effect in Spain in January 2021. Further, in Spain, new taxes have been created that apply only to credit institutions.
On December 19, 2024, the Spanish Congress passed Law 7/2024 which transposes the EU Council Directive 2022/2523, creating a new tax on the net interest income and commissions of certain credit institutions in Spain, including BBVA. The taxable base of this tax is the positive balance of the net interest income and the net commissions derived from the activity carried out in Spain, subject to an exemption of €100 million. The net taxable base cannot be negative, and the applicable tax rate varies from 1% to 7%. Certain reductions and deductions from the tax quota are provided for in the law. The new tax applies for the first three consecutive tax periods starting on or after January 1, 2024. For additional information, see “Item 4. Information on the Company—Business Overview—Supervision and Regulation—Principal Markets—Spain—Interest Margin and Commission Tax (IMIC)”. Increases in the tax burden of the Group could materially and adversely affect the Group’s business, financial condition and results of operations.
The Group is exposed to compliance risks
The Group, due to its role in the economy and the nature of its activities, is singularly exposed to certain compliance risks. In particular, the Group must comply with regulations regarding customer conduct, antitrust, market conduct, the prevention of money laundering and the financing of terrorist activities, the protection of personal data, the restrictions established by national or international sanctions programs and anti-corruption laws (including the U.S. Foreign Corrupt Practices Act of 1977 and the UK Bribery Act of 2010), the violations of which could lead to very significant penalties.
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These anti-corruption laws generally prohibit providing anything of value to government officials for the purposes of obtaining or retaining business or securing any improper business advantage. As part of the Group’s business, the Group directly or indirectly, through third parties, deals with entities whose employees are considered to be government officials. Generally, all these regulations require banking entities to, among other measures, use due diligence measures to manage compliance risk.
Sometimes, banking entities must apply enhanced due diligence measures due to the very nature of their activities (among others, private banking, money transfer and foreign currency exchange operations), as they may present a higher risk of money laundering or terrorist financing. Although the Group has adopted policies, procedures, systems and other measures to manage compliance risk, it is dependent on its employees and external suppliers for the implementation of these policies, procedures, systems and other measures, and it cannot guarantee that these are sufficient or that the employees (127,174 as of December 31, 2025) or other persons of the Group or its business partners, agents and/or other third parties with a business or professional relationship with the Group do not circumvent or violate regulations or the Group’s ethics and compliance regulations, acts for which such persons or the Group could be held ultimately responsible and/or that could damage the Group’s reputation. In particular, acts of misconduct by any employee, and particularly by senior management, could erode trust and confidence and damage the Group’s reputation among existing and potential clients and other stakeholders.
Actual or alleged misconduct by Group entities in any number of activities or circumstances, including operations, employment-related offenses such as sexual harassment and discrimination, regulatory compliance, the use and protection of data and systems, and the satisfaction of client expectations, and actions taken by regulators or others in response to such misconduct, could lead to, among other things, sanctions, fines and reputational damage, any of which could have a material adverse effect on the Group’s business, financial condition and results of operations. Furthermore, the Group may not be able to prevent third parties outside the Group from using the banking network in order to launder money or carry out illegal or inappropriate activities. The inherent risk of money laundering has increased in recent years, due to the accelerated transformation of the financial services business model, including the digitalization of the customer relationship, increased complexity in clients (including clients’ legal structures), and the growing cross-border interconnection of operations and products. Further, financial crimes continually evolve and emerging technologies, such as cryptocurrencies and blockchain, could limit the Group’s ability to track the movement of funds. Additionally, in a context of adverse economic conditions and growing geopolitical tensions, it is possible that financial crime attempts will increase significantly.
If there is a breach of the applicable regulations or the Group’s ethics and compliance regulations or if the competent authorities consider that the Group does not perform the necessary due diligence inherent to its activities, such authorities could impose limitations on the Group’s activities, the revocation of its authorizations and licenses, and economic penalties, in addition to having significant consequences for the Group’s reputation, which could have a material adverse effect on the Group’s business, financial condition and results of operations. Furthermore, the Group from time to time conducts investigations related to alleged violations of such regulations and the Group’s ethics and compliance regulations, and any such investigation or any related proceedings could be time consuming and costly, and its results difficult to predict.
BBVA’s financial statements are based in part on assumptions and estimates which, if inaccurate, could cause material misstatement of the results of its operations and financial condition
The preparation of financial statements in compliance with IFRS-IASB and EU-IFRS requires the use of estimates. It also requires management to exercise judgment in applying relevant accounting policies. The key areas involving a higher degree of judgment or complexity, or areas where assumptions are significant to the consolidated and individual financial statements, include the classification, measurement and impairment of financial assets, particularly where such assets do not have a readily available market price, the assumptions used to quantify certain provisions and for the actuarial calculation of post-employment benefit liabilities and commitments, the useful life and impairment losses of tangible and intangible assets, the valuation of goodwill and purchase price allocation of business combinations, the fair value of certain unlisted financial assets and liabilities, the recoverability of deferred tax assets and the exchange and inflation rates of certain countries where the Group operates.
There is a risk that if the judgment exercised or the estimates or assumptions used subsequently turn out to be incorrect then this could result in significant loss to the Group beyond that anticipated or provided for, which could have a material adverse effect on the Group’s business, financial condition and results of operations. Observable market prices are not available for many of the financial assets and liabilities that the Group holds at fair value and a variety of techniques to estimate the fair value are used. Should the valuation of such financial assets or liabilities become observable, for example as a result of sales or trading in comparable assets or liabilities by third parties, this could result in a materially different valuation to the current carrying value in the Group’s financial statements.
The further development of standards and interpretations under IFRS-IASB and EU-IFRS could also significantly affect the results of operations, financial condition and prospects of the Group.
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OPERATIONAL RISKS
Attacks, failures or deficiencies in the Group’s procedures, systems and security or those of third parties to which the Group is exposed could have a material adverse effect on the Group’s business, financial condition and results of operations, and could harm its reputation
The Group’s activities depend to a large extent on its ability to process and report effectively and accurately on a high volume of highly complex transactions with numerous and diverse products and services, in different currencies and subject to different regulatory regimes. Therefore, it relies on information technology (“IT”) systems for data transmission, processing and storage. However, IT systems are vulnerable to various problems, such as hardware and software malfunctions, computer viruses, hacking, and physical damage to IT centers. BBVA’s exposure to these risks has increased significantly in recent years due to the Group’s implementation of its ambitious digital strategy. Currently, approximately 66% of new clients choose digital channels to start their relationship with BBVA.
The Group suffers cybersecurity incidents and other attacks, failures or deficiencies in the Group’s procedures, systems and security from time to time. Such attacks, failures and deficiencies have from time to time in the past and may in the future lead to, among other things, the misappropriation of funds of the Group’s clients or the Group itself and the unauthorized disclosure, destruction or use of confidential information or personal data, 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, such attacks, failures or deficiencies have from time to time in the past and may in the future 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 may have a material adverse effect on the Group’s business, financial condition and results of operations. Furthermore, it is possible that such attacks, failures or deficiencies will not be detected on time or ever. The Group is likely to be forced to spend significant additional resources to improve its security measures in the future. As cyber-attacks are becoming increasingly sophisticated and difficult to prevent (including as a result of the use of artificial intelligence), the Group may not be able to anticipate or prevent all possible vulnerabilities, nor implement preventive measures that are effective or sufficient.
The prolific use of artificial intelligence technologies has increased the risk of unauthorized access to BBVA’s IT systems and client accounts and of unauthorized disclosure, destruction or use of confidential information or personal data. While there is potential for these technologies to support BBVA’s detection of and defense against unauthorized access attempts and accidental disclosures, malicious or negligent use of these technologies by employees or other third parties may increase these risks. For example, our employees or other third parties may input confidential information into a generative artificial intelligence system (in particular, a system that is managed, owned or controlled by a third party), thereby compromising our business operations or the integrity of BBVA’s proprietary information or client data. Any such incident of unauthorized access or disclosure could have a material adverse effect on the Group’s business, financial condition and results of operations, and could harm its reputation.
The integrity of the Group’s communications and the security of its digital assets face an unprecedented structural challenge due to the advancement of quantum computing. The emergence of the so-called 'Q-Day'—the point at which a quantum computer becomes capable of breaking current public-key cryptography algorithms—represents a systemic risk to data confidentiality. The Group is exposed to the “Harvest Now, Decrypt Later” threat, wherein malicious actors intercept and store encrypted data with the intent of decrypting it once quantum technology matures. Furthermore, the emergence of quantum computing poses a significant risk regarding the potential breaking and forgery of digital signatures. Despite efforts to implement Quantum-Safe protocols and post-quantum cryptography (PQC) standards, the complexity of migrating legacy systems and the sheer speed of technological advancement could outpace the Group’s response capacity. Failure to ensure a timely transition to a quantum-resilient infrastructure could result in the vulnerability of sensitive historical information, compromising client trust and exposing the entity to significant legal and financial consequences. Customers and other third parties to which the Group is significantly exposed, including the Group’s service providers (such as providers of data processing or cloud computing services to which the Group has outsourced certain services), face similar risks. Any attack, failure or deficiency that may affect such third parties could, among other things, adversely affect the Group’s ability to carry out operations or provide services to its clients or result in the unauthorized disclosure, destruction or use of confidential information or personal data. Furthermore, the Group may not be aware of such attack, failure or deficiency in time, which could limit its ability to react. Moreover, as a result of the increasing consolidation, interdependence and complexity of financial institutions and technological systems, an attack, failure or deficiency that significantly degrades, eliminates or compromises the systems or data of one or more financial institutions could have a significant impact on its counterparts or other market participants, including the Group.
Given the increasing consolidation among technology service providers, a systemic adverse event at a key third party could materially impact the Group’s operational continuity and its ability to provide core financial services in the markets where it operates, which could have a material adverse effect on the BBVA Group’s reputational standing or otherwise have a material adverse effect on the Group’s business, financial condition and results of operations.
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ITEM 4. INFORMATION ON THE COMPANY
A. History and Development of the Company
BBVA’s predecessor bank, BBV (Banco Bilbao Vizcaya), was incorporated as a public limited company (a “sociedad anónima” or S.A.) under the Spanish Corporations Law on October 1, 1988. BBVA was formed following the merger of Argentaria into BBV (Banco Bilbao Vizcaya), which was approved by the shareholders of each entity on December 18, 1999 and registered on January 28, 2000. It conducts its business under the commercial name “BBVA”. BBVA is registered with the Commercial Registry of Vizcaya (Spain). It has its registered office at Plaza de San Nicolás 4, Bilbao, Spain, 48005, and operates out of Calle Azul, 4, 28050, Madrid, Spain (Telephone: +34-91-374-6201). BBVA’s agent in the U.S. for U.S. federal securities law purposes is Banco Bilbao Vizcaya Argentaria, S.A. New York Branch (Two Manhattan West 375 9th Avenue, 8th Floor, New York, New York 10001 (Telephone: +1-212-728-1660)). BBVA is incorporated for an unlimited term.
Capital Expenditures
Our principal investments are financial investments in our subsidiaries and affiliates. In 2025, 2024 and 2023, there were no significant capital expenditures.
Capital Divestitures
Our principal divestitures are divestitures in our subsidiaries and affiliates. In 2025, 2024 and 2023, there were no significant capital divestitures.
Public Information
The SEC maintains an Internet site (www.sec.gov) that contains reports and other information regarding issuers that file electronically with the SEC, including BBVA. See “Item 10. Additional Information—Documents on Display”. Additional information on the Group is also available on our website at https://shareholdersandinvestors.bbva.com. The information contained on such websites does not form part of this Annual Report.
B. Business Overview
The BBVA Group is a customer-centric global financial services group founded in 1857. Internationally diversified and with strengths in the traditional banking businesses of retail banking, asset management and wholesale banking, the Group is committed to offering a compelling digital proposition focused on customer experience.
For this purpose, the Group is focused on increasingly offering products online and through mobile channels, improving the functionality of its digital offerings and refining the customer experience, contributing to the delivery of its strategy in a sustainable and inclusive way. BBVA places sustainability at the core of its strategy. Sustainability is impacting the banking business, affecting not only relations with customers but also internal processes.
In 2025, the number of digital and mobile phone customers and the volume of online transactions continued to increase.
Operating Segments
As of December 31, 2025, the structure of the operating segments used by the BBVA Group for management purposes remained the same as in 2024.
Set forth below are the Group’s current five operating segments:
• Spain;
• Mexico;
• Turkey;
• South America; and
• Rest of Business.
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In addition to the operating segments referred to above, the Group has a Corporate Center which includes those items that have not been allocated to an operating segment. It includes the Group’s general management functions, including costs from central units that have a corporate function; management of structural exchange rate positions carried out by the ALCO, including currency hedging; certain proprietary portfolios; certain tax assets and liabilities; certain provisions related to commitments with employees; and goodwill and other intangibles, as well as the financing of such asset portfolios. It also includes the results of the Group’s stake in the venture capital fund Propel Venture Partners.
Following the publication of our consolidated financial statements as of and for the years ended December 31, 2024, 2023 and 2022 included in our annual report on Form 20-F for the year ended December 31, 2024, certain immaterial balance sheet amounts related to specific activities undertaken by the business units were reallocated between the operating segments and the Corporate Center. As a result, certain expenses were reallocated, in particular, between Spain, Rest of Business and the Corporate Center. In order to make the segment information as of and for the years ended December 31, 2024 and 2023 comparable with the segment information as of and for the year ended December 31, 2025, segment information as of and for the years ended December 31, 2024 and 2023 has been revised in conformity with these intra-group adjustments. These intra-group adjustments had no impact at the consolidated level.
The breakdown of the Group’s total assets by each of BBVA’s operating segments and the Corporate Center as of December 31, 2025, 2024 and 2023 was as follows:
| As of December 31, | |||||||||||
| 2025 | 2024 | 2023 | |||||||||
| (In Millions of Euros) | |||||||||||
| Spain | 456,419 | 411,620 | 452,423 | ||||||||
| Mexico | 182,525 | 168,470 | 173,489 | ||||||||
| Turkey | 90,702 | 82,782 | 68,329 | ||||||||
| South America | 76,648 | 73,997 | 64,779 | ||||||||
| Rest of Business | 88,638 | 66,534 | 64,274 | ||||||||
| Subtotal Assets by Operating Segment | 894,931 | 803,404 | 823,294 | ||||||||
| Corporate Center and Adjustments (1) | (35,355) | (31,002) | (47,736) | ||||||||
| Total Assets BBVA Group | 859,576 | 772,402 | 775,558 | ||||||||
(1)Includes balance sheet intra-group adjustments between the Corporate Center and the operating segments (see “Presentation of Financial Information—Changes in Intra-Group Adjustments” for information on such adjustments).
The following table sets forth information relating to the profit (loss) attributable to parent company for each of BBVA’s operating segments and the Corporate Center for the years ended December 31, 2025, 2024 and 2023. Such information is presented under management criteria; however, for the years ended December 31, 2025, 2024 and 2023, there are no differences between the sum of the income statements of our operating segments and the Corporate Center (calculated in accordance with management criteria used to report segment financial information) and the consolidated income statement of the Group. For additional information on the profit (loss) attributable to parent company for each of BBVA’s operating segments and the Corporate Center, see “Item 5. Operating and Financial Review and Prospects—Operating Results—Results of Operations by Operating Segment”.
Profit / (Loss) Attributable to Parent Company | % of Profit / (Loss) Attributable to Parent Company (1) | |||||||||||||||||||
For the year ended December 31, | ||||||||||||||||||||
2025 | 2024 | 2023 | 2025 | 2024 | 2023 | |||||||||||||||
(In Millions of Euros) | (In Percentage) | |||||||||||||||||||
Spain | 4,175 | 3,752 | 2,690 | 36 | 34 | 28 | ||||||||||||||
Mexico | 5,264 | 5,447 | 5,319 | 45 | 50 | 56 | ||||||||||||||
Turkey | 805 | 611 | 527 | 7 | 6 | 6 | ||||||||||||||
South America | 726 | 635 | 601 | 6 | 6 | 6 | ||||||||||||||
Rest of Business | 627 | 511 | 403 | 5 | 5 | 4 | ||||||||||||||
Subtotal operating segments | 11,597 | 10,956 | 9,541 | 100 | 100 | 100 | ||||||||||||||
Corporate Center | (1,086) | (901) | (1,522) | |||||||||||||||||
Profit attributable to parent company | 10,511 | 10,054 | 8,019 | |||||||||||||||||
(1) Based on subtotal from operating segments.
24
The following table sets forth certain summarized information relating to the income of each operating segment and the Corporate Center for the years ended December 31, 2025, 2024 and 2023. Such information is presented under management criteria; however, for the years ended December 31, 2025, 2024 and 2023, there are no differences between the sum of the income statements of our operating segments and the Corporate Center (calculated in accordance with management criteria used to report segment financial information) and the consolidated income statement of the Group. For additional information on the income of each of BBVA’s operating segments and the Corporate Center, see “Item 5. Operating and Financial Review and Prospects—Operating Results—Results of Operations by Operating Segment”.
| Operating Segments | |||||||||||||||||||||||
| Spain | Mexico | Turkey | South America | Rest of Business | Corporate Center | Total | |||||||||||||||||
| (In Millions of Euros) | |||||||||||||||||||||||
December 2025 | |||||||||||||||||||||||
| Net interest income / (expense) | 6,588 | 11,424 | 3,079 | 4,830 | 828 | (469) | 26,280 | ||||||||||||||||
| Gross income | 10,027 | 15,198 | 5,213 | 5,363 | 1,807 | (678) | 36,931 | ||||||||||||||||
| Operating profit / (loss) before tax | 5,933 | 7,341 | 1,863 | 1,758 | 772 | (1,440) | 16,227 | ||||||||||||||||
| Profit / (loss) attributable to parent company | 4,175 | 5,264 | 805 | 726 | 627 | (1,086) | 10,511 | ||||||||||||||||
December 2024 | |||||||||||||||||||||||
| Net interest income / (expense) | 6,384 | 11,556 | 1,492 | 5,589 | 742 | (495) | 25,267 | ||||||||||||||||
| Gross income | 9,443 | 15,337 | 4,212 | 5,405 | 1,472 | (388) | 35,481 | ||||||||||||||||
| Operating profit / (loss) before tax | 5,263 | 7,522 | 1,741 | 1,342 | 648 | (1,110) | 15,405 | ||||||||||||||||
| Profit / (loss) attributable to parent company | 3,752 | 5,447 | 611 | 635 | 511 | (901) | 10,054 | ||||||||||||||||
December 2023 | |||||||||||||||||||||||
| Net interest income / (expense) | 5,570 | 11,054 | 1,869 | 4,394 | 539 | (336) | 23,089 | ||||||||||||||||
| Gross income | 7,848 | 14,267 | 2,981 | 4,331 | 1,113 | (999) | 29,542 | ||||||||||||||||
| Operating profit / (loss) before tax | 3,855 | 7,329 | 1,324 | 1,189 | 499 | (1,777) | 12,419 | ||||||||||||||||
| Profit / (loss) attributable to parent company | 2,690 | 5,319 | 527 | 601 | 403 | (1,522) | 8,019 | ||||||||||||||||
25
The following tables set forth summarized information relating to the balance sheet of the operating segments and the Corporate Center and adjustments as of December 31, 2025, 2024 and 2023:
As of December 31, 2025 | |||||||||||||||||||||||
Spain | Mexico | Turkey | South America | Rest of Business | Total Operating Segments | Corporate Center and Adjustments (1) | |||||||||||||||||
(In Millions of Euros) | |||||||||||||||||||||||
Total Assets | 456,419 | 182,525 | 90,702 | 76,648 | 88,638 | 894,931 | (35,355) | ||||||||||||||||
Cash, cash balances at central banks and other demand deposits | 19,928 | 10,417 | 9,061 | 8,075 | 11,564 | 59,045 | (208) | ||||||||||||||||
Financial assets at fair value (2) | 119,919 | 59,528 | 5,010 | 10,499 | 2,032 | 196,988 | (2,716) | ||||||||||||||||
Financial assets at amortized cost | 263,566 | 105,972 | 72,047 | 54,336 | 74,448 | 570,369 | (1,477) | ||||||||||||||||
Loans and advances to customers | 192,958 | 97,259 | 53,745 | 51,151 | 66,502 | 461,616 | (1,216) | ||||||||||||||||
Of which: | |||||||||||||||||||||||
Residential mortgages | 69,596 | 18,487 | 1,906 | 8,807 | 872 | 99,668 | |||||||||||||||||
Consumer finance | 17,596 | 15,331 | 7,900 | 10,297 | 815 | 51,940 | |||||||||||||||||
Other households | 5,857 | 2,242 | 2,929 | 900 | 238 | 12,166 | |||||||||||||||||
Credit cards | 2,797 | 11,098 | 11,033 | 3,800 | 26 | 28,755 | |||||||||||||||||
Loans to enterprises | 79,418 | 43,426 | 29,041 | 25,021 | 63,770 | 240,676 | |||||||||||||||||
Loans to public sector | 15,677 | 7,158 | 270 | 1,656 | 822 | 25,583 | |||||||||||||||||
Total Liabilities | 441,245 | 171,511 | 81,467 | 69,391 | 83,421 | 847,034 | (49,256) | ||||||||||||||||
Financial liabilities held for trading and designated at fair value through profit or loss | 82,785 | 32,406 | 1,690 | 2,428 | 766 | 120,074 | (9,740) | ||||||||||||||||
Financial liabilities at amortized cost - Customer deposits | 251,430 | 93,855 | 62,984 | 53,375 | 40,932 | 502,576 | (75) | ||||||||||||||||
Of which: | |||||||||||||||||||||||
Demand and savings deposits | 198,559 | 77,148 | 31,340 | 32,945 | 20,888 | 360,881 | |||||||||||||||||
Time deposits | 39,887 | 16,669 | 31,194 | 20,430 | 20,044 | 128,224 | |||||||||||||||||
Total Equity | 15,174 | 11,014 | 9,235 | 7,257 | 5,217 | 47,897 | 13,901 | ||||||||||||||||
Assets under management | 119,535 | 69,533 | 26,290 | 8,289 | 736 | 224,383 | |||||||||||||||||
Mutual funds | 92,820 | 62,657 | 19,436 | 8,289 | — | 183,201 | |||||||||||||||||
Pension funds | 26,715 | — | 6,855 | — | 736 | 34,306 | |||||||||||||||||
Other placements | — | 6,876 | — | — | — | 6,876 | |||||||||||||||||
(1)Includes balance sheet intra-group adjustments between the Corporate Center and the operating segments (see “Presentation of Financial Information—Changes in Intra-Group Adjustments” for information on such adjustments).
(2)Financial assets at fair value includes: “Financial assets held for trading”, “Non-trading financial assets mandatorily at fair value through profit or loss”, “Financial assets designated at fair value through profit or loss” and “Financial assets at fair value through other comprehensive income”.
26
As of December 31, 2024 | |||||||||||||||||||||||
Spain | Mexico | Turkey | South America | Rest of Business | Total Operating Segments | Corporate Center and Adjustments (1) | |||||||||||||||||
(In Millions of Euros) | |||||||||||||||||||||||
Total Assets | 411,620 | 168,470 | 82,782 | 73,997 | 66,534 | 803,404 | (31,002) | ||||||||||||||||
Cash, cash balances at central banks and other demand deposits | 12,734 | 12,564 | 8,828 | 8,906 | 8,348 | 51,379 | (234) | ||||||||||||||||
Financial assets at fair value (2) | 109,569 | 54,547 | 4,503 | 10,884 | 1,627 | 181,130 | (1,798) | ||||||||||||||||
Financial assets at amortized cost | 237,279 | 94,595 | 64,893 | 49,983 | 56,013 | 502,763 | (362) | ||||||||||||||||
Loans and advances to customers | 179,667 | 88,725 | 48,299 | 46,846 | 50,392 | 413,930 | (1,453) | ||||||||||||||||
Of which: | |||||||||||||||||||||||
Residential mortgages | 67,975 | 16,280 | 1,636 | 8,011 | 679 | 94,580 | |||||||||||||||||
Consumer finance | 15,911 | 13,087 | 6,286 | 9,582 | 700 | 45,566 | |||||||||||||||||
Other households | 5,642 | 2,578 | 2,306 | 827 | 191 | 11,544 | |||||||||||||||||
Credit cards | 2,798 | 9,514 | 10,185 | 3,557 | 15 | 26,070 | |||||||||||||||||
Loans to enterprises | 71,877 | 40,745 | 27,605 | 23,041 | 48,155 | 211,423 | |||||||||||||||||
Loans to public sector | 12,516 | 6,840 | 225 | 1,645 | 654 | 21,879 | |||||||||||||||||
Total Liabilities | 396,475 | 156,743 | 74,537 | 66,907 | 61,501 | 756,163 | (43,774) | ||||||||||||||||
Financial liabilities held for trading and designated at fair value through profit or loss | 75,143 | 30,885 | 1,943 | 2,060 | 642 | 110,674 | (9,131) | ||||||||||||||||
Financial liabilities at amortized cost - Customer deposits | 226,391 | 84,949 | 58,095 | 50,738 | 27,432 | 447,605 | 41 | ||||||||||||||||
Of which: | |||||||||||||||||||||||
Demand and savings deposits | 192,770 | 70,091 | 26,482 | 31,172 | 11,295 | 331,810 | |||||||||||||||||
Time deposits | 27,153 | 13,871 | 30,961 | 19,566 | 16,137 | 107,687 | |||||||||||||||||
Total Equity | 15,145 | 11,727 | 8,245 | 7,090 | 5,033 | 47,242 | 12,772 | ||||||||||||||||
Assets under management | 108,694 | 57,253 | 18,076 | 7,936 | 645 | 192,604 | |||||||||||||||||
Mutual funds | 82,852 | 52,528 | 12,949 | 7,936 | — | 156,264 | |||||||||||||||||
Pension funds | 25,841 | — | 5,128 | — | 645 | 31,614 | |||||||||||||||||
Other placements | — | 4,726 | — | — | — | 4,726 | |||||||||||||||||
(1)Includes balance sheet intra-group adjustments between the Corporate Center and the operating segments (see “Presentation of Financial Information—Changes in Intra-Group Adjustments” for information on such adjustments).
(2)Financial assets at fair value includes: “Financial assets held for trading”, “Non-trading financial assets mandatorily at fair value through profit or loss”, “Financial assets designated at fair value through profit or loss” and “Financial assets at fair value through other comprehensive income”.
27
As of December 31, 2023 | |||||||||||||||||||||||
Spain | Mexico | Turkey | South America | Rest of Business | Total Operating Segments | Corporate Center and Adjustments (1) | |||||||||||||||||
(In Millions of Euros) | |||||||||||||||||||||||
Total Assets | 452,423 | 173,489 | 68,329 | 64,779 | 64,274 | 823,294 | (47,736) | ||||||||||||||||
Cash, cash balances at central banks and other demand deposits | 44,653 | 10,089 | 9,700 | 6,585 | 4,748 | 75,776 | (359) | ||||||||||||||||
Financial assets at fair value (2) | 141,045 | 60,379 | 3,692 | 10,508 | 15,475 | 231,099 | (18,159) | ||||||||||||||||
Financial assets at amortized cost | 216,334 | 96,342 | 51,543 | 44,508 | 43,363 | 452,089 | (357) | ||||||||||||||||
Loans and advances to customers | 173,168 | 88,112 | 37,416 | 41,213 | 39,322 | 379,231 | (1,588) | ||||||||||||||||
Of which: | |||||||||||||||||||||||
Residential mortgages | 67,028 | 17,119 | 1,041 | 7,409 | 766 | 93,363 | |||||||||||||||||
Consumer finance | 14,949 | 12,862 | 4,908 | 9,335 | 646 | 42,699 | |||||||||||||||||
Other households | 5,593 | 2,613 | 1,200 | 833 | 221 | 10,460 | |||||||||||||||||
Credit cards | 2,575 | 9,695 | 6,734 | 2,595 | 13 | 21,611 | |||||||||||||||||
Loans to enterprises | 66,851 | 38,689 | 22,967 | 19,015 | 37,035 | 184,556 | |||||||||||||||||
Loans to public sector | 12,716 | 7,712 | 489 | 1,826 | 521 | 23,264 | |||||||||||||||||
Total Liabilities | 437,797 | 162,271 | 61,892 | 58,485 | 60,083 | 780,528 | (60,235) | ||||||||||||||||
Financial liabilities held for trading and designated at fair value through profit or loss | 111,682 | 28,492 | 1,878 | 3,289 | 14,831 | 160,173 | (25,158) | ||||||||||||||||
Financial liabilities at amortized cost - Customer deposits | 216,114 | 92,564 | 50,651 | 42,567 | 13,056 | 414,952 | (1,465) | ||||||||||||||||
Of which: | |||||||||||||||||||||||
Demand and savings deposits | 187,937 | 76,156 | 23,100 | 26,080 | 5,170 | 318,443 | |||||||||||||||||
Time deposits | 28,067 | 14,770 | 26,221 | 16,488 | 7,885 | 93,431 | |||||||||||||||||
Total Equity | 14,626 | 11,218 | 6,438 | 6,294 | 4,191 | 42,766 | 12,500 | ||||||||||||||||
Assets under management | 97,253 | 53,254 | 7,768 | 5,525 | 566 | 164,366 | |||||||||||||||||
Mutual funds | 72,875 | 49,062 | 4,386 | 5,525 | — | 131,848 | |||||||||||||||||
Pension funds | 24,378 | — | 3,382 | — | 566 | 28,326 | |||||||||||||||||
Other placements | — | 4,192 | — | — | — | 4,192 | |||||||||||||||||
(1)Includes balance sheet intra-group adjustments between the Corporate Center and the operating segments (see “Presentation of Financial Information—Changes in Intra-Group Adjustments” for information on such adjustments).
(2)Financial assets at fair value includes: “Financial assets held for trading”, “Non-trading financial assets mandatorily at fair value through profit or loss”, “Financial assets designated at fair value through profit or loss” and “Financial assets at fair value through other comprehensive income”.
28
Spain
This operating segment includes all of BBVA’s banking and non-banking businesses in Spain, other than those included in the Corporate Center. The primary business units included in this operating segment are:
•Spanish Retail Network: including individual customers, private banking, small companies and businesses in the domestic market;
•Corporate and Business Banking: which manages small and medium sized enterprises (“SMEs”), companies and corporations, and public institutions;
•Corporate and Investment Banking: responsible for business with large corporations and multinational groups and the trading floor and distribution business in Spain; and
•Other units: which includes the insurance business unit in Spain (BBVA Seguros) as well as the Group’s shareholding in Compañía de Seguros y Reaseguros, S.A., the Asset Management unit (which manages Spanish mutual funds and pension funds), lending to real estate developers and foreclosed real estate assets in Spain, as well as certain proprietary portfolios and certain funding and structural interest-rate positions of the euro balance sheet which are not included in the Corporate Center. During 2020, BBVA Seguros transferred to Allianz, Compañía de Seguros y Reaseguros, S.A. (“Allianz”), 50% of the share capital plus one share in BBVA Seguros Generales. Further to the purchase price paid by Allianz at such time, Allianz will need to pay to BBVA up to an additional €100 million if certain business goals and milestones are met. As of December 31, 2025 and 2024, BBVA recorded a portion of the amount corresponding to the earn-out for the respective last five years. As of December 31, 2023, BBVA received the total amount corresponding to the earn-out for the three years 2020 to 2023, which was not material for the consolidated financial statements of the BBVA Group.
Cash, cash balances at central banks and other demand deposits as of December 31, 2025 amounted to €19,928 million, a 56.5% increase compared with the €12,734 million recorded as of December 31, 2024, mainly driven by the narrowing of the credit gap (as loans increased less than deposits), the increase in cash balances held at the ECB through repurchase agreements and, to a lesser extent, the proceeds of debt issuances completed during 2025.
Financial assets at fair value of this operating segment (which includes the following portfolios: “Financial assets held for trading”, “Non-trading financial assets mandatorily at fair value through profit or loss”, “Financial assets designated at fair value through profit or loss” and “Financial assets at fair value through other comprehensive income”) amounted to €119,919 million as of December 31, 2025, a 9.4% increase from the €109,569 million recorded as of December 31, 2024, mainly as a result of the increase in loans and advances through reverse repurchase agreements in the corporate portfolio, and the increase in holdings of sovereign debt securities of European countries and equity instruments, partially offset by the decrease in derivatives and decreases in loans and advances to credit institutions (through reverse repurchase agreements), all of which were recorded under “Financial assets held for trading”.
Financial assets at amortized cost of this operating segment as of December 31, 2025 amounted to €263,566 million, an 11.1% increase compared with the €237,279 million recorded as of December 31, 2024. Within this heading, loans and advances to customers amounted to €192,958 million as of December 31, 2025, a 7.4% increase compared with the €179,667 million recorded as of December 31, 2024, mainly due to the increases in corporate loans, public sector loans and consumer loans. Loans to the public sector included the recognition of an asset under the “Financial assets at amortized cost - General Governments” line item in the balance sheet as of December 31, 2025, as a result of the €295 million payment corresponding to the new tax on the net interest margin and commissions of certain financial entities (the Interest Margin and Commission Tax or “IMIC”) for the year ended December 31, 2024, given that such payment was made but considered undue with respect to such year under the existing legal framework as of December 31, 2025 (see Note 14 to the Consolidated Financial Statements). In addition, within this heading, debt securities of this operating segment as of December 31, 2025 amounted to €55,491 million, a 29.7% increase compared with the €42,791 million recorded as of December 31, 2024, mainly as a result of an increase in holdings of sovereign debt securities of European countries recorded under “Financial assets at amortized cost”.
Financial liabilities held for trading and designated at fair value through profit or loss of this operating segment as of December 31, 2025 amounted to €82,785 million, a 10.2% increase compared with the €75,143 million recorded as of December 31, 2024, mainly due to the increase in deposits (through repurchase agreements), supported by higher liquidity in the financial system, partially offset by the decrease in derivatives.
29
Customer deposits at amortized cost of this operating segment as of December 31, 2025 amounted to €251,430 million, an 11.1% increase compared with the €226,391 million recorded as of December 31, 2024, mainly due to the increase in time deposits from public institutions (through repurchase agreements) within the Corporate and Investment Banking portfolio, supported by higher short-term liquidity placements of the public sector within a low interest rate environment, increases in time deposits within the corporate portfolio and the increase in demand deposits from households.
Off-balance sheet funds of this operating segment (which includes “Mutual funds” (including customers’ portfolios) and “Pension funds”) as of December 31, 2025 amounted to €119,535 million, a 10.0% increase compared with the €108,694 million recorded as of December 31, 2024, mainly due to the shift towards mutual funds from other instruments, as declining interest rates reduced deposit yields and boosted the performance of fixed-income and equity funds.
This operating segment’s non-performing loan ratio (defined as non-performing loans divided by total credit risk and calculated as the sum of impaired loans and advances to customers, impaired guarantees to customers and other impaired commitments divided by the sum of loans and advances to customers, guarantees to customers and other commitments) decreased to 3.0% as of December 31, 2025 from 3.7% as of December 31, 2024. This ratio was positively affected by the sale of non-performing loan portfolios and a decrease in the amount of non-performing retail loans due to improvements in collateralized loans, and increases in corporate loans, loans to the public sector and consumer loans, increasing the overall loans and advances to customers in the ratio’s denominator. This operating segment’s non-performing loan coverage ratio (defined as allowance for credit losses divided by non-performing loans and calculated as loss allowances on loans and advances divided by the sum of impaired loans and advances to customers, impaired guarantees to customers and other impaired commitments) increased to 67% as of December 31, 2025 from 59% as of December 31, 2024.
Mexico
The Mexico operating segment includes the banking, insurance and asset management business conducted in Mexico by BBVA Mexico. It also includes BBVA Mexico’s agency in Houston.
The Mexican peso appreciated 2.0% against the euro as of December 31, 2025 compared with December 31, 2024. See “Item 5. Operating and Financial Review and Prospects―Operating Results―Factors Affecting the Comparability of our Results of Operations and Financial Condition―Trends in Exchange Rates”.
Cash, cash balances at central banks and other demand deposits as of December 31, 2025 amounted to €10,417 million, a 17.1% decrease compared with the €12,564 million recorded as of December 31, 2024, mainly driven by the decrease in cash balances at the Mexican Central Bank (“BANXICO”), through repurchase agreements activity, partially offset by the proceeds of debt issuances completed during the year ended December 31, 2025.
Financial assets at fair value of this operating segment (which includes the following portfolios: “Financial assets held for trading”, “Non-trading financial assets mandatorily at fair value through profit or loss”, “Financial assets designated at fair value through profit or loss” and “Financial assets at fair value through other comprehensive income”) as of December 31, 2025 amounted to €59,528 million, a 9.1% increase from the €54,547 million recorded as of December 31, 2024, mainly due to the increase in loans and advances through reverse repurchase agreements recorded under “Financial assets held for trading”.
Financial assets at amortized cost of this operating segment as of December 31, 2025 amounted to €105,972 million, a 12.0% increase compared with the €94,595 million recorded as of December 31, 2024. Within this heading, loans and advances to customers of this operating segment as of December 31, 2025 amounted to €97,259 million, a 9.6% increase compared with the €88,725 million recorded as of December 31, 2024, mainly as a result of increases in the volume of mortgages and consumer loans within the retail loan portfolio.
Financial liabilities held for trading and designated at fair value through profit or loss of this operating segment as of December 31, 2025 amounted to €32,406 million, a 4.9% increase compared with the €30,885 million recorded as of December 31, 2024, mainly as a result of the increase in deposits from financial institutions resulting from repurchase agreements, partially offset by decreases in short positions.
Customer deposits at amortized cost of this operating segment as of December 31, 2025 amounted to €93,855 million, a 10.5% increase compared with the €84,949 million recorded as of December 31, 2024, mainly as a result of increases in time deposits from the household and the corporate portfolios.
Off-balance sheet funds of this operating segment (which includes “Mutual funds” (including customers’ portfolios) and “Other placements”) as of December 31, 2025 amounted to €69,533 million, a 21.4% increase compared with the €57,253 million as of December 31, 2024, mainly as a result of the continuing search by customers for higher-return investments, which continued to boost mutual funds.
30
This operating segment’s non-performing loan ratio (as defined herein) stood at 2.7% as of December 31, 2025 and 2024. The impact of the increase in the non-performing loan entries in the retail loan portfolio on the ratio was partially offset by decreases in the non-performing wholesale loan portfolio. This operating segment’s non-performing loan coverage ratio (as defined herein) increased to 124% as of December 31, 2025 from 121% as of December 31, 2024, mainly due to the higher coverage requirements in the retail portfolio as a result of the deterioration of the macroeconomic outlook.
Turkey
This operating segment comprises the activities carried out by Garanti BBVA as an integrated financial services group operating in the banking, insurance and asset management business in Turkey, including corporate, commercial, SME, payment systems, retail, private and investment banking, together with its subsidiaries in pension and life insurance, leasing, factoring, brokerage and asset management, as well as its international subsidiaries in Romania and the Netherlands.
The Turkish lira depreciated 27.2% against the euro as of December 31, 2025 compared to December 31, 2024, adversely affecting the business activity of the Turkey operating segment as of December 31, 2025 expressed in euros. See “Item 5. Operating and Financial Review and Prospects―Operating Results―Factors Affecting the Comparability of our Results of Operations and Financial Condition―Trends in Exchange Rates”.
Since the first half of 2022, the Turkish economy has been considered to be hyperinflationary as defined by IAS 29 “Financial Reporting in Hyperinflationary Economies”. See “Presentation of Financial Information—Hyperinflationary Economies” and Note 2.2.18 to the Consolidated Financial Statements for information on the impact of hyperinflation accounting. Regulation and monetary policy, including the liraization strategy adopted by the CBRT to protect the Turkish lira, has affected this operating segment. See “Item 4. Information on the Company―Business Overview—Supervision and Regulation—Principal Markets—Turkey” for information on certain regulation that is relevant to our operations.
Cash, cash balances at central banks and other demand deposits as of December 31, 2025 amounted to €9,061 million, a 2.6% increase compared with the €8,828 million recorded as of December 31, 2024, mainly driven by the increase in equity, due to retained earnings, the proceeds of debt issuances completed during the year together with foreign currency deposit accumulation partially offset by an increase in the credit gap (loans grew more than deposits) and the depreciation of the Turkish lira against the euro.
Financial assets at fair value of this operating segment (which includes the following portfolios: “Financial assets held for trading”, “Non-trading financial assets mandatorily at fair value through profit or loss”, “Financial assets designated at fair value through profit or loss” and “Financial assets at fair value through other comprehensive income”) as of December 31, 2025 amounted to €5,010 million, an 11.2% increase from the €4,503 million recorded as of December 31, 2024, mainly due to the increase in local currency-denominated debt securities, whose valuation increased supported by the decrease in interest reference rates during the year ended December 31, 2025, offset, to a great extent, by the depreciation of the Turkish lira against the euro.
Financial assets at amortized cost of this operating segment as of December 31, 2025 amounted to €72,047 million an 11.0% increase compared with the €64,893 million recorded as of December 31, 2024. Within this heading, loans and advances to customers of this operating segment as of December 31, 2025 amounted to €53,745 million, an 11.3% increase compared with the €48,299 million recorded as of December 31, 2024, mainly due to the increase in the volume of Turkish lira-denominated consumer and wholesale loans, due, in part, to the measures adopted by the Turkish authorities (e.g., the lessening of loan reserve requirements) to encourage Turkish lira-denominated loans (see “—Supervision and Regulation—Principal Markets—Turkey”), partially offset by the depreciation of the Turkish lira against the euro. In addition, within this heading, debt securities of this operating segment amounted to €6,299 million, a 15.1% decrease from the €7,417 million recorded as of December 31, 2024, as a result of the depreciation of the Turkish lira against the euro, partially offset by increases in the volume of local currency-denominated bonds as part of our liquidity management measures. Further, loans and advances to central banks increased in the year ended December 31, 2025, as a result of increases in the volume of Turkish lira deposits and the continued existence of reserve ratio requirements applicable to Turkish lira deposits established by the CBRT during the period. See “—Supervision and Regulation—Principal Markets—Turkey”.
Financial liabilities held for trading and designated at fair value through profit or loss of this operating segment as of December 31, 2025 amounted to €1,690 million, a 13.1% decrease compared with the €1,943 million recorded as of December 31, 2024, mainly due to the depreciation of the Turkish lira against the euro, partially offset by the increase in debt certificates issued by Garanti BBVA.
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Customer deposits at amortized cost of this operating segment as of December 31, 2025 amounted to €62,984 million, an 8.4% increase compared with the €58,095 million recorded as of December 31, 2024, mainly due to the increase in Turkish lira-denominated retail and wholesale demand deposits and wholesale time deposits due in part to the phase-out of the foreign currency-protected deposit scheme (“KKM”) scheme resulting in the transfer of foreign currency deposits towards Turkish lira deposits, and certain additional measures adopted by the Turkish authorities to encourage and protect deposits denominated in Turkish lira and prevent further dollarization of deposits, which included the increase —in May 2025— in the reserve requirements applicable to deposits denominated in foreign currencies (see “—Supervision and Regulation—Principal Markets—Turkey”)), partially offset by the depreciation of the Turkish lira against the euro.
Off-balance sheet funds of this operating segment (which includes “Mutual funds” and “Pension funds”) as of December 31, 2025 amounted to €26,290 million, a 45.4% increase compared with the €18,076 million as of December 31, 2024, mainly due to increases in mutual funds as a result of the shift towards higher-return investments, partially offset by the depreciation of the Turkish lira against the euro.
The non-performing loan ratio (as defined herein) of this operating segment increased to 3.9% as of December 31, 2025 from 3.1% as of December 31, 2024, mainly as a result of the increase in the balance of non-performing retail loans (mainly credit card and consumer loans) due, in part, to a deterioration in credit quality as a result of the lower repayment capacity of retail customers, as interest rates have grown at a greater pace than inflation within the period, partially offset by the increase in the volume of Turkish lira-denominated consumer and wholesale loans. This operating segment’s non-performing loan coverage ratio (as defined herein) decreased to 76% as of December 31, 2025 from 96% as of December 31, 2024, mainly due to new Stage 3 entries and lower requirements from the wholesale portfolio.
South America
The South America operating segment includes the Group’s banking, finance, insurance and asset management business mainly in Argentina, Chile, Colombia, Peru, Uruguay and Venezuela.
The main business units included in the South America operating segment are:
•Retail and Corporate Banking: includes banks in Argentina, Chile, Colombia, Peru, Uruguay and Venezuela.
•Insurance: includes insurance businesses in Argentina, Colombia and Venezuela.
As of December 31, 2025, the Argentine peso and the Peruvian sol depreciated against the euro by 37.4% and 1.2%, respectively, compared to December 31, 2024. On the other hand, the Colombian peso appreciated against the euro by 3.8% compared to December 31, 2024. Overall, changes in exchange rates resulted in a negative exchange rate effect on the business activity of the South America operating segment as of December 31, 2025 expressed in euros. See “Item 5. Operating and Financial Review and Prospects―Operating Results―Factors Affecting the Comparability of our Results of Operations and Financial Condition―Trends in Exchange Rates”.
As of and for the years ended December 31, 2025, 2024 and 2023, the Argentine and Venezuelan economies were considered to be hyperinflationary as defined by IAS 29 “Financial Reporting in Hyperinflationary Economies”. See “Presentation of Financial Information—Hyperinflationary Economies” and Note 2.2.18 to the Consolidated Financial Statements for information on the impact of hyperinflation accounting.
Cash, cash balances at central banks and other demand deposits as of December 31, 2025 amounted to €8,075 million, a 9.3% decrease compared with the €8,906 million recorded as of December 31, 2024, mainly driven by the credit gap widening (as loans increased more than deposits) in Colombia and Peru and the depreciation of the Argentine peso against the euro.
Financial assets at fair value for this operating segment (which includes the following portfolios: “Financial assets held for trading”, “Non-trading financial assets mandatorily at fair value through profit or loss”, “Financial assets designated at fair value through profit or loss” and “Financial assets at fair value through other comprehensive income”) as of December 31, 2025 amounted to €10,499 million, a 3.5% decrease compared with the €10,884 million recorded as of December 31, 2024, mainly due to the depreciation of the Argentine peso against the euro, partially offset by the increase in debt securities in Argentina and the increase in derivatives in Colombia.
Financial assets at amortized cost of this operating segment as of December 31, 2025 amounted to €54,336 million, an 8.7% increase compared with the €49,983 million recorded as of December 31, 2024. Within this heading, loans and advances to customers of this operating segment as of December 31, 2025 amounted to €51,151 million, a 9.2% increase compared with the €46,846 million recorded as of December 31, 2024, mainly as a result of increases in corporate loans in Argentina and Colombia and increases in household loans in Argentina and Peru, partially offset by the depreciation of the Argentine peso against the euro.
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Financial liabilities held for trading and designated at fair value through profit or loss of this operating segment as of December 31, 2025 amounted to €2,428 million, a 17.9% increase compared with the €2,060 million recorded as of December 31, 2024, mainly due to increases in derivatives in Colombia.
Customer deposits at amortized cost of this operating segment as of December 31, 2025 amounted to €53,375 million, a 5.2% increase compared with the €50,738 million recorded as of December 31, 2024, mainly as a result of the increase in demand deposits in the household portfolios in Peru and Colombia, and in the wholesale portfolios in Argentina, and the increase in time deposits in the wholesale portfolios in Colombia and Argentina, partially offset by the depreciation of the Argentine peso against the euro.
Off-balance sheet funds of this operating segment (which includes “Mutual funds”, including customers’ portfolios, in Argentina, Colombia and Peru) as of December 31, 2025 amounted to €8,289 million, a 4.5% increase compared with the €7,936 million as of December 31, 2024, mainly due to increases in mutual funds in Peru and, to a lesser extent, in Colombia and Argentina, as a result of the shift towards higher-return investments, partially offset by the depreciation of the Argentine peso against the euro.
The non-performing loan ratio (as defined herein) of this operating segment as of December 31, 2025 decreased to 4.0% from 4.5% as of December 31, 2024, mainly as a result of the decrease in non-performing loans in the retail portfolios in Peru and Colombia, partially offset by higher impairment requirements in the retail loan portfolio un Argentina. This operating segment’s non-performing loan coverage ratio (as defined herein) increased to 92% as of December 31, 2025, from 88% as of December 31, 2024 as a result of the abovementioned decreases in non-performing loans in the retail portfolios in Peru and Colombia.
Rest of Business
This operating segment mainly includes the wholesale activity carried out by the Group in Europe (excluding Spain), the United States and (through BBVA branches located therein) Asia, as well as the Group’s digital banks in Italy and Germany.
The U.S. dollar depreciated 11.6% against the euro as of December 31, 2025 compared to December 31, 2024, adversely affecting the business activity of the Rest of Business operating segment as of December 31, 2025 expressed in euros. See “Item 5. Operating and Financial Review and Prospects―Operating Results―Factors Affecting the Comparability of our Results of Operations and Financial Condition―Trends in Exchange Rates”.
Cash, cash balances at central banks and other demand deposits as of December 31, 2025 amounted to €11,564 million, a 38.5% increase compared with the €8,348 million recorded as of December 31, 2024, mainly driven by the increase in cash balances held at central banks through repurchase agreements within this operating segment, in particular, at the Federal Reserve System, due in part to the shift towards liquid trading assets, which typically offer higher short-term yields and, to a lesser extent increases in other demand deposits, partially offset by the depreciation of the U.S. dollar against the euro.
Financial assets at fair value for this operating segment (which includes the following portfolios: “Financial assets held for trading”, “Non-trading financial assets mandatorily at fair value through profit or loss”, “Financial assets designated at fair value through profit or loss” and “Financial assets at fair value through other comprehensive income”) as of December 31, 2025 amounted to €2,032 million, a 24.9% increase compared with the €1,627 million recorded as of December 31, 2024, mainly due to the increase in loans and advances in Europe, partially offset by the depreciation of the U.S. dollar against the euro.
Financial assets at amortized cost of this operating segment as of December 31, 2025 amounted to €74,448 million, a 32.9% increase compared with the €56,013 million recorded as of December 31, 2024. Within this heading, loans and advances to customers of this operating segment as of December 31, 2025 amounted to €66,502 million, a 32.0% increase compared with the €50,392 million recorded as of December 31, 2024, mainly due to increased wholesale loans in the branches located in New York, Europe and Asia driven by increased activity amid a lower interest rate environment, partially offset by the depreciation of the U.S. dollar against the euro.
Financial liabilities held for trading and designated at fair value through profit or loss of this operating segment as of December 31, 2025 amounted to €766 million, a 19.3% increase compared with the €642 million recorded as of December 31, 2024, mainly due to the increase in deposits (through repurchase agreements) in BBVA Securities Inc., our broker-dealer in the United States, partially offset by the depreciation of the U.S. dollar against the euro.
Customer deposits at amortized cost of this operating segment as of December 31, 2025 amounted to €40,932 million, a 49.2% increase compared with the €27,432 million recorded as of December 31, 2024, mainly as a result of the growth in household demand deposits through our digital banking offerings in Europe and the increase in wholesale demand deposits in Asia and Europe.
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Off-balance sheet funds of this operating segment as of December 31, 2025 amounted to €736 million, a 14.2% increase compared with the €645 million recorded as of December 31, 2024, mainly due to increases in the balance of pension funds in the branches located in Europe, as declining interest rates reduced deposit yields and boosted the performance of fixed-income and equity funds.
The non-performing loan ratio (as defined herein) of this operating segment as of December 31, 2025 decreased to 0.2% from 0.3% as of December 31, 2024, mainly due to the increased wholesale loans in the branches located in New York, Europe and Asia (which led to an increase in the denominator) driven by increased activity amid a lower interest rate environment and decreases in non-performing loans. This operating segment’s non-performing loan coverage ratio (as defined herein) increased to 173% as of December 31, 2025 from 102% as of December 31, 2024 mainly as a result of the decrease in non-performing loans, in particular in Europe and increases in the coverage level of certain corporate loans.
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Insurance Activity
The Group has insurance subsidiaries mainly in Spain, Latin America (mostly in Mexico) and Turkey. The insurance entities located in Spain and Mexico together accounted for approximately 95% of total liabilities under insurance and reinsurance contracts as of December 31, 2025. The main products offered by the insurance subsidiaries are life insurance to cover the risk of death and life-savings insurance. Within life insurance, a distinction is made between freely sold products and those offered to customers who have taken mortgage or consumer loans, which cover the principal of those loans in the event of the customer’s death.
The Group offers, in general, two types of savings products: individual insurance, which seeks to provide the customer with savings for retirement or other events, and collective insurance, which is taken out by employers to cover their commitments to their employees.
See Note 23 to the Consolidated Financial Statements for additional information on our insurance activity, including its risk management.
Monetary Policy
The integration of Spain into the European Monetary Union (“EMU”) on January 1, 1999 implied the yielding of monetary policy sovereignty to the Eurosystem. The “Eurosystem” is composed of the ECB and the national central banks of the 20 member countries that form the EMU.
The Eurosystem determines and executes the policy for the single monetary union of the 21 member countries of the EMU. The Eurosystem collaborates with the central banks of member countries to take advantage of the experience of the central banks in each of its national markets. The basic tasks carried out by the Eurosystem include:
•defining and implementing the single monetary policy of the EMU;
•conducting foreign exchange operations in accordance with the set exchange policy;
•lending to national monetary financial institutions in collateralized operations;
•holding and managing the official foreign reserves of the member states; and
•promoting the smooth operation of the payment systems.
In addition, the Treaty on the EU (“EU Treaty”) establishes a series of rules designed to safeguard the independence of the system, in its institutional as well as its administrative functions.
Supervision and Regulation
This section discusses the most significant supervision and regulatory matters applicable to us as a bank organized under the laws of Spain, our principal market, and as a result of activities we undertake in the European Union. Further below, this section also includes information regarding supervision and regulatory matters applicable to our operations in Mexico, Turkey and the United States.
The Bank’s “home” supervisor is the ECB at the European level and the Bank of Spain at the national level, both authorities being part of the Single Supervisory Mechanism (“SSM”). The BBVA Group is also subject to supervision by a wide variety of other local authorities given the Bank’s global presence, which are considered to be “host” supervisors given the Bank’s foreign origin. These include authorities in countries such as the United States (the Federal Reserve Bank of New York (“FRBNY”) has the primary supervisory responsibility for the Bank’s New York branch, with input from other Federal and State authorities that have supervisory responsibilities for various BBVA entities operating in the United States), Mexico, Turkey and the whole of BBVA’s footprint in South America.
Following the 2008 financial crisis, European politicians took action to stabilize the region’s banking sector, due to a period of turbulence and doubts regarding its sustainability. This action culminated in the launch of the European Banking Union (“EBU”).
In 2024, the EU approved the transposition into domestic law of a final set of rules forming part of the Basel III framework Regulation (EU) 2024/1623, which constitutes a reform of the prudential regulatory framework (Capital Requirements Regulation and Directive). These new rules came into force on January 1, 2025, and their main objective is to make capital ratios more comparable among banks by imposing restrictions on banks that use their own internal models to calculate capital requirements.
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The first pillar of the EBU relates to supervision and includes the SSM, which unified banking supervision in the European Union. This responsibility was placed under the ECB, which follows a strict policy of separation and confidentiality in order to ensure the independence of banking supervision and monetary policy. The SSM works in very close coordination with the national competent authorities (“NCAs”). As a result, the joint supervisory teams (“JSTs”) that are responsible for the daily supervision of the most significant banks (one JST per bank) are composed of employees from the ECB and, in the case of BBVA, mainly from the Bank of Spain, who rotate periodically.
The second pillar of the EBU relates to resolution mechanisms and includes the Single Resolution Mechanism (“SRM”), for which the Single Resolution Board (“SRB”) was created. The SRB, located in Brussels, works closely with the National Resolution Authorities (“NRAs”), and, in the case of Spain, the Bank of Spain and the Spanish Executive Resolution Authority (“FROB”), to ensure the orderly resolution of failing banks.
The role of the SRB is proactive and focuses on resolution planning and preparation with a forward-looking mindset to avoid the negative impacts of a bank failure on the economy and financial stability of the participating EU member states and other countries. Accordingly, one of the key tasks of the SRB and NRAs is to draft resolution plans for the banks under its remit. These plans are prepared jointly by the SRB and NRAs through internal resolution teams (“IRTs”). The IRTs are composed of staff from the SRB and the NRAs and are headed by coordinators appointed from the SRB’s senior staff.
Bank resolution regulation was adopted following the 2008 financial crisis to minimize the extent to which taxpayer funds would be used to rescue failing financial institutions. The idea that underlies bank resolution regulation is that a “bail-in” is preferable to a “bail-out”. A “bail-out” occurs when a government rescues a bank by providing capital and/or liquidity support. On the other hand, a “bail-in” occurs when a bank’s creditors (in addition to its shareholders) are forced to bear some of the burden by having some or all of their debt written off. See “—Capital Requirements, MREL and Resolution” below.
Within the framework of the SRM, the Single Resolution Fund (“SRF”) was also developed. This is a fund composed of contributions from credit institutions and certain investment firms in the 21 participating countries within the EBU and may be used only under specific circumstances in banking resolution, such as to guarantee the assets or liabilities of an institution under resolution or make contributions to a bridge institution or asset management vehicle. The SRF can be used only to ensure the effective application of resolution tools but not to absorb the losses of an institution or for a recapitalization.
The first and second pillars of the EBU are highly interlinked. Prior to entering into a resolution process, a bank must be considered by the SSM as failing or likely to fail, which occurs when there is no other option to restore its viability (such as applying the bank’s recovery plan) within the available time frame.
The third and final pillar of the EBU, which is still under discussion, is the European Deposit Insurance Scheme (“EDIS”). The EDIS would provide the same level of insurance for deposits regardless of the country of origin of the bank, thus creating a fully harmonized banking union. Furthermore, it would enhance risk sharing mechanisms within the EBU. In May 2024, the Committee of Economic and Monetary Affairs (ECON) approved the EDIS Proposal; however, the plenary scheduled vote was postponed indefinitely.
At the national level, BBVA is required to make contributions to the Deposit Guarantee Fund of Credit Institutions.
Banks in the EBU face increasingly intense supervisory scrutiny, in particular with respect to asset quality and capital and liquidity levels. The Supervisory Review and Examination Process (“SREP”) is an annual exercise that determines a bank’s capital requirements, on a “Pillar 2” basis, as well as the qualitative requirements that the bank must address in the following year. This exercise takes four different elements of a bank into account: (a) business model and profitability, (b) capital, (c) liquidity and (d) governance and risk management.
In addition, any work done during the year related to on-site inspections, deep dives, thematic reviews, internal model investigations and other ad hoc requests (e.g., targeted review) feeds into the SREP. The SREP culminates with a supervisory dialogue at the end of the year, where a preliminary review of the bank is presented. In addition, prior to the beginning of each year, the SSM presents a Supervisory Examination Program (“SEP”) which details the inspections, high-level meetings and potential visits to group subsidiaries that are forecasted to occur throughout the year.
Another important tool that the SSM possesses to supervise large European banking groups is the Supervisory Colleges. For those banks for which the SSM acts as the consolidated “home” supervisor, the SSM together with the relevant NCA organizes an event where all of the banking group’s “host” supervisors are gathered at a roundtable and where they discuss the current state of affairs of the bank in the different relevant jurisdictions. The SRB follows a similar approach, organizing Resolution Colleges with the banking group’s “host” resolution authorities.
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Furthermore, the EBA organizes and performs an EU-wide stress test in coordination with the ECB. This test, which occurs every two years, does not confer a pass or fail result but instead contributes to determining “Pillar 2” guidance. While “Pillar 2” guidance is a non-binding capital requirement, the EBA nonetheless expects compliance with it. In those years in which there is no EBA stress test, the SSM organizes a more specific stress test concerning a particular topic, such as the impact of interest rate risk on the banking book or liquidity or cyber resilience.
In 2025, the EBA conducted an EU-wide stress test in cooperation with the ECB and the European Systemic Risk Board (“ESRB”). The aim of the EU-wide stress test is to assess EU banks’ resilience to a common set of adverse economic developments in order to identify potential risks, inform supervisory decisions and increase market discipline. The banks participating in the 2025 exercise included the Group.
The macro-prudential aspect of supervision is also increasingly gaining relevance, including through specific thematic reviews undertaken by the SSM on certain portfolios (e.g., commercial real estate or non-banking financial institutions) and the creation of new authorities and review boards. At the European level, these include the ESRB, which is responsible for monitoring macro-risks at the European level. The ESRB also develops the adverse scenarios to be used in the EU-wide stress test. In addition, in 2019 the Spanish Government created the Macro-prudential Authority Financial Stability Council, which is chaired by the Minister of Economy and Business and vice-chaired by the Governor of the Bank of Spain. In 2025, the Bank of Spain set a positive neutral counter-cyclical capital buffer of 0.5% (applicable from October 1, 2025) and announced its intention to gradually increase it to 1% if cyclical systemic risk remained at an intermediate level. However, following a public consultation process carried out in July 2025, the Bank of Spain decided to raise the countercyclical capital buffer to 1% effective from October 1, 2026.
The foregoing illustrates how much the regulatory and supervisory landscape has changed since the 2008 financial crisis, due in large part to the Basel Committee on Banking Supervision (the “Basel Committee”), an international, standard-setting forum, which established important reforms at a global level. Some of these reforms have been adopted in regulations at the European level.
The following is a discussion of certain of these and other regulations that are applicable to BBVA and certain related requirements.
Liquidity Requirements – Minimum Reserve Ratio
The legal framework for the minimum reserve ratio is set out in Regulation (EU) No. 2021/378 of the ECB of January 2021 on the application of minimum reserves requirements (ECB/2021/1).
According to the Delegated Regulation (EU) 2015/61 issued by the European Commission (EC) of October 10, 2014, the liquidity coverage ratio came into force in Europe on October 1, 2015, with an initial 60% minimum requirement, which was progressively increased (phased-in) up to 100% in 2018.
Capital Requirements, MREL and Resolution
As a Spanish credit institution, the Bank is subject to Directive 2013/36/EU of the European Parliament and of the Council of June 26, 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions, amending Directive 2002/87/EC, and repealing Directives 2006/48/EC and 2006/49/EC (as amended, replaced or supplemented from time to time, the “CRD Directive”). The core regulation regarding the solvency of credit institutions is Regulation (EU) No. 575/2013 of the European Parliament and of the Council of June 26, 2013 on prudential requirements for credit institutions, and amending Regulation (EU) No. 648/2012 (as amended, replaced or supplemented from time to time, the “CRR” and, together with the CRD Directive and any measures implementing the CRD Directive or CRR which may from time to time be applicable in Spain, “CRD”), which is complemented by several binding regulatory technical standards, all of which are directly applicable in all EU Member States, without the need for national implementation measures. The implementation of the CRD Directive into Spanish law has taken place, primarily, through Royal Decree-Law 14/2013, of November 29, Law 10/2014, of June 26, on the organization, supervision and solvency of credit institutions (“Law 10/2014”), Royal Decree 84/2015, of February 13 (“Royal Decree 84/2015”), Bank of Spain Circular 2/2014, of January 31, Bank of Spain Circular 2/2016, of February 2 (“Bank of Spain Circular 2/2016”), Bank of Spain Circular 3/2022, of March 30 and the Bank of Spain Circular 3/2023, of October 31, each as amended, supplemented or otherwise modified from time to time.
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The final legal texts of Directive (EU) 2024/1619 of the European Parliament and of the Council of May 31, 2024 amending CRD Directive as regards supervisory powers, sanctions, third-country branches, and environmental, social and governance risks (“CRD VI”) and Regulation (EU) 2024/1623 of the European Parliament and of the Council of May 31, 2024 amending the CRR as regards requirements for credit risk, credit valuation adjustment risk, operational risk, market risk and the output floor (“CRR III”) have been published in the Official Journal of the European Union. CRR III became generally applicable from January 1, 2025 (with some exceptions). CRD VI should have been transposed into national law by member states by January 11, 2026, and implementation may vary among Member States. CRD VI and CRR III introduce, among other things, amendments to the output floor in the calculation of capital requirements, amendments to the input floors in respect of the calculation of risk exposure amounts, a revision of the standardized approaches for capital requirements for credit, market and operational risk and strengthened requirements for ESG risks management and reporting. As of the date of this Annual Report, the transposition of CRD VI into Spanish law and the adaptation of the Spanish regulatory framework to CRR III has not taken place within the prescribed deadline. Moreover, no draft bill or other formal legislative initiative has been published or announced to date. Accordingly, there is no certainty as to the timing or content of the transposition of CRD VI into Spanish law, and no such transposition is currently expected to occur in the upcoming months.
CRD, among other things, established a “Pillar 1” minimum capital requirement and increased the level of capital required through the “combined capital buffer requirement” that institutions must comply with from 2016 onwards. The “combined capital buffer requirement” introduced five new capital buffers: (i) the capital conservation buffer, (ii) the Global Systemically Important Banks (“G-SIB”) buffer, (iii) the institution-specific countercyclical capital buffer, (iv) the Domestic Systemically Important Banks (“D-SIB”) buffer and (v) the systemic risk buffer (a buffer to prevent systemic or macroprudential risks). The “combined capital buffer requirement” (broadly, the combination of the capital conservation buffer, the institution-specific countercyclical buffer, the systemic risk buffer and the higher of (depending on the institution) the G-SIB buffer and the D-SIB buffer, in each case as applicable to the institution) applies in addition to the minimum “Pillar 1” capital requirements and must be satisfied with additional CET1 capital to that provided to meet the “Pillar 1” minimum capital requirement.
As of the date of this Annual Report, the Bank of Spain considers the Bank to be a D-SIB at a consolidated level. The Bank is required to maintain a fully-loaded D-SIB buffer of a CET1 ratio of 1% on a consolidated basis in 2025 and 0.75% on a consolidated basis in 2026.
The countercyclical capital buffer applicable to the Group’s credit exposures in Spain is reviewed quarterly by the Bank of Spain. The countercyclical capital buffer applicable to the Group’s credit exposures in Spain stands at 0.25% as from September 30, 2025. On October 1, 2025, the Bank of Spain announced its decision to increase the counter-cyclical capital buffer applicable to credit exposures in Spain to 1% which will be applicable from October 1, 2026 given that, according to their analysis, in the year ended December 31, 2025 the cyclical systemic risk remained at an intermediate level.
Additionally, Article 104 of the CRD Directive, as implemented by Article 68 of Law 10/2014, and similarly Article 16 of Council Regulation (EU) No. 1024/2013 of October 15, 2013, conferring specific tasks on the ECB concerning policies relating to the prudential supervision of credit institutions (the “SSM Regulation”), also contemplates the possibility that the supervisory authorities may require credit institutions to meet capital requirements exceeding the “Pillar 1” minimum capital requirements and the “combined capital buffer requirement” by establishing “Pillar 2” capital requirements (which, with respect to other requirements, are above the “Pillar 1” requirements and below the “combined capital buffer requirement”).
In response to the COVID-19 pandemic, the ECB announced on March 12, 2020 that it would allow banks to partially use AT1 and Tier 2 instruments to meet the “Pillar 2” requirement, being this measure introduced by Directive 2019/878/EU of the European Parliament and of the Council of May 20, 2019 (as amended, replaced or supplemented from time to time (“CRD V”). In particular, the composition of the capital instruments to meet the “Pillar 2” requirement, shall include 56.25% of CET1 capital and 75% of Tier 1 capital, at a minimum.
Consequently, all additional “Pillar 2” own funds requirements that the ECB may impose on the Bank and/or the Group under the SREP will require the Bank and/or the Group to maintain capital levels higher than the “Pillar 1” minimum capital requirement.
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As a result of the most recent SREP carried out by the ECB, BBVA must maintain, at a consolidated level, from January 1, 2026, a CET1 capital ratio of 8.98% and a total capital ratio of 13.13%. The consolidated total capital requirement includes: (i) the “Pillar 1” capital requirement of 8.00%, of which a minimum of 4.50% must be met with CET1 capital, 1.50% could be met with AT1 instruments and 2.00% could be met with Tier 2 instruments; (ii) the “Pillar 2” capital requirement of 1.62%, of which a minimum of 0.96% must be met with CET1 capital (of which 0.12% is determined on the basis of the ECB’s prudential provisioning expectation), 0.28% could be met with AT1 instruments and 0.38% could be met with Tier 2 instruments; (iii) the capital conservation buffer (2.50% that must be met exclusively with CET1 capital); (iv) the D-SIB capital buffer (0.75% that must be met exclusively with CET1 capital); (v) the capital buffer for Countercyclical Risk (0.25% that must be met exclusively with CET1 capital); and (vi) the capital buffer for Systemic Risk (0.01% that must be met exclusively with CET1 capital).
In addition, as from January 1, 2026, BBVA must maintain, at an individual level, a CET1 ratio of 7.47% and a total capital ratio of 10.97%. These ratios include a 0.02% capital buffer for Systemic Risk and 0.45% capital buffer for Countercyclical Risk2 applicable to the Bank at an individual level that shall be met with CET1.
For further information on the countercyclical capital buffer and the total capital requirements applicable to the BBVA Group, see Note 32 to the Consolidated Financial Statements.
In accordance with Article 48 of Law 10/2014, Article 73 of Royal Decree 84/2015 and Rule 24 of Bank of Spain Circular 2/2016, any institution not meeting its “combined capital buffer requirement” is required to calculate its MDA as stipulated in such legislation. Should that requirement not be met and until the MDA has been calculated and communicated to the Bank of Spain, the relevant institution shall not make any: (i) distributions relating to CET1 capital; (ii) payments related to variable remuneration or discretionary pension benefits; and (iii) distributions linked to AT1 instruments (“discretionary payments”), and once the MDA has been calculated and communicated to the Bank of Spain, the discretionary payments will be subject to the limit of the calculated MDA. Accordingly, restrictions on discretionary payments will be scaled based on the degree of breach of the “combined buffer requirement” and calculated as a percentage of the profit of the institution generated since the last annual decision on the distribution of profit. Such calculation will result in a MDA in each relevant period. As an example, the scaling is such that in the bottom quartile of the “combined buffer requirement”, no discretionary payments will be permitted to be made.
Additionally, pursuant to Article 48 of Law 10/2014, the adoption by the Bank of Spain of the measures provided by Articles 68.2.h) and 68.2.i) of Law 10/2014, aimed at strengthening own funds and limiting or prohibiting the distribution of dividends, respectively, will also entail the requirement to determine the MDA and to restrict discretionary payments to such MDA. In accordance with the EU legislative and regulatory framework governing capital, liquidity, loss-absorbing capacity, recovery and resolution of credit institutions and investment firms, including CRD V, CRR II (EU Regulation (EU) 2019/876 amending the Capital Requirements Regulation (CRR), introducing enhanced prudential requirements for EU credit institutions and investment firms), BRRD II (as defined below) and SRM Regulation II (as defined below), each as amended, replaced or supplemented from time to time (the “EU Banking Reforms”), the calculation of the MDA and the restrictions described in the preceding paragraph while such calculation is pending, may also be triggered by a breach of the combined buffer requirement when considered in addition to its MREL requirement (see “Item 3. Key Information—Risk Factors—Regulatory, Tax, Compliance and Reporting Risks—Increasingly onerous capital and liquidity requirements may have a material adverse effect on the Group’s business, financial condition and results of operations”).
CRD also distinguishes between “Pillar 2” capital requirements and “Pillar 2” capital guidance, with only the former being regarded as mandatory requirements. Notwithstanding the foregoing, CRD provides that, besides other measures, supervisory authorities are entitled to impose further “Pillar 2” capital requirements when an institution repeatedly fails to follow the “Pillar 2” capital guidance previously imposed.
Additionally, CRR sets a binding leverage ratio requirement of 3% of Tier 1 capital that is added to the own funds requirements and to the requirements based on an entity’s RWAs. In particular, any breach of this leverage ratio would also entail the need to determine the MDA and the related consequences.
Furthermore, on December 7, 2017 the Basel Committee on Banking Supervision announced the end of the Basel III reforms (informally referred to as Basel IV), which entered into force on January 1, 2025. These reforms mainly include changes to the risk weightings applied to the different assets and measures to enhance the sensitivity to risk in those weightings and impose limits on the use of internal ratings-based approaches to ensure a minimum level of conservatism in the use of such approaches and enhance comparability among banks in which such internal ratings-based approaches are used.
2 The countercyclical buffer is estimated as of December 2025, using the outstanding exposures as of December 2025.
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Resolution
The Directive 2014/59/EU, establishing a framework for the recovery and resolution of credit institutions and investment firms, as amended, replaced or supplemented from time to time (the “BRRD”) (which has been implemented in Spain through Law 11/2015 and Royal Decree 1012/2015, each as amended, replaced or supplemented from time to time) and the Regulation (EU) No. 806/2014 of the European Parliament and of the Council, establishing a framework for the resolution of credit institutions and certain investment firms within the Single Resolution Mechanism, as amended by Regulation (EU) 2019/877, and as further amended, replaced or supplemented from time to time (the “SRM Regulation”), are designed to provide the authorities with mechanisms and instruments to intervene sufficiently early and rapidly in failing or likely to fail credit institutions or investment firms (each, an “Entity”) in order to ensure the continuity of the Entity’s critical financial and economic functions, while minimizing the impact of its non-feasibility on the economic and financial system. The BRRD further provides that a Member State may only use additional financial stabilization instruments to provide extraordinary public financial support as a last resort, once the following resolution instruments have been evaluated and used to the fullest extent possible while maintaining financial stability.
In accordance with the provisions of Article 20 of Law 11/2015, an Entity will be considered as failing or likely to fail in any of the following situations: (i) when the Entity significantly fails, or may reasonably be expected to significantly fail in the near future, to comply with the solvency requirements or other requirements necessary to maintain its authorization; (ii) when the Entity’s enforceable liabilities exceeds its assets, or it is reasonably foreseeable that they will exceed them in the near future; (iii) when the Entity is unable, or it is reasonably foreseeable that it will not be able, to meet its enforceable obligations in a timely manner; or (iv) when the Entity needs extraordinary public financial support (except in limited circumstances). The decision as to whether the Entity is failing or likely to fail may depend on a number of factors which may be outside of that Entity’s control.
In line with the provisions of the BRRD, Law 11/2015 contains four resolution tools which may be used individually or in any combination, when the Relevant Spanish Resolution Authority considers that (a) an Entity is non-viable or is failing or likely to fail, (b) there is no reasonable prospect of any other measures that would prevent the failure of such Entity within a reasonable period of time and (c) resolution is necessary or advisable, rather than the winding up of the Entity through ordinary insolvency proceedings, for reasons of public interest.
The four resolution instruments are (i) the sale of the Entity’s business, which enables the resolution authorities to transfer, under market conditions, all or part of the business of the Entity being resolved; (ii) bridge institution, which enables resolution authorities to transfer all or part of the business of the Entity to a “bridge institution” (an entity created for this purpose that is wholly or partially in public control); (iii) asset separation, which enables resolution authorities to transfer certain categories of assets (normally impaired or otherwise problematic) to one or more asset management vehicles to allow them to be managed with a view to maximizing their value through eventual sale or orderly wind-down (this can be used together with another resolution tool only); and (iv) the “Bail-in Tool”. Any exercise of the Bail-in Tool by the Relevant Spanish Resolution Authority may include the write down and/or conversion into equity or other securities or obligations (which equity, securities and obligations could also be subject to any future application of the Bail-in Tool) of certain unsecured debt claims of an institution.
In the event that an Entity is in a resolution situation, the Bail-in Tool is understood to mean any write-down, conversion, transfer, modification, or suspension power existing from time to time under: (i) any law, regulation, rule or requirement applicable from time to time in Spain, relating to the transposition or development of the BRRD (as amended, replaced or supplemented from time to time), including, but not limited to Law 11/2015, RD 1012/2015; and the SRM Regulation, each as amended, replaced or supplemented from time to time; or (ii) any other law, regulation, rule or requirement applicable from time to time in Spain pursuant to which (a) obligations or liabilities of banks, investment firms or other financial institutions or their affiliates can be reduced, cancelled, modified, transferred or converted into shares, other securities, or other obligations of such persons or any other person (or suspended for a temporary period or permanently) or (b) any right in a contract governing such obligations may be deemed to have been exercised.
In accordance with the provisions of Article 48 of Law 11/2015 (without prejudice to any exclusions that may be applied by the Relevant Spanish Resolution Authority in accordance with Article 43 of Law 11/2015), in the event of any application of the Bail-in Tool, any resulting write-down or conversion by the Relevant Spanish Resolution Authority will be carried out in the following sequence: (i) CET1 items; (ii) the principal amount of AT1 instruments; (iii) the principal amount of Tier 2 instruments; (iv) the principal amount of other subordinated claims other than AT1 or Tier 2 capital; and (v) the principal or outstanding amount of the remaining eligible liabilities in the order of the hierarchy of claims in normal insolvency proceedings (with senior non-preferred claims (créditos ordinarios no preferentes) subject to the Bail-in Tool after any subordinated claims (créditos subordinados) of the Bank but before the other senior claims of the Bank).
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In addition to the Bail-in Tool, the BRRD, Law 11/2015 and the SRM Regulation provide for resolution authorities to have the further power to permanently write-down or convert into equity capital instruments (and, pursuant to Directive (EU) 2019/879 of the European Parliament and of the Council, amending Directive 2014/59/EU to establish enhanced requirements for the recovery and resolution of credit institutions and investment firms, as amended, replaced or supplemented from time to time (the “BRRD II”) and the Regulation (EU) 2019/877 of the European Parliament and of the Council, amending Regulation (EU) No. 806/2014 to enhance the loss-absorbing and recapitalization capacity and the resolution framework of credit institutions and certain investment firms within the Single Resolution Mechanism, as amended, replaced or supplemented from time to time (the “SRM Regulation II”), certain internal eligible liabilities and instruments) at the point of non-viability (“Non-Viability Loss Absorption” and, together with the Bail-in Tool, the “Spanish Bail-in Power”) of an Entity. Any write-down or conversion must follow the same insolvency hierarchy as described above. The point of non-viability of an Entity is the point at which the Relevant Spanish Resolution Authority determines that the Entity meets the conditions for resolution or will no longer be viable unless the relevant capital instruments are written down or converted into equity or extraordinary public support is to be provided and without such support the Relevant Spanish Resolution Authority determines that the institution would no longer be viable. The point of non-viability of a group is the point at which the group infringes or there are objective elements to support a determination that the group, in the near future, will infringe its consolidated solvency requirements in a way that would justify action by the Relevant Spanish Resolution Authority in accordance with article 38.3 of Law 11/2015. Non-Viability Loss Absorption may be imposed prior to or in combination with any exercise of the Bail-in Tool or any other resolution tool or power (where the conditions for resolution referred to above are met) or in combination with such exercise in respect of all eligible liabilities.
In addition, the EBA has published certain technical regulation standards and technical implementation standards to be adopted by the European Commission, in addition to other guidelines. These standards and guidelines could potentially be relevant in determining when or how a Relevant Spanish Resolution Authority may exercise the Bail-in Tool and/or impose a Non-Viability Loss Absorption. These include guidelines on the treatment of shareholders when applying the Bail-in Tool or Non-Viability Loss Absorption, as well as on the rate for converting debt into shares or other securities or debentures in the application of the Bail-in Tool and/or Non-Viability Loss Absorption.
To the extent that any resulting treatment of a holder of the Bank’s securities pursuant to the exercise of the Bail-in Tool is less favorable than would have been the case under such hierarchy in normal insolvency proceedings, a holder of such affected securities would have a right to compensation under the BRRD and the SRM Regulation based on an independent valuation of the institution, in accordance with Article 10 of RD 1012/2015 and the SRM Regulation, together with any other compensation provided for in any Applicable Banking Regulations (as defined below) including, inter alia, compensation in accordance with Article 36.5 of Law 11/2015. However, if the treatment of a creditor following a Non-Viability Loss Absorption is less favorable than it would have been under ordinary insolvency proceedings, it is uncertain whether said creditor would be entitled to the compensation provided for in the BRRD and the SRM Regulation.
Finally, on April 18, 2023, the European Commission published a proposal for the further amendment of the BRRD, including, among other things, the amendment of the ranking of claims in insolvency to provide for a general depositor preference, pursuant to which the insolvency laws of Members States would be required by the BRRD to extend the legal preference of claims in respect of deposits relative to ordinary unsecured claims to all deposits, as well as a proposal amending the SRM Regulation as regards early intervention measures, conditions for resolution and funding of resolution actions and the Deposit Guarantee Schemes Directive (Directive 2014/49/EU of the European Parliament and of the European Council of April 16, 2014 on deposit guarantee schemes) as regards the scope of deposit protection, use of deposit guarantee schemes funds, cross-border co-operation, and transparency.
The implementation of the BRRD proposal is subject to further legislative procedures but if it is implemented in its current form, this would mean that senior preferred claims (créditos ordinarios preferentes) of the Bank would rank junior to the claims of all depositors, including deposits of large corporates and other deposits that are currently excluded from the above privileged claims.
Any such general depositor preference would also affect any application of the Bail-In Tool, as such application is to be carried out in the order of the hierarchy of claims in normal insolvency proceedings. Accordingly, this would mean that following any such amendment of the insolvency laws of Spain to establish a general depositor preference, any resulting write-down or conversion of senior preferred claims (créditos ordinarios preferentes) by the Relevant Spanish Resolution Authority would be carried out before any write-down or conversion of the claims of depositors such as those of large corporates that previously would have been written-down or converted alongside such senior preferred claims (créditos ordinarios preferentes). By removing the requirement for such deposits to be written-down or converted in this manner, one of the stated objectives of this proposed amendment is to reduce the likelihood of deposits generally needing to be included in any such write-down or conversion upon any application of the Bail-In Tool and improve the process for the application of the Bail-In Tool.
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“Applicable Banking Regulations” means at any time the laws, regulations, requirements, guidelines and policies relating to capital adequacy, resolution and/or solvency then applicable to the Bank and/or the Group including, inter alia, the CRD Directive, CRR, BRRD, the SRM Regulation and those laws, regulations, requirements, guidelines and policies relating to capital adequacy, resolution and/or solvency then in effect in Spain (whether or not such regulations, requirements, guidelines or policies have the force of law and whether or not they are applied generally or specifically to the Bank and/or the Group).
“Relevant Spanish Resolution Authority” means the FROB, the SRB, the Bank of Spain, the Spanish Securities Market Commission or any other entity with the authority to exercise any of the resolution tools and powers contained in Law 11/2015 and the SRM Regulation from time to time.
“Law 11/2015” means Law 11/2015, of June 18, on the recovery and resolution of credit institutions and investment firms, as amended, replaced or supplemented from time to time, including as amended by Royal Decree Law 7/2021 of 27 April on the transposition of European Union directives in matters of credit institutions, among others.
MREL
The BRRD prescribes that banks shall hold a minimum level of own funds and eligible liabilities in relation to RWAs known as MREL. According to the Commission Delegated Regulation (EU) 2016/1450 of May 23, 2016, supplementing Directive 2014/59/EU of the European Parliament and of the Council, establishing a framework for the recovery and resolution of credit institutions and investment firms, as amended, replaced or supplemented from time to time (the “BRRD I”) with regard to regulatory technical standards specifying the criteria relating to the methodology for setting the minimum requirement for own funds and eligible liabilities, the level of own funds and eligible liabilities required under MREL will be set by the resolution authority, in agreement with the competent authority, for each bank (and/or group) based on, among other things, the criteria set forth in Article 45 of the BRRD, including the systemic importance of the institution. Eligible liabilities may be senior or subordinated, provided that, among other requirements, they have a remaining maturity of at least one year and, if governed by a non-EU law, they must be able to be written down or converted by the resolution authority of a member state under that law or through contractual provisions.
If the Relevant Spanish Resolution Authority considers that there may be any obstacles to resolvability by the Bank and/or the Group, a higher MREL could be imposed.
The EU Banking Reforms provide that the breach by a bank of its MREL should be addressed by the competent authorities through their powers to address or remove obstacles to resolution, the exercise of their supervisory powers and their power to impose early intervention measures, administrative sanctions and other administrative measures. If there were a deficit in the level of an entity’s eligible own funds and liabilities, and that entity’s own funds were contributing to meeting the “combined capital buffer requirement,” these own funds would automatically be deemed to count toward meeting the MREL of said entity and would cease to count for purposes of meeting the “combined capital buffer requirement”, which could lead the entity to fail to comply with its “combined capital buffer requirement”. This could result in the need to calculate the MDA and the resolution authority would have the power (but not the obligation) to impose restrictions on the making of discretionary payments. Therefore, the Bank will have to fully comply with its “combined capital buffer requirement”, in addition to its MREL, to ensure that it can make discretionary payments.
In addition, in accordance with the EBA guidelines on the assumptions of triggering the use of early intervention measures of May 8, 2015, a significant deterioration in the amount of eligible liabilities and own funds held by an entity in order to comply with its MREL could place an entity in a situation where the conditions for early intervention are met, which could entail the application of early intervention measures by the competent resolution authority, which in the Spanish case are detailed in Articles 9 and 10 of Law 11/2015, including the intervention or provisional replacement of administrators.
The EU Banking Reforms further include, as part of MREL, a new subordination requirement of eligible instruments for G-SIBs and “top tier” banks (including the Bank) that is determined according to their systemic importance, involving a minimum “Pillar 1” subordination requirement. This “Pillar 1” subordination requirement must be satisfied with own funds and other eligible MREL instruments (which MREL instruments may not for these purposes be senior debt instruments and only MREL instruments constituting “non-preferred” senior debt and other subordinated liabilities will be eligible for compliance with the subordination requirement). For “top tier” banks such as the Bank, this “Pillar 1” subordination requirement has been determined as the highest of 13.5% of the Bank’s RWAs and 5% of its leverage exposure. Resolution authorities may also impose further “Pillar 2” subordination requirements, which would be determined on a case-by-case basis but at a minimum level equal to the lower of 8% of a bank’s total liabilities and own funds and 27% of its RWAs (both including MREL Pillar 1 and Pillar 2).
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On June 12, 2025, BBVA announced that it had received a communication from the Bank of Spain regarding its MREL (Minimum Requirement for own funds and Eligible Liabilities) requirement, established by the SRB, which was calculated taking into account the financial and supervisory information as of December 31, 2023, which communication repeals and supersedes the previous MREL requirement communicated in March 2024. In accordance with this MREL communication, BBVA must maintain, as from June 12, 2025, an amount of own funds and eligible liabilities equal to 23.13% of the total RWAs of its resolution group, on a sub-consolidated level (the “MREL in RWAs”) (compared to the MREL in RWAs requirement of at least 22.79% which was applicable from March 27, 2024 which was calculated taking into account the financial and supervisory information as of December 31, 2022). Within this MREL in RWAs, an amount equal to 13.50% of the total RWAs of BBVA’s resolution group must be met with subordinated instruments (the “subordination requirement in RWAs”). The MREL in RWAs and the subordination requirement in RWAs do not include the combined capital buffer requirement which, according to applicable regulations and supervisory criteria, was 3.97% as of December 31, 2025 and 3.65% as of December 31, 2024.
In addition, BBVA must maintain, as from June 12, 2025, an amount of own funds and eligible liabilities in terms of the total exposure considered for calculating the leverage ratio equal to 8.59% (the “MREL in LR”) of which 5.66% in terms of the total exposure considered for calculating the leverage ratio shall be satisfied with subordinated instruments (the “subordination requirement in LR”).
As of the date of this Annual Report, no MREL Pillar 2 requirement has been imposed on BBVA. Given the own funds and eligible liabilities structure of BBVA’s resolution group as of December 31, 2025, the amount of own funds and eligible liabilities stood at 28.89% of the RWAs of its resolution group, at the sub-consolidated level, complying with the aforementioned MREL in RWAs requirement, and the amount of subordinated instruments was equal to 24.67% of the RWAs of it resolution group, at the sub-consolidated level, complying with the subordination requirement in RWAs.
In addition, as of December 31, 2025, the amount of own funds and eligible liabilities of BBVA in terms of the total exposure considered for calculating the leverage ratio stood at 10.21% and the amount of subordination instruments in terms of the total exposure considered for calculating the leverage ratio stood at 8.72%, complying with the MREL in LR and the subordination requirement in LR, respectively.
The resolution group consists of BBVA and its subsidiaries belonging to the same European resolution group and, as of December 31, 2023 (the currently applicable reference date), the RWAs of the resolution group amounted to €205,154 million and the total exposure considered for calculating the leverage ratio amounted to €580,788 million.
Single Resolution Fund
The SRF was established by Regulation (EU) No 806/2014 (“SRM Regulation”) as a key element of the Single Resolution Mechanism (SRM). Where necessary, the SRF may be used to ensure the efficient application of resolution tools and the exercise of the resolution powers conferred to the SRB by the SRM Regulation.
As stated above, the SRF is composed of contributions from credit institutions and certain investment firms in the participating Member States within the EBU and was gradually built during the course of eight years (from 2016 to 2023, when the SRF reached its target level of 1% of covered deposits).
Within the resolution scheme, the SRF may be used only to the extent necessary to ensure the effective application of the resolution tools, as last resort, in particular:
•To guarantee the assets or the liabilities of the institution under resolution;
•To make loans to or to purchase assets of the institution under resolution;
•To make contributions to a bridge institution and an asset management vehicle;
•To make a contribution to the institution under resolution in lieu of the write-down or conversion of liabilities of certain creditors under specific conditions;
•To pay compensation to shareholders or creditors who incurred greater losses than under normal insolvency proceedings.
The Intergovernmental Agreement (“IGA”) acknowledges that situations may exist where the means available in the SRF are not sufficient to undertake a particular resolution action, and where the ex-post contributions that should be raised in order to cover the necessary additional amounts are not immediately accessible.
In December 2013, ECOFIN Ministers agreed to put in place a system by which bridge financing would be available as a last resort. The arrangements for the transitional period should be operational by the time the Fund was established.
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In this scenario, the Eurogroup decided in 2017 to expand the European Stability Mechanism (“ESM”) role to serve as a backstop for the SRF. While the new features of the expanded role for the ESM were agreed by 2019, it was not until late 2020 that the euro area finance ministers agreed to proceed with the reform of the ESM, and related treaty amendments (the “ESM Treaty amendments”) were later signed by Member States (represented by their ambassadors to the EU) on January 27, 2021. The backstop to the SRF was expected to be operational at the beginning of 2022, but the ratification process was not completed. As of the date of this Annual Report, the ESM Treaty amendments are pending ratification by Italy. On December 21, 2023, the Italian Parliament voted against the ratification of the ESM Treaty amendments.
When the ratification process is completed, the ESM will be able to provide support for up to €68 billion (in the form of credit lines). If this financial assistance is requested, the SRF will pay back the ESM loan with funds obtained from banks’ contributions (in a period of three years, with the possibility to extend it to five years).
Capital Management
Basel Capital Accord - Economic Capital
The Group’s capital management is performed at both the regulatory and economic levels. Regulatory capital management is based on the analysis of the capital base and the capital ratios (CET1, Tier 1, etc.) using the BIS Framework rules and the CRR. See Note 32 to the Consolidated Financial Statements.
The aim of our capital management is to achieve a capital structure that is as efficient as possible in terms of both cost and compliance with the requirements of regulators, ratings agencies and investors. Active capital management includes securitizations, sales of assets, and preferred and subordinated issues of equity and hybrid instruments. Various actions have been taken during the last years in connection with our capital management and in order to comply with various capital requirements applicable to us related to various actions regarding asset sales. In addition, we may make securities issuances or undertake new asset sales in the future, which could involve outright sales of businesses or reductions in interests held by us, which could be material and could be undertaken at less than their respective book values, resulting in material losses thereon, in connection with our capital management and in order to comply with capital requirements or otherwise. The Bank has obtained the Bank of Spain’s and ECB’s approvals with respect to its internal model of capital estimation concerning certain portfolios.
Following the European supervisory and regulatory focus on reducing the variability of own funds requirements (via the TRIM and EBA Repair Programme respectively), the Bank is currently reviewing its IRB models to ensure adherence to the evolving regulatory requirements. Although the final impact of this review is not yet known, it could result in an increase in the capital needs of BBVA.
From an economic standpoint, capital management seeks to optimize value creation for the Group and its different business units. The Group allocates economic capital (“CER”) commensurate with the risks incurred by each business. This is based on the concept of unexpected loss at a certain level of statistical confidence, depending on the Group’s targets in terms of capital adequacy. The CER calculation combines credit risk, market risk (including structural risk associated with the balance sheet and equity positions), operational risk, model risk, business risk, reputational risk and technical risks in the case of insurance companies.
Shareholders’ equity, as calculated under the BIS Framework rules, is an important metric for the Group. For the purpose of allocating capital to operating segments, the Group focuses on both economic and regulatory capital. The purpose is to ensure that the businesses are run considering both the risk-sensitive perspective and the regulation requirement. These are designed to provide an equitable basis for assigning capital and ensure adequate capital management across the Group.
Concentration of Risk
In accordance with Article 392 of CRR III, an institution’s exposure to a client or a group of connected clients shall be considered a large exposure where the value of the exposure is equal to or exceeds 10% of the institution’s eligible capital.
Additionally, according to Article 395 of CRR III an institution shall not incur an exposure, after taking into account the effect of the credit risk mitigation in accordance with Articles 399 to 403, to a client or a group of connected clients the value of which exceeds 25% of its eligible capital. Where that client is an institution or where a group of connected clients includes one or more institutions, that value shall not exceed 25% of the institution’s eligible capital or €150 million, whichever is higher, provided that the sum of exposure values, after taking into account the effect of the credit risk mitigation in accordance with Articles 399 to 403, to all connected clients that are not institutions does not exceed 25% of the institution’s eligible capital.
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Where the amount of €150 million is higher than 25% of the institution’s eligible capital, the value of the exposure, after having taken into account the effect of credit risk mitigation in accordance with Articles 399 to 403 of this Regulation, shall not exceed a reasonable limit in terms of that institution’s eligible capital. That limit shall be determined by the institution in accordance with the policies and procedures referred to in Article 81 of Directive 2013/36/EU in order to address and control concentration risk. That limit shall not exceed 100% of the institution’s eligible capital.
Legal and Other Restricted Reserves
We are subject to the legal and other restricted reserves requirements applicable to Spanish companies. Please see “—Capital Requirements, MREL and Resolution”.
Dividends
A bank may generally dedicate all of its net profits and its distributable reserves to the payment of dividends. In no event may dividends be paid from non-distributable reserves. For additional information see “Item 8. Financial Information—Consolidated Statements and Other Financial Information—Dividends”.
Since January 1, 2016, according to CRD, those credit entities required to calculate their MDA are subject to restrictions on discretionary payments, which include, among others, dividend payments. See “—Capital Requirements, MREL and Resolution”.
Although banks are not legally required to seek prior approval from the Bank of Spain or the ECB before declaring dividends (despite distributions from the share premium account, which are subject to prior approval), we inform each of them on a voluntary basis upon the declaration of a dividend.
Our Bylaws allow for dividends to be paid in cash or in kind as determined by shareholders’ resolution.
Principal Markets
The following is a summary of certain additional laws and regulations applicable to BBVA’s operations in Spain, Mexico, Turkey and the United States.
Spain
BBVA’s operations in Spain are subject to European Union-wide and Spanish national regulations. Spain has a broad regulatory framework designed to ensure consumer protection and enhance transparency. Finance and deposits products are subject to both general consumer and product-specific laws which, in certain circumstances, differentiate between consumers and non-consumers.
Payments accounts
The provision of payment accounts and services in Spain is subject to various regulations, most of which transpose European legislation, such as Directive (EU) 2015/2366 (“PSD 2”) (transposed by means of Royal Decree-Law 19/2018, of November 23, on Payment Services) and Directive (EU) 2014/92 (transposed by means Royal Decree-Law 19/2017, of November 24, on basic payment accounts, transfer of payment accounts and comparability of fees). Such regulations lay down minimum information requirements for providers of payment accounts and services as well as certain transparency provisions with regard to fees. A significant development in relation to PSD 2 is a requirement to allow third parties access to accounts to provide account information and payment initiation services, provided they have a customer’s consent.
Finance
Regarding loans, there are separate regulations applying to consumer loans and residential loans which are, in both cases, mainly derived from European legislation, including Directive (EU) 2008/48 (relating to credit agreements for consumers) (transposed by means of Law 16/2011, of June 24, on Consumer Credit Contracts) and Directive (EU) 2014/17 (relating to credit agreements for residential immovable property). In 2019, Law 5/2019, of March 15, regulating real estate credit agreements (“Law 5/2019”) was passed, transposing Directive 2014/17. It applies to individuals, whether or not they are consumers, and sets limits on default interest, early maturity and early repayment fees, and provides a comprehensive framework of pre-contractual information provisions. Law 5/2019 also requires that a notarial act shall be granted prior to signing a residential credit agreement in which the notary verifies that the bank has fulfilled all of its legal pre-contractual information obligations and that the borrower has understood all the clauses.
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Additionally, specific regulations applicable to mortgage loans for vulnerable consumers are in effect. Royal Decree-Law 6/2012 (“CGP 6/2012”) establishes a Code of Good Practices to support debtors facing severe financial difficulties. Measures include a five-year grace period for principal repayment, reduced interest rates during this period, and loan term extensions of up to 40 years. If refinancing is not viable, debt reduction or dation in payment (handing over) of the mortgaged home to cancel the debt is possible.
Royal Decree-Law 19/2022 expanded CGP 6/2012 to include more types of debtors but reduced the grace period to two years and allowed loan term extensions of up to seven years. It also introduced a new Code of Good Practices (“CGP 19/2022”) to mitigate rising interest rates. Eligible debtors can extend the loan term by up to seven years (not exceeding 40 years) with options such as freezing installments for 12 months or converting to a fixed interest rate.
CGP 19/2022 was extended until December 31, 2025, nationwide, and until June 30, 2026, for residents in areas affected by the late 2024 floods (DANA).
Instant Payments Regulation
Regulation (EU) 2024/886 or the European Parliament and of the Council of March 13, 2024 amending Regulations (EU) No 260/2012 and (EU) 2021/1230 and Directives 98/26/EC and (EU) 2015/2366 as regards instant credit transfers in euro requires all payment service providers that offer regular transfer services to offer consumers and businesses in the European Economic Area (EEA)—the 27 EU member states plus Iceland, Liechtenstein, and Norway—the ability to transfer money within a maximum of 10 seconds, at any time of day, every day of the week.
Additionally, if there is a fee, such fee cannot be higher than the fee applied to regular transfers. Furthermore, in order to prevent sending money to fraudulent accounts, payment service providers must offer users the possibility of verifying that the IBAN number of the account to which the money is being sent matches the name of the recipient.
The Regulation establishes a transitional period for its implementation, granting entities in the eurozone until January 9, 2025 to receive transfers and to apply fees for this service, which must not exceed those for standard transfers. Furthermore, entities will have until October 9, 2025, to implement the capability to send instant transfers, incorporate the verification service to ensure that the beneficiary’s name matches the IBAN, and offer customers the possibility to set limits on transferred amounts.
New Draft Bill on Financial Customer Defense Authority
The Congress of Deputies is currently debating the draft bill for the creation of the Financial Customer Defense Authority (the “Authority”). The final approval could take place during the year 2025. The below discussion is based on the latest proposal as of the date of this Annual Report, and any final resolution (if passed) may include additional or different provisions.
Based on the current proposal, the Authority will have faculties to hear and adopt binding resolutions, with respect to financial entities only, in connection with claims of financial customers or potential customers (i) not exceeding 20,000 euros, regarding breaches of conduct regulations (included voluntary codes of good practices) and abusive clauses; or (ii) with an undetermined amount (this will need to be further developed by subsequent regulation). The Authority’s resolution will not be binding when the amount of the claim is equal to or greater than 20,000 euros or is related to good practices. In relation to abusive clauses, the Authority will decide on the existence of abusive clauses if these have been previously declared as such by the Supreme Court and the Court of Justice of the European Union and a final ruling has been registered with the Spanish registry of general terms and conditions of contracting.
The Authority shall resolve complaints from individuals and companies, including potential customers. Resolutions may be appealed, regardless of whether they are binding or not, before the civil courts in Spain.
With respect to claims of an economic nature, the resolution may order the refund of amounts determined to be unduly charged, plus interest for late payment.
The Authority may impose penalties for non-compliance with its resolutions (from 500,000 to 2,000,000 euros). Additionally, sanctions could be imposed on managers and directors (from 250,000 to 1,000,000 euros).
The Authority will be entirely financed by financial entities, which will be required to pay a varying annual fee based on the number of complaints filed against them, and the number of complaints resolved against them, in the preceding year. In particular, 40% of the costs incurred by the Authority in a given year will be distributed among institutions on a pro rata basis based on their respective weight within the absolute number of complaints brought in such year, while 60% of the costs will be distributed on a pro rata basis based on their respective weight within the absolute number of complaints resolved in favor of customers brought in such year.
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Insolvency Law
In 2022 Law 16/2022 of September 5 on the reform of the consolidated text of the Insolvency Law (Law 16/2022) was passed. Law 16/2022 transposes Directive (EU) 2019/1023 of the European Parliament and of the Council of June 20, 2019 on frameworks for preventive restructuring, debt waivers and disqualifications, and on measures to increase the efficiency of restructuring, insolvency and debt waiver procedures. The new insolvency legal framework provides for (i) the creation of a new state of insolvency (“the likelihood of insolvency”), prior to imminent and actual insolvency, which enables access to certain pre-bankruptcy institutions, (ii) the removal of out-of-court payment agreements and refinancing agreements, introducing instead “Restructuring Plans” and (iii) the new “Special procedure for micro-enterprises” applicable to debtors, whether natural or legal persons, that meet certain characteristics.
Organic Law 1/2025, of January 2, on Measures to Improve the Efficiency of the Public Justice Service
This Law introduces the following changes:
(i) New Regime for Late Payment Interest
In consumer actions, if companies fail to cooperate in reaching an agreement on disputes related to either clauses that are declared null and void by the Supreme Court, resolutions registered in the General Register of Contract Terms, or judgments of the Court of Justice of the European Union (CJEU), courts may impose compensation for late payment. This compensation will consist of an annual interest equal to the legal interest rate in effect at the time, increased by 50%. If more than two years have passed since the judgment ordering the restitution of amounts, the annual interest shall not be less than 20%. Interest will accrue daily from the date the consumer paid the amounts claimed (e.g., in cases of expenses related to a mortgage loan, from the time of signing of such mortgage loan).
(ii) Mandatory Pre-Claim Process
Before filing a lawsuit, in most civil disputes, it will be mandatory to attempt to resolve the dispute through alternative dispute resolution mechanisms. For disputes filed by consumers against financial institutions related to unfair terms in mortgages, this requirement will involve submitting a prior claim to the lender, who must respond and include, as the case may be, a calculation of the amount to be reimbursed. If the lender fails to resolve the claim, it cannot introduce new arguments in court beyond those included in its response.
In the case of judicial debt claims where no enforcement proceedings are initiated, the financial institution shall also resort to alternative dispute resolution mechanisms. In addition, at any stage of enforcement proceedings, the parties may submit to mediation or any other appropriate dispute resolution mechanisms, in which case the enforcement proceeding shall be suspended.
(iii) Modification of the Valuation of Unquantifiable Claims
Courts have generally considered that a declaratory claim for the nullity of a clause is of indeterminate value. When the value of a lawsuit is indeterminate, the regulation provides that, for the purposes of cost assessment, claims are estimated at €18,000, unless the complexity of the case dictates otherwise.
The new law provides for increasing the valuation of unquantifiable claims from €18,000 to €24,000. If a party is found to have committed a “misuse of judicial resources”, procedural costs and fines of up to €6,000 may be imposed on such a party. This may increase the costs of litigation.
Additionally, certain articles of procedural law were amended, including, among others, those related to the judicial auction of assets.
Investment Services
Several sustainability initiatives within the European Union are expected to significantly impact the asset management and investment services sectors during 2026.
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•The European Commission, the European Parliament and the European Council have agreed on certain amendments to be made to MIFID II and Regulation (EU) No 600/2014 on markets in financial instruments (MiFIR). The vast majority of the changes relate to MiFIR, where some existing obligations are removed or alleviated. In particular, the pre-transparency obligation is limited to equity products and products subject to the clearing obligation. The systematic internalized figure is also reduced in its scope and, as an alternative, the figure of the designated publishing entity is created to facilitate the buy-side compliance with post-transparency rules. Most of these changes entered into force on March 28, 2024, although (i) a some of them will need to be further developed by level 2 legislation; and (ii) ESMA and the European Commission published two statements to clarify that certain obligations will not enter into force until a later date.
•The European Commission has published a regulatory package called Retail Investment Strategy (“RIS”) which aims to increase the participation of retail investors in European capital markets. Directive 2014/65/EU on markets in financial instruments (MiFID) is included among the different EU directives to be reviewed, with relevant changes proposed in retail investor protection. The European Parliament and European Council have recently announced an agreement on the general framework to be included in the RIS. Technical work will now continue to finalize the legal texts. Once published in the EU’s official journal, member states will have to transpose the new rules within 24 months. They will start applying 30 months following their publication, with the exception of the new rules under PRIIPs which would start applying 18 months following their publication.
•The regulatory package amending, among others, Regulation (EU) 648/2012 of the European Parliament and Council on over-the-counter derivatives, central counterparties and trade repositories (EMIR 3.0) was published in the Official Journal and most of the changes apply from December 24, 2024. The main changes aim to increase clearing at EU central counterparties and reduce reliance on certain UK central counterparties through the so-called “active accounts”. The European Commission has recently approved some of the level 2 legislation (with the legislation dealing with active accounts being the most relevant) without relevant deviations from the reports issued by ESMA.
In addition, as part of the RIS, the European Commission has published a proposal to amend the Regulations for packaged retail investment products (PRIIPs). The proposed changes are mainly focused on providing alternatives for the use of digital channels and the inclusion of a new ESG section within the Key Information Document (KID). The new rules under PRIIPs will start applying 18 months following their publication in the EU’s official journal.
The European Union has also been very active in terms of adopting legislation to preserve financial stability. In this regard, the BBVA Group has been subject to initial margin requirements under Regulation (EU) 648/2012, regarding OTC derivatives, central counterparties and trade repositories, since September 2019, as well as similar legislation in other geographical areas. In addition, BBVA Group entities classified as financial counterparties are required to post and receive initial margins when dealing with other in-scope entities.
In Spain, the Ministry of Economy has launched a public consultation regarding the regulatory framework for a new Savings and Investment Account and the “Finance Europe” label. Its key points are the creation and design of a simple national regulatory framework for a Savings and Investment Account, aligning with a European Commission Recommendation from September 30, 2025 and the implementation of the “Finance Europe” label in Spain.
EU Market Integration Package
The European Commission published on December 4, 2025 the so-called Market Integration Package, an initiative seeking to constitute a fundamental pillar of the Savings and Investments Union (SIU) Strategy. Its primary objective is to remove the barriers that fragment the Union’s capital markets in the areas of trading, post-trading, asset management and crypto-asset services, while at the same time strengthening integrated supervision.
Overall, the package aims to achieve: (i) greater integration and economies of scale, (ii) more coherent supervision, partly centralized within ESMA, (iii) facilitation of innovation (DLT, tokenization), and (iv) simplification through the removal of redundant rules and the consolidation of the “single rulebook.” On top of that, it proposes a new modification of the UCITS (Undertakings for Collective Investment in Transferable Securities) and AIFM (Alternative Investment Fund Manager) Directive, which affects both the management companies and the funds under management of the BBVA Group, and BBVA as a depositary bank.
Transposition of the Consumer Credit Directive into the Spanish market
At its meeting on January 7, 2026, the Spanish Council of Ministers initiated the legislative procedure for the transposition of the Consumer Credit Directive 2023/2225, which repeals and updates the former Directive 2008/48/EC, thereby modernizing the European regulatory framework for consumer credit.
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As part of the transposition process, which is expected to enter into force on November 20, 2026, a law-ranking regulation and an accompanying Royal Decree will be adopted. One of the most relevant aspects is that the aforementioned Royal Decree could introduce certain limitations on the applicable interest rates, as well as mechanisms for monitoring and publishing the interest rates normally applied in the market, under the terms to be set out in the implementing legislation.
In general terms, the scope of transactions and entities supervised by the competent authorities will be expanded, measures will be introduced to ensure borrowers’ creditworthiness for the repayment of the loans requested, and transparency in the marketing of credit products will be strengthened.
Pension Funds
The European Commission has published its regulatory package on supplementary pensions, a key initiative framed within the Savings and Investment Union (SIU). The European Commission’s proposal is designed to supplement public pensions, rather than replace them, and its main objective is to strengthen both the demand and supply of occupational and personal pension plans to improve financial security and mobilize long-term savings towards productive investments across the EU.
Sustainability
In November 2025, the European Commission published a proposal to amend Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (SFDR), following a comprehensive assessment process initiated in 2023. The review aims to address implementation challenges identified since the SFDR entered into application in 2021, including regulatory complexity, compliance costs and risks of greenwashing, and forms part of the Commission’s broader simplification agenda within the EU sustainable finance framework.
The proposal introduces a harmonized categorization system for financial products making sustainability-related claims —sustainable, transition and ESG basics— alongside a significant streamlining of disclosure requirements, notably through the reduction of entity-level obligations and more proportionate product-level disclosures. The revised framework is intended to improve investor understanding and comparability of ESG products, strengthen investor protection and enhance coherence with other EU sustainability legislation, including the EU Taxonomy Regulation, the Corporate Sustainability Reporting Directive and recent ESMA ESG fund naming guidelines. As of the date of this Annual Report, the proposal remains subject to the ordinary legislative procedure and its final content and timing of application remain uncertain.
Digital Operational Resilience Act (DORA)
Regulation 2022/2554, on digital operational resilience for the financial sector (DORA), is an EU regulation aimed at ensuring the operational resilience of financial entities against digital and cybersecurity risks, which entered into force in January 2025.
Enacted as part of the EU’s broader Digital Finance Package, it establishes a uniform framework for financial institutions, including banks, investment firm, and asset managers, to manage and mitigate technological risks. DORA mandates stringent requirements for risk management, incident reporting, oversight of third-party information and communication technology (ICT) service providers and testing of operational resilience. Its impact on financial entities is significant, as it drives the need for enhanced IT systems, stronger governance structures and robust third-party risk management. As a result, DORA is already affecting financial entities and its relationship with counterparties and providers.
Interest Margin and Commission Tax (IMIC)
On December 21, 2024, Law 7/2024 was published in the Official State Gazette, the ninth Final Provision of which regulates a new tax on the net interest margin and commissions of certain financial entities, including Banco Bilbao Vizcaya Argentaria, S.A. The tax is levied on the net interest margin and commissions obtained by credit institutions from the activity they carry out in Spain and is applicable to the first three consecutive tax periods that begin on January 1, 2024.
During 2025, the Group made a payment corresponding to the IMIC for the 2024 financial year. However, since this payment was not required under the legal framework in place as of December 31, 2025, an asset for the amount paid (€295 million) was recorded under the heading “General Governments” of the item “Financial assets at amortized cost - Loans and advances to customers” in the balance sheet.
In addition, as of December 31, 2025, current tax liabilities include approximately €318 million corresponding to the accrual of the IMIC for the 2025 financial year in respect of certain Group financial entities, and the related expense was recognized under the heading of “Tax expense or income related to profit or loss from continuing operations”.
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No impact associated with the IMIC has been recorded in the Consolidated Financial Statements for the year ended December 31, 2024. See Note 19.6 to the Consolidated Financial Statements for additional information on certain other contributions and taxes.
Temporary Tax on Credit Institutions in Spain
On December 28, 2022, the Law for the establishment of the temporary tax on credit entities and financial credit establishments was published in the Official State Gazette.
This law established a temporary tax on extraordinary profits applicable to credit institutions operating in Spain during the years 2023 and 2024 whose aggregate interest income and fee and commission income in 2019 was €800 million or more.
The amount to be paid under such temporary tax on extraordinary profits was 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 belonged, corresponding to the calendar year prior to the year in which the obligation to make such a payment arose. The payment obligation arose 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 temporary tax in 2024 and 2023 amounted to €285 million and €215 million, respectively, which amounts were recorded under “Other operating expense” in the consolidated income statements (see Note 42 to the Consolidated Financial Statements). This temporary tax had no impact on the Consolidated Financial Statements for the year ended December 31, 2025.
See Note 19.6 to the Consolidated Financial Statements for additional information on certain other contributions and taxes.
Prevention of Money Laundering and Terrorist Financing
Directive (EU) 2015/849 of the European Parliament and of the Council of May 20 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing aims to prevent the use of the EU’s financial system for the purposes of money laundering and terrorist financing.
Spanish Law 10/2010 of April 28 transposes Directive (EU) 2015/849 and establishes obligations in respect of preventing money laundering and terrorist financing, including applicable due diligence, internal controls and reporting obligations to obliged entities. Credit institutions, including BBVA, are part of the entities that are subject to such regulation.
On July 20, 2021, the European Commission presented an ambitious package of legislative proposals to strengthen EU rules against money laundering and terrorist financing. This legislative package consisted of four texts: (i) a regulation governing the creation of an EU Authority for Anti-Money Laundering and Countering the Financing of Terrorism (the “AMLA Regulation”); (ii) a new regulation on the prevention of money laundering and terrorist financing (“AML/CFT” and the “AML/CFT Regulation”, respectively); (iii) the 6th Directive on the prevention of money laundering and terrorist financing (the “6th AML/CFT Directive”); and (iv) the revision of a 2015 regulation on transfers of funds related to tracing transfers of certain crypto-assets (the “Travel Rule Regulation”).
The Travel Rule Regulation was adopted in May 2023. The remaining proposals were approved by the Parliament on April 24, 2024 and by the Council on April 30, 2024 (with publication in the Official Journal of the European Union on June 19, 2024).
The new Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) will have direct and indirect supervisory powers over high-risk obliged entities in the financial sector and will establish an integrated mechanism with national supervisors to ensure that obliged entities comply with AML/CFT-related obligations. The AMLA Regulation applies since July 1, 2025.
The AML/CFT Regulation harmonizes anti-money laundering rules across the EU and extends anti-money laundering rules to new obliged entities. The AML/CFT Regulation also establishes stricter due diligence requirements and regulates beneficial ownership. It will apply from July 10, 2027.
The 6th AML/CFT Directive sets out clear rules on how Financial Intelligence Units (“FIUs”) and supervisors work together, requires EU Member States to provide information from centralized bank account registers through a single access point and includes harmonization of the format of bank statements. The deadline for transposition is July 10, 2027.
Finally, the Travel Rule Regulation, which regulates measures to detect and manage transfers of funds or crypto-assets, began to apply on December 30, 2024.
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Data Protection Regulation
Regulation (EU) 2016/679 of the European Parliament and of the Council of April 27, 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data (“GDPR”) aims to achieve effective protection of personal data by providing natural persons in all EU member states with the same level of legally enforceable rights and obligations regarding personal data and imposing responsibilities on data controllers and processors to ensure consistent monitoring of the processing of personal data. Organic Law 3/2018, of December 5, on the protection of personal data and guarantee of digital rights implemented the GDPR into law in Spain. The regulatory body primarily responsible for oversight in Spain is the Spanish Data Protection Agency (“AEPD”).
The GDPR’s strengthened accountability requirements have led to the revision and improvement of our privacy management processes, including processes to obtain consents from clients, enable clients to exercise their rights, and manage cross-border data transfers.
The GDPR introduces a risk-based approach to data processing (the higher the risk associated with the data processing, the higher the standard for the evidence to be submitted in order to prove compliance with the GDPR), including the preparation of Data Protection Impact Assessments for each high-risk data processing activity, “privacy by design” and “privacy by default” requirements (where data protection is integrated in the technology from the outset) and the legitimate interest assessment (to weigh the reasons a business holds personal data against the data rights of an individual). This seeks to ensure appropriate risk-based prioritization of mitigations and controls and a significantly effective data management program based on assessed risk. Furthermore, subsequent guidance from the European Data Protection Board and the AEPD has further refined expectations regarding topics such as lawful bases for processing in marketing and the use of complex profiling techniques.
Furthermore, GDPR obligations and requirements to notify breaches to authorities and individuals under different circumstances led BBVA to review and enhance its data security measures and programs and to update its breach response plans and notification procedures, while ensuring continuous staff training and leadership buy-in. In the years following the initial implementation of the GDPR, the focus has shifted from initial compliance efforts to ensuring the maturity and operational embedding of these controls.
Mexico
BBVA’s operations in Mexico are highly regulated. The Mexican regulatory framework for financial and banking activities aims to ensure the stability of the financial system and combat money laundering, as well as to provide consumer protection and transparency in the provision of financial services.
Constitutional and Institutional Reform
On September 15, 2024, a constitutional reform regarding the Judiciary System was published in Mexico’s Federal Official Gazette. The reform, which took effect the day after its publication, primarily establishes the popular election of federal judges, including the Supreme Court Justice (“SCJN”). Furthermore, it reduces the number of SCJN justices from 11 to 9.
Additionally, on December 20, 2024, a further constitutional reform was published in Mexico’s Federal Official Gazette to eliminate several Constitutionally Autonomous Bodies, transferring their functions to other entities of the federal government. Among others, the reform provides for the redistribution of the responsibilities of the National Institute of Transparency (“INAI”) to government agencies, and the replacement of the Federal Economic Competition Commission (“COFECE”) by a decentralized body stemming from the Federal Executive, which will also be in charge of telecommunications’ antitrust matters.
As a result of the aforementioned reform, on March 20, 2025, a decree was published in the Federal Official Gazette enacting new legislation on transparency and personal data protection. The new legal framework includes: (i) the General Law on Transparency and Access to Public Information; (ii) the General Law on Personal Data Protection Held by Obligated Subjects; and (iii) the Federal Law on Personal Data Protection Held by Private Parties. These new laws reassign transparency-related responsibilities from INAI to various entities including the Secretariat of Anti-Corruption and Good Governance and the Federal Judiciary. They also mandate the establishment of the National Information Access System and the creation of specialized courts and tribunals to address these matters. The enactment of secondary regulation is still pending.
Furthermore, on July 9, 2025, the Mexican Congress approved a reform to the Federal Economic Competition Law (“LFCE”), which was subsequently published in the Federal Official Gazette on July 16. This amendment introduces significant changes –such as the creation of a new National Antitrust Commission (“CNA”), enhanced enforcement powers, and an expanded sanctions framework–and will affect various sectors, including banking, by increasing scrutiny over market behavior and dominant positions. On October 17, 2025, the new LFCE came into effect, COFECE was officially dissolved and the CNA began operations.
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COFECE Investigation into Card Payments Market
In 2018, the Investigative Authority (IA) of the COFECE launched an investigation into the card payments market. In July 2023, the COFECE’s Board issued a final resolution recommending that regulators implement regulatory changes and mandating clearing houses to establish a compliance program and appoint an antitrust compliance officer. In February 2025, COFECE formally confirmed that BBVA Mexico, as an investor in E-Global, a clearing house, has complied with the resolution.
Separately, in October 2022, COFECE announced that it had initiated an investigation in April 2022 into potential collusion in credit card transactions involving deferred monthly payments at zero interest. Although not under investigation, in July 2024, BBVA was requested to assist the authority by providing information related to the case. The request was fulfilled in December 2024. On December 18, 2024, COFECE concluded the investigation phase. In April 2025, the Investigative Authority of COFECE presented its findings to the Board of Commissioners. As a result of the investigation, COFECE issued a Statement of Probable Responsibility and notified the involved parties, thereby initiating the trial-like stage of the proceeding. BBVA is not an involved party and did not receive any notification.
Financial, Deposit and Credit Services
The provision of financial and deposit products is mainly regulated in the Banking Law and provisions issued by the National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores or “CNBV”) and the Mexican Central Bank (“BANXICO”), where CNBV issues prudential regulation and BANXICO regulates banking transactions, including financial and deposit products. In addition, the Financial Services Transparency and Regulation Law contains provisions regarding transparency and consumer protection.
Furthermore, Banking Deposit Insurance Law (IPAB Law) governs the creation, organization, and functions of IPAB, the Mexican bank deposit protection agency. The IPAB provides financial support to banks to safeguard customer deposits. Deposit insurance is paid upon a bank’s liquidation.
Finally, the Law for the Protection and Defense of Financial Services Users aims to protect and defend the rights and interests of users of financial services. It establishes the CONDUSEF, an autonomous agency with broad authority to safeguard user rights, including the power to impose fines. Banks are required to maintain an internal unit dedicated to resolving disputes submitted by clients.
Capital Markets
The regulatory framework for capital markets includes specific regulations designed to develop the stock market in an equitable, efficient and transparent manner, protect the interests of investors and promote competition, and minimize systemic risk.
Asset Management
Regarding asset management, regulation encourages the creation and development of investment companies and promotes the strengthening and the decentralization of the stock market by facilitating the access of small and medium investors. It also establishes the rules for the organization and operation of investment funds, the intermediation of their shares in the stock market, and the organization and operation of the people who provide asset management services.
Anti-Money Laundering (AML) Regulations
The primary AML regulations applicable to credit institutions are issued by the Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público or “SHCP”) and are set forth in the general provisions referred to in Article 115 of the Mexican Banking Law. These provisions impose obligations on financial institutions, including customer due diligence, transaction monitoring, suspicious activity reporting, and risk-based compliance programs. The CNBV and SHCP enforce AML regulations and impose severe penalties for non-compliance.
On June 26, 2025, the Mexican Congress approved a reform to the Anti-Money Laundering Law (the Federal Law for the Prevention and Identification of Operations with Illicit Proceeds), which was subsequently published in the Federal Official Gazette on July 16, 2025. This amendment introduces expanded definitions (including “beneficial owner” and “politically exposed person”), enhances the Ministry of Finance’s oversight powers, and strengthens coordination with public and national security authorities. It is expected that these changes will have legal and operational impacts, including increased due diligence requirements, stricter reporting obligations, and updates to internal AML systems.
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Turkey
BBVA’s operations in Turkey are subject to substantial regulation. Apart from fundamental legal rules and product/service-specific legal regulations, the most basic regulation for the sector is the Banking Law No. 5411. The purpose of this law is to regulate the principles and procedures for ensuring confidence and stability in financial markets, the efficient functioning of the credit system and the protection of the rights and interests of depositors.
In general, the rules applicable to products and services that banks in Turkey offer to consumers are more stringent than rules applicable with respect to commercial and corporate banking customers. Besides general consumer protection regulations, there are specific regulations of the Banking Regulation and Supervision Agency (“BRSA”) on banking consumers.
Below is a brief summary of certain regulations that are relevant to our activity. For additional information on certain recent legal and market developments, see “—Competition—Turkey”.
Regulation on Loans and Reserve Requirements
Since 2020, the BRSA and the CBRT have issued recommendations to protect the value of the Turkish lira by ensuring that customers who are granted cash loans do not use the loan amounts for buying foreign currency or gold, and introduced and regulated the Foreign Currency Protected Turkish Lira Deposit Account, an instrument designed to protect Turkish lira-denominated deposits from volatility in exchange rates. Several Communiqués were issued since then, establishing maximum limits with respect to loan allocation and loan disbursement fees, revising applicable rates, and implementing policies to strengthen the monetary policy transmission mechanisms and to balance domestic demand.
On September 23, 2022, the Procedures and Principles Regarding Fees to be Collected by Banks from Commercial Customers entered into force (through Communiqué No. 2020/4 and further amendments), establishing maximum limits with respect to loan allocation and loan disbursement fees. According to such Communiqué, starting on January 4, 2024, monetary limits and maximum fees which are stated as fixed rates will be revised annually at the rate of increase in the annual consumer price index, as announced by the Turkish Statistical Institute at the end of the year. The Communiqué was amended on June 28, 2024 to introduce a change in the calculation method of the prepayment fee for fixed-rate and floating-rate commercial loans and subsequently further amended on November 1, 2025, when a simplified reduced limit of 0.20% was introduced.
On the other hand, policies were implemented in 2024 to strengthen the monetary policy transmission mechanism and balance domestic demand. In order to enhance the effectiveness of loan growth limits, a reserve requirement (funds to be held at the CBRT as a percentage of loans or deposits, as the case may be) based on loan growth was introduced in 2024. During 2024, the monthly growth limit was reduced from 2.5% to 2.0% for Turkish lira commercial loans and from 3.0% to 2.0% for general purpose loans. On January 4, 2025, the growth limit was revised to 2.5% for SME loans and 1.5% for commercial loans. These measures were implemented in order to control the growth in Turkish lira denominated loans within a lower interest rate environment.
On June 21, 2025, the Communiqué on Deposit and Loan Interest Rates and Participation Account Profit and Loss Participation Rates lowered the additional reserve requirement to 2.5%, from 4.0%.
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Regulation on Deposits
Since 2020, BRSA has issued recommendations to protect the value of the Turkish lira by ensuring that customers who are granted cash loans do not use the loan amounts for buying foreign currency or gold, and introduced the Foreign Currency Protected Deposit Account (KKM). While the scheme initially allowed individuals and legal entities to convert foreign currency and gold into protected Turkish lira-denominated deposits (with eligibility dates updated periodically, such as the September 2024 amendment referencing balances as of August 31, 2024), the CBRT began phasing out the program in 2025.
On July 20, 2024, the Communiqué on Amendments to the Communiqué on the Deposit and Participation Scheme for Non-Resident Turkish Citizens was adopted, setting forth certain regulation applicable to time deposit and participation accounts (“YUVAM”) that are the result of converting foreign currency deposit accounts and participation funds of certain non-resident persons that were denominated in foreign currency into Turkish lira deposits or accounts, and which provide additional returns according to the procedures determined by the CBRT. YUVAM accounts are a subset of foreign currency-protected deposit accounts (KKM), specifically tailored for non-resident individuals and legal entities, offering both exchange rate protection and an additional yield. As per the latest amendments, Turkish authorities are to gradually phase out the broader KKM scheme, specifically by excluding domestic legal entities from its scope for new openings and renewals, while maintaining YUVAM accounts as a distinct, regulated mechanism to attract foreign currency from non-resident individuals and legal entities. As of February 15, 2025, account openings and renewals for legal entities were terminated. On August 23, 2025, the opening and renewal of standard KKM accounts for individuals were also terminated, effectively ending the scheme for domestic residents.
Pursuant to CBRT legislation, banks are free to determine the interest rates on deposits and loans. However, between 2020 and 2024, the yearly interest rate on current deposit accounts was capped at low levels (around 0.25%), significantly below the annual inflation rate (30.9% as of late 2025).
Further amendments introduced an additional reserve requirement, which was set at 5% as of September 2024, and which requires Garanti BBVA to make Turkish lira-denominated deposits with the CBRT in such proportion with respect to all foreign currency-denominated deposits and participation funds (excluding those obtained from banks abroad) held by Garanti BBVA, regardless of their maturities. Further amendments reduced this requirement in November 2024 (4.0%) and June 2025 (2.5%). The reserve requirement framework was significantly revised throughout 2025 to simplify macroprudential tools. While a 5% additional reserve requirement was temporarily in force following the September 2024 amendments, the CBRT overhauled these regulations effective December 2025 (Communiqué No. 2025/61).
Under the updated regime in 2025, effective as of January 2, 2026, reserve requirement ratios for foreign currency-denominated deposits and participation funds were unified and set at 30% for short-term (up to 1 month) and 26% for long-term maturities. These amendments also eliminated previous divergences between foreign currency and gold deposit ratios, effectively superseding the specific 5% additional tranche mechanism previously in place. In addition, the reserve requirement for precious metal deposit accounts has been removed. For other liabilities (including foreign bank deposits/participation funds), the reserve requirement ratios have been changed for various maturity profiles. The rates for up to 2 years (including 2 years) decreased from 16% to 10%, for up to 3 years (including 3 years) from 11% to 8%, for up to 5 years (including 5 years) from 7% to 3% and for longer than 5 years from 5% to 0%. The 25% reserve requirement for foreign currency deposits/participation funds from repo transactions with domestic residents, with maturities up to 1 year, remains unchanged.
The Regulation on the Maintenance of Securities, pursuant to which each bank in Turkey (including Garanti BBVA) was required to hold certain amounts of Turkish lira-denominated long-term government debt securities and lease certificates issued by the Leasing Company of Under secretariat of Treasury based on their respective balances of foreign currency deposits, participation funds and precious metals held by customers and Turkish lira deposits, among other assets and liabilities, was amended on December 22, 2023. The relevant requirement for foreign currency deposits, participation funds and precious metals accounts held by customers and funds from foreign exchange-denominated repo transactions was set at 4%. The CBRT repealed the Regulation on the Maintenance of Securities on May 9, 2024 with immediate effect and, therefore, the rules requiring banks to hold long-term Turkish lira-denominated securities issued by the Turkish government with the CBRT have been abolished.
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Pursuant to the Communiqué on Deposit and Loan Interest Rates and Participation Account Profit and Loss Participation Rate of June 21, 2025, the following amendments were implemented with respect to Turkish lira-denominated deposits: (i) new reserve requirement ratios were set for accounts with variable interest rates linked to the consumer price index (CPI), producer price index (PPI), and Turkish lira Overnight Reference Rate (“TLREF”) Index, set at 10%; (ii) for accounts with maturities up to 6 months benefiting from CBRT exchange rate/price protection, the ratio increased from 33% to 40%, while demand deposits/participation funds in foreign banks belonging to parent companies were set at 0%; and (iii) variable interest rates may be applied to Turkish lira deposits with maturities longer than 1 month (previously, 3 months or longer).
Other Regulations
The Communiqué Regarding Maximum Interest Rates Applicable to Credit Card Transactions, published on and effective as of March 13, 2025, has altered both the amounts of period debt and interest rates applicable to credit card transactions in Turkish lira (excluding cash withdrawals or usage transactions and corporate credit card transactions). The updated period debt rates are calculated by adding 14 basis points (reduced from 39) for credit cards with a period debt below thirty thousand Turkish lira (previously twenty-five thousand); 64 basis points (reduced from 89) for credit cards with a period debt between thirty thousand and one hundred and eighty thousand Turkish lira (previously between twenty five and fifty thousand) 64 basis points (reduced from 89) and 114 basis points (reduced from 139) for credit cards with a period debt above one hundred and eighty thousand (previously above fifty thousand).
For corporate credit card transactions in Turkish lira (excluding cash withdrawals or purchase transactions) the monthly maximum contractual interest rate is determined by adding 114 basis points to the monthly reference rate, reduced from 139 basis points. For cash withdrawals or purchase transactions in Turkish lira, the monthly maximum contractual interest rate is determined by adding 114 basis points to the monthly reference rate, reduced from 139 basis points.
In addition, in September 2024, the BRSA introduced regulations regarding the restructuring of retail credit card debts, including the possibility of adding the installment amount for each month to the minimum payment of the relevant month, limited to a maximum of 60 months. The credit card limit allocated to the cardholder cannot be increased until 50% of the restructured debt is paid off. If the restructured amount exceeds the credit card limit, the excess amount will not be considered an overdraft (debit). The interest rate applicable to restructured credit card debts must not exceed the reference rate specified in the regulation updates of September 2024, and was amended on November 1, 2025, by establishing a limit of 3.11%.
New regulations in Turkey, effective June 2025, have significantly tightened anti-money laundering (AML) protocols for crypto asset service providers (“CSP”). The Financial Crimes Investigation Board (“FCIB”) now requires CSP to conduct remote Know Your Customer (“KYC”) checks, verifying customer identity and address through government databases for ongoing business relationships. This move integrates crypto services into the broader AML framework, aiming to increase transparency and accountability within the digital asset space. Further updates from the FCIB introduce specific restrictions on crypto asset transfers.
The CBRT, via the Communiqué Regarding the Determination of Interest Rates to be Applied in Rediscount and Advance Transactions, published on and effective as of 20 December 2025, has set the discount rate applicable to rediscount transactions for bills with a remaining maturity of up to 3 months at 38.75% per annum, and the interest rate applicable to advance transactions at 39.75% per annum.
United States
BBVA’s activities and operations in the United States are subject to extensive U.S. federal and state supervision and regulation, and in some cases, U.S. requirements may impose restrictions on BBVA’s global activities.
U.S. Bank Regulation
Because BBVA maintains a branch in the United States, BBVA is a foreign banking organization and a bank holding company within the meaning of the U.S. Bank Holding Company Act of 1956, as amended (the “BHC Act”) and the International Banking Act of 1978, as amended (the “IBA”), and as a result, BBVA is subject to regulation and supervision by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). BBVA has also elected to be treated as a financial holding company. To continue to be treated as a financial holding company, each of BBVA and BBVA Bancomer, S.A. and BBVA Mexico, S.A. must maintain certain regulatory capital ratios above minimum requirements and must be deemed to be “well-managed” for U.S. bank regulatory purposes.
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As a bank holding company, BBVA’s direct and indirect activities and investments in the United States are limited to banking activities and certain non-banking activities that are “closely related to banking”, as determined by the Federal Reserve, and certain other activities permitted under the BHC Act and IBA. As a bank holding company that has elected to be treated as a financial holding company, BBVA can also engage in direct and indirect activities and investments in the United States that are “financial in nature”, as determined by the Federal Reserve, and certain other activities permitted under the BHC Act and IBA. BBVA is required to obtain the prior approval of the Federal Reserve before acquiring, directly or indirectly, the ownership or control of more than 5% of any class of voting securities of any U.S. bank or bank holding company.
BBVA’s non-FDIC insured New York branch is supervised by the Federal Reserve through the Federal Reserve Bank of New York, as well as licensed and supervised by the New York State Department of Financial Services. BBVA’s Houston representative office is supervised by the Federal Reserve through the Federal Reserve Bank of Dallas, as well as licensed and supervised by the Texas Department of Banking. BBVA Mexico, S.A.’s agency office in Houston, Texas is a non-FDIC insured agency office of BBVA Mexico, S.A., an indirect subsidiary of BBVA, which is licensed under the laws of the State of Texas and supervised by the Texas Department of Banking and the Federal Reserve Bank of Dallas. BBVA’s U.S. branch and agency are subject to liquidity requirements.
Sections 23A and 23B of Federal Reserve Act and Regulation W place various qualitative and quantitative restrictions on transactions between BBVA’s U.S. branch and agency and BBVA’s U.S. broker-dealer subsidiary with regard to extensions of credit, credit exposures arising from derivative transactions, and securities borrowing and lending transactions or engaging in certain other transactions involving the U.S. branch and agency. Such transactions must be on terms that would ordinarily be offered to unaffiliated entities, must be secured by designated amounts of specified collateral, and are subject to quantitative limitations.
BBVA is subject to certain Federal Reserve regulations under Regulation YY related to its compliance with Spanish capital adequacy standards, risk management and governance requirements, and liquidity and capital stress testing requirements based on its worldwide total assets. Because BBVA does not have $100 billion or more in combined U.S. assets, it is not subject to the enhanced prudential standards under Regulation YY applicable to foreign banking organizations with combined U.S. assets of $100 billion or more.
BBVA is subject to certain U.S. resolution planning requirements. Under Title I of the Dodd-Frank Act and implementing regulations issued by the Federal Reserve and the FDIC, BBVA must prepare and submit a plan for the orderly resolution of its U.S. subsidiaries and U.S. operations in the event of future material financial distress or failure (the “Title I Resolution Plan”). Based on its worldwide total assets, BBVA is required to file a reduced Title I Resolution Plan once every three years, filing its most recent Title I Resolution Plan in 2025.
BBVA is subject to the Volcker Rule. The Volcker Rule prohibits a foreign bank that maintains a branch or agency in the United States, such as BBVA, and its affiliates from (1) engaging in “proprietary trading” and (2) investing in or sponsoring certain types of funds (covered funds) subject to certain limited exceptions. The Volcker Rule regulations contain certain exemptions, including for market-making, hedging, underwriting, trading in U.S. government and agency obligations, and permit certain ownership interests in certain types of funds to be retained. They also permit the offering and sponsoring of funds under certain conditions. In the case of non-U.S. banking entities, such as BBVA, there is also an exemption permitting activities conducted solely outside of the United States, provided that certain criteria are satisfied. While the Volcker Rule regulations impose significant compliance and reporting obligations on banking entities, BBVA is of the view that the impact of the Volcker Rule is not material to its business operations.
Derivatives
BBVA is registered as a “swap dealer” as defined in the Commodity Exchange Act and the regulations promulgated thereunder with the U.S. Commodity Futures Trading Commission (the “CFTC”), which subjects BBVA to regulation and supervision by the CFTC and the National Futures Association with respect to its activities involving “swaps” (as defined in the Commodity Exchange Act), which include many types of over-the-counter derivatives, such as interest rate swaps and certain foreign exchange derivatives. In general, as a non-U.S. swap dealer, BBVA is not subject to all CFTC requirements applicable to U.S. swap dealers, including certain business conduct standards, when entering into swaps with non-U.S. counterparties. In addition, subject to certain conditions, BBVA may comply with EU OTC derivatives requirements in lieu of certain CFTC requirements, including portfolio reconciliation, portfolio compression and trade confirmation requirements, pursuant to substituted compliance determinations issued by the CFTC.
BBVA’s worldwide swap activities are also subject to regulations adopted by the European Commission pursuant to the European Market Infrastructure Regulation (“EMIR”) and the EU’s Markets in Financial Instruments Directive (“MiFID”) and other European regulations and directives.
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BBVA is conditionally registered as a security-based swap dealer with the SEC, which subjects BBVA to regulation and supervision by the SEC with respect to its activities involving “security-based swaps” (as defined in the Securities Exchange Act of 1934), which include many types of over-the-counter derivatives referencing single securities or loans or narrow-based indexes of securities, such as credit default swaps and equity total return swaps. In general, as a non-U.S. security-based swap dealer, BBVA is not subject to all SEC requirements applicable to U.S. security-based swap dealers, including certain business conduct standards, when entering into security-based swaps with non-U.S. counterparties. In addition, subject to certain conditions, BBVA may comply with EU OTC derivatives requirements in lieu of certain SEC requirements, pursuant to a substituted compliance determination issued by the SEC.
Anti-Money Laundering; Office of Foreign Assets Control
A major focus of U.S. governmental policy relating to financial institutions in recent years has been aimed at combatting money laundering and terrorist financing. Laws and regulations applicable to BBVA and certain of its affiliates impose obligations to maintain appropriate policies, procedures, and controls to detect, prevent, and report money laundering and terrorist financing. In particular, the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “USA PATRIOT Act”), and its implementing regulations require financial institutions operating in the United States to, among other things, (a) conduct due diligence and collect certain information related to correspondent and payable-through bank accounts; (b) implement enhanced due diligence for private banking and correspondent banking relationships; (c) scrutinize the beneficial ownership and activity of certain non-U.S., private banking and other high-risk customers (e.g., senior foreign political figures); and (d) develop and maintain anti-money laundering programs that include a Customer Identification Program; compliance policies, procedures, and internal controls designed to ensure the detection and reporting of money laundering and terrorist financing; the designation of a Bank Secrecy Act compliance officer; as well as training and audit functions. Financial institutions are also expected to maintain compliance programs designed to comply with economic sanctions administered by the United States Department of the Treasury’s Office of Foreign Assets Control. Failure of a financial institution to maintain and implement adequate anti-money laundering and sanctions compliance programs could have serious legal and reputational consequences for the institution.
Other Regulated U.S. Entities
BBVA’s direct U.S. broker-dealer subsidiary, BBVA Securities Inc. (“BSI”), is subject to regulation and supervision by the Securities and Exchange Commission (“SEC”) and the Financial Industry Regulatory Authority (“FINRA”) with respect to its securities activities, as well as various U.S. state regulatory authorities. In addition, the securities underwriting and dealing activities of BSI are subject to regulation and supervision by the Federal Reserve.
The activities of BBVA’s U.S. investment adviser affiliate are regulated and supervised by the SEC. In August 2025, BBVA established an insurance agency subsidiary, BBVA Global Wealth Insurance Agency, Inc., which is subject to regulation and supervision by various U.S. state regulatory authorities pending applications and state regulatory approval of applicable insurance licenses.
Disclosure of Iranian Activities under Section 13(r) of the Exchange Act
The BBVA Group discloses the following information pursuant to Section 13(r) of the Exchange Act, which requires an issuer to disclose whether it or any of its affiliates knowingly engaged in certain activities, transactions or dealings relating to Iran or with natural persons or entities designated by the U.S. government under specified executive orders, including activities not prohibited by U.S. law and conducted outside the United States by non-U.S. affiliates in compliance with local law. In order to comply with this requirement, the Company has requested relevant information from its affiliates globally.
To the BBVA Group’s knowledge, neither the Company nor any of the Company’s affiliates have knowingly engaged in any activities, transactions, or dealings during the period covered by this Annual Report, that are required to be disclosed under Section 13(r) of the Exchange Act.
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C. Organizational Structure
For information on the composition of the BBVA Group as of December 31, 2025, see Note 1.1 to the Consolidated Financial Statements.
The companies comprising the BBVA Group are principally domiciled in the following countries: Argentina, Belgium, Chile, Colombia, France, Germany, Italy, Mexico, Netherlands, Peru, Portugal, Romania, Spain, Switzerland, Turkey, United Kingdom, the United States of America and Uruguay. In addition, BBVA has an active presence in Asia.
Below is a simplified organizational chart of BBVA’s most significant subsidiaries as of December 31, 2025.
Subsidiary | Country of Incorporation | Activity | BBVA Voting Power | BBVA Ownership | Total Assets (1) | ||||||||||||
(In Percentages) | (In Millions of Euros) | ||||||||||||||||
| BBVA MEXICO | MEXICO | Bank | 100.00 | 100.00 | 155,059 | ||||||||||||
GARANTI BBVA | TURKEY | Bank | 85.97 | 85.97 | 72,157 | ||||||||||||
BBVA PERÚ | PERU | Bank | 94.26 (2) | 47.13 | 28,019 | ||||||||||||
BBVA COLOMBIA S.A. | COLOMBIA | Bank | 96.35 | 96.35 | 23,027 | ||||||||||||
BBVA SEGUROS S.A. DE SEGUROS Y REASEGUROS | SPAIN | Insurance | 99.96 | 99.96 | 13,879 | ||||||||||||
| BANCO BBVA ARGENTINA S.A. | ARGENTINA | Bank | 67.00 | 66.55 | 14,085 | ||||||||||||
BBVA SEGUROS MÉXICO, S.A. DE CV GRUPO FINANCIERO BBVA MEXICO | MEXICO | Insurance | 99.98 | 100.00 | 13,366 | ||||||||||||
| GARANTIBANK BBVA INTERNATIONAL N.V. (3) | THE NETHERLANDS | Bank | 85.97 | 100.00 | 10,746 | ||||||||||||
| BBVA PENSIONES MEXICO, S.A. DE C.V., GRUPO FINANCIERO BBVA MEXICO | MEXICO | Insurance | 100.00 | 100.00 | 8,754 | ||||||||||||
BANCO BILBAO VIZCAYA ARGENTARIA URUGUAY S.A. | URUGUAY | Bank | 100.00 | 100.00 | 4,016 | ||||||||||||
(1)Information for non-EU subsidiaries has been calculated using the prevailing exchange rates on December 31, 2025.
(2)Subject to certain exceptions.
(3)BBVA owns 85.97% of Garanti BBVA, which in turn owns 100% of GarantiBank BBVA International N.V.
D. Property, Plants and Equipment
We own or rent a substantial network of properties in Spain and abroad, including 1,871 branch offices in Spain and, principally through our various subsidiaries, 3,771 branch offices abroad as of December 31, 2025 (1,881 and 3,868, respectively, as of December 31, 2024). As of December 31, 2025, approximately 46% of our branches in Spain and 71% of our branches abroad were rented from third parties pursuant to leases that may be renewed by mutual agreement (48% and 72%, respectively, as of December 31, 2024). For additional information on property, plants and equipment, see Note 17 to the Consolidated Financial Statements.
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E. Selected Statistical Information
The following is a presentation of selected statistical information for the periods indicated. Where required under subpart 1400 of Regulation S-K, we have provided such selected statistical information separately for our domestic and foreign activities, pursuant to our determination, where applicable, that our foreign operations are significant according to Rule 9-05 of Regulation S-X. The allocation of assets and liabilities between “domestic” and “foreign” is based on the domicile of the Group entity at which the relevant asset or liability is accounted for, with “domestic” referring to the assets and liabilities of the BBVA Group entities domiciled in Spain.
Interest income figures, when used, do not include interest income on non-accruing loans to the extent that cash payments have been received, as a result of the application of the interpretation issued by the International Financial Reporting Interpretations Committee (IFRIC) in its “IFRIC Update” of March 2019 regarding the collection of interest on impaired financial assets under IFRS 9 (Collection of interest on impaired financial assets). Loan fees are included in the computation of interest revenue. Interest income figures include “other income”, which amounted to €233 million, €214 million and €231 million for the years ended December 31, 2025, 2024 and 2023, respectively. For additional information on “interest and other income” see Note 37.1 to the Consolidated Financial Statements.
Average Balances and Rates
The tables below set forth selected statistical information on our average balance sheets, which are based on the beginning and month-end balances in each year. We do not believe that monthly averages present trends materially different from those that would be presented by daily averages. We have not recalculated tax-exempt income on a tax-equivalent basis because the effect of doing so would not be significant.
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| Average Balance Sheet - Assets and Interest from Interest Earning Assets | |||||||||||||||||||||||||||||
| Year ended December 31, 2025 | Year ended December 31, 2024 | Year ended December 31, 2023 | |||||||||||||||||||||||||||
| Average Balance | Interest | Average Yield | Average Balance | Interest | Average Yield | Average Balance | Interest | Average Yield | |||||||||||||||||||||
| (In Millions of Euros, Except Percentages) | |||||||||||||||||||||||||||||
Total Assets (1) | 817,040 | 58,345 | 7.14 | % | 777,997 | 61,659 | 7.93 | % | 748,459 | 47,850 | 6.39 | % | |||||||||||||||||
Interest-earning assets | 753,424 | 58,345 | 7.74 | % | 716,824 | 61,659 | 8.60 | % | 694,361 | 47,850 | 6.89 | % | |||||||||||||||||
Cash and balances with central banks and other demand deposits | 48,161 | 1,621 | 3.36 | % | 57,589 | 2,283 | 3.96 | % | 70,177 | 2,482 | 3.54 | % | |||||||||||||||||
Domestic | 12,954 | 232 | 1.79 | % | 28,603 | 972 | 3.40 | % | 42,535 | 1,394 | 3.28 | % | |||||||||||||||||
Foreign | 35,208 | 1,389 | 3.94 | % | 28,986 | 1,311 | 4.52 | % | 27,642 | 1,088 | 3.94 | % | |||||||||||||||||
Financial assets held for trading | 87,855 | 4,525 | 5.15 | % | 90,479 | 5,664 | 6.26 | % | 85,279 | 4,870 | 5.71 | % | |||||||||||||||||
Domestic | 69,448 | 2,693 | 3.88 | % | 68,451 | 3,092 | 4.52 | % | 66,812 | 2,482 | 3.72 | % | |||||||||||||||||
Foreign | 18,407 | 1,832 | 9.95 | % | 22,029 | 2,572 | 11.68 | % | 18,467 | 2,387 | 12.93 | % | |||||||||||||||||
Financial assets at fair value through other comprehensive income | 56,559 | 3,342 | 5.91 | % | 59,061 | 4,108 | 6.96 | % | 62,677 | 3,791 | 6.05 | % | |||||||||||||||||
Domestic | 25,129 | 710 | 2.82 | % | 27,744 | 805 | 2.90 | % | 32,682 | 777 | 2.38 | % | |||||||||||||||||
Foreign | 31,429 | 2,632 | 8.37 | % | 31,317 | 3,303 | 10.55 | % | 29,995 | 3,014 | 10.05 | % | |||||||||||||||||
Financial assets at amortized cost | 525,020 | 47,074 | 8.97 | % | 472,827 | 48,109 | 10.17 | % | 434,214 | 36,063 | 8.31 | % | |||||||||||||||||
Domestic | 251,632 | 8,608 | 3.42 | % | 228,751 | 9,505 | 4.16 | % | 211,019 | 8,142 | 3.86 | % | |||||||||||||||||
Foreign | 273,388 | 38,467 | 14.07 | % | 244,076 | 38,604 | 15.82 | % | 223,195 | 27,921 | 12.51 | % | |||||||||||||||||
Debt securities | 65,530 | 2,277 | 3.48 | % | 55,967 | 2,307 | 4.12 | % | 44,609 | 1,415 | 3.17 | % | |||||||||||||||||
Domestic | 51,166 | 1,373 | 2.68 | % | 40,606 | 1,096 | 2.70 | % | 29,407 | 748 | 2.54 | % | |||||||||||||||||
Foreign | 14,364 | 904 | 6.29 | % | 15,361 | 1,210 | 7.88 | % | 15,202 | 667 | 4.38 | % | |||||||||||||||||
Loans and advances | 459,489 | 44,797 | 9.75 | % | 416,861 | 45,803 | 10.99 | % | 389,605 | 34,648 | 8.89 | % | |||||||||||||||||
Central banks | 8,918 | 2,164 | 24.26 | % | 7,710 | 2,053 | 26.62 | % | 5,720 | 508 | 8.88 | % | |||||||||||||||||
Domestic | 40 | 1 | 2.10 | % | 15 | — | 3.00 | % | 30 | 1 | 3.33 | % | |||||||||||||||||
Foreign | 8,878 | 2,163 | 24.36 | % | 7,695 | 2,052 | 26.67 | % | 5,690 | 507 | 8.91 | % | |||||||||||||||||
Credit institutions | 23,616 | 1,142 | 4.84 | % | 20,939 | 1,568 | 7.49 | % | 16,595 | 1,451 | 8.75 | % | |||||||||||||||||
Domestic | 14,708 | 638 | 4.34 | % | 13,822 | 916 | 6.63 | % | 9,472 | 828 | 8.74 | % | |||||||||||||||||
Foreign | 8,908 | 504 | 5.66 | % | 7,117 | 652 | 9.16 | % | 7,123 | 623 | 8.75 | % | |||||||||||||||||
Government | 24,848 | 1,316 | 5.30 | % | 22,665 | 1,530 | 6.75 | % | 22,478 | 1,427 | 6.35 | % | |||||||||||||||||
Domestic | 14,534 | 373 | 2.57 | % | 12,369 | 379 | 3.06 | % | 12,541 | 323 | 2.58 | % | |||||||||||||||||
Foreign | 10,314 | 943 | 9.15 | % | 10,295 | 1,151 | 11.18 | % | 9,937 | 1,104 | 11.11 | % | |||||||||||||||||
Other financial corporations | 19,913 | 1,434 | 7.20 | % | 14,638 | 1,265 | 8.64 | % | 12,822 | 987 | 7.70 | % | |||||||||||||||||
Domestic | 6,723 | 307 | 4.57 | % | 5,176 | 411 | 7.95 | % | 5,224 | 375 | 7.18 | % | |||||||||||||||||
Foreign | 13,191 | 1,127 | 8.55 | % | 9,461 | 854 | 9.02 | % | 7,598 | 612 | 8.05 | % | |||||||||||||||||
Individuals | 184,055 | 19,458 | 10.57 | % | 174,309 | 19,057 | 10.93 | % | 165,941 | 15,244 | 9.19 | % | |||||||||||||||||
Domestic | 95,736 | 3,367 | 3.52 | % | 93,466 | 3,774 | 4.04 | % | 92,119 | 3,391 | 3.68 | % | |||||||||||||||||
Mortgages | 71,776 | 1,995 | 2.78 | % | 70,678 | 2,488 | 3.52 | % | 70,392 | 2,217 | 3.15 | % | |||||||||||||||||
Other | 23,960 | 1,372 | 5.73 | % | 22,788 | 1,287 | 5.65 | % | 21,727 | 1,174 | 5.40 | % | |||||||||||||||||
Foreign | 88,318 | 16,091 | 18.22 | % | 80,842 | 15,283 | 18.90 | % | 73,822 | 11,852 | 16.05 | % | |||||||||||||||||
Mortgages | 29,806 | 2,992 | 10.04 | % | 26,356 | 2,845 | 10.80 | % | 25,835 | 2,440 | 9.45 | % | |||||||||||||||||
Other | 58,512 | 13,099 | 22.39 | % | 54,487 | 12,437 | 22.83 | % | 47,987 | 9,412 | 19.61 | % | |||||||||||||||||
Non-financial corporations | 198,139 | 19,283 | 9.73 | % | 176,601 | 20,330 | 11.51 | % | 166,049 | 15,032 | 9.05 | % | |||||||||||||||||
Domestic | 68,725 | 2,549 | 3.71 | % | 63,296 | 2,928 | 4.63 | % | 62,226 | 2,475 | 3.98 | % | |||||||||||||||||
Foreign | 129,414 | 16,733 | 12.93 | % | 113,304 | 17,402 | 15.36 | % | 103,824 | 12,556 | 12.09 | % | |||||||||||||||||
Derivatives and other financial assets (2) | 35,830 | 1,784 | 4.98 | % | 36,868 | 1,494 | 4.05 | % | 42,014 | 645 | 1.53 | % | |||||||||||||||||
Domestic | 28,573 | 432 | 1.51 | % | 28,199 | 429 | 1.52 | % | 30,670 | (121) | (0.39) | % | |||||||||||||||||
Foreign | 7,256 | 1,353 | 18.64 | % | 8,669 | 1,066 | 12.29 | % | 11,344 | 765 | 6.75 | % | |||||||||||||||||
Non interest earning assets (3) | 63,616 | — | — | 61,172 | — | — | 54,098 | — | — | ||||||||||||||||||||
(1)Foreign activity represented 48.57% of the average total assets for the year ended December 31, 2025, 47.03% for the year ended December 31, 2024 and 44.12% for the year ended December 31, 2023.
(2)Includes “Derivatives - Hedge accounting”, “Derivatives - Held for trading” and “Financial assets designated at fair value through profit or loss”.
(3)Includes “Insurance and reinsurance assets”, “Joint ventures and associates”, “Tangible assets”, “Intangible assets”, “Tax assets”, “Non-current assets and disposal groups classified as held for sale”, “Non-trading financial assets mandatorily at fair value through profit or loss” and “Other assets”.
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| Average Balance Sheet - Liabilities and Interest Paid on Interest Bearing Liabilities | |||||||||||||||||||||||||||||
| Year ended December 31, 2025 | Year ended December 31, 2024 | Year ended December 31, 2023 | |||||||||||||||||||||||||||
| Average Balance | Interest | Average Rate Paid | Average Balance | Interest | Average Rate Paid | Average Balance | Interest | Average Rate Paid | |||||||||||||||||||||
| (In Millions of Euros, Except Percentages) | |||||||||||||||||||||||||||||
Total Liabilities (1) | 817,040 | 32,065 | 3.92 | % | 777,997 | 36,392 | 4.68 | % | 748,459 | 24,761 | 3.31 | % | |||||||||||||||||
Interest-bearing liabilities | 715,347 | 32,065 | 4.48 | % | 684,200 | 36,392 | 5.32 | % | 662,856 | 24,761 | 3.74 | % | |||||||||||||||||
Financial liabilities held for trading | 70,915 | 3,054 | 4.31 | % | 73,448 | 4,104 | 5.59 | % | 76,280 | 3,424 | 4.49 | % | |||||||||||||||||
Domestic | 61,017 | 2,297 | 3.76 | % | 56,326 | 2,529 | 4.49 | % | 60,308 | 2,087 | 3.46 | % | |||||||||||||||||
Foreign | 9,897 | 757 | 7.65 | % | 17,122 | 1,575 | 9.20 | % | 15,972 | 1,337 | 8.37 | % | |||||||||||||||||
Financial liabilities at amortized cost | 590,520 | 26,107 | 4.42 | % | 555,981 | 28,429 | 5.11 | % | 526,650 | 19,215 | 3.65 | % | |||||||||||||||||
Domestic | 315,958 | 4,777 | 1.51 | % | 306,852 | 6,115 | 1.99 | % | 304,574 | 5,209 | 1.71 | % | |||||||||||||||||
Foreign | 274,562 | 21,330 | 7.77 | % | 249,130 | 22,314 | 8.96 | % | 222,076 | 14,007 | 6.31 | % | |||||||||||||||||
Debt certificates | 74,870 | 3,373 | 4.51 | % | 69,098 | 3,114 | 4.51 | % | 61,289 | 2,349 | 3.83 | % | |||||||||||||||||
Domestic | 46,367 | 1,481 | 3.19 | % | 46,700 | 1,616 | 3.46 | % | 43,453 | 1,248 | 2.87 | % | |||||||||||||||||
Foreign | 28,502 | 1,892 | 6.64 | % | 22,398 | 1,499 | 6.69 | % | 17,836 | 1,101 | 6.17 | % | |||||||||||||||||
Deposits | 515,650 | 22,734 | 4.41 | % | 486,884 | 25,315 | 5.20 | % | 465,360 | 16,867 | 3.62 | % | |||||||||||||||||
Central banks | 16,809 | 896 | 5.33 | % | 17,756 | 1,264 | 7.12 | % | 26,864 | 1,574 | 5.86 | % | |||||||||||||||||
Domestic | 8,296 | 337 | 4.07 | % | 8,163 | 399 | 4.89 | % | 16,215 | 600 | 3.70 | % | |||||||||||||||||
Foreign | 8,513 | 558 | 6.56 | % | 9,593 | 865 | 9.02 | % | 10,649 | 973 | 9.14 | % | |||||||||||||||||
Credit institutions | 34,354 | 2,854 | 8.31 | % | 34,614 | 2,923 | 8.44 | % | 39,695 | 2,424 | 6.11 | % | |||||||||||||||||
Domestic | 24,416 | 950 | 3.89 | % | 26,230 | 1,436 | 5.47 | % | 32,493 | 1,610 | 4.95 | % | |||||||||||||||||
Foreign | 9,937 | 1,903 | 19.15 | % | 8,384 | 1,487 | 17.74 | % | 7,202 | 814 | 11.31 | % | |||||||||||||||||
Government | 48,970 | 1,376 | 2.81 | % | 44,245 | 1,750 | 3.96 | % | 26,919 | 1,027 | 3.82 | % | |||||||||||||||||
Domestic | 33,684 | 606 | 1.80 | % | 30,554 | 932 | 3.05 | % | 14,836 | 277 | 1.87 | % | |||||||||||||||||
Foreign | 15,285 | 769 | 5.03 | % | 13,691 | 818 | 5.98 | % | 12,083 | 750 | 6.21 | % | |||||||||||||||||
Other financial corporations | 33,499 | 1,858 | 5.55 | % | 28,928 | 1,749 | 6.05 | % | 26,665 | 1,418 | 5.32 | % | |||||||||||||||||
Domestic | 12,278 | 483 | 3.93 | % | 11,473 | 624 | 5.44 | % | 13,192 | 716 | 5.43 | % | |||||||||||||||||
Foreign | 21,220 | 1,376 | 6.48 | % | 17,455 | 1,125 | 6.44 | % | 13,473 | 703 | 5.21 | % | |||||||||||||||||
Individuals | 252,020 | 8,773 | 3.48 | % | 242,236 | 10,509 | 4.34 | % | 236,151 | 5,461 | 2.31 | % | |||||||||||||||||
Domestic | 145,559 | 459 | 0.32 | % | 142,664 | 524 | 0.37 | % | 143,506 | 294 | 0.20 | % | |||||||||||||||||
Foreign | 106,461 | 8,314 | 7.81 | % | 99,572 | 9,984 | 10.03 | % | 92,645 | 5,168 | 5.58 | % | |||||||||||||||||
Non-financial corporations | 129,998 | 6,976 | 5.37 | % | 119,105 | 7,120 | 5.98 | % | 109,066 | 4,962 | 4.55 | % | |||||||||||||||||
Domestic | 45,356 | 460 | 1.02 | % | 41,068 | 584 | 1.42 | % | 40,880 | 464 | 1.13 | % | |||||||||||||||||
Foreign | 84,642 | 6,516 | 7.70 | % | 78,037 | 6,536 | 8.38 | % | 68,187 | 4,498 | 6.60 | % | |||||||||||||||||
Provisions | 2,264 | 234 | 10.35 | % | 2,422 | 228 | 9.40 | % | 2,494 | 174 | 6.97 | % | |||||||||||||||||
Domestic | 1,810 | 67 | 3.68 | % | 2,066 | 81 | 3.91 | % | 2,217 | 100 | 4.51 | % | |||||||||||||||||
Foreign | 454 | 168 | 36.94 | % | 356 | 147 | 41.32 | % | 277 | 74 | 26.63 | % | |||||||||||||||||
Derivatives and other financial liabilities (2) | 51,649 | 2,670 | 5.17 | % | 52,348 | 3,631 | 6.94 | % | 57,433 | 1,948 | 3.39 | % | |||||||||||||||||
Domestic | 32,476 | 200 | 0.62 | % | 32,424 | 1,041 | 3.21 | % | 36,007 | 844 | 2.34 | % | |||||||||||||||||
Foreign | 19,173 | 2,470 | 12.88 | % | 19,924 | 2,591 | 13.00 | % | 21,425 | 1,104 | 5.15 | % | |||||||||||||||||
Non-interest bearing liabilities and Equity (3) | 101,692 | — | — | 93,797 | — | — | 85,602 | — | — | ||||||||||||||||||||
(1)Foreign activity represented 43.20% of the total average liabilities for the year ended December 31, 2025, 42.63% for the year ended December 31, 2024 and 40.05% for the year ended December 31, 2023.
(2)Includes “Insurance and reinsurance liabilities”, “Derivatives - Hedge accounting”, “Financial liabilities held for trading” and “Financial liabilities designated at fair value through profit or loss”.
(3)Includes “Tax liabilities”, “Liabilities included in disposal groups classified as held for sale” and “Other liabilities”.
Changes in Net Interest Income-Volume and Rate Analysis
The following tables allocate changes in our net interest income between changes in volume and changes in rate for the year ended December 31, 2025 compared with the year ended December 31, 2024, and the year ended December 31, 2024 compared with the year ended December 31, 2023. Volume and rate variance have been calculated based on movements in average balances over the period and changes in interest rates on average interest-earning assets and average interest-bearing liabilities. The only out-of-period items and adjustments excluded from such table are interest payments on loans which are made in a period other than the period in which they are due.
61
| 2025/2024 | |||||||||||
| Increase (Decrease) Due to Changes in | |||||||||||
| Volume (1) | Rate (2) | Net Change | |||||||||
| (In Millions of Euros) | |||||||||||
| Interest income | |||||||||||
| Cash and balances with central banks and other demand deposits | (374) | (289) | (663) | ||||||||
| Domestic | (532) | (208) | (740) | ||||||||
| Foreign | 281 | (204) | 77 | ||||||||
| Financial assets held for trading | (164) | (975) | (1,139) | ||||||||
| Domestic | 45 | (444) | (399) | ||||||||
| Foreign | (423) | (317) | (740) | ||||||||
| Financial assets at fair value through other comprehensive income | (174) | (593) | (767) | ||||||||
| Domestic | (76) | (20) | (96) | ||||||||
| Foreign | 12 | (683) | (671) | ||||||||
| Financial assets at amortized cost | 5,311 | (6,346) | (1,035) | ||||||||
| Domestic | 951 | (1,848) | (897) | ||||||||
| Foreign | 4,636 | (4,774) | (138) | ||||||||
| Debt securities | 394 | (423) | (29) | ||||||||
| Domestic | 285 | (8) | 277 | ||||||||
| Foreign | (79) | (228) | (306) | ||||||||
| Loans and advances | 4,684 | (5,690) | (1,006) | ||||||||
| Central banks | 322 | (211) | 111 | ||||||||
| Domestic | 1 | — | — | ||||||||
| Foreign | 316 | (205) | 111 | ||||||||
| Credit institutions | 200 | (626) | (426) | ||||||||
| Domestic | 59 | (337) | (279) | ||||||||
| Foreign | 164 | (311) | (147) | ||||||||
| Government | 147 | (361) | (214) | ||||||||
| Domestic | 66 | (72) | (6) | ||||||||
| Foreign | 2 | (210) | (208) | ||||||||
| Other financial corporations | 456 | (287) | 169 | ||||||||
| Domestic | 123 | (227) | (104) | ||||||||
| Foreign | 337 | (63) | 273 | ||||||||
| Individuals | 1,066 | (665) | 400 | ||||||||
| Domestic | 92 | (499) | (408) | ||||||||
| Mortgages | 39 | (532) | (493) | ||||||||
| Other | 66 | 19 | 85 | ||||||||
| Foreign | 1,413 | (605) | 808 | ||||||||
| Mortgages | 373 | (226) | 147 | ||||||||
| Other | 919 | (258) | 661 | ||||||||
| Non-financial corporations | 2,479 | (3,527) | (1,047) | ||||||||
| Domestic | 251 | (630) | (378) | ||||||||
| Foreign | 2,474 | (3,143) | (669) | ||||||||
| Derivatives and other financial assets | (42) | 332 | 290 | ||||||||
| Domestic | 6 | (3) | 3 | ||||||||
| Foreign | (174) | 461 | 287 | ||||||||
| Total income | 3,094 | (6,408) | (3,314) | ||||||||
(1)The volume effect is calculated as the result of the average interest rate of the earlier period multiplied by the difference between the average balances of both periods.
(2)The rate effect is calculated as the result of the average balance of the earlier period multiplied by the difference between the average interest rates of both periods.
62
| 2025/2024 | |||||||||||
| Increase (Decrease) Due to Changes in | |||||||||||
| Volume (1) | Rate (2) | Net Change | |||||||||
| (In Millions of Euros) | |||||||||||
Interest expense | |||||||||||
| Financial liabilities held for trading | (142) | (909) | (1,050) | ||||||||
| Domestic | 211 | (443) | (233) | ||||||||
| Foreign | (665) | (153) | (818) | ||||||||
Financial liabilities at amortized cost | 1,766 | (4,088) | (2,322) | ||||||||
| Domestic | 181 | (1,519) | (1,338) | ||||||||
| Foreign | 2,278 | (3,262) | (984) | ||||||||
Debt certificates | 260 | (1) | 259 | ||||||||
Domestic | (11) | (123) | (135) | ||||||||
Foreign | 408 | (15) | 394 | ||||||||
Deposits | 1,496 | (4,077) | (2,581) | ||||||||
Central banks | (67) | (301) | (368) | ||||||||
Domestic | 7 | (68) | (62) | ||||||||
Foreign | (97) | (209) | (307) | ||||||||
Credit institutions | (22) | (47) | (69) | ||||||||
Domestic | (99) | (386) | (485) | ||||||||
Foreign | 276 | 140 | 416 | ||||||||
Government | 187 | (561) | (374) | ||||||||
Domestic | 95 | (421) | (325) | ||||||||
Foreign | 95 | (144) | (49) | ||||||||
Other financial corporations | 276 | (167) | 110 | ||||||||
Domestic | 44 | (186) | (142) | ||||||||
Foreign | 243 | 9 | 251 | ||||||||
Individuals | 424 | (2,160) | (1,735) | ||||||||
Domestic | 11 | (76) | (65) | ||||||||
Foreign | 691 | (2,361) | (1,670) | ||||||||
Non-financial corporations | 651 | (795) | (143) | ||||||||
Domestic | 61 | (185) | (124) | ||||||||
Foreign | 553 | (573) | (20) | ||||||||
Provisions | (15) | 22 | 7 | ||||||||
Domestic | (10) | (4) | (14) | ||||||||
Foreign | 41 | (20) | 21 | ||||||||
Derivatives and other financial liabilities (3) | (48) | (913) | (962) | ||||||||
Domestic | 2 | (842) | (841) | ||||||||
Foreign | (98) | (23) | (121) | ||||||||
Total expense | 1,826 | (6,153) | (4,327) | ||||||||
Net interest income | 1,013 | ||||||||||
(1)The volume effect is calculated as the result of the average interest rate of the earlier period multiplied by the difference between the average balances of both periods.
(2)The rate effect is calculated as the result of the average balance of the earlier period multiplied by the difference between the average interest rates of both periods.
(3)Includes “Insurance and reinsurance liabilities”, “Derivatives - Hedge accounting”, “Financial liabilities held for trading” and “Financial liabilities designated at fair value through profit or loss”.
63
| 2024/2023 | |||||||||||
| Increase (Decrease) Due to Changes in | |||||||||||
| Volume (1) | Rate (2) | Net Change | |||||||||
| (In Millions of Euros) | |||||||||||
| Interest income | |||||||||||
| Cash and balances with central banks and other demand deposits | (445) | 247 | (198) | ||||||||
| Domestic | (457) | 35 | (422) | ||||||||
| Foreign | 53 | 171 | 224 | ||||||||
| Financial assets held for trading | 297 | 497 | 794 | ||||||||
| Domestic | 61 | 549 | 609 | ||||||||
| Foreign | 460 | (276) | 185 | ||||||||
| Financial assets at fair value through other comprehensive income | (219) | 536 | 318 | ||||||||
| Domestic | (117) | 146 | 28 | ||||||||
| Foreign | 133 | 157 | 289 | ||||||||
| Financial assets at amortized cost | 3,207 | 8,839 | 12,046 | ||||||||
| Domestic | 684 | 679 | 1,363 | ||||||||
| Foreign | 2,612 | 8,071 | 10,683 | ||||||||
| Debt securities | 360 | 531 | 892 | ||||||||
| Domestic | 285 | 63 | 348 | ||||||||
| Foreign | 7 | 537 | 544 | ||||||||
| Loans and advances | 2,424 | 8,731 | 11,155 | ||||||||
| Central banks | 177 | 1,368 | 1,545 | ||||||||
| Domestic | — | — | — | ||||||||
| Foreign | 179 | 1,366 | 1,545 | ||||||||
| Credit institutions | 380 | (263) | 117 | ||||||||
| Domestic | 380 | (292) | 89 | ||||||||
| Foreign | (1) | 29 | 28 | ||||||||
| Government | 12 | 92 | 103 | ||||||||
| Domestic | (4) | 60 | 56 | ||||||||
| Foreign | 40 | 8 | 48 | ||||||||
| Other financial corporations | 140 | 138 | 278 | ||||||||
| Domestic | (3) | 40 | 36 | ||||||||
| Foreign | 150 | 92 | 242 | ||||||||
| Individuals | 769 | 3,045 | 3,814 | ||||||||
| Domestic | 50 | 333 | 383 | ||||||||
| Mortgages | 9 | 261 | 270 | ||||||||
| Other | 57 | 55 | 112 | ||||||||
| Foreign | 1,127 | 2,304 | 3,431 | ||||||||
| Mortgages | 49 | 356 | 405 | ||||||||
| Other | 1,275 | 1,751 | 3,026 | ||||||||
| Non-financial corporations | 955 | 4,343 | 5,298 | ||||||||
| Domestic | 43 | 410 | 453 | ||||||||
| Foreign | 1,147 | 3,699 | 4,846 | ||||||||
| Derivatives and other financial assets | (79) | 929 | 850 | ||||||||
| Domestic | 10 | 539 | 549 | ||||||||
| Foreign | (180) | 481 | 300 | ||||||||
Total income | 1,888 | 11,921 | 13,809 | ||||||||
(1)The volume effect is calculated as the result of the average interest rate of the earlier period multiplied by the difference between the average balances of both periods.
(2)The rate effect is calculated as the result of the average balance of the earlier period multiplied by the difference between the average interest rates of both periods.
64
| 2024/2023 | |||||||||||
| Increase (Decrease) Due to Changes in | |||||||||||
| Volume (1) | Rate (2) | Net Change | |||||||||
| (In Millions of Euros) | |||||||||||
Interest expense | |||||||||||
| Financial liabilities held for trading | (127) | 808 | 680 | ||||||||
| Domestic | (138) | 580 | 442 | ||||||||
| Foreign | 96 | 142 | 238 | ||||||||
Financial liabilities at amortized cost | 1,070 | 8,143 | 9,214 | ||||||||
| Domestic | 39 | 867 | 906 | ||||||||
| Foreign | 1,706 | 6,601 | 8,307 | ||||||||
Debt certificates | 299 | 466 | 766 | ||||||||
Domestic | 93 | 274 | 368 | ||||||||
Foreign | 282 | 116 | 398 | ||||||||
Deposits | 780 | 7,668 | 8,448 | ||||||||
Central banks | (534) | 224 | (309) | ||||||||
Domestic | (298) | 97 | (201) | ||||||||
Foreign | (97) | (12) | (108) | ||||||||
Credit institutions | (310) | 809 | 498 | ||||||||
Domestic | (310) | 136 | (174) | ||||||||
Foreign | 134 | 539 | 673 | ||||||||
Government | 661 | 62 | 723 | ||||||||
Domestic | 294 | 361 | 655 | ||||||||
Foreign | 100 | (32) | 68 | ||||||||
Other financial corporations | 120 | 210 | 331 | ||||||||
Domestic | (93) | 2 | (91) | ||||||||
Foreign | 208 | 214 | 422 | ||||||||
Individuals | 141 | 4,907 | 5,048 | ||||||||
Domestic | (2) | 233 | 231 | ||||||||
Foreign | 386 | 4,430 | 4,817 | ||||||||
Non-financial corporations | 457 | 1,701 | 2,158 | ||||||||
Domestic | 2 | 118 | 120 | ||||||||
Foreign | 650 | 1,388 | 2,038 | ||||||||
Provisions | (5) | 59 | 54 | ||||||||
Domestic | (7) | (13) | (19) | ||||||||
Foreign | 21 | 52 | 73 | ||||||||
Derivatives and other financial liabilities (3) | (172) | 1,856 | 1,684 | ||||||||
Domestic | (84) | 280 | 196 | ||||||||
Foreign | (77) | 1,564 | 1,487 | ||||||||
Total expense | 977 | 10,654 | 11,631 | ||||||||
Net interest income | 2,178 | ||||||||||
(1)The volume effect is calculated as the result of the average interest rate of the earlier period multiplied by the difference between the average balances of both periods.
(2)The rate effect is calculated as the result of the average balance of the earlier period multiplied by the difference between the average interest rates of both periods.
(3)Includes “Insurance and reinsurance liabilities”, “Derivatives - Hedge accounting”, “Financial liabilities held for trading” and “Financial liabilities designated at fair value through profit or loss”.
65
Interest Earning Assets—Margin and Spread
The following table analyzes the levels of our average interest earning assets and illustrates the comparative gross and net yields and spread obtained for each of the years indicated.
December 31, | |||||||||||
2025 | 2024 | 2023 | |||||||||
(In Millions of Euros, Except Percentages) | |||||||||||
Average interest earning assets | 753,424 | 716,824 | 694,361 | ||||||||
Gross yield (1) | 7.7% | 8.6% | 6.9% | ||||||||
Net yield (2) | 3.5% | 3.5% | 3.3% | ||||||||
Average effective rate paid on interest-bearing liabilities | 4.5% | 5.3% | 3.7% | ||||||||
Spread (3) | 3.3% | 3.3% | 3.2% | ||||||||
(1)“Gross yield” represents interest income divided by average interest-earning assets.
(2)“Net yield” represents net interest income divided by average interest-earning assets.
(3)“Spread” is the difference between “Gross yield” and the “Average effective rate paid on interest-bearing liabilities”.
66
ASSETS
Interest-Bearing Deposits in Other Banks
As of December 31, 2025, interbank deposits (excluding deposits with central banks) (which are recorded under “Loans and advances to credit institutions” in the “Financial assets held for trading”, “Financial assets at amortized cost” and “Financial assets at fair value through other comprehensive income” portfolios), represented 4.9% of our total assets (compared to 5.7% of our total assets as of December 31, 2024). Of such interbank deposits, 14.8% were held outside of Spain and 85.2% in Spain. We believe that our deposits are generally placed with highly rated banks and have a lower risk than many loans we could make in Spain. However, such deposits are subject to the risk that the deposit banks may fail or that such banks or the banking system of certain of the countries in which a portion of our deposits are made may face liquidity or other problems.
Securities Portfolio
As of December 31, 2025, our securities portfolio, consisting of investment securities and loans and advances recorded under “Financial assets held for trading” and “Financial assets at fair value through other comprehensive income” portfolios, was carried on our consolidated balance sheet at a carrying amount (equivalent to its market or appraised value as of such date) of €149,443 million, representing 17.4% of our total assets, a 13.3% increase compared to our securities portfolio as of December 31, 2024, mainly due to increases in the trading portfolio in Spain, as a result of the increase in loans and advances through reverse repurchase agreements in the corporate portfolio in Spain, the increase in holdings of sovereign debt securities of European countries and equity instruments in Spain and the increase in loans and advances through reverse repurchase agreements in Mexico, partially offset by the decrease in derivatives in Spain. €14,047 million, or 9.4%, of our securities portfolio as of December 31, 2025 consisted of Spanish Treasury bonds and Treasury bills. The average yield during 2025 on the investment securities that BBVA held was 6.2%, compared with an average yield of approximately 4.5% earned on loans and advances in the portfolios “Financial assets held for trading” and “Financial assets at fair value through other comprehensive income” during 2025. See Notes 10 and 13 to the Consolidated Financial Statements for additional information.
The tables in Note 8.1 and the first table in Note 13.3 to the Consolidated Financial Statements set forth the fair value and the book value of our debt securities and equity instruments recorded under “Financial assets at fair value through other comprehensive income” as of December 31, 2025, 2024 and 2023.
Notes 8.2 and 14.2 to the Consolidated Financial Statements set forth the fair value and the book value of our debt securities recorded under “Financial assets at amortized cost” as of December 31, 2025, 2024 and 2023.
This information is not provided for debt securities recorded under “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” since the amortized costs and fair values of these items are the same. See Note 8 to the Consolidated Financial Statements.
The second table in Note 13.3 to the Consolidated Financial Statements shows the fair value of debt securities recorded, as of December 31, 2025, 2024 and 2023, under “Financial assets at fair value through other comprehensive income” by rating categories.
The second table in Note 14.2 to the Consolidated Financial Statements shows the fair value of debt securities recorded, as of December 31, 2025, 2024 and 2023, under “Financial assets at amortized cost”, by rating categories.
Readers are directed to the tables and Notes referred to above for information regarding our securities portfolio.
For a discussion of our investments in joint ventures and associates, see Note 16 to the Consolidated Financial Statements. For a discussion of the manner in which we value our securities, see Notes 2.2.1 and 8 to the Consolidated Financial Statements.
The following table analyzes the maturities of our debt securities recorded under “Financial assets at fair value through other comprehensive income” and “Financial assets at amortized cost”, by type and geographical area, as of December 31, 2025.
67
Maturity at One Year or Less | Maturity After One Year to Five Years | Maturity after Five Years to Ten Years | Maturity after Ten Years | Total | |||||||||||||||||||||||||
Amount | Yield % (1) | Amount | Yield % (1) | Amount | Yield % (1) | Amount | Yield % (1) | Amount | |||||||||||||||||||||
(Millions of Euros, Except Percentages) | |||||||||||||||||||||||||||||
DEBT SECURITIES | |||||||||||||||||||||||||||||
AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME PORTFOLIO | |||||||||||||||||||||||||||||
Domestic | |||||||||||||||||||||||||||||
Spanish government and other government agencies debt securities | 838 | 2.98 | 2,703 | 4.02 | 3,975 | 1.27 | 2,573 | 3.82 | 10,090 | ||||||||||||||||||||
Other debt securities | 391 | 2.52 | 326 | 3.68 | 157 | 3.29 | 33 | 5.16 | 907 | ||||||||||||||||||||
Total Domestic | 1,230 | 2.83 | 3,029 | 3.99 | 4,132 | 1.35 | 2,606 | 3.84 | 10,997 | ||||||||||||||||||||
Foreign | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Mexico | 1,443 | 5.55 | 7,278 | 4.87 | 5,427 | 5.50 | 6,848 | 4.74 | 20,995 | ||||||||||||||||||||
Mexican government and other government agency debt securities | 1,343 | 5.50 | 6,970 | 4.89 | 4,941 | 5.43 | 6,499 | 4.78 | 19,752 | ||||||||||||||||||||
Other debt securities | 100 | 6.22 | 307 | 4.25 | 486 | 6.18 | 349 | 4.05 | 1,243 | ||||||||||||||||||||
The United States | 2,434 | 3.20 | 1,487 | 3.22 | 1,547 | 2.57 | 746 | 2.90 | 6,214 | ||||||||||||||||||||
U.S. Treasury and other government agencies debt securities | 2,299 | 3.28 | 577 | 3.12 | 746 | 1.32 | — | — | 3,621 | ||||||||||||||||||||
Other debt securities | 136 | 1.92 | 910 | 3.28 | 801 | 3.74 | 746 | 2.90 | 2,593 | ||||||||||||||||||||
Turkey | 376 | 32.58 | 1,793 | 35.61 | 738 | 20.44 | — | — | 2,907 | ||||||||||||||||||||
Turkey government and other government agencies debt securities | 376 | 32.58 | 1,793 | 35.61 | 738 | 20.44 | — | — | 2,907 | ||||||||||||||||||||
Other debt securities | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Other countries | 4,919 | 13.81 | 4,809 | 3.73 | 4,356 | 3.03 | 1,803 | 3.94 | 15,888 | ||||||||||||||||||||
Securities of other foreign governments (2) | 3,251 | 18.92 | 2,979 | 3.71 | 3,560 | 2.87 | 507 | 4.78 | 10,298 | ||||||||||||||||||||
Other debt securities of other countries | 1,668 | 3.84 | 1,830 | 3.77 | 796 | 3.78 | 1,296 | 3.61 | 5,590 | ||||||||||||||||||||
Total Foreign | 9,173 | 10.46 | 15,366 | 7.94 | 12,068 | 5.15 | 9,397 | 4.44 | 46,004 | ||||||||||||||||||||
TOTAL AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME PORTFOLIO | 10,402 | 9.56 | 18,396 | 7.29 | 16,200 | 4.18 | 12,004 | 4.31 | 57,001 | ||||||||||||||||||||
AT AMORTIZED COST PORTFOLIO | |||||||||||||||||||||||||||||
Domestic | |||||||||||||||||||||||||||||
Spanish government and other government agencies debt securities | 10,349 | 2.19 | 19,395 | 2.03 | 9,404 | 1.98 | 104 | 3.40 | 39,252 | ||||||||||||||||||||
Other debt securities | 693 | 3.18 | 630 | 2.47 | 177 | 3.60 | 13 | 2.26 | 1,512 | ||||||||||||||||||||
Total Domestic | 11,042 | 2.25 | 20,025 | 2.04 | 9,581 | 2.01 | 117 | 3.27 | 40,764 | ||||||||||||||||||||
Foreign | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Mexico | 1,093 | 4.38 | 2,104 | 3.89 | 3,462 | 5.36 | 42 | 4.00 | 6,701 | ||||||||||||||||||||
Mexican government and other government agency debt securities | 1,093 | 4.38 | 2,064 | 3.78 | 1,943 | 4.06 | 42 | 4.00 | 5,142 | ||||||||||||||||||||
Other debt securities | — | — | 40 | 9.45 | 1,519 | 7.03 | — | — | 1,559 | ||||||||||||||||||||
The United States | 1,849 | 4.59 | 432 | 4.24 | — | — | — | — | 2,282 | ||||||||||||||||||||
U.S. Treasury and other government agencies debt securities | 1,849 | 4.59 | 395 | 4.20 | — | — | — | — | 2,244 | ||||||||||||||||||||
Other debt securities | — | — | 38 | 4.66 | — | — | — | — | 38 | ||||||||||||||||||||
Turkey | 553 | 23.34 | 2,719 | 24.29 | 1,990 | 23.37 | — | — | 5,262 | ||||||||||||||||||||
Turkey government and other government agencies debt securities | 524 | 21.87 | 2,719 | 24.29 | 1,990 | 23.37 | — | — | 5,233 | ||||||||||||||||||||
Other debt securities | 29 | 49.72 | — | — | — | — | — | — | 29 | ||||||||||||||||||||
Other countries | 3,086 | 8.36 | 5,344 | 2.62 | 9,870 | 1.84 | 71 | 4.84 | 18,370 | ||||||||||||||||||||
Securities of other foreign governments (2) | 1,967 | 11.21 | 3,142 | 2.68 | 8,841 | 1.73 | 47 | 5.28 | 13,997 | ||||||||||||||||||||
Other debt securities of other countries | 1,118 | 3.34 | 2,202 | 2.53 | 1,029 | 2.77 | 23 | 3.95 | 4,373 | ||||||||||||||||||||
Total Foreign | 6,581 | 7.90 | 10,599 | 8.50 | 15,323 | 5.43 | 112 | 4.53 | 32,615 | ||||||||||||||||||||
TOTAL AT AMORTIZED COST PORTFOLIO | 17,623 | 4.36 | 30,624 | 4.28 | 24,904 | 4.12 | 229 | 3.89 | 73,379 | ||||||||||||||||||||
TOTAL DEBT SECURITIES | 28,025 | 6.29 | 49,019 | 5.41 | 41,103 | 4.14 | 12,233 | 4.30 | 130,380 | ||||||||||||||||||||
(1)The weighted average yield for each range of maturity is calculated by dividing the annual interest income by the book value of the debt securities. Yields on tax-exempts obligations have not been computed on a tax-equivalent basis.
(2)Securities of other foreign governments mainly include investments made by our subsidiaries in securities issued by the governments of the countries where they operate.
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Loans and Advances
Diversification in our loan portfolio is our principal means of reducing the risk of loan losses. We also carefully monitor our loans to borrowers in sectors or countries experiencing liquidity problems. Our exposure to our five largest borrowers as of December 31, 2025 excluding government-related loans amounted to €5,497 million or approximately 1.1% of our total outstanding loans and advances to customers.
During the year ended December 31, 2025, the Group’s loan activity has been affected by geopolitical and other challenges and uncertainties globally. See “Item 5. Operating and Financial Review and Prospects―Operating Results―Factors Affecting the Comparability of our Results of Operations and Financial Condition―Macroeconomic and geopolitical conditions” and Note 7.2 to the Consolidated Financial Statements for information on the impact of these challenges and uncertainties on our financial condition and results of operations.
Loans and Advances to Customers
As of December 31, 2025, our total loans and advances to customers amounted to €504,876 million, or 58.7% of total assets. Net of our loss allowances, total loans and advances to customers amounted to €492,514 million as of December 31, 2025, or 57.3% of our total assets, an increase from 55.6% of our total assets as of December 31, 2024. As of December 31, 2025 our total loans and advances to customers in Spain amounted to €187,039 million, up from €174,854 million as of December 31, 2024, mainly due to the increases in corporate loans, public sector loans and consumer loans. Our total loans and advances to customers outside Spain amounted to €317,837 million as of December 31, 2025, up from €266,288 million as of December 31, 2024, mainly as a result of increases in the volume of mortgages and consumer loans within the retail loan portfolio in Mexico, the increase in the volume of Turkish lira-denominated consumer and wholesale loans, due, in part, to the measures adopted by the Turkish authorities (e.g., the lessening of loan reserve requirements) to encourage Turkish lira-denominated loans in Turkey, and increased wholesale loans in the branches located in New York, Europe and Asia driven by increased activity amid a lower interest rate environment, partially offset by the depreciation of the Turkish lira and the U.S. dollar against the euro.
Loans by Geographical Area
The following table shows our loans and advances to customers by geographical area as of the dates indicated:
As of December 31, | |||||||||||
2025 | 2024 | 2023 | |||||||||
(In Millions of Euros) | |||||||||||
Domestic | 187,039 | 174,854 | 169,140 | ||||||||
Foreign | |||||||||||
Western Europe | 51,515 | 41,907 | 36,978 | ||||||||
Mexico | 104,358 | 93,016 | 92,802 | ||||||||
Turkey | 49,269 | 45,314 | 34,876 | ||||||||
South America | 60,203 | 54,544 | 48,150 | ||||||||
Other (1) | 52,491 | 31,507 | 21,439 | ||||||||
Total foreign | 317,837 | 266,288 | 234,244 | ||||||||
Total loans and advances (2) | 504,876 | 441,142 | 403,384 | ||||||||
Loss allowances | (12,362) | (11,611) | (11,269) | ||||||||
Total net lending (2) | 492,514 | 429,532 | 392,115 | ||||||||
(1)Balances correspond, in part, to the entities in the United States that were not included within the scope of the USA Sale.
(2)Includes loans and advances to customers included in the following headings: “Financial assets held for trading”, “Non-trading financial assets mandatorily at fair value through profit or loss”, “Financial assets designated at fair value through profit or loss” and “Financial assets at amortized cost”, net of loss allowances.
Loans and Advances to Credit Institutions and Central Banks
As of December 31, 2025, our total loans and advances to credit institutions and central banks amounted to €53,850 million, or 6.3% of total assets (compared to €52,467 million, or 6.8% of total assets as of December 31, 2024), of which total loans and advances to credit institutions and central banks at amortized cost amounted to €35,113 million, or 4.1% of total assets. Loans and advances to credit institutions as of December 31, 2025 decreased by 3.0% compared to December 31, 2024, mainly as a result of decreases in loans and advances to credit institutions (through reverse repurchase agreements) in Spain.
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Loans and Advances to Spanish Government and its Agencies
Loans and advances outstanding to the Spanish government and its agencies amounted to €14,490 million, or 3.1% of our total loans and advances to customers as of December 31, 2025, compared with the €12,001 million, or 2.8% of our total loans and advances to customers as of December 31, 2024, in each case, excluding loans to companies controlled by the Spanish government.
Loans to Associates and Jointly Controlled Companies
As of December 31, 2025, total loans and advances by BBVA and its subsidiaries to associates and jointly controlled companies amounted to €632 million, a 1.1% decrease compared with €639 million as of December 31, 2024.
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Maturity and Interest Sensitivity
The following table sets forth a breakdown by maturity of our total loans and advances to customers, including their fixed and variable rates, by type of customer as of December 31, 2025. The determination of maturities is based on contract terms.
Maturity | Maturity After One Year | ||||||||||||||||||||||
Due In One Year or Less | Due After One Year Through Five Years | Due After Five Years Through Fifteen Years | Due After Fifteen Years | Total | Fixed Rate | Variable Rate | |||||||||||||||||
(In Millions of Euros) | |||||||||||||||||||||||
Domestic | |||||||||||||||||||||||
Agriculture, forestry and fishing | 670 | 668 | 177 | 12 | 1,526 | 460 | 396 | ||||||||||||||||
Manufacturing, mining and quarrying, and other industrial activities | 9,144 | 7,015 | 1,243 | 150 | 17,551 | 3,195 | 5,212 | ||||||||||||||||
Of which: manufacturing | 7,926 | 5,397 | 729 | 123 | 14,175 | 2,902 | 3,347 | ||||||||||||||||
Construction | 2,257 | 1,801 | 1,161 | 134 | 5,354 | 724 | 2,373 | ||||||||||||||||
Wholesale and retail trade, transportation and storage, accommodation and food service activities | 10,285 | 8,301 | 2,884 | 316 | 21,787 | 5,352 | 6,150 | ||||||||||||||||
Information and communication | 1,561 | 929 | 207 | 12 | 2,708 | 239 | 909 | ||||||||||||||||
Financial and insurance activities | 3,371 | 4,979 | 693 | 224 | 9,266 | 2,363 | 3,532 | ||||||||||||||||
Real estate activities | 858 | 2,666 | 1,319 | 63 | 4,905 | 1,607 | 2,441 | ||||||||||||||||
Professional, scientific, technical, administrative and support service activities | 2,008 | 2,482 | 649 | 47 | 5,186 | 1,448 | 1,730 | ||||||||||||||||
Public administration and defense, education, human health and social work activities | 4,074 | 5,165 | 6,413 | 56 | 15,707 | 7,070 | 4,563 | ||||||||||||||||
Other service activities | 13,703 | 25,412 | 35,865 | 25,416 | 100,395 | 54,413 | 32,279 | ||||||||||||||||
Of which: | |||||||||||||||||||||||
Households | 13,089 | 24,988 | 35,756 | 25,409 | 99,243 | 54,085 | 32,069 | ||||||||||||||||
For House Purchase | 3,736 | 14,131 | 29,887 | 25,140 | 72,894 | 38,330 | 30,829 | ||||||||||||||||
Credit for consumption | 5,726 | 8,523 | 4,499 | 36 | 18,784 | 12,876 | 182 | ||||||||||||||||
Other purposes | 3,628 | 2,333 | 1,371 | 233 | 7,565 | 2,879 | 1,058 | ||||||||||||||||
Total Domestic | 47,932 | 59,416 | 50,610 | 26,428 | 184,386 | 76,871 | 59,584 | ||||||||||||||||
Foreign | |||||||||||||||||||||||
Agriculture, forestry and fishing | 2,031 | 1,484 | 528 | 13 | 4,057 | 1,363 | 662 | ||||||||||||||||
Manufacturing, mining and quarrying, and other industrial activities | 30,748 | 22,652 | 5,074 | 778 | 59,252 | 7,861 | 20,642 | ||||||||||||||||
Of which: manufacturing | 22,711 | 13,873 | 2,285 | 116 | 38,984 | 5,569 | 10,704 | ||||||||||||||||
Construction | 2,845 | 2,800 | 596 | 4 | 6,246 | 825 | 2,576 | ||||||||||||||||
Wholesale and retail trade, transportation and storage, accommodation and food service activities | 22,072 | 16,824 | 4,592 | 221 | 43,708 | 10,021 | 11,616 | ||||||||||||||||
Information and communication | 4,939 | 5,558 | 193 | 12 | 10,702 | 1,316 | 4,447 | ||||||||||||||||
Financial and insurance activities | 15,194 | 9,920 | 837 | 59 | 26,011 | 2,573 | 8,243 | ||||||||||||||||
Real estate activities | 1,381 | 5,341 | 1,675 | 1 | 8,399 | 1,093 | 5,925 | ||||||||||||||||
Professional, scientific, technical, administrative and support service activities | 2,053 | 3,522 | 706 | 4 | 6,286 | 1,868 | 2,364 | ||||||||||||||||
Public administration and defense, education, human health and social work activities | 1,445 | 3,657 | 7,406 | 3,102 | 15,610 | 2,092 | 12,074 | ||||||||||||||||
Other service activities | 28,311 | 41,859 | 19,884 | 18,453 | 108,507 | 66,794 | 13,403 | ||||||||||||||||
Of which: | |||||||||||||||||||||||
Households | 23,428 | 41,010 | 19,651 | 18,392 | 102,480 | 65,890 | 13,162 | ||||||||||||||||
For House Purchase | 125 | 2,234 | 13,545 | 16,092 | 31,996 | 30,487 | 1,384 | ||||||||||||||||
Credit for consumption | 18,694 | 34,978 | 5,659 | 2,205 | 61,536 | 31,705 | 11,136 | ||||||||||||||||
Other purposes | 4,609 | 3,798 | 448 | 95 | 8,949 | 3,698 | 642 | ||||||||||||||||
Total Foreign | 111,019 | 113,618 | 41,492 | 22,647 | 288,776 | 95,806 | 81,950 | ||||||||||||||||
Total loans and advances (1) | 158,951 | 173,034 | 92,102 | 49,075 | 473,162 | 172,677 | 141,534 | ||||||||||||||||
(1)Includes mainly loans and advances to customers included in “Financial assets at amortized cost”.
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Loss Allowances on Loans and Advances
The following table provides information regarding the ratios of allowances for credit losses to total loans and net charge-offs to average loans for the periods indicated, in each case. For a discussion of accounting standards related to loss allowances on financial assets, see Note 2.2.1 to the Consolidated Financial Statements.
As of and for the year ended December 31, | |||||||||||
2025 | 2024 | 2023 | |||||||||
(In Millions of Euros) | |||||||||||
Allowance for credit losses to total loans and advances at amortized cost outstanding | 2.43 | % | 2.56 | % | 2.75 | % | |||||
Allowance for credit losses | 12,329 | 11,630 | 11,356 | ||||||||
Domestic | 4,490 | 4,495 | 4,373 | ||||||||
Foreign | 7,839 | 7,135 | 6,983 | ||||||||
Total loans outstanding | 508,023 | 455,016 | 412,916 | ||||||||
Domestic | 211,332 | 197,937 | 186,938 | ||||||||
Foreign | 296,691 | 257,079 | 225,978 | ||||||||
Net loan charge-offs as a percentage of average loans and advances at amortized cost during the period | |||||||||||
Domestic | 0.15 | % | 0.18 | % | 0.26 | % | |||||
Non-financial corporations | 0.14 | % | 0.18 | % | 0.37 | % | |||||
Net charge-offs during the period | 151 | 177 | 334 | ||||||||
Average loans outstanding | 109,935 | 95,956 | 90,520 | ||||||||
Individuals | 0.23 | % | 0.26 | % | 0.24 | % | |||||
Net charge-offs during the period | 225 | 248 | 226 | ||||||||
Average loans outstanding | 97,377 | 94,984 | 93,737 | ||||||||
Other | — | % | 0.01 | % | 0.01 | % | |||||
Foreign | 1.87 | % | 1.72 | % | 1.70 | % | |||||
Non-financial corporations | 0.45 | % | 0.49 | % | 0.52 | % | |||||
Net charge-offs during the period | 394 | 392 | 391 | ||||||||
Average loans outstanding | 88,204 | 80,645 | 75,530 | ||||||||
Individuals | 3.91 | % | 3.52 | % | 3.49 | % | |||||
Net charge-offs during the period | 3,387 | 2,793 | 2,520 | ||||||||
Average loans outstanding | 86,678 | 79,325 | 72,204 | ||||||||
Other | — | — | — | ||||||||
Total loan charge-offs as a percentage of average loans and advances at amortized cost during the period | 0.91 | % | 0.87 | % | 0.89 | % | |||||
Net charge-offs during the period | 4,158 | 3,612 | 3,473 | ||||||||
Average total loans and advances at amortized cost outstanding | 459,497 | 416,861 | 389,605 | ||||||||
When the recovery of any recognized amount is considered to be remote, this amount is removed from the consolidated balance sheet, without prejudice to any actions taken by the consolidated entities in order to collect the amount until their rights extinguish in full through expiry, forgiveness or for other reasons.
Our total net charge-offs to average loans at amortized cost ratio increased to 0.91% for the year ended December 31, 2025, compared with 0.87% for the year ended December 31, 2024 mainly as a result of the increase in charge-offs in “Individuals” in Mexico, in a context of growing retail lending activity and, to a lesser extent, the increase in charge-offs in Argentina. The increase was partially offset by decreases in charge-offs in the non-financial corporations portfolio in Spain and in the retail portfolio in Peru. Total net loan charge-offs increased during 2025, while average loans and advances at amortized cost also grew across all geographies. However, charge-offs increased at a faster pace than the average loan portfolio, resulting in a higher ratio.
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Our allowance for credit losses to total loans and advances at amortized cost decreased to 2.43% as of December 31, 2025 compared with 2.56% as of December 31, 2024, mainly as a result of the increase in total loans outstanding, in particular, the increases in corporate loans, public sector loans and consumer loans in Spain, and the increase in the volume of Turkish lira-denominated consumer and wholesale loans, due, in part, to the measures adopted by the Turkish authorities (e.g., the lessening of loan reserve requirements) to encourage Turkish lira-denominated loans in Turkey, and increased wholesale loans in the branches located in New York, Europe and Asia driven by increased activity amid a lower interest rate environment, partially offset by the depreciation of the Turkish lira and the U.S. dollar against the euro.
Impaired Loans
Loans are considered to be credit-impaired under IFRS 9 if one or more events have occurred and they have a detrimental impact on the estimated future cash flows of the loan.
Amounts collected in relation to impaired financial assets at amortized cost are first applied to the outstanding interest and any excess amount is used to reduce the unpaid principal. The approximate amount of interest on our impaired loans which was included in profit attributable to parent company in 2025, 2024 and 2023 was €560.4 million, €415.6 million, €314.7 million, respectively.
The following table provides information regarding our impaired loans to customers, central banks and credit institutions as of the dates indicated:
| As of December 31, | |||||||||||
2025 | 2024 | 2023 | |||||||||
| (In Millions of Euros) | |||||||||||
| Impaired loans | |||||||||||
| Domestic | 6,431 | 7,319 | 7,682 | ||||||||
| Public sector | 9 | 15 | 24 | ||||||||
| Other resident sector | 6,423 | 7,304 | 7,658 | ||||||||
| Foreign | 7,914 | 6,894 | 6,764 | ||||||||
| Public sector | 10 | 11 | 1 | ||||||||
| Other non-resident sector | 7,905 | 6,883 | 6,763 | ||||||||
| Total impaired loans | 14,346 | 14,213 | 14,446 | ||||||||
| Allowance for credit losses | (12,394) | (11,630) | (11,316) | ||||||||
| Impaired loans net of allowance | 1,952 | 2,583 | 3,130 | ||||||||
| Impaired loans as a percentage of loans and advances at amortized cost | 2.82 | % | 3.12 | % | 3.49 | % | |||||
| Impaired loans (net of allowance) as a percentage of loans and advances at amortized cost | 0.38 | % | 0.57 | % | 0.76 | % | |||||
Our total impaired loans amounted to €14,346 million as of December 31, 2025, a 0.9% increase compared with €14,213 million as of December 31, 2024.
Our allowance for credit losses includes loss reserve for impaired assets and loss reserve for unimpaired assets which present an expected credit loss. As of December 31, 2025, the allowance for credit losses amounted to €12,394 million, a 6.6% increase compared with the €11,630 million recorded as of December 31, 2024. The allowance for credit losses increased year-on-year due to certain non-performing loan entries in the retail loan portfolio in Mexico, partially offset by higher write-offs in Mexico.
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LIABILITIES
Deposits
The principal components of our customer deposits recorded under “Financial liabilities at amortized cost” are domestic demand and time deposits and foreign demand and time deposits. The following tables provide information regarding the average amount of the following deposit categories recorded under “Financial liabilities at amortized cost” for the periods indicated:
Average Balance for the Year Ended December 31, | |||||||||||
2025 | 2024 | 2023 | |||||||||
(In Millions of Euros) | |||||||||||
Demand deposits | 341,196 | 323,940 | 318,212 | ||||||||
Domestic | 196,761 | 191,782 | 196,496 | ||||||||
Foreign | 144,436 | 132,157 | 121,716 | ||||||||
Time deposits | 139,021 | 122,951 | 115,889 | ||||||||
Domestic | 48,553 | 42,364 | 45,184 | ||||||||
Foreign | 90,468 | 80,586 | 70,706 | ||||||||
Other | 35,432 | 39,994 | 31,259 | ||||||||
Domestic | 24,277 | 26,006 | 19,441 | ||||||||
Foreign | 11,156 | 13,988 | 11,818 | ||||||||
Total Domestic | 269,590 | 260,152 | 261,121 | ||||||||
Total Foreign | 246,060 | 226,732 | 204,240 | ||||||||
Total | 515,650 | 486,884 | 465,360 | ||||||||
The amount of uninsured deposits recorded under “Financial liabilities at amortized cost” as of December 31, 2025, 2024 and 2023 amounted to €292,540 million, €255,129 million and €226,832 million, respectively. Uninsured deposits are the portion of deposit accounts that exceed each local deposit insurance limit and amounts in any other uninsured investment or deposit accounts that are classified as deposits and are not subject to any state deposit insurance regimes.
As of December 31, 2025, the maturity of our time deposits in uninsured accounts recorded under “Financial liabilities at amortized cost” was as follows:
As of December 31, 2025 | |||||||||||
Domestic | Foreign | Total | |||||||||
(In Millions of Euros) | |||||||||||
Portion in excess of local deposit insurance limit | 15,708 | 50,936 | 66,644 | ||||||||
Other uninsured time deposits | 30,759 | 23,035 | 53,793 | ||||||||
3 months or under | 19,848 | 20,505 | 40,353 | ||||||||
Over 3 to 6 months | 3,776 | 1,071 | 4,847 | ||||||||
Over 6 to 12 months | 2,771 | 1,015 | 3,785 | ||||||||
Over 12 months | 4,363 | 444 | 4,807 | ||||||||
Total | 46,466 | 73,970 | 120,437 | ||||||||
Large denomination deposits may be a less stable source of funds than demand and savings deposits because they are more sensitive to variations in interest rates and changes in perceptions of the credit or liquidity profile of the Bank. For additional information on our deposits recorded under “Financial liabilities at amortized cost” as of December 31, 2025, 2024 and 2023, see Note 22 to the Consolidated Financial Statements.
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Short-term Borrowings
Securities sold under agreements to repurchase and promissory notes issued by us constituted the only categories of short-term borrowings that equaled or exceeded 30% of stockholders’ equity as of December 31, 2025, 2024 and 2023.
The following table provides information about our total short-term borrowings for the years ended December 31, 2025, 2024 and 2023:
As of and for the year ended December 31, 2025 | As of and for the year ended December 31, 2024 | As of and for the year ended December 31, 2023 | ||||||||||||||||||||||||
Amount | Average rate | Amount | Average rate | Amount | Average rate | |||||||||||||||||||||
(In Millions of Euros, Except Percentages) | ||||||||||||||||||||||||||
Securities sold under agreements to repurchase: | ||||||||||||||||||||||||||
As of end of period | 77,506 | 2.7 | % | 67,517 | 4.1 | % | 91,844 | 4.0 | % | |||||||||||||||||
Average during period | 69,274 | 2.8 | % | 83,001 | 4.1 | % | 90,329 | 3.9 | % | |||||||||||||||||
Bank promissory notes: | ||||||||||||||||||||||||||
As of end of period | 8,145 | 2.8 | % | 4,267 | 4.4 | % | 5,567 | 4.2 | % | |||||||||||||||||
Average during period | 6,622 | 3.0 | % | 3,932 | 4.4 | % | 3,680 | 3.8 | % | |||||||||||||||||
Bonds and subordinated debt: | ||||||||||||||||||||||||||
As of end of period | 18,741 | 3.1 | % | 12,969 | 3.3 | % | 15,361 | 3.2 | % | |||||||||||||||||
Average during period | 15,696 | 3.4 | % | 14,309 | 3.7 | % | 12,265 | 2.7 | % | |||||||||||||||||
Total short-term borrowings as of end of period (1) | 104,392 | 2.8 | % | 84,753 | 4.0 | % | 112,772 | 3.8 | % | |||||||||||||||||
(1)Includes all repurchase agreements recorded under “Financial liabilities at amortized cost” and “Financial liabilities held for trading”.
As of December 31, 2025, 2024 and 2023, the securities sold under agreements to repurchase were mainly Mexican and Spanish treasury bills and such agreements were entered into with credit and other financial institutions.
Certain Ratios
The following table sets out certain ratios as of and for the years ended December 31, 2025, 2024 and 2023:
As of and for the year ended December 31, | |||||||||||
2025 | 2024 | 2023 | |||||||||
(In Percentages) | |||||||||||
Net interest margin (1) | 3.22 | % | 3.30 | % | 3.08 | % | |||||
Return on average total assets (2) | 1.4 | % | 1.4 | % | 1.1 | % | |||||
Return on average shareholders’ funds (3) | 18.4 | % | 18.9 | % | 16.2 | % | |||||
Equity to assets ratio (4) | 7.5 | % | 7.4 | % | 7.1 | % | |||||
(1)Represents net interest income as a percentage of average total assets.
(2)Represents profit as a percentage of average total assets.
(3)Represents profit for the year as a percentage of average shareholders’ funds for the year.
(4)Represents average total equity (net assets) over average total assets.
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EQUITY
The majority of the balance not explained in the subsections below is related to the conversion to euros of the financial statements balances from consolidated entities whose functional currency is not the euro.
Total equity
As of December 31, 2025, total equity amounted to €61,798 million, a 3.0% increase compared to the €60,014 million recorded as of December 31, 2024, mainly as a result of the increase in shareholders’ funds, partially offset by higher negative exchange differences arising from the conversion to euros of balances in the functional currencies of the consolidated entities whose functional currency is not the euro, recorded under the line item “Foreign currency translation”.
Shareholders’ funds
As of December 31, 2025, shareholders’ funds amounted to €76,228 million, a 4.6% increase compared to the €72,875 million recorded as of December 31, 2024, primary due to the annual increase in profit, partially offset by the distribution of dividends and the share buyback programs.
Accumulated other comprehensive income (loss)
As of December 31, 2025, the accumulated other comprehensive loss amounted to €18,871 million, a 9.6% increase compared to the €17,220 million loss recorded as of December 31, 2024, mainly due to the depreciation of certain currencies against the euro, in particular, the Argentine peso and the Turkish lira.
Non-controlling interest
As of December 31, 2025, non-controlling interest amounted to €4,441 million, a 1.9% increase compared to the €4,359 million recorded as of December 31, 2024 mainly due to greater profit in Peru.
F. Competition
In recent years, the global financial services sector has undergone significant transformation in relation to the development of the Internet and mobile and other exponential technologies and the entrance of new players into activities previously provided by financial institutions. Whereas commercial banks were previously almost the sole providers of the whole range of financial products, from credit to deposits, or payments and investment services, today, a set of non-bank digital providers compete (and cooperate) among each other and with banks in the provision of financial services. These new fintech providers can be startup firms that are specialized in a specific service or niche of the financial services market, or large digital players (known as BigTechs). BigTech companies such as Amazon, Facebook and Apple have also started to offer financial services (mainly, in relation to payments and credit) ancillary to their core business.
In this new competitive environment, banks and other players are calling for a level playing field that ensures fair competition among the different financial services providers. Regulations on consumer protection and the integrity of the financial system (such as anti-money laundering regulations or regulations for combating the financing of terrorism) are generally activity-specific and, therefore, meet the principle of a level playing field. However, with regards to financial stability, banking groups are subject to prudential regulations that have implications for most of their activities, including those in which they compete with non-bank players that are only subject to activity-specific regulations, at best, or not regulated at all. Therefore, the scope of the perimeter of prudential consolidation to which the prudential regulation and supervision in the European Union and elsewhere applies compromises the level playing field principle by requiring banking groups to apply banking-level controls to all subsidiaries, no matter their activities and actual risks involved. Restrictions on the activity of bank players, for instance as regards internal governance requirements, leave EU banks at a competitive disadvantage as regards cost, time-to-market or talent attraction compared to their competitors.
Existing loopholes in the regulatory framework are another cause of an uneven playing field between banks and non-bank players. Some new services or business models are not yet subject to existing regulations. In such cases, not only are potential risks to financial stability, consumer protection and the integrity of the financial system unaddressed, but asymmetries may arise between players since regulated providers often face obstacles that unregulated providers do not. See also “Item 3. Key Information—Risk Factors—Business Risks—The Group faces increasing competition and is exposed to a changing business model”.
Another trend in the market is consolidation. Following the 2008 financial crisis, a number of banks disappeared or were absorbed by other banks. Going forward, there may be additional consolidation in the regions where the Group operates.
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Additional information on certain market dynamics affecting the three main countries where we operate is provided below.
Spain
The commercial banking sector in Spain has undergone significant consolidation since the 2008 financial crisis. Following the merger of Caixabank and Bankia in 2021, Caixabank is the largest bank in Spain in terms of total assets. In addition, the merger between Unicaja and Liberbank, completed in June 2021, created the sixth largest bank in terms of loans in Spain as of December 2022. Caixabank and Banco Santander are BBVA’s main competitors in the Spanish market. The aggregate market share in terms of loans of the five largest banks in Spain is approximately 75% according to the latest available data.
We face strong competition in all of our principal areas of operations. After the protracted period of low interest rates, which adversely impacted interest income, the sharp rise in official and market interest rates in 2022 and 2023 has resulted in a superior pricing environment for banks. However, Spanish banks have been generally cautious in increasing borrowing rates in order not to prompt any surge in default rates. Such an approach and the fact that Spain has a mature credit market contribute to the strong competitive environment in the Spanish banking system. In particular, in recent years, competition has been acutely intense in the credit market for lending to SMEs, where new credit interest rates fell from a weighted average of 5.5% between January 2012 and May 2014 to around 2.1% in 2021. Although interest rates on new loans to SMEs increased to approximately 6.0% as of December 2023 due to the sharp rise in official interest rates, they subsequently declined to around 4.3% as of October 2025 (latest available data).
Regarding the mortgage segment, the pandemic triggered changes in household preferences (larger houses, outside space, second houses) driving an increase in the demand for mortgages. As a result, after the long period of deleveraging that preceded the pandemic, the portfolio of mortgages in Spain grew by 1.1% in 2021, though the volume of mortgages declined by 0.1% and 3.2% in 2022 and 2023, respectively, in response to higher interest rates. Subsequently, mortgages loans grew by 0.3% in 2024 and 3.1% year-on-year in November 2025, supported by the stronger evolution of lending in recent years in Spain.
Competition has become increasingly asymmetric in the credit business. In addition to traditional banks, alternative financing providers—particularly private credit firms—have significantly increased their presence, competing with banks in the provision of credit to households and, above all, to corporates and SMEs. These players have gained market share due to their speed of execution, flexible structuring capabilities, and tailored solutions, especially in mid-market corporate lending and complex financing transactions. This trend has contributed to a partial disintermediation of traditional bank lending and has pushed banks toward greater specialization, traditional lending with origination, structuring, and risk distribution roles.
With respect to deposits, in the aftermath of the 2008 financial crisis, the necessity for a more balanced funding structure led to increased competition for deposits in Spain. Until 2022, the low interest rate environment depressed remuneration on deposits; however, there was an effective “zero lower bound” interest rate floor on deposit rates, which never entered negative territory, despite the Euribor being below 0% between 2016 and April 2022. As interest rates have risen, competition among Spanish entities and from other alternative savings financial products has led to higher deposit rates, especially time deposit rates. However, the excess liquidity of the Spanish banking system (as shown by the system’s loans-to-deposits ratio, which was approximately 82% as of October 2025), and the strong competition in the loan market, caused deposit rates in Spain to increase less than in other European countries.
The entry of “fintech companies” and online banks into the Spanish market for financial services has further increased competition, particularly in payment services. Insurance companies and other financial service firms also compete for customer funds. Insurance companies and other financial service firms are also expanding the services they offer to consumers in Spain, which have traditionally been the domain of commercial banks. We face competition from other commercial banks, former savings banks and, to a lesser extent, credit cooperatives across all types of loans and deposits.
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In Spain and in Europe, changes in banking regulation could have a significant potential impact on competition in the near future. The EU Directive on Investment Services permits all brokerage houses authorized to operate in other member states of the European Union to carry out investment services in Spain. Although the EU Directive is not specifically addressed to banks, it affects the activities of banks operating in Spain. Certain initiatives have also been implemented in order to facilitate the creation of a Pan-European financial market, such as the Single Euro Payments Area, which is a payment-integration initiative for the harmonization of payment services (bank transfers, direct debits and payment cards) mainly within the European Union, and MiFID, complemented with the introduction of MiFID II in January 2018, which aims to create a European framework for investment services. In addition, further steps have been taken towards achieving a banking and capital markets union in Europe, such as the Retail Investment Strategy (RIS). The ECB assumed responsibility as the unique supervisor of the Eurozone banking sector in November 2014, responsible for the supervision of over 100 entities (including BBVA). Moreover, the foundations of a single resolution mechanism were laid with, among others, the appointment of the SRB and the adoption of the Bail-in Tool. The year 2025 marks the operational launch of the Anti-Money Laundering and Counter-Terrorist Financing Authority (AMLA). The creation of this new authority is part of a broader regulatory package, known as the AML (Anti Money-Laundering) package, which was published in 2024 and includes the creation of AMLA, the publication of the new European AML Regulation, and the 6th AML Directive.
For additional information, see “―Business Overview―Supervision and Regulation”.
Mexico
As of December 31, 2025, the Mexican banking sector comprised 50 institutions, one fewer than the 51 banks that operated at the beginning of 2025. In addition, eight other entities are either waiting for the approval of their license or ready to start operations within the banking sector: Revolut, Nu Bank, Klar, Masari Casa de Bolsa, Finsus, Konfío, and Plata Card.
The seven largest banks of the system (the “G7 group”, that comprises BBVA Mexico, Santander, Banorte, Banamex, HSBC, Scotiabank and Inbursa) held 70.6% of the total assets of banks in Mexico as of October 30, 2025, less than the 71.1% in December 2024. All but two members of the G7 group decreased their share in total assets and BBVA Mexico led the way with a 0.6% drop. The two institutions with gains were Banamex (+0.3%) and Santander (+0.1%).
Regarding credit balances, the G7 group market share increased marginally from 77.45% in December 2024 to 77.47% in October 2025. In particular, BBVA Mexico increased its participation in total credit balances from 25.4% to 25.6% during such period. Banamex, Santander and Banorte also experienced an increase in their market share (0.4%, 0.2% and 0.1% respectively), while HSBC, Scotiabank and Inbursa lost market share. The pace of expansion of credit balances in 2026 is expected to remain weak as the recovery in employment and private investment is expected to take time to make an impact.
As for deposits, the G7 group market share declined marginally between December 2024 and October 2025 (from 73.16% to 73.04%), with four of the G7 banks losing share. BBVA Mexico was the institution with the greatest gain (+0.4%), while Scotiabank was the bank with the largest drop (-0.3%). A slow recovery of formal employment and the ongoing rate cutting cycle are expected to hinder the growth of deposits in 2026.
For information on COFECE’s investigation regarding competition in the card payments’ market, see “―Business Overview―Supervision and Regulation—Principal Markets—Mexico”.
Turkey
In Turkey, where we operate through Garanti BBVA, the three public banks that operate in the country accounted for 37% of the total loans of financial institutions as of December 26, 2025, whereas private deposit banks (including Garanti BBVA) accounted for 48%. Development banks and participation banks (banks that operate under the ethos of Islamic banking) together accounted for 15% of the total.
The CBRT cut the policy rate by a total of 500 basis points between January and March 2025, bringing it down to 42.5%. At the interim Monetary Policy Committee (MPC) meeting held on March 20, 2025, in order to contain the risks that financial market developments could pose to the inflation outlook, the MPC decided to raise the overnight lending rate to 46.0%, while keeping the policy rate and the overnight borrowing rate unchanged. Additionally, the CBRT suspended the one-week repo auctions temporarily, and provided funding at the overnight lending rate. In April 2025, in response to the effects of financial market developments on underlying inflation, the CBRT raised the policy rate, the overnight lending rate, and the overnight borrowing rate to 46%, 49%, and 44.5%, respectively, and also announced the resumption of the one-week repo auctions. The CBRT kept the policy rate unchanged in June 2025, and reduced it by a total amount of 800 basis points in the remainder of the year, eventually bringing it down to 38% by December 2025.
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The CBRT continued to implement macroprudential policies to support disinflation. In this regard, the CBRT started to publish interim targets in its Inflation Report which are defined as the headline inflation levels intended to be achieved in the short term, while progressing towards the medium-term inflation target. The CBRT also continued simplifying its monetary policy measures, in line with the path started in 2024. The most significant decision in this respect was the termination of the opening and renewal of KKM accounts and, accordingly, the abolition of all targets related to the renewal of KKM accounts and their transition to Turkish lira. The increase in the share of Turkish lira deposits within total deposits and the measures to phase out KKM accounts continued to reinforce the monetary policy stance in 2025. The introduction of limits on the share of Turkish-lira deposits held by companies, together with the revision of the existing limits on the share of Turkish-lira deposits held by households, strengthened the monetary policy transmission mechanism. KKM accounts balance declined to USD 0.2 billion as of December 26, 2025, and Turkish lira deposits accounted for 61% of the total.
Policies for loan growth continued to be implemented to strengthen the monetary policy transmission mechanism and rebalance domestic demand in 2025. With respect to the reserve requirement for loan growth, the 2% monthly growth limit for Turkish lira commercial loans was replaced with two limits: 2.5% for SME loans, and 1.5% for other commercial loans. Moreover, the monthly growth limit of 1.5% for FX loans was reduced to 1% and then 0.5%. The scope of loans exempted from growth limit for FX loans was narrowed. The calculation period for loan growth rates was later extended to eight weeks from four weeks, to provide greater flexibility in the management of loan growth limits. To restrain borrowing behavior and contribute to the moderation of domestic demand, there continues to be different maximum interest rates for personal credit card loans based on the amount of debt.
This policy framework is expected to be maintained throughout 2026 to ensure that loan growth and loan composition will be supportive of the disinflation process and the monetary transmission mechanism. The limits for loan growth and exceptions to be provided are expected to be revised throughout the year. The CBRT is also expected to maintain the policy framework designed to prioritize Turkish lira-denominated deposits and a long-term maturity structure for external funding.
Banks’ profitability, which had remained flat in the first half of 2025, recovered during the remainder of 2025 due to the policy rate cuts. Interest rates are expected to continue their downward trend in 2026. The pace of the downward trend in inflation and the associated change in the interest rate outlook is expected to affect banks’ net interest margin. The positive impact of the improving net interest margin on return on equity (“ROE”) is expected to be more pronounced in 2026. Furthermore, the strong course of banking fees, commissions and service revenues is expected to continue to support profitability, while the rise in credit risk costs will likely limit further improvement.
ITEM 4A. UNRESOLVED STAFF COMMENTS
None.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
Overview
The BBVA Group is a customer-centric global financial services group founded in 1857. Internationally diversified and with strengths in the traditional banking businesses of retail banking, asset management and wholesale banking, the Group is committed to offering a compelling digital proposition focused on customer experience.
BBVA has a leadership position in the Spanish market, it is the largest financial institution in Mexico in terms of assets, it has leading franchises in South America and it is the majority shareholder in Garanti BBVA, Turkey’s largest bank in terms of market capitalization. BBVA also has considerable corporate and investment banking activity in the United States. On May 18, 2022, BBVA closed its voluntary takeover bid for the entire share capital of Garanti BBVA, which resulted in BBVA increasing its stake in Garanti BBVA from 49.85% to 85.97%.
The BBVA Group operates in Spain through Banco Bilbao Vizcaya Argentaria, S.A., 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. In addition to the transactions it carries out directly, Banco Bilbao Vizcaya Argentaria, S.A. is the parent company of the BBVA Group, which includes a group of subsidiaries, joint ventures and associates performing a wide range of activities.
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Critical Accounting Policies
The Consolidated Financial Statements as of and for the years ended December 31, 2025, 2024 and 2023 were prepared by the Bank’s directors in compliance with IFRS-IASB and in accordance with EU-IFRS required to be applied under the Bank of Spain’s Circular 4/2017, and by applying the basis of consolidation, accounting policies and measurement bases described in Note 2 to the Consolidated Financial Statements, so that they present fairly the Group’s total equity and financial position as of December 31, 2025, 2024 and 2023, and its results of operations and consolidated cash flows for the years ended December 31, 2025, 2024 and 2023. The Consolidated Financial Statements were prepared on the basis of the accounting records kept by the Bank and by each of the other Group companies and include the adjustments and reclassifications required to unify the accounting policies and measurement bases used by the Group. See Note 2.2 to the Consolidated Financial Statements.
In preparing the Consolidated Financial Statements, estimates were made by the Group and the consolidated companies in order to quantify certain of the assets, liabilities, income, expense and commitments reported herein. These estimates relate mainly to the following:
•The loss allowance of certain financial assets.
•The assumptions used in the valuation of insurance and reinsurance contracts, to quantify certain provisions and the actuarial calculation of the post-employment benefit liabilities and commitments.
•The useful life and impairment losses of tangible and intangible assets and impairment losses on non-current assets held for sale.
•The valuation of goodwill and price allocation of business combinations.
•The fair value of certain unlisted financial assets and liabilities.
•The recoverability of deferred tax assets and the estimate for the corporate income tax.
Although these estimates were made on the basis of the best information available as of December 31, 2025, 2024 and 2023, respectively, events that take place in the future might make it necessary to revise these estimates (upwards or downwards), which revisions would be carried out prospectively in coming years. Any such changes would be recorded prospectively, recognizing the effects of the change in estimation in the corresponding consolidated financial statements.
The BBVA Group is working on its estimation models so that they consider and reflect how climate risk and other climate-related matters can affect the consolidated financial statements, cash flows and financial performance of the Group. The relevant estimates and judgments are being taking into account when preparing the consolidated financial statements of the BBVA Group and, where relevant, they are mentioned in the corresponding Notes to the Consolidated Financial Statements.
Further, recent greater macroeconomic and geopolitical uncertainties have resulted in greater complexity in developing reliable estimates and applying judgment. During 2025 there have been no other significant changes in the estimates made as of December 31, 2024 and 2023, with the exception of those indicated in the Consolidated Financial Statements.
Note 2 to the Consolidated Financial Statements contains a summary of our significant accounting policies. We consider certain of our critical accounting policies to be particularly important due to their effect on the financial reporting of our financial condition and results of operations and because they require management to make difficult, complex or subjective judgments, some of which may relate to matters that are inherently uncertain. Our reported financial condition and results of operations are sensitive to accounting methods, assumptions and estimates that underlie the preparation of the Consolidated Financial Statements. The nature of critical accounting policies, the judgments and other uncertainties affecting application of those policies and the sensitivity of reported results to changes in conditions and assumptions are factors to be considered when reviewing the Consolidated Financial Statements and the discussion below. For information on the estimates made by the Group in preparing the Consolidated Financial Statements, see Note 1.4 to the Consolidated Financial Statements.
We have identified the accounting policies enumerated below as critical to the understanding of our financial condition and results of operations, since the application of these policies requires significant management assumptions and estimates that could result in materially different amounts to be reported if the assumptions used or underlying circumstances were to change.
See Note 2.3 to the Consolidated Financial Statements for information on changes to IFRS or their interpretation that were not yet effective as of December 31, 2025.
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Financial instruments
Loss allowance of certain 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.
During 2024, the criteria for identifying significant increases in credit risk were reviewed and updated. As part of this update, certain short-term portfolio transactions as well as those meeting the expanded definition of the low credit risk exception (see Note 2.2.1 to the Consolidated Financial Statements) were exempted from transfer to Stage 2 based on certain quantitative criteria. These changes led to a significant reduction in the Stage 2 balance at the Group level during the last quarter of 2024, with the impact of these measures primarily concentrated in Banco Bilbao Vizcaya Argentaria, S.A.
–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.
Fair value of financial instruments
The fair value of an asset or a liability on a given date is taken to be the price that would be received upon the sale of an asset, or paid, upon the transfer of a liability in an orderly transaction between market participants at the measurement date. The most objective and common reference for the fair value of an asset or a liability is the price that would be paid for it on an organized, transparent and deep market (“quoted price” or “market price”).
If there is no market price for a given asset or liability, its fair value is estimated on the basis of the price established in recent transactions involving similar instruments and, in the absence thereof, by using mathematical measurement models sufficiently tried and trusted by the international financial community. Such estimates would take into consideration the specific features of the asset or liability to be measured and, in particular, the various types of risk associated with the asset or liability. However, the limitations inherent to the measurement models developed and the possible inaccuracies of the assumptions required by these models may signify that the fair value of an asset or liability thus estimated does not coincide exactly with the price for which the asset or liability could be purchased or sold on the date of its measurement.
See Notes 2.2.1 and 8 to the Consolidated Financial Statements, which contain a summary of our significant accounting policies.
Derivatives and other future transactions
These instruments include outstanding foreign currency purchase and sale transactions, outstanding securities purchase and sale transactions, futures transactions relating to securities, exchange rates or interest rates, forward interest rate agreements, options relating to exchange rates, securities or interest rates and various types of financial swaps.
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All derivatives are recognized on the balance sheet at fair value from the date of arrangement. If the fair value of a derivative is positive, it is recorded as an asset and if it is negative, it is recorded as a liability. Unless there is evidence to the contrary, it is understood that on the date of arrangement, the fair value of the derivatives is equal to the transaction price. Changes in the fair value of derivatives after the date of arrangement are recognized in the heading “Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net” in the consolidated income statement.
Specifically, the fair value of the standard financial derivatives included in the held for trading portfolios is equal to their daily quoted price. If, under exceptional circumstances, their quoted price cannot be established on a given date, these derivatives are measured using methods similar to those used to measure over-the-counter (“OTC”) derivatives.
The fair value of OTC derivatives is equal to the sum of the future cash flows arising from the instruments discounted at the measurement date (“present value” or “theoretical value”). These derivatives are measured using methods recognized by the financial markets, including the net present value method and option price calculation models.
Financial derivatives that have equity instruments as their underlying, whose fair value cannot be determined in a sufficiently objective manner and are settled by delivery of those instruments, are measured at cost, although the amortized cost criteria is not used when accounting for these instruments.
Financial derivatives designated as hedging items are included in the heading of the balance sheet “Derivatives - Hedge accounting”. These financial derivatives are valued at fair value.
See Note 2.2.1 to the Consolidated Financial Statements, which contains a summary of our significant accounting policies with respect to these instruments.
Goodwill in consolidation
Pursuant to IFRS 3, if the difference on the date of a business combination between the sum of the consideration transferred, the amount of all the non-controlling interests and the fair value of equity interest previously held in the acquired entity, on one hand, and the fair value of the assets acquired and liabilities assumed, on the other hand, is positive, it is recorded as goodwill on the asset side of the balance sheet. Goodwill represents the advance payment made by the entity for future economic benefits, from assets that have not been individually identified nor separately recognized in a business combination.
Goodwill is allocated to one or more cash-generating units (CGUs), that will benefit from the synergies arising from business combinations. CGUs represent the smallest identifiable groups of assets that generate cash flows for the Group.
Goodwill is not amortized and is subject periodically to an impairment analysis, comparing the carrying amount of the relevant CGU - adjusted by the amount of goodwill attributable to minority interests, in the event that the Group has not chosen to measure minority interests at fair value, with its recoverable amount.
If the difference is negative, it is recognized directly in the income statement under the heading “Negative goodwill recognized in profit or loss”.
The recoverable amount of a CGU is equal to the fair value less sale costs or its value in use, whichever is greater. Value in use is calculated as the discounted value of the cash flow projections that the unit’s management estimates and is based on the latest budgets approved for the coming years. The main assumptions used in its calculation are: a growth rate to extrapolate the cash flows indefinitely, and the discount rate used to discount the cash flows, which is equal to the cost of the capital assigned to each CGU, and equivalent to the sum of the risk-free rate plus a risk premium inherent to the CGU being evaluated for impairment. If the carrying amount of the CGU exceeds the related recoverable amount, the Group recognizes an impairment loss.
See Notes 2.1 and 2.2.7 to the Consolidated Financial Statements, which contain a summary of our significant accounting policies related to goodwill.
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The recoverable amounts of all the CGUs were in excess of their carrying value as of December 31, 2025, December 31, 2024 and December 31, 2023.
Mexico CGU
Most of the Group’s goodwill balance corresponds to the CGU in Mexico. The impairment test used the cash flow projections estimated by the Group’s management, based on the latest budgets available for the next five years. As of December 31, 2025, the Group used a growth rate of 5.2% (5.5% as of December 31, 2024 and 5.6% as of December 31, 2023) to extrapolate the cash flows in perpetuity starting in the fifth year, based on the real GDP growth rate of Mexico, expected inflation and the potential growth of the banking sector in Mexico. The rate used to discount cash flows is the cost of capital assigned to the CGU, 16.7% as of December 31, 2025 (18.3% as of December 31, 2024 and 12.4% as of December 31, 2023).
As of December 31, 2025, if the discount rate had increased or decreased by 50 basis points, the recoverable amount would have decreased or increased by 3% and 4%, respectively (3% and 3%, respectively, as of December 31, 2024, and 6% and 7%, respectively, as of December 31, 2023). If, as of December 31, 2025, the growth rate had increased or decreased by 50 basis points, the recoverable amount would have increased or decreased by 2% and 2%, respectively (2% and 2%, respectively, as of December 31, 2024, and 5% and 4%, respectively, as of December 31, 2023). The Group concluded there was no evidence of indicators of impairment that required recognizing significant impairment losses in the Mexico CGU.
Insurance contracts
For the years ended December 31, 2025, 2024 and 2023, the valuation method used by default for all insurance and reinsurance contracts was the General Model (Building Block Approach) based on IFRS 17, except in respect of contracts eligible to be valued under the Simplified Model (Premium Allocation Approach) or the Variable Fee Approach. The General Model requires that insurance contracts be initially valued for the total of fulfillment cash flows and the contractual service margin (CSM), each as further described in Note 2.2.8 to the Consolidated Financial Statements. Subsequently, the amount recognized in the consolidated balance sheet for each group of insurance contracts measured under this model comprises the liability for remaining coverage, which includes the aforementioned fulfillment cash flows and the contractual service margin, and the liability for incurred claims, which includes the cash flows from related to claims that have occurred, but have not been paid, discounted to reflect the time value of money, the financial risk associated with future cash flows, and a risk adjustment for non-financial risk that would represent the compensation required by the uncertainty associated with the amount and timing of the expected cash flows.
See Notes 2.2.8 and 23 to the Consolidated Financial Statements, which contain a summary of our significant accounting policies and assumptions about our most significant insurance contracts.
Post-employment benefits and other long-term commitments to employees
Pension and post-retirement benefit costs and credits are based on actuarial calculations. Inherent in these calculations are assumptions including discount rates, rate of salary increase and expected return on plan assets. Changes in pension and post-retirement costs may occur in the future as a consequence of changes in interest rates, expected return on assets or other assumptions. See Notes 2.2.13 and 25 to the Consolidated Financial Statements, which contain a summary of our significant accounting policies about pension and post-retirement benefit costs and credits.
Tax assets and liabilities
Expenses on corporate income tax applicable to the BBVA Group’s Spanish entities and on similar income taxes applicable to consolidated foreign entities are recognized as an expense for the period in the consolidated 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 consolidated 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 Notes 2.2.9 and 19 to the Consolidated Financial Statements, which contain a summary of our significant accounting policies about tax assets and liabilities.
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A. Operating Results
Factors Affecting the Comparability of our Results of Operations and Financial Condition
Set forth below are the main factors that affect the comparability of the Group’s results of operations and financial condition as of and for the years ended December 31, 2025, 2024 and 2023.
Trends in Exchange Rates
We are exposed to foreign exchange rate risk in that our reporting currency is the euro, whereas certain of our subsidiaries and investees have different functional and accounting currencies, principally the Mexican peso, Turkish lira, Argentine peso, Colombian peso, Peruvian sol and U.S. dollar. For example, if these currencies depreciate against the euro, when the results of operations of our subsidiaries in the countries using these currencies are included in our consolidated financial statements, the euro value of their results declines, even if, in local currency terms, their results of operations and financial condition have remained the same. By contrast, the appreciation of these currencies against the euro would have a positive impact on the results of operations of our subsidiaries in the countries using these currencies when their results of operations are included in our consolidated financial statements. Accordingly, changes in exchange rates may limit the ability of our results of operations, stated in euro, to fully show the performance in local currency terms of our subsidiaries.
Except with respect to hyperinflationary economies, where all the components of the financial statements (including income statement items) of the relevant subsidiaries (in each case, for any period in which the economy was considered to be hyperinflationary) are converted at the period-end exchange rate, the assets and liabilities of our subsidiaries which maintain their accounts in currencies other than the euro have been converted to the euro at the period-end exchange rates for inclusion in the Consolidated Financial Statements, and income statement items have been converted at the average exchange rates for the period. See Note 2.2.18 to the Consolidated Financial Statements for information on the application of IAS 29 “Financial Reporting in Hyperinflationary Economies”. The following table sets forth the exchange rates of the currencies of the main non-euro regions where we operate against the euro, expressed in local currency per €1.00 as averages for the years ended December 31, 2025, 2024 and 2023 and as period-end exchange rates as of December 31, 2025, 2024 and 2023 according to the ECB.
Average Exchange Rates | Period-End Exchange Rates | |||||||||||||||||||
Year ended December 31, 2025 | Year ended December 31, 2024 | Year ended December 31, 2023 | As of December 31, 2025 | As of December 31, 2024 | As of December 31, 2023 | |||||||||||||||
Mexican peso | 21.6743 | 19.8220 | 19.1866 | 21.1180 | 21.5504 | 18.7231 | ||||||||||||||
Turkish lira | 50.4838 | 36.7372 | 32.6531 | |||||||||||||||||
U.S. dollar | 1.1302 | 1.0822 | 1.0815 | 1.1750 | 1.0389 | 1.1050 | ||||||||||||||
Argentine peso | 1,714.8146 | 1,072.6642 | 892.8124 | |||||||||||||||||
Colombian peso | 4,575.5520 | 4,405.4736 | 4,679.2170 | 4,414.5690 | 4,580.6659 | 4,223.3653 | ||||||||||||||
Peruvian sol | 4.0249 | 4.0546 | 4.0404 | 3.9486 | 3.9027 | 4.1042 | ||||||||||||||
During 2025, the Mexican peso and, to a lesser extent, the U.S. dollar and the Colombian peso depreciated against the euro in average terms compared with the prior year. On the other hand, the Peruvian sol appreciated slightly against the euro in average terms compared with the average exchange rates for the prior year. In terms of period-end exchange rates, the Turkish lira, the Argentine peso, the U.S. dollar and, to a lesser extent, the Peruvian sol depreciated against the euro. On the other hand, the Mexican peso and the Colombian peso appreciated against the euro in terms of period-end exchange rates. The overall effect of changes in exchange rates was negative for the period-on-period comparison of the Group’s income statement (mainly due to the depreciation of the Mexican peso in average terms and the depreciation of the period-end exchange rates of the Turkish lira and the Argentine peso used to convert income statement items pursuant to IAS 21) and balance sheet.
During 2024, the Mexican peso and, to a lesser extent, the U.S. dollar and the Peruvian sol depreciated against the euro in average terms compared with the prior year. On the other hand, the Colombian peso appreciated against the euro in average terms compared with the average exchange rates for the prior year. The income statement of BBVA Argentina for the year ended December 31, 2024 was significantly impacted by the decline of the Argentine peso during the year, including, in particular, the extraordinary devaluation of the Argentine peso against the euro in December 2023, as a result of the economic measures adopted by the new government. In terms of period-end exchange rates, the Mexican peso, the Turkish lira, the Argentine peso and the Colombian peso depreciated against the euro. On the other hand, the U.S. dollar and the Peruvian sol appreciated against the euro in terms of period-end exchange rates. The overall effect of changes in exchange rates was negative for the period-on-period comparison of the Group’s income statement (mainly due to the depreciation of the Mexican peso in average terms and the depreciation of the period-end exchange rates of the Turkish lira and the Argentine peso used to convert income statement items pursuant to IAS 21) and balance sheet.
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When comparing two dates or periods in this Annual Report on Form 20-F we have sometimes excluded, where specifically indicated, the impact of changes in exchange rates by assuming constant exchange rates. In doing this, with respect to income statement amounts, we have used the average exchange rate for the more recent period for both periods (except with respect to hyperinflationary economies, where we have used the period-end exchange rate of the more recent period for both periods) and, with respect to balance sheet amounts, we have used the period-end exchange rate of the more recent period for both period ends.
Macroeconomic and geopolitical conditions
The Group is vulnerable to deteriorating economic conditions and changes in the institutional environment in the countries in which it operates, and is exposed to sovereign debt, particularly in Spain, Mexico and Turkey.
The global economy is facing significant changes, due in part to the policies of the U.S. administration. Uncertainty about the consequences is exceptionally high, substantially increasing geopolitical, economic, and financial risks.
The increase in U.S. tariffs on imports from its trading partners has triggered financial market volatility, reinforcing global-wide risks. The level and duration of these tariffs, and uncertainty in connection therewith, could negatively impact the global economy, worsening the prospects for the macroeconomic environment. As a result of the tariffs already adopted or announced, global growth could slow significantly.
While fiscal stimulus and monetary easing measures could partially offset the impact of trade protectionism, particularly in the Eurozone, where significant public spending increases have been announced, the impact of higher U.S. tariffs could be amplified by the adoption of retaliatory measures by other countries, sustained uncertainty, weakening confidence levels and financial volatility, among other factors.
Increased tariffs also raise the risk of inflation in the United States and the Eurozone, which could further slow private demand and constrain the Federal Reserve’s and ECB’s ability to lower rates if warranted by activity.
Beyond import tariffs, tighter controls on migration flows in the United States could also affect the labor market, add to inflationary pressures and weigh on economic growth. The U.S. administration’s fiscal, monetary, regulatory, industrial and foreign policies, among others, could likewise contribute to financial and macroeconomic volatility. This is compounded by concerns that the Federal Reserve’s independence in decision-making may be weakened by political considerations.
Amid heightened uncertainty over U.S. policies and large fiscal deficits, the U.S. risk premium has increased, pushing up long-term sovereign yields and weakening the U.S. dollar. These developments could also spark episodes of volatility, especially given the high public debt levels in both developed and emerging economies. The relatively high valuations of assets linked to artificial intelligence also represent a source of uncertainty, with potential implications in the financial markets.
Rising trade protectionism and the U.S.-China rivalry could further heighten geopolitical tensions, especially against the backdrop of ongoing conflicts in Ukraine and the Middle East, recent tensions in Latin America and Iran and the Greenland crisis. In response to these risks and the changes in the foreign policy of the U.S. administration, the European Union has adopted measures to increase military spending, which could support growth but, to some extent, add pressure on inflation and interest rates in the region.
Overall, rising global geopolitical tensions increase uncertainty around the outlook for the world economy and the likelihood of economic and financial disruptions, including an economic recession. For additional information on the deteriorating economic environment, see “—Operating Environment”.
The Group’s results of operations have also been affected in recent years by the high inflation in all countries in which BBVA operates, especially Turkey and Argentina. In particular, the Turkish economy has been considered hyperinflationary since the first half of 2022. See “Presentation of Financial Information—Hyperinflationary Economies”.
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The Group is exposed, among others, to the following general risks related to the economic and institutional environment in the countries where it operates: changes in economic activity, including potential recession scenarios; inflationary pressures that could lead to tightening of monetary conditions; stagflation triggered by intense or prolonged supply shocks, including as a result of a protectionist escalation or a sharp rise in oil and gas prices; exchange rate volatility; adverse developments in real estate markets; changes in the institutional environment of the countries where the Group operates, which could lead to sudden and pronounced GDP contractions and/or shifts in regulatory or government policy, including capital controls, dividend restrictions, or the imposition of new taxes or levies; high levels of public debt or external deficits, which could lead to sovereign credit rating downgrades or defaults or debt restructurings; the impact of policies adopted by the current U.S. administration, about which significant uncertainty remains; and episodes of financial market volatility, such as those seen recently, that could result in significant losses for the Group.
In Spain, political, regulatory, and economic conditions may have a negative impact on activity. In Mexico, there is considerable uncertainty regarding the impact of recently approved constitutional and institutional reforms, and the policies of the U.S. administration and the outcome of the review of the USMCA have already adversely affected the country’s economy and deteriorated its prospects. In Turkey, despite the gradual improvement in macroeconomic conditions, the situation remains relatively unstable, marked by pressure on the Turkish lira, high inflation, a significant trade deficit, relatively low central bank foreign exchange reserves, and high external financing costs. Recent political and social tensions and the geopolitical situation in the Middle East could also trigger new episodes of financial volatility and macroeconomic risks. Further, our activities in Turkey have been affected by the regulation and monetary policy adopted by the CBRT in recent years. For additional information on measures adopted by the CBRT, see “Item 4. Information on the Company―Business Overview—Supervision and Regulation—Principal Markets—Turkey”. In South America, ongoing and potential interventionist actions by the United States in some of its countries constitute a significant source of risk. In Argentina, despite the improvement in prospects following significant fiscal, monetary and exchange rate adjustments, the risk of economic and financial turmoil persists amid heightened political uncertainty. Lastly, in Colombia and Peru, meteorological events, political tensions, and a deterioration of public finances could weigh on economic performance.
Any of these factors may have a significant adverse effect on the Group’s business, financial condition and results of operations.
Operating Environment
The below discussion of BBVA’s operating environment includes the current expectations, estimates and beliefs of BBVA Research, based on internal and third-party sources, with respect to the future evolution of macroeconomic conditions. These expectations, estimates and beliefs are subject to uncertainty, and the actual evolution of macroeconomic conditions could differ materially from any expected evolution described below.
Our results of operations are dependent, to a large extent, on the level of demand for our products and services (primarily loans and deposits but also intermediation of financial products such as sovereign or corporate debt) in the countries in which we operate. Demand for our products and services in those countries is affected by the performance of their respective economies in terms of Gross Domestic Product (“GDP”), as well as prevailing levels of employment, inflation and, particularly, interest rates. Typically, the demand for loans and saving products correlates positively with income, which correlates in turn with GDP, employment and the evolution of corporate earnings. Interest rates have a direct impact on bank results as banking activity mainly relies on the generation of positive interest margins by paying lower interest on liabilities, primarily deposits, than the interest received on assets, primarily loans. However, it should be noted that higher interest rates, all else being equal, also reduce the demand for banking loans and increase the cost of funding and also typically lead to unrealized losses on fixed income securities and higher default rates.
The global economy has exhibited greater resilience than expected throughout 2025, despite elevated levels of uncertainty, trade and geopolitical tensions, and the tightening of migration policies by the U.S. administration. The adverse effects of protectionist measures appear to have been mitigated by lower effective tariffs than initially announced, an expansion of fiscal stimulus, and a sharp increase in investment in artificial intelligence, particularly in the United States. Low financial market volatility—supported by the Federal Reserve’s (Fed) accommodative monetary policy stance—and contained energy prices have also provided support to global economic activity.
Against this backdrop, BBVA Research expects global growth to have reached 3.2% in 2025, only slightly below the rate recorded in 2024. This outcome has been driven in part by stronger-than-expected economic performance in both the United States and China. In the United States, the resilience of private consumption and the momentum of technology-related investment are estimated to have lifted GDP growth in 2025 to 2.0%. In China, robust external sector performance has helped offset weaker consumption and private investment, raising the estimated GDP growth rate to 5.0%, in line with 2024. The euro area has also shown a gradual recovery path, albeit at more moderate rates. Fiscal stimulus measures and renewed spending on infrastructure and defense have supported domestic demand, resulting in an estimated GDP growth rate of 1.4% in 2025.
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Regarding price dynamics, tariff policies and the strength of domestic demand have been the main drivers of inflation developments in 2025. In the United States, the impact of tariffs has kept inflation around 3%, a level at which it is expected to have closed the year. This has constrained the Fed’s scope for interest rate cuts, with the policy rate standing at 3.75% in December 2025, down from 4.5% at the end of 2024. In contrast, in the European Union, inflation stability (near the 2% mark) and the gradual pace of the recovery have allowed the ECB to maintain an accommodative monetary stance, reducing the deposit facility rate to 2.0%. China has also adopted an accommodative monetary policy posture in light of its low-inflation environment, with headline inflation expected to have closed 2025 at 0.3%.
Looking ahead to 2026, global growth is projected by BBVA Research at 3.1% amid a mild deceleration across major economies. U.S. GDP growth is expected to reach 1.9%, while economic activity in the euro area is projected to expand by 1.1%, and China’s economy is forecast to grow by 4.5%. Inflation is likely to remain close to 3% in the United States due to tariff effects (with a projected year-end rate of 2.9%), stabilize around the ECB’s 2% target in the euro area (1.9% in December 2025), and rise gradually in China to approximately 1% by the end of the year. Under this growth and inflation outlook, the Fed could continue to lower interest rates at a gradual pace, reaching 3.25% by end-2026. A similarly accommodative stance is expected from the People’s Bank of China, while policy rates in the euro area are projected to remain unchanged.
Overall, the balance of risks to the global economy remains tilted to the downside, although it is somewhat more balanced than previously expected. In addition to protectionist measures in trade and immigration and the structural challenges facing Europe and China, downside risks include heightened geopolitical tensions—such as ongoing and potential U.S. interventions in Latin America and the Middle East, or the Greenland crisis—and uncertainty surrounding the independence of the Fed and its implications for financial markets. On the upside, increased investment in artificial intelligence and its medium-term impact on productivity in economies that actively promote its adoption stand out as a key positive factor.
In Spain, economic growth has remained robust throughout 2025, and near-term prospects continue to be relatively favorable. Activity has been supported by the resilience of services exports, a recovery in construction investment, and rising private consumption, amid accommodative monetary conditions and wage growth. The acceleration in the deployment of European recovery funds and increased defense spending could further support domestic demand and economic growth in the coming months. According to BBVA Research, GDP growth is most likely to have reached 2.9% in 2025. For 2026, growth is expected to gradually moderate to 2.4%, reflecting factors such as global protectionism, reduced fiscal support, limited productivity gains, and supply constraints in sectors such as housing. Headline inflation remained around 3% throughout 2025, closing the year at 2.9%, and is projected to ease slightly to 2.6% by the end of 2026.
In Mexico, weak investment and industrial activity constrained economic growth in 2025, with machinery exports and services acting as the main drivers of activity. BBVA Research maintains its 2025 growth estimation at 0.7% and projects GDP growth of 1.2% in 2026 amid looser monetary conditions, less fiscal consolidation, and ongoing uncertainty related to the review of the USMCA. Inflation fluctuated between 3.5% and 4.0% during 2025, closing the year at 3.7%, and is expected to remain at similar levels in 2026 (3.8% year-end). The expected inflation and growth environment point to a gradual pace of further interest rate cuts following the reductions implemented in 2025, with the policy rate projected to reach 6.5% by the end of 2026, 50 basis points below its current level.
In Turkey, economic activity maintained strong momentum throughout 2025, supported by robust domestic demand. Together with more accommodative monetary conditions, a relatively more favorable global environment, and a neutral fiscal stance, this has underpinned positive growth expectations for the coming quarters. According to BBVA Research, GDP growth is estimated to have reached 3.7% in 2025 and is expected to rise to 4.0% in 2026. Inflation continued on a path of gradual moderation during 2025 reaching 30.9% in December 2025. This has allowed the CBRT to continue gradually cutting interest rates, which stood at 38% at year-end. For 2026, both inflation and interest rates are expected to continue declining, potentially reaching 25% and 32%, respectively, by year-end.
In Argentina, 2025 concluded with a recovery in economic activity amid a gradual reduction in political instability and lower exchange rate pressures. BBVA Research maintains its GDP growth estimate for 2025 at 4.5% and expects growth to moderate gradually to 3.0% in 2026. Inflation continued its downward trend throughout 2025, reaching 31.5% in December 2025. For 2026, inflationary pressures are expected to ease further, with headline inflation declining to approximately 20% by year-end.
In Colombia, private consumption and fiscal spending have continued to support economic activity. BBVA Research estimates GDP growth for 2025 at 2.7%, with a similar expansion of 2.8% expected in 2026. Strong domestic demand has limited the disinflation process, with inflation closing December 2025 at 5.1%, prompting the central bank to keep policy rates unchanged at 9.25%. The announced increase in the minimum wage is expected to generate additional inflationary pressures in 2026, with headline inflation potentially reaching 6.5%, and could lead the central bank to tighten monetary policy, raising interest rates to as high as 12.25%.
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In Peru, economic activity performed favorably in 2025, supported by private consumption, withdrawals from private pension funds, and relatively favorable terms of trade. According to BBVA Research, GDP growth could have reached 3.3% in 2025 and is expected to moderate slightly to 3.1% in 2026 amid rising domestic political uncertainty and upcoming elections. Inflation remained well contained, closing December 2025 at 1.5%, and is projected to rise gradually to 2.5% by the end of 2026, while low interest rates—expected to remain unchanged at the current 4.25%—continue to support the growth outlook.
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BBVA Group results of operations for 2025 compared to 2024
The table below shows the Group’s consolidated income statements for 2025 and 2024.
| Year ended December 31, | |||||||||||
2025 | 2024 | Change | |||||||||
| (In Millions of Euros) | (In %) | ||||||||||
| Interest and other income | 58,345 | 61,659 | (5.4) | ||||||||
| Interest expense | (32,065) | (36,392) | (11.9) | ||||||||
| Net interest income | 26,280 | 25,267 | 4.0 | ||||||||
| Dividend income | 123 | 120 | 2.7 | ||||||||
| Share of profit or loss of entities accounted for using the equity method | 62 | 40 | 54.6 | ||||||||
| Fee and commission income | 13,743 | 13,036 | 5.4 | ||||||||
| Fee and commission expense | (5,528) | (5,048) | 9.5 | ||||||||
| Net gains (losses) on financial assets and liabilities (1) | 2,941 | 3,218 | (8.6) | ||||||||
| Exchange differences, net | (285) | 695 | n.m. (2) | ||||||||
| Other operating income | 688 | 623 | 10.5 | ||||||||
| Other operating expense | (2,614) | (3,951) | (33.8) | ||||||||
| Income on insurance and reinsurance contracts | 3,890 | 3,720 | 4.6 | ||||||||
| Expense on insurance and reinsurance contracts | (2,370) | (2,238) | 5.9 | ||||||||
| Gross income | 36,931 | 35,481 | 4.1 | ||||||||
| Administration costs | (12,811) | (12,660) | 1.2 | ||||||||
| Personnel expense | (7,773) | (7,659) | 1.5 | ||||||||
| Other administrative expense | (5,038) | (5,001) | 0.7 | ||||||||
| Depreciation and amortization | (1,521) | (1,533) | (0.8) | ||||||||
Net margin before provisions (3) | 22,599 | 21,288 | 6.2 | ||||||||
| Provisions or reversal of provisions | (373) | (198) | 88.8 | ||||||||
| Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification | (6,073) | (5,745) | 5.7 | ||||||||
| Impairment or reversal of impairment on non-financial assets | (13) | 1 | n.m. (2) | ||||||||
| Gains (losses) on derecognition of non-financial assets and subsidiaries, net and Impairment or reversal of impairment of investments in joint ventures and associates | 68 | 77 | (11.2) | ||||||||
| Gains (losses) from non-current assets and disposal groups classified as held for sale not qualifying as discontinued operations | 18 | (17) | n.m. (2) | ||||||||
| Operating profit / (loss) before tax | 16,227 | 15,405 | 5.3 | ||||||||
| Tax expense or income related to profit or loss from continuing operations | (5,100) | (4,830) | 5.6 | ||||||||
| Profit / (loss) from continuing operations | 11,126 | 10,575 | 5.2 | ||||||||
| Profit / (loss) from discontinued operations, net | — | — | — | ||||||||
| Profit / (loss) | 11,126 | 10,575 | 5.2 | ||||||||
| Profit / (loss) attributable to parent company | 10,511 | 10,054 | 4.5 | ||||||||
| Profit / (loss) attributable to non-controlling interests | 615 | 521 | 18.1 | ||||||||
(1)Comprises the following income statement line items contained in the Consolidated Financial Statements: “Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net”, “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”, “Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net” and “Gains (losses) from hedge accounting, net”.
(2)Not meaningful.
(3)Calculated as “Gross income” less “Administration costs” and “Depreciation and amortization”.
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The changes in the Group’s consolidated income statements for the years ended December 31, 2025 and 2024 were as follows:
Net interest income
The following table summarizes net interest income for the years ended December 31, 2025 and 2024.
| Year ended December 31, | |||||||||||
2025 | 2024 | Change | |||||||||
| (In Millions of Euros) | (In %) | ||||||||||
Interest and other income | 58,345 | 61,659 | (5.4) | ||||||||
Interest expense | (32,065) | (36,392) | (11.9) | ||||||||
Net interest income | 26,280 | 25,267 | 4.0 | ||||||||
Net interest income for the year ended December 31, 2025 amounted to €26,280 million, a 4.0% increase compared with the €25,267 million recorded for the year ended December 31, 2024, as interest expense decreased by 11.9% partially offset by the 5.4% decrease in interest and other income, both primarily driven by lower interest rates, as repricing dynamics affected interest-earning assets more than funding costs, and credit quality deteriorated. Further, the depreciation in average terms of the currencies of the main countries where the Group operates, except for the Peruvian sol, affected interest and other income to a greater extent than interest expense, especially in Turkey, Mexico and South America, due to asymmetric exposure to changes in exchange rates. The decrease in interest and other income was partially offset by the higher volume of Turkish lira-denominated loans supported by the lessening of the loan reserve requirements by the CBRT throughout 2025, the higher customer spread in Turkey, and the higher contribution from the securities portfolio and the ALCO portfolio in Spain. At constant exchange rates, net interest income increased by 13.9%, driven by an increase in interest and other income and a decrease in interest expense.
Dividend income
Dividend income for the year ended December 31, 2025 amounted to €123 million, a 2.7% increase compared with the €120 million recorded for the year ended December 31, 2024.
Share of profit or loss of entities accounted for using the equity method
Share of profit or loss of entities accounted for using the equity method for the year ended December 31, 2025 amounted to income of €62 million, a 54.6% increase compared with the income of €40 million recorded for the year ended December 31, 2024.
Fee and commission income
The table below provides a breakdown of fee and commission income for the years ended December 31, 2025 and 2024:
| Year ended December 31, | |||||||||||
2025 | 2024 | Change | |||||||||
(In Millions of Euros) | (In %) | ||||||||||
Bills receivables | 19 | 21 | (5.8) | ||||||||
Demand accounts | 298 | 300 | (0.5) | ||||||||
Credit and debit cards and POS (1) | 7,308 | 7,106 | 2.8 | ||||||||
Checks | 134 | 166 | (19.4) | ||||||||
Transfers and other payment orders | 970 | 961 | 0.9 | ||||||||
Insurance product commissions | 524 | 461 | 13.7 | ||||||||
Loan commitments given | 371 | 322 | 15.3 | ||||||||
Other commitments and financial guarantees given | 548 | 530 | 3.3 | ||||||||
Asset management | 1,845 | 1,685 | 9.5 | ||||||||
Securities fees | 401 | 360 | 11.4 | ||||||||
Custody securities | 219 | 221 | (0.9) | ||||||||
Other fees and commissions | 1,105 | 902 | 22.5 | ||||||||
Fee and commission income | 13,743 | 13,036 | 5.4 | ||||||||
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Fee and commission income increased by 5.4% to €13,743 million for the year ended December 31, 2025 from the €13,036 million recorded for the year ended December 31, 2024, primarily due to the higher fees paid to BBVA in connection with the debt issuances in which BBVA Securities Inc., our broker-dealer in the United States, acted as underwriter, and the increase in payment systems fees (fees related to credit and debit cards and POS (points of sale)),as shown in Note 40 to the Consolidated Financial Statements supported by the increase in the maximum credit card fees banks may charge in Turkey pursuant to the regulation established by the CBRT and the increase in the volume of asset management activities in Spain, Turkey and Mexico, partially offset by the depreciation against the euro, in average terms, of the currencies of the main countries where the Group operates, except for the Peruvian sol.
Fee and commission expense
The breakdown of fee and commission expense for the years ended December 31, 2025 and 2024 is as follows:
| Year ended December 31, | |||||||||||
2025 | 2024 | Change | |||||||||
(In Millions of Euros) | (In %) | ||||||||||
Demand accounts | 9 | 7 | 24.2 | ||||||||
Credit and debit cards | 3,654 | 3,534 | 3.4 | ||||||||
Transfers and other payment orders | 192 | 153 | 25.7 | ||||||||
Commissions for selling insurance | 44 | 47 | (7.5) | ||||||||
Custody securities | 96 | 101 | (4.9) | ||||||||
Other fees and commissions | 1,533 | 1,206 | 27.1 | ||||||||
Fee and commission expense | 5,528 | 5,048 | 9.5 | ||||||||
Fee and commission expense increased by 9.5% to €5,528 million for the year ended December 31, 2025 from the €5,048 million recorded for the year ended December 31, 2024, primarily due to the increase in fees paid to third parties driven by the increase in payment systems fee income in Turkey and Mexico and, to a lesser extent, the higher fees paid to third parties related to the increase in volume of asset management activities in Spain, partially offset by the depreciation in average terms of the currencies of the main countries where the Group operates, except for the Peruvian sol.
Net gains (losses) on financial assets and liabilities
Net gains on financial assets and liabilities amounted to €2,941 million for the year ended December 31, 2025, an 8.6% decrease compared to the net gain of €3,218 million recorded for the year ended December 31, 2024, mainly due to the depreciation in average terms of the currencies of the main countries where the Group operates, except for the Peruvian sol, and lower gains from the Global Markets unit in Spain recorded under “Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net”, partially offset by higher trading gains in the Global Markets unit in Colombia, the higher gains from the ALCO portfolio resulting from the repurchase of bonds in Mexico, the higher gains in the trading portfolio from the Global Markets unit in Turkey and the sale of certain securities portfolios in Turkey.
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The table below provides a breakdown of net gains (losses) on financial assets and liabilities for the years ended December 31, 2025 and 2024:
| Year ended December 31, | |||||||||||
| 2025 | 2024 | Change | |||||||||
| (In Millions of Euros) | (In %) | ||||||||||
| Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net | 423 | 327 | 29.2 | ||||||||
| Financial assets at fair value through other comprehensive income | 400 | 306 | 30.9 | ||||||||
| Financial assets at amortized cost | 24 | 20 | 19.9 | ||||||||
| Other financial assets and liabilities | (2) | 1 | n.m. (1) | ||||||||
| Gains (losses) on financial assets and liabilities held for trading, net | 2,255 | 2,458 | (8.2) | ||||||||
| Gains (losses) on non-trading financial assets mandatorily at fair value through profit or loss, net | 236 | 179 | 31.7 | ||||||||
| Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net | 28 | 249 | (88.7) | ||||||||
| Gains (losses) from hedge accounting, net | (1) | 5 | n.m. (1) | ||||||||
| Net gains (losses) on financial assets and liabilities | 2,941 | 3,218 | (8.6) | ||||||||
(1)Not meaningful.
Exchange differences, net
Exchange differences amounted to a €285 million loss for the year ended December 31, 2025 compared with a €695 million gain for the year ended December 31, 2024, mainly driven by negative exchange differences in Turkey and the Corporate Center, in particular, with respect to the Mexican peso, and the lower gains on certain U.S. bonds driven by the depreciation of the U.S. dollar.
Other operating income and other operating expense
Other operating income for the year ended December 31, 2025 increased by 10.5% to €688 million compared with the €623 million recorded for the year ended December 31, 2024, mainly due to higher sales of non-financial assets in Turkey, partially offset by the depreciation in average terms of the currencies of the main countries where the Group operates, except for the Peruvian sol.
Other operating expense for the year ended December 31, 2025 amounted to €2,614 million, a 33.8% decrease compared with the €3,951 million recorded for the year ended December 31, 2024, mainly driven by the lower aggregate expense attributable to the loss on the net monetary position resulting from the adjustment for hyperinflation in Argentina (€356 million in 2025 compared to €1,419 million in 2024) and in Turkey (€878 million in 2025 compared to €1,512 million in 2024), and the depreciation of the Mexican peso, the Turkish lira and the Argentine peso, partially offset by the lower gain from the revaluation of bonds linked to inflation in Turkey (€674 million, compared to €1,164 million for the year ended December 31, 2024) and the higher loss on the net monetary position resulting from the adjustment for hyperinflation in Venezuela (€183 million in 2025). In addition, the year-on-year decrease was driven in part by the fact that the other operating expense for the year ended December 31, 2024, included the impact of the temporary tax on credit institutions and financial credit establishments in Spain amounting to €285 million (which was paid in 2024), whereas the 2025 expense related to the IMIC was recorded under “Tax expense or income related to profit or loss from continuing operations”.
Income and expense on insurance and reinsurance contracts
Income on insurance and reinsurance contracts for the year ended December 31, 2025 was €3,890 million, a 4.6% increase compared with the €3,720 million of income recorded for the year ended December 31, 2024, mainly due to the increase in insurance premiums, attributable in part to a higher volume of insurance sales in Mexico, and the higher insurance sales by the insurance companies in Turkey, partially offset by the depreciation in average terms of the currencies of the main countries where the Group operates, except for the Peruvian sol.
Expense on insurance and reinsurance contracts for the year ended December 31, 2025 was €2,370 million, a 5.9% increase compared with the €2,238 million expense recorded for the year ended December 31, 2024, mainly as a result of increased insurance sales, in particular, in Mexico, partially offset by the depreciation in average terms of the currencies of the main countries where the Group operates, except for the Peruvian sol.
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Administration costs
Administration costs, which include personnel expense and other administrative expense, for the year ended December 31, 2025 amounted to €12,811 million, a 1.2% increase compared with the €12,660 million recorded for the year ended December 31, 2024, mainly as a result of the increase in personnel expenses, driven by the increase in salaries (mainly driven by inflation) and, to a lesser extent, the number of employees, the increase in administrative expense in Spain related to advertising and the increase in general expenses (technology, outsourced services and maintenance), in particular, in Turkey and, to a lesser extent, Mexico, driven to a great extent by the higher average inflation rates, partially offset by the depreciation in average terms of the currencies of the main countries where the Group operates, except for the Peruvian sol.
The table below provides a breakdown of personnel expense for the years ended December 31, 2025 and 2024:
| Year ended December 31, | |||||||||||
| 2025 | 2024 | Change | |||||||||
| (In Millions of Euros) | (In %) | ||||||||||
| Wages and salaries | 6,088 | 5,937 | 2.5 | ||||||||
| Social security costs | 1,070 | 1,007 | 6.2 | ||||||||
| Defined contribution plan expense | 152 | 158 | (3.9) | ||||||||
| Defined benefit plan expense | 43 | 51 | (15.3) | ||||||||
| Other personnel expense | 420 | 506 | (17.0) | ||||||||
| Personnel expense | 7,773 | 7,659 | 1.5 | ||||||||
The table below provides a breakdown of other administrative expense for the years ended December 31, 2025 and 2024:
| Year ended December 31, | |||||||||||
| 2025 | 2024 | Change | |||||||||
| (In Millions of Euros) | (In %) | ||||||||||
| Technology and systems | 1,778 | 1,732 | 2.6 | ||||||||
| Communications | 247 | 261 | (5.5) | ||||||||
| Advertising | 564 | 441 | 27.8 | ||||||||
| Property, fixtures and materials | 561 | 577 | (2.8) | ||||||||
| Taxes other than income tax | 322 | 481 | (33.1) | ||||||||
| Surveillance and cash courier services | 244 | 255 | (4.5) | ||||||||
| Other expense | 1,323 | 1,253 | 5.6 | ||||||||
| Other administrative expense | 5,038 | 5,001 | 0.7 | ||||||||
Depreciation and amortization
Depreciation and amortization for the year ended December 31, 2025 was €1,521 million, a 0.8% decrease compared with the €1,533 million recorded for the year ended December 31, 2024.
Provisions or reversal of provisions
Provisions or reversal of provisions for the year ended December 31, 2025 amounted to an expense of €373 million, an 88.8% increase compared with the €198 million expense recorded for the year ended December 31, 2024, mainly due to higher provisions for contingent risks in Turkey and, to a lesser extent, in Mexico.
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification for the year ended December 31, 2025 was an expense of €6,073 million, a 5.7% increase compared with the €5,745 million expense recorded for the year ended December 31, 2024, mainly due to the increase in the expected losses related to the retail portfolio (mainly related to consumer and credit card loans, which volumes increased and also required higher credit impairments) in Turkey and, to a lesser extent, higher credit impairment requirements in Mexico as a result of the worsening of the macroeconomic scenario.
93
The table below provides a breakdown of impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification for the years ended December 31, 2025 and 2024:
Year ended December 31, | |||||||||||
2025 | 2024 | Change | |||||||||
Impairment or reversal of impairment on: | (In Millions of Euros) | (In %) | |||||||||
Financial assets at fair value through other comprehensive income | (28) | 58 | n.m. (2) | ||||||||
Financial assets at amortized cost | 6,101 | 5,687 | 7.3 | ||||||||
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification | 6,073 | 5,745 | 5.7 | ||||||||
Impairment or reversal of impairment on non-financial assets
Impairment or reversal of impairment on non-financial assets for the year ended December 31, 2025 amounted to a €13 million expense, compared with the €1 million income recorded for the year ended December 31, 2024.
Gains (losses) on derecognition of non-financial assets and subsidiaries, net and Impairment or reversal of impairment of investments in joint ventures and associates
Gains on derecognition of non-financial assets and subsidiaries, net and Impairment or reversal of impairment of investments in joint ventures and associates for the year ended December 31, 2025 amounted to €68 million, an 11.2% decrease compared with the €77 million gain recorded for the year ended December 31, 2024, mainly due to the reversal of impairment of certain investments in joint ventures and associates.
Gains (losses) from non-current assets and disposal groups classified as held for sale not qualifying as discontinued operations
Gains from non-current assets and disposal groups classified as held for sale not qualifying as discontinued operations for the year ended December 31, 2025 amounted to €18 million, compared with the €17 million loss recorded for the year ended December 31, 2024.
Operating profit / (loss) before tax
As a result of the foregoing, operating profit before tax for the year ended December 31, 2025 amounted to €16,227 million, a 5.3% increase compared with the €15,405 million operating profit before tax recorded for the year ended December 31, 2024.
Tax expense or income related to profit or loss from continuing operations
Tax expense related to profit from continuing operations for the year ended December 31, 2025 amounted to €5,100 million, a 5.6% increase compared with the €4,830 million expense recorded for the year ended December 31, 2024, mainly due to the higher operating profit before tax in Spain and, to a lesser extent, South America and Turkey, and the approximately €318 million expense recorded in connection with the accrual of the estimated amount of the IMIC for the year ended December 31, 2025 in Spain (see Note 19 to the Consolidated Financial Statements and “Item 4. Information on the Company—Business Overview—Supervision and Regulation—Principal Markets—Spain—Temporary Tax on Credit Institutions in Spain”). The year-on-year increase was partially offset by an adjustment in the estimate of the annual tax rate for the BBVA Group, which reflects the Group’s reassessment of the coverage needs for the identified tax risks and certain deferred tax assets corresponding to the Group in Spain, which had not previously been recorded and were first recognized in 2025 (see Note 19 to the Consolidated Financial Statements), and the depreciation in average terms of the currencies of the main countries where the Group operates, except for the Peruvian sol.
Amounts paid by BBVA under the temporary tax on credit institutions and financial credit establishments and the IMIC in Spain are a non-deductible expense for tax purposes.
Profit / (loss)
As a result of the foregoing, profit for the year ended December 31, 2025 amounted to €11,126 million, a 5.2% increase compared with the €10,575 million recorded for the year ended December 31, 2024.
Profit / (loss) attributable to parent company
As a result of the foregoing, profit attributable to parent company for the year ended December 31, 2025 amounted to €10,511 million, a 4.5% increase compared with the €10,054 million recorded for the year ended December 31, 2024.
94
Profit / (loss) attributable to non-controlling interests
Profit attributable to non-controlling interests for the year ended December 31, 2025 amounted to €615 million, an 18.1% increase compared with the €521 million profit attributable to non-controlling interests recorded for the year ended December 31, 2024, mainly attributable to Peru.
95
BBVA Group results of operations for 2024 compared to 2023
The table below shows the Group’s consolidated income statements for 2024 and 2023.
| Year ended December 31, | |||||||||||
2024 | 2023 | Change | |||||||||
| (In Millions of Euros) | (In %) | ||||||||||
Interest and other income | 61,659 | 47,850 | 28.9 | ||||||||
Interest expense | (36,392) | (24,761) | 47.0 | ||||||||
Net interest income | 25,267 | 23,089 | 9.4 | ||||||||
Dividend income | 120 | 118 | 1.4 | ||||||||
Share of profit or loss of entities accounted for using the equity method | 40 | 26 | 52.5 | ||||||||
Fee and commission income | 13,036 | 9,899 | 31.7 | ||||||||
Fee and commission expense | (5,048) | (3,611) | 39.8 | ||||||||
Net gains (losses) on financial assets and liabilities (1) | 3,218 | 1,844 | 74.5 | ||||||||
Exchange differences, net | 695 | 339 | 105.0 | ||||||||
Other operating income | 623 | 619 | 0.7 | ||||||||
Other operating expense | (3,951) | (4,042) | (2.3) | ||||||||
Income on insurance and reinsurance contracts | 3,720 | 3,081 | 20.7 | ||||||||
Expense on insurance and reinsurance contracts | (2,238) | (1,821) | 22.9 | ||||||||
Gross income | 35,481 | 29,542 | 20.1 | ||||||||
Administration costs | (12,660) | (10,905) | 16.1 | ||||||||
Personnel expense | (7,659) | (6,530) | 17.3 | ||||||||
Other administrative expense | (5,001) | (4,375) | 14.3 | ||||||||
Depreciation and amortization | (1,533) | (1,403) | 9.3 | ||||||||
Net margin before provisions (2) | 21,288 | 17,233 | 23.5 | ||||||||
Provisions or reversal of provisions | (198) | (373) | (47.1) | ||||||||
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification | (5,745) | (4,428) | 29.7 | ||||||||
Impairment or reversal of impairment on non-financial assets | 1 | (54) | n.m. (3) | ||||||||
Gains (losses) on derecognition of non-financial assets and subsidiaries, net and Impairment or reversal of impairment of investments in joint ventures and associates | 77 | 19 | n.m. (3) | ||||||||
Gains (losses) from non-current assets and disposal groups classified as held for sale not qualifying as discontinued operations | (17) | 22 | n.m. (3) | ||||||||
Operating profit / (loss) before tax | 15,405 | 12,419 | 24.0 | ||||||||
Tax expense or income related to profit or loss from continuing operations | (4,830) | (4,003) | 20.7 | ||||||||
Profit / (loss) from continuing operations | 10,575 | 8,416 | 25.7 | ||||||||
Profit / (loss) from discontinued operations, net | — | — | — | ||||||||
Profit / (loss) | 10,575 | 8,416 | 25.7 | ||||||||
Profit / (loss) attributable to parent company | 10,054 | 8,019 | 25.4 | ||||||||
Profit / (loss) attributable to non-controlling interests | 521 | 397 | 31.2 | ||||||||
(1)Comprises the following income statement line items contained in the Consolidated Financial Statements: “Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net”, “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”, “Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net” and “Gains (losses) from hedge accounting, net”.
(2)Calculated as “Gross income” less “Administration costs” and “Depreciation and amortization”.
(3)Not meaningful.
96
The changes in the Group’s consolidated income statements for the years ended December 31, 2024 and 2023 were as follows:
Net interest income
The following table summarizes net interest income for the years ended December 31, 2024 and 2023.
Year ended December 31, | |||||||||||
2024 | 2023 | Change | |||||||||
(In Millions of Euros) | (In %) | ||||||||||
Interest and other income | 61,659 | 47,850 | 28.9 | ||||||||
Interest expense | (36,392) | (24,761) | 47.0 | ||||||||
Net interest income | 25,267 | 23,089 | 9.4 | ||||||||
Net interest income for the year ended December 31, 2024 amounted to €25,267 million, a 9.4% increase compared with the €23,089 million recorded for the year ended December 31, 2023, as interest and other income increased by 28.9% due mainly to the increase in yields and volumes (see “Item 4. Information on the Company—Selected Statistical Information—Average Balances and Rates”), particularly of loans to enterprises and consumer loans, partially offset by an increase in interest expense of 47.0%, mainly driven by higher overall funding costs due to interest rate increases, and the depreciation of the Argentine peso and the Mexican peso against the euro. At constant exchange rates, net interest income increased by 12.9%. The following factors, set out by region, were the main contributors to the 9.4% increase in net interest income:
•South America: there was a 27.2% increase mainly as a result of increases in the volume and yield of credit card loans and the commercial loan portfolios in Argentina and Colombia.
•Spain: there was a 14.6% increase mainly as a result of the higher yield of the loans to enterprises and consumer loans, which led to an increase in the customer spread (calculated as the average rate at which assets are remunerated, less the equivalent average rate for deposits), as a result of the impact of the increase in interest rates in 2023 up to the cuts beginning in the second half of 2024 and, to a lesser extent, an increase in the average volume of loan portfolios.
•Mexico: there was a 4.5% increase mainly as a result of the higher contribution from the wholesale and retail loan portfolios (attributable to increases in volume), and the higher contribution from the securities portfolio.
The period-on-period increase was offset in substantial part by the overall higher funding costs in all regions due to the interest rate increases, the higher interest expense on Turkish lira-denominated deposits (due to the higher volume of deposits and the higher interest rates paid on them), the higher wholesale and swap funding costs in Turkey, the impact of interest rates cuts implemented by the ECB since the second half of 2024 on consumer and household loan portfolios in Spain, which are mostly referenced to variable interest rates, and the depreciation of the Turkish lira, the Argentine peso and the Mexican peso against the euro. As a result, interest expense grew significantly more rapidly than interest and other income, negatively affecting net interest income.
Dividend income
Dividend income for the year ended December 31, 2024 amounted to €120 million, a 1.4% increase compared with the €118 million recorded for the year ended December 31, 2023.
Share of profit or loss of entities accounted for using the equity method
Share of profit or loss of entities accounted for using the equity method for the year ended December 31, 2024 amounted to income of €40 million, a 52.5% increase compared with the income of €26 million recorded for the year ended December 31, 2023.
97
Fee and commission income
The table below provides a breakdown of fee and commission income for the years ended December 31, 2024 and 2023:
Year ended December 31, | |||||||||||
2024 | 2023 | Change | |||||||||
(In Millions of Euros) | (In %) | ||||||||||
Bills receivables | 21 | 24 | (13.8) | ||||||||
Demand accounts | 300 | 300 | (0.1) | ||||||||
Credit and debit cards and POS (1) | 7,106 | 4,665 | 52.3 | ||||||||
Checks | 166 | 175 | (5.2) | ||||||||
Transfers and other payment orders | 961 | 862 | 11.5 | ||||||||
Insurance product commissions | 461 | 384 | 19.9 | ||||||||
Loan commitments given | 322 | 307 | 4.8 | ||||||||
Other commitments and financial guarantees given | 530 | 471 | 12.7 | ||||||||
Asset management | 1,685 | 1,407 | 19.8 | ||||||||
Securities fees | 360 | 345 | 4.4 | ||||||||
Custody securities | 221 | 207 | 6.8 | ||||||||
Other fees and commissions | 902 | 751 | 20.1 | ||||||||
Fee and commission income | 13,036 | 9,899 | 31.7 | ||||||||
Fee and commission income increased by 31.7% to €13,036 million for the year ended December 31, 2024 from the €9,899 million recorded for the year ended December 31, 2023, primarily due to the increase in payment systems fees (fees related to credit and debit cards and POS (points of sale), as shown in Note 40 to the Consolidated Financial Statements) supported by the increase in the maximum credit card fees banks may charge in Turkey pursuant to the regulation established by the CBRT and, to a lesser extent, the increased volume of transactions by credit card customers and of asset management activities in Mexico, the increase in the volume of asset management activities and the higher credit card fees in Spain and increases in payment systems-related fees (in particular, related to credit cards), as a result of increases in the volume of transactions and commission rates in Argentina, partially offset by the depreciation of the Turkish lira, the Mexican peso and the Argentine peso against the euro.
Fee and commission expense
The breakdown of fee and commission expense for the years ended December 31, 2024 and 2023 is as follows:
Year ended December 31, | |||||||||||
2024 | 2023 | Change | |||||||||
(In Millions of Euros) | (In %) | ||||||||||
Demand accounts | 7 | 6 | 9.7 | ||||||||
Credit and debit cards | 3,534 | 2,337 | 51.3 | ||||||||
Transfers and other payment orders | 153 | 156 | (1.9) | ||||||||
Commissions for selling insurance | 47 | 40 | 16.8 | ||||||||
Custody securities | 101 | 111 | (8.5) | ||||||||
Other fees and commissions | 1,206 | 961 | 25.4 | ||||||||
Fee and commission expense | 5,048 | 3,611 | 39.8 | ||||||||
Fee and commission expense increased by 39.8% to €5,048 million for the year ended December 31, 2024 from the €3,611 million recorded for the year ended December 31, 2023, primarily due to the increase in fees paid by the Group in connection with the increase in payment systems fees in Turkey (in particular, due to an increase in the volume of transactions by credit card customers), partially offset by the depreciation of the Turkish lira, the Mexican peso and the Argentine peso against the euro.
98
Net gains (losses) on financial assets and liabilities
Net gains on financial assets and liabilities increased to €3,218 million for the year ended December 31, 2024, a 74.5% increase compared to the net gain of €1,844 million recorded for the year ended December 31, 2023, mainly due to the gains from foreign currency hedges in Turkey, the gains from certain foreign currency hedges (recorded in the ALCO portfolio of the Corporate Center) on the estimated results of the operating segments resulting from the impact of the depreciation of the Mexican peso and, to a lesser extent, the higher gains from the Global Markets units in Mexico and Spain, recorded under “Gains (losses) on financial assets and liabilities held for trading, net”, partially offset by the depreciation of the Turkish lira and the Argentine peso against the euro.
The table below provides a breakdown of net gains (losses) on financial assets and liabilities for the years ended December 31, 2024 and 2023:
Year ended December 31, | |||||||||||
| 2024 | 2023 | Change | |||||||||
| (In Millions of Euros) | (In %) | ||||||||||
| Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net | 327 | 76 | n.m. (1) | ||||||||
| Financial assets at fair value through other comprehensive income | 306 | 42 | n.m. (1) | ||||||||
| Financial assets at amortized cost | 20 | 41 | (50.7) | ||||||||
| Other financial assets and liabilities | 1 | (7) | n.m. (1) | ||||||||
| Gains (losses) on financial assets and liabilities held for trading, net | 2,458 | 1,352 | 81.8 | ||||||||
| Gains (losses) on non-trading financial assets mandatorily at fair value through profit or loss, net | 179 | 337 | (46.8) | ||||||||
| Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net | 249 | 96 | 158.8 | ||||||||
| Gains (losses) from hedge accounting, net | 5 | (17) | n.m. (1) | ||||||||
| Net gains (losses) on financial assets and liabilities | 3,218 | 1,844 | 74.5 | ||||||||
(1)Not meaningful.
Exchange differences, net
Exchange differences increased to a €695 million gain for the year ended December 31, 2024 from a €339 million gain for the year ended December 31, 2023, mainly as a result of the positive exchange differences recognized in the Corporate Center, partially offset by the lower positive exchange differences in Turkey compared to 2023.
Other operating income and other operating expense
Other operating income for the year ended December 31, 2024 increased by 0.7% to €623 million compared with the €619 million recorded for the year ended December 31, 2023.
Other operating expense for the year ended December 31, 2024 amounted to €3,951 million, a 2.3% decrease compared with the €4,042 million recorded for the year ended December 31, 2023, mainly driven by the lower aggregate expense attributable to the loss on the net monetary position resulting from the adjustment for hyperinflation in Turkey (€1,512 million in 2024 compared to €2,118 million in 2023) and the depreciation of the Mexican peso, the Turkish lira and the Argentine peso, partially offset by the higher loss on the net monetary position resulting from the adjustment for hyperinflation in Argentina (€1,419 million in 2024 compared to €1,062 million in 2023), the lower gain from the revaluation of bonds linked to inflation in Turkey (€1,164 million, compared to €1,202 million for the year ended December 31, 2023) and the higher expense recorded in connection with the temporary tax on credit institutions and financial credit establishments in Spain (totaling €285 million in the year ended December 31, 2024, compared to €215 million in the year ended December 31, 2023).
As of December 31, 2023, BBVA had satisfied in full the amount to be paid by it at a global level under the ECB’s Single Resolution Fund.
Income and expense on insurance and reinsurance contracts
Income on insurance and reinsurance contracts for the year ended December 31, 2024 was €3,720 million, a 20.7% increase compared with the €3,081 million of income recorded for the year ended December 31, 2023, mainly due to increased insurance activity in Spain and the increase in insurance premiums, attributable in part to higher insurance sales in Mexico.
99
Expense on insurance and reinsurance contracts for the year ended December 31, 2024 was €2,238 million, a 22.9% increase compared with the €1,821 million expense recorded for the year ended December 31, 2023, mainly as a result of higher insurance-related expenses in Spain, due in part to the increased activity.
Administration costs
Administration costs, which include personnel expense and other administrative expense, for the year ended December 31, 2024 amounted to €12,660 million, a 16.1% increase compared with the €10,905 million recorded for the year ended December 31, 2023, mainly as a result of the increase in personnel expenses, driven by the increase in salaries (mainly driven by inflation) and, to a lesser extent, the number of employees and the increase in general expenses (technology, outsourced services and maintenance), in particular, in Turkey and Argentina, driven to a great extent by the higher average inflation rates, partially offset by the depreciation of the Turkish lira, the Mexican peso and the Argentine peso against the euro.
The table below provides a breakdown of personnel expense for the years ended December 31, 2024 and 2023:
Year ended December 31, | |||||||||||
2024 | 2023 | Change | |||||||||
(In Millions of Euros) | (In %) | ||||||||||
Wages and salaries | 5,937 | 5,068 | 17.1 | ||||||||
Social security costs | 1,007 | 834 | 20.7 | ||||||||
Defined contribution plan expense | 158 | 139 | 14.0 | ||||||||
Defined benefit plan expense | 51 | 49 | 3.5 | ||||||||
Other personnel expense | 506 | 440 | 15.0 | ||||||||
Personnel expense | 7,659 | 6,530 | 17.3 | ||||||||
The table below provides a breakdown of other administrative expense for the years ended December 31, 2024 and 2023:
Year ended December 31, | |||||||||||
| 2024 | 2023 | Change | |||||||||
| (In Millions of Euros) | (In %) | ||||||||||
| Technology and systems | 1,732 | 1,512 | 14.5 | ||||||||
| Communications | 261 | 219 | 19.6 | ||||||||
| Advertising | 441 | 349 | 26.4 | ||||||||
| Property, fixtures and materials | 577 | 520 | 10.9 | ||||||||
| Taxes other than income tax | 481 | 451 | 6.6 | ||||||||
| Surveillance and cash courier services | 255 | 234 | 9.2 | ||||||||
| Other expense | 1,253 | 1,090 | 15.0 | ||||||||
| Other administrative expense | 5,001 | 4,375 | 14.3 | ||||||||
Depreciation and amortization
Depreciation and amortization for the year ended December 31, 2024 was €1,533 million, a 9.3% increase compared with the €1,403 million recorded for the year ended December 31, 2023, mainly due to the increase in the depreciation expense related to IT equipment especially, in Turkey and Argentina, partially offset by the depreciation of the Turkish lira and the Argentine peso against the euro.
Provisions or reversal of provisions
Provisions or reversal of provisions for the year ended December 31, 2024 amounted to an expense of €198 million, a 47.1% decrease compared with the €373 million expense recorded for the year ended December 31, 2023, mainly due to the impact, in 2023, of the provisions recorded in connection with the February 2023 earthquakes.
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification for the year ended December 31, 2024 was an expense of €5,745 million, a 29.7% increase compared with the €4,428 million expense recorded for the year ended December 31, 2023, mainly due to the higher impairment entries in the retail loan portfolios in Mexico and Turkey and, to a lesser extent, in South America, as further explained in “—Results of Operations by Operating Segment”. In addition, the deterioration of macroeconomic conditions and forecast led to higher impairments in Mexico.
100
The table below provides a breakdown of impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification for the years ended December 31, 2024 and 2023:
Year ended December 31, | |||||||||||
2024 | 2023 | Change | |||||||||
Impairment or reversal of impairment on: | (In Millions of Euros) | (In %) | |||||||||
Financial assets at fair value through other comprehensive income | 58 | 42 | 38.2 | ||||||||
Financial assets at amortized cost | 5,687 | 4,386 | 29.7 | ||||||||
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification | 5,745 | 4,428 | 29.7 | ||||||||
Impairment or reversal of impairment on non-financial assets
Impairment or reversal of impairment on non-financial assets for the year ended December 31, 2024 amounted to €1 million of income, compared with the €54 million expense recorded for the year ended December 31, 2023.
Gains (losses) on derecognition of non-financial assets and subsidiaries, net and Impairment or reversal of impairment of investments in joint ventures and associates
Gains on derecognition of non-financial assets and subsidiaries, net and Impairment or reversal of impairment of investments in joint ventures and associates for the year ended December 31, 2024 amounted to €77 million, compared with the €19 million gain recorded for the year ended December 31, 2023, mainly due to the reversal of impairment of certain investments in joint ventures and associates.
Gains (losses) from non-current assets and disposal groups classified as held for sale not qualifying as discontinued operations
Losses from non-current assets and disposal groups classified as held for sale not qualifying as discontinued operations for the year ended December 31, 2024 amounted to €17 million, compared with the €22 million gains recorded for the year ended December 31, 2023.
Operating profit / (loss) before tax
As a result of the foregoing, operating profit before tax for the year ended December 31, 2024 amounted to €15,405 million, a 24.0% increase compared with the €12,419 million operating profit before tax recorded for the year ended December 31, 2023.
Tax expense or income related to profit or loss from continuing operations
Tax expense related to profit from continuing operations for the year ended December 31, 2024 amounted to €4,830 million, a 20.7% increase compared with the €4,003 million expense recorded for the year ended December 31, 2023, mainly due to the higher operating profit before tax in Mexico and Spain.
Amounts paid by BBVA under the temporary tax on credit institutions and financial credit establishments in Spain are a non-deductible expense for tax purposes.
Profit / (loss)
As a result of the foregoing, profit for the year ended December 31, 2024 amounted to €10,575 million, a 25.7% increase compared with the €8,416 million recorded for the year ended December 31, 2023.
Profit / (loss) attributable to parent company
As a result of the foregoing, profit attributable to parent company for the year ended December 31, 2024 amounted to €10,054 million, a 25.4% increase compared with the €8,019 million recorded for the year ended December 31, 2023.
Profit / (loss) attributable to non-controlling interests
Profit attributable to non-controlling interests for the year ended December 31, 2024 amounted to €521 million, a 31.2% increase compared with the €397 million profit attributable to non-controlling interests recorded for the year ended December 31, 2023.
101
Results of Operations by Operating Segment
The information contained in this section is presented under management criteria; however, for the years ended December 31, 2025, 2024 and 2023, there are no differences between the sum of the income statements of our operating segments and the Corporate Center (calculated in accordance with management criteria used to report segment financial information) and the consolidated income statement of the Group.
Following the publication of our consolidated financial statements as of and for the years ended December 31, 2024, 2023 and 2022 included in our annual report on Form 20-F for the year ended December 31, 2024, certain immaterial balance sheet amounts related to specific activities undertaken by the business units were reallocated between the operating segments and the Corporate Center. As a result, certain expenses were reallocated, in particular, between Spain, Rest of Business and the Corporate Center. For certain relevant information concerning the preparation and presentation of the financial information included in this Annual Report, see “Presentation of Financial Information”.
For the year ended December 31, 2025 | |||||||||||||||||||||||
Spain | Mexico | Turkey | South America | Rest of Business | Corporate Center | Group | |||||||||||||||||
(In Millions of Euros) | |||||||||||||||||||||||
Net interest income / (expense) | 6,588 | 11,424 | 3,079 | 4,830 | 828 | (469) | 26,280 | ||||||||||||||||
Net fees and commissions | 2,364 | 2,367 | 2,123 | 897 | 591 | (127) | 8,215 | ||||||||||||||||
Net gains (losses) on financial assets and liabilities and Exchange differences, net (1) | 723 | 788 | 394 | 568 | 382 | (200) | 2,656 | ||||||||||||||||
Other operating income and expense, net (2) | 351 | 619 | (384) | (932) | 7 | 118 | (221) | ||||||||||||||||
Gross income | 10,027 | 15,198 | 5,213 | 5,363 | 1,807 | (678) | 36,931 | ||||||||||||||||
Administration costs | (2,937) | (4,182) | (2,084) | (2,146) | (889) | (573) | (12,811) | ||||||||||||||||
Depreciation and amortization | (386) | (440) | (231) | (210) | (40) | (213) | (1,521) | ||||||||||||||||
Net margin before provisions (3) | 6,704 | 10,576 | 2,898 | 3,007 | 878 | (1,464) | 22,599 | ||||||||||||||||
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification | (649) | (3,130) | (1,000) | (1,208) | (85) | (1) | (6,073) | ||||||||||||||||
Provisions or reversal of provisions and other results | (121) | (105) | (34) | (42) | (22) | 25 | (299) | ||||||||||||||||
Operating profit / (loss) before tax | 5,933 | 7,341 | 1,863 | 1,758 | 772 | (1,440) | 16,227 | ||||||||||||||||
Tax expense or income related to profit or loss from continuing operations | (1,755) | (2,076) | (904) | (582) | (145) | 361 | (5,100) | ||||||||||||||||
Profit / (loss) from continuing operations | 4,178 | 5,265 | 959 | 1,176 | 627 | (1,079) | 11,126 | ||||||||||||||||
Profit / (loss) from discontinued operations, net and Other | — | — | — | — | — | — | — | ||||||||||||||||
Profit / (loss) | 4,178 | 5,265 | 959 | 1,176 | 627 | (1,079) | 11,126 | ||||||||||||||||
Profit / (loss) attributable to non-controlling interests | (3) | (1) | (154) | (450) | — | (7) | (615) | ||||||||||||||||
Profit / (loss) attributable to parent company | 4,175 | 5,264 | 805 | 726 | 627 | (1,086) | 10,511 | ||||||||||||||||
(1)Includes “Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net”, “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”, “Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net”, “Gains (losses) from hedge accounting, net” and “Exchange differences, net”.
(2)Includes “Dividend income”, “Share of profit or loss of entities accounted for using the equity method”, “Income from insurance and reinsurance contracts”, “Expense from insurance and reinsurance contracts”, “Other operating income” and “Other operating expense”.
(3)“Net margin before provisions” is calculated as “Gross income” less “Administration costs” and “Depreciation and amortization”.
102
For the year ended December 31, 2024 | |||||||||||||||||||||||
Spain | Mexico | Turkey | South America | Rest of Business | Corporate Center | Group | |||||||||||||||||
(In Millions of Euros) | |||||||||||||||||||||||
Net interest income / (expense) | 6,384 | 11,556 | 1,492 | 5,589 | 742 | (495) | 25,267 | ||||||||||||||||
Net fees and commissions | 2,281 | 2,443 | 2,111 | 834 | 390 | (71) | 7,988 | ||||||||||||||||
Net gains (losses) on financial assets and liabilities and Exchange differences, net (1) | 728 | 767 | 1,145 | 798 | 337 | 138 | 3,913 | ||||||||||||||||
Other operating income and expense, net (2) | 50 | 571 | (535) | (1,815) | 4 | 39 | (1,686) | ||||||||||||||||
Gross income | 9,443 | 15,337 | 4,212 | 5,405 | 1,472 | (388) | 35,481 | ||||||||||||||||
Administration costs | (2,980) | (4,170) | (1,895) | (2,341) | (710) | (564) | (12,660) | ||||||||||||||||
Depreciation and amortization | (366) | (477) | (216) | (226) | (33) | (215) | (1,533) | ||||||||||||||||
Net margin before provisions (3) | 6,097 | 10,689 | 2,101 | 2,838 | 730 | (1,168) | 21,288 | ||||||||||||||||
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification | (684) | (3,098) | (526) | (1,369) | (71) | 3 | (5,745) | ||||||||||||||||
Provisions or reversal of provisions and other results | (150) | (69) | 165 | (127) | (11) | 54 | (137) | ||||||||||||||||
Operating profit / (loss) before tax | 5,263 | 7,522 | 1,741 | 1,342 | 648 | (1,110) | 15,405 | ||||||||||||||||
Tax expense or income related to profit or loss from continuing operations | (1,508) | (2,074) | (1,014) | (313) | (138) | 215 | (4,830) | ||||||||||||||||
Profit / (loss) from continuing operations | 3,755 | 5,448 | 727 | 1,029 | 511 | (895) | 10,575 | ||||||||||||||||
Profit / (loss) | 3,755 | 5,448 | 727 | 1,029 | 511 | (895) | 10,575 | ||||||||||||||||
Profit / (loss) attributable to non-controlling interests | (3) | (1) | (116) | (394) | — | (7) | (521) | ||||||||||||||||
Profit / (loss) attributable to parent company | 3,752 | 5,447 | 611 | 635 | 511 | (901) | 10,054 | ||||||||||||||||
(1)Includes “Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net”, “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”, “Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net”, “Gains (losses) from hedge accounting, net” and “Exchange differences, net”.
(2)Includes “Dividend income”, “Share of profit or loss of entities accounted for using the equity method”, “Income from insurance and reinsurance contracts”, “Expense from insurance and reinsurance contracts”, “Other operating income” and “Other operating expense”.
(3)“Net margin before provisions” is calculated as “Gross income” less “Administration costs” and “Depreciation and amortization”.
103
For the year ended December 31, 2023 | |||||||||||||||||||||||
Spain | Mexico | Turkey | South America | Rest of Business | Corporate Center | Group | |||||||||||||||||
(In Millions of Euros) | |||||||||||||||||||||||
| Net interest income / (expense) | 5,570 | 11,054 | 1,869 | 4,394 | 539 | (336) | 23,089 | ||||||||||||||||
| Net fees and commissions | 2,124 | 2,226 | 998 | 700 | 309 | (69) | 6,288 | ||||||||||||||||
Net gains (losses) on financial assets and liabilities and Exchange differences, net (1) | 460 | 572 | 937 | 633 | 261 | (681) | 2,183 | ||||||||||||||||
Other operating income and expense, net (2) | (305) | 415 | (824) | (1,395) | 3 | 87 | (2,018) | ||||||||||||||||
| Gross income | 7,848 | 14,267 | 2,981 | 4,331 | 1,113 | (999) | 29,542 | ||||||||||||||||
| Administration costs | (2,809) | (3,946) | (1,252) | (1,785) | (560) | (553) | (10,905) | ||||||||||||||||
| Depreciation and amortization | (383) | (469) | (150) | (165) | (26) | (210) | (1,403) | ||||||||||||||||
Net margin before provisions (3) | 4,656 | 9,853 | 1,579 | 2,381 | 527 | (1,762) | 17,233 | ||||||||||||||||
| Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification | (656) | (2,499) | (118) | (1,134) | (28) | 6 | (4,428) | ||||||||||||||||
Provisions or reversal of provisions and other results | (145) | (25) | (137) | (58) | (1) | (21) | (386) | ||||||||||||||||
| Operating profit / (loss) before tax | 3,855 | 7,329 | 1,324 | 1,189 | 499 | (1,777) | 12,419 | ||||||||||||||||
| Tax expense or income related to profit or loss from continuing operations | (1,162) | (2,009) | (702) | (286) | (96) | 252 | (4,003) | ||||||||||||||||
| Profit / (loss) from continuing operations | 2,693 | 5,320 | 622 | 903 | 403 | (1,525) | 8,416 | ||||||||||||||||
| Profit / (loss) | 2,693 | 5,320 | 622 | 903 | 403 | (1,525) | 8,416 | ||||||||||||||||
| Profit / (loss) attributable to non-controlling interests | (2) | (1) | (95) | (302) | — | 3 | (397) | ||||||||||||||||
| Profit / (loss) attributable to parent company | 2,690 | 5,319 | 527 | 601 | 403 | (1,522) | 8,019 | ||||||||||||||||
(1)Includes “Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net”, “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”, “Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net”, “Gains (losses) from hedge accounting, net” and “Exchange differences, net”.
(2)Includes “Dividend income”, “Share of profit or loss of entities accounted for using the equity method”, “Income from insurance and reinsurance contracts”, “Expense from insurance and reinsurance contracts”, “Other operating income” and “Other operating expense”.
(3)“Net margin before provisions” is calculated as “Gross income” less “Administration costs” and “Depreciation and amortization”.
104
Results of Operations by Operating Segment for 2025 Compared with 2024
SPAIN
For the year ended December 31, | |||||||||||
2025 | 2024 | Change | |||||||||
| (In Millions of Euros) | (In %) | ||||||||||
| Net interest income | 6,588 | 6,384 | 3.2 | ||||||||
| Net fees and commissions | 2,364 | 2,281 | 3.7 | ||||||||
| Net gains (losses) on financial assets and liabilities and Exchange differences, net (1) | 723 | 728 | (0.7) | ||||||||
| Other operating income and expense, net | (36) | (329) | (89.0) | ||||||||
| Income and expense on insurance and reinsurance contracts | 387 | 379 | 2.1 | ||||||||
| Gross income | 10,027 | 9,443 | 6.2 | ||||||||
| Administration costs | (2,937) | (2,980) | (1.4) | ||||||||
| Depreciation and amortization | (386) | (366) | 5.4 | ||||||||
| Net margin before provisions (2) | 6,704 | 6,097 | 10.0 | ||||||||
| Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification | (649) | (684) | (5.1) | ||||||||
| Provisions or reversal of provisions and other results | (121) | (150) | (19.0) | ||||||||
| Operating profit / (loss) before tax | 5,933 | 5,263 | 12.7 | ||||||||
| Tax expense or income related to profit or loss from continuing operations | (1,755) | (1,508) | 16.4 | ||||||||
| Profit from continuing operations | 4,178 | 3,755 | 11.3 | ||||||||
| Profit / (loss) from discontinued operations, net and Other | — | — | — | ||||||||
| Profit | 4,178 | 3,755 | 11.3 | ||||||||
| Profit attributable to non-controlling interests | (3) | (3) | — | ||||||||
| Profit attributable to parent company | 4,175 | 3,752 | 11.3 | ||||||||
(1)Includes “Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net”, “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”, “Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net”, “Gains (losses) from hedge accounting, net” and “Exchange differences, net”.
(2)Calculated as “Gross income” less “Administration costs” and “Depreciation and amortization”.
(3)Not meaningful.
Net interest income
Net interest income of this operating segment for the year ended December 31, 2025 amounted to €6,588 million, a 3.2% increase compared with the €6,384 million recorded for the year ended December 31, 2024, mainly as a result of the higher contribution from the securities portfolio and the ALCO portfolio, and the lower funding costs in the wholesale portfolios, partially offset by the impact of interest rates cuts implemented by the ECB since the second half of 2024 on the consumer and household loan portfolios, which are mostly referenced to variable interest rates. The net interest margin over average total assets of this operating segment amounted to 1.49% for the year ended December 31, 2025, compared with 1.47% for the year ended December 31, 2024.
Net fees and commissions
Net fees and commissions of this operating segment for the year ended December 31, 2025 amounted to €2,364 million, a 3.7% increase compared with the €2,281 million recorded for the year ended December 31, 2024, mainly due to the increase in the volume of asset management activities and, to a lesser extent, payment systems fees (driven in part by increases in the volume of credit card loans), partially offset by the higher fees paid to third parties related to the increase in volume of asset management activities.
Net gains (losses) on financial assets and liabilities and Exchange differences, net
Net gains on financial assets and liabilities and exchange differences of this operating segment for the year ended December 31, 2025 was a net gain of €723 million, a 0.7% decrease compared with the €728 million net gain recorded for the year ended December 31, 2024, mainly as a result of the lower gains from the Global Markets unit, partially offset by the gains from certain ALCO portfolio sales and positive exchange differences.
105
Other operating income and expense, net
Other operating income and expense, net of this operating segment for the year ended December 31, 2025 amounted to a €36 million expense, an 89.0% decrease compared with the €329 million expense recorded for the year ended December 31, 2024. Other operating expense for the year ended December 31, 2024 included the impact of the temporary tax on credit institutions and financial credit establishments in Spain amounting to €285 million (which was paid in 2024), whereas the accrual of the IMIC for the year ended December 31, 2025 was recorded under “Tax expense or income related to profit or loss from continuing operations”.
Further, during 2025, the Group made the payment corresponding to the IMIC for the 2024 financial year (€295 million). However, since this payment is not required under the legal framework in place as of December 31, 2025, an asset for the amount paid (€295 million) has been recorded under the heading “General Governments” of the item “Financial assets at amortized cost - Loans and advances to customers” in the balance sheet. Therefore, the IMIC payment for the 2024 financial year was not recorded as an operating expense for the year ended December 31, 2025.
Income and expense on insurance and reinsurance contracts
Net income on insurance and reinsurance contracts of this operating segment for the year ended December 31, 2025 was €387 million, a 2.1% increase compared with the €379 million income recorded for the year ended December 31, 2024, as a result of increased insurance activity.
Administration costs
Administration costs of this operating segment for the year ended December 31, 2025 amounted to €2,937 million, a 1.4% decrease compared with the €2,980 million recorded for the year ended December 31, 2024.
Depreciation and amortization
Depreciation and amortization for the year ended December 31, 2025 was €386 million, a 5.4% increase compared with the €366 million recorded for the year ended December 31, 2024 mainly due to the increase in the depreciation expense related to IT equipment.
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification of this operating segment for the year ended December 31, 2025 amounted to a €649 million expense, a 5.1% decrease compared with the €684 million expense recorded for the year ended December 31, 2024, mainly due to the lower credit impairment requirements in the mortgage loan portfolio.
Provisions or reversal of provisions and other results
Provisions or reversal of provisions and other results of this operating segment for the year ended December 31, 2025 were a €121 million expense, a 19.0% decrease compared with the €150 million expense recorded for the year ended December 31, 2024, mainly due to higher gains from the sale of certain investments recorded under other results.
Operating profit / (loss) before tax
As a result of the foregoing, operating profit before tax of this operating segment for the year ended December 31, 2025 was €5,933 million, a 12.7% increase compared with the €5,263 million profit recorded for the year ended December 31, 2024.
Tax expense or income related to profit or loss from continuing operations
Tax expense related to profit from continuing operations of this operating segment for the year ended December 31, 2025 was €1,755 million, a 16.4% increase compared with the €1,508 million expense recorded for the year ended December 31, 2024, mainly as a result of the approximately €318 million expense recorded in connection with the accrual of the estimated amount of the IMIC for the year ended December 31, 2025 (see Note 19 to the Consolidated Financial Statements and “Item 4. Information on the Company—Business Overview—Supervision and Regulation—Principal Markets—Spain—Temporary Tax on Credit Institutions in Spain”), and the higher operating profit before tax recorded for the year ended December 31, 2025. The effective tax rate increased to 29.6% for the year ended December 31, 2025 from 28.7% for the year ended December 31, 2024.
106
Profit attributable to parent company
As a result of the foregoing, profit attributable to parent company of this operating segment for the year ended December 31, 2025 amounted to €4,175 million, an 11.3% increase compared with the €3,752 million profit recorded for the year ended December 31, 2024.
107
MEXICO
For the year ended December 31, | |||||||||||
2025 | 2024 | Change | |||||||||
| (In Millions of Euros) | (In %) | ||||||||||
| Net interest income | 11,424 | 11,556 | (1.1) | ||||||||
| Net fees and commissions | 2,367 | 2,443 | (3.1) | ||||||||
| Net gains (losses) on financial assets and liabilities and Exchange differences, net (1) | 788 | 767 | 2.7 | ||||||||
| Other operating income and expense, net | (346) | (342) | 1.0 | ||||||||
| Income and expense on insurance and reinsurance contracts | 965 | 913 | 5.7 | ||||||||
| Gross income | 15,198 | 15,337 | (0.9) | ||||||||
| Administration costs | (4,182) | (4,170) | 0.3 | ||||||||
| Depreciation and amortization | (440) | (477) | (7.7) | ||||||||
| Net margin before provisions (2) | 10,576 | 10,689 | (1.1) | ||||||||
| Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification | (3,130) | (3,098) | 1.0 | ||||||||
| Provisions or reversal of provisions and other results | (105) | (69) | 52.6 | ||||||||
| Operating profit / (loss) before tax | 7,341 | 7,522 | (2.4) | ||||||||
| Tax expense or income related to profit or loss from continuing operations | (2,076) | (2,074) | 0.1 | ||||||||
| Profit | 5,265 | 5,448 | (3.4) | ||||||||
| Profit attributable to non-controlling interests | (1) | (1) | — | ||||||||
| Profit attributable to parent company | 5,264 | 5,447 | (3.4) | ||||||||
(1)Includes “Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net”, “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”, “Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net”, “Gains (losses) from hedge accounting, net” and “Exchange differences, net”.
(2)“Net margin before provisions” is calculated as “Gross income” less “Administration costs” and “Depreciation and amortization”.
In the year ended December 31, 2025, the Mexican peso depreciated by 8.5% against the euro in average terms compared with the year ended December 31, 2024, adversely affecting the results of operations of the Mexico operating segment for the year ended December 31, 2025 expressed in euros. See “―Factors Affecting the Comparability of our Results of Operations and Financial Condition―Trends in Exchange Rates”.
Net interest income
Net interest income of this operating segment for the year ended December 31, 2025 amounted to €11,424 million, a 1.1% decrease compared with the €11,556 million recorded for the year ended December 31, 2024, mainly as a result of the depreciation of the Mexican peso against the euro, partially offset by increases in the volume of the mortgage and consumer loan portfolios and lower wholesale funding costs. At constant exchange rates, there was an 8.1% increase in net interest income. The net interest margin over average total assets of this operating segment amounted to 6.74% for the year ended December 31, 2025, compared with 6.73% for the year ended December 31, 2024.
Net fees and commissions
Net fees and commissions of this operating segment for the year ended December 31, 2025 amounted to €2,367 million, a 3.1% decrease compared with the €2,443 million recorded for the year ended December 31, 2024, mainly due to the depreciation of the Mexican peso against the euro and the increase in commissions paid to third parties in relation to payment systems fees, offset, to a great extent, by the increase in payment systems fees and, to a lesser extent, the increase in fees received related to asset management activities (mutual and pension funds), as a result of the increase in the volume of such funds. At constant exchange rates, there was a 6.0% increase in net fees and commissions.
Net gains (losses) on financial assets and liabilities and Exchange differences, net
Net gains on financial assets and liabilities and exchange differences of this operating segment for the year ended December 31, 2025 were €788 million, a 2.7% increase compared with the €767 million gain recorded for the year ended December 31, 2024, mainly as a result of the higher gains from the ALCO portfolio resulting from the repurchase of bonds, partially offset by the depreciation of the Mexican peso against the euro. At constant exchange rates, there was a 12.3% increase in net gains on financial assets and liabilities and exchange differences.
108
Other operating income and expense, net
Other operating income and expense, net of this operating segment for the year ended December 31, 2025 was a net expense of €346 million, a 1.0% increase compared with the €342 million net expense recorded for the year ended December 31, 2024, mainly as a result of the higher contributions made to the Deposit Guarantee Fund, partially offset by the depreciation of the Mexican peso against the euro. At constant exchange rates, there was a 10.5% increase in net expense.
Income and expense on insurance and reinsurance contracts
Net income on insurance and reinsurance contracts of this operating segment for the year ended December 31, 2025 was €965 million, a 5.7% increase compared with the €913 million net income recorded for the year ended December 31, 2024, due mainly to the increase in insurance premiums, attributable in part to a higher volume of insurance sales, partially offset by the depreciation of the Mexican peso against the euro. At constant exchange rates, there was a 15.6% increase in income on insurance and reinsurance contracts.
Administration costs
Administration costs of this operating segment for the year ended December 31, 2025 were €4,182 million, a 0.3% increase compared with the €4,170 million recorded for the year ended December 31, 2024, mainly as a result of the higher general expenses related mainly to IT and the higher personnel expenses driven by the higher salaries and the increase in the number of employees, partially offset by the depreciation of the Mexican peso against the euro. At constant exchange rates, administration costs increased by 9.6%.
Depreciation and amortization
Depreciation and amortization for the year ended December 31, 2025 was €440 million, a 7.7% decrease compared with the €477 million recorded for the year ended December 31, 2024. At constant exchange rates, there was a 0.9% increase in depreciation and amortization.
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification of this operating segment for the year ended December 31, 2025 was a €3,130 million expense, a 1.0% increase compared with the €3,098 million expense recorded for the year ended December 31, 2024, mainly due to higher credit impairment requirements, in particular, in the retail portfolio as a result of the worsening of the macroeconomic scenario in Mexico (see “—Factors Affecting the Comparability of our Results of Operations and Financial Condition—Macroeconomic and geopolitical conditions”), as well as higher credit impairment requirements in retail loans, driven by the increase in the volume of such loans, partially offset by the depreciation of the Mexican peso against the euro. At constant exchange rates, there was a 10.5% increase in impairment on financial assets not measured at fair value through profit or loss or net gains by modification.
Provisions or reversal of provisions and other results
Provisions or reversal of provisions and other results of this operating segment for the year ended December 31, 2025 were a €105 million expense, a 52.6% increase compared with the €69 million expense recorded for the year ended December 31, 2024, mainly due to the higher provisions related to contingent and legal risks. At constant exchange rates, there was a 66.8% decrease in provisions and other results.
Operating profit / (loss) before tax
As a result of the foregoing, operating profit before tax of this operating segment for the year ended December 31, 2025 was €7,341 million, a 2.4% decrease compared with the €7,522 million of operating profit before tax recorded for the year ended December 31, 2024. At constant exchange rates, there was a 6.7% increase in operating profit before tax.
Tax expense or income related to profit or loss from continuing operations
Tax expense related to profit from continuing operations of this operating segment for the year ended December 31, 2025 was €2,076 million, a 0.1% increase compared with the €2,074 million expense recorded for the year ended December 31, 2024. The effective tax rate amounted to 28.3% of operating profit before tax for the year ended December 31, 2025, and 27.6% for the year ended December 31, 2024. At constant exchange rates, there was a 9.5% increase in tax expense related to profit from continuing operations.
109
Profit attributable to parent company
As a result of the foregoing, profit attributable to parent company of this operating segment for the year ended December 31, 2025 amounted to €5,264 million, a 3.4% decrease compared with the €5,447 million recorded for the year ended December 31, 2024. At constant exchange rates, there was a 5.7% increase in profit attributable to parent company.
110
TURKEY
For the year ended December 31, | |||||||||||
2025 | 2024 | Change | |||||||||
| (In Millions of Euros) | (In %) | ||||||||||
| Net interest income | 3,079 | 1,492 | 106.4 | ||||||||
| Net fees and commissions | 2,123 | 2,111 | 0.6 | ||||||||
| Net gains (losses) on financial assets and liabilities and Exchange differences, net (1) | 394 | 1,145 | (65.6) | ||||||||
| Other operating income and expense, net | (478) | (595) | (19.8) | ||||||||
| Income and expense on insurance and reinsurance contracts | 94 | 60 | 55.7 | ||||||||
| Gross income | 5,213 | 4,212 | 23.8 | ||||||||
| Administration costs | (2,084) | (1,895) | 10.0 | ||||||||
| Depreciation and amortization | (231) | (216) | 7.1 | ||||||||
| Net margin before provisions (2) | 2,898 | 2,101 | 37.9 | ||||||||
| Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification | (1,000) | (526) | 90.1 | ||||||||
| Provisions or reversal of provisions and other results | (34) | 165 | n.m. (2) | ||||||||
| Operating profit / (loss) before tax | 1,863 | 1,741 | 7.1 | ||||||||
| Tax expense or income related to profit or loss from continuing operations | (904) | (1,014) | (10.8) | ||||||||
| Profit | 959 | 727 | 31.9 | ||||||||
| Profit attributable to non-controlling interests | (154) | (116) | 32.5 | ||||||||
| Profit attributable to parent company | 805 | 611 | 31.8 | ||||||||
(1)Includes “Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net”, “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”, “Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net”, “Gains (losses) from hedge accounting, net” and “Exchange differences, net”.
(2)“Net margin before provisions” is calculated as “Gross income” less “Administration costs” and “Depreciation and amortization”.
(3)Not meaningful.
As of December 31, 2025, the Turkish lira depreciated by 27.2% against the euro compared to December 31, 2024, adversely affecting the results of operations of the Turkey operating segment for the year ended December 31, 2025 expressed in euros (as the period-end exchange rates of the Turkish lira are used to convert income statement items pursuant to IAS 21 for the years ended December 31, 2025 and 2024, respectively). See “―Factors Affecting the Comparability of our Results of Operations and Financial Condition―Trends in Exchange Rates”.
Since the first half of 2022, the Turkish economy has been considered to be hyperinflationary as defined by IAS 29 “Financial Reporting in Hyperinflationary Economies”. See “Presentation of Financial Information—Hyperinflationary Economies” and Note 2.2.18 to the Consolidated Financial Statements for information on the impact of hyperinflation accounting. Regulation and monetary policy, including the liraization strategy adopted by the CBRT to protect the Turkish lira, has affected this operating segment. See “Item 4. Information on the Company―Business Overview—Supervision and Regulation—Principal Markets—Turkey”.
Net interest income
Net interest income of this operating segment for the year ended December 31, 2025 amounted to €3,079 million compared with the €1,492 million recorded for the year ended December 31, 2024, as a result mainly of the higher volume of Turkish lira-denominated loans supported by the lessening of the loan reserve requirements by the CBRT throughout 2025, and the higher customer spread (calculated as the average rate at which assets are remunerated, less the equivalent average rate for deposits), partially offset by the depreciation of the Turkish lira against the euro, and, to a lesser extent, the higher cost of wholesale funding. The year-on-year comparison was positively affected by changes in the reserve requirement for foreign currency deposits, which was set at 8.0% as of February 2024 and reduced in September 2024 (5.0%), November 2024 (4.0%) and June 2025 (2.5%) (see “Item 4. Information on the Company―Business Overview—Supervision and Regulation—Principal Markets—Turkey”), and which requires Garanti BBVA to make Turkish lira-denominated deposits with the CBRT in such proportion with respect to all foreign currency-denominated deposits and participation funds, excluding those obtained from banks abroad, regardless of their maturities. The net interest margin over average total assets of this operating segment amounted to 3.56% for the year ended December 31, 2025, compared with 1.98% for the year ended December 31, 2024.
111
Net fees and commissions
Net fees and commissions of this operating segment for the year ended December 31, 2025 amounted to €2,123 million, a 0.6% increase compared with the €2,111 million recorded for the year ended December 31, 2024, mainly as a result of the increase in payment systems fees supported by the increase in the maximum credit card fees banks may charge in Turkey pursuant to the regulation established by the CBRT in November 2024 and the increase in the volume of asset management activities, partially offset by the depreciation of the Turkish lira against the euro and the increase in fees paid to third parties driven by the increase in payment systems fee income. At constant exchange rates, there was a 32.3% increase in net fees and commissions.
Net gains (losses) on financial assets and liabilities and Exchange differences, net
Net gains on financial assets and liabilities and exchange differences of this operating segment for the year ended December 31, 2025 amounted to €394 million, a 65.6% decrease compared with the €1,145 million gain recorded for the year ended December 31, 2024, mainly driven by a negative foreign currency position and, to a lesser extent, the depreciation of the Turkish lira against the euro, partially offset by higher gains in the trading portfolio from the Global Markets unit and the sale of certain securities portfolios. At constant exchange rates, net gains on financial assets and liabilities and exchange differences decreased by 55.4%.
Other operating income and expense, net
Other operating income and expense, net of this operating segment for the year ended December 31, 2025 was a €478 million net expense, a 19.8% decrease compared with the €595 million net expense recorded for the year ended December 31, 2024. In the year ended December 31, 2025, other operating income and expense, net, was positively affected by the lower loss on the net monetary position resulting from the adjustment for hyperinflation (€878 million and €1,512 million in the years ended December 31, 2025 and 2024, respectively) and negatively affected by the lower positive impact of the revaluation of bonds linked to inflation in the period (€674 million and €1,164 million, respectively, in the years ended December 31, 2025 and 2024) and the depreciation of the Turkish lira against the euro. At constant exchange rates, there was a 48.3% decrease in net expense. See “Presentation of Financial Information—Hyperinflationary Economies” and Note 2.2.18 to the Consolidated Financial Statements for information on the impact of hyperinflation accounting.
Income and expense on insurance and reinsurance contracts
Net income on insurance and reinsurance contracts of this operating segment for the year ended December 31, 2025 was €94 million, a 55.7% increase compared with the €60 million income recorded for the year ended December 31, 2024, mainly due to the higher insurance sales by the insurance companies.
Administration costs
Administration costs of this operating segment for the year ended December 31, 2025 amounted to €2,084 million, a 10.0% increase compared with the €1,895 million recorded for the year ended December 31, 2024, mainly as a result of the increase in personnel expenses, driven by the increase in the number of employees and salary updates, and the increase in general expenses (technology and marketing) driven to a great extent by the high average inflation rates, partially offset by the depreciation of the Turkish lira. At constant exchange rates, administration costs increased by 44.3%, which was above Turkey’s inflation rate for the year.
Depreciation and amortization
Depreciation and amortization for the year ended December 31, 2025 was €231 million, a 7.1% increase compared with the €216 million recorded for the year ended December 31, 2024, mainly as a result of the increase in the depreciation expense related to IT equipment, offset in part by the depreciation of the Turkish lira. At constant exchange rates, there was a 22.5% increase in depreciation and amortization.
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification of this operating segment for the year ended December 31, 2025 was a €1,000 million expense, a 90.1% increase compared with the €526 million expense recorded for the year ended December 31, 2024, mainly as a result of the increase in the expected losses related to the retail portfolio (mainly related to consumer and credit card loans, which volumes increased and also required higher credit impairments), partially offset by lower expected losses in the corporate loan portfolio and the depreciation of the Turkish lira against the euro.
112
Provisions or reversal of provisions and other results
Provisions or reversal of provisions and other results of this operating segment for the year ended December 31, 2025 were a €34 million expense compared with the €165 million income recorded for the year ended December 31, 2024, mainly due to higher provisions for contingent risks.
Operating profit / (loss) before tax
As a result of the foregoing, operating profit before tax of this operating segment for the year ended December 31, 2025 was €1,863 million, a 7.1% increase compared with the €1,741 million recorded for the year ended December 31, 2024.
Tax expense or income related to profit or loss from continuing operations
Tax expense related to profit from continuing operations of this operating segment for the year ended December 31, 2025 was €904 million, a 10.8% decrease compared with the €1,014 million expense recorded for the year ended December 31, 2024. The tax expense for the year ended December 31, 2025 was lower than for the year ended December 31, 2024 notwithstanding the year-on-year increase in operating profit before tax, mainly as a result of the application of hyperinflationary accounting in assessing the tax burden in Turkey (with lower inflation and lower loss from the net monetary position, the effective tax rate is also lower). At constant exchange rates, there was an 18.5% increase in tax expense related to profit or loss from continuing operations.
Profit attributable to non-controlling interests
Profit attributable to non-controlling interests of this operating segment for the year ended December 31, 2025 amounted to €154 million, a 32.5% increase compared with the €116 million recorded for the year ended December 31, 2024, as a result, in part, of the increase in profit.
Profit attributable to parent company
As a result of the foregoing, profit attributable to parent company of this operating segment for the year ended December 31, 2025 amounted to €805 million, a 31.8% increase compared with the €611 million recorded for the year ended December 31, 2024.
113
SOUTH AMERICA
For the year ended December 31, | |||||||||||
2025 | 2024 | Change | |||||||||
| (In Millions of Euros) | (In %) | ||||||||||
| Net interest income | 4,830 | 5,589 | (13.6) | ||||||||
| Net fees and commissions | 897 | 834 | 7.6 | ||||||||
| Net gains (losses) on financial assets and liabilities and Exchange differences, net (1) | 568 | 798 | (28.8) | ||||||||
| Other operating income and expense, net | (1,008) | (1,935) | (47.9) | ||||||||
| Income and expense on insurance and reinsurance contracts | 76 | 120 | (36.7) | ||||||||
| Gross income | 5,363 | 5,405 | (0.8) | ||||||||
| Administration costs | (2,146) | (2,341) | (8.3) | ||||||||
| Depreciation and amortization | (210) | (226) | (7.2) | ||||||||
| Net margin before provisions (2) | 3,007 | 2,838 | 6.0 | ||||||||
| Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification | (1,208) | (1,369) | (11.8) | ||||||||
| Provisions or reversal of provisions and other results | (42) | (127) | (67.1) | ||||||||
| Operating profit / (loss) before tax | 1,758 | 1,342 | 31.0 | ||||||||
| Tax expense or income related to profit or loss from continuing operations | (582) | (313) | 86.1 | ||||||||
| Profit | 1,176 | 1,029 | 14.3 | ||||||||
| Profit attributable to non-controlling interests | (450) | (394) | 14.2 | ||||||||
| Profit attributable to parent company | 726 | 635 | 14.3 | ||||||||
(1)Includes “Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net”, “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”, “Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net”, “Gains (losses) from hedge accounting, net” and “Exchange differences, net”.
(2)“Net margin before provisions” is calculated as “Gross income” less “Administration costs” and “Depreciation and amortization”.
In the year ended December 31, 2025, the Argentine peso depreciated by 37.4% against the euro (considering the period-end exchange rates used to convert income statement items for the years ended December 31, 2025 and 2024, respectively, pursuant to IAS 21) and the Colombian peso depreciated by 3.7% against the euro in average terms compared with the year ended December 31, 2024. On the other hand, the Peruvian sol appreciated by 0.7% against the euro in average terms compared with the year ended December 31, 2024. Overall, changes in exchange rates adversely affected the results of operations of the South America operating segment for the year ended December 31, 2025 expressed in euros. See “―Factors Affecting the Comparability of our Results of Operations and Financial Condition―Trends in Exchange Rates”.
As of and for the years ended December 31, 2025 and 2024, the Argentine and Venezuelan economies were considered to be hyperinflationary as defined by IAS 29 “Financial Reporting in Hyperinflationary Economies” (see “Presentation of Financial Information—Hyperinflationary Economies” and Note 2.2.18 to the Consolidated Financial Statements for information on the impact of hyperinflation accounting).
Net interest income
Net interest income of this operating segment for the year ended December 31, 2025 amounted to €4,830 million, a 13.6% decrease compared with the €5,589 million recorded for the year ended December 31, 2024, mainly as a result of the depreciation of the Argentine peso against the euro and lower yields in the loan portfolio driven in part by the decline in the monetary policy rate in Argentina. At constant exchange rates, there was a 1.6% increase in net interest income. The net interest margin over average total assets of this operating segment amounted to 6.59% for the year ended December 31, 2025, compared with 8.18% for the year ended December 31, 2024.
Net fees and commissions
Net fees and commissions of this operating segment for the year ended December 31, 2025 amounted to €897 million of income, a 7.6% increase compared with the €834 million of income recorded for the year ended December 31, 2024, mainly due to increases in payment systems fees (in particular, related to credit cards), as a result of increases in the volume of transactions and commission rates in Argentina, partially offset by the depreciation of the Argentine peso against the euro, and increased commissions paid to third parties as a result of higher activity. At constant exchange rates, there was a 20.7% increase in net fees and commissions.
114
Net gains (losses) on financial assets and liabilities and Exchange differences, net
Net gains on financial assets and liabilities and exchange differences of this operating segment for the year ended December 31, 2025 were €568 million, a 28.8% decrease compared with the €798 million gain recorded for the year ended December 31, 2024, mainly due to the lower gains on exchange differences from the Global Markets unit in Colombia and, to a lesser extent, lower gains on exchange differences in the ALCO portfolio in Argentina, partially offset by higher trading gains in the Global Markets unit in Colombia. At constant exchange rates, there was a 20.4% decrease in net gains on financial assets and liabilities and exchange differences.
Other operating income and expense, net
Other operating income and expense, net of this operating segment for the year ended December 31, 2025 was a €1,008 million expense, a 47.9% decrease compared with the €1,935 million expense recorded for the year ended December 31, 2024, mainly driven by the lower loss on the net monetary position resulting from the adjustment for hyperinflation in Argentina, which resulted in a monetary loss of €356 million in the year ended December 31, 2025, compared to the €1,419 million monetary loss recorded for the year ended December 31, 2024, partially offset by the higher loss on the net monetary position in Venezuela, which resulted in a monetary loss of €183 million in the year ended December 31, 2025 compared to the €9 million monetary loss recorded in the year ended December 31, 2024. At constant exchange rates, there was a 44.7% decrease in net other operating expense.
Income and expense on insurance and reinsurance contracts
Net income on insurance and reinsurance contracts of this operating segment for the year ended December 31, 2025 was €76 million, a 36.7% decrease compared with the €120 million income recorded for the year ended December 31, 2024. At constant exchange rates, there was a 29.5% decrease in net income on insurance and reinsurance contracts.
Administration costs
Administration costs of this operating segment for the year ended December 31, 2025 amounted to €2,146 million, an 8.3% decrease compared with the €2,341 million recorded for the year ended December 31, 2024, mainly as a result of the depreciation of the Argentine peso against the euro, partially offset by increases in personnel expenses, mainly driven by salary updates (aimed at compensating the loss of purchasing power due to inflation) and certain general expenses in Peru and Argentina (mainly related to marketing and IT). At constant exchange rates, there was a 5.9% increase in administration costs.
Depreciation and amortization
Depreciation and amortization for the year ended December 31, 2025 was €210 million, a 7.2% decrease compared with the €226 million recorded for the year ended December 31, 2024, mainly due to the decrease in the depreciation expense related to IT equipment in Argentina. At constant exchange rates, there was a 3.7% decrease in depreciation and amortization.
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification of this operating segment for the year ended December 31, 2025 was a €1,208 million expense, an 11.8% decrease compared with the €1,369 million expense recorded for the year ended December 31, 2024, mainly as a result of lower credit impairment requirements in the retail loan portfolios in Peru and Colombia and the depreciation of the Argentine peso against the euro, partially offset by the higher credit impairment requirements in the retail loan portfolio in Argentina, as a result in part of the greater credit activity (as we increased private lending as a result of lower government borrowings). At constant exchange rates, there was a 5.2% decrease in impairment on financial assets not measured at fair value through profit or loss or net gains by modification.
Provisions or reversal of provisions and other results
Provisions or reversal of provisions and other results of this operating segment for the year ended December 31, 2025 were a €42 million expense, a 67.1% decrease compared with the €127 million expense recorded for the year ended December 31, 2024, attributable mainly due to higher gains on non-financial assets in Argentina recorded under other results and lower provisions in Peru and Argentina. At constant exchange rates, there was a 64.4% decrease in provisions and other results.
115
Operating profit / (loss) before tax
As a result of the foregoing, operating profit before tax of this operating segment for the year ended December 31, 2025 was €1,758 million, a 31.0% increase compared with the €1,342 million recorded for the year ended December 31, 2024.
Tax expense or income related to profit or loss from continuing operations
Tax expense related to profit from continuing operations of this operating segment for the year ended December 31, 2025 was €582 million, an 86.1% increase compared with the €313 million expense recorded for the year ended December 31, 2024, as a result mainly of the higher operating profit before tax and the impact of the hyperinflation-related adjustments in Argentina. The effective tax rate amounted to 33.1% of operating profit before tax for the year ended December 31, 2025, and 23.3% for the year ended December 31, 2024.
Profit attributable to non-controlling interests
Profit attributable to non-controlling interests of this operating segment for the year ended December 31, 2025 amounted to €450 million, a 14.2% increase compared with the €394 million recorded for the year ended December 31, 2024, mainly due to the higher operating profit before tax. At constant exchange rates, there was a 54.4% increase in profit attributable to non-controlling interests.
Profit attributable to parent company
As a result of the foregoing, profit attributable to parent company of this operating segment for the year ended December 31, 2025 amounted to €726 million, a 14.3% increase compared with the €635 million recorded for the year ended December 31, 2024. At constant exchange rates, there was a 71.5% increase in profit attributable to parent company.
116
REST OF BUSINESS
For the year ended December 31, | |||||||||||
2025 | 2024 | Change | |||||||||
| (In Millions of Euros) | (In %) | ||||||||||
Net interest income | 828 | 742 | 11.6 | ||||||||
Net fees and commissions | 591 | 390 | 51.3 | ||||||||
Net gains (losses) on financial assets and liabilities and Exchange differences, net (1) | 382 | 337 | 13.6 | ||||||||
Other operating income and expense, net | 4 | 2 | 107.8 | ||||||||
Income and expense on insurance and reinsurance contracts | 3 | 2 | 62.2 | ||||||||
Gross income | 1,807 | 1,472 | 22.8 | ||||||||
Administration costs | (889) | (710) | 25.3 | ||||||||
Depreciation and amortization | (40) | (33) | 22.2 | ||||||||
Net margin before provisions (2) | 878 | 730 | 20.3 | ||||||||
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification | (85) | (71) | 19.5 | ||||||||
Provisions or reversal of provisions and other results | (22) | (11) | 98.3 | ||||||||
Operating profit / (loss) before tax | 772 | 648 | 19.1 | ||||||||
Tax expense or income related to profit or loss from continuing operations | (145) | (138) | 5.2 | ||||||||
Profit | 627 | 511 | 22.9 | ||||||||
Profit attributable to non-controlling interests | — | — | — | ||||||||
Profit attributable to parent company | 627 | 511 | 22.9 | ||||||||
(1)Includes “Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net”, “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”, “Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net”, “Gains (losses) from hedge accounting, net” and “Exchange differences, net”.
(2)“Net margin before provisions” is calculated as “Gross income” less “Administration costs” and “Depreciation and amortization”.
(3)Not meaningful.
In the year ended December 31, 2025, the U.S. dollar depreciated by 4.3% against the euro in average terms compared with the year ended December 31, 2024, adversely affecting the results of operations of the Rest of Business operating segment for the year ended December 31, 2025 expressed in euros. See “―Factors Affecting the Comparability of our Results of Operations and Financial Condition―Trends in Exchange Rates”.
Net interest income
Net interest income of this operating segment for the year ended December 31, 2025 amounted to €828 million, an 11.6% increase compared with the €742 million recorded for the year ended December 31, 2024, mainly due to the increase in the corporate and investment banking activity of the New York branch, supported by the increase in loan activity, in particular, in the wholesale portfolio, and careful price management, partially offset by the depreciation of the U.S. dollar against the euro and decreased activity in Europe. At constant exchange rates, there was a 15.9% increase in net interest income. The net interest margin over average total assets of this operating segment amounted to 1.16% for the year ended December 31, 2025 compared with 1.24% for the year ended December 31, 2024.
Net fees and commissions
Net fees and commissions of this operating segment for the year ended December 31, 2025 amounted to €591 million, a 51.3% increase compared with the €390 million recorded for the year ended December 31, 2024 mainly due to the higher fees paid to BBVA in connection with the debt issuances in which BBVA Securities Inc., our broker-dealer in the United States, acted as underwriter and higher commissions charged to transactional banking clients, partially offset by the depreciation of the U.S. dollar against the euro. At constant exchange rates, there was a 56.0% increase in net fees and commissions.
Net gains (losses) on financial assets and liabilities and Exchange differences, net
Net gains on financial assets and liabilities and exchange differences of this operating segment for the year ended December 31, 2025 was €382 million, a 13.6% increase compared with the €337 million net gain recorded for the year ended December 31, 2024, mainly due to the higher positive exchange differences in Asia and the higher trading gains in the New York branch and in BBVA Securities Inc. mainly related to equity brokerage activity, partially offset by the depreciation of the U.S. dollar against the euro and lower trading gains in Europe. At constant exchange rates, there was a 19.4% increase in net gains on financial assets and liabilities and exchange differences.
117
Other operating income and expense, net
Other operating income and expense, net of this operating segment for the year ended December 31, 2025 was €4 million income, compared with the €2 million income for the year ended December 31, 2024.
Income and expense on insurance and reinsurance contracts
Income on insurance and reinsurance contracts for the year ended December 31, 2025 was €3 million, compared with the €2 million of income recorded for the year ended December 31, 2024.
Administration costs
Administration costs of this operating segment for the year ended December 31, 2025 amounted to €889 million, a 25.3% increase compared with the €710 million recorded for the year ended December 31, 2024, mainly due to increases in personnel expenses in the branches located in Europe and New York, due to new hires and investment in strategic projects, partially offset by the depreciation of the U.S. dollar against the euro. At constant exchange rates, there was a 29.7% increase in administration costs.
Depreciation and amortization
Depreciation and amortization for the year ended December 31, 2025 was €40 million, a 22.2% increase compared with the €33 million recorded for the year ended December 31, 2024. At constant exchange rates, there was a 26.2% increase in depreciation and amortization.
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification of this operating segment for the year ended December 31, 2025 was a €85 million expense, a 19.5% increase compared with the €71 million expense recorded for the year ended December 31, 2024, mainly as a result of the higher credit impairment requirements in the corporate and investment banking loan portfolios in the United States, partially offset by the lower credit impairments in the household portfolio in Europe.
Provisions or reversal of provisions and other results
Provisions or reversal of provisions and other results of this operating segment for the year ended December 31, 2025 were a €22 million expense, a 98.3% increase compared with the €11 million expense recorded for the year ended December 31, 2024.
Operating profit / (loss) before tax
As a result of the foregoing, operating profit before tax of this operating segment for the year ended December 31, 2025 was €772 million, a 19.1% increase compared with the €648 million recorded for the year ended December 31, 2024. At constant exchange rates, there was a 25.2% increase in operating profit before tax.
Tax expense or income related to profit or loss from continuing operations
Tax expense related to profit from continuing operations of this operating segment for the year ended December 31, 2025 was €145 million, a 5.2% increase compared with the €138 million expense recorded for the year ended December 31, 2024. At constant exchange rates, there was a 9.6% increase in tax expense related to profit from continuing operations.
Profit attributable to parent company
As a result of the foregoing, profit attributable to parent company of this operating segment for the year ended December 31, 2025 amounted to €627 million, a 22.9% increase compared with the €511 million recorded for the year ended December 31, 2024. At constant exchange rates, there was a 29.4% increase in profit attributable to parent company.
118
CORPORATE CENTER
For the year ended December 31, | |||||||||||
2025 | 2024 | Change | |||||||||
| (In Millions of Euros) | (In %) | ||||||||||
Net interest income / (expense) | (469) | (495) | (5.3) | ||||||||
Net fees and commissions | (127) | (71) | 80.4 | ||||||||
Net gains (losses) on financial assets and liabilities and Exchange differences, net (1) | (200) | 138 | n.m. (2) | ||||||||
Other operating income and expense, net | 116 | 37 | 212.7 | ||||||||
Income and expense on insurance and reinsurance contracts | 2 | 2 | — | ||||||||
Gross income | (678) | (388) | 74.5 | ||||||||
Administration costs | (573) | (564) | 1.6 | ||||||||
Depreciation and amortization | (213) | (215) | (0.9) | ||||||||
Net margin before provisions (3) | (1,464) | (1,168) | 25.4 | ||||||||
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification | (1) | 3 | n.m. (2) | ||||||||
Provisions or reversal of provisions and other results | 25 | 54 | (54.3) | ||||||||
Operating profit / (loss) before tax | (1,440) | (1,110) | 29.8 | ||||||||
Tax expense or income related to profit or loss from continuing operations | 361 | 215 | 68.1 | ||||||||
Profit / (loss) | (1,079) | (895) | 20.6 | ||||||||
Profit / (loss) attributable to non-controlling interests | (7) | (7) | — | ||||||||
Profit / (loss) attributable to parent company | (1,086) | (901) | 20.5 | ||||||||
(1)Includes “Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net”, “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”, “Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net”, “Gains (losses) from hedge accounting, net” and “Exchange differences, net”.
(2)Not meaningful.
(3)“Net margin before provisions” is calculated as “Gross income” less “Administration costs” and “Depreciation and amortization”.
Net interest income / (expense)
Net interest expense of the Corporate Center for the year ended December 31, 2025 was €469 million, a 5.3% decrease compared with the €495 million net expense recorded for the year ended December 31, 2024, mainly due to lower funding costs of investments.
Net fees and commissions
Net fees and commissions of the Corporate Center for the year ended December 31, 2025 amounted to a €127 million expense, an 80.4% increase compared with the €71 million expense recorded for the year ended December 31, 2024, mainly as a result of the higher fees paid by BBVA in connection with the debt issuances carried out by Banco Bilbao Vizcaya Argentaria, S.A. (the parent company of the Group).
Net gains (losses) on financial assets and liabilities and Exchange differences, net
Net losses on financial assets and liabilities and exchange differences of the Corporate Center for the year ended December 31, 2025 were €200 million compared with the €138 million net gains recorded for the year ended December 31, 2024, mainly as a result of losses from foreign exchange hedging, in particular, with respect to the Mexican peso, the lower gains on certain U.S. bonds driven by the depreciation of the U.S. dollar and the lower gains in the ALCO portfolio, partially offset by higher gains in the non-trading portfolio from the revaluation of certain venture capital investments.
Other operating income and expense, net
Other operating income and expense, net of the Corporate Center for the year ended December 31, 2025 was €116 million of net income, compared with the €37 million net income recorded for the year ended December 31, 2024.
Administration costs
Administration costs of the Corporate Center for the year ended December 31, 2025 amounted to €573 million, a 1.6% increase compared with the €564 million recorded for the year ended December 31, 2024.
119
Depreciation and amortization
Depreciation and amortization of the Corporate Center for the year ended December 31, 2025 was €213 million, a 0.9% decrease compared with the €215 million recorded for the year ended December 31, 2024.
Provisions or reversal of provisions and other results
Provisions or reversal of provisions and other results of the Corporate Center for the year ended December 31, 2025 was €25 million income, a 54.3% decrease compared with the €54 million income recorded for the year ended December 31, 2024, mainly due to losses from certain investments in associates.
Operating profit / (loss) before tax
As a result of the foregoing, operating loss before tax of the Corporate Center for the year ended December 31, 2025 was €1,440 million, a 29.8% increase compared with the €1,110 million loss recorded for the year ended December 31, 2024.
Tax expense or income related to profit or loss from continuing operations
Tax income related to loss from continuing operations of the Corporate Center for the year ended December 31, 2025 amounted to €361 million, a 68.1% increase compared with the €215 million income recorded for the year ended December 31, 2024 mainly due to the higher operating loss before tax and the adjustment in the estimate of the annual tax rate for the BBVA Group, which reflects the Group’s reassessment of the coverage needs for the identified tax risks and certain deferred tax assets corresponding to the Group in Spain, which had not previously been recorded and were first recognized in the current period (see Note 19 to the Consolidated Financial Statements).
Profit / (loss) attributable to parent company
As a result of the foregoing, loss attributable to parent company of the Corporate Center for the year ended December 31, 2025 was €1,086 million, a 20.5% increase compared with the €901 million loss recorded for the year ended December 31, 2024.
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Results of Operations by Operating Segment for 2024 Compared with 2023
SPAIN
For the year ended December 31, | |||||||||||
2024 | 2023 | Change | |||||||||
| (In Millions of Euros) | (In %) | ||||||||||
| Net interest income | 6,384 | 5,570 | 14.6 | ||||||||
| Net fees and commissions | 2,281 | 2,124 | 7.4 | ||||||||
| Net gains (losses) on financial assets and liabilities and Exchange differences, net (1) | 728 | 460 | 58.3 | ||||||||
| Other operating income and expense, net | (329) | (658) | (50.0) | ||||||||
| Income and expense on insurance and reinsurance contracts | 379 | 353 | 7.6 | ||||||||
| Gross income | 9,443 | 7,848 | 20.3 | ||||||||
| Administration costs | (2,980) | (2,809) | 6.1 | ||||||||
| Depreciation and amortization | (366) | (383) | (4.4) | ||||||||
| Net margin before provisions (2) | 6,097 | 4,656 | 30.9 | ||||||||
| Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification | (684) | (656) | 4.3 | ||||||||
| Provisions or reversal of provisions and other results | (150) | (145) | 3.2 | ||||||||
| Operating profit / (loss) before tax | 5,263 | 3,855 | 36.5 | ||||||||
| Tax expense or income related to profit or loss from continuing operations | (1,508) | (1,162) | 29.7 | ||||||||
| Profit from continuing operations | 3,755 | 2,693 | 39.4 | ||||||||
| Profit / (loss) from discontinued operations, net and Other | — | — | — | ||||||||
| Profit | 3,755 | 2,693 | 39.4 | ||||||||
| Profit attributable to non-controlling interests | (3) | (2) | 31.7 | ||||||||
| Profit attributable to parent company | 3,752 | 2,690 | 39.4 | ||||||||
(1)Includes “Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net”, “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”, “Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net”, “Gains (losses) from hedge accounting, net” and “Exchange differences, net”.
(2)Calculated as “Gross income” less “Administration costs” and “Depreciation and amortization”.
(3)Not meaningful.
Net interest income
Net interest income of this operating segment for the year ended December 31, 2024 amounted to €6,384 million, a 14.6% increase compared with the €5,570 million recorded for the year ended December 31, 2023, mainly as a result of the higher yield of the loans to enterprises and consumer loans, which led to an increase in the customer spread (calculated as the average rate at which assets are remunerated, less the equivalent average rate for deposits), as a result of the impact of the increase in interest rates in 2023 up to the cuts beginning in the second half of 2024 and, to a lesser extent, an increase in the average volume of loan portfolios, partially offset by higher funding costs and the impact of interest rates cuts implemented by the ECB since the second half of 2024 on consumer and household loan portfolios, which are mostly referenced to variable interest rates. The net interest margin over average total assets of this operating segment amounted to 1.47% for the year ended December 31, 2024, compared with 1.33% for the year ended December 31, 2023.
Net fees and commissions
Net fees and commissions of this operating segment for the year ended December 31, 2024 amounted to €2,281 million, a 7.4% increase compared with the €2,124 million recorded for the year ended December 31, 2023, mainly due to the increase in the volume of asset management activities and the higher credit card fees.
Net gains (losses) on financial assets and liabilities and Exchange differences, net
Net gains on financial assets and liabilities and exchange differences of this operating segment for the year ended December 31, 2024 was a net gain of €728 million, a 58.3% increase compared with the €460 million net gain recorded for the year ended December 31, 2023, mainly as a result of the positive performance of the Global Markets unit and, to a lesser extent, certain ALCO portfolio sales and positive exchange differences. The ALCO portfolio is used to manage the risk of changes in interest rates.
121
Other operating income and expense, net
Other operating income and expense, net of this operating segment for the year ended December 31, 2024 amounted to a €329 million expense, a 50.0% decrease compared with the €658 million expense recorded for the year ended December 31, 2023. The decrease was driven in part by the fact that BBVA was not required to make any contributions to the ECB’s Single Resolution Fund in the year ended December 31, 2024, since its constitution was completed in 2023, and the lower contribution to the Deposit Guarantee Fund. The decrease was offset in part by the higher expense recorded in connection with the temporary tax on credit institutions and financial credit establishments in Spain (totaling €285 million in the year ended December 31, 2024, compared to €215 million in the year ended December 31, 2023).
No impact associated with IMIC was recorded in the Consolidated Financial Statements for the year ended December 31, 2024. See Note 19.6 to the Consolidated Financial Statements for additional information on certain contributions and taxes.
Income and expense on insurance and reinsurance contracts
Net income on insurance and reinsurance contracts of this operating segment for the year ended December 31, 2024 was €379 million, a 7.6% increase compared with the €353 million income recorded for the year ended December 31, 2023, as a result of increased insurance activity.
Administration costs
Administration costs of this operating segment for the year ended December 31, 2024 amounted to €2,980 million, a 6.1% increase compared with the €2,809 million recorded for the year ended December 31, 2023, mainly as a result of the increase in general expenses related to IT equipment (driven by inflation), and, to a lesser extent, personnel expenses (driven by salary updates).
Depreciation and amortization
Depreciation and amortization for the year ended December 31, 2024 was €366 million, a 4.4% decrease compared with the €383 million recorded for the year ended December 31, 2023.
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification of this operating segment for the year ended December 31, 2024 amounted to a €684 million expense, a 4.3% increase compared with the €656 million expense recorded for the year ended December 31, 2023, mainly due to higher credit impairment requirements in the wholesale loan portfolio.
Provisions or reversal of provisions and other results
Provisions or reversal of provisions and other results of this operating segment for the year ended December 31, 2024 were a €150 million expense, a 3.2% increase compared with the €145 million expense recorded for the year ended December 31, 2023.
Operating profit / (loss) before tax
As a result of the foregoing, operating profit before tax of this operating segment for the year ended December 31, 2024 was €5,263 million, a 36.5% increase compared with the €3,855 million profit recorded for the year ended December 31, 2023.
Tax expense or income related to profit or loss from continuing operations
Tax expense related to profit from continuing operations of this operating segment for the year ended December 31, 2024 was €1,508 million, a 29.7% increase compared with the €1,162 million expense recorded for the year ended December 31, 2023, as a result of the higher operating profit before tax recorded for the year ended December 31, 2024. The effective tax rate decreased to 28.7% for the year ended December 31, 2024 from 30.1% for the year ended December 31, 2023. Amounts paid by BBVA under the temporary tax on credit institutions and financial credit establishments in Spain are a non-deductible expense for tax purposes.
Profit attributable to parent company
As a result of the foregoing, profit attributable to parent company of this operating segment for the year ended December 31, 2024 amounted to €3,752 million, a 39.4% increase compared with the €2,690 million profit recorded for the year ended December 31, 2023.
122
MEXICO
For the year ended December 31, | |||||||||||
2024 | 2023 | Change | |||||||||
| (In Millions of Euros) | (In %) | ||||||||||
| Net interest income | 11,556 | 11,054 | 4.5 | ||||||||
| Net fees and commissions | 2,443 | 2,226 | 9.7 | ||||||||
| Net gains (losses) on financial assets and liabilities and Exchange differences, net (1) | 767 | 572 | 34.0 | ||||||||
| Other operating income and expense, net | (342) | (332) | 3.0 | ||||||||
| Income and expense on insurance and reinsurance contracts | 913 | 748 | 22.1 | ||||||||
| Gross income | 15,337 | 14,267 | 7.5 | ||||||||
| Administration costs | (4,170) | (3,946) | 5.7 | ||||||||
| Depreciation and amortization | (477) | (469) | 1.8 | ||||||||
| Net margin before provisions (2) | 10,689 | 9,853 | 8.5 | ||||||||
| Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification | (3,098) | (2,499) | 24.0 | ||||||||
| Provisions or reversal of provisions and other results | (69) | (25) | 175.0 | ||||||||
| Operating profit / (loss) before tax | 7,522 | 7,329 | 2.6 | ||||||||
| Tax expense or income related to profit or loss from continuing operations | (2,074) | (2,009) | 3.2 | ||||||||
| Profit | 5,448 | 5,320 | 2.4 | ||||||||
| Profit attributable to non-controlling interests | (1) | (1) | — | ||||||||
| Profit attributable to parent company | 5,447 | 5,319 | 2.4 | ||||||||
(1)Includes “Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net”, “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”, “Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net”, “Gains (losses) from hedge accounting, net” and “Exchange differences, net”.
(2)“Net margin before provisions” is calculated as “Gross income” less “Administration costs” and “Depreciation and amortization”.
In the year ended December 31, 2024, the Mexican peso depreciated 3.2% against the euro in average terms compared with the year ended December 31, 2023, resulting in a negative exchange rate effect on the consolidated income statement for the year ended December 31, 2024 and in the results of operations of the Mexico operating segment for such period expressed in euros. See “―Factors Affecting the Comparability of our Results of Operations and Financial Condition―Trends in Exchange Rates”.
Net interest income
Net interest income of this operating segment for the year ended December 31, 2024 amounted to €11,556 million, a 4.5% increase compared with the €11,054 million recorded for the year ended December 31, 2023, mainly as a result of the higher contribution from the wholesale and retail loan portfolios (attributable to increases in volume), and the higher contribution from the securities portfolio, partially offset by higher wholesale funding costs and the depreciation of the Mexican peso against the euro. At constant exchange rates, there was an 8.0% increase in net interest income. The net interest margin over average total assets of this operating segment amounted to 6.73% for the year ended December 31, 2024, compared with 7.09% for the year ended December 31, 2023.
Net fees and commissions
Net fees and commissions of this operating segment for the year ended December 31, 2024 amounted to €2,443 million, a 9.7% increase compared with the €2,226 million recorded for the year ended December 31, 2023, mainly due to the increased volume of transactions by credit card customers and of asset management activities, offset in part by the depreciation of the Mexican peso against the euro. At constant exchange rates, there was a 13.4% increase in net fees and commissions.
Net gains (losses) on financial assets and liabilities and Exchange differences, net
Net gains on financial assets and liabilities and exchange differences of this operating segment for the year ended December 31, 2024 were €767 million, a 34.0% increase compared with the €572 million gain recorded for the year ended December 31, 2023, mainly as a result of the higher gains from the Global Markets unit, resulting from foreign currency hedges, and, to a lesser extent, the higher gains from the ALCO portfolio, offset in part by the depreciation of the Mexican peso against the euro. At constant exchange rates, there was a 38.5% increase in net gains on financial assets and liabilities and exchange differences.
123
Other operating income and expense, net
Other operating income and expense, net of this operating segment for the year ended December 31, 2024 was a net expense of €342 million, a 3.0% increase compared with the €332 million net expense recorded for the year ended December 31, 2023, mainly due to the higher contributions made to the Deposit Guarantee Fund, offset in part by the depreciation of the Mexican peso against the euro. At constant exchange rates, there was a 6.4% increase in net expense.
Income and expense on insurance and reinsurance contracts
Net income on insurance and reinsurance contracts of this operating segment for the year ended December 31, 2024 was €913 million, a 22.1% increase compared with the €748 million net income recorded for the year ended December 31, 2023, due mainly to the increase in insurance premiums, attributable in part to higher insurance sales, partially offset mainly by the higher insurance premiums paid to third parties.
Administration costs
Administration costs of this operating segment for the year ended December 31, 2024 were €4,170 million, a 5.7% increase compared with the €3,946 million recorded for the year ended December 31, 2023, mainly as a result of the higher personnel expenses driven by the increase in the number of employees and the higher salaries, and the higher general expenses related to value added tax, partially offset by the depreciation of the Mexican peso against the euro. At constant exchange rates, administration costs increased by 9.2%.
Depreciation and amortization
Depreciation and amortization for the year ended December 31, 2024 was €477 million, a 1.8% increase compared with the €469 million recorded for the year ended December 31, 2023.
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification of this operating segment for the year ended December 31, 2024 was a €3,098 million expense, a 24.0% increase compared with the €2,499 million expense recorded for the year ended December 31, 2023, mainly due to higher impairment entries in the retail loan portfolio (in particular, credit cards and consumer loans, which are loans that generally entail greater profitability but also carry a greater default risk), within a context of deteriorating macroeconomic conditions and forecast.
Provisions or reversal of provisions and other results
Provisions or reversal of provisions and other results of this operating segment for the year ended December 31, 2024 were a €69 million expense compared with the €25 million expense recorded for the year ended December 31, 2023, mainly due to the impairment of a guarantee on a leasing transaction.
Operating profit / (loss) before tax
As a result of the foregoing, operating profit before tax of this operating segment for the year ended December 31, 2024 was €7,522 million, a 2.6% increase compared with the €7,329 million of operating profit before tax recorded for the year ended December 31, 2023.
Tax expense or income related to profit or loss from continuing operations
Tax expense related to profit from continuing operations of this operating segment for the year ended December 31, 2024 was €2,074 million, a 3.2% increase compared with the €2,009 million expense recorded for the year ended December 31, 2023, mainly as a result of the higher operating profit before tax. The effective tax rate amounted to 27.6% of operating profit before tax for the year ended December 31, 2024, and 27.4% for the year ended December 31, 2023.
Profit attributable to parent company
As a result of the foregoing, profit attributable to parent company of this operating segment for the year ended December 31, 2024 amounted to €5,447 million, a 2.4% increase compared with the €5,319 million recorded for the year ended December 31, 2023.
124
TURKEY
For the year ended December 31, | |||||||||||
2024 | 2023 | Change | |||||||||
| (In Millions of Euros) | (In %) | ||||||||||
| Net interest income | 1,492 | 1,869 | (20.2) | ||||||||
| Net fees and commissions | 2,111 | 998 | 111.5 | ||||||||
| Net gains (losses) on financial assets and liabilities and Exchange differences, net (1) | 1,145 | 937 | 22.1 | ||||||||
| Other operating income and expense, net | (595) | (887) | (32.9) | ||||||||
| Income and expense on insurance and reinsurance contracts | 60 | 63 | (4.3) | ||||||||
| Gross income | 4,212 | 2,981 | 41.3 | ||||||||
| Administration costs | (1,895) | (1,252) | 51.3 | ||||||||
| Depreciation and amortization | (216) | (150) | 44.3 | ||||||||
| Net margin before provisions (2) | 2,101 | 1,579 | 33.1 | ||||||||
| Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification | (526) | (118) | n.m. (3) | ||||||||
| Provisions or reversal of provisions and other results | 165 | (137) | n.m. (3) | ||||||||
| Operating profit / (loss) before tax | 1,741 | 1,324 | 31.5 | ||||||||
| Tax expense or income related to profit or loss from continuing operations | (1,014) | (702) | 44.4 | ||||||||
| Profit | 727 | 622 | 16.9 | ||||||||
| Profit attributable to non-controlling interests | (116) | (95) | 22.6 | ||||||||
| Profit attributable to parent company | 611 | 527 | 15.9 | ||||||||
(1)Includes “Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net”, “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”, “Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net”, “Gains (losses) from hedge accounting, net” and “Exchange differences, net”.
(2)“Net margin before provisions” is calculated as “Gross income” less “Administration costs” and “Depreciation and amortization”.
(3)Not meaningful.
As of December 31, 2024, the Turkish lira depreciated by 11.1% against the euro compared to December 31, 2023 (i.e., the year-end exchange rates of the Turkish lira used by the Group to convert income statement items pursuant to IAS 21 for the years ended December 31, 2024 and 2023, respectively), adversely affecting the results of operations of the Turkey operating segment for the year ended December 31, 2024 expressed in euros. See “―Factors Affecting the Comparability of our Results of Operations and Financial Condition―Trends in Exchange Rates”.
Since the first half of 2022, the Turkish economy has been considered to be hyperinflationary as defined by IAS 29 “Financial Reporting in Hyperinflationary Economies”. See “Presentation of Financial Information—Hyperinflationary Economies” and Note 2.2.18 to the Consolidated Financial Statements for information on the impact of hyperinflation accounting.
Net interest income
Net interest income of this operating segment for the year ended December 31, 2024 amounted to €1,492 million, a 20.2% decrease compared with the €1,869 million recorded for the year ended December 31, 2023, as a result mainly of the depreciation of the Turkish lira against the euro, higher interest expense on Turkish lira-denominated deposits (due to the higher volume of deposits and the higher interest rates paid on them) and the higher wholesale and swap funding costs (which were affected by the reserve requirement for foreign currency deposits, which was set at 8% as of February 2024 and amended in September 2024 and November 2024 to 5% and 4%, respectively; and which requires Garanti BBVA to make Turkish lira-denominated deposits with the CBRT in such proportion with respect to all foreign currency-denominated deposits and participation funds, excluding those obtained from banks abroad, regardless of their maturities). The year-on-year decrease was partially offset by the higher volume and yield of Turkish lira-denominated loans and the increase in volume and yield of sovereign debt securities, as a result in part –with respect to the increases in the volumes of Turkish lira-denominated loans and sovereign debt securities- of the measures adopted by the CBRT (see “Item 4. Information on the Company―Business Overview—Supervision and Regulation—Principal Markets—Turkey”). At constant exchange rates, there was a 10.4% decrease in net interest income. The net interest margin over average total assets of this operating segment amounted to 1.98% for the year ended December 31, 2024, compared with 2.83% for the year ended December 31, 2023.
125
Net fees and commissions
Net fees and commissions of this operating segment for the year ended December 31, 2024 amounted to €2,111 million compared with the €998 million recorded for the year ended December 31, 2023, mainly as a result of the increase in payment systems fees (fees related to credit and debit cards and POS) supported by the increase in the maximum credit card fees banks may charge in Turkey pursuant to the regulation established by the CBRT, partially offset by the depreciation of the Turkish lira against the euro.
Net gains (losses) on financial assets and liabilities and Exchange differences, net
Net gains on financial assets and liabilities and exchange differences of this operating segment for the year ended December 31, 2024 amounted to €1,145 million, a 22.1% increase compared with the €937 million gain recorded for the year ended December 31, 2023, mainly driven by gains from foreign currency hedges, offset in part by lower positive exchange differences compared to 2023, the depreciation of the Turkish lira and, to a lesser extent, lower gains from the Global Markets unit due to lower sales. At constant exchange rates, net gains on financial assets and liabilities and exchange differences increased by 34.5%.
Other operating income and expense, net
Other operating income and expense, net of this operating segment for the year ended December 31, 2024 was a €595 million net expense, a 32.9% decrease compared with the €887 million net expense recorded for the year ended December 31, 2023, mainly due to the lower loss on the net monetary position resulting from the adjustment for hyperinflation (€1,512 million and €2,118 million in the years ended December 31, 2024 and 2023, respectively) and, to a lesser extent, the depreciation of the Turkish lira against the euro, partially offset by certain sales of non-financial services and the lower positive impact of the revaluation of bonds linked to inflation in the period (€1,164 million and €1,202 million, respectively, in the years ended December 31, 2024 and 2023). At constant exchange rates, there was a 42.1% decrease in net expense. See “Presentation of Financial Information—Hyperinflationary Economies” and Note 2.2.18 to the Consolidated Financial Statements for information on the impact of hyperinflation accounting.
Income and expense on insurance and reinsurance contracts
Net income on insurance and reinsurance contracts of this operating segment for the year ended December 31, 2024 was €60 million, a 4.3% decrease compared with the €63 million income recorded for the year ended December 31, 2023. At constant exchange rates, there was a 5.2% increase.
Administration costs
Administration costs of this operating segment for the year ended December 31, 2024 amounted to €1,895 million, a 51.3% increase compared with the €1,252 million recorded for the year ended December 31, 2023, mainly as a result of the increase in personnel expenses, driven by the increase in salaries (mainly driven by inflation) and, to a lesser extent, the number of employees, and the increase in general expenses (technology, outsourced services and maintenance) driven to a great extent by the higher average inflation rates, partially offset by the depreciation of the Turkish lira. At constant exchange rates, administration costs increased by 69.4%, which was above Turkey’s inflation rate for the year.
Depreciation and amortization
Depreciation and amortization for the year ended December 31, 2024 was €216 million, a 44.3% increase compared with the €150 million recorded for the year ended December 31, 2023, mainly as a result of the increase in the depreciation expense related to IT equipment, offset in part by the depreciation of the Turkish lira. At constant exchange rates, there was a 55.0% increase.
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification of this operating segment for the year ended December 31, 2024 was a €526 million expense compared with the €118 million expense recorded for the year ended December 31, 2023, mainly as a result of the increase in the expected losses related to the retail portfolio (mainly credit card and consumer loans, which volumes increased and also experienced greater deterioration), partially offset by the depreciation of the Turkish lira and the higher reversal of impairment on the wholesale portfolio compared to 2023. The year ended December 31, 2023 was affected by the change in the staging of certain loans from Stage 1 to Stage 2, due to the impact of the earthquakes in February 2023 and certain significant Stage 3 entries in the retail and wholesale portfolios.
126
Provisions or reversal of provisions and other results
Provisions or reversal of provisions and other results of this operating segment for the year ended December 31, 2024 were a €165 million income compared with the €137 million expense recorded for the year ended December 31, 2023, mainly due to the impact, in 2023, of the provisions recorded in connection with the February 2023 earthquakes, and increases in the value of certain real estate assets in 2024.
Operating profit / (loss) before tax
As a result of the foregoing, operating profit before tax of this operating segment for the year ended December 31, 2024 was €1,741 million, a 31.5% increase compared with the €1,324 million recorded for the year ended December 31, 2023. At constant exchange rates, operating profit before tax increased by 83.3%.
Tax expense or income related to profit or loss from continuing operations
Tax expense related to profit from continuing operations of this operating segment for the year ended December 31, 2024 was €1,014 million, a 44.4% increase compared with the €702 million expense recorded for the year ended December 31, 2023, mainly as a result of the increase in operating profit before tax recorded for the year ended December 31, 2024.
Current tax regulation in Turkey does not include a provision to reduce tax expense upon the existence of a loss linked to the net monetary position. The effective tax rate amounted to 58.2% of operating profit before tax of this operating segment for the year ended December 31, 2024 and 53.0% for the year ended December 31, 2023.
Profit attributable to non-controlling interests
Profit attributable to non-controlling interests of this operating segment for the year ended December 31, 2024 amounted to €116 million, a 22.6% increase compared with the €95 million recorded for the year ended December 31, 2023, as a result, in part, of the increase in profit.
Profit attributable to parent company
As a result of the foregoing, profit attributable to parent company of this operating segment for the year ended December 31, 2024 amounted to €611 million, a 15.9% increase compared with the €527 million recorded for the year ended December 31, 2023.
127
SOUTH AMERICA
For the year ended December 31, | |||||||||||
2024 | 2023 | Change | |||||||||
| (In Millions of Euros) | (In %) | ||||||||||
| Net interest income | 5,589 | 4,394 | 27.2 | ||||||||
| Net fees and commissions | 834 | 700 | 19.1 | ||||||||
| Net gains (losses) on financial assets and liabilities and Exchange differences, net (1) | 798 | 633 | 26.0 | ||||||||
| Other operating income and expense, net | (1,935) | (1,491) | 29.7 | ||||||||
| Income and expense on insurance and reinsurance contracts | 120 | 96 | 24.9 | ||||||||
| Gross income | 5,405 | 4,331 | 24.8 | ||||||||
| Administration costs | (2,341) | (1,785) | 31.2 | ||||||||
| Depreciation and amortization | (226) | (165) | 36.4 | ||||||||
| Net margin before provisions (2) | 2,838 | 2,381 | 19.2 | ||||||||
| Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification | (1,369) | (1,134) | 20.7 | ||||||||
| Provisions or reversal of provisions and other results | (127) | (58) | 120.5 | ||||||||
| Operating profit / (loss) before tax | 1,342 | 1,189 | 12.8 | ||||||||
| Tax expense or income related to profit or loss from continuing operations | (313) | (286) | 9.3 | ||||||||
| Profit | 1,029 | 903 | 14.0 | ||||||||
| Profit attributable to non-controlling interests | (394) | (302) | 30.5 | ||||||||
| Profit attributable to parent company | 635 | 601 | 5.6 | ||||||||
(1)Includes “Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net”, “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”, “Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net”, “Gains (losses) from hedge accounting, net” and “Exchange differences, net”.
(2)“Net margin before provisions” is calculated as “Gross income” less “Administration costs” and “Depreciation and amortization”.
In the year ended December 31, 2024, the Argentine peso depreciated by 16.8% against the euro (considering the period-end exchange rates used to convert income statement items for the years ended December 31, 2024 and 2023, respectively, pursuant to IAS 21). On the other hand, the Colombian peso appreciated by 6.2% against the euro in average terms compared with the year ended December 31, 2023. The Peruvian sol remained practically unchanged against the euro in average terms compared with the year ended December 31, 2023. Overall, changes in exchange rates resulted in a negative exchange rate effect on the consolidated income statement for the year ended December 31, 2024 and in the results of operations of the South America operating segment for such period expressed in euros. See “―Factors Affecting the Comparability of our Results of Operations and Financial Condition―Trends in Exchange Rates”.
As of and for the years ended December 31, 2024 and 2023, the Argentine and Venezuelan economies were considered to be hyperinflationary as defined by IAS 29 “Financial Reporting in Hyperinflationary Economies” (see “Presentation of Financial Information—Hyperinflationary Economies”).
Net interest income
Net interest income of this operating segment for the year ended December 31, 2024 amounted to €5,589 million, a 27.2% increase compared with the €4,394 million recorded for the year ended December 31, 2023, mainly as a result of increases in the volume and yield of credit card loans and the commercial loan portfolios in Argentina and Colombia, partially offset by higher funding costs, particularly in Argentina as a result of increases in interest rates, and the depreciation of the Argentine peso against the euro. At constant exchange rates, there was a 31.9% increase in net interest income. The net interest margin over average total assets of this operating segment amounted to 8.18% for the year ended December 31, 2024, compared with 6.99% for the year ended December 31, 2023.
Net fees and commissions
Net fees and commissions of this operating segment for the year ended December 31, 2024 amounted to €834 million of income, a 19.1% increase compared with the €700 million of income recorded for the year ended December 31, 2023, mainly due to increases in payment systems-related fees (in particular, related to credit cards), as a result of increases in the volume of transactions and commission rates, especially in Argentina, partially offset by the depreciation of the Argentine peso against the euro. At constant exchange rates, there was a 21.5% increase.
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Net gains (losses) on financial assets and liabilities and Exchange differences, net
Net gains on financial assets and liabilities and exchange differences of this operating segment for the year ended December 31, 2024 were €798 million, a 26.0% increase compared with the €633 million gain recorded for the year ended December 31, 2023, mainly due to the higher gains from the ALCO portfolio in Argentina, partially offset by the depreciation of the Argentine peso against the euro. At constant exchange rates, net gains on financial assets and liabilities and exchange differences, net, increased by 33.3%.
Other operating income and expense, net
Other operating income and expense, net of this operating segment for the year ended December 31, 2024 was a €1,935 million expense, a 29.7% increase compared with the €1,491 million expense recorded for the year ended December 31, 2023, mainly driven by the higher loss on the net monetary position resulting from the adjustment for hyperinflation in Argentina, which resulted in a monetary loss of €1,419 million in the year ended December 31, 2024, compared to the €1,062 million monetary loss recorded for the year ended December 31, 2023, partially offset by the depreciation of the Argentine peso against the euro. At constant exchange rates, the net expense increased by 31.8%.
Income and expense on insurance and reinsurance contracts
Net income on insurance and reinsurance contracts of this operating segment for the year ended December 31, 2024 was €120 million, a 24.9% increase compared with the €96 million income recorded for the year ended December 31, 2023, mainly as a result of higher income related to life insurance in Colombia and, to a lesser extent, Argentina, partially offset by the depreciation of the Argentine peso against the euro.
Administration costs
Administration costs of this operating segment for the year ended December 31, 2024 amounted to €2,341 million, a 31.2% increase compared with the €1,785 million recorded for the year ended December 31, 2023, mainly as a result of increases in personnel expenses, mainly driven by salary updates (aimed at compensating the loss of purchasing power due to inflation) and certain general expenses related to technology (affected by the high inflation) in Argentina, partially offset by the depreciation of the Argentine peso against the euro. At constant exchange rates, administration costs increased by 33.8%.
Depreciation and amortization
Depreciation and amortization for the year ended December 31, 2024 was €226 million, a 36.4% increase compared with the €165 million recorded for the year ended December 31, 2023, mainly due to the increase in the depreciation expense related to IT equipment in Argentina. At constant exchange rates, depreciation and amortization increased by 36.5%.
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification of this operating segment for the year ended December 31, 2024 was a €1,369 million expense, a 20.7% increase compared with the €1,134 million expense recorded for the year ended December 31, 2023, mainly as a result of higher credit impairment requirements in retail loans, within an inflationary and high interest environment, in Colombia and Peru (where default rates are starting to increase), and the larger loan portfolio. At constant exchange rates, impairment on financial assets not measured at fair value through profit or loss or net gains by modification increased by 21.0%.
Provisions or reversal of provisions and other results
Provisions or reversal of provisions and other results of this operating segment for the year ended December 31, 2024 were a €127 million expense compared with the €58 million expense recorded for the year ended December 31, 2023, attributable mainly to the higher provisions for property, plant and equipment in Argentina, partially offset by the depreciation of the Argentine peso against the euro.
Operating profit / (loss) before tax
As a result of the foregoing, operating profit before tax of this operating segment for the year ended December 31, 2024 was €1,342 million, a 12.8% increase compared with the €1,189 million recorded for the year ended December 31, 2023. At constant exchange rates, there was a 28.1% increase.
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Tax expense or income related to profit or loss from continuing operations
Tax expense related to profit from continuing operations of this operating segment for the year ended December 31, 2024 was €313 million, a 9.3% increase compared with the €286 million expense recorded for the year ended December 31, 2023, as a result mainly of the higher operating profit before tax, partially offset by the impact of hyperinflation-related adjustments in Argentina. At constant exchange rates (and excluding the impact of the hyperinflation-related adjustments in Argentina), tax expense or income related to profit or loss from continuing operations increased by 32.5%. The effective tax rate amounted to 23.3% of operating profit before tax for the year ended December 31, 2024, and 24.1% for the year ended December 31, 2023.
Profit attributable to non-controlling interests
Profit attributable to non-controlling interests of this operating segment for the year ended December 31, 2024 amounted to €394 million, a 30.5% increase compared with the €302 million recorded for the year ended December 31, 2023, mainly due to the higher operating profit before tax. At constant exchange rates, there was a 46.3% increase.
Profit attributable to parent company
As a result of the foregoing, profit attributable to parent company of this operating segment for the year ended December 31, 2024 amounted to €635 million, a 5.6% increase compared with the €601 million recorded for the year ended December 31, 2023. At constant exchange rates, there was a 17.1% increase.
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REST OF BUSINESS
For the year ended December 31, | |||||||||||
2024 | 2023 | Change | |||||||||
(In Millions of Euros) | (In %) | ||||||||||
Net interest income | 742 | 539 | 37.6 | ||||||||
Net fees and commissions | 390 | 309 | 26.3 | ||||||||
Net gains (losses) on financial assets and liabilities and Exchange differences, net (1) | 337 | 261 | 28.8 | ||||||||
Other operating income and expense, net | 2 | — | n.m. (3) | ||||||||
Income and expense on insurance and reinsurance contracts | 2 | 3 | (51.3) | ||||||||
Gross income | 1,472 | 1,113 | 32.3 | ||||||||
Administration costs | (710) | (560) | 26.8 | ||||||||
Depreciation and amortization | (33) | (26) | 25.5 | ||||||||
Net margin before provisions (2) | 730 | 527 | 38.5 | ||||||||
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification | (71) | (28) | 155.9 | ||||||||
Provisions or reversal of provisions and other results | (11) | (1) | n.m. (3) | ||||||||
Operating profit / (loss) before tax | 648 | 499 | 30.0 | ||||||||
Tax expense or income related to profit or loss from continuing operations | (138) | (96) | 44.0 | ||||||||
Profit | 511 | 403 | 26.7 | ||||||||
Profit attributable to non-controlling interests | — | — | — | ||||||||
Profit attributable to parent company | 511 | 403 | 26.7 | ||||||||
(1)Includes “Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net”, “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”, “Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net”, “Gains (losses) from hedge accounting, net” and “Exchange differences, net”.
(2)“Net margin before provisions” is calculated as “Gross income” less “Administration costs” and “Depreciation and amortization”.
(3)Not meaningful.
In the year ended December 31, 2024, the U.S. dollar remained practically unchanged against the euro in average terms compared with the year ended December 31, 2023. See “―Factors Affecting the Comparability of our Results of Operations and Financial Condition―Trends in Exchange Rates”.
Net interest income
Net interest income of this operating segment for the year ended December 31, 2024 amounted to €742 million, a 37.6% increase compared with the €539 million recorded for the year ended December 31, 2023, mainly due to increase in the corporate and investment banking activity of the branches located in Europe and New York, supported by the increase in loan activity and an adequate price management. The net interest margin over average total assets of this operating segment amounted to 1.24% for the year ended December 31, 2024 compared with 1.05% for the year ended December 31, 2023.
Net fees and commissions
Net fees and commissions of this operating segment for the year ended December 31, 2024 amounted to €390 million, a 26.3% increase compared with the €309 million recorded for the year ended December 31, 2023 as a result of increased investment banking activity.
Net gains (losses) on financial assets and liabilities and Exchange differences, net
Net gains on financial assets and liabilities and exchange differences of this operating segment for the year ended December 31, 2024 was €337 million, a 28.8% increase compared with the €261 million net gain recorded for the year ended December 31, 2023, mainly due to the higher gains from the Global Markets units in Europe and the higher gains from the broker-dealer BBVA Securities Inc., partially offset by negative exchange differences.
Other operating income and expense, net
Other operating income and expense, net of this operating segment for the year ended December 31, 2024 was €2 million income, compared with nil for the year ended December 31, 2023.
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Income and expense on insurance and reinsurance contracts
Income on insurance and reinsurance contracts for the year ended December 31, 2024 was €2 million, compared with the €3 million of income recorded for the year ended December 31, 2023.
Administration costs
Administration costs of this operating segment for the year ended December 31, 2024 amounted to €710 million, a 26.8% increase compared with the €560 million recorded for the year ended December 31, 2023, mainly due to increases in personnel expenses, due to the increase in the number of employees, and in marketing expenses in the branches located in New York and Europe.
Depreciation and amortization
Depreciation and amortization for the year ended December 31, 2024 was €33 million, a 25.5% increase compared with the €26 million recorded for the year ended December 31, 2023.
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification of this operating segment for the year ended December 31, 2024 was a €71 million expense compared with the €28 million expense recorded for the year ended December 31, 2023, mainly as a result of the higher credit impairment requirements related to certain new impairment entries in the wholesale loans portfolio in Europe.
Provisions or reversal of provisions and other results
Provisions or reversal of provisions and other results of this operating segment for the year ended December 31, 2024 were an €11 million expense compared with the €1 million expense recorded for the year ended December 31, 2023.
Operating profit / (loss) before tax
As a result of the foregoing, operating profit before tax of this operating segment for the year ended December 31, 2024 was €648 million, a 30.0% increase compared with the €499 million recorded for the year ended December 31, 2023.
Tax expense or income related to profit or loss from continuing operations
Tax expense related to profit from continuing operations of this operating segment for the year ended December 31, 2024 was €138 million, a 44.0% increase compared with the €96 million expense recorded for the year ended December 31, 2023 due, mainly, to the increase in operating profit.
Profit attributable to parent company
As a result of the foregoing, profit attributable to parent company of this operating segment for the year ended December 31, 2024 amounted to €511 million, a 26.7% increase compared with the €403 million recorded for the year ended December 31, 2023.
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CORPORATE CENTER
| For the year ended December 31, | |||||||||||
2024 | 2023 | Change | |||||||||
(In Millions of Euros) | (In %) | ||||||||||
| Net interest income / (expense) | (495) | (336) | 47.5 | ||||||||
| Net fees and commissions | (71) | (69) | 2.3 | ||||||||
| Net gains (losses) on financial assets and liabilities and Exchange differences, net (1) | 138 | (681) | n.m. (2) | ||||||||
| Other operating income and expense, net | 37 | 89 | (58.3) | ||||||||
| Income and expense on insurance and reinsurance contracts | 2 | (2) | n.m. (2) | ||||||||
| Gross income | (388) | (999) | (61.1) | ||||||||
| Administration costs | (564) | (553) | 2.0 | ||||||||
| Depreciation and amortization | (215) | (210) | 2.5 | ||||||||
| Net margin before provisions (3) | (1,168) | (1,762) | (33.7) | ||||||||
| Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification | 3 | 6 | (48.2) | ||||||||
| Provisions or reversal of provisions and other results | 54 | (21) | n.m. (2) | ||||||||
| Operating profit / (loss) before tax | (1,110) | (1,777) | (37.5) | ||||||||
| Tax expense or income related to profit or loss from continuing operations | 215 | 252 | (14.6) | ||||||||
| Profit / (loss) | (895) | (1,525) | (41.3) | ||||||||
| Profit / (loss) attributable to non-controlling interests | (7) | 3 | n.m. (2) | ||||||||
| Profit / (loss) attributable to parent company | (901) | (1,522) | (40.8) | ||||||||
(1)Includes “Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net”, “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”, “Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net”, “Gains (losses) from hedge accounting, net” and “Exchange differences, net”.
(2)Not meaningful.
(3)“Net margin before provisions” is calculated as “Gross income” less “Administration costs” and “Depreciation and amortization”.
Net interest income / (expense)
Net interest expense of the Corporate Center for the year ended December 31, 2024 was €495 million, a 47.5% increase compared with the €336 million net expense recorded for the year ended December 31, 2023, mainly due to higher funding costs of investments as a result of higher interest rates.
Net fees and commissions
Net fees and commissions of the Corporate Center for the year ended December 31, 2024 amounted to a €71 million expense, a 2.3% increase compared with the €69 million expense recorded for the year ended December 31, 2023.
Net gains (losses) on financial assets and liabilities and Exchange differences, net
Net gains on financial assets and liabilities and exchange differences of the Corporate Center for the year ended December 31, 2024 were €138 million compared with the €681 million net losses recorded for the year ended December 31, 2023, mainly as a result of the gains from certain foreign currency hedges (recorded in the ALCO portfolio of the Corporate Center) on the estimated results of the operating segments resulting from the impact of the depreciation of the Mexican peso and positive exchange differences.
Other operating income and expense, net
Other operating income and expense, net of the Corporate Center for the year ended December 31, 2024 was €37 million of net income, a 58.3% decrease compared with the €89 million net income recorded for the year ended December 31, 2023, mainly due to the expenses on the subscription of bonds issued by the Central Bank of Argentina.
Administration costs
Administration costs of the Corporate Center for the year ended December 31, 2024 amounted to €564 million, a 2.0% increase compared with the €553 million recorded for the year ended December 31, 2023.
Depreciation and amortization
Depreciation and amortization of the Corporate Center for the year ended December 31, 2024 was €215 million, a 2.5% increase compared with the €210 million recorded for the year ended December 31, 2023.
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Provisions or reversal of provisions and other results
Provisions or reversal of provisions and other results of the Corporate Center for the year ended December 31, 2024 were €54 million income, compared with the €21 million expense recorded for the year ended December 31, 2023, mainly due to the reversal of provisions related to certain investments in associates.
Operating profit / (loss) before tax
As a result of the foregoing, operating loss before tax of the Corporate Center for the year ended December 31, 2024 was €1,110 million, a 37.5% decrease compared with the €1,777 million loss recorded for the year ended December 31, 2023.
Tax expense or income related to profit or loss from continuing operations
Tax income related to profit or loss from continuing operations of the Corporate Center for the year ended December 31, 2024 amounted to €215 million, a 14.6% decrease compared with the €252 million income recorded for the year ended December 31, 2023, mainly due to the lower operating loss before tax.
Profit / (loss) attributable to parent company
As a result of the foregoing, loss attributable to parent company of the Corporate Center for the year ended December 31, 2024 was €901 million, a 40.8% decrease compared with the €1,522 million loss recorded for the year ended December 31, 2023.
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B. Liquidity and Capital Resources
BBVA’s principal source of funds is its customer deposit base, which consists primarily of demand, savings and time deposits. In addition to relying on customer deposits, BBVA also accesses the interbank market (overnight and time deposits) and domestic and international capital markets for its additional liquidity requirements. To access the capital markets, BBVA has in place a series of domestic and international programs for the issuance of commercial paper and medium- and long-term debt. Another source of liquidity is the generation of cash flow from operations. Finally, BBVA may supplement its funding sources with borrowings from the ECB or the respective central banks of the countries where its subsidiaries are located. For additional information on the financing structure of the BBVA Group, see Note 7.5.3 to the Consolidated Financial Statements.
During 2025, liquidity conditions remained adequate in all the countries where the BBVA Group operates.
The following table shows the balances as of December 31, 2025, 2024 and 2023 of our principal sources of funds (including accrued interest, hedge transactions and issue expenses):
As of December 31, | |||||||||||
2025 | 2024 | 2023 | |||||||||
(In Millions of Euros) | |||||||||||
Deposits from central banks | 20,879 | 18,028 | 26,707 | ||||||||
Deposits from credit institutions | 54,909 | 50,690 | 83,376 | ||||||||
Customer deposits | 530,079 | 468,590 | 437,405 | ||||||||
Debt certificates | 87,839 | 74,464 | 72,685 | ||||||||
Other financial liabilities | 31,782 | 27,173 | 23,650 | ||||||||
Total | 725,488 | 638,945 | 643,823 | ||||||||
Liquidity and Funding Risk Management of the BBVA Group aims, in the short term, to prevent any Group entity from having difficulties in meeting its payment commitments and from having to resort –in order to meet them– to obtaining funds on burdensome conditions and, in the medium term, to support the suitability of the Group’s financial structure and its evolution, within the prevailing economic, market and regulatory conditions.
One of the key elements in the BBVA Group’s Liquidity and Financing Risk Management is the maintenance of large, high quality liquidity buffers in all its bank subsidiaries. Due, in part, to the Group’s decision to follow a Multiple Point of Entry strategy, in accordance with the framework for the resolution of financial entities designed by the Financial Stability Board (FSB), the Group’s subsidiaries are self-sufficient and each subsidiary is responsible for managing its own capital and liquidity, without fund transfers or financing between either the parent company and the subsidiaries or between the different subsidiaries. This strategy aims to limit the spread of a liquidity crisis among the Group’s different areas, and supports that the cost of liquidity and financing is correctly reflected in the price formation process. As part of this strategy, the BBVA Group is organized into eight Liquidity Management Units (“LMUs”) composed of the parent company and the bank subsidiaries in each of Spain, Mexico, Turkey, South America (Argentina, Colombia, Peru, Uruguay) and Switzerland, plus the branches that depend on them.
Regarding liquidity and funding performance, the BBVA Group seeks to maintain an adequate and dynamic funding structure consistent with the existing Risk Appetite Framework, through liquidity and funding planning. In this regard, the Liquidity and Funding Management model evaluates liquid resources needed and the ability to maintain the liquidity profile over the planning horizon, including in the face of unexpected stress conditions. The Group’s funding structure is predominantly of a retail nature, as customer deposits represent the main source of funding.
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Throughout 2025, BBVA has maintained its objective of preserving the strength of the funding structure of the different Group entities by focusing on strengthening self-funding from customer funds, maintaining a buffer of fully available liquid assets, diversifying sources of funding and generating and optimizing collateral available to deal with the withdrawal of central banks’ monetary stimulus and/or stress situations in the markets.
During 2025, 2024 and 2023, all LMUs held self-funding levels deemed by the Group to be sufficient, mainly satisfied by customer deposits. The Liquidity Coverage Ratio (LCR), a liquidity buffer, at both a consolidated and individual level, was 143% as of December 31, 2025 (in excess of the required 100%) and 134% as of December 31, 2024 (in excess of the required 100%). The net stable funding ratio (NSFR) of the BBVA Group was 126% as of December 31, 2025 (in excess of the required 100%) and 127% as of December 31, 2024 (in excess of the required 100%). The NSFR ratio is the result of the division between the amount of stable funding available and the amount of stable funding required, requiring banks to maintain a stable financing profile in relation to the composition of their assets and off-balance sheet activities.
The Group has pension commitments with its employees, which are due on retirement, death and long term disability. The Group maintains insurance contracts contracted with insurance companies owned by the Group, which use derivatives to mitigate the interest rate risk arising from such commitments. See Notes 23 and 25 to the Consolidated Financial Statements for additional information on the Group’s contractual obligations with respect to its insurance activity and the post-employment benefits of the Group, respectively. See also “Item 3. Key Information—Risk Factors—Financial Risks—The Group has a substantial amount of commitments with personnel considered wholly unfunded due to the absence of qualifying plan assets”.
Furthermore, the BBVA Group holds loan commitments and financial guarantees which are in turn 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. For information on loan commitments, financial guarantees and other commitments given by the Group, see Note 33 to the Consolidated Financial Statements.
We believe that our working capital is sufficient for our present requirements and to pursue our planned business strategies. Please see Notes 51 and 7.5 to the Consolidated Financial Statements for additional information on the BBVA Group’s liquidity and capital resources.
Potential structural limitations affecting Banco Bilbao Vizcaya Argentaria, S.A.’s funding
As some of the Group’s operations are conducted through subsidiaries, Banco Bilbao Vizcaya Argentaria, S.A.’s results depend in part on the ability of its subsidiaries to generate earnings.
The Group operates in Spain, Mexico, Turkey and over 25 other countries, mainly in Europe, South America, the United States and Asia. Our banking subsidiaries around the world are subject to supervision and regulation by a variety of regulatory bodies relating to, among other things, the satisfaction of different solvency, resolution and/or governance requirements. The obligation to satisfy such requirements may affect the ability of our banking subsidiaries to transfer funds to Banco Bilbao Vizcaya Argentaria, S.A. in the form of cash dividends, loans or advances. In addition, under the laws of the various jurisdictions where our subsidiaries are incorporated, dividends may only be paid out of funds legally available and, in certain cases, subject to the prior approval of the competent regulatory or supervisory authorities.
Even where any applicable requirements are met and funds are legally available, the relevant regulator could advise against the transfer of funds to Banco Bilbao Vizcaya Argentaria, S.A. in the form of cash dividends, loans or advances, for prudence reasons or otherwise. For example, the repatriation of dividends from BBVA’s Turkish, Argentinian and Venezuelan subsidiaries is subject to certain restrictions and there is no assurance that further restrictions will not be imposed.
The geographic diversification of the Group’s businesses, however, may help to limit the effect of any restrictions that could be adopted in any given country.
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Customer deposits
Customer deposits (including “Financial liabilities at amortized cost - Customer deposits”, “Financial liabilities designated at fair value through profit or loss – Customer deposits” and “Financial liabilities held for trading – Customer deposits”) amounted to €530,079 million as of December 31, 2025 compared with €468,590 million as of December 31, 2024 (€437,405 million as of December 31, 2023), a 13.1% increase, mainly due to: (i) the increase in time deposits from public institutions (through repurchase agreements) within the Corporate and Investment Banking portfolio, supported by higher short-term liquidity placements of the public sector within a low interest rate environment, increases in time deposits within the corporate portfolio and the increase in demand deposits from households in Spain; (ii) the growth in household demand deposits through our digital banking offerings in Europe and the increase in wholesale demand deposits in Asia and Europe; and (iii) the increase in Turkish lira-denominated retail and wholesale demand deposits and wholesale time deposits, partially offset by the depreciation of the Turkish lira against the euro.
Our customer deposits, excluding repurchase agreements, amounted to €489,057 million as of December 31, 2025, an 11.3% increase compared with €439,469 million as of December 31, 2024 (€410,044 million as of December 31, 2023).
Short-term customer deposits at amortized cost amounted to €473,799 million as of December 31, 2025, or 89.4% of our total customer deposits, compared to €426,174 million and 90.9% of our total customer deposits as of December 31, 2024 (see Note 22.3 to the Consolidated Financial Statements).
Deposits from credit institutions and central banks
The following table shows amounts due to credit institutions and central banks as of December 31, 2025, 2024 and 2023:
As of December 31, | |||||||||||
2025 | 2024 | 2023 | |||||||||
(In Millions of Euros) | |||||||||||
Deposits from credit institutions | 54,909 | 50,690 | 83,376 | ||||||||
Deposits from central banks | 20,879 | 18,028 | 26,707 | ||||||||
Total | 75,789 | 68,719 | 110,083 | ||||||||
Deposits from credit institutions and central banks amounted to €75,789 million as of December 31, 2025 compared with €68,719 million as of December 31, 2024 (€110,083 million as of December 31, 2023). The increase as of December 31, 2025 compared to December 31, 2024 was mainly attributable to an increase in time deposits from central banks and deposits from credit institutions (through repurchase agreements) in the amortized cost and trading portfolios in Spain, partially offset by decreases in deposits from central banks (through repurchase agreements) in Mexico.
Capital markets
We make debt issuances in the domestic and international capital markets in order to finance our activities. As of December 31, 2025 we had €60,894 million of debt certificates outstanding, comprising €52,734 million in bonds and debentures and €8,160 million in promissory notes and other securities, compared with €50,310 million, €45,988 million and €4,322 million outstanding, respectively, as of December 31, 2024, and €52,875 million, €47,124 million and €5,752 million outstanding, respectively, as of December 31, 2023 (see Note 22.4 to the Consolidated Financial Statements).
In addition, we had a total of €21,052 million in subordinated debt and subordinated deposits and €1 million preferred securities outstanding as of December 31, 2025 compared with €19,611 million and €1 million, respectively, as of December 31, 2024 (€15,867 million and nil, respectively, as of December 31, 2023).
The following is a breakdown as of December 31, 2025 of the maturities of our debt certificates (including bonds), subordinated debt, subordinated deposits and preferred securities. Regulatory equity instruments have been classified according to their contractual maturity:
Demand | Up to 1 Month | 1 to 3 Months | 3 to 12 Months | 1 to 5 Years | Over 5 Years | Total | |||||||||||||||||
(In Millions of Euros) | |||||||||||||||||||||||
Debt certificates (including bonds) | — | 3,348 | 3,902 | 16,876 | 25,792 | 10,976 | 60,894 | ||||||||||||||||
Subordinated debt, subordinated deposits and preferred securities | — | 3 | — | 35 | 2,105 | 18,910 | 21,053 | ||||||||||||||||
Total | — | 3,351 | 3,902 | 16,911 | 27,897 | 29,886 | 81,947 | ||||||||||||||||
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Capital
As of December 31, 2025, 2024 and 2023, equity is calculated in accordance with current regulations on minimum capital base requirements for Spanish credit institutions on both an individual and consolidated basis. These regulations dictate how to calculate equity levels, as well as the various internal capital adequacy assessment processes they should have in place and the information such institutions should disclose to the market.
The minimum capital base requirements established by the current regulations are calculated according to the Group’s exposure to credit and dilution risk, counterparty and liquidity risk relating to the trading portfolio, exchange-rate risk and operational risk. In addition, the Group must fulfill the risk concentration limits established in these regulations and internal corporate governance obligations.
For information on our SREP requirements, the consolidated capital ratios as of December 31, 2025, 2024 and 2023, our RWAs, our MREL requirements, the capital issuances of Banco Bilbao Vizcaya Argentaria, S.A. and the impact on BBVA’s CET1 arising from certain singular effects, see “Item 4. Information on the Company—Business Overview—Supervision and Regulation” and Note 32 to the Consolidated Financial Statements.
C. Research and Development, Patents and Licenses, etc.
In 2025, we continued to foster the use of new technologies as a key component of our global development strategy. We explored new business and growth opportunities, focusing on three major areas: emerging technologies, digital banking and data driven initiatives, in each case with the customer as the focal point of our banking business.
The BBVA Group is not materially dependent on the issuance of patents, licenses and industrial, mercantile or financial contracts or on new manufacturing processes in carrying out its business purpose.
D. Trend Information
The European financial services sector is expected to remain competitive in the current challenging environment. See “Item 4. Information on the Company―Competition”. See also “Item 3. Key Information—Risk Factors—Business Risks—The Group faces increasing competition and is exposed to a changing business model”.
Trends expected to shape the sector’s profitability in the future include the following:
•positive interest rates, especially in Spain, after the protracted period of low (or even negative) interest rates ended in 2022. Changes in interest rates may be particularly significant in countries like Spain, where mortgages account for a significant proportion of credit (more than 40%) and approximately two-thirds of mortgage loans are estimated to have floating rates. Although interest rates are declining from the peak reached in June 2024, the persistence of relatively high and positive interest rates may lead to higher interest revenue, but also to an increase in non-performing loans and a decrease in the demand for loans, in addition to resulting in higher funding costs;
•a more challenging competitive environment with the entry of non-bank digital financial services providers, which are growing very fast in line with technological advances and becoming a very important competitor for the banking industry. These entities do not have to comply with a regulation scheme as strict as that applicable to banks. For additional information, see “Item 4. Information on the Company―Competition”;
•the completion and the implementation of the ongoing financial regulatory reforms. On one hand, when such reforms are applied locally, inconsistently and heterogeneously, regulatory fragmentation and the implementation by some countries of more flexible or stricter rules or regulations may put certain banks at a disadvantage. Conversely, it is possible that, in the framework of the banking union and in the capital markets union, regulatory changes and enhanced institutional architecture might contribute to a less fragmented, but more competitive, landscape. Moreover, regulatory changes, adopted or proposed, as well as their interpretation or application, have increased and may continue to increase operating expenses and decrease margins. For information on certain significant supervision and regulatory matters which affect the Group, see “Item 4. Information on the Company—Business Overview—Supervision and Regulation”;
•the increasing tax burden in certain regions such as the tax on net interest revenue and net fees and commissions applicable to credit institutions operating in Spain and the proposed Tax Directive of the European Commission for the Financial Transactions Tax (which would tax the acquisitions of certain securities, negotiated in markets where the Group operates);
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•the adoption of novel pro-consumer regulation and measures, such as the proposed creation of a new administrative authority in Spain, which shall resolve complaints against banks from customers and potential customers and be financed by financial institutions, and the amendments introduced in the Code of Good Practices in recent years, easing the impact of interest rate hikes on mortgage loans agreements related to primary residences, among others (see “Item 4. Information on the Company—Business Overview—Supervision and Regulation—Principal Markets—Spain” for additional information); and
•the relevance of ESG and climate change matters, albeit milder than in previous years, which may result, among others, in changes in consumer preferences and additional legislation and regulatory requirements. For example, several of the European Union’s sustainability initiatives are expected to significantly impact asset management activities in coming years, as asset managers need to include sustainability as part of their financial advice. Further, climate-related disasters could result in market volatility, negatively impact customers’ ability to pay outstanding loans, result in the deterioration of the value of collateral or insurance shortfalls or otherwise disrupt the operations of banks or the operations of their customers or third parties on which they rely. See “Item 3. Key Information—Risk Factors—Business Risks—Environmental, social and governance (ESG) risks may adversely impact the Group”.
E. Critical Accounting Estimates
Not Applicable.
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ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
We have a one-tier board system with a single collegiate body, the Board of Directors, that is collectively responsible for the highest functions of managing the Company and overseeing and controlling the management of the Company, all with the aim of achieving the Company’s purpose and best serving the corporate interest.
Our Board of Directors is subject to Board of Directors Regulations that reflect and implement the principles and elements of BBVA’s concept of corporate governance. These Board of Directors Regulations include standards for the internal management and operation of the Board and its committees, as well as the rights and obligations of directors in the performance of their duties.
General shareholders’ meetings are subject to their own set of regulations on issues such as how they operate and what rights shareholders have at such meetings. These establish the possibility of exercising or delegating votes over remote communication media.
Our Board of Directors has approved the annual report on corporate governance and a report on directors’ remuneration for 2025, according to the provisions established in the Spanish regulation for listed companies.
Shareholders and investors may find the documents referred to above on BBVA’s website (www.bbva.com), under the “Shareholders and Investors” and “Shareholders and Investors—Corporate Governance and Remuneration Policy” sections.
BBVA’s website was created to facilitate information and communication with shareholders and other stakeholders. It provides special direct access to all information considered relevant to BBVA’s corporate governance system in a user-friendly manner. In addition, all the information required by Article 539 of the Spanish Corporate Enterprises Act can be accessed on BBVA’s website (www.bbva.com).
A. Directors and Senior Management
We are managed by a Board of Directors that is currently composed of 15 members, 13 of which are non-executive directors and two are executive directors.
Pursuant to Article 1 of the Board of Directors Regulations, Bank’s directors may be executive or non-executive. Executive directors are those who perform management duties in the Bank or any of its Group companies, irrespective of the legal relationship they have with it. All other members of the Board of Directors will hold non-executive directorships, and may be proprietary, independent or other external directors.
Independent directors are those non-executive directors who are appointed based on their personal and professional qualities and who may perform their duties without being constrained by their relationship with the Company, or its Group, its significant shareholders or managers. Under the Board of Directors Regulations, directors may not be considered independent in any of the following situations:
a.They have been employees or have been executive directors of Group companies in the last three or five years, respectively.
b.They receive from the Bank, or from Group companies, any amount or benefit for any item other than director’s remuneration, except for those which are not significant for such director. For the purposes of this item, neither dividends nor pension allowances received by directors relating to their previous professional or employment relations will be taken into account, provided that said allowances are unconditional in nature and, therefore, the company that provides said allowances may not suspend, modify or revoke their accrual at its discretion without breaching its obligations.
c.They are, or have been in the past three years, a partner of an external auditor or have been responsible during this time for the auditor’s report of the Company or any other company within its Group.
d.They are executive directors or senior managers of another company for which an executive director or senior manager of the Company is an external director.
e.They have, or have had over the last year, a significant business relationship with the Bank or any company within its Group, whether in their own name or as a significant shareholder, director or senior manager of a company that has, or has had, such a relationship. Business relationships include supplying goods or services, including financial services, as well as acting as an adviser or consultant.
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f.They are significant shareholders, executive directors or senior managers of a company that receives, or has received in the past three years, donations from the Company or from its Group. Those who are simply trustees of a foundation receiving donations will not be considered included in this item.
g. They are spouses, partners in a similar relationship of affection or relatives up to the second degree of an executive director or senior manager of the Company.
h.They have not been proposed for appointment or renewal by the Appointments and Corporate Governance Committee.
i.They have been directors for a continuous period of more than twelve years.
j.In relation to a significant shareholder or shareholder represented on the Board of Directors, any of the circumstances referred to in items (a), (e), (f) or (g) above shall apply. In the event of the kinship relations referred to in item (g), the limitation will apply not only to the shareholder, but also to any proprietary directors of the company in which shares are held.
The directors with a shareholding in the Company may be considered independent provided that they do not meet the conditions above and, in addition, that their shareholding is not legally regarded as significant.
Board of Directors Regulations
The principles and elements comprising our corporate governance are set forth in our Board of Directors Regulations, which govern the internal procedures and the operation of the Board and its committees, as well as directors’ rights and duties.
The full text of the Board of Directors Regulations and those of the Board committees can be found on BBVA’s website (www.bbva.com).
The following provides a brief description of several significant matters covered in the Board of Directors Regulations.
Performance of Directors’ Duties
Directors must fulfill the duties imposed by laws and the Bylaws with fidelity to the corporate interest, understood as the interest of the Company. They must also have the availability and dedication required at all times for the performance of their duties as directors, including when discharging their duties as members of the various committees.
They will participate in the deliberations, discussions and debates held on matters submitted for their consideration, and they should clearly express their opposition when they consider that any proposal submitted to the Bank’s corporate bodies may be contrary to the corporate interest or may harm shareholders not represented on the Board of Directors, and will be provided in advance with the information needed to form an opinion with respect to the matters within the remit of the Bank’s corporate bodies. They may ask for any additional information and advice required to perform their duties. They must devote to their duty the necessary time and effort to perform it effectively and are required to personally attend the meetings of the corporate bodies on which they sit, except for a justifiable reason. If it is not possible for a director to attend a meeting of the Board of Directors, the director may authorize another director to act as their proxy and cast votes on their behalf, by sending a letter or email to the Company with the information needed by the proxy director to follow the absent director’s instructions. Applicable legislation states, however, that non-executive directors may only grant a proxy to another non-executive director. In addition, this system applies to attendance at meetings of Board of Directors committees.
The directors may also request the Board of Directors for external expert assistance for any matters submitted to their consideration whose special complexity or importance so requires.
Conflicts of Interest
The rules comprising the Board of Directors Regulations detail different situations in which conflicts of interest could arise between directors, their family members and/or organizations to which they are linked, and the BBVA Group. They set out procedures for such cases, in order to avoid conduct contrary to our best interests. The rules contained in the Board of Directors Regulations are in line with the specific regulations established in the Spanish Corporate Enterprises Act.
These rules help ensure directors’ conduct reflects stringent ethical codes, in keeping with applicable standards and according to core values of the BBVA Group.
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Incompatibilities
Directors are also subject to the rules on limitations and incompatibilities established under the applicable regulations at any time and, in particular, to the provisions of Spanish Law 10/2014 and Circular 2/2016, of the Bank of Spain, for credit institutions on regulation, supervision and solvency. A director of BBVA may not simultaneously hold more positions than those provided for in the following combinations: (i) one executive position and two non-executive positions; or (ii) four non-executive positions. Executive positions are understood to be those that undertake management duties irrespective of the legal bond attributed by those duties. In this respect, the following will count as a single position: 1) executive or non-executive positions held within the same group; 2) executive or non-executive positions held within (i) entities that form part of the same institutional protection scheme or (ii) companies in which the entity holds a significant shareholding. Positions held in non-profit organizations or entities or companies pursuing non-commercial purposes will not count when determining the maximum number of positions. Nevertheless, the Bank of Spain may authorize members of the Board of Directors to hold an additional non-executive position if it deems that this would not interfere with the proper performance of the director’s activities in the credit institution.
In addition, pursuant to the provisions of Article 12 of Board of Directors Regulations, directors may not provide professional services to companies competing with the Bank or any of its Group companies, or agree to be an employee, manager or director of such companies, unless they have received express prior authorization from the Board of Directors or from the general shareholders’ meeting, as appropriate, or unless these activities had been provided or conducted before the director joined the Bank, they had posed no effective competition and they had informed the Bank of such at that time.
Moreover, directors may not have direct or indirect shareholdings in businesses or companies in which the Bank or its Group companies hold an interest, unless such shareholding was held prior to joining the Board of Directors or to the time when the Group acquired its holding in such businesses or companies, or unless such companies are listed on national or international securities markets, or unless authorized to do so by the Board of Directors.
Lastly, directors may not hold political positions or perform any other activities that might have public significance or may affect the Company’s image in any way, unless this is with prior authorization from the Bank’s Board of Directors.
Term of Directorships and Director Age Limit
Directors will stay in office for the term set out in our Bylaws (three years). If they have been co-opted, they will stay in office until the first general shareholders’ meeting is held. The general shareholders’ meeting may then ratify their appointment for the term of office established under our Bylaws.
BBVA’s Board of Directors Regulations do not establish an age limit for sitting on the Bank’s Board.
Appointment and Re-election of Directors
The proposals for appointment or re-election of directors submitted by the Board of Directors to the general shareholders’ meeting, as well as the appointments made directly to fill vacancies under its co-opting powers, will be approved at the proposal of the Appointments and Corporate Governance Committee for independent directors and prior report from this Committee for all other directors.
The proposal must be accompanied by an explanatory report by the Board of Directors assessing the skills, experience and merits of the candidate proposed, which will be added to the minutes of the general shareholders’ meeting or the Board of Directors meeting.
To such end, the Appointments and Corporate Governance Committee will evaluate the balance of knowledge, skills, diversity and experience of the Board of Directors, as well as the conditions that the candidates must meet to cover the vacancies that arise, assessing the dedication of time considered necessary to adequately carry out their duties, in view of the needs of the corporate bodies at any given time.
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Directors’ Resignation and Dismissal
Furthermore, in accordance with the Board of Directors Regulations, directors must offer their resignation to the Board of Directors and accept its decision regarding their continuity in office or not. Should the Board decide against their continuity, they are required to tender their resignation in any of the following circumstances:
•When they are affected by circumstances of incompatibility or prohibition as defined under legislation in force, in the Bylaws or in the Board of Directors Regulations.
•When significant changes occur in their personal or professional situation that affect the status by virtue of which they were appointed as directors.
•In the event of serious breach of their duties in the performance of their role as directors.
•When, for reasons attributable to the directors in their status as such, serious damage has been done to the Company’s equity, standing or reputation; or
•When they are no longer suitable to hold the status of director of the Bank.
Evaluation
Article 18 of the Board of Directors Regulations indicates that the Board of Directors will assess the quality and effectiveness of the operation of the Board of Directors, as well as will assess the performance of the duties of the Chair, based in each case on the report submitted by the Appointments and Corporate Governance Committee (process which will be led by the Lead Director with respect to the Chair according to article 22 of the Board of Directors Regulations). Likewise, the Board of Directors will carry out the assessment of the operation of its committees, based on the reports submitted thereby. Furthermore, the Board of Directors will assess the performance of the Chief Executive Officer, based on the report submitted by the Appointments and Corporate Governance Committee, which will include the assessment made by the Executive Committee.
Moreover, Article 19 of the Board of Directors Regulations establishes that the Chair will organize and coordinate the periodic assessment of the Board’s performance with the chairs of the relevant committees. Pursuant to the provisions of the Board of Directors Regulations, during the assessment process conducted for 2025, the Board of Directors evaluated: (i) the quality and efficiency of the operation of the Board of Directors; (ii) the performance of the duties of the Chair and the Chief Executive Officer; and (iii) the operation of the Board committees.
The Board of Directors
As of the date of this Annual Report, our Board of Directors is comprised of 15 members, 13 of which are non-executive directors and two are executive directors.
The following table sets forth the names of the members of the Board of Directors as of the date of this Annual Report, their date of appointment and, if applicable, re-election, their current positions and their present principal outside occupation and main employment history.
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| Name | Birth Year | Current Position | Date Nominated | Date Re-elected | Principal Business Activities and Employment History (*) | ||||||||||||
| Carlos Torres Vila (1)(6) | 1966 | Chair | May 4, 2015 | March 21, 2025 | Chair of the Board of Directors of BBVA since December 2018. Chair of the Executive Committee and of the Technology and Cybersecurity Committee. Director at the following BBVA Group companies: Grupo Financiero BBVA México, S.A. de C.V. and BBVA México S.A., Institución de Banca Múltiple, Grupo Financiero BBVA México. Chief Executive Officer of BBVA from May 2015 to December 2018. He started at BBVA in September 2008 holding senior management posts such as Head of Digital Banking from March 2014 to May 2015 and Head of BBVA Strategy & Corporate Development from January 2009 to March 2014. He previously held positions of responsibility in other companies, such as Chief Financial Officer, Corporate Director of Strategy and member of the Executive Committee of Endesa, as well as elected partner at McKinsey & Company. | ||||||||||||
| Onur Genç (1) | 1974 | Chief Executive Officer | December 20, 2018 | March 21, 2025 | Chief Executive Officer of BBVA since December 2018. Director at the following BBVA Group companies: Grupo Financiero BBVA México, S.A. de C.V. and BBVA México S.A., Institución de Banca Múltiple, Grupo Financiero BBVA México. President and CEO of BBVA USA Bancshares, Inc. and BBVA’s Country Manager in the United States from 2017 to December 2018. Deputy CEO at Garanti BBVA between 2015 and 2017 and Executive Vice President for retail and private banking at Garanti BBVA between 2012 and 2015. He has also held positions of responsibility in different McKinsey & Company offices, having been a Senior Partner and Manager of its Turkish office. | ||||||||||||
| José Miguel Andrés Torrecillas (1)(2)(3)(8) | 1955 | Deputy Chair; Independent Director | March 13, 2015 | March 15, 2024 | Deputy Chair of the BBVA Board of Directors since April 2019. Chair of the Audit Committee and the Appointments and Corporate Governance Committee. Independent director of Obrascón Hularte Laín, S.A. (OHL). Chair of Ernst & Young Spain from 2004 to 2014, where he was a partner since 1987 and also held a series of senior offices, including Managing Partner of the Banking Group from 1989 to 2004, General Managing Partner for Audit and Advisory Services at Ernst & Young Spain from 2001 to 2004, and Managing Director of the Audit and Advisory practices at Ernst & Young Italy and Portugal from 2008 to 2013. He has been director of Zardoya Otis, S.A. from 2015 to 2022. He has been a member of various organizations such as the ROAC (Official Registry of Auditors), the REA (Registry of Economic Auditors), the Governing Board of the Spanish Institute of Financial Analysts, Empresa y Sociedad Foundation, Spanish Institute of Chartered Accountants, Advisory Board of the Institute of Internal Auditors; and of the Institute of Chartered Accountants in England & Wales (the ICAEW). | ||||||||||||
Jaime Caruana Lacorte (1)(3)(5) | 1952 | Independent Director | March 16, 2018 | March 15, 2024 | General Manager of the Bank of International Settlements (BIS) between 2009 and 2017. Between 2006 and 2009 he was Head of the Monetary, Capital Markets Department and Financial Counselor to the General Manager at the International Monetary Fund (IMF), between 2003 and 2006 he was Chair of the Basel Committee on Banking Supervision, and between 2000 and 2006 he was Governor of the Bank of Spain and member of the Governing Council of the European Central Bank. | ||||||||||||
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Enrique Casanueva Nárdiz (2)(5) | 1961 | Independent Director | March 15, 2024 | Not applicable | He has held various positions of responsibility at J.P. Morgan as Managing Director responsible for Investment Banking Spain and Portugal (2000-2006), President and CEO of Spain and Portugal and member of the EMEA Management Committee (2006-2015), Head of Southern Europe, Nordic Countries, Central and Eastern Europe, Ireland and Israel and member of the EMEA Executive Committee (2015-2017) and Senior Advisor and member of EMEA Advisory Council (2019-2024). Previously, he served as Managing Director of Investment Banking Spain and Portugal at Banco Santander, in the Santander Investment Area (1995-2000) and executive director in the Investment Banking department at Goldman Sachs (1991-1995). | ||||||||||||
Sonia Dulá (2)(5) | 1961 | Independent Director | March 17, 2023 | Not applicable | Independent director at Huntsman Corporation, Acciona and Corporación Acciona Energías Renovables, as well as lifetime member of the Council on Foreign Relations. Executive Director and Vice President in Investment Banking at Goldman Sachs (1986-1995). She has held various positions at Bank of America Merrill Lynch, including Director of Corporate and Investment Banking for Latin America (2007-2010), Head of Wealth Management for Latin America (2010-2013) and Vice Chair for Latin America (2013-2018). She has sat on the boards of Bestinver, Grupo Prisa, Millicom, Hemisphere Media, Council of the Americas, Women’s World Banking, and The Adrienne Arsht Center for the Performing Arts. She has also been a member of the International Advisory Board of Banco Itaú (Brazil), of the Young Presidents Organization (YPO) and of the Bank of America Global Diversity and Inclusion Council. | ||||||||||||
Raúl Galamba de Oliveira (3)(5)(6)(7) | 1964 | Independent Director | March 13, 2020 | March 17, 2023 | Lead Director of BBVA since April 2022 and Chair of the Risk and Compliance Committee. Independent Chair of the Board of Directors of CTT – Correios de Portugal, S.A. and non-executive director of José de Mello Capital. His career path has been mainly linked to McKinsey & Company, where he was appointed partner in 1995, Director of the global practice of financial services in 2000, Managing Partner for Spain and Portugal between 2005 and 2011, Managing Partner of Global Risk practice between 2013 and 2016, member of the Global Shareholders Council from 2005 to 2011, member of the Global Partner Election and Evaluation Committees between 2001 and 2017, member of the Remuneration Committee from 2005 to 2013 and Chair of the Global Learning Board from 2006 to 2011. | ||||||||||||
Belén Garijo López (1)(3) | 1960 | External Director | March 16, 2012 | March 15, 2024 | Chair of the Executive Board and CEO of Merck Group. Chair of the European side of EU-Japan Business Round Table, member of the executive committee of the German Chemical Industry Association, member of the European Round Table for Industry, member of The Business Council and member of The European Innovation Council (EIC). Director of L’Oréal from 2014 to 2024. Previously, she has held various positions of responsibility at Abbot Laboratories (1989–1996), Rhône-Poulenc (1996–1999), Aventis Pharma (1999–2004), Sanofi Aventis (2004–2011) and Merck (since 2011). | ||||||||||||
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Connie Hedegaard Koksbang (2) | 1960 | Independent Director | March 18, 2022 | March 21, 2025 | Independent director at Danfoss A/S. She participates on an ongoing basis in international forums and organizations and in foundations: she is member of the Board of Trustees at the European Climate Foundation, Chair of the OECD’s Round Table on Sustainable Development, member of the Climate and Environment Advisory Council of the European Investment Bank (EIB), member of the Villum Foundation, Chair of the European Commission’s Mission Adaptation to Climate Change, including Social Change, Chair of the Board at Aarhus University, and a member of the Sustainability Council at Volkswagen and advisor to the Board of Gazelle Wind Power. She has been non-executive director of Nordex SE from 2016 to 2022 and of Cadeler A/S from 2020 to 2023. She has held various positions in the public sector in Denmark and the European Union, such as EU Commissioner for Climate Action, Danish Minister for Climate and Energy, Minister for Environment, and Minister for Nordic Cooperation. | ||||||||||||
| Lourdes Máiz Carro (2)(4) | 1959 | Independent Director | March 14, 2014 | March 17, 2023 | Independent director of Actividades de Construcción y Servicios, S.A. (ACS). Secretary of the Board of Directors and Head of Legal Services at Iberia, Líneas Aéreas de España from 2001 until 2016; as well as Director of several companies, including Renfe, GIF (Gerencia de Infraestructuras Ferroviarias – Railway Infrastructure Administrator, now ADIF), the ICO (Instituto de Crédito Oficial – Official Credit Institution), Aldeasa and Banco Hipotecario. Joined the Spanish State Counsel Corps (Cuerpo de Abogados del Estado) in 1992 and held various senior positions in the Public Administration, including Director of the Cabinet of the Assistant Secretary of Public Administration, Director of the Cabinet of the Assistant Secretary of Education; General Director of Administrative Organization, Personnel and IT, General Director of the Sociedad Estatal de Participaciones Patrimoniales (SEPPA) within the Ministry of Economy and Finance and Technical General Secretary of the Ministry of Agriculture, Fisheries and Food. | ||||||||||||
Cristina de Parias Halcón (3)(6) | 1965 | External Director | March 15, 2024 | Not applicable | Independent director of Endesa, S.A. and Sanitas Seguros. Member of the Board of Trustees of the BBVA Microfinance Foundation. Director at the following Group companies until 2024: BBVA México, S.A., Institución de Banca Múltiple, Grupo Financiero BBVA México and Grupo Financiero BBVA México, S.A. de C.V. She has held positions of responsibility at BBVA such as Head of the Consumer Finance subsidiary (Finanzia) and CEO of Uno-e Bank (2005-2008), Head of New Digital Businesses (2008-2011), Head of Central Business Area (2011-2014) and Country Manager Spain and Portugal (2014-2019). She was also Head of Marketing and Multichannel for retail clients and Head of the Personal Banking business unit (Citigold) at Citibank (1991-1998). | ||||||||||||
Ana Peralta Moreno (2)(4) | 1961 | Independent Director | March 16, 2018 | March 15, 2024 | Independent director of Grenergy Renovables, S.A. and of Inmobiliaria Colonial, SOCIMI, S.A. She was an independent member of the Board of Directors of Deutsche Bank SAE (2015-2018) and Banco Etcheverría, S.A. (2013-2014), as well as independent director at Grupo Lar Holding Residencial, S.A.U. (2017-2018) and Senior Advisor at Oliver Wyman Financial Services (2012-2018). Chief Risk Officer and member of the Management Committee of Banco Pastor, S.A. (2008-2011). Before that, she held several positions at Bankinter, including Chief Risk Officer and member of the Management Committee (2004- 2008). | ||||||||||||
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Ana Revenga Shanklin (4) (5)(6) | 1963 | Independent Director | March 13, 2020 | March 17, 2023 | Chair of the Remuneration Committee. Member of the Board of Trustees of the BBVA Microfinance Foundation and member of the Advisory Council of ESADE EcPol - Center for Economic Policy and Political Economy. She has been President of the Board of Trustees at the ISEAK Foundation (2018-2025), Associate Professor at the Walsh School of Foreign Service at Georgetown University (2019-2021) and Senior Fellow at the Brookings Institution (2018-2023). She has held several positions of responsibility at the World Bank, including Senior Director Global of the Poverty and Equity Practice between 2014 and 2016 and Deputy Chief Economist in 2016 and 2017. | ||||||||||||
Carlos Salazar Lomelín (4) | 1951 | External Director | March 13, 2020 | March 17, 2023 | Independent director of Sukarne S.A. de C.V., Alsea, S.A.B. de C.V. and CYDSA Corporativo, S.A. de C.V. Director of the following BBVA Group companies: Grupo Financiero BBVA México, S.A. de C.V., BBVA México, S.A., Institución de Banca Múltiple, Grupo Financiero BBVA México, BBVA Seguros México, S.A. de C.V. Grupo Financiero BBVA México, BBVA Pensiones México, S.A. de C.V. Grupo Financiero BBVA México and BBVA Seguros Salud México, S.A. de C.V. Grupo Financiero BBVA México. Chair of the Consejo Coordinador Empresarial de México (the Mexican Business Coordinating Council) from 2019 to 2022. His career path has been linked to the Grupo Fomento Económico Mexicano S.A.B. de C.V. (Femsa) until 2019, having held roles such as General Manager of Cervecería Cuauhtémoc-Moctezuma, Manager of Coca Cola Femsa and General Manager of Femsa. | ||||||||||||
Jan Verplancke (4)(6) | 1963 | Independent Director | March 16, 2018 | March 15, 2024 | Advisor to the Internal Advisory Board at Abdul Latif Jameel and CEO of Vestraco, S.à.R.L. Non-executive director at Cambridge Solutions (2006-2009) and Monitise (2008-2011). Director, Chief Information Officer, Group Head of Technology and Banking Operations of Standard Chartered Bank between 2004 and 2015, Vice President of Technology and Information Officer, in the EMEA region, of Dell (1999-2004), as well as Vice President and Chief of Architecture and Vice President of Information of the Youth Category at Levi Strauss (1994 - 1999). | ||||||||||||
(*) Where no date is provided, the position is currently held.
(1) Member of the Executive Committee.
(2) Member of the Audit Committee.
(3) Member of the Appointments and Corporate Governance Committee.
(4) Member of the Remuneration Committee.
(5) Member of the Risk and Compliance Committee.
(6) Member of the Technology and Cybersecurity Committee.
(7) Lead Director.
(8) Deputy Chair.
The statutory mandate of three years of the directors Sonia Dulá, Raúl Galamba de Oliveira, Lourdes Máiz Carro, Ana Revenga Shanklin and Carlos Salazar Lomelín will expire during 2026. The Bank’s Board of Directors has proposed that Sonia Dulá, Raúl Galamba de Oliveira, Ana Revenga Shanklin and Carlos Salazar Lomelín be re-elected by the general shareholders’ meeting, planned to be held on March 20, 2026, for another statutory period of three years.
The Bank’s Board of Directors has also submitted to such general shareholders’ meeting the appointment of Jorge Montalbo Todolí, for the statutory period of three years, with the status of independent director. Mr. Montalbo spent most of his professional career at Deloitte (1990-2022), where he specialized in auditing for the financial and insurance sectors. During his tenure, he held senior leadership positions, including partner in charge of insurance in Spain, audit and insurance partner for financial services, and co-leader of insurance audit for Europe, Middle East and Africa (EMEA region). His academic background and professional experience bring extensive knowledge of the financial sector, together with solid expertise in risk management and auditing.
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The aforementioned proposed re-elections and appointment are subject to approval of the general shareholders’ meeting of BBVA. In the case of the appointment, it is also subject to verification by the ECB, considering the regulatory suitability requirements for the performance of his duties as director.
Senior Management
Our senior managers were each appointed for an indefinite term. Their positions as of the date of this Annual Report are as follows:
| Name | Current Position | Present Principal Occupation and Employment History(*) | ||||||
| Carlos Torres Vila | Chair | See “—The Board of Directors” above. In addition, as set out in the Board of Directors Regulations, he oversees the following BBVA’s areas: Strategy & M&A, Engineering, Talent and Culture, Data, Sustainability in matters related to strategy and transformation, Accounting, Supervisors and Regulation, Legal, Communications, Institutional Relations and General Secretariat. | ||||||
| Onur Genç | Chief Executive Officer | See “—The Board of Directors” above. In addition, as set out in the Board of Directors Regulations, he oversees the following BBVA’s areas: Business Units (Corporate and Investment Banking (C&IB), Sustainability, Commercial Client Solutions, Retail Client Solutions, Digital Banks, Country Monitoring, Spain, Mexico and Turkey), Finance and Global Risk Management. | ||||||
| Domingo Armengol Calvo | General Secretary | General Secretary and Secretary of the Board of Directors of BBVA since 2009. Deputy Secretary of the Board of BBVA from 2005 to 2009 and Head of the Institutional Legal Department of BBVA from 2000 to 2009. | ||||||
| María Jesús Arribas de Paz | Global Head of Legal | Global Head of Legal since December 2018. Director at BBVA OP3N, S.L. between 2018 and 2019. She held the position of Head of Corporate Legal Services at BBVA between 2002 and 2018. Before that, she was head of Legal services and board secretary at Finanzia Banco de Crédito S.A. (1996-2002). | ||||||
Pello Belausteguigoitia Mateache | Spain Country Manager | Spain Country Manager since December 2019. Director of BBVA Seguros, S.A. Seguros y Reaseguros. Director at BBVA OP3N, S.L. between 2018 and 2020. Head of Business Development BBVA Spain from 2017 to 2019, Director of BBVA Spain Northern Region from 2015 to 2017, Director of BBVA Spain Eastern Region from 2014 to 2015, Local Director at BBVA Spain Northwestern Region between 2011 and 2014 and Director of Commercial Businesses at BBVA Spain Northwestern Region from 2008 to 2011. | ||||||
Antonio Bravo Acín | Global Head of Data | Global Head of Data since February 2025. Previously he had been Head of Sustainability & CIB Strategy, Coverage of Corporate Clients, Industries & Cross-border from 2023 to 2025, Head of Sustainability Strategy & Net Zero (2021-2023), Head of IT Strategy & Control (2019-2021), Head of Agile Organization (2017-2019) and Head of Business Development and Digital Banking for South America (2016-2019), among other responsibilities held in BBVA. | ||||||
| Carlos Casas Moreno | Global Head of Engineering | Global Head of Engineering since July 2024. Chair of the Comisión Liquidadora de Servicios Tecnológicos Singulares, S.A. and BBVA Consultoría, S.A. from 2017 to 2019 and non-executive director of Colegio Universitario de Estudios Financieros, S.L. from 2015 to 2019. At BBVA he led the roles of Global Head of Talent & Culture from 2019 to 2024, Head of Compensation, Pensions & Benefits from 2016 to December 2018, and was responsible for Organization Matters and Global Talent Management Policies in the Talent & Culture area between 2015 and 2016. Between 2010 and 2015, he worked on Process Re-engineering within BBVA’s Innovation and Technology area. | ||||||
| Victoria del Castillo Marchese | Global Head of Strategy & M&A | Global Head of Strategy & M&A since December 2018. Director at Atom Bank PLC between 2018 and 2019. She has held other relevant positions within the BBVA Group, such as Head of M&A for Europe and Turkey (2014 to December 2018), Director of Strategic Projects of the Finance Area (2009 to 2014) and Head of M&A for the USA (2006 to 2009). | ||||||
| José Luis Elechiguerra Joven | Global Head of Global Risk Management | Global Head of Global Risk Management since July 2024. He has held other relevant positions within the BBVA Group such as Global Head of Engineering from 2021 to 2024, Head of Client Solutions at BBVA USA Bancshares, Inc. during 2019-2020, Global Director of Data Governance from 2017 to 2019 and Global Director of Organization & Business Process Engineering from 2015 to 2017, both positions at BBVA. Director of Business Transformation from 2013 to 2015, Director of Strategic & Financial Planning for the Retail Business from 2011 to 2013 and Director of Business Development & Strategic Planning for the Mortgage Business from 2008 to 2011, all of them at BBVA México. | ||||||
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| Ana Fernández Manrique | Global Head of Regulation & Internal Control | Global Head of Regulation & Internal Control since July 2019. She has held several relevant positions within the BBVA Group such as Director of Non-Financial Risks during 2018, Director of Strategy and Finance at BBVA Real Estate Area from 2014 to 2017, Director of Strategy and Finance at Global Retail Area from 2011 to 2014, and Strategy & M&A Managing Director between 2008 and 2011. | ||||||
Paul García Tobin | Global Head of Talent & Culture | Global Head of Talent & Culture since July 2024. He has held various senior posts at BBVA such as Global Head of Communications from 2015 to 2024 and Director of Corporate Communications from 2011 to 2015. | ||||||
Luisa Gómez Bravo | Global Head of Finance | Global Head of Finance since July 2023. She has held several relevant positions within the BBVA Group such as Global Head of Corporate & Investment Banking (C&IB) from 2018 to 2023, Global Head of Investment & Cost Management (between 2017 and December 2018), Head of Investors & Shareholders Relations (between 2014 and 2017), Head of Transformation & Operations at BBVA Spain and Portugal (between 2012 and 2014), and Global Head of Asset Management (between 2008 and 2012), among others. | ||||||
| Eduardo Osuna Osuna | Mexico Country Manager | Mexico Country Manager since May 2015 and General Manager and Deputy Chair of BBVA México. Previously he was Head of Government and Corporate Banking of BBVA México from 2013 to 2015 and Head of Commercial Banking of BBVA México from 2010 to 2012, as well as Head of Hipotecaria Nacional between 2005 and 2010. | ||||||
| David Puente Vicente | Global Head of Retail Client Solutions | Global Head of Retail Client Solutions since July 2024. Director of BBVA Data & Analytics (currently, BBVA AI Factory, S.L.) from 2017 until 2019. He held positions in BBVA such as Global Head of Client Solutions from 2019 to 2024, Head of Data from 2017 to 2019, Head of Business Development & Digital Transformation for Spain and Portugal from 2012 to 2016. Previously, he held other posts at BBVA such as Head of CEO’s Office from 2009 to 2012, Head of Planning and Development of Retail Banking from 2006 to 2009 and Head of New Business Models from 2004 to 2006. | ||||||
| Francisco Javier Rodríguez Soler | Global Head of Sustainability and Corporate & Investment Banking | Global Head of Sustainability since July 2021 and of Corporate & Investment Banking since July 2023. Previously he was BBVA’s Country Manager in the United States from 2018 to 2021, Global Head of Strategy & M&A of BBVA from 2015 to 2018 and Head of M&A and Corporate Development of BBVA from 2010 to 2015. | ||||||
| Jaime Sáenz de Tejada Pulido | Global Head of Commercial Client Solutions | Global Head of Commercial Client Solutions since July 2024 and Director of Garanti BBVA. He has held several relevant positions within the BBVA Group such as Head of Global Risk Management from 2021 to 2024, Global Head of Finance from May 2015 to 2021, Head of Strategy and Finance from 2014 to 2015 and Head of Spain and Portugal from 2012 to 2014, Business Development Manager of Spain and Portugal at BBVA from 2011 to 2012, and Regional Center Manager from 2008 to 2011. | ||||||
| Jorge Sáenz-Azcúnaga Carranza | Head of Country Monitoring | Head of Country Monitoring since July 2016. Director of BBVA México, S.A., Institución de Banca Múltiple, Grupo Financiero BBVA México, of Grupo Financiero BBVA México, S.A. de C.V. and Vice President of Garanti BBVA. He has held various senior posts at BBVA such as Country Networks - Head of Business Monitoring Spain, USA and Turkey from 2015 to 2016, Head of Strategy and Planning, Spain & Portugal from 2008 to 2013 and Head of Strategy, Whole Banking and Asset Management from 2006 to 2008. | ||||||
Carlos Sanz-Pastor Revorio | Global Head of Internal Audit | Global Head of Internal Audit since March 2025. Head of Strategy in Internal Audit (from 2015 to 2025), Head of Internal Audit for Business in South America (from 2011 to 2015), Head of Internal Audit for Wholesale Banking & Asset Management (from 2009 to 2011), Head of Internal Audit for Markets (from 2007 to 2009), and Head of Internal Audit for Investment Banking (from 2004 to 2007). | ||||||
(*) Where no date is provided, positions are currently held.
B. Compensation
The provisions of BBVA’s Bylaws that relate to compensation of directors are in accordance with the relevant provisions of Spanish law. Furthermore, BBVA has a remuneration policy for BBVA directors, which is aligned with the specific regulations applicable to credit institutions and best market practices.
Directors’ Remuneration Policy
The directors’ remuneration policy for 2023, 2024, 2025 and 2026 was approved by the general shareholders’ meeting held on March 17, 2023, by a majority of 95.03% (the “Directors’ Remuneration Policy”). This policy is available on our website (www.bbva.com).
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BBVA has defined its Directors’ Remuneration Policy on the basis of the same general principles that govern the BBVA Group’s General Remuneration Policy, last updated by the Board of Directors on March 29, 2023 (the “BBVA Group’s General Remuneration Policy”). These policies take into consideration compliance with legal requirements applicable to credit institutions and those applicable in the different sectors in which it operates, as well as alignment with best market practices, and include items devised to reduce exposure to excessive risks and to adjust remuneration to the targets, values and long-term interests of the Group.
On the basis of the principles of the BBVA Group’s General Remuneration Policy, and pursuant to the statutory requirements established by applicable regulations, BBVA has devised a specific incentive system for staff whose professional activities have a significant impact on the risk profile (the “Identified Staff”), which includes BBVA executive directors and BBVA Senior Management, that is aligned with the regulations and recommendations applicable to the remuneration schemes for this staff. The result is a remuneration scheme for the Identified Staff based, inter alia, on the following basic characteristics, with the particularities set forth below for BBVA executive directors and BBVA Senior Management:
•Adequate balance between the fixed and variable elements of total remuneration, in line with applicable regulations, designed to provide flexibility with regard to payment and amounts of the variable components, allowing for such components to be reduced, in part or in full, where appropriate. The proportion between the two elements is established in accordance with the type of functions carried out by each beneficiary.
•The variable remuneration shall be aligned with effective risk management and linked to the level of achievement of financial and non-financial targets previously established and defined at the Group, area and individual levels, that take into account present and future risks assumed and the Group’s long-term interests.
•The variable remuneration for each year will not accrue, or will accrue in a reduced amount, should a certain level of profit and capital ratio not be achieved, thus being subject to ex ante adjustments.
•The variable remuneration for each year currently comprises two components: a short-term incentive and a long-term incentive.
•The short-term incentive shall be calculated on the basis of: (i) annual indicators (financial and non-financial); (ii) scales of achievement, as per the weightings allocated to each indicator; and (iii) a target short-term incentive, representing the amount of the short-term incentive if 100% of the pre-established targets are met. The resulting amount shall constitute the short-term incentive of each beneficiary.
•The long-term incentive shall initially be awarded should the previously referred level of profit and capital ratio be achieved. However, its final amount, which may range between 0% and 150% of the target long-term incentive (representing the amount of the long-term incentive if 100% of the pre-established targets are met), shall be calculated once the last financial year of the measurement period of the long-term indicators approved for its calculation has ended. The calculation of the long-term incentive shall be done on the basis of: (i) long-term indicators (financial and non-financial) with a four-year measurement period; (ii) scales of achievement, as per the weightings allocated to each indicator; and (iii) a target long-term incentive. The resulting amount shall constitute the long-term incentive of each beneficiary.
•The sum of the amounts of the short-term incentive and the long-term incentive will constitute the variable remuneration of each beneficiary for a given financial year.
•The variable remuneration for members of the Identified Staff shall be subject to specific rules regarding its vesting and payment, including the following:
◦Once the variable remuneration has been awarded, a percentage not exceeding 60% of the variable remuneration for members of the Identified Staff and 40% of the variable remuneration for executive directors, Senior Management and those members of the Identified Staff with particularly high variable remuneration shall vest and be paid, if conditions are met, as a general rule, in the first quarter of the financial year following that to which it corresponds (the upfront portion).
◦At least 40% of the variable remuneration for members of the Identified Staff and 60% of the variable remuneration for executive directors, Senior Management and those members of the Identified Staff with particularly high variable remuneration amounts shall be deferred over a period of four years, in the case of members of the Identified Staff, and of five years, in the case of executive directors and Senior Management (the deferred portion). The deferred portion shall be paid, if conditions are met, after each of the years of deferral has elapsed. In no event shall the deferred portion be paid faster than in a proportionate way.
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◦Within this deferral period, payment of the long-term incentive shall only begin after the measurement period of the long-term indicators has ended. The result of the long-term incentive is therefore dependent on the result of the long-term indicators and shall be part of the deferred portion of the variable remuneration for the financial year.
◦Both the upfront portion and the deferred portion of the variable remuneration for each member of the Identified Staff shall be paid 50% in cash and 50% in BBVA shares or in instruments linked to BBVA shares. For executive directors and members of Senior Management, the upfront portion shall be paid 50% in cash and 50% in BBVA shares and the deferred portion shall be paid 40% in cash and 60% in BBVA shares or in instruments linked to BBVA shares.
◦In particular, a portion of the deferred variable remuneration may be awarded in the form of stock options on BBVA shares (“BBVA stock options”).
◦Shares or instruments vested as variable remuneration shall be withheld for a one-year lock-up period after delivery, except for the transfer of those shares or instruments that may be required to honor the payment of taxes.
◦Additionally, in the case of executive directors, following the award of BBVA shares or instruments linked to BBVA shares derived from the settlement of the variable remuneration, they shall not transfer their ownership until a period of at least three years has elapsed, except if the relevant executive director has, at the time of the transfer, a net economic exposure to the variation in the price of the shares for a market value equivalent to an amount of at least twice his annual fixed remuneration through the ownership of shares, options or other financial instruments. The foregoing shall not apply to the shares that the executive director needs to sell to meet the costs related to their acquisition or, subject to the approval by the Remuneration Committee, in the event of extraordinary situations that require it.
◦The deferred portion of the variable remuneration that becomes payable each year will not vest or may be reduced, should certain capital and liquidity thresholds not be met, thus being subject to ex post risk adjustments.
◦Resulting cash portions of the deferred variable remuneration to be vested, shall 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.
◦No personal hedging strategies or insurance may be employed by Identified Staff members in connection with their remuneration and accountability that may undermine their incentives to align with sound risk management.
◦The variable element of remuneration for a year shall be limited to a maximum amount of 100% of the fixed element of total remuneration, unless the general shareholders’ meeting resolves to increase this percentage up to a maximum of 200%. In this regard, as in prior years, the general shareholders’ meeting held on March 21, 2025 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, on the terms indicated in the report issued for this purpose by the Board of Directors dated February 11, 2025.
◦The entire variable remuneration shall be subject to “malus” and “clawback” arrangements during the whole deferral and lock-up period, as follows:
1.Up to 100% of the variable remuneration of members of the Identified Staff, including executive directors and Senior Management, corresponding to each year shall be subject to “malus” and “clawback” arrangements, both linked to a downturn in financial performance of the Bank as a whole, or of a specific unit or area, or of exposures generated by such member of the Identified Staff, when such downturn in financial performance arises from any of the following circumstances:
(a)misconduct, fraud or serious infringement of the Code of Conduct and other applicable internal rules by such member of the Identified Staff;
(b)regulatory sanctions or judicial convictions due to events that could be attributed to such member of the Identified Staff;
(c)significant failure of risk management committed by the Bank or by a business or risk control unit, to which the willful misconduct or gross negligence of such member of the Identified Staff contributed; or
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(d)restatement of the Bank’s financial statements, except where such restatement is due to a change in applicable accounting legislation.
For these purposes, the Bank will compare the performance assessment carried out for the relevant member of the Identified Staff with the ex post performance of one or more of the criteria that contributed to the achievement of the targets.
Both “malus” and “clawback” arrangements will apply to both the cash portion and the portion in shares or instruments linked to shares of the variable remuneration of the year in which the event giving rise to application of the “malus” and/or “clawback” arrangements occurred, and they may be applied during the entire deferral and lock-up period applicable to the shares or instruments corresponding to said variable remuneration.
2.Notwithstanding the foregoing, in the event that the above circumstances give rise to a dismissal or termination of contract of the member of the Identified Staff due to a serious and guilty breach of duties, “malus” arrangements may apply to the entire deferred variable remuneration from previous years pending payment at the date of the dismissal or termination decision, in light of the extent of the damage caused.
3.Moreover, “malus” and “clawback” arrangements shall also be applicable in the event the above circumstances, regardless of their financial impact, lead to a material reputational damage for the Bank. These arrangements shall be applicable to the variable remuneration, including to the deferred amounts of previous financial years, the payment of which corresponds to or has taken place in the financial year in which the damage is revealed.
In any case, the variable remuneration will only vest or be paid if it is sustainable according to the situation of the BBVA Group as a whole, and justified based on the results of the Bank, the relevant business unit and the Identified Staff member concerned.
In addition, the “malus” and “clawback” arrangements shall also be applicable to the variable remuneration received by executive directors or members of Senior Management, where the recoupment of such remuneration is required under the BBVA remuneration recoupment policy approved by the Board of Directors on November 29, 2023 (see Exhibit 97.1 to this report).
As regards non-executive directors, their remuneration system, in accordance with the Bank’s Bylaws and Directors’ Remuneration Policy, is based on the criteria of responsibility, dedication and incompatibilities inherent to their role, and consists entirely of fixed remuneration.
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Remuneration of non-executive directors
The remuneration of the non-executive members of the Board of Directors corresponding to 2025 and 2024 is indicated below, individually and itemized for each non-executive director.
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 Functions (2) | Total | ||||||||||||||||||||||||
2025 | 2024 | |||||||||||||||||||||||||||||||
José Miguel Andrés Torrecillas | 129 | 167 | 165 | ─ | ─ | 115 | ─ | 50 | 625 | 625 | ||||||||||||||||||||||
Jaime Caruana Lacorte | 129 | 167 | ─ | 107 | ─ | 46 | ─ | ─ | 449 | 455 | ||||||||||||||||||||||
Enrique Casanueva Nárdiz (3) | 129 | ─ | 66 | 107 | ─ | ─ | ─ | ─ | 302 | 223 | ||||||||||||||||||||||
Sonia Dulá | 129 | ─ | 66 | 107 | ─ | ─ | ─ | ─ | 302 | 302 | ||||||||||||||||||||||
Raúl Galamba de Oliveira | 129 | ─ | ─ | 214 | ─ | 46 | 43 | 80 | 512 | 512 | ||||||||||||||||||||||
Belén Garijo López | 129 | 167 | ─ | ─ | ─ | 46 | ─ | ─ | 342 | 378 | ||||||||||||||||||||||
Connie Hedegaard Koksbang | 129 | ─ | 66 | ─ | ─ | ─ | ─ | ─ | 195 | 195 | ||||||||||||||||||||||
Lourdes Máiz Carro | 129 | ─ | 66 | ─ | 43 | ─ | ─ | ─ | 238 | 238 | ||||||||||||||||||||||
Cristina de Parias Halcón (4) | 129 | ─ | ─ | ─ | ─ | 46 | 43 | ─ | 218 | 167 | ||||||||||||||||||||||
Ana Peralta Moreno | 129 | ─ | 66 | ─ | 43 | ─ | ─ | ─ | 238 | 238 | ||||||||||||||||||||||
Ana Revenga Shanklin | 129 | ─ | ─ | 107 | 107 | ─ | 43 | ─ | 386 | 364 | ||||||||||||||||||||||
Carlos Salazar Lomelín (5) | 129 | ─ | ─ | ─ | 43 | ─ | ─ | ─ | 172 | 172 | ||||||||||||||||||||||
Jan Verplancke | 129 | ─ | ─ | ─ | 43 | ─ | 43 | ─ | 214 | 214 | ||||||||||||||||||||||
Total (6) | 1,673 | 500 | 497 | 642 | 278 | 301 | 171 | 130 | 4,193 | 4,083 | ||||||||||||||||||||||
(1)Includes amounts corresponding to positions on the Board and its various Committees, the composition of which was last modified on April 26, 2024.
(2)Amounts corresponding to the positions of Deputy Chair of the Board of Directors and Lead Director.
(3)Director appointed by the general shareholders’ meeting held on March 15, 2024. Remuneration in 2024 corresponding to the term in office in that financial year.
(4)Director appointed by the general shareholders’ meeting held on March 15, 2024. Remuneration in 2024 corresponding to the term in office in that financial year. In addition, in 2025 and in 2024 she received €30 thousand and 7,593 BBVA shares and €56 thousand and 14,697 BBVA shares, respectively, corresponding to the deferred portion of 2018 and 2019 variable remuneration accrued in her former condition of BBVA’s member of Senior Management, including the update of its cash portion. Likewise, in 2024 she received €72 thousand as per diems for her attendance to the meetings of the management body of BBVA México, S.A. de C.V. and Grupo Financiero BBVA México, S.A. de C.V. She ceased to hold these positions in 2024.
(5)In addition, in financial years 2025 and 2024, the director Carlos Salazar Lomelín received €171 thousand and €113 thousand, respectively, as per diems for his attendance to the meetings of the management body of BBVA México, S.A. de C.V. and Grupo Financiero BBVA México, S.A. de C.V. and the strategy forum of BBVA México, S.A. de C.V.
(6)The total amount reported for financial year 2024 does not include amounts corresponding to the positions on the Board and on the various Committees received by José Maldonado Ramos and Juan Pi Llorens, who ceased to hold office on March 15, 2024, and whose remuneration for those items in 2024 amounted to €85 thousand and €81 thousand, respectively.
Likewise, during the 2025 and 2024 financial years, €103 thousand and €112 thousand were paid out, respectively, in healthcare and casualty insurance premiums for non-executive directors.
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 general shareholders’ meeting held on March 18, 2006 and subsequently extended by resolutions of the general shareholders’ meetings held in 2011, 2016, 2021 and 2023.
This system is based on the annual allocation to non-executive directors of a number of theoretical shares equivalent to 20% of the total annual fixed allowance in cash received by each director in the previous year, calculated according to the average closing prices of the BBVA share during the sixty trading sessions prior to the annual general shareholders’ meeting 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 directorship for any reason other than serious breach of their duties.
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The theoretical shares allocated to non-executive directors who were beneficiaries of the remuneration system with deferred delivery of shares in the 2025 and 2024 financial years, were as follows:
2025 | 2024 | |||||||||||||
Theoretical shares allocated (1) | Theoretical shares accumulated as at December 31 | Theoretical shares allocated (1) | Theoretical shares accumulated as at December 31 | |||||||||||
José Miguel Andrés Torrecillas | 10,930 | 158,385 | 13,407 | 147,455 | ||||||||||
Jaime Caruana Lacorte | 7,959 | 114,269 | 11,350 | 106,310 | ||||||||||
Enrique Casanueva Nárdiz (2) | 3,894 | 3,894 | 0 | 0 | ||||||||||
Sonia Dulá | 5,279 | 10,321 | 5,042 | 5,042 | ||||||||||
Raúl Galamba de Oliveira | 8,944 | 49,135 | 10,423 | 40,191 | ||||||||||
Belén Garijo López | 6,598 | 117,191 | 9,401 | 110,593 | ||||||||||
Connie Hedegaard Koksbang | 3,410 | 10,587 | 3,914 | 7,177 | ||||||||||
Lourdes Máiz Carro | 4,159 | 81,136 | 5,384 | 76,977 | ||||||||||
Cristina de Parias Halcón (2) | 2,915 | 2,915 | 0 | 0 | ||||||||||
Ana Peralta Moreno | 4,159 | 51,872 | 5,384 | 47,713 | ||||||||||
Ana Revenga Shanklin | 6,364 | 37,525 | 6,947 | 31,161 | ||||||||||
Carlos Salazar Lomelín | 2,998 | 24,010 | 3,882 | 21,012 | ||||||||||
Jan Verplancke | 3,747 | 44,370 | 4,851 | 40,623 | ||||||||||
Total (3) | 71,356 | 705,610 | 79,985 | 634,254 | ||||||||||
(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 general shareholders’ meetings of March 21, 2025 and March 15, 2024 which were €11.45 and €8.84 per share, respectively.
(2)Directors appointed by the general shareholders’ meeting held on March 15, 2024; accordingly, the allocation of theoretical shares was made for the first time in 2025.
(3)The total number of theoretical shares allocated in the financial year 2024 does not include the 7,735 and 8,157 theoretical shares respectively allocated to José Maldonado Ramos and Juan Pi Llorens, who ceased to hold office on March 15, 2024. In application of the system, they received a total of 154,609 and 156,699 BBVA shares, respectively, after leaving office, which is equivalent to the total of theoretical shares accumulated up to that date by each of them.
Remuneration of executive directors
During the 2025 and 2024 financial years, the executive directors received the amount of the annual fixed remuneration corresponding to such financial years, established for each director in the Directors’ Remuneration Policy.
In addition, in the 2025 and 2024 financial years, the executive directors accrued the annual variable remuneration corresponding to each such year, which was awarded once the financial year had ended, in accordance with the provisions of the Directors’ Remuneration Policy.
In 2025 executive directors accrued a short-term incentive of €2,627 thousand in the case of Chair and €1,965 thousand in the case of Chief Executive Officer. In addition, the executive directors were awarded 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 long-term incentive. However, its final amount, which may range between 0% and 150% of the target long-term incentive, shall be calculated once the last financial year of the measurement period of the long-term indicators approved for its calculation has ended. If 100% of the pre-established objectives are achieved, the long-term incentive will amount to €1,286 thousand in the case of Chair and €962 thousand in the case of Chief Executive Officer. The sum of the short-term incentive and the long-term incentive initially awarded constitutes the annual variable remuneration of each executive director for 2025.
In addition, the remaining rules applicable to the annual variable remuneration of the executive directors established in the BBVA Directors’ Remuneration Policy, shall apply to the annual variable remuneration for financial year 2025, 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 consumer price index; (iv) potential ex post risk adjustments; (v) “malus” and “clawback” arrangements during the whole periods of deferral and withholding of shares or instruments; and (vi) the limitation of variable remuneration up to a maximum amount of 200% of the fixed component of the total remuneration, as resolved by the general shareholders’ meeting held in 2025.
The upfront portion of the annual variable remuneration for 2025 and 2024 financial years vested and became payable following its award in 2026 and 2025, respectively, while the rest of it was deferred for a period of five years. All of it, in accordance with the deferral, vesting and payment rules and other conditions applicable to annual variable remuneration as set out in the Directors’ Remuneration Policy.
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Moreover, in accordance with the applicable remuneration policies for previous financial years, once the 2025 and 2024 financial years had ended, the corresponding portions of deferred annual variable remuneration from previous years vested and became payable to executive directors.
The remuneration of executive directors corresponding to the 2025 and 2024 financial years is indicated below, individually and itemized:
Annual Fixed Remuneration (thousands of euros) | 2025 | 2024 | ||||||
Chair | 2,924 | 2,924 | ||||||
Chief Executive Officer | 2,179 | 2,179 | ||||||
Total | 5,103 | 5,103 | ||||||
Annual Variable Remuneration | 2025 (1) | 2024 (2) | ||||||||||||
In cash (thousands of euros) | In shares | In cash (thousands of euros) | In shares | |||||||||||
Chair | 821 | 40,850 | 897 | 92,803 | ||||||||||
Chief Executive Officer | 614 | 30,552 | 671 | 69,408 | ||||||||||
Total | 1,435 | 71,402 | 1,568 | 162,211 | ||||||||||
(1)Upfront portion (36%) of the annual variable remuneration, which represents the first payment of the short-term incentive for financial year 2025 and will be paid during the first quarter of financial year 2026, in equal parts in cash and BBVA shares. The remaining amount of the annual variable remuneration for financial year 2025 (which includes the long-term incentive for financial year 2025) will be deferred (40% in cash and 60% in shares and 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 financial year 2025. Likewise, and as an ex-post risk adjustment mechanism, the deferred portion may be reduced if certain capital and liquidity thresholds are not reached. The foregoing is intended to ensure that payment only occurs if it is sustainable, taking into account the Bank’s payment capacity.
As part of the deferred portion to be paid in shares or share-linked instruments, BBVA stock options shall be delivered to the Chair and the Chief Executive Officer (52,441 and 39,221, respectively), provided that the relevant conditions are met, once the second year of deferral has elapsed (that is, on February 15, 2028). The BBVA stock options may be exercised only on their expiration date, which shall be February 15, 2030, that is, four years after the effective date of the award and two years after their vesting, provided that the closing price of the BBVA share on the expiration date is above the exercise price. The exercise price has been set at €20.10 which is equal to the average closing price of the BBVA share between December 15, 2025 and January 15, 2026, both inclusive. The underlying asset of each BBVA stock option is one BBVA share. The BBVA stock options shall be settled by differences, meaning that the amount to be paid to each beneficiary as a result of their exercise shall be the difference between the market value of the BBVA share corresponding to the exercise date and the exercise price. This amount shall be paid to executive directors in BBVA shares.
(2)Upfront portion (37%) of the annual variable remuneration, which represents the first payment of the short-term incentive for financial year 2024 paid in 2025. Annual variable remuneration for financial year 2024 is subject to the rules on deferral, vesting and payment and to the remaining conditions established in the Directors Remuneration Policy.
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Deferred Annual Variable Remuneration corresponding to previous financial years | 2025 (1) | 2024 (2) | |||||||||||||||||||||
Deferred Annual Variable Remuneration | In cash (thousands of euros) | In shares | In stock options (3) | In cash (thousands of euros) | In shares | In stock options (3) | |||||||||||||||||
Chair | 2024 | 222 | 33,410 | ─ | ─ | ─ | ─ | ||||||||||||||||
2023 | 228 | 11,862 | 189,609 | 221 | 38,821 | ─ | |||||||||||||||||
2022 | 243 | 56,941 | ─ | 236 | 56,941 | ─ | |||||||||||||||||
2021 | 235 | 57,325 | ─ | 228 | 57,325 | ─ | |||||||||||||||||
2020 | 0 | 0 | ─ | 0 | 0 | ─ | |||||||||||||||||
2019 | ─ | ─ | ─ | 181 | 45,529 | ─ | |||||||||||||||||
Subtotal | 927 | 159,538 | 189,609 | 867 | 198,616 | ||||||||||||||||||
Chief Executive Officer | 2024 | 166 | 24,987 | ─ | ─ | ─ | ─ | ||||||||||||||||
2023 | 170 | 8,872 | 141,809 | 166 | 29,034 | ─ | |||||||||||||||||
2022 | 187 | 43,793 | ─ | 181 | 43,793 | ─ | |||||||||||||||||
2021 | 179 | 43,552 | ─ | 173 | 43,552 | ─ | |||||||||||||||||
2020 | 0 | 0 | ─ | 0 | 0 | ─ | |||||||||||||||||
2019 | ─ | ─ | ─ | 163 | 40,858 | ─ | |||||||||||||||||
Subtotal | 701 | 121,204 | 141,809 | 683 | 157,237 | ||||||||||||||||||
Total | 1,629 | 280,742 | 331,418 | 1,550 | 355,853 | ─ | |||||||||||||||||
(1)Deferred remuneration to be paid after 2025 year-end, including the update of its cash portion. Payment thereof to the Chair and to the Chief Executive Officer will be made in 2026 in accordance with the vesting and payment rules established in the remuneration policies in force in each financial year:
•2024 deferred annual variable remuneration: first payment of the deferred short-term incentive (17.9% of the deferred portion) becomes payable to executive directors. Thereafter, the second payment of the deferred short-term incentive (17.9% of the deferred portion) and the long-term incentive (64.2% of the deferred portion), will be deferred for both executive directors. The final amount of the 2024 long-term incentive shall depend on the result of the long-term indicators established for its calculation once their measurement period ends (at 2027 year-end), which may range between a level of achievement of 0% to 150%. If the relevant conditions are met, the second payment of the 2024 deferred short-term incentive will be made in 2027 and the three payments of the 2024 long-term incentive will be made in 2028, 2029 and 2030.
•2023 deferred annual variable remuneration: second payment of the deferred short-term incentive (17.9% of the deferred portion) becomes payable to executive directors. Thereafter, payment of the deferred short-term incentive will be completed and the long-term incentive (64.2% of the deferred portion), will be deferred for both executive directors. The final amount of the 2023 long-term incentive shall depend on the result of the long-term indicators established for its calculation once their measurement period ends (at 2026 year-end), which may range between a level of achievement of 0% to 150%. If the relevant conditions are met, the three payments of the 2023 long-term incentive will be made in 2027, 2028 and 2029.
•2022 deferred annual variable remuneration: third payment (20% of the deferred portion) becomes payable to executive directors, after having verified that no reduction is applicable based on the result of the multi-year performance indicators determined in 2022 by the Board of Directors. Thereafter, 40% of the 2022 deferred annual variable remuneration will be deferred for both executive directors, which, if the conditions are met, will be paid in 2027 and 2028.
•2021 deferred annual variable remuneration: fourth payment (20% of the deferred portion) becomes payable to executive directors. Thereafter, 20% of the 2021 deferred annual variable remuneration will be deferred for both executive directors, which, if the conditions are met, will be paid in 2027.
•2020 deferred annual variable remuneration: given the exceptional circumstances arising from the COVID-19 crisis, executive directors voluntarily waived the accrual of the whole of their annual variable remuneration for 2020 financial year.
(2)Deferred remuneration paid after 2024 year-end, including the update of its cash portion. Payment thereof to the Chair and to the Chief Executive Officer was made in 2025 in accordance with the vesting and payment rules established in the remuneration policies in force in each financial year:
•2023 deferred annual variable remuneration: in 2025, the first payment of the deferred short-term incentive (17.9% of the deferred portion) was made to executive directors.
•2022 deferred annual variable remuneration: in 2025, the second payment (20% of the deferred portion) was made to executive directors.
•2021 deferred annual variable remuneration: in 2025, the third payment (20% of the deferred portion) was made to executive directors.
•2020 deferred annual variable remuneration: given the exceptional circumstances arising from the COVID-19 crisis, executive directors voluntarily waived the accrual of the whole of their annual variable remuneration for 2020 financial year.
•2019 deferred annual variable remuneration: in 2025, the third and final payment (20% of the deferred portion) was made to executive directors. With such payments, the payment of the 2019 deferred annual variable remuneration was completed.
(3)The delivery of the stock options awarded as part of the 2023 deferred annual variable remuneration is part of the second payment of the 2023 deferred short-term incentive, which is due after the 2025 year-end (in 2026). The delivery of the stock options awarded as part of the 2024 deferred annual variable remuneration is part of the second payment of the 2024 deferred short-term incentive, which, if the relevant conditions are met, will be due after the 2026 year-end (in 2027).
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In addition, during the 2025 and 2024 financial years, the Chair received, each year, the amount of €41 thousand of fixed allowances for vehicle rental and others. Meanwhile, the Chief Executive Officer received, each year, the amount of €654 thousand of fixed remuneration in cash in lieu of pension (see “—Pension commitments with executive directors”), and the amount of €600 thousand for his mobility allowance.
Likewise, the executive directors received remuneration in kind during the 2025 and 2024 financial years, including insurance premiums and others, €132 thousand and €140 thousand in the case of the Chair and €128 thousand, each year, in the case of the Chief Executive Officer, respectively.
Pension commitments with executive directors
The Bank does not have pension commitments with non-executive directors.
With regard to the executive directors, the Directors’ Remuneration Policy establishes a pension framework whereby, in the case of the Chair, he is eligible, provided that he does not leave his position as a result of a serious breach of duties, to receive a retirement pension, paid as a lump sum or in installments, when he reaches the legally established retirement age. The amount of this pension will be determined by the annual contributions made by the Bank, together with their corresponding accumulated yields as of that date.
The agreed annual contribution to cover the retirement contingency for the Chair’s defined-contribution system, as established in the Directors’ Remuneration Policy, amounts to €439 thousand. The Board of Directors may update this amount during the term of the Directors’ Remuneration Policy, in the same way and under the same terms as it may update the annual fixed remuneration.
A portion of 15% of the aforementioned agreed annual contribution will be based on variable components and considered “discretionary pension benefits”, and will, therefore, be subject to the conditions regarding delivery in shares, retention and clawback established in the applicable regulations, as well as any other conditions concerning variable remuneration that may be applicable in accordance with the Directors’ Remuneration Policy.
In the event the Chair’s contract terminates before reaching retirement age for reasons other than serious breach of duties, the retirement pension due to the Chair upon reaching the legally established retirement age will be calculated based on the funds accumulated through the contributions made by the Bank under the terms set out, up to that date, plus the corresponding accumulated yield, with no additional contributions to be made by the Bank as of the time of termination.
With respect to the commitments in favor of the Chair to cover the contingencies for death and disability, the Bank will undertake the payment of the corresponding annual insurance premiums in order to top up the coverage of these contingencies.
In line with the above, during the 2025 financial year, the following amounts were recorded to meet the pension commitments for the Chair: €456 thousand with regard to the retirement contingency, which corresponds to the annual contribution agreed to cover the retirement contingency, which is €439 thousand, increased in an amount of €17 thousand corresponding to the upward adjustment of the “discretionary pension benefits” for the 2024 financial year, which were declared at the end of said financial year and had to be registered in the accumulated fund in 2025. Likewise, an amount of €236 thousand has been recorded for the payment of premiums for death and disability contingencies.
As of December 31, 2025, the total accumulated amount of the fund to meet the retirement commitments for the Chair amounted to €29,821 thousand.
With regard to the agreed annual contribution to the retirement contingency corresponding to the 2025 financial year, 15% (€66 thousand) was registered in that 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 Chair’s short-term incentive for the 2025 financial year and was determined to amount to €76 thousand, which represents an upward adjustment of €10 thousand. This upward adjustment to the “discretionary pension benefits” will be included in the accumulated fund in the 2026 financial year and will be subject to the conditions established for them in the Directors’ Remuneration Policy.
With regard to the Chief Executive Officer, in accordance with the provisions of the Directors’ Remuneration Policy and his contract, the Bank is not required to make any contributions to a retirement pension, although he is entitled to an annual cash sum instead of a retirement pension equal to 30% of his annual fixed remuneration. However, the Bank has pension commitments to cover the death and disability contingencies, for which purpose the corresponding annual insurance premiums are paid.
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In accordance with the above, in the 2025 financial year the Bank paid the Chief Executive Officer the amount of €654 thousand as cash in lieu of pension as set out under “—Remuneration of executive directors”. Furthermore, €220 thousand was disbursed for the payment of the annual insurance premiums to cover the death and disability contingencies.
In accordance with the above, amounts recorded to meet the pension commitments for the executive directors during 2025 and 2024 are indicated below:
Pension systems (thousands of euros) | Contributions (1) | Accumulated funds | ||||||||||||||||||
Retirement | Death and disability | |||||||||||||||||||
2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||
Chair | 456 | 456 | 236 | 252 | 29,821 | 26,893 | ||||||||||||||
Chief Executive Officer | — | — | 220 | 221 | — | — | ||||||||||||||
Total | 456 | 456 | 457 | 472 | 29,821 | 26,893 | ||||||||||||||
(1)Contributions recognized to meet pension commitments for the executive directors in the financial years 2025 and 2024. 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 2024 and 2023, and 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 2025 and 2024 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.
Extinction of contractual relationship
In accordance with the Directors’ Remuneration Policy, the Bank has no commitments to make severance payments to any executive directors.
Remuneration of Senior Management
During the 2025 and 2024 financial years, the members of Senior Management, excluding executive directors (16 members with such status as of December 31 of each financial year), received the amounts of their fixed remuneration corresponding to such financial years.
In addition, in the 2025 and 2024 financial years, the members of Senior Management accrued the annual variable remuneration corresponding to each such year, which was awarded once the financial year had ended in accordance with the BBVA Group’s General Remuneration Policy.
In 2025 members of Senior Management with such status as of December 31, 2025, accrued a short-term incentive for an aggregate amount of €7,299 thousand. Likewise, members of Senior Management were awarded the right to a long-term incentive for an aggregate maximum theoretical amount of €5,149 thousand, which is equivalent to the sum of 150% of each beneficiary’s target long-term incentive. However, its final amount, which may range between 0% and 150% of the target long-term incentive, shall be calculated once the last financial year of the measurement period of the long-term indicators approved for its calculation has ended. If 100% of the pre-established objectives are achieved, the long-term incentive will amount to an aggregate amount of €3,433 thousand. The sum of the short-term incentive and the long-term incentive initially awarded constitutes the annual variable remuneration of Senior Management for 2025.
In addition, the remaining rules applicable to the annual variable remuneration of the members of the Senior Management established in the BBVA Group’s General Remuneration Policy will apply to the annual variable remuneration for financial year 2025, 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 consumer price index; (iv) potential ex post risk adjustments; (v) “malus” and “clawback” arrangements during the whole periods of deferral and withholding of shares or instruments; and (vi) the limitation of variable remuneration up to a maximum amount of 200% of the fixed component of the total remuneration, as resolved by the general shareholders’ meeting held in 2025.
The upfront portion of the annual variable remuneration for financial years 2024 and 2024 vested and became payable following its award in 2026 and 2025, respectively, while the rest of it was deferred for a period of five years. All of it, in accordance with the deferral, vesting and payment rules and other conditions applicable to annual variable remuneration as set out in the BBVA Group’s General Remuneration Policy.
Moreover, in accordance with the applicable remuneration policies for previous financial years, once the 2025 and 2024 financial years had ended, the corresponding portions of deferred annual variable remuneration from previous years vested and became payable to members of Senior Management.
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The aggregate remuneration corresponding to the 2025 and 2024 financial years to members of the Senior Management, who held that position as of December 31, 2025 and as of December 31, 2024, is indicated and itemized below:
Fixed Remuneration (thousands of euros) | 2025 | 2024 | ||||||
Total Senior Management (1) | 20,787 | 19,928 | ||||||
(1)16 members at December 31, 2025 and December 31, 2024, excluding executive directors in both cases.
Annual Variable Remuneration | 2025 (1) | 2024 (2) | ||||||||||||
In cash (thousands of euros) | In shares | In cash (thousands of euros) | In shares | |||||||||||
Total Senior Management (3) | 2,281 | 112,500 | 2,266 | 235,016 | ||||||||||
(1)Upfront portion of the annual variable remuneration, which represents the first payment of the short-term incentive for financial year 2025 and will be paid during the first quarter of financial year 2026, in equal parts in cash and BBVA shares (the upfront portion). The remaining amount of the annual variable remuneration for financial year 2025 (which includes the long-term incentive for financial year 2025) 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 financial year 2025. Likewise, and as an ex-post risk adjustment mechanism, the deferred portion may be reduced if certain capital and liquidity thresholds are not reached. The foregoing is intended to ensure that payment only occurs if it is sustainable, taking into account the Bank’s payment capacity.
As part of the deferred portion to be paid in shares or share-linked instruments, an aggregate number of BBVA stock options (137,550 in the aggregate), shall be delivered to the members of Senior Management, provided that the relevant conditions are met, once the second year of deferral has elapsed (that is, on February 15, 2028). The BBVA stock options may be exercised only on their expiration date, which shall be February 15, 2030, that is four years after the effective date of the award and two years after their vesting, provided that the closing price of the BBVA share on the expiration date is above the exercise price. The exercise price has been set at €20.10 which is equal to the average closing price of the BBVA share between December 15, 2025 and January 15, 2026, both inclusive. The underlying asset of each BBVA stock option is one BBVA share. The BBVA stock options shall be settled by differences, meaning that the amount to be paid to each beneficiary as a result of their exercise shall be the difference between the market value of the BBVA share corresponding to the exercise date and the exercise price. This amount shall be paid in BBVA shares.
(2)Upfront portion of the annual variable remuneration, which represents the first payment of the short-term incentive for financial year 2024 paid in 2025. Annual variable remuneration for financial year 2024 is subject to the rules on deferral, vesting and payment and to the remaining conditions established in the BBVA Group’s General Remuneration Policy.
(3)16 members at December 31, 2025 and December 31, 2024, excluding executive directors in both cases.
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Deferred Annual Variable Remuneration corresponding to previous financial years | 2025 (1) | 2024 (2) | |||||||||||||||||||||
Deferred Annual Variable Remuneration | In cash (thousands of euros) | In shares | In stock options (3) | In cash (thousands of euros) | In shares | In stock options (3) | |||||||||||||||||
Senior Management Total (4) | 2024 | 534 | 81,445 | — | — | — | ─ | ||||||||||||||||
2023 | 549 | 30,492 | 444,545 | 574 | 98,636 | ─ | |||||||||||||||||
2022 | 501 | 117,265 | ─ | 526 | 125,129 | ─ | |||||||||||||||||
2021 | 469 | 112,536 | ─ | 488 | 119,207 | ─ | |||||||||||||||||
2020 | 51 | 14,340 | ─ | 56 | 14,340 | ─ | |||||||||||||||||
2019 | ─ | ─ | ─ | 314 | 77,447 | ─ | |||||||||||||||||
Total | 2,104 | 356,078 | 444,545 | 1,957 | 434,759 | ─ | |||||||||||||||||
(1)Deferred remuneration to be paid after 2025 year-end, including the update of its cash portion. Payment thereof to members of Senior Management who are beneficiaries will take place in 2026 in accordance with the remuneration policies applicable in each financial year and the vesting and payment rules set forth therein applicable to each member of Senior Management, based on when they became such a member:
•2024 deferred annual variable remuneration: first payment of the deferred short-term incentive becomes payable.
•2023 deferred annual variable remuneration: second payment of the deferred short-term incentive becomes payable.
•2022 deferred annual variable remuneration: third payment becomes payable, after having verified that no reduction is applicable based on the result of the multi-year performance indicators determined in 2022 by the Board of Directors.
•2021 deferred annual variable remuneration: fourth payment becomes payable.
•2020 deferred annual variable remuneration: given the exceptional circumstances arising from the COVID-19 crisis, all members of Senior Management voluntarily waived the accrual of the whole of their annual variable remuneration for 2020 financial year. Without prejudice to the foregoing, a member of the Senior Management, who was an executive of BBVA USA Bancshares, Inc. (“BBVA USA”) at that moment, is entitled to the third and last payment of the deferred portion of a success bonus on the sale of BBVA USA.
(2)Deferred remuneration paid after 2024 year-end, including the update of its cash portion. Payment thereof to members of Senior Management who were beneficiaries took place in 2025 in accordance with the vesting and payment rules applicable in each case depending on when they became members of the Senior Management, provided for in the remuneration policies applicable in each financial year:
•2023 deferred annual variable remuneration: in 2025, the first payment of the deferred short-term incentive was made to the members of Senior Management.
•2022 deferred annual variable remuneration: in 2025, the second payment was made to the members of Senior Management.
•2021 deferred annual variable remuneration: in 2025, the third payment was made to the members of Senior Management.
•2020 deferred annual variable remuneration: given the exceptional circumstances arising from the COVID-19 crisis, all members of Senior Management voluntarily waived the accrual of the whole of their annual variable remuneration for 2020 financial year. Without prejudice to the foregoing, a member of the Senior Management, who was an executive of BBVA USA at that moment, was entitled to the second payment in 2025 of the deferred portion of a success bonus on the sale of BBVA USA.
•2019 deferred annual variable remuneration: in 2025, the third and last payment was made to the members of Senior Management that were beneficiaries.
(3)The delivery of the stock options awarded as part of the 2023 deferred annual variable remuneration is part of the second payment of the 2023 deferred short-term incentive, which is due after the 2025 year-end (in 2026). The delivery of the stock options awarded as part of the 2024 deferred annual variable remuneration is part of the second payment of the 2024 deferred short-term incentive, which, if the relevant conditions are met, will be due after the 2026 year-end (in 2027).
(4)16 members at December 31, 2025 and December 31, 2024, excluding executive directors in both cases.
In addition, members of Senior Management received fixed allowances for vehicle rental and others during the 2025 and 2024 financial years, amounting to a total of €257 thousand and €347 thousand, respectively.
Moreover, the members of Senior Management received remuneration in kind during the 2025 and 2024 financial years, including insurance premiums and others, amounting to a total of €640 thousand and €603 thousand, respectively.
Pension commitments with Senior Management
In the 2025 financial year, to meet the pension commitments for members of the Senior Management, the following aggregate amounts were recorded: an amount of €4,411 thousand for contribution to the retirement contingency (which corresponds to the annual contribution agreed to cover the retirement contingency, increased by an amount of €139 thousand corresponding to the upward adjustment of “discretionary pension benefits” for the 2024 financial year which had to be registered in the accumulated fund in 2025), and an amount of €1,115 thousand for insurance premiums to cover the death and disability contingencies.
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As of December 31, 2025, the total accumulated amount of the fund to meet the retirement commitments for members of Senior Management amounted to €47,281 thousand.
As in the case of executive directors, 15% of the agreed annual contributions for members of the Senior Management to cover retirement contingencies will be based on variable components and considered “discretionary pension benefits”, and therefore subject to the conditions regarding delivery in shares, retention and clawback established in the applicable regulations, as well as any other conditions concerning variable remuneration that may be applicable in accordance with the remuneration policy applicable to members of the Senior Management.
Therefore, with regard to the agreed annual contribution for the retirement contingency registered in the 2025 financial year, an amount of €625 thousand was registered in 2025 as “discretionary pension benefits”, and following the end of the financial year, this amount was adjusted applying the same criteria used to determine the short-term incentive for 2025 financial year that is part of the annual variable remuneration for members of Senior Management.
Accordingly, the “discretionary pension benefits” for members of the Senior Management for the 2025 financial year were determined in an amount of €747 thousand, representing an upward adjustment of €122 thousand. This upward adjustment to the “discretionary pension benefits” will be included in the accumulated fund in the 2026 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.
In accordance with the above, amounts recorded to meet the pension commitments for the members of Senior Management during 2025 and 2024 are indicated below:
Pension systems (thousands of euros) | Contributions (1) | Accumulated funds | ||||||||||||||||||
Retirement | Death and disability | |||||||||||||||||||
2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||
Senior Management Total (2) | 4,411 | 4,226 | 1,115 | 1,181 | 47,281 | 40,549 | ||||||||||||||
(1)Contributions recorded to meet pension commitments for the whole of Senior Management in 2025 and 2024, which correspond to the sum of the annual retirement pension contributions and the adjustments made to the “discretionary pension benefits” for 2024 and 2023, respectively, and the insurance premiums paid by the Bank for death and disability contingencies.
(2)16 members at December 31, 2025 and December 31, 2024, excluding executive directors in both cases.
Extinction of contractual relationship
Regarding Senior Management, excluding the executive directors, in 2025 the contractual relationship of a member of Senior Management was terminated, giving rise to the right of a severance payment of €1,908 thousand. In this regard, the Senior Management contracts include the right to receive the severance payment that legally corresponds, provided that termination of the contractual relationship 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. Likewise, the contract establishes a post-contractual non-compete agreement for a one-year term from termination of the contractual relationship, which shall be compensated with an amount of €885 thousand which shall be paid on a monthly basis during the non-competition period.
In 2024, there were no terminations of contractual relationships of members of Senior Management.
C. Board Practices
Committees
Our corporate governance system is based on the distribution of functions between the Board and the following specialized Board committees: the Executive Committee, Audit Committee; the Appointments and Corporate Governance Committee; the Remuneration Committee; the Risk and Compliance Committee; and the Technology and Cybersecurity Committee.
Additional information on our Board committees, including their current composition, is provided in the following sections.
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Executive Committee
Our Board of Directors is assisted in fulfilling its responsibilities by the Executive Committee (Comisión Delegada Permanente) of the Board of Directors.
As of the date of this Annual Report, BBVA’s Executive Committee is comprised of two executive directors, one external director and two independent directors, who are the following:
Position (type of directorship) | Name | ||||
Chair (Executive) | Mr. Carlos Torres Vila | ||||
Member (Executive) | Mr. Onur Genç | ||||
Member (Independent) | Mr. José Miguel Andrés Torrecillas | ||||
Member (Independent) | Mr. Jaime Félix Caruana Lacorte | ||||
Member (External) | Mrs. Belén Garijo López | ||||
According to the Regulations of the Executive Committee, the Executive Committee will deal with matters delegated to it by the Board of Directors and, in particular, will have the following functions, among others:
Support functions to the Board of Directors in its decision-making:
•On strategy: (i) establishment of the bases and previous analysis of the proposals submitted to the Board of Directors in relation to the Bank’s Strategic Plan or other strategic decisions, including the Risk Appetite Framework; (ii) prior analysis of the strategic and financial aspects of the proposals submitted to the Board of Directors in relation to corporate transactions corresponding to its decision-making powers, in respect of which it will submit its report to the Board, accompanied, where necessary, by reports from the other Board committees on those matters within their respective remits; (iii) adoption of decisions and execution of mandates that may be expressly delegated by the Board of Directors in these fields, once the decisions reserved to it are adopted by the Board.
•On budgets: (i) prior analysis of the proposals submitted to the Board of Directors in relation to the Bank’s budgets; (ii) adoption of the corresponding decisions for the implementation of the budget approved by the Board of Directors; (iii) analysis of deviations from the approved budget and, where appropriate, reporting such to the Board of Directors.
•On finances: (i) establishment of the bases and previous analysis of the proposals submitted to the Board of Directors relating to the Bank’s funding plan, its capital and liquidity structure, and its dividends policy, as well as of the processes of self-assessment of the Bank’s and the Group’s capital and liquidity adequacy, and of the Recovery Plan; (ii) adoption of implementation decisions of mandates expressly conferred on it by the Board of Directors in these fields.
•Analysis of matters relating to business risk in the proposals and plans submitted to the Board of Directors.
•Analysis, assessment and management of matters relating to reputational risk.
Functions of prior reporting on policies submitted to the Board of Directors:
•Analyze, prior to their consideration by the Board of Directors, the general Group and Company policies that, in accordance with the law or internal regulations, must be approved by the Board of Directors, except for policies relating to issues within other Board committees’ remit.
Monitoring and control functions:
•The Committee will perform monitoring and control functions regarding the following matters, among others: (i) the Group’s activity and results; (ii) budget monitoring; (iii) progress of the Strategic Plan, through the key performance indicators established for this purpose and of the main plans and projects developed by the management team; (iv) the Group’s liquidity and funding plan and capital situation, as well as of the activity of the Assets and Liabilities Committee; (v) the evolution of the risk profile and the metrics defined by the Board of Directors; (vi) evolution of share-price performance and changes in shareholder composition; (vii) analysis of the markets in which the Group carries out its activities; (viii) progress of the projects and investments agreed upon within its remit, as well as those agreed upon by the Board of Directors at a strategic level; (ix) monitoring the Bank’s resolution.
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Decision-making powers over the following issues, among others:
•Investments and divestments exceeding €50 million and not reaching €400 million, unless they are of a strategic nature due to their particular characteristics, in which case the decision will correspond to the Board of Directors.
•Plans and projects that are considered of importance to the Group and that arise from its activities, when they do not fall within the remit of the Board of Directors.
•The assignment of non-mortgage loans and credits to securitization funds promoted by the Bank.
•The granting and revoking of the Bank’s powers of attorney.
•Proposals for the appointment and replacement of directors in the Bank’s subsidiaries or investee companies with more than €50 million in own funds, or in those that comply with the criteria set forth in the internal procedures established by the Bank for such purposes.
•Decisions regarding whether executive directors may hold management positions in companies controlled, directly or indirectly, by the Bank, or in the Group’s investee companies.
The Executive Committee will meet whenever it is convened by its Chair, who is empowered to call the Committee meetings and to set their agendas. The Committee will endeavor to establish an annual calendar of meetings, considering the amount of time to be devoted to its different tasks. During 2025, the Executive Committee met sixteen (16) times.
Audit Committee
The Audit Committee shall perform the duties required under applicable law, Board of Directors Regulations, our Bylaws and its specific Regulations. Essentially, its mission is to assist the Board of Directors in overseeing the preparation of the financial statements and public information, and the relationship with the external auditor and the Internal Audit function.
The Board of Directors Regulations establish that the Audit Committee will be composed of a minimum of four directors to be appointed by the Board of Directors, which will also appoint its Chair, who will be replaced every four years and may be re-elected one year after ceasing to hold the position. The Audit Committee will be composed exclusively of independent directors. The Board of Directors will endeavor to ensure that the members of the Committee have the knowledge and experience appropriate to the duties they are called upon to perform. In any event, at least one member will be appointed taking into account his or her knowledge and experience in accounting, auditing or both. See “Item 16.A. Audit Committee Financial Expert”.
As of the date of this Annual Report, the Audit Committee is comprised of five independent directors, who are the following:
Position (type of directorship) | Name | ||||
Chair (Independent) | Mr. José Miguel Andrés Torrecillas | ||||
Member (Independent) | Mr. Enrique Casanueva Nárdiz | ||||
Member (Independent) | Mrs. Sonia Dulá | ||||
Member (Independent) | Mrs. Connie Hedegaard Koksbang | ||||
Member (Independent) | Mrs. Lourdes Máiz Carro | ||||
Member (Independent) | Mrs. Ana Cristina Peralta Moreno | ||||
According to its Regulations, the Audit Committee has the following functions:
With regard to the supervision of financial statements and public information:
•Inform the general shareholders’ meeting on the questions raised in relation to the matters that are within the remit of the Committee and, in particular, on the result of the audit of accounts, and, where applicable, the verification of required non-financial information, explaining how the audit has contributed to the integrity of the financial information and the function performed by the Committee in these processes.
•Oversee the process of preparing and reporting financial and non-financial information of the Bank and the Group and submit recommendations or proposals to the Board of Directors aimed at safeguarding its integrity.
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•Likewise, analyze, prior to their submission to the Board of Directors and in enough detail to guarantee their accuracy, reliability, sufficiency and clarity, the financial statements and non-financial information of the Bank and of its consolidated Group contained in the annual, six-monthly and quarterly reports, as well as in all other required financial and non-financial information.
•Review the necessary consolidation perimeter, the correct application of accounting criteria, and all the relevant changes relating to the accounting principles used and to the presentation of the financial statements.
•Oversee the effectiveness of the Company’s internal control, internal audit and risk management systems, in terms of the process of preparing and reporting financial information, and discuss with the auditor any significant weaknesses in the internal control system detected during the audit, without undermining its independence.
With regard to the Internal Audit function:
•Propose to the Board of Directors the selection, appointment and removal of the head of the Internal Audit function.
•Monitor the independence, effectiveness and operation of the Internal Audit function.
•Propose to the Board the objectives for the head of the Internal Audit and the assessment of his or her performance, the result of which will be submitted to the Remuneration Committee for the purposes of determining his or her variable remuneration.
•Ensure that the Internal Audit function has the necessary material and human resources for the effective performance of its functions, in terms of personnel, as well as material elements, systems, procedures and operation manuals.
•Analyze and, where appropriate, approve the annual work plan for the Internal Audit function, as well as any other occasional or specific plans to be implemented as a result of regulatory changes or of the needs of the Group.
•Receive monthly information from the head of the Internal Audit function regarding the activities carried out by the Internal Audit function and regarding any incidents and obstacles that may arise, as well as verify that Senior Management takes into account the conclusions and recommendations of its reports, and monitor the implementation of the recommendations contained in said reports.
•Be apprised of the audited units’ degree of compliance with corrective measures previously recommended by the Internal Audit function, and, where appropriate, report to the Board on those cases that may involve a significant risk for the Group.
With regard to the external auditor:
•Submit to the Board of Directors proposals for the selection, appointment, re-election and replacement of the external auditor, taking responsibility for the selection process in accordance with applicable regulations, as well as the hiring conditions of the external auditor.
•Ensure the independence of the auditor in two senses: (i) avoiding that the auditor’s warnings, opinions or recommendations may be adversely influenced. To this end, ensuring that compensation for the auditor’s work does not compromise either its quality or independence, in compliance with the auditing legislation in force at any given moment; (ii) establishing incompatibility between the provision of audit services and those of any other nature, unless they are tasks required by supervisors or the provision of which by the auditor is permitted by applicable legislation, and there are no alternatives on the market that are equal in terms of content, quality or efficiency to those provided by the auditor, in which case, conformity of the Committee will be required, and this decision may be delegated in advance to its Chair.
•Establish appropriate relations with the auditor in order to receive information on any matters that may jeopardize their independence and any other matters in connection with the auditing process, as well as those other communications provided for in applicable legislation. In any event, the Committee must receive from the external auditors, on an annual basis, a statement of their independence with regard to the Company or entities directly or indirectly associated with it, as well as detailed and individualized information on additional services of any kind provided and the corresponding fees received by the external auditor or by persons or entities associated with the external auditor, as provided for in legislation governing the auditing activity.
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•Authorize the provision of additional services other than prohibited services, by the auditor or associated persons or entities, the performance of which is allowed by applicable regulations in each case. Such authorization may also be granted, in advance and by delegation, by the Chair of the Committee.
•Issue, on an annual basis and before the audit report is issued, a report expressing an opinion on whether the auditor’s independence has been compromised. This report must, in all cases, contain a reasoned assessment of the provision of each and every additional services, considered individually and collectively, other than the legal audit, and relating to the framework of independence or the regulations on audit activity.
•Regularly gather information from the external auditor on the external audit plan and its execution, in addition to preserving their independence in the performance of their duties. Likewise, verify, with an appropriate frequency, that the external audit program is being carried out in accordance with the relevant contract conditions and that it is thereby meeting the requirements of the competent official authorities and the corporate bodies. Request, at least once per year, from the auditor an evaluation of the quality of the internal control procedures regarding the preparation and reporting of the Group’s financial information.
•Ensure that the auditor holds an annual meeting with the Board of Directors to inform it of the work carried out and the progress of the Company’s risks and accounting situations.
Other functions include:
•Be apprised of any infringements, situations requiring adjustments, or anomalies that may be detected during the course of the external audit, provided that these are relevant.
•Be apprised of reports, documents or communications from external supervisory bodies related to the scope of the Committee’s functions in the terms set out above. The Committee will ensure that the instructions, requirements and recommendations received from the supervisory bodies are implemented in due time and form, in order to correct any irregularities, shortfalls or inadequacies that may be detected in the inspections performed, within the scope of their functions.
•Inform, prior to any decisions that the Board of Directors or, as appropriate, the Executive Committee must adopt, on all matters within its remit provided for by the law, the Bylaws, the Regulations of the Board of Directors or in the Regulations of the Audit Committee, and in particular on: financial information that the Company is required to publish; economic conditions and accounting impact of relevant corporate transactions and structural modifications (modificaciones estructurales); the creation or acquisition of shares in special purpose vehicles or in entities domiciled in territories considered to be tax havens; and Related-Party Transactions (as this term is defined in the Regulations of the Board of Directors).
•Provide prior information on Related-Party Transactions (as this term is defined in the Regulations of the Board of Directors) that must be submitted for approval by the general shareholders’ meeting or the Board of Directors, in accordance with the provisions of the law and the Regulations of the Board of Directors, and periodically supervise the internal procedure that the Company has established, where applicable, for those Related-Party Transactions whose approval the Board of Directors has agreed to delegate.
•Analyze, prior to their consideration by the Board of Directors, the general policies of the Company or the Group that, by law or pursuant to internal regulations, the Board of Directors must approve, within the scope of the Committee’s powers.
The Audit Committee will meet whenever it is convened by its Chair, who is empowered to call the Committee meetings and to set their agendas. The Committee will endeavor to establish an annual calendar of meetings, considering the amount of time to be devoted to its different tasks. During 2025, the Audit Committee met fourteen (14) times.
Executives responsible for the areas that manage matters within the Committee’s remit may be called to meetings, in particular, Accounting and Internal Audit areas and, at the request thereof, those persons within the Group who have knowledge of or responsibility for the matters covered by the agenda, when their presence at the meeting is deemed convenient. The Committee may also call any other Group employee or manager, and even arrange for them to attend without the presence of any other manager.
Notwithstanding the foregoing, it will seek to ensure that the presence of non-Committee members during these meetings, such as Group managers and employees, be limited to those cases where it is necessary and to the items on the agenda for which they are called. In any event, the Committee will endeavor to hold private meetings with the head of Internal Audit and with the external auditor, without the attendance of other persons and at appropriate intervals.
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The Committee may, through its Secretary, engage external advisory services for relevant issues when it considers that these cannot be provided by experts or technical staff within the Group on grounds of specialization or independence.
Furthermore, the Committee may solicit personal cooperation and reports from any employee or member of the Senior Management if deemed necessary in order to comply with its functions in relevant matters.
Appointments and Corporate Governance Committee
The Appointments and Corporate Governance Committee assists the Board of Directors in matters relating to the selection and appointment of members of the Board of Directors; the assessment of performance; the drafting of succession plans; the Bank’s corporate governance system; and the supervision of the conduct of directors and any conflicts of interest that may affect them.
In compliance with the Board of Directors Regulations, this Committee will be composed of a minimum of three directors who must be non-executive directors appointed by the Board of Directors, which will also appoint its Chair. The Chair and the majority of its members must be independent directors.
As of the date of this Annual Report, the Appointments and Corporate Governance Committee is composed of three independent directors, including its Chair, and of two external directors, who are the following:
Position (type of directorship) | Name | ||||
Chair (Independent) | Mr. José Miguel Andrés Torrecillas | ||||
Member (Independent) | Mr. Jaime Félix Caruana Lacorte | ||||
Member (Independent) | Mr. Raúl Catarino Galamba de Oliveira | ||||
Member (External) | Mrs. Belén Garijo López | ||||
Member (External) | Mrs. Cristina de Parias Halcón | ||||
The functions of the Appointments and Corporate Governance Committee according to its Regulations are as follows:
•Submit proposals to the Board of Directors for the appointment, re-election or removal of independent directors and report on proposals for the appointment, re-election or removal of the remaining directors.
To this end, the Committee will evaluate the balance of knowledge, skills, diversity and experience of the Board of Directors, as well as the conditions that the candidates must meet to cover the vacancies that arise, assessing the dedication of time considered necessary to adequately carry out their duties, in view of the needs that the corporate bodies have at any given time.
The Committee will ensure that selection procedures are not implicitly biased in such a way that may entail any kind of discrimination and, in particular, that may hinder the selection of directors of the underrepresented gender, endeavoring that directors of said gender who display the professional profile sought are included amongst potential candidates.
The Committee, when drafting the corresponding proposals for the appointment of directors, will take into consideration, in case they may be considered suitable, any requests that may be made by any member of the Board of Directors regarding potential candidates to fill the vacancies that have arisen.
•Submit proposals to the Board of Directors on policies on the selection, suitability and diversity of the members of the Board of Directors.
•Establish a target for representation of the underrepresented gender on the Board of Directors and draw up guidelines on how to reach that target.
•Analyze the structure, size and composition of the Board of Directors, at least once per year, when assessing its operation.
•Analyze the suitability of the members of the Board of Directors.
•Review the status of each director each year, so that this may be reflected in the Annual Corporate Governance Report.
•Report on proposals for the appointment of the Chair of the Board and Secretary and, where appropriate, the Deputy Chair and the Deputy Secretary, as well as the Chief Executive Officer.
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•Submit to the Board of Directors proposals for the appointment, removal or re-election of the Lead Director.
•Determine the procedure for assessing the performance of the Chair of the Board of Directors, the Chief Executive Officer, the Board of Directors as a whole and the Board’s committees, and to oversee its implementation.
•Report on the quality and efficiency of the performance of the Board of Directors.
•Report on the performance of the Chair of the Board of Directors and of the Chief Executive Officer, integrating for the latter the assessment made in this regard, where applicable, by the Executive Committee, for the purpose of the periodic assessment of both by the Board of Directors.
•Examine and organize the succession of the Chair of the Board of Directors, the Chief Executive Officer and, where applicable, the Deputy Chair, in coordination with the Lead Director in the case of the Chair of the Board and, where appropriate, submit proposals to the Board of Directors to ensure that the succession takes place in an orderly and planned manner.
•Review the Board of Directors’ policy on the selection and appointment of members of the Senior Management, and submit recommendations to the Board when applicable.
•Report on proposals for the appointment and removal of senior managers.
•Regularly review and assess the Company’s corporate governance system and, where applicable, submit proposals to the Board of Directors, for approval or subsequent submission to the General Shareholders’ Meeting, on any amendments and updates that would contribute to its implementation and continuous improvement.
•Ensure compliance with the provisions applicable to directors contained in the Board of Directors Regulations or in the applicable legislation, as well as with the rules relating to conduct on the securities markets, and inform the Board of Directors of these if it deems it necessary.
•Report, prior to any decisions that may be made by the Board of Directors or the Executive Committee, on all matters within its remit as provided for in the law, the Bylaws, the Board of Directors Regulations and the Regulations of the Appointments and Corporate Governance Committee, and in particular on situations of conflict of interest of the directors.
•Analyze, prior to their consideration by the Board of Directors, the general policies of the Company or the Group that, by law or pursuant to internal regulations, the Board of Directors must approve, within the scope of the Committee’s powers.
In the performance of its duties, the Appointments and Corporate Governance Committee, through its chair, will consult with the Chair of the Board of Directors, particularly with respect to matters relating to executive directors and senior managers.
In accordance with the Regulations of the Appointments and Corporate Governance Committee, executives responsible for the areas that manage matters within the Committee’s remit may be called to meetings, as well as, at the request thereof, those persons within the Group who have knowledge of or responsibility for the matters covered by the agenda, when their presence at the meeting is deemed convenient. The Committee may also call any other Group employee or manager, and even arrange for them to attend without the presence of any other manager.
Notwithstanding the foregoing, it will seek to ensure that the presence of non-Committee members during these meetings, such as Group managers and employees, be limited to those cases where it is necessary and to the items on the agenda for which they are called.
The Committee may, through its Secretary, engage external advisory services for relevant issues when it considers that these cannot be provided by experts or technical staff within the Group on grounds of specialization or independence. Furthermore, the Committee may solicit personal cooperation and reports from any employee or member of the Senior Management if deemed necessary in order to comply with its functions in relevant matters.
The Committee will meet whenever it is convened by its Chair, who is empowered to call the Committee meetings and to set their agendas. The Committee will endeavor to establish an annual calendar of meetings, considering the amount of time to be devoted to its different tasks. During 2025, the Appointments and Corporate Governance Committee met five (5) times.
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Remuneration Committee
The Remuneration Committee, in accordance with the Board of Directors Regulations, assists the Board of Directors in remuneration matters within its remit and, in particular, those relating to the remuneration of directors, senior managers and those employees whose professional activities have a significant impact on the Group’s risk profile.
Under the Board of Directors Regulations, the Committee will be composed of a minimum of three directors appointed by the Board of Directors. All the members must be non-executive directors, with a majority of independent directors, including the Chair.
As of the date of this Annual Report, the Remuneration Committee is composed of four independent directors, including its Chair, and one external director, who are the following:
Position (type of directorship) | Name | ||||
Chair (Independent) | Mrs. Ana Leonor Revenga Shanklin | ||||
Member (Independent) | Mrs. Lourdes Máiz Carro | ||||
Member (Independent) | Mrs. Ana Cristina Peralta Moreno | ||||
Member (External) | Mr. Carlos Salazar Lomelín | ||||
Member (Independent) | Mr. Jan Paul Marie Francis Verplancke | ||||
In accordance with the Regulations of the Remuneration Committee, the scope of the functions of the Remuneration Committee is as follows:
•Propose to the Board of Directors, for submission to the general shareholders’ meeting, the remuneration policy for directors, and also submit its corresponding report, all in accordance with the terms established by applicable regulations at any given time.
•Propose the remuneration of non-executive directors, as provided for in the remuneration policy for directors, submitting the corresponding proposals to the Board.
•Propose to the Board of Directors the contracts that the Company must enter into with the executive directors, in accordance with the remuneration policy for directors.
•Propose the objectives and criteria for measuring the variable remuneration of the executive directors and assess the degree of achievement thereof, submitting the corresponding proposals to the Board of Directors, which, in the case of the Chief Executive Officer, may include the assessment made by the Executive Committee and, in the case of other executive directors who may report to the Chair or to the Chief Executive Officer, the assessment made by these.
•Analyze, where appropriate, in accordance with the approved remuneration policies, the need to make ex-ante or ex-post adjustments to variable remuneration, including the application of malus or clawback arrangements for variable remuneration, submitting the corresponding proposals to the Board of Directors, prior report of the corresponding committees in each case.
•Annually submit the proposal of the annual report on the remuneration of the Bank’s directors to the Board of Directors, which will then be submitted to the Annual General Shareholders’ Meeting, in accordance with the provisions of the applicable law.
•Propose to the Board of Directors the remuneration policies for senior managers and employees whose professional activities have a significant impact on the risk profile of the Bank and/or the Group, and that of the Group as a whole. Likewise, oversee its implementation, including supervision of the process for identifying such employees.
•Propose to the Board of Directors the basic contractual conditions for senior managers, including their remuneration and severance indemnity in the event of termination, and directly oversee their remuneration, within the framework of the remuneration policy applicable to Senior Management at any given time.
•Propose to the Board of Directors the criteria for determining variable remuneration of the heads of Regulation and Internal Control and Internal Audit, and propose that remuneration, submitting the corresponding proposals to the Board of Directors, on the basis of the assessment of their performance that, for these purposes, is submitted by the Risk and Compliance Committee and the Audit Committee, respectively.
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•Ensure observance of the remuneration policies established by the Company and review them periodically, proposing, where appropriate, any modifications deemed necessary to ensure, amongst other things, that they are adequate for the purposes of attracting and retaining the best professionals, that they contribute to the creation of long-term value and adequate control and management of risks, and that they attend to the principle of pay equity. In particular, ensure that the remuneration policies established by the Company are subject to internal, central and independent review at least once a year.
•Verify the information on the remuneration of directors and senior managers contained in the various corporate documents, including the annual report on the remuneration of directors.
•Inform, prior to any decisions that the Board of Directors or, as appropriate, the Executive Committee must adopt, on all matters within its remit provided for by law, the Bylaws, or any of the regulations of the Company’s corporate bodies.
•Oversee the selection of external advisers, whose advice or support is required for the performance of their functions in remuneration matters, ensuring that any potential conflicts of interest do not impair the independence of the advice provided.
In the performance of its duties, the Committee, through its chair, will consult with the Chair of the Board of Directors, particularly with respect to matters relating to executive directors and senior managers.
Pursuant to the Regulations of the Remuneration Committee, executives responsible for the areas that manage matters within the Committee’s remit may be called to meetings, as well as, at the request thereof, those persons within the Group who have knowledge of or responsibility for the matters covered by the agenda, when their presence at the meeting is deemed convenient. The Committee may also call any other Group employee or manager, and even arrange for them to attend without the presence of any other manager.
Notwithstanding the foregoing, it will seek to ensure that the presence of non-Committee members during these meetings, such as Group managers and employees, be limited to those cases where it is necessary and to the items on the agenda for which they are called.
The Remuneration Committee will meet whenever it is convened by its Chair, who is empowered to call the Committee meetings and to set their agendas. The Committee will endeavor to establish an annual calendar of meetings, considering the amount of time to be devoted to its different tasks. During 2025, the Remuneration Committee met on five (5) occasions.
Risk and Compliance Committee
The Board’s Risk and Compliance Committee’s essential function is to assist the Board of Directors in the determination and monitoring of the Group’s risk control and management policy, including risk internal control and non-financial risks, acquiring a global and comprehensive overview of all financial and non-financial risks; with the exception of the specificities that, with regard to internal financial control, correspond to the Audit Committee; with regard to technological risk, correspond to the Technology and Cybersecurity Committee; and with regard to business and reputational risk, correspond to the Executive Committee; in each case in accordance with the Board of Directors Regulations and the Regulations of the committees. It will also assist the Board of Directors in the oversight of the Compliance functions and the implementation of a risk and compliance culture in the Group.
The Risk and Compliance Committee will consist of a minimum of three directors appointed by the Board of Directors, which will also appoint its Chair. All the members of this Committee must be non-executive directors and the majority, including the Chair, must be independent directors. The Board of Directors will endeavor to ensure that the members of the Committee possess the appropriate knowledge, ability and experience to understand and control the risk strategy.
As of the date of this Annual Report, the Risk and Compliance Committee is composed of five independent directors, including its Chair, who are the following:
Position (type of directorship) | Name | ||||
Chair (Independent) | Mr. Raúl Catarino Galamba de Oliveira | ||||
Member (Independent) | Mr. Jaime Félix Caruana Lacorte | ||||
Member (Independent) | Mr. Enrique Casanueva Nárdiz | ||||
Member (Independent) | Mrs. Sonia Dulá | ||||
Member (Independent) | Mrs. Ana Leonor Revenga Shanklin | ||||
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Under the Regulations of the Risk and Compliance Committee, such Committee has the following duties:
•Based on the strategic elements established by either the Board of Directors or the Executive Committee at any given time, analyze and submit to the Board or, as appropriate, to the Executive Committee:
a.The proposals on the Group’s strategy, risk control and management, which shall include the Group’s Risk Appetite Framework, in which, in particular, the level of risk deemed appropriate shall be identified, broken down by businesses and areas relevant to the Group’s activity; and
b.The aspects of risks and internal control of the self-assessment exercises of the capital and liquidity adequacy of the Bank and its Group.
•Address, in a manner consistent with the Risk Appetite Framework established by the Board of Directors, the control and management policies for the different risks, including financial risks, and, to the extent that they do not correspond to another Board committee, non-financial risks, as well as information and internal control systems.
•Oversee the effectiveness of the Regulation and Internal Control function, which will hierarchically report to the Board of Directors, through the Committee, and in particular:
a.Propose to the Board of Directors the appointment and removal of the head of Regulation and Internal Control function.
b.Propose to the Board of Directors the objectives for the head of Regulation and Internal Control function and his or her performance, incorporating the assessment of the Chair of the Board regarding the Regulation and Supervisors functions, whose results will be shared with the Remuneration Committee for the purposes of determining his or her variable remuneration.
c.Ensure that the Regulation and Internal Control function has the necessary material and human resources for the effective performance of its functions.
d.Analyze and, where appropriate, approve the annual work plan for the Regulation and Internal Control function, as well as its modifications, and monitor compliance thereof.
•Receive periodically information from the head of the areas of Global Risk Management and the Regulation and Internal Control function regarding the activities carried out by these areas, as well as regarding any incidents that may arise, and the way in which those are taken into consideration by the management team. Notwithstanding the foregoing, the heads of both areas will also report periodically to the Board of Directors.
The Committee may also receive periodic information from the heads of the units that integrate the Areas of Global Risk Management (GRM) and Regulation and Internal Control.
•Monitor the evolution of the Group’s financial and non-financial risks and their degree of compatibility with established strategies and policies, and with the Group’s Risk Appetite Framework, and oversee procedures, tools and risk measurement indicators established at Group level to obtain a global view of the Bank’s and the Group’s risks. Likewise, monitor compliance with prudential regulation and supervisory requirements regarding risks.
Furthermore, analyze, where appropriate, the measures envisaged to mitigate the impact of identified risks, should these materialize, to be adopted by the Executive Committee or the Board of Directors, as appropriate.
•Analyze, within its remit, the risks associated with projects that are considered strategic for the Group or with corporate transactions to be submitted to consideration by the Board of Directors or, where appropriate, to consideration by the Executive Committee and, where necessary, submit the corresponding report.
•Analyze, prior to their submission to the Board of Directors or to the Executive Committee those risk operations to be submitted to the consideration of the Board of Directors or, as applicable, of the Executive Committee, except for those Related-Party Transactions whose prior report corresponds solely to the Audit Committee.
•Examine whether the prices of the assets and liabilities offered to customers fully take into account the Bank’s business model and risk strategy and, if not, submit a plan to the Board of Directors aimed at rectifying the situation.
•Participate in the process of establishing the remuneration policies, ascertaining that it is compatible with an adequate and effective risk management strategy and that it does not offer incentives to assume risks that exceed the level tolerated by the Group.
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•Verify that the Company and the Group have means, systems, structures and resources that are consistent with best practices that enable to implement their risk management strategy, ensuring that the Bank’s and the Group’s risk management mechanisms are adequate in relation thereto.
•Report, prior to any decisions that may have to be adopted by the Board of Directors or, as appropriate, the Executive Committee, on all matters within its remit as provided for in the law, the Bylaws, the Board of Directors Regulations, the Regulations of the Risk and Compliance Committee or in any of the regulations of the corporate bodies.
•Ensure compliance with applicable national or international regulations on matters related to money laundering, conduct on the securities markets, data protection and the scope of Group activities with respect to competition, and ensure that requests for information or action made by official authorities on these matters are dealt with in due time and in an appropriate manner.
•Be informed on any breach of the applicable internal or external regulations, as well as the relevant events that the areas reporting to the Committee may have identified within their oversight and control functions. Likewise, the Committee shall be informed on those issues related to legal risks which may arise in the course of the Group’s activity.
•Examine draft codes of ethics and conduct and their respective modifications prepared by the corresponding area of the Group, and issue its opinion in advance of the proposals to be drawn up to the corporate bodies.
•Be apprised of reports, documents or communications from external supervisory bodies, notwithstanding any communication made with the remaining committees with regard to their respective remits. Likewise, verify that the instructions, requirements and recommendations received from the supervisory bodies in order to correct the irregularities, shortfalls or inadequacies identified in the inspections performed are fulfilled in due time and appropriate manner.
•Ensure the promotion of risk culture across the Group.
•Supervise the Group’s criminal risk prevention model.
•Review and supervise the systems under which Group professionals may confidentially report any possible irregularities in the field of financial information or other matters.
Pursuant to the Regulations of the Risk and Compliance Committee, executives responsible for the areas that manage matters within the Committee’s remit may be called to meetings, in particular, Regulation and Internal Control area and Risks area, and, at the request thereof, those persons within the Group who have knowledge of or responsibility for the matters covered by the agenda, when their presence at the meeting is deemed convenient. The Committee may also call any other Group employee or manager, and even arrange for them to attend without the presence of any other manager.
Notwithstanding the foregoing, it will seek to ensure that the presence of non-Committee members during these meetings, such as Group managers and employees, be limited to those cases where it is necessary and to the items on the agenda for which they are called.
The Committee will meet whenever it is convened by its Chair, who is empowered to call the Committee meetings and to set their agendas. The Committee will endeavor to establish an annual calendar of meetings, considering the amount of time to be devoted to its different tasks. In 2025, it held twenty-two (22) meetings.
Technology and Cybersecurity Committee
The Technology and Cybersecurity Committee’s essential function is to assist the Board of Directors in connection with the Group’s technological strategy and technological and cybersecurity risks, without prejudice to the functions corresponding to the Risk and Compliance Committee.
The Technology and Cybersecurity Committee will consist of a minimum of three directors appointed by the Board of Directors, which will also appoint its Chair. The Board of Directors will endeavor to ensure that the members of the Committee have the knowledge and experience appropriate to the duties they are called upon to perform.
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As of the date of this Annual Report, the Technology and Cybersecurity Committee is composed of one executive director, three independent directors and one external director, who are the following:
Position (type of directorship) | Name | ||||
Chair (Executive) | Mr. Carlos Torres Vila | ||||
Member (Independent) | Mr. Raúl Catarino Galamba de Oliveira | ||||
Member (External) | Mrs. Cristina de Parias Halcón | ||||
Member (Independent) | Mrs. Ana Leonor Revenga Shanklin | ||||
Member (Independent) | Mr. Jan Paul Marie Francis Verplancke | ||||
Under its regulations, the Technology and Cybersecurity Committee has the following functions:
Group’s technological and cybersecurity risk:
•Analysis and monitoring of the Group’s main technological and cybersecurity risks, as well as the plans and programs adopted by the executive area to monitor such risks.
•Analysis and monitoring of the policies and systems for the assessment, control and management of the Group’s technological infrastructures and risks, including risks related to the digital operational resilience and response and recovery plans in the event of cyber-attacks.
•Analysis and monitoring of business continuity plans in the areas of technology and technological infrastructure.
•Analysis and monitoring of: (i) Compliance risks associated with information technologies; and (ii) Procedures established to identify, assess, oversee, manage and mitigate these risks.
•Analysis and monitoring of any relevant events and incidents that may have occurred with regard to cybersecurity and technological security.
Technological Strategy:
•Analysis and monitoring of the main policies, strategic projects and plans defined by the corresponding executive areas, in accordance with its remit.
•Analysis and monitoring of the technology strategy and trends that may affect the Group’s strategic plans, including the monitoring of the matters related to new technologies, applications, information systems and best practices.
•Analysis and monitoring of the strategic metrics established for management and control in the technological field, including the developments and investments that the Group may carry out in this regard.
Other functions:
•Inform, prior to any decisions that the Board of Directors or, as appropriate, the Executive Committee must adopt, on all matters within its remit provided for by law, the Bylaws, or any of the regulations of the Company’s corporate bodies.
•Analyze, prior to their consideration by the Board of Directors, the general policies of the Company or the Group that, by law or pursuant to internal regulations, the Board of Directors must approve, within the scope of the Committee’s powers.
For a better performance of its functions, appropriate coordination systems will be established between the Technology and Cybersecurity Committee and the Audit Committee to facilitate, in particular, that the Committee is aware of the conclusions of the work carried out by the Internal Audit area in technology and cybersecurity matters.
The Committee will meet whenever it is convened by its Chair, who is empowered to call the Committee meetings and to set their agenda. The Committee will endeavor to establish an annual calendar of meetings, considering the amount of time to be devoted to its different tasks. In 2025, it held seven (7) meetings.
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D. Employees
As of December 31, 2025, we had 127,174 employees. Approximately 99.7% of our employees in Spain held technical, managerial and executive positions, while the remainder were clerical and support staff. The table below sets forth the number of BBVA employees by geographical area.
As of December 31, 2025 | ||||||||||||||
Country | BBVA | Bank Subsidiaries | Non-bank Subsidiaries | Total | ||||||||||
Spain | 22,318 | — | 7,161 | 29,479 | ||||||||||
United Kingdom | 375 | — | — | 375 | ||||||||||
France | 91 | — | — | 91 | ||||||||||
Italy | 105 | — | — | 105 | ||||||||||
Germany | 78 | — | — | 78 | ||||||||||
Switzerland | — | 129 | — | 129 | ||||||||||
Portugal | 336 | — | 72 | 408 | ||||||||||
Belgium | 16 | — | — | 16 | ||||||||||
The Netherlands | — | 286 | — | 286 | ||||||||||
Romania | — | 1,192 | — | 1,192 | ||||||||||
Ireland | — | — | — | — | ||||||||||
Luxembourg | — | — | — | — | ||||||||||
Turkey | — | 21,725 | — | 21,725 | ||||||||||
Malta | — | 14 | — | 14 | ||||||||||
Cyprus | — | 94 | — | 94 | ||||||||||
Finland | — | — | — | — | ||||||||||
Total Europe | 23,319 | 23,440 | 7,233 | 53,992 | ||||||||||
The United States | 446 | — | 221 | 667 | ||||||||||
Argentina | — | 6,531 | 208 | 6,739 | ||||||||||
Brazil | — | 73 | — | 73 | ||||||||||
Colombia | — | 5,124 | 1,392 | 6,516 | ||||||||||
Venezuela | — | 1,840 | 27 | 1,867 | ||||||||||
Mexico | — | 44,673 | 3,072 | 47,745 | ||||||||||
Uruguay | — | 510 | 45 | 555 | ||||||||||
Paraguay | — | — | — | — | ||||||||||
Bolivia | — | — | 35 | 35 | ||||||||||
Chile | — | — | 862 | 862 | ||||||||||
Cuba | — | — | — | — | ||||||||||
Peru | — | 7,658 | 206 | 7,864 | ||||||||||
Total Latin America | — | 66,409 | 5,847 | 72,256 | ||||||||||
Japan | 14 | — | — | 14 | ||||||||||
China (1) | 193 | — | — | 193 | ||||||||||
Singapore | 24 | — | — | 24 | ||||||||||
India | 2 | — | — | 2 | ||||||||||
South Korea | 2 | — | — | 2 | ||||||||||
United Arab Emirates | 3 | — | — | 3 | ||||||||||
Taiwan | 18 | — | — | 18 | ||||||||||
Indonesia | 3 | — | — | 3 | ||||||||||
— | — | — | ||||||||||||
Total Asia | 259 | — | — | 259 | ||||||||||
Total | 24,024 | 89,849 | 13,301 | 127,174 | ||||||||||
(1)Includes employees of BBVA entities in Hong Kong and the rest of China.
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As of December 31, 2024, we had 125,916 employees. Approximately 99.6% of our employees in Spain held technical, managerial and executive positions, while the remainder were clerical and support staff. The table below sets forth the number of BBVA employees by geographical area.
As of December 31, 2024 | ||||||||||||||
Country | BBVA | Bank Subsidiaries | Non-bank Subsidiaries | Total | ||||||||||
Spain | 21,965 | — | 6,889 | 28,854 | ||||||||||
United Kingdom | 234 | — | — | 234 | ||||||||||
France | 77 | — | — | 77 | ||||||||||
Italy | 85 | — | — | 85 | ||||||||||
Germany | 62 | — | — | 62 | ||||||||||
Switzerland | — | 125 | — | 125 | ||||||||||
Portugal | 344 | — | 77 | 421 | ||||||||||
Belgium | 16 | — | — | 16 | ||||||||||
The Netherlands | — | 249 | — | 249 | ||||||||||
Romania | — | 1,177 | — | 1,177 | ||||||||||
Ireland | — | — | — | — | ||||||||||
Luxembourg | — | — | — | — | ||||||||||
Turkey | — | 21,126 | — | 21,126 | ||||||||||
Malta | — | 14 | — | 14 | ||||||||||
Cyprus | — | 98 | — | 98 | ||||||||||
Finland | — | — | — | — | ||||||||||
Total Europe | 22,783 | 22,789 | 6,966 | 52,538 | ||||||||||
The United States | 348 | — | 165 | 513 | ||||||||||
Argentina | — | 5,986 | 196 | 6,182 | ||||||||||
Brazil | — | 34 | — | 34 | ||||||||||
Colombia | — | 5,265 | 1,289 | 6,554 | ||||||||||
Venezuela | — | 1,809 | 28 | 1,837 | ||||||||||
Mexico | — | 45,849 | 3,044 | 48,893 | ||||||||||
Uruguay | — | 506 | 47 | 553 | ||||||||||
Paraguay | — | — | — | — | ||||||||||
Bolivia | — | — | 58 | 58 | ||||||||||
Chile | — | — | 773 | 773 | ||||||||||
Cuba | — | — | — | — | ||||||||||
Peru | — | 7,427 | 355 | 7,782 | ||||||||||
Total Latin America | — | 66,876 | 5,790 | 72,666 | ||||||||||
Japan | 8 | — | — | 8 | ||||||||||
China (1) | 154 | — | — | 154 | ||||||||||
Singapore | 16 | — | — | 16 | ||||||||||
India | 2 | — | — | 2 | ||||||||||
South Korea | 2 | — | — | 2 | ||||||||||
United Arab Emirates | 1 | — | — | 1 | ||||||||||
Taiwan | 14 | — | — | 14 | ||||||||||
Indonesia | 2 | — | — | 2 | ||||||||||
Total Asia | 199 | — | — | 199 | ||||||||||
Total | 23,330 | 89,665 | 12,921 | 125,916 | ||||||||||
(1)Includes employees of BBVA entities in Hong Kong and the rest of China.
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As of December 31, 2023, we had 121,486 employees. Approximately 99.3% of our employees in Spain held technical, managerial and executive positions, while the remainder were clerical and support staff. The table below sets forth the number of BBVA employees by geographical area.
As of December 31, 2023 | ||||||||||||||
Country | BBVA | Bank Subsidiaries | Non-bank Subsidiaries | Total | ||||||||||
Spain | 21,571 | — | 5,839 | 27,410 | ||||||||||
United Kingdom | 154 | — | — | 154 | ||||||||||
France | 75 | — | — | 75 | ||||||||||
Italy | 65 | — | — | 65 | ||||||||||
Germany | 47 | — | — | 47 | ||||||||||
Switzerland | — | 124 | — | 124 | ||||||||||
Portugal | 350 | 79 | — | 429 | ||||||||||
Belgium | 19 | — | — | 19 | ||||||||||
The Netherlands | — | 239 | — | 239 | ||||||||||
Romania | — | 1,200 | — | 1,200 | ||||||||||
Ireland | — | — | — | — | ||||||||||
Luxembourg | — | — | — | — | ||||||||||
Turkey | — | 20,452 | — | 20,452 | ||||||||||
Malta | — | 14 | — | 14 | ||||||||||
Cyprus | — | 111 | — | 111 | ||||||||||
Finland | — | — | — | — | ||||||||||
Total Europe | 22,281 | 22,219 | 5,839 | 50,339 | ||||||||||
The United States | 288 | 117 | — | 405 | ||||||||||
— | ||||||||||||||
Argentina | — | 5,804 | 192 | 5,996 | ||||||||||
Brazil | — | 6 | — | 6 | ||||||||||
Colombia | — | 5,529 | 1,301 | 6,830 | ||||||||||
Venezuela | — | 1,805 | 27 | 1,832 | ||||||||||
Mexico | — | 44,133 | 2,758 | 46,891 | ||||||||||
Uruguay | — | 521 | 52 | 573 | ||||||||||
Paraguay | — | — | — | — | ||||||||||
Bolivia | — | — | 109 | 109 | ||||||||||
Chile | — | — | 786 | 786 | ||||||||||
Cuba | — | — | — | — | ||||||||||
Peru | — | 7,208 | 339 | 7,547 | ||||||||||
Total Latin America | — | 65,006 | 5,564 | 70,570 | ||||||||||
Japan | 6 | — | — | 6 | ||||||||||
China (1) | 131 | — | — | 131 | ||||||||||
Singapore | 16 | — | — | 16 | ||||||||||
India | 2 | — | — | 2 | ||||||||||
South Korea | 2 | — | — | 2 | ||||||||||
United Arab Emirates | 1 | — | — | 1 | ||||||||||
Taiwan | 12 | — | — | 12 | ||||||||||
Indonesia | 2 | — | — | 2 | ||||||||||
Total Asia | 172 | — | — | 172 | ||||||||||
Total | 22,741 | 87,342 | 11,403 | 121,486 | ||||||||||
(1)Includes employees of BBVA entities in Hong Kong and the rest of China.
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The number of employees increased by 1.0% during 2025 and by 3.6% in 2024. The increase in the Group’s workforce was mainly due to the hiring of individuals with engineering, data, client solutions and sustainability profiles in Spain, Mexico and Peru to boost the transformation areas, as well as the hiring of employees from the branch network to support business growth in Mexico and Peru.
The basic terms and conditions of employment in the private bank sector in Spain are negotiated with the unions representing bank employees in the sector. Wage negotiations take place on a sector level. This process has historically resulted in binding collective bargaining agreements for all Spanish banks and their employees. The XXV Banking Collective Bargaining Agreement (BCBA) was signed on November 12, 2024 and will remain in force until December 31, 2026.
As of December 31, 2025, 2024 and 2023, we had 75, 119 and 203 temporary employees in Spain, respectively.
Employee Pension Plans
Under the relevant collective labor agreements, BBVA and some of its subsidiaries provide supplemental pension payments to certain active and retired employees and their beneficiaries. These payments supplement social security benefits from the Spanish government. See Note 2.2.13 and Note 25 to the Consolidated Financial Statements.
E. Share Ownership
As of February 16, 2026, the members of the Board of Directors owned an aggregate of BBVA shares as shown in the table below:
| Name | Directly owned shares | Indirectly owned shares | Total shares | % Capital Stock | ||||||||||
| Carlos Torres Vila | 1,887,078 | _ | 1,887,078 | 0.033 | ||||||||||
| Onur Genç * | 1,218,789 | _ | 1,218,789 | 0.021 | ||||||||||
| José Miguel Andrés Torrecillas | 10,828 | _ | 10,828 | 0.000 | ||||||||||
| Jaime Caruana Lacorte | 35,000 | 10,000 | 45,000 | 0.001 | ||||||||||
| Enrique Casanueva Nárdiz | _ | _ | _ | _ | ||||||||||
| Sonia Dulá * | 7,500 | _ | 7,500 | 0.000 | ||||||||||
| Raúl Galamba de Oliveira | 30,000 | _ | 30,000 | 0.001 | ||||||||||
| Belén Garijo López | _ | _ | _ | _ | ||||||||||
| Connie Hedegaard Koksbang | _ | _ | _ | _ | ||||||||||
| Lourdes Máiz Carro | _ | _ | _ | _ | ||||||||||
| Cristina de Parias Halcón | 357,683 | _ | 357,683 | 0.006 | ||||||||||
| Ana Peralta Moreno | _ | _ | _ | _ | ||||||||||
| Ana Revenga Shanklin* | 10,000 | _ | 10,000 | 0.000 | ||||||||||
| Carlos Salazar Lomelín ** | 890,499 | 1,836,888 | 2,727,387 | 0.048 | ||||||||||
| Jan Verplancke | _ | _ | _ | _ | ||||||||||
| TOTAL | 4,447,377 | 1,846,888 | 6,294,265 | 0.110 | ||||||||||
* In relation to the declared position of Onur Genç, Sonia Dulá and Ana Revenga Shanklin, it includes 31,326, 7,500 and 10,000 shares in the form of ADSs (American Depositary Shares), respectively.
** In relation to the declared position of Carlos Salazar Lomelín, it includes the shares in the form of ADSs that he holds both directly (592,000) and indirectly (1,836,888).
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As of February 16, 2026 the Senior Management (excluding executive directors) owned an aggregate of BBVA shares as shown in the table below:
| Name | Directly owned shares | Indirectly owned shares | Total shares | % Capital Stock | ||||||||||
| Domingo Armengol Calvo | 228,087 | _ | 228,087 | 0.004 | ||||||||||
| María Jesús Arribas de Paz | 185,020 | _ | 185,020 | 0.003 | ||||||||||
| Pello Belausteguigoitia Mateache | 157,659 | _ | 157,659 | 0.003 | ||||||||||
Antonio Bravo Acín * | 17,126 | _ | 17,126 | 0.000 | ||||||||||
| Carlos Casas Moreno | 70,498 | _ | 70,498 | 0.001 | ||||||||||
| Victoria del Castillo Marchese | 129,690 | _ | 129,690 | 0.002 | ||||||||||
| José Luis Elechiguerra Joven | 110,293 | _ | 110,293 | 0.002 | ||||||||||
| Ana Fernández Manrique | 123,400 | 105,031 | 228,431 | 0.004 | ||||||||||
| Paul García Tobin | 187,829 | _ | 187,829 | 0.003 | ||||||||||
| María Luisa Gómez Bravo | 355,620 | _ | 355,620 | 0.006 | ||||||||||
| Eduardo Osuna Osuna | 65,633 | _ | 65,633 | 0.001 | ||||||||||
| David Puente Vicente | 246,993 | _ | 246,993 | 0.004 | ||||||||||
Francisco Javier Rodríguez Soler * | 402,985 | _ | 402,985 | 0.007 | ||||||||||
| Jaime Sáenz de Tejada Pulido | 376,978 | 211 | 377,189 | 0.007 | ||||||||||
| Jorge Sáenz-Azcúnaga Carranza | 267,796 | _ | 267,796 | 0.005 | ||||||||||
Carlos Sanz-Pastor Revorio | 10,234 | _ | 10,234 | 0.000 | ||||||||||
| TOTAL | 2,935,841 | 105,242 | 3,041,083 | 0.053 | ||||||||||
As of February 16, 2026 a total of 12,212 employees (excluding the members of the Senior Management and executive directors) owned an aggregate of 37,121,943 shares, which represented 0.650% of our capital stock.
In accordance with the vesting and payment rules set forth in the Directors’ Remuneration Policy and the BBVA Group’s General Remuneration Policy applicable to 2023 annual variable remuneration, BBVA stock options awarded to executive directors and the rest of the members of Senior Management as part of the 2023 annual variable remuneration, vested on February 15, 2026.
However, the BBVA stock options vested as part of the annual variable remuneration may be exercised only on their expiration date, which shall take place two years after their vesting, provided that the closing price of the BBVA share on the expiration date is above the exercise price. The underlying asset of each BBVA stock option is one BBVA share. The BBVA stock options shall be settled by differences, meaning that the amount to be paid to each beneficiary as a result of their exercise shall be the difference between the market value of the BBVA share corresponding to the exercise date and the exercise price. This amount shall be paid to each beneficiary in BBVA shares.
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In accordance with the above as of February 16, 2026, the executive members of the Board of Directors owned an aggregate of BBVA stock options as shown in the table below:
| Name | Remuneration Plan | Owned stock options | Underlying shares | Exercise price | Expiration date / Potential exercise date | ||||||||||||
| Carlos Torres Vila | 2023 annual variable remuneration | 189,609 | 189,609 | €8.319 | 2/15/2028 | ||||||||||||
| Onur Genç | 2023 annual variable remuneration | 141,809 | 141,809 | €8.319 | 2/15/2028 | ||||||||||||
| TOTAL | 331,418 | 331,418 | |||||||||||||||
Likewise, as of February 16, 2026 the Senior Management (excluding executive directors) owned an aggregate of BBVA stock options as shown in the table below:
| Name | Remuneration Plan | Owned stock options | Underlying shares | Exercise price | Expiration date / Potential exercise date | ||||||||||||
| Domingo Armengol Calvo | 2023 annual variable remuneration | 15,638 | 15,638 | €8.319 | 2/15/2028 | ||||||||||||
| María Jesús Arribas de Paz | 2023 annual variable remuneration | 18,925 | 18,925 | €8.319 | 2/15/2028 | ||||||||||||
| Pello Belausteguigoitia Mateache | 2023 annual variable remuneration | 35,658 | 35,658 | €8.319 | 2/15/2028 | ||||||||||||
| Antonio Bravo Acín | 2023 annual variable remuneration | 8,217 | 8,217 | €8.319 | 2/15/2028 | ||||||||||||
| Carlos Casas Moreno | 2023 annual variable remuneration | 22,797 | 22,797 | €8.319 | 2/15/2028 | ||||||||||||
| Victoria del Castillo Marchese | 2023 annual variable remuneration | 22,265 | 22,265 | €8.319 | 2/15/2028 | ||||||||||||
| José Luis Elechiguerra Joven | 2023 annual variable remuneration | 30,939 | 30,939 | €8.319 | 2/15/2028 | ||||||||||||
| Ana Fernández Manrique | 2023 annual variable remuneration | 14,006 | 14,006 | €8.319 | 2/15/2028 | ||||||||||||
| Paul García Tobin | 2023 annual variable remuneration | 15,307 | 15,307 | €8.319 | 2/15/2028 | ||||||||||||
| María Luisa Gómez Bravo | 2023 annual variable remuneration | 35,351 | 35,351 | €8.319 | 2/15/2028 | ||||||||||||
| Eduardo Osuna Osuna | 2023 annual variable remuneration | 84,896 | 84,896 | €8.319 | 2/15/2028 | ||||||||||||
| David Puente Vicente | 2023 annual variable remuneration | 33,927 | 33,927 | €8.319 | 2/15/2028 | ||||||||||||
| Francisco Javier Rodríguez Soler | 2023 annual variable remuneration | 48,695 | 48,695 | €8.319 | 2/15/2028 | ||||||||||||
| Jaime Sáenz de Tejada Pulido | 2023 annual variable remuneration | 26,523 | 26,523 | €8.319 | 2/15/2028 | ||||||||||||
Jorge Sáenz-Azcúnaga Carranza | 2023 annual variable remuneration | 26,363 | 26,363 | €8.319 | 2/15/2028 | ||||||||||||
Carlos Sanz-Pastor Revorio | 2023 annual variable remuneration | 5,038 | 5,038 | €8.319 | 2/15/2028 | ||||||||||||
| TOTAL | 444,545 | 444,545 | |||||||||||||||
In accordance with the provisions of the Directors’ Remuneration Policy and the BBVA Group’s General Remuneration Policy, a portion of the annual variable remuneration for the 2025 financial year of executive directors, the rest of Senior Management and members of the Identified Staff, has also been awarded in the form of BBVA stock options. Such BBVA stock options have not vested yet and they will only do so, provided the relevant conditions are met, in 2028. For additional information on such BBVA stock options, see “—Compensation”.
F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation
Not applicable.
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ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A. Major Shareholders
On February 5, 2024, BlackRock, Inc. reported to the SEC that it beneficially owned 7.2% of BBVA’s ordinary shares.
As of February 19, 2025, to BBVA’s knowledge, no other corporation, government or any other natural or legal person beneficially owned, directly or indirectly, five percent or more of BBVA’s shares.
On August 13, 2025, Capital Research and Management Company reported to the SEC that it indirectly had voting power over 3.1% of BBVA’s ordinary shares.
BBVA’s major shareholders do not have voting rights which are different from those held by the rest of its shareholders. To the extent known to BBVA, BBVA is not controlled, directly or indirectly, by any other corporation, government or any other natural or legal person. As of February 16, 2026, there were 655,510 registered holders of BBVA’s shares, with an aggregate of 5,708,968,700 shares, of which 731 shareholders with registered addresses in the United States held a total of 1,537,955,760 shares (including shares represented by American Depositary Shares evidenced by American Depositary Receipts (“ADRs”)). Since certain of such shares and ADRs are held by nominees, the foregoing figures are not representative of the number of beneficial holders.
B. Related Party Transactions
BBVA entities engage, on a regular and routine basis, in a number of customary transactions with other BBVA entities, including overnight call deposits, time deposits, foreign exchange purchases and sales, derivative transactions (such as forward purchases and sales), money market fund transfers, letters of credit for imports and exports, financial guarantees and service level agreements.
They also engage in other similar transactions within the scope of the ordinary course of their business, such as loans and other banking services, with our shareholders, employees, associates and family members of all the above and other BBVA non-banking subsidiaries or affiliates. These transactions are made in the ordinary course of business; on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons; and do not involve more than the normal risk of collectability or present other unfavorable features.
For information on these transactions as of December 31, 2025, 2024 and 2023, see Note 53 to the Consolidated Financial Statements.
C. Interests of Experts and Counsel
Not Applicable.
ITEM 8. FINANCIAL INFORMATION
A. Consolidated Statements and Other Financial Information
Financial Information
See Item 18.
Dividends
“Final” dividends for a year may be proposed by the Board of Directors to be approved by the Annual General Shareholders’ Meeting following the end of the year to which they relate. Additionally, the Board of Directors may approve the payment of “interim” dividends on account of the year’s end profits following the fulfillment of certain requirements under Spanish law, which payment is endorsed by the Annual General Shareholders’ Meeting. Interim and final dividends are payable to shareholders of record on the record date for the dividend payment. Any unclaimed cash dividends revert to BBVA five years after declaration.
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The table below sets forth the gross amount of interim, final and total cash dividends and distributions paid or expected to be paid by BBVA on its shares for the years 2021 to 2025. The rate used to convert euro amounts to U.S. dollars was the noon buying rate at the end of each year.
Per Share | ||||||||||||||||||||
Interim | Final | Total | ||||||||||||||||||
2021 | €0.080 | $0.091 | €0.230 | $0.260 | €0.310 | $0.351 | ||||||||||||||
2022 | €0.120 | $0.128 | €0.310 | $0.332 | €0.430 | $0.460 | ||||||||||||||
2023 | €0.160 | $0.177 | €0.390 | $0.431 | €0.550 | $0.608 | ||||||||||||||
2024 | €0.290 | $0.300 | €0.410 | $0.424 | €0.700 | $0.725 | ||||||||||||||
2025 (1) | €0.320 | $0.376 | €0.600 | $0.704 | €0.920 | $1.080 | ||||||||||||||
(1)Includes a cash distribution in the amount of €0.60 gross per share, announced on February 5, 2026 and proposed to be paid in April 2026, as the final dividend for the year 2025 (see “—Cash Dividends” herein).
Dividend Policy
The Group’s shareholder distribution policy establishes an annual distribution of between 40% and 50% of the consolidated ordinary profit of each year (excluding amounts and items of an extraordinary nature included in the consolidated income statement). 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 relevant authorizations and approvals applicable at any given time.
While we expect to declare and pay dividends on our shares in the future, the payment of dividends will depend upon the results of BBVA, market conditions, the regulatory framework, the recommendations or restrictions regarding dividends that may be adopted by domestic or European regulatory bodies or authorities and other factors. In particular, BBVA may not pay dividends except out of its annual results and its distributable reserves, after taking into account the applicable capital adequacy requirements and any recommendations on payment of dividends, and any other required authorization or restriction, if applicable. Capital adequacy requirements are applied on both a consolidated and individual basis. See “Item 4. Information on the Company— Business Overview—Supervision and Regulation—Capital Requirements, MREL and Resolution” and “Item 5. Operating and Financial Review and Prospects—Liquidity and Capital Resources—Capital”. Under applicable capital adequacy requirements, we estimate that as of December 31, 2025, BBVA had approximately €15.0 billion of reserves in excess of applicable capital and reserve requirements (based on a 13.44% total capital minimum requirement).
Subject to the terms of the deposit agreement entered into with the Bank of New York Mellon, holders of ADSs are entitled to receive dividends (in cash or scrip, as applicable) attributable to the shares represented by the ADSs evidenced by ADRs to the same extent as if they were holders of such shares.
Cash Dividends
The Annual General Shareholders’ Meeting held on March 17, 2023 approved a payment in cash of €0.31 (€0.2511 net of withholding tax) per share, as a final dividend for 2022, which was paid on April 5, 2023. The total amount paid against 2022 results, amounted to €1,857 million. Further, BBVA communicated on September 27, 2023 that the Board of Directors had approved the payment in cash of €0.16 (€0.1296 net of withholding tax) per share, as an interim dividend against 2023 results, which was paid on October 11, 2023. The total amount paid amounted to €951 million.
The Annual General Shareholders’ Meeting of BBVA held on March 15, 2024 approved a payment in cash of €0.39 (€0.3159 net of withholding tax) per share, as a final dividend for 2023, which was paid on April 10, 2024. The total amount paid against 2023 results amounted to €2,245 million.
On February 14, 2025 BBVA announced by means of an inside information notice (información privilegiada) filing with the CNMV, that the Board of Directors of BBVA had resolved to propose to the Annual General Shareholders’ Meeting to be held on March 21, 2025 a cash distribution of €0.41 (€0.3321 net of withholding tax) per share as a final dividend for 2024 to be paid on April 10, 2025. The Annual General Shareholders’ Meeting of BBVA held on March 21, 2025, approved, under item 1.3 of the Agenda, such cash distribution. The total amount paid amounted to €2,357 million.
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BBVA communicated on September 26, 2024 that the Board of Directors had approved a payment in cash of €0.29 (€0.2349 net of withholding tax), as an interim dividend against 2024 results, which was paid on October 10, 2024. The total amount paid amounted to €1,668 million.
By means of an inside information notice (información privilegiada) dated September 29, 2025, BBVA announced that the Board of Directors had approved the payment of a cash interim dividend of €0.32 gross (€0.2592 net of withholding tax) per each outstanding BBVA share entitled to participate in this distribution, which was paid on November 7, 2025. The total amount paid amounted to €1,840 million.
On February 5, 2026, BBVA announced by means of an inside information notice (información privilegiada) filing with the CNMV, that the Board of Directors of BBVA had resolved to propose to the Annual General Shareholders’ Meeting to be held on March 20, 2026, a cash distribution in the amount of €0.60 gross (€0.4860 net of withholding tax) per each of the outstanding shares entitled to receive said distribution, to be paid tentatively in April 2026 as the final dividend for the year 2025.
Share Buyback Programs
2025
On January 30, 2025, BBVA announced a share buyback program for a monetary amount of €993 million. The execution of the program was carried out externally by Citigroup Global Markets Europe AG.
By means of an other relevant information (otra información relevante) notice dated December 10, 2025, BBVA announced the completion of the share buyback program upon reaching the maximum monetary amount, having acquired a total of 54,316,765 BBVA shares, between October 31 and December 10, 2025, representing, approximately, 0.93% of BBVA’s share capital as of December 10, 2025.
On December 23, 2025, BBVA notified through an other relevant information (otra información relevante) notice the partial execution of the share capital reduction resolution adopted by the Annual General Shareholders’ Meeting of BBVA held on March 21, 2025, under item 3 of the Agenda, through the reduction of BBVA’s share capital in a nominal amount of €26,615,214.85 and the consequent redemption, charged to unrestricted reserves, of the 54,316,765 BBVA shares of €0.49 par value each acquired derivatively by BBVA in execution of the aforementioned BBVA share buyback program and which were held as treasury shares (see Notes 4, 26, 27, 28 and 29 to the Consolidated Financial Statements).
On December 19, 2025, and after receiving the required authorization from the ECB, BBVA announced, by means of an inside information notice (información privilegiada), that the Board of Directors of BBVA, at its meeting on December 18, 2025, had agreed to carry out the execution of a framework share buyback program for the repurchase of BBVA shares, all in accordance with the provisions of Regulation (EU) No. 596/2014 of the European Parliament and of the Council of April 16, 2014 on market abuse and Commission Delegated Regulation (EU) 2016/1052 of March 8, 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council (the “Regulations”). This program will be executed in several tranches for a maximum monetary amount of €3,960 million, with the purpose of reducing BBVA’s share capital (the “Framework Program”), without prejudice to the possibility of suspending or terminating the Framework Program early if circumstances warrant. It also announced that the Board of Directors agreed to execute a first tranche of the Framework Program in compliance with the Regulations, for the purpose of reducing BBVA’s share capital for a maximum monetary amount of €1,500 million. Between December 22, 2025 and February 13, 2026, J.P. Morgan SE has acquired 51,166,012 BBVA shares within this program.
2024
On January 30, 2024, BBVA announced by means of an inside information (información privilegiada) notice filing with the CNMV, its intention to submit for the consideration of the corresponding BBVA governing bodies the execution of a share buyback program of BBVA for an amount of €781 million, subject to obtaining the corresponding regulatory authorizations and the communication of the specific terms and conditions of the program before its execution. On March 1, 2024, after receiving the required authorization from the ECB, BBVA announced, by means of an inside information (información privilegiada) notice, that it would implement such buyback program for the repurchase of own shares in accordance with the provisions of the Regulations, aimed at reducing BBVA’s share capital by a maximum monetary amount of €781 million.
On April 9, 2024, BBVA announced, by means of an other relevant information (otra información relevante) notice, the completion of the execution of the share buyback program upon reaching the maximum monetary amount, having acquired 74,654,915 own shares between March 4 and April 9, 2024, representing, approximately, 1.28% of BBVA’s share capital as of April 9, 2024. The execution of the share buyback program was carried out externally by Citigroup Global Markets Europe AG.
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On May 24, 2024, BBVA announced, by means of an other relevant information (otra información relevante) notice filing with the CNMV, the partial execution of the share capital reduction resolution adopted by the Annual General Shareholders’ Meeting of BBVA held on March 15, 2024, by reducing BBVA’s share capital in a nominal amount of €36,580,908 and the consequent redemption of 74,654,915 own shares of €0.49 par value each acquired by BBVA in execution of the share buyback program scheme and which were held as treasury shares. See Notes 4, 26, 27, 28 and 29 to the Consolidated Financial Statements.
2023
On February 1, 2023, BBVA announced, among others, its intention to submit for the consideration of the corresponding BBVA governing bodies the execution of a share buyback program of BBVA for an amount of €422 million in relation to the 2022 results, subject to obtaining the corresponding regulatory authorizations and to the communication of the specific terms and conditions of the share buyback program before its execution. On March 17, 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 provisions of 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.
On April 21, 2023, BBVA announced, by means of an other relevant information (otra información relevante) notice, 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 announced, by means of an other relevant information (otra información relevante) notice, that it had completed a 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 BBVA shares of €0.49 par value each acquired derivatively by BBVA in execution of the aforementioned share buyback program and which were held as treasury shares (see Notes 4 and 26 to the Consolidated Financial Statements). The share capital reduction was carried out pursuant to the resolution adopted by the Annual General Shareholders’ Meeting of BBVA held on March 17, 2023, under item 3 of the agenda.
On July 28, 2023, BBVA announced, by means of an inside information (información privilegiada) notice, its request to the ECB for the relevant supervisory authorization in order to carry out a share buyback program of up to €1,000 million, subject to the granting of such authorization, the adoption of the corresponding corporate resolutions and 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 new buyback program for the repurchase of own shares in accordance with the provisions of the Regulations, aimed at reducing BBVA’s share capital by a maximum monetary amount of €1,000 million.
On 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 date.
On December 19, 2023, BBVA notified through an other relevant information (otra información relevante) 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 €62,490,986.25 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 described above and which were held as treasury shares (see Notes 26, 27, 28 and 29 to the Consolidated Financial Statements).
Legal Proceedings
BBVA and its subsidiaries are involved in a number of legal and regulatory actions and proceedings, including legal claims and proceedings, civil and criminal regulatory proceedings, governmental investigations and proceedings, tax proceedings and other proceedings, in jurisdictions around the world. Legal and regulatory actions and proceedings are subject to many uncertainties, and their outcomes, including the timing thereof, the amount of fines or settlements or the form of any settlements, or changes in business practices we may need to introduce as a result thereof, any of which may be material, are often difficult to predict, particularly in the early stages of a particular legal or regulatory matter. See Note 24 to the Consolidated Financial Statements for information on the related provisions.
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As of the date hereof, the Group is involved in a number of legal and regulatory actions and proceedings in various jurisdictions around the world (including, among others, Spain, Mexico and the United States), the adverse resolution of which may adversely impact the Group. See “Item 3. Key Information—Risk Factors—Legal Risks—The Group is party to a number of legal and regulatory actions and proceedings”, “Item 3. Key Information—Risk Factors—Legal Risks—The Spanish judicial authorities are carrying out a criminal investigation relating to possible bribery and revelation of secrets by BBVA” and “Item 3. Key Information—Risk Factors—Regulatory, Tax, Compliance and Reporting Risks”.
BBVA can provide no assurance that the legal and regulatory actions and proceedings to which it is subject, or to which it may become subject in the future or otherwise affected by, will not, if resolved adversely, result in a material adverse effect on the Group’s business, financial position, results of operations or liquidity.
B. Significant Changes
No significant change has occurred since the date of the Consolidated Financial Statements other than those mentioned in this Annual Report or the Consolidated Financial Statements.
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ITEM 9. THE OFFER AND LISTING
A. Offer and Listing Details
BBVA’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’s ADSs are listed on the New York Stock Exchange and are also traded on the Lima (Peru) Stock Exchange, by virtue of an exchange agreement entered into between these two exchanges. Each ADS represents the right to receive one share. For information on BBVA’s shares and ADSs, see Note 26 to the Consolidated Financial Statements and “Item 7. Major Shareholders and Related Party Transactions—Major Shareholders”.
Fluctuations in the exchange rate between the euro and the dollar will affect the dollar equivalent of the euro price of BBVA’s shares on the Spanish Stock Exchanges and the price of BBVA’s ADSs on the New York Stock Exchange. Cash dividends are paid by BBVA in euro, and exchange rate fluctuations between the euro and the dollar will affect the dollar amounts received by holders of ADRs on conversion by The Bank of New York Mellon (acting as depositary) of cash dividends on the shares underlying the ADSs evidenced by such ADRs.
From January 1, 2025 through December 31, 2025 the percentage of outstanding shares held by BBVA and its affiliates ranged between 0.080% and 1.146%, calculated on a daily basis. As of January 31, 2026, the percentage of outstanding shares held by BBVA and its affiliates was 0.177%.
Securities Trading in Spain
The Spanish securities market for equity securities consists of the Spanish Stock Exchange Interconnection System (“Sistema de Interconexión Bursátil” or “SIBE” in Spanish, and hereinafter referred to as “Automated Quotation System”) and the four stock exchanges located in Madrid, Bilbao, Barcelona and Valencia. During 2025, the Automated Quotation System accounted for the majority of the total trading volume of equity securities on the Spanish Stock Exchanges.
Automated Quotation System. The Automated Quotation System links the four local exchanges, providing those securities listed on it with a uniform continuous market that eliminates certain of the differences among the local exchanges. The principal feature of the system is the computerized matching of buy and sell orders at the time of entry of the order. Each order shall be deemed valid when it takes place and definitively confirmed with full obligatory enforceability as soon as a matching order is entered. Exceptionally, the order may be cancelled, altered or corrected with the consent of the contracting parties and provided always that the appropriate authorization has been granted by the Supervision Department or the Trading and Control Committee of Sociedad de Bolsas, S.A. (“Sociedad de Bolsas”). The activity of the market can be continuously monitored by investors and brokers. The Automated Quotation System is operated and regulated by Sociedad de Bolsas, a corporation owned by the companies that manage the local exchanges. All trades on the Automated Quotation System must be placed through a bank, brokerage firm, an official stock broker or a dealer firm member of a Spanish Stock Exchange directly. Since January 1, 2000, Spanish banks have been allowed to place trades on the Automated Quotation System and have been allowed to become members of the Spanish Stock Exchanges. We are currently a member of the four Spanish Stock Exchanges and can trade through the Automated Quotation System.
Sociedad de Bolsas reinstated the Operating Rules of the Spanish Stock Exchange Automated Quotation System by means of Sociedad de Bolsas Circular 1/2026, of January 12, which came into effect on January 13, 2026 with the aim of incorporating and consolidating into a single regulatory text the former rules governing trading on the Automated Quotation System for the sake of greater clarity.
The general trading hours are as follows:
a.In a pre-opening auction held from 8:30 a.m. to 9:00 a.m. each trading day, an opening price is established for each security traded on the Automated Quotation System based on orders placed at that time. In this period of time orders can be entered, altered and cancelled but no trades can be executed. At the start of each session, the closing price of the previous session shall be taken as the reference price. There are static and dynamic price ranges for each listed share, calculated on the basis of the most recent historical volatility of each share, and made publicly available and updated on a regular basis by Sociedad de Bolsas.
b.The open session is from 9:00 a.m. to 5:30 p.m., when continuous trading is carried out.
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c.If, during the open session, the quoted price of a share exceeds the static or dynamic price ranges, volatility auctions are triggered, resulting in new static or dynamic price ranges being set for the share object of the same. A volatility auction will have a duration of five minutes and, during this period, orders can be entered, altered and cancelled but no trades can be made. Once the auction ends, the open session will restart. If a security’s volatility auction overlaps with the closing auction, the security will remain under auction with the conditions of the closing auction.
d.Between 5:30 p.m. and 5:35 p.m. a closing price of the session is established for each security through an auction system similar to the one held for the pre-opening early in the morning.
e.Following the closing auction, there is a 10-minute trading phase lasting until 5:45 p.m. (referred to as “Trading at Last”), during which trades meeting some conditions are executed at the official closing price. For securities subject to an extended closing auction, this phase may last up to eight minutes maximum.
Exceptional trading hours: In the event of important news or events or particularly significant incidents arising during Automated Quotation System sessions, the usual duration of trading hours may exceptionally be altered in accordance with the provisions of the Operating Rules of the Spanish Automated Quotation System. The start of a session may also be brought forward for the same reasons. Such decision shall be properly announced and disseminated through the technical means of the Automated Quotation System as soon as possible.
Certain transactions may be executed in the Automated Quotation System outside the general trading hours between 5:40 p.m. and 8:00 p.m., such as block trades (consisting of previously agreed trades out of the order book, provided that they meet certain requirements) or trades related to the hedging or the execution of futures and options carried out in MEFF, the Spanish Derivatives Exchange.
Information with respect to the computerized trades between 9:00 a.m. and 5:30 p.m. is made public immediately, and information with respect to trades outside the computerized matching system is reported to Sociedad de Bolsas by the end of the trading day and published in the “Boletín de Cotización” and in the computer system by the beginning of the next trading day.
Sociedad de Bolsas is also the manager of the IBEX 35® Index. This index 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. Apart from its quotation on the four Spanish Exchanges, BBVA is also currently included in the IBEX 35® Index.
Additionally, on September 19, 2025, BBVA was also incorporated into the STOXX Europe 50 index, which gathers Europe’s 50 largest companies.
Clearing and Settlement System
On April 1, 2003, by virtue of Law 44/2002 and of Order ECO 689/2003 of March 27, 2003 approved by the Spanish Ministry of Economy, the integration of the two main existing book-entry settlement systems existing in Spain at the time (the equity settlement system Servicio de Compensación y Liquidación de Valores (“SCLV”) and the Public Debt settlement system Central de Anotaciones de Deuda del Estado (“CADE”)) took place. As a result of this integration, a single entity, known as Sociedad de Gestión de los Sistemas de Registro Compensación y Liquidación de Valores (“Iberclear”) assumed the functions formerly performed by SCLV and CADE. Iberclear is currently regulated by Regulation EU 909/2014, of July 23, on Central Securities Depositories, by articles 83 to 92 of Law 6/2023 on the Securities Markets and Investment Services and by Royal Decree 814/2023, of November 8.
In addition, and according to Law 41/1999, Iberclear currently manages the ARCO Securities settlement system (the “ARCO System”) for securities in book-entry form listed on the four Spanish Stock Exchanges, on the Spanish Public Debt Book-Entry Market, on “AIAF Mercado de Renta Fija”, or on other Multilateral Trading Facilities that have appointed Iberclear for such purposes. Cash settlement for all systems is managed through the TARGET2-Banco de España payment system.
Laws 32/2011 and 11/2015 amended the Spanish Securities Market Act and Royal Decree 878/2015 replaced Royal Decree 116/1992 from February 3, 2016, introducing changes to the Spanish clearing, settlement and book-entry registry procedures applicable to securities transactions to allow post-trading Spanish systems to integrate into the TARGET2 Securities System (“T2S”). The project to reform Spain’s clearing, settlement and registry system and connect it to the T2S (the “Reform”) introduced significant changes that affected all classes of securities and all post-trade activities.
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The Reform was implemented in two phases:
The first phase took place from April 27, 2016 and involved setting up a new system for equities including all the changes envisaged in the Reform, encompassing the incorporation of central counterparty clearing (performed by, among others, BME Clearing, S.A.U.) in a post-trading scheme compatible with the T2S (including with respect to messages, account structure, definition of operations, etc.). Accordingly, the SCLV (Servicio de Compensación y Liquidación de Valores) platform was discontinued.
The T+3 settlement cycle for trades executed in trading venues, affecting mainly equities, was reduced to T+2 from October 2016, in line with what is set forth in European Regulation 909/2014, of July 23 on improving securities settlement in the European Union and on Central Securities Depositories (“CSDR”).
Regulation (EU) 2025/2075, published on October 14, 2025, will shorten the EU securities settlement cycle from T+2 to T+1 under the CSDR from October 11, 2027, with limited exemptions for certain bilateral transactions and securities financing transactions (such as repos, buy/sell backs or securities lending/borrowing transactions provided that they are documented as single transactions composed of two linked operations).
The CADE platform continued to operate unchanged until the last quarter of 2017, and cash settlements in the new system continue to be made through the TARGET2-Bank of Spain cash accounts.
The second phase started on September 18, 2017, when Iberclear successfully connected itself to T2S. At this time, fixed-income securities were transferred to the new system (being the CADE discontinued), as well as equity securities, with both types of securities beginning to be also settled in accordance with the procedures, formats and time periods of the T2S and under the ARCO System. The Reform culminated with the successful migration to T2S.
The latest amendments to Iberclear’s Rulebook reflecting the Reform were officially published in the Spanish Official Gazette on May 3 and August 18, 2016 and September 14, 2017, and the Rulebook was subsequently restated on June 4, 2024.
During the last quarter of 2017, Iberclear filed for authorization as Central Securities Depository pursuant to CSDR. On September 23, 2019, Iberclear made public that it had been granted the authorization to continue providing services as a Central Securities Depositary.
Under Law 41/1999 and Royal Decree 878/2015 (which replaced Royal Decree 116/1992 on February 3, 2016), transactions carried out on the Spanish Stock Exchanges are cleared and settled through Iberclear and its participants (each an “entidad participante”), through the ARCO System. Only Iberclear participants to this ARCO System are entitled to use it, with participation restricted to credit entities, investment firms authorized to render custody services, certain public bodies, and Central Securities Depositories and Central Counterparties authorized under their respective European Union Regulations. BBVA is currently a participant in Iberclear. Iberclear and its participants are responsible for maintaining records of purchases and sales under the book-entry system. In order to be listed, shares of Spanish companies must be held in book-entry form. Iberclear, maintains a “two-step” book-entry registry reflecting the number of shares held by each of its participants as well as the amount of such shares held on behalf of beneficial owners. Each participant, in turn, maintains a registry of the owners of such shares. Spanish law considers the legal owner of the shares to be:
•the participant appearing in the records of Iberclear as holding the relevant shares in its own name, or
•the investor appearing in the records of the participant as holding the shares.
Obtaining legal title to shares of a company listed on a Spanish Stock Exchange requires the participation of an investment firm, bank or other entity authorized under Spanish law to record the transfer of shares in book-entry form in its capacity as Iberclear participant for the equity securities settlement system. To evidence title to shares, at the owner’s request the relevant participant entity must issue a certificate of ownership. In the event the owner is a participant entity, Iberclear is in charge of the issuance of the certificate with respect to the shares held in the participant entity’s own name.
Brokers’ fees, to the extent charged, will apply upon transfer of title of our shares from the depositary to a holder of ADSs, and upon any later sale of such shares by such holder. Transfers of ADSs do not require the participation of a member of a Spanish Stock Exchange. The deposit agreement provides that holders depositing our shares with the depositary in exchange for ADSs or withdrawing our shares in exchange for ADSs will pay the fees of the official stockbroker or other person or entity authorized under Spanish law applicable both to such holder and to the depositary.
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Securities Market Legislation
The first Spanish Securities Markets Act was enacted in 1988 (now repealed) with the purpose of reforming the organization and supervision of the Spanish securities markets. This legislation and the regulation implementing it:
•established an independent regulatory authority, the CNMV, to supervise the securities markets;
•established a framework for the regulation of trading practices, tender offers and insider trading;
•required stock exchange members to be corporate entities;
•required companies listed on a Spanish Stock Exchange to file annual audited financial statements and to make public quarterly financial information;
•established the legal framework for the Automated Quotation System;
•exempted the sale of securities from transfer and value added taxes;
•deregulated brokerage commissions; and
•provided for transfer of shares by book-entry or by delivery of evidence of title.
On February 14, 1992, Royal Decree No. 116/92 established the clearance and settlement system and the book-entry system, and required that all companies listed on a Spanish Stock Exchange adopt the book-entry system. On February 3, 2016 Royal Decree 878/2015 came into force and replaced Royal Decree 116/1992 (Royal Decree 827/2017, of September 1 and Royal Decree 1464/2018, of December 21, amended Royal Decree 878/2015 by reflecting certain aspects of the Reform and of MiFID II).
On April 12, 2007, the Spanish Congress approved Law 6/2007, which amended the Securities Markets Act in order to adapt it to Directive 2004/25/EC on takeover bids, and Directive 2004/109/EC on the harmonization of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market (amending Directive 2001/34/EC). Regarding the transparency of listed companies, Law 6/2007 amended the reporting requirements and the disclosure regime, and established changes in the supervision system. On the takeover bids side, Law 6/2007 has established the cases in which a company must launch a takeover bid and the ownership thresholds at which a takeover bid must be launched. It also regulates conduct rules for the board of directors of target companies and the squeeze-out and sell-out when a 90% of the share capital is held after a takeover bid. Additionally, Law 6/2007 was further developed by Royal Decree 1362/2007, on transparency requirements for issuers of listed securities, which was subsequently amended. See “—Trading by the Bank and its Affiliates in the Shares”.
On December 19, 2007, the Spanish Congress approved Law 47/2007, which amended the Securities Markets Act in order to adapt it to Directive 2004/37/EC on markets in financial instruments (MiFID), Directive 2006/49/EC on the capital adequacy of investment firms and credit institutions, and Directive 2006/73/EC implementing Directive 2004/39/EC with respect to organizational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive. Further MiFID implementation was introduced by Royal Decree 217/2008. Royal Decree 217/2008 has been amended from time to time, including in 2018 by Royal Decree 1464/2018, of December 21, in order to adapt it to the MiFID II rules that became effective on January 3, 2018.
The Regulation of the European Parliament and of the Council on short selling and certain aspects of credit default swaps (EU) No 236/2012 (Regulation) has been in force since March 25, 2012 and became directly effective in EU countries from November 1, 2012. This Regulation introduced a pan-European regulatory framework for dealing with short selling and requires persons to disclose short positions in relation to shares of EU listed companies and EU sovereign debt. For significant net short positions in shares of EU listed companies, these regulations create a two-tier reporting model: (i) when a net short position reaches 0.20% of an issuer’s share capital (and at every 0.1% thereafter), such position must be privately reported to the relevant regulator; and (ii) when such position reaches 0.50% (and at every 0.1% thereafter) of an issuer’s share capital, apart from being disclosed to the regulators, such position must be publicly reported to the market.
The Prospectus Regulation (EU) 2017/1129 of the European Parliament and of the Council, of October 14, which became effective on July 21, 2019, aims to achieve greater harmonization of prospectus rules throughout the European Union. Such rules are applicable to issuers which offer debt or equity securities to the public or which seek admission to trading on a regulated market in the EU. The Prospectus Regulation has been amended by Regulation (EU) 2024/2809 of the European Parliament and of the Council of October 23, amending Regulations (EU) 2017/1129, (EU) No 596/2014 and (EU) No 600/2014 to make public capital markets in the European Union more attractive for companies and to facilitate access to capital for small and medium-sized enterprises (“Listing Act Regulation”). Among other things, the Listing Act Regulation updates certain disclosure requirements and expands the available exemptions from the requirement to produce a prospectus. While many of the changes under the Listing Act Regulation began to apply on December 4, 2024, some provisions will not apply until March 5, 2026 or June 5, 2026.
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Directive 2014/65/EU of the European Parliament and of the Council of May 15, 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II) and Regulation (EU) 600/2014 of the European Parliament and Council of May 15, 2014 on markets in financial instruments and amending Regulation (EU) 648/2012 (MiFIR), were published on June 12, 2014 and became applicable on January 3, 2018, affecting the Spanish securities market legislation, markets and infrastructures and implying higher compliance costs for financial institutions. MiFID II was implemented into Spanish Law by Royal Decree-Law 21/2017, of December 29, by Royal Decree-Law 14/2018, of September 28, and by Royal Decree 1464/2018, of December 21, which were repealed following the entry into force of Law 6/2023 described below. MiFID II and MiFIR, have been further amended from time to time.
Royal Legislative Decree 4/2015, of October 23, approved the reinstated text of the Securities Markets Act, which has been affected and amended, among others, by the aforementioned MiFID II implementation rules.
On March 18, 2023, Law 6/2023 on the Securities Markets and Investment Services was enacted and it became generally applicable from April 7, 2023, repealing, among others, former Royal Legislative Decree 4/2015. This new Spanish Securities Markets Act creates the new framework law for the securities markets, systematizing and reorganizing former laws and regulations and implementing several European directives, particularly in the area of crypto-assets and distributed ledger technologies. This new Securities Markets Act is further developed by four royal decrees published on November 9, 2023 in the Official Spanish Gazette: (i) Royal Decree 813/2023, of November 8, on the regime for investment firms and other entities providing investment services; (ii) Royal Decree 814/2023, of November 8, on financial instruments, admission to trading, register of negotiable securities and market infrastructures; (iii) Royal Decree 815/2023, of November 8, on official registers of the CNMV, cooperation with other authorities and supervision of investment firms; and (iv) Royal Decree 816/2023, of November 8, amending Royal Decree 1082/2012, of July 13, and developing Law 35/2003, of November 4, on collective investment schemes.
On April 12, 2021, Law 5/2021, implementing Directive (EU) 2017/828 of the European Parliament and of the Council of May 17, 2017, as regards the encouragement of long-term shareholder engagement was published, amending the Corporate Enterprises Act.
Trading by the Bank and its Affiliates in the Shares
Trading by subsidiaries in their parent companies shares is restricted by the Corporate Enterprises Act.
Neither BBVA nor its affiliates may purchase BBVA’s shares unless the making of such purchases is authorized at a meeting of BBVA’s shareholders by means of a resolution establishing, among other matters, the maximum number of shares to be acquired and the authorization term, which cannot exceed five years. Restricted reserves equal to the purchase price of any shares that are purchased by BBVA or its subsidiaries must be made by the purchasing entity. The total number of shares held by BBVA and its subsidiaries may not exceed 10% of BBVA’s total share capital, as per the treasury stock limits set forth in the Corporate Enterprises Act. It is the practice of Spanish banking groups, including the BBVA Group, to establish subsidiaries to trade in their parent company’s shares in order to meet imbalances of supply and demand, to provide liquidity (especially for trades by their customers) and to modulate swings in the market price of their parent company’s shares.
A share buyback program was executed in 2025, and separate buyback programs were also executed in 2024 and 2023. See “Item 8. Financial Information—Consolidated Statements and Other Financial Information—Dividends—Share Buyback Programs”.
Spanish Financial Transaction Tax Bill
The Financial Transaction Tax (FTT) was enacted by means of Law 5/2020, of October 15, 2020 and became effective on January 16, 2021. The Spanish FTT is an indirect tax, amounting to 0.2%, to be charged on acquisitions of shares in Spanish companies, regardless of the tax residence of the participants in such transactions, provided that such companies are listed and their respective market capitalization is above €1,000 million. Accordingly, any purchaser of BBVA’s shares not falling under an exemption will be subject to the Spanish FTT. The FTT law was further developed by Royal Decree 366/2021 and several Ministerial Orders.
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Reporting Requirements
Royal Decree 1362/2007, as amended, requires that any person or entity which acquires or transfers shares and as a consequence the number of voting rights held exceeds, reaches or is below the thresholds of 3%, 5%, 10%, 15%, 20%, 25%, 30%, 35%, 40%, 45%, 50%, 60%, 70%, 75%, 80% and 90% of the capital stock of a company listed on a Spanish Stock Exchange must, within four stock exchange business days after that acquisition or transfer, report it to such company, and to the CNMV. This duty to report the holding of a significant stake is applicable not only to the acquisitions and transfers in the terms described above, but also to those cases in which in the absence of an acquisition or transfer of shares, the ratio of an individual’s voting rights exceeds, reaches or is below the thresholds that trigger the duty to report, as a consequence of an alteration in the total number of voting rights of an issuer.
In addition, any company listed on a Spanish Stock Exchange must report on a non-public basis to the CNMV, within four Stock Exchange business days, any acquisition by such company (or an affiliate) of the company’s own shares if such acquisition, together with any previous one from the date of the last communication, exceeds 1% of its capital stock, regardless of the balance retained. Members of the board of directors must report the ratio of voting rights held at the time of their appointment as members of the board, when they are ceased as members, and each time they transfer or acquire share capital of a company listed on the Spanish Stock Exchanges, regardless of the size of the transaction. Additionally, since we are a credit entity, any individual or company who intends to acquire a significant participation in BBVA’s share capital must obtain prior approval from the Bank of Spain in order to carry out the transaction. See “Item 10. Additional Information—Exchange Controls—Restrictions on Acquisitions of Shares”.
Royal Decree 1362/2007 also establishes reporting requirements in connection with any entity acting from a tax haven or a country where no securities regulatory commission exists, in which case the threshold of three percent is reduced to one percent.
Royal Decree 1362/2007 was amended in 2015 in order to, among other matters, include some changes to the reporting requirements applicable to major shareholdings. In particular, cash settled instruments creating long positions on underlying listed shares shall be disclosed if the specified shareholding threshold is reached or exceeded; cash holdings and holdings as a result of financial instruments shall be aggregated for disclosure purposes and a disclosure exemption for shareholding positions held by financial entities in their trading books is available.
Regulation (EU) No 596/2014 of the European Parliament and of the Council of April 16, 2014 on market abuse (“MAR”) and its implementing regulations entered into force on July 3, 2016, involving a number of changes for BBVA as a listed issuer, including in relation to areas such as disclosure of inside information to the market, maintenance of insider lists and disclosure of restrictions on dealings by directors and persons discharging managerial responsibilities. Regulation (EU) 2024/2809 (the “Listing Act Regulation”) amended certain aspects of MAR, easing certain burdens on issuers and market participants, as to repurchase programs, market soundings, insider lists and blackout periods, effective as of December 4, 2024.
Through Royal Decree-Law 19/2018 of November 23, on payment services and other urgent financial measures, the consolidated text of the then-applicable Securities Market Act was adapted to the European MAR framework, including the following changes:
•the Spanish legislator opted for certain solutions among those permitted by the European MAR framework in certain specific cases;
•several amendments were introduced in the sanctioning regime on market abuse (inside information and market manipulation); and
•some special provisions applicable to listed companies in this area which were not compatible with this European regulatory framework or not consistent with the objective of MAR of achieving full harmonization throughout the European Union were expressly repealed.
Organic Law 1/2019, of February 20, modifies, among other laws and regulations, the Spanish Criminal Code in order to implement in Spain Directive 2014/57/UE regarding applicable criminal sanctions related to market abuse, complementing the MAR framework.
Banks are required to inform the Bank of Spain of any acquisitions or disposals of holdings in their capital that cross any of the levels indicated in Articles 16 (at least 10% of the capital or of the voting rights of the credit institution), 17 (either the percentage of voting rights or capital held is equal to or greater than 20%, 30% or 50%, or the acquisition entails acquiring control of the credit institution) and 21 (the percentage of voting rights or of capital held falls below 20%, 30% or 50% or the disposal entails the loss of control of the credit institution) of Law 10/2014, of June 26, 2014.
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Tax Requirements
According to Law 10/2014, an issuer’s parent company (credit entity or listed company) is required, on an annual basis, to provide the Spanish tax authorities with the following: (i) disclosure of information regarding those investors with Spanish Tax residency obtaining income from securities and (ii) the amount of income obtained by them in each period.
B. Plan of distribution
Not Applicable.
C. Markets
See “Item 9. The Offer and Listing”.
D. Selling Shareholders
Not Applicable.
E. Dilution
Not Applicable.
F. Expenses of the Issue
Not Applicable.
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ITEM 10. ADDITIONAL INFORMATION
A. Share Capital
Not Applicable.
B. Memorandum and Articles of Association
Spanish law and BBVA’s Bylaws are the main sources of regulation affecting the Company. All rights and obligations of BBVA’s shareholders are contained in BBVA’s Bylaws and in Spanish law. Pursuant to Royal Decree 84/2015 of February 13, implementing Law 10/2014, amendments of the bylaws of a bank are subject to notice or prior authorization of the Bank of Spain.
Registry and Company’s Objects and Purposes
BBVA is registered with the Commercial Registry of Bizkaia (Spain). Its registration number at the Commercial Registry of Bizkaia is volume 2,083, Company section folio 1, sheet BI-17-A, 1st entry. Its corporate purpose is to carry out all kinds of activities, operations, acts, contracts and services within the banking business or directly or indirectly related to it, which are permitted or not prohibited by the provisions in force and supplementary activities. Its corporate purpose also includes the acquisition, possession, use and disposal of securities, public offering of acquisition and sale of securities, as well as all types of holdings in any entity or company. BBVA’s corporate purpose is contained in Article 3 of BBVA’s Bylaws.
Certain Powers of the Board of Directors
In general, provisions regarding directors are contained in our Bylaws. Also, our Board of Directors Regulations govern the internal procedures and the operation of the Board of Directors and its committees and directors’ rights and duties as described in their charter. The referred Board of Directors Regulations establishes that directors must refrain from participating in deliberations and votes on resolutions or decisions in which they or a related party may have a direct or indirect conflict of interest, unless these are decisions relating to the appointment or removal of positions of the management body. Directors are not required to hold shares of BBVA in order to be appointed as such. As regards compensation in shares for executive directors, please see “Item 6. Directors, Senior Management and Employees—Compensation”.
Lastly, the Board of Directors Regulations contain a series of ethical standards. For more information please see “Item 6. Directors, Senior Management and Employees”.
Certain Provisions Regarding Privileged Shares
Our Bylaws authorize us to issue ordinary, non-voting, redeemable and privileged shares. As of the date of this Annual Report, we have no non-voting, redeemable or privileged shares outstanding.
The Company may issue shares that confer some privilege over ordinary shares under the legally established terms and conditions, complying with the formalities prescribed for amending our Bylaws.
The Company may issue shares that are redeemable at the request of the issuing company, the holders of said shares or both, for a nominal amount not exceeding one quarter of the share capital. The resolution of the issue will set the conditions for the exercise of the right or redemption. If the aforementioned right is attributed exclusively to the issuing company, it may not be exercised within three years of the issuance. Redeemable shares must be fully paid up at the time of subscription. Redemption of redeemable shares must be charged to profits or free reserves or with the proceeds of a new share issue resolved by the general shareholders’ meeting or, where appropriate, the Board of Directors, for the purpose of financing the redemption transaction. If the redemption of these shares is charged to profits or free reserves, the Company must constitute a reserve for the amount of the nominal value of the redeemed shares. If the redemption is not charged to profits or free reserves or with the issue of new shares, it may only be carried out under the requirements established for the reduction of the share capital by the refund of contributions.
Holders of non-voting shares, if issued, are entitled to receive a minimum annual dividend, fixed or variable, as resolved by the general shareholders’ meeting and/or the Board of Directors at the time of deciding to issue the shares. Once the minimum dividend has been agreed, holders of non-voting shares will be entitled to the same dividend as corresponds to ordinary shares. Where there are distributable profits, the Company is required to agree the distribution of the aforementioned minimum divided. If there are no distributable profits or insufficient amounts thereof, the unpaid part of the minimum dividend will or not be accumulated in the terms agreed upon by the general shareholders’ meeting at the time of deciding to issue the shares. Holders of non-voting shares may exercise their pre-emptive subscription right in the event that this be resolved by the general shareholders’ meeting and/or the Board of Directors at the time of issuing shares or convertible bonds. Recovery of voting rights must be resolved at the same time.
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Certain Provisions Regarding Shareholders Rights
As of the date of the filing of this Annual Report, our capital is comprised of one class of ordinary shares, all of which have the same rights.
Once the allocation requirements established by law and in our Bylaws have been covered, dividends may be paid out to shareholders and charged to the year’s profit or to unrestricted reserves, in proportion to the capital they may have paid up, provided the value of the total net assets is not, or as a result of such distribution would not be, less than the share capital. In addition, BBVA must take into account any applicable capital adequacy requirements and any recommendations on payment of dividends, and any other required authorization or restriction that may be applicable. See “Item 4. Information on the Company—Business Overview—Supervision and Regulation—Dividends” and “Item 8. Financial Information—Consolidated Statements and Other Financial Information—Dividends”. Shareholders will participate in the distribution of profit in proportion to their capital paid-up. The right to collect a dividend lapses after five years as of the date in which it was first available to the shareholders. Shareholders also have the right to participate in proportion to their capital paid-up in any distribution of net assets resulting from our liquidation.
Each voting share will confer the right to one vote on the holder present or represented at the general shareholders’ meeting. However, unpaid shares with respect to which a shareholder is in default of the resolutions of the Board of Directors relating to their payment will not be entitled to vote. Our Bylaws contain no provisions regarding cumulative voting.
Our Bylaws do not contain any provisions relating to sinking funds or potential liability of shareholders to further capital calls by us.
Our Bylaws do not establish that special quorums are required to change the rights of shareholders. Under Spanish law, the rights of shareholders may only be changed by an amendment to the Bylaws that complies with the requirements explained below under “—Shareholders’ Meetings”, plus the affirmative vote of the majority of the shares of the class that will be affected by the amendment.
Shareholders’ Meetings
The Annual General Shareholders’ Meeting has its own set of regulations on issues such as how it operates and what rights shareholders enjoy regarding general shareholders’ meetings. These establish the possibility of voting or delegating votes over remote communication media.
General shareholders’ meetings may be annual or extraordinary. The Annual General Shareholders’ Meeting is required to meet within the first six months of each financial year to, where appropriate, approve corporate management, as well as the financial statements for the previous financial year and decide on the allocation of results, without prejudice to the fact that it may also adopt resolutions on any other matter within its remit included in the agenda or allowed by law. Extraordinary general shareholders’ meetings are those meetings that are not ordinary. In any case, the requirements mentioned below for constitution and adoption of resolutions are applicable to both categories of general shareholders’ meetings.
General shareholders’ meetings will be called at the initiative of and according to the agenda determined by the Board of Directors, which must necessarily call them whenever it deems necessary or advisable for the corporate interests, and in any case on the dates or periods determined by law and the Company Bylaws, or upon the request of one or more shareholders representing at least three percent of our share capital.
Our General Meeting Regulations establish that annual and extraordinary general shareholders’ meetings must be called within the notice period required by law. This will be done by means of a notice published by the Board of Directors, or its proxy, in the Official Gazette of the Commercial Registry (“BORME”) or one of the highest-readership daily newspapers in Spain, and will be published on the CNMV website and the Company website, except when legal provisions establish other media for disseminating the notice.
The general shareholders’ meetings may be attended by shareholders who own the minimum number of shares established in our Bylaws (500), provided that these shares are recorded in the corresponding accounting register five days before the scheduled date of the general shareholders’ meeting and that, at least, the same number of shares are retained until the general shareholders’ meeting is held. Holders of fewer shares may group together to make up at least that number and appointing a representative.
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General shareholders’ meetings, both annual and extraordinary, will be validly constituted at first summons with the presence of at least 25% of our voting capital, either in person or by proxy. No minimum quorum is required to hold a general shareholders’ meeting at second summons. In either case, resolutions will be agreed by the simple majority of the votes, meaning that a resolution is adopted when the favorable votes exceed the votes against the adoption of the resolution. However, a general shareholders’ meeting will only be validly held with the presence of 50% of our voting capital at first summons or of 25% of the voting capital at second summons, in the case of resolutions concerning the following matters:
•debt issuances;
•share capital increases or decreases;
•the exclusion or limitation of the pre-emptive subscription rights over new shares;
•transformation, merger of BBVA or spin-off and global assignment of assets and liabilities;
•the off-shoring of domicile, and
•any other amendment to the Bylaws.
In these cases, resolutions may only be approved with the vote of the absolute majority of the shares if at least 50% of the voting capital is present or represented at the general shareholders’ meeting. If the voting capital present or represented at the meeting at second summons is less than 50% (but over 25%), then resolutions may only be adopted by two-thirds of the shares present or represented.
Additionally, our Bylaws state that, in order to adopt resolutions approving the replacement of the corporate purpose, the transformation, total spin-off, the winding up of BBVA and amending that paragraph of the relevant article of our Bylaws, two-thirds of the subscribed voting capital must attend the general shareholders’ meeting at first summons, or 60% of that capital at second summons.
Restrictions on the Ownership of Shares
Our Bylaws do not provide for any restrictions on the ownership of our ordinary shares. Spanish law, however, provides for certain restrictions which are described below under “—Exchange Controls—Restrictions on Acquisitions of Shares” and “—Restrictions on Foreign Investments”.
Restrictions on Foreign Investments
Exchange controls and foreign investments are regulated under Law 19/2003, of July 4 (“Law 19/2003”), as amended pursuant to Royal Decree-Law 8/2020, of March 17, Royal Decree-Law 11/2020, of March 31, Royal Decree-Law 34/2020, of November 17, Royal Decree-Law 20/2022, of December 27, and Royal Decree-Law 9/2024, of December 23. Foreign investments are generally liberalized unless they fall within the scope of article 7 bis of Law 19/2003, enacted in March 2020, Sole Transitional Provision of Royal Decree-Law 34/2020, of November 17, or —only with respect to investments in the defense sector— article 11 of Royal Decree 664/1999, of April 23 (repealed by RD 571/2023).
Article 7 bis of Law 19/2003 establishes a screening mechanism for certain investments made by non-EU and non-EFTA residents (“foreign investors”), based on public order, public health and public security reasons (the “Screening Mechanism”). The Screening Mechanism aligns part of the Spanish foreign investment legal framework with Regulation (EU) 2019/452 of March 19, 2019 establishing a framework for the screening of foreign direct investments into the European Union. Certain provisions of Regulation (EU) 2019/452—such as the list of sectors affecting public order and public security or the definition of state-owned enterprises and other similar investors—are mirrored in the regulations establishing the Screening Mechanism.
In addition, and according to Sole Transitional Provision of Royal Decree-Law 34/2020, of November 17 (as amended first by article 4 of Royal Decree-Law 27/2021, of November 23, and subsequently by article 1 and article 62 of Royal Decree-Law 20/2022, of December 27), effective November 19, 2020 and until December 31, 2024 (a proposed further extension until December 31, 2026, as set forth in article 1 of Royal Decree-Law 9/2024, of December 23, has not yet been approved by the Spanish Congress), the following persons will also be deemed to be foreign investors, provided they invest in listed companies or the investment value exceeds €500 million—for investments in private – non listed – companies:
•EU and EFTA residents in countries other than Spain, and
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•Spanish residents beneficially owned by EU or EFTA residents in countries other than Spain, that is, those in which a EU or EFTA resident other than in Spain ultimately owns or controls more than 25% of the share capital or voting rights of, or otherwise exercises control over, the Spanish resident.
Foreign direct investments (“FDI”) are:
•investments that result in a foreign investor reaching a stake of at least 10% of the share capital of a Spanish company; and
•any corporate transaction, business action or legal transaction which enables effective participation in the management or control of a Spanish company.
Not all foreign direct investments are subject to the Screening Mechanism. Investors are subject to the Screening Mechanism only if they qualify as FDI and the investment is made in one of the critical sectors mentioned in article 7 bis of Law 19/2003, is made pursuant to what is foreseen in Sole Transitional Provision of Royal Decree-Law 34/2020, of November 17, or—only where the investor is a Non-UE or non-EFTA investor—by investors that meet certain subjective criteria regardless of the business of the target.
Foreign direct investments by the following “foreign investors” are also subject to the Screening Mechanism, regardless of the business of the target:
•Investors directly or indirectly controlled by the government, including state bodies or armed forces, of a non EU/EFTA country.
•Investors that have already made an investment affecting national security, public order or public health in another EU Member State, including an investment in any of the above-mentioned sectors.
•Investors subject to ongoing judicial or administrative proceedings for engaging in illegal or criminal activities.
Foreign direct investments by the following non-EU and non-EFTA investors are also subject to the Screening Mechanism, regardless of the business of the target:
•Investors directly or indirectly controlled by a non-EU and non-EFTA government, including state bodies, armed forces or sovereign wealth funds; the possibility of exercising decisive influence as a result of an agreement or through the ownership of shares or interests in another person (directly or indirectly) is deemed to constitute “control” for these purposes.
•Investors that have already made an investment affecting national security, public order or public health in another EU Member State, including an investment in any of the above-mentioned sectors.
•If there is a serious risk that the investor engages in illegal or criminal activities affecting national security, public order or public health in Spain.
Foreign direct investments described above shall be subject to prior administrative authorization granted by the relevant Spanish Authority, in accordance with the administrative conditions established.
In addition to the above, pursuant to Council Regulation (EU) 833/2014, it shall be prohibited to sell euro denominated transferable securities issued after April 12, 2022, or securities denominated in any other currency and issued after August 6, 2023, or units in collective investment undertakings providing exposure to such securities, to any Russian national or natural person residing in Russia or any legal person, entity or body established in Russia. This restriction shall not apply to nationals of a Member State or a country member of the European Economic Area or of Switzerland, or natural persons having a temporary or permanent residence permit in a Member State, in a country member of the European Economic Area or in Switzerland.
Further, pursuant to Council Regulation (EC) No 765/2006, it shall be prohibited to sell transferable securities denominated in any official currency of a Member State issued after April 12, 2022 or units in collective investment undertakings providing exposure to such securities, to any Belarusian national or natural person residing in Belarus or any legal person, entity or body established in Belarus. Such prohibition shall not apply to nationals of a Member State or natural persons having a temporary or permanent residence permit in a Member State.
C. Material Contracts
No Group member has entered into any contract outside its ordinary course of business within the past two years that is material to the Group as a whole.
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D. Exchange Controls
In 1991, Spain adopted the EU Standards for free movement of capital and services. As a result, foreign investors may transfer invested capital, capital gains and dividends out of Spain without limitation as to amount, subject to applicable taxes. See “—Taxation”.
Pursuant to Royal Decree 664/1999, of April 23 (repealed by RD 571/2023), on the Applicable rules to Foreign Investments, foreign investors may freely invest in shares of Spanish companies except in the case they fall within the scope of article 7 bis of Law 19/2003, enacted in March 2020, Sole Transitional Provision of Royal Decree-Law 34/2020, of November 17 (as amended by article 62 of Royal Decree-Law 20/2022, of December 27), or—only with respect to investments in the defense sector—article 11 of Royal Decree 664/1999, of April 23. For information on certain additional regulation applicable to foreign direct investments, see “—Memorandum and Articles of Association—Restrictions on Foreign Investments”. Likewise, Royal Decree 664/1999, of April 23, and Law 19/2003, of July 4 on the legal regime on capital movements and foreign transactions (“Law 19/2003”), required notification of all foreign investments in Spain and liquidations of such investments upon completion of such investments to the Investments Registry of the Ministry of Economy Affairs and Digital Transformation for administrative statistical and economical purposes. Shares in listed Spanish companies acquired or held by foreign investors needed to be reported to the Spanish Registry of Foreign Investments by the depositary bank or relevant Iberclear member. When a foreign investor acquires shares that are subject to the reporting requirements of the CNMV regarding significant stakes, notice must be given directly by the foreign investor to the relevant authorities.
The Spanish Government approved Royal Decree 571/2023 of July 4 on foreign investments (the “New Spanish FDI Regulations”), which repeals Royal Decree 664/1999 and develops Law 19/2003. The New Spanish FDI Regulations came into force on September 1, 2023, and their provisions apply to FDI filings submitted from that date onwards (ongoing FDI filings as of such date are governed by the former regulations). Royal Decree 571/2023 was further developed by Order ECM 57/2024, of January 29, setting forth the templates for the declarations in foreign investments.
These new Spanish FDI Regulations set out: (i) post-closing notification obligations for foreign investments in Spain for statistical purposes; (ii) post-closing notification obligations for Spanish investments in foreign countries for statistical purposes; and (iii) most significantly, amended and developed rules for Spanish FDIs screening mechanisms (“Screening Mechanisms”), under which the closing of specific FDIs requires prior authorization through both EU-law based general FDI screening, regulated in article 7 bis of Law 19/2003 (“General FDI Screening Mechanism”), and sector-specific screening (which applies to activities directly related to Spanish National Defense, the acquisition of real estate for diplomatic purposes by non-EU Member States and investments in activities directly related to weapons, cartridges, pyrotechnic items and civil use explosives or other material to be used by the State Security Forces and Bodies), which is a new mechanism.
These Screening Mechanisms do not prohibit foreign investments in Spain; rather, they are mandatory authorization procedures to be carried out prior to closing specific transactions. In particular, the General FDI Screening Mechanism brings the Spanish screening framework in line with that set out in the European Union laws, in particular, Regulation (EU) 2019/452, which allows Member States to adopt mechanisms to screen FDIs in the European Union. Banking is not expressly mentioned in the FDI sectors subject to the General FDI Screening Mechanism, which are the following: critical infrastructure, critical and dual-use technologies, key technologies for industrial leadership and training, technologies developed pursuant to projects or programs of particular interest to Spain, supply of critical inputs, sectors with access to or control to sensitive information and media.
Moreover, investments by foreigners domiciled in enumerated tax haven jurisdictions, under Royal Decree 1080/1991, are subject to special reporting requirements.
For information on certain additional regulation applicable to foreign direct investments, see “—Memorandum and Articles of Association—Restrictions on Foreign Investments”.
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Restrictions on Acquisitions of Shares
Pursuant to Spanish Law 10/2014, any individual or corporation, acting alone or in concert with others, intending to directly or indirectly acquire a significant holding in a Spanish financial institution (as defined in article 16 of the aforementioned Law 10/2014) or to directly or indirectly increase its holding in one in such a way that either the percentage of voting rights or of capital owned were equal to or exceed 20%, 30% or 50%, or by virtue of the acquisition, might take control over the financial institution, must first notify the Bank of Spain.
For the purpose of this Law, a significant participation is considered 10% of the outstanding share capital of a financial institution or a lower percentage if such holding allows for the exercise of a significant influence.
The Bank of Spain will be responsible for evaluating the proposed transaction, in accordance with the terms established by Royal Decree 84/2015, of February 13 (as stated in Article 25.1 of said Royal Decree 84/2015) in order to guarantee the sound and prudent operation on the target financial institution. The Bank of Spain will submit a proposition before the ECB, which will be in charge of deciding upon the proposed transaction in the term of 60 working days after the date on which the notification was received.
Any acquisition without such prior notification, or before the period established in the Royal Decree 84/2015 has elapsed or against the objection of the Bank of Spain, will produce the following results:
•the acquired shares will have no voting rights;
•if considered appropriate, the target bank may be taken over or its directors replaced; and
•the sanctions established in Title IV of Law 10/2014.
Regarding the transparency of listed companies, such matter is mainly regulated in Spain in Royal Decree 4/2015, of October 23, approving the restated text of the Securities Market Act. The transparency requirements set out in such Act are further developed by Royal Decree 1362/2007 developing the Securities Market Act on transparency requirement for issuers of listed securities, which stipulates among other matters a communication threshold of 3% for significant stakes and extends the disclosure obligations to the acquisition or transfer of financial instruments that grant rights to acquire shares with voting rights. For more information see “Item 9. The Offer and Listing—Offer and Listing Details—Reporting Requirements”.
Tender Offers
The Spanish legal regime concerning takeover bids, which reflects the related EU regulation (mainly Directive 2004/25/EC), is set forth in Royal Decree 4/2015, of October 23, approving the restated text of the Securities Market Act, and Royal Decree 1066/2007, of July 29, on takeover bids.
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E. Taxation
Spanish Tax Considerations
The following is a summary of the material Spanish tax consequences to U.S. Residents (as defined below) of the acquisition, ownership and disposition of BBVA’s ADSs or ordinary shares as of the date of the filing of this Annual Report. This summary does not address all tax considerations that may be relevant to all categories of potential purchasers, some of whom (such as life insurance companies, tax-exempt entities, dealers in securities or financial institutions) may be subject to special rules. In particular, the summary deals only with U.S. Holders (as defined below) that will hold ADSs or ordinary shares as capital assets and who do not at any time own individually, and are not treated as owning, 10% or more of BBVA’s shares, including ADSs.
As used in this particular section, the following terms have the following meanings:
(1) “U.S. Holder” means a beneficial owner of BBVA’s ADSs or ordinary shares that is for U.S. federal income tax purposes:
•a citizen or an individual resident of the United States,
•a corporation or other entity treated as a corporation, created or organized under the laws of the United States, any state therein or the District of Columbia, or
•an estate or trust the income of which is subject to U.S. federal income tax without regard to its source.
(2) “Treaty” means the Convention between the United States and the Kingdom of Spain for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, together with a related Protocol.
(3) “U.S. Resident” means a U.S. Holder that is a resident of the United States for the purposes of the Treaty and entitled to the benefits of the Treaty, whose holding is not effectively connected with (1) a permanent establishment in Spain through which such holder carries on or has carried on business, or (2) a fixed base in Spain from which such holder performs or has performed independent personal services.
Holders of ADSs or ordinary shares should consult their tax advisors, particularly as to the applicability of any tax treaty. The statements regarding Spanish tax laws set out below are based on interpretations of those laws in force as of the date of this Annual Report. Such statements also assume that each obligation in the Deposit Agreement and any related agreement will be performed in full accordance with the terms of those agreements.
Taxation of Dividends
Under Spanish law, cash dividends paid by BBVA to a holder of ordinary shares or ADSs who is not resident in Spain for tax purposes and does not operate through a permanent establishment in Spain, are subject to Spanish Non-Resident Income Tax, withheld at source at a 19% tax rate. For these purposes, upon distribution of the dividend, BBVA or its paying agent will withhold an amount equal to the tax due according to the rules set forth above (applying a withholding tax rate of 19%), transferring the resulting net amount to the depositary. However, in the case of cash distribution of share premium no withholding tax would be applicable.
However, under the Treaty, in cash dividends distributions, if you are a U.S. Resident, you are entitled to a reduced withholding tax rate of 15%. To benefit from the Treaty-reduced rate of 15%, if you are a U.S. Resident, you must provide to BBVA through our paying agent depositary, before the tenth day following the end of the month in which the dividends were payable, a certificate from the U.S. Internal Revenue Service (“IRS”) stating that, to the best knowledge of the IRS, you are a resident of the United States within the meaning of the Treaty and entitled to its benefits.
If the paying agent depositary provides timely evidence (i.e., by means of the IRS certificate) of your right to apply the Treaty-reduced rate it will immediately receive the surplus amount withheld, which will be credited to you. The IRS certificate is valid for a period of one year from issuance.
To help shareholders obtain such certificates, BBVA has set up an online procedure to make this as easy as possible.
If the certificate referred to in the above paragraph is not provided to us through our paying agent depositary within said term, you may afterwards obtain a refund of the amount withheld in excess of the rate provided for in the Treaty.
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Spanish Refund Procedure
According to Spanish Regulations on Non-Resident Income Tax, approved by Royal Decree 1776/2004 dated July 30, 2004, as amended, a refund for the amount withheld in excess of the Treaty-reduced rate can be obtained from the relevant Spanish tax authorities. To pursue the refund claim, if you are a U.S. Resident, you are required to file:
•the corresponding Spanish tax form,
•the certificate referred to in the preceding section, and
•evidence of the Spanish Non-Resident Income Tax that was withheld with respect to you.
The refund claim must be filed within four years from the date in which the withheld tax was collected by the Spanish tax authorities, but not before February 1 of the following year.
U.S. Residents (including U.S. Holders, as defined below under “—U.S. Tax Considerations”) are urged to consult their own tax advisors regarding refund procedures and any U.S. tax implications thereof.
Taxation of Rights
Distribution of preemptive rights to subscribe for new shares made with respect to shares in BBVA will not be treated as income under Spanish law and, therefore, will not be subject to Spanish Non-Resident Income Tax. The exercise of such preemptive rights is not considered a taxable event under Spanish law and thus is not subject to Spanish tax. Capital gains derived from the disposition of preemptive rights received by U.S. Residents are generally not taxed in Spain provided that certain conditions are met (see “—Taxation of Capital Gains” below).
Taxation of Capital Gains
Under Spanish law, any capital gains derived from securities issued by persons residing in Spain for tax purposes are considered to be Spanish-source income and, therefore, are taxable in Spain. For Spanish tax purposes, gain recognized by U.S. Residents from the sale of BBVA’s ADSs or ordinary shares will be treated as capital gains. Spanish Non-Resident Income Tax is currently levied at a 19% tax rate, on capital gains recognized by persons who are not residents of Spain for tax purposes, who are not entitled to the benefit of any applicable treaty for the avoidance of double taxation and who do not operate through a fixed base or a permanent establishment in Spain.
Notwithstanding the discussion above, capital gains derived from the transfer of shares on an official Spanish secondary stock market by any holder who is resident in a country that has entered into a treaty for the avoidance of double taxation with an “exchange of information” clause (the Treaty contains such a clause) will be exempt from taxation in Spain. Additionally, capital gains realized by non-residents of Spain who are entitled to the benefit of an applicable treaty for the avoidance of double taxation will, in the majority of cases, not be taxed in Spain (since most tax treaties provide for taxation only in the taxpayer’s country of residence). Under the Treaty, U.S. Residents’ capital gains arising from the disposition of ordinary shares or ADSs will not be taxed in Spain. U.S. Residents will be required to establish that they are entitled to this exemption by providing to the relevant Spanish tax authorities a certificate of residence in the United States from the IRS (discussed above in “—Taxation of Dividends”), together with the corresponding Spanish tax form.
Spanish Inheritance and Gift Taxes
Transfers of BBVA’s shares or ADSs upon death or by gift to individuals are subject to Spanish inheritance and gift taxes (Spanish Law 29/1987), if the transferee is a resident in Spain for tax purposes, or if BBVA’s shares or ADSs are located in Spain, regardless of the residence of the transferee. In this regard, the Spanish tax authorities may argue that all shares of a Spanish corporation and all ADSs representing such shares are located in Spain for Spanish tax purposes. The applicable tax rate for individuals, after applying all relevant factors, ranges between approximately 7.65% and 81.6% under Spanish Law 29/1987. After determining the tax rate, multipliers that range from 1.0 to 2.4, are applied in order to assess the tax due. Those multipliers take into account the preexisting wealth of the inheritor / donee, and the kinship with the deceased / donor.
Corporations that are non-residents of Spain that receive BBVA’s shares or ADSs as a gift are subject to Spanish Non-Resident Income Tax at a 19% tax rate on the fair market value of such ordinary shares or ADSs as a capital gain tax. If the donee is a U.S. resident corporation, the exclusions available under the Treaty described in “—Taxation of Capital Gains” above will be applicable.
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Spanish Transfer Tax
Transfers of BBVA’s ordinary shares or ADSs will be exempt from Transfer Tax (Impuesto sobre Transmisiones Patrimoniales) or Value-Added Tax. Additionally, no stamp duty will be levied on such transfers.
U.S. Tax Considerations
The following summary describes material U.S. federal income tax consequences of the ownership and disposition of ADSs or ordinary shares, but it does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a particular person’s decision to hold the securities. The summary applies only to U.S. Holders that are eligible for the benefits of the Treaty (in each case, as defined under “—Spanish Tax Considerations” above) and that hold ADSs or ordinary shares as capital assets for tax purposes. This discussion does not address all of the tax consequences that may be relevant to any particular U.S. Holder, including the potential application of the provisions of the Internal Revenue Code of 1986, as amended (the “Code”) known as the Medicare contribution tax, and tax consequences that may be relevant to holders subject to special rules, such as:
•certain financial institutions;
•dealers or traders in securities who use a mark-to-market method of accounting;
•persons holding ADSs or ordinary shares as part of a hedging transaction, straddle, wash sale, conversion transaction or integrated transaction or persons entering into a constructive sale with respect to the ADSs or ordinary shares;
•persons whose “functional currency” for U.S. federal income tax purposes is not the U.S. dollar;
•persons liable for the alternative minimum tax;
•tax-exempt entities;
•partnerships or other entities classified as partnerships for U.S. federal income tax purposes;
•persons holding ADSs or ordinary shares in connection with a trade or business conducted outside of the United States;
•persons who acquired our ADSs or ordinary shares pursuant to the exercise of any employee stock option or otherwise as compensation; or
•persons who own or are deemed to own 10% or more of our stock, by vote or value.
If an entity that is classified as a partnership for U.S. federal income tax purposes holds ADSs or ordinary shares, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships holding ADSs or ordinary shares and partners in such partnerships should consult their tax advisors as to the particular U.S. federal income tax consequences of holding and disposing of the ADSs or ordinary shares.
The summary is based upon the tax laws of the United States, including the Code, the Treaty, administrative pronouncements, judicial decisions and final, temporary and proposed Treasury regulations, all as of the date hereof. These laws are subject to change, possibly with retroactive effect. In addition, the summary is based in part on representations by the depositary and assumes that each obligation provided for in or otherwise contemplated by BBVA’s deposit agreement and any other related document will be performed in accordance with its terms. Purchasers or owners of the ADSs or ordinary shares are urged to consult their tax advisors as to the U.S., Spanish or other tax consequences of the ownership and disposition of ADSs or ordinary shares in their particular circumstances, including the effect of any U.S. state or local tax laws.
In general, for United States federal income tax purposes, a U.S. Holder who owns ADSs will be treated as the owner of the underlying ordinary shares represented by those ADSs. Accordingly, no gain or loss will be recognized if a U.S. Holder exchanges ADSs for the underlying ordinary shares represented by those ADSs.
Except as described in “—Passive Foreign Investment Company Rules” below, this discussion assumes that BBVA has not been, and will not become, a passive foreign investment company (“PFIC”).
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Taxation of Distributions
Distributions, before reduction for any Spanish income tax withheld by BBVA or its paying agent, made with respect to ADSs or ordinary shares (other than certain pro rata distributions of ordinary shares or rights to subscribe for ordinary shares of BBVA’s capital stock) will be includible in the income of a U.S. Holder as ordinary income, to the extent paid out of BBVA’s current or accumulated earnings and profits as determined in accordance with U.S. federal income tax principles. Because we do not maintain calculations of our earnings and profits under U.S. federal income tax principles, it is expected that distributions generally will be reported to U.S. Holders as dividends. The amount of such dividends will generally be treated as foreign-source dividend income and will not be eligible for the “dividends-received deduction” generally allowed to U.S. corporations under the Code. Subject to applicable limitations (including the satisfaction of a minimum holding period and certain other requirements), dividends paid to certain non-corporate U.S. Holders of ADSs will be taxable as “qualified dividend income” and therefore will be taxable at favorable rates applicable to long-term capital gains. U.S. Holders should consult their own tax advisors to determine the availability of these favorable rates in their particular circumstances.
The amount of dividend income will equal the U.S. dollar value of the euro received, calculated by reference to the exchange rate in effect on the date of receipt (which, for U.S. Holders of ADSs, will be the date such distribution is received by the depositary), whether or not the depositary or U.S. Holder in fact converts any euro received into U.S. dollars at that time. If the dividend is converted into U.S. dollars on the date of receipt, a U.S. Holder should not be required to recognize foreign currency gain or loss in respect of the dividend income. A U.S. Holder may have foreign currency gain or loss if the dividend is converted into U.S. dollars after the date of receipt.
Subject to applicable limitations that vary depending upon a U.S. Holder’s circumstances, a U.S. Holder will be entitled to a credit against its U.S. federal income tax liability for Spanish income taxes withheld by BBVA or its paying agent at a rate not exceeding the rate the U.S. Holder is entitled to under Spanish domestic law or the Treaty. Spanish taxes withheld in excess of the rate applicable under Spanish domestic law or the Treaty or that are otherwise refundable will not be eligible for credit against the U.S. Holder’s U.S. federal income tax liability. See “Spanish Tax Considerations—Taxation of Dividends” for a discussion of how to obtain the Treaty rate. The rules governing foreign tax credits are complex. For example, under applicable Treasury regulations, in the absence of an election to apply the benefits of an applicable income tax treaty, in order to be creditable, foreign income tax rules must be consistent with certain U.S. federal income tax principles, and we have not determined whether the Spanish income tax system meets all these requirements. However, the IRS released notices that indicate that the Treasury Department and the IRS are considering amendments to these Treasury regulations and provide relief from certain of their provisions for taxable years ending before the date that a notice or other guidance withdrawing or modifying the temporary relief is issued (or any later date specified in such notice or other guidance). U.S. Holders should consult their tax advisors regarding the availability of foreign tax credits in their particular circumstances. Instead of claiming a credit, the U.S. Holder may, at its election and subject to applicable limitations, deduct such Spanish taxes in computing its U.S. federal taxable income. An election to deduct foreign taxes instead of claiming foreign tax credits applies to all taxes paid or accrued in the taxable year to foreign countries and possessions of the United States.
Sale or Other Disposition of ADSs or Shares
For U.S. federal income tax purposes, gain or loss realized by a U.S. Holder on the sale or other disposition of ADSs or ordinary shares will be capital gain or loss in an amount equal to the difference between the U.S. Holder’s tax basis in the ADSs or ordinary shares disposed of and the amount realized on the disposition, in each case as determined in U.S. dollars. Such gain or loss will be long-term capital gain or loss if the U.S. Holder held the ordinary shares or ADSs for more than one year at the time of disposition. The deductibility of capital losses is subject to limitations. Gain or loss, if any, will generally be U.S. source for foreign tax credit purposes. Under certain Treasury regulations, you generally will be precluded from claiming a foreign tax credit with respect to Spanish income taxes on gains from dispositions of ADSs or ordinary share. However, as discussed above under “—Taxation of Distributions”, the IRS released notices that provide relief from certain of the provisions of these Treasury regulations (including the limitation described in the preceding sentence) for taxable years ending before the date that a notice or other guidance withdrawing or modifying the temporary relief is issued (or any later date specified in such notice or other guidance). However, even if these Treasury regulations do not prohibit you from claiming a foreign tax credit with respect to Spanish taxes on disposition gains, other limitations under the foreign tax credit rules may preclude you from claiming a foreign tax credit with respect to such Spanish taxes.
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Passive Foreign Investment Company Rules
Based upon certain proposed Treasury regulations, which are proposed to be effective for taxable years beginning after December 31, 1994 (“Proposed Regulations”) and upon which taxpayers are currently permitted to rely, we believe that we were not a PFIC for U.S. federal income tax purposes for our 2025 taxable year. However, since our PFIC status depends upon the composition of our income and assets and the market value of our assets (including, among others, less than 25% owned equity investments) from time to time and since there is no guarantee that the Proposed Regulations will be adopted in their current form and because the manner of the application of the Proposed Regulations is not entirely clear, there can be no assurance that we will not be considered a PFIC for any taxable year.
If we were treated as a PFIC for any taxable year during which a U.S. Holder held ADSs or ordinary shares, gain recognized by such U.S. Holder on a sale or other disposition (including certain pledges) of an ADS or an ordinary share would be allocated ratably over the U.S. Holder’s holding period for the ADS or the ordinary share. The amounts allocated to the taxable year of the sale or other exchange and to any year before we became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as applicable for that taxable year, and an interest charge would be imposed on the amount of tax allocated to such taxable year. The same treatment would apply to distributions received by a U.S. Holder on its ordinary shares or ADSs in a taxable year to the extent that such distributions exceed 125% of the average of the annual distributions on the ordinary shares or ADSs received during the preceding three taxable years or the U.S. Holder’s holding period, whichever is shorter. In addition, if we were a PFIC or, with respect to a particular U.S. Holder, were treated as a PFIC for the taxable year in which we paid a dividend or the prior taxable year, the favorable tax rates discussed above with respect to dividends paid to certain non-corporate U.S. Holders would not apply. Certain elections may be available (including a mark-to-market election) that may provide alternative tax treatments. U.S. Holders should consult their tax advisors regarding whether we are or were a PFIC, the potential application of the PFIC rules to their ownership and disposition of ordinary shares or ADSs, whether any elections for alternative treatment would be available and, if so, what the consequences of the alternative treatments would be in their particular circumstances. If we were a PFIC for any taxable year during which a U.S. Holder owned our shares, the U.S. Holder would generally be required to file IRS Form 8621 with the U.S. Holder’s annual U.S. federal income tax returns, subject to certain exceptions.
Information Reporting and Backup Withholding
Information returns may be filed with the IRS in connection with payments of dividends on, and the proceeds from a sale or other disposition of, ADSs or ordinary shares. A U.S. Holder may be subject to U.S. backup withholding on these payments if the U.S. Holder fails to provide its taxpayer identification number to the paying agent and comply with certain certification procedures or otherwise establish an exemption from backup withholding. The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the U.S. Holder’s U.S. federal income tax liability and may entitle the U.S. Holder to a refund, provided that the required information is timely furnished to the IRS.
Certain U.S. Holders who are individuals or specified entities may be required to report information relating to securities of non-U.S. companies, or non-U.S. accounts through which they are held. U.S. Holders should consult their tax advisors regarding the effect, if any, of these rules on their ownership or disposition of ordinary shares or ADSs.
F. Dividends and Paying Agents
Not Applicable.
G. Statement by Experts
Not Applicable.
H. Documents on Display
We are subject to the information requirements of the Exchange Act, except that as a foreign private issuer, we are not subject to the proxy rules or the short-swing profit disclosure rules of the Exchange Act. In accordance with these statutory requirements, we file or furnish reports and other information with the SEC. Reports and other information filed or furnished by BBVA with the SEC may be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. Copies of such material may also be inspected at the offices of the New York Stock Exchange, 11 Wall Street, New York, New York 10005, on which BBVA’s ADSs are listed. In addition, the SEC maintains a web site that contains information filed or furnished electronically with the SEC, which can be accessed over the internet at http://www.sec.gov. Except as otherwise expressly indicated herein, any such information does not form part of this Annual Report on Form 20-F.
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I. Subsidiary Information
Not Applicable.
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
For quantitative and qualitative disclosures about market risk, see Notes 7.4 and 7.3 to the Consolidated Financial Statements.
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ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
A. Debt Securities
Not Applicable.
B. Warrants and Rights
Not Applicable.
C. Other Securities
Not Applicable.
D. American Depositary Shares
Our ADSs are listed on the New York Stock Exchange under the symbol “BBVA”. The Bank of New York Mellon is the depositary (the “Depositary”) issuing ADSs pursuant to an amended and restated deposit agreement dated June 29, 2007 among BBVA, the Depositary and the holders from time to time of ADSs (the “Deposit Agreement”). Each ADS represents the right to receive one share. The table below sets forth the fees payable, either directly or indirectly, by a holder of ADSs as of the date of this Annual Report.
| Category | Depositary Actions | Associated Fee / By Whom Paid | ||||||
(a) Depositing or substituting the underlying shares | Issuance of ADSs | Up to $5.00 for each 100 ADSs (or portion thereof) delivered (charged to person depositing the shares or receiving the ADSs) | ||||||
(b) Receiving or distributing dividends | Distribution of cash dividends or other cash distributions; distribution of share dividends or other free share distributions; distribution of securities other than ADSs or rights to purchase additional ADSs | Not applicable | ||||||
(c) Selling or exercising rights | Distribution or sale of securities | Not applicable | ||||||
(d) Withdrawing an underlying security | Acceptance of ADSs surrendered for withdrawal of deposited securities | Up to $5.00 for each 100 ADSs (or portion thereof) surrendered (charged to person surrendering or to person to whom withdrawn securities are being delivered) | ||||||
(e) Transferring, splitting or grouping receipts | Transfers, combining or grouping of depositary receipts | Not applicable | ||||||
(f) General depositary services, particularly those charged on an annual basis | Other services performed by the Depositary in administering the ADSs | Not applicable | ||||||
(g) Expenses of the Depositary | Expenses incurred on behalf of holders in connection with a.stock transfer or other taxes (including Spanish income taxes) and other governmental charges; b.cable, telex and facsimile transmission and delivery charges incurred at request of holder of ADS or person depositing shares for the issuance of ADSs; c.transfer, brokerage or registration fees for the registration of shares or other deposited securities on the share register and applicable to transfers of shares or other deposited securities to or from the name of the custodian; d.reasonable and customary expenses of the depositary in connection with the conversion of foreign currency into U.S. dollars | Expenses payable by holders of ADSs or persons depositing shares for the issuance of ADSs; expenses payable in connection with the conversion of foreign currency into U.S. dollars are payable out of such foreign currency | ||||||
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The Depositary may remit to us all or a portion of the fees charged for the reimbursement of certain of the expenses we incur in respect of the ADS program established pursuant to the Deposit Agreement upon such terms and conditions as we may agree from time to time. In the year ended December 31, 2025, the Depositary reimbursed us $682,633 with respect to certain fees and expenses. The table below sets forth the types of expenses that the Depositary has agreed to reimburse and the amounts reimbursed in 2025.
| Category of Expenses | Amount Reimbursed in the year ended December 31, 2025 | ||||
| (In Dollars) | |||||
| NYSE Listing Fees | 310,591 | ||||
| Investor Relations Marketing | 270,875 | ||||
| Professional Services | 19,271 | ||||
| Annual General Shareholders’ Meeting Expenses | 78,056 | ||||
| Other | 3,839 | ||||
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PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
Not Applicable.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
Not Applicable.
ITEM 15. CONTROLS AND PROCEDURES
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
As of December 31, 2025, BBVA, under the supervision and with the participation of BBVA’s management, including our Group Executive Chairman, Chief Executive Officer and Chief Financial Officer, performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). There are inherent limitations to the effectiveness of any control system, including disclosure controls and procedures. Accordingly, even effective disclosure controls and procedures can provide only reasonable assurance of achieving their control objectives.
Based upon their evaluation, BBVA’s Group Executive Chairman, Chief Executive Officer and Chief Financial Officer concluded that BBVA’s disclosure controls and procedures are effective at a reasonable assurance level in ensuring that information relating to BBVA, including its consolidated subsidiaries, required to be disclosed in reports that it files under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (2) accumulated and communicated to the management, including principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control Over Financial Reporting
The management of BBVA is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. BBVA’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
•pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of BBVA;
•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of BBVA’s management and directors; and
•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Under the supervision and with the participation of BBVA’s management, including our Group Executive Chairman, Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria established in “Internal Control – Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this assessment, our management concluded that, as of December 31, 2025 our internal control over financial reporting was effective based on those criteria.
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Changes in Internal Control Over Financial Reporting
There have been no changes in BBVA’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) which have materially affected or are reasonably likely to materially affect BBVA’s internal control over financial reporting during the year ended December 31, 2025.
Our internal control over financial reporting as of December 31, 2025 has been audited by Ernst & Young, S.L., an independent registered public accounting firm, as stated in their report which follows below.
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Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Banco Bilbao Vizcaya Argentaria, S.A.:
Opinion on Internal Control Over Financial Reporting
We have audited Banco Bilbao Vizcaya Argentaria, S.A.’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Banco Bilbao Vizcaya Argentaria, S.A. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025, 2024 and 2023, the related consolidated statements of income, recognized income and expense, changes in equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”), and our report dated February 20, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young, S.L.
Madrid, Spain
February 20, 2026
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ITEM 16. [RESERVED]
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
The Regulations of the Audit Committee establish that committee members will be appointed by the Board of Directors, seeking to ensure that they possess the necessary dedication, skills and experience to carry out their duties. In any event, at least one member will be appointed taking into account his or her knowledge and experience in accounting, auditing or both. As a whole, the Committee members will possess relevant technical knowledge in the financial sector.
We have determined that Mr. José Miguel Andrés Torrecillas, current Chair of the Audit Committee, and the Audit Committee members Mrs. Sonia Dulá and Mrs. Ana Cristina Peralta Moreno are “audit committee financial experts” as such term is defined by the SEC.
Moreover, all the members of the Audit Committee (Mr. José Miguel Andrés Torrecillas, Mr. Enrique Casanueva Nárdiz, Mrs. Sonia Dulá, Mrs. Connie Hedegaard Koksbang, Mrs. Lourdes Máiz Carro and Mrs. Ana Cristina Peralta Moreno) are independent within the meaning of Rule 10A-3 under the Exchange Act.
ITEM 16B. CODE OF ETHICS
The BBVA Group Code of Conduct, which was updated by the Board of Directors on February 9, 2022, and underwent a minor revision in July 2024, applies to all companies and persons which form part of the BBVA Group. This Code sets out the standards of behavior that should be adhered to so that the Group’s conduct towards its customers, colleagues and the society be consistent with BBVA’s values. The BBVA Group Code of Conduct can be found on BBVA’s website at www.bbva.com.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table provides information on the aggregate fees paid and payable to our independent registered public accounting firm (Ernst & Young, S.L. , Madrid, Spain , Auditor Firm ID 1461 ), and its worldwide affiliates, by type of service rendered for the periods indicated.
Year ended December 31, | ||||||||
Services Rendered | 2025 | 2024 | ||||||
(In Millions of Euros) | ||||||||
Audit Fees (1) | 32.5 | 32.6 | ||||||
Audit-Related Fees (2) | 2.0 | 1.9 | ||||||
Tax Fees (3) | — | — | ||||||
All Other Fees (4) | 0.3 | 0.1 | ||||||
Total | 34.8 | 34.5 | ||||||
(1)Aggregate fees paid and payable by BBVA for professional services rendered by our principal accountant (Ernst & Young, S.L., Madrid, Spain, Auditor Firm ID 1461) and its worldwide affiliates for the audit of BBVA’s annual financial statements, review of interim financial statements, SEC regulatory filings or services that are normally provided by our principal accountants and their worldwide affiliates in connection with statutory and regulatory filings or engagements for the relevant fiscal year.
(2)Aggregate fees paid and payable by BBVA for assurance and related services by our principal accountant (Ernst & Young, S.L., Madrid, Spain, Auditor Firm ID 1461) and its worldwide affiliates that are reasonably related to the performance of the audit or review of BBVA’s financial statements and are not reported under (1) above. This includes work related to the corporate social responsibility report of certain Group entities and certain regulatory work rendered by the independent auditor.
(3)Aggregate fees paid and payable by BBVA for professional services rendered by our principal accountant (Ernst & Young, S.L., Madrid, Spain, Auditor Firm ID 1461) and its worldwide affiliates for tax compliance, tax advice, and tax planning.
(4)Aggregate fees paid and payable by BBVA for products and services provided by our principal accountant (Ernst & Young, S.L., Madrid, Spain, Auditor Firm ID 1461) and its worldwide affiliates other than the services reported in (1), (2) and (3) above. Services in this category consisted primarily of consultancy and implementation of new regulation.
The fees of our independent registered public accounting firms are recorded under “Other administrative expense” in the consolidated income statements for the relevant years.
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The Audit Committee’s Pre-Approval Policies and Procedures
In order to assist in ensuring the independence of our external auditor, the regulations of our Audit Committee provides that our external auditor is generally prohibited from providing us with non-audit services, other than under the specific circumstance described below. For this reason, our Audit Committee has developed a pre-approval policy regarding the contracting of BBVA’s external auditor, or any affiliate of the external auditor, for professional services. The professional services covered by such policy include audit and non-audit services provided to BBVA or any of its subsidiaries reflected in agreements dated on or after May 6, 2003.
The pre-approval policy is as follows:
1.The hiring of BBVA’s external auditor or any of its affiliates is prohibited, unless there is no other firm available to provide the needed services at a comparable cost and that could deliver a similar level of quality.
2.In the event that there is no other firm available to provide needed services at a comparable cost and delivering a similar level of quality, the external auditor (or any of its affiliates) may be hired to perform such services, but only with the pre-approval of the Audit Committee.
3.The Chairman of the Audit Committee has been delegated the authority to approve the hiring of BBVA’s external auditor (or any of its affiliates). In such an event, however, the Chairman would be required to inform the Audit Committee of such decision at the Committee’s next meeting.
4.The hiring of the external auditor for any of BBVA’s subsidiaries must also be pre-approved by the Audit Committee.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not Applicable.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
The below table shows the purchases of BBVA shares made by or on behalf of BBVA or any affiliated purchaser during 2025.
2025 | Total Number of Shares Purchased (1) | Average Price Paid per Share in Euro | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Maximum Number (or Approximate Euro Value) of Shares that May Yet Be Purchased Under the Plans or Programs (3) | ||||||||||
January | 7,261,080 | 10.02 | — | — | ||||||||||
February | 16,463,252 | 11.45 | — | — | ||||||||||
March | 6,176,327 | 11.79 | — | — | ||||||||||
April | 13,019,595 | 11.32 | — | — | ||||||||||
May | 854,222 | 13.22 | — | — | ||||||||||
June | 1,714,124 | 12.98 | — | — | ||||||||||
July | 1,888,766 | 12.95 | — | — | ||||||||||
August | 527,345 | 15.86 | — | — | ||||||||||
September | 1,104,438 | 16.28 | — | — | ||||||||||
October | 3,306,031 | 17.21 | — | — | ||||||||||
November | 40,137,692 | 18.01 | 39,352,824 | €282,734,560 | ||||||||||
December | 34,037,521 | 19.06 | 22,325,112 | €1,492,666,440 | ||||||||||
Total | 126,490,393 | 15.77 | 61,677,936 | |||||||||||
(1)All of the purchases made in the period from January 2025 to October 2025 (both inclusive), as well as the purchase of 784,868 and 11,712,409 shares in November and December 2025, respectively, were made other than through a publicly announced plan or program and were made in open-market transactions.
(2)Refers to the number of shares purchased under the share buyback program in the relevant month. See “—Share Buyback Programs”.
(3)Refers to the approximate euro value of shares yet to be purchased under share buyback programs as of the end of the relevant month. See “—Share Buyback Programs”. As of November 30, 2025 and December 31, 2025, the dollar value of such shares was approximately $327 million and $1,754 million, respectively (based on a euro/dollar exchange rate on November 30, 2025 and December 31, 2025 of €1.00=$1.157 and €1.00=$1.175), respectively.
During 2025, 115,548,741 shares were disposed of for an average price of €15.20 per share. In addition, 54,316,765 shares were cancelled pursuant to the share capital reductions that were announced on December 23, 2025.
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Share Buyback Programs
For information on share buyback programs implemented by BBVA in recent years, see “Item 8. Financial Information—Consolidated Statements and Other Financial Information—Dividends—Share Buyback Programs”.
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
Not Applicable.
ITEM 16G. CORPORATE GOVERNANCE
Compliance with NYSE Listing Standards on Corporate Governance
On November 4, 2003, the SEC approved rules proposed by the New York Stock Exchange (the “NYSE”) intended to strengthen corporate governance standards for listed companies. In compliance therewith, the following is a summary of the significant differences between our corporate governance practices and those applicable to domestic issuers under the NYSE listing standards.
Independence of the Directors on the Board of Directors and Board Committees
Under the NYSE corporate governance rules, (i) a majority of a U.S. company’s board of directors must be composed of independent directors, (ii) all members of the audit committee must be independent and (iii) all U.S. companies listed on the NYSE must have a compensation committee and a nominations committee and all members of such committees must be independent. In each case, the independence of directors must be established pursuant to highly detailed rules promulgated by the NYSE and, in the case of the audit committee, the NYSE and the SEC.
The Spanish Corporate Enterprises Act sets out a definition of what constitutes independence for the purpose of board or committee membership. Such definition is in line with the definition provided by our Board of Directors Regulations.
In addition, pursuant to the Spanish Corporate Enterprises Act, listed companies shall have, at least, an audit committee and an appointments and remuneration committee. This Act also establishes that such committees (i) shall be composed exclusively of non-executive directors, (ii) shall have a majority of independent directors (in the case of the audit committee) or at least two of their members shall be independent directors (in the case of the appointments and remuneration committee) and (iii) they shall be chaired by an independent director.
Likewise, Law 10/2014, which completes the transposition of the Capital Requirements Directive IV (“CRD IV”) (which refers to the European Union framework, together with the CRR, that implements the Basel III standards in the European Union) into Spanish legislation, includes rules on corporate governance, among others, as regards board committees and their membership, establishing that the remuneration committee, the appointments committee and risk committee shall be composed of non-executive directors and at least one third of their members shall be independent and, in any event, the chair of these committees shall also be an independent director.
Moreover, pursuant to the Good Governance Code for Listed Companies of the CNMV, which includes non-binding recommendations applicable to listed companies in Spain, under the comply or explain principle: (i) independent directors must represent, at least, half of the total board members; (ii) the majority of the members of the appointments and remuneration committee must be independent; and (iii) companies with high market capitalization must have two separate committees, an appointments committee and a remuneration committee.
Pursuant to Article 1 of our Board of Directors Regulations, BBVA considers that independent directors are non-executive directors appointed based on their personal and professional qualities and who may perform their duties without being constrained by their relationship with the Company, or its Group, significant shareholders or managers. Directors may not be considered independent in any of the following situations:
a) They have been employees or have been executive directors of Group companies in the last three or five years, respectively.
b) They receive from the Bank, or from Group companies, any amount or benefit for any item other than director’s remuneration, except for those amounts which are not significant for such director. For the purposes of this item, neither dividends nor pension allowances received by directors relating to their previous professional or employment relations will be taken into account, provided that said allowances are unconditional in nature and, therefore, the company that provides said allowances may not suspend, modify or revoke their accrual at its discretion without breaching its obligations.
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c) They are, or have been in the past three years, a partner of an external auditor or have been responsible during this time for the auditor’s report for the Company or any other company within its Group.
d) They are executive directors or senior managers of another company for which an executive director or senior manager of the Company is an external director.
e) They have, or have had over the last year, a significant business relationship with the Bank or any company within its Group, whether in their own name or as a significant shareholder, director or senior manager of a company that has, or has had, such a relationship. Business relationships include supplying goods or services, including financial services, as well as acting as an adviser or consultant.
f) They are significant shareholders, executive directors or senior managers of a company that receives, or has received in the past three years, donations from the Company or from its Group. Those who are simply trustees of a foundation receiving donations will not be considered to be included in this category.
g) They are spouses, partners in a similar relationship of affection or relatives up to the second degree of an executive director or senior manager of the Company.
h) They have not been proposed for appointment or renewal by the Appointments and Corporate Governance Committee.
i) They have been directors for a continuous period of more than twelve years.
j) In relation to a significant shareholder or shareholder represented on the Board of Directors, any of the circumstances referred to in items (a), (e), (f) or (g) above shall apply. In the event of the kinship relations referred to in item (g), the limitation will apply not only to the shareholder, but also to any proprietary directors of the company in which shares are held.
The directors with a shareholding in the Company may be considered independent provided that they do not meet the conditions above and, in addition, that their shareholding is not legally regarded as significant.
As of the date of this Annual Report, 13 of the 15 members of our Board of Directors are non-executive directors and ten out of the 15 members of our Board are independent under the definition of independence described above, which is in line with the definition provided by the Spanish Corporate Enterprises Act.
In addition, our Audit Committee is composed exclusively of independent directors and the Committee chair has experience in accounting, auditing and technical knowledge in the financial sector, in accordance with the specific regulations of the Audit Committee. Our Risk and Compliance Committee is also currently composed exclusively of independent directors. Also, in accordance with the Spanish Corporate Enterprises Act and with corporate governance non-binding recommendations, our Board of Directors has two separate committees: an Appointments and Corporate Governance Committee and a Remuneration Committee, which are composed exclusively of non-executive directors, the majority of whom (including their chairs) are independent directors.
Separate Meetings for Independent Directors
In accordance with the NYSE corporate governance rules, independent directors must meet periodically outside of the presence of the executive directors. Under Spanish law, this requirement is not contemplated as such. We note, however, that our non-executive directors meet periodically outside the presence of our executive directors every time a committee with oversight functions meets, since these committees are comprised solely of non-executive directors. Furthermore, the Board of Directors has appointed a Lead Director with powers to coordinate and meet with the non-executive directors, among other faculties conferred by applicable law and in Article 22 of our Board of Directors Regulations. The Lead Director also maintains ongoing contact, holds meetings and has conversations with other Bank directors in order to seek their opinions on the corporate governance and operation of the Bank’s corporate bodies. In addition, in accordance with Article 38 of the Board of Directors Regulations, the Lead Director coordinated during 2025 monthly meetings with non-executive directors, which took place following the meetings of the Board of Directors.
Code of Ethics
The NYSE listing standards require U.S. companies to adopt a code of business conduct and ethics for directors, officers and employees, and promptly disclose any waivers of the code for directors or executive officers. For information with respect to BBVA’s code of business conduct and ethics see “Item 16 B. Code of Ethics”.
ITEM 16H. MINE SAFETY DISCLOSURE
Not Applicable.
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ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not Applicable.
ITEM 16J. INSIDER TRADING POLICIES
BBVA has adopted insider trading policies and procedures governing the purchase, sale, and other dispositions of the registrant’s securities by directors, senior management, and employees that are reasonably designed to promote compliance with applicable insider trading laws, rules and regulations, and any listing standards applicable to BBVA. A copy of BBVA’s General Policy on Conduct in the Securities Markets is filed as Exhibit 11 to this report. This policy sets forth certain minimum standards for the prevention of -among others- market abuse, use of inside information, market manipulation, conflicts of interest and market abuse. Such minimum standards are adopted and, where applicable, further developed and supplemented at a regional level.
ITEM 16K. CYBERSECURITY
Cybersecurity Risk Management
Risk Management and Strategy
For BBVA, cybersecurity is not only a strategic priority, but also one of the main elements in the digital transformation of the Bank. BBVA’s Corporate Security Area is responsible for ensuring adequate information security management by establishing security policies, procedures and controls that bolster the security of the Group’s global infrastructures, digital channels and payment methods following a holistic and threat intelligence-led approach, where a program has been designed for each of the four fundamental pillars of BBVA’s security strategy: cybersecurity, data protection, physical security and security in business processes and fraud management, with the aim to reduce the risks identified in the risk taxonomy defined by the Group.
As cyberattacks evolve and become more sophisticated, the Group has strengthened its prevention and monitorization efforts. During the past few years, cybersecurity and information security measures have been reinforced with the aim to ensure an adequate protection of BBVA’s information and the assets supporting business processes. Security measures adopted in the past few years include measures intended to: (i) ensure end-to-end protection of business processes, considering logical and physical security, privacy and fraud management concerns, (ii) ensure compliance with the security and privacy by design principles; and (iii) improve client access control and authentication services related to online services, from a security and user experience perspective, including by enhancing the use of facial biometrics, behavioral biometrics, advanced analytics models and the implementation of dynamic Card Verification Values (CVV).
Further, system monitoring capabilities, as well as incident prevention, detection and response capabilities have also been strengthened through the use of integrated information sources, improved analytical capabilities and automated platforms, improving information security management from a preventive and proactive approach.
Additionally, and with the aim to ensure that security is embedded in business processes, the security management model has been reinforced in the software development lifecycle process and in infrastructure, architecture and operations management.
The Global Computer Emergency Response Team (“CERT”) is the Group’s first line of detection and response to cyberattacks aimed at global users and the Group’s infrastructure. The Global CERT, which is based in Madrid, operates 24x7 and provides services in all countries where the Group operates, with operation lines dedicated to fraud and cybersecurity. The Global CERT receives information on cybersecurity threats from our Threat Intelligence Unit. Both of them are part of the Corporate Security Area.
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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 technical tests of technological platforms as well as malicious users’ simulated attacks performed by the “red team”. The outcome of such exercises is a fundamental part of a feedback process designed to improve the Group’s cybersecurity strategies. Both the Corporate Security Area and the Risk Control Area engage third-party security experts for risk assessments and system enhancements.
BBVA continues to work on the development of new artificial-intelligence and machine-learning models that enable the prediction and prevention of cyberattacks on financial infrastructure, providing a more secure client experience. BBVA’s Threat Intelligence Area has been reinforced in 2024 and 2025, adopting measures directed at transforming detailed technical information into actionable intelligence information that can be used to make decisions related to risk management. The Threat Intelligence Area continuously monitors threats that affect the financial sector and analyses risk trends with the aim to implement measures to minimize the risks the Group is exposed to. Analysis performed includes not only security trends but also the type, frequency and origin of attacks on systems and information.
In addition, BBVA continuously carries out training and awareness initiatives related to security and privacy, promoting training and awareness campaigns for BBVA’s employees, clients and society, through the BBVA app, online channels and social networks. Some of the topics covered include protection of personal information, secure password management, device protection (laptops, smartphones, etc.), social engineering (phishing, smishing, vishing), malware and other technical attacks detection, detection of scams, security on online purchases and how to react if there is a security incident.
BBVA’s cybersecurity strategy is based on internationally accepted security standards. It covers best practices established in information-security standards and guidelines including ISO/IEC 27002 and other ISO/IEC 27000 series standards, COBIT 5 and the NIST Cybersecurity Framework.
BBVA has also obtained several security certifications (such as Tier IV and ISAE 3402 certifications) in different countries. To maintain these certifications, periodic external audits are performed, considering the specific requirements of each certification. The external auditors that perform these audits are selected from among the most recognized audit firms in the areas of each certification.
Governance
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The risk management process includes lines of action related to the adequate training of BBVA’s Board members in the area of cybersecurity and incident management, as well as the periodic performance of global and local simulation exercises in order to raise the level of training and awareness of the Board of Directors and certain key personnel and ensure an immediate and effective response in case of a security breach.
Further, BBVA’s Corporate Security Area and the Risk Control Area, based in Madrid, are responsible for identifying and assessing material cybersecurity risks on an ongoing basis, establishing processes to ensure that such potential cybersecurity risk exposures are monitored, putting in place appropriate mitigation measures and maintaining cybersecurity programs. Our cybersecurity programs are under the direction of our CSO, who receives reports from our cybersecurity team (which is part of the Corporate Security Area) and monitors the prevention, detection, mitigation, and remediation of cybersecurity incidents. Both the Corporate Security Area and the Risk Control Area engage third-party security experts for risk assessments and system enhancements.
Our CSO and certain of the personnel of the Corporate Security Area have obtained internationally recognized certifications such as ISACA, Certified Information Systems Auditor (CISA), Certified Information Security Manager (CISM), Certified in Risk and Information Systems Control (CRISC), Certified Data Privacy Solutions Engineer (CDPSE), SANS Institute Certifications (GIAC Security Essentials, GIAC Certified Incident Handler Certification, GIAC Strategic Planning Policy and Leadership), Certified Information Systems Security Professional (CISSP) and ISO Certifications (ISO 27001 Lead Auditor), among others, and consist of experienced information systems security professionals and information security managers with the experience and capabilities required for their security functions. The CSO regularly reports to BBVA’s Internal Control & Operational Risk Committee on the Group’s cybersecurity programs, material cybersecurity risks and mitigation strategies and provide cybersecurity reports to them every two months that cover, among other topics, third-party assessments of the Group’s cybersecurity programs, developments in cybersecurity and updates to the Group’s cybersecurity programs and mitigation strategies.
PART III
ITEM 17. FINANCIAL STATEMENTS
We have responded to Item 18 in lieu of responding to this Item.
ITEM 18. FINANCIAL STATEMENTS
Please see pages F-1 through F-260.
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ITEM 19 EXHIBITS
| Exhibit Number | Description | |||||||
| 1.1 | Amended and Restated Bylaws (Estatutos) of the Registrant (English translation) | |||||||
| 2.1 | Description of Registrant’s Securities Registered under Section 12 of the Exchange Act | |||||||
| 4.1 | Information on Compensation Plans (*) | |||||||
| 8.1 | Subsidiaries of Registrant (see Appendix I to the Consolidated Financial Statements included herein) (**) | |||||||
| 11.1 | Insider Trading Policy | |||||||
| 12.1 | Section 302 Group Executive Chair Certification | |||||||
| 12.2 | Section 302 Chief Executive Officer Certification | |||||||
| 12.3 | Section 302 Chief Financial Officer Certification | |||||||
| 13.1 | Section 906 Certification | |||||||
| 15.1 | Consent of Independent Registered Public Accounting Firm | |||||||
| 97.1 | Remuneration Recoupment Policy (***) | |||||||
| 101 | Inline XBRL Instance Document — the instance document does not appear on the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||
| 101.SCH | Inline XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT | |||||||
| 101.CAL | Inline XBRL TAXONOMY EXTENSION CALCULATION LINKBASE DOCUMENT | |||||||
| 101.DEF | Inline XBRL TAXONOMY EXTENSION DEFINITION LINKBASE DOCUMENT | |||||||
| 101.LAB | Inline XBRL TAXONOMY EXTENSION LABELS LINKBASE DOCUMENT | |||||||
| 101.PRE | Inline XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT | |||||||
| 104 | Cover Page Interactive Data File — the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||
(*) Incorporated by reference to BBVA’s report on Form 6-K submitted on February 13, 2026 (SEC Accession No. 0001193125-26-050597), excluding the following sections of the Annual Report on the Remuneration of BBVA Directors: (i) “Executive summary”; (ii) section 3.2 (B) - “Variable Remuneration 2025” and (iii) section 6 “Directors’ Remuneration Policy applicable in 2026”.
(**) See also “Item 4. Information on the Company—Organizational Structure”.
(***) Incorporated by reference to BBVA’s Annual Report on Form 20-F for the year ended December 31, 2023.
We will furnish to the Commission, upon request, copies of any unfiled instruments that define the rights of holders of our long-term debt.
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the Registrant certifies that it meets all of the requirements for filing on Form 20-F and had duly caused this Annual Report to be signed on its behalf by the undersigned, thereto duly authorized.
| BANCO BILBAO VIZCAYA ARGENTARIA, S.A. | |||||
| By: | |||||
/s/ Luisa Gómez Bravo | |||||
| Name: | Luisa Gómez Bravo | ||||
| Title: | Chief Financial Officer | ||||
Date: | February 20, 2026 | ||||
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Consolidated Financial Statements and Report of Independent Registered Public Accounting Firm for the years 2025, 2024 and 2023
Index
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated balance sheets | F-3 | ||||
Consolidated income statements | F-6 | ||||
Consolidated statements of recognized income and expense | F-8 | ||||
Consolidated statements of changes in equity | F-9 | ||||
Consolidated statements of cash flows | F-12 | ||||
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Introduction, basis for the presentation of the Consolidated Financial Statements, Internal Control over Financial Reporting and other information | F-13 | ||||
2. Principles of consolidation, accounting policies and measurement bases applied and recent IFRS pronouncements | F-16 | ||||
3. BBVA Group | F-50 | ||||
4. Shareholder remuneration system | F-51 | ||||
5. Earnings per share | F-55 | ||||
6. Operating segment reporting | F-56 | ||||
7. Risk management | F-57 | ||||
8. Fair value of financial instruments | F-116 | ||||
9. Cash, cash balances at central banks and other demand deposits | F-132 | ||||
10. Financial assets and liabilities held for trading | F-132 | ||||
11. Non-trading financial assets mandatorily at fair value through profit or loss | F-134 | ||||
12. Financial assets and liabilities designated at fair value through profit or loss | F-135 | ||||
13. Financial assets at fair value through other comprehensive income | F-135 | ||||
14. Financial assets at amortized cost | F-139 | ||||
15. Derivatives - Hedge accounting and fair value changes of the hedged items in portfolio hedges of interest rate risk | F-141 | ||||
16. Investments in joint ventures and associates | F-146 | ||||
17. Tangible assets | F-149 | ||||
18. Intangible assets | F-152 | ||||
19. Tax assets and liabilities | F-154 | ||||
20. Other assets and liabilities | F-161 | ||||
21. Non-current assets and disposal groups classified as held for sale and liabilities included in disposal groups classified as held for sale | F-161 | ||||
22. Financial liabilities at amortized cost | F-163 | ||||
23. Assets and liabilities under insurance and reinsurance contracts | F-168 | ||||
24. Provisions | F-172 | ||||
25. Post-employment and other employee benefit commitments | F-173 | ||||
26. Capital | F-182 | ||||
27. Share premium | F-185 | ||||
28. Retained earnings and other reserves | F-185 | ||||
29. Treasury shares | F-188 | ||||
30. Accumulated other comprehensive income (loss) | F-189 | ||||
31. Minority interests (non-controlling interests) | F-189 | ||||
32. Capital base and capital management | F-190 | ||||
33. Commitments and guarantees given | F-195 | ||||
34. Other contingent assets and liabilities | F-196 | ||||
35. Purchase and sale commitments and future payment obligations | F-196 | ||||
36. Transactions on behalf of third parties | F-196 | ||||
37. Net interest income | F-196 | ||||
38. Dividend income | F-197 | ||||
39. Share of profit or loss of entities accounted for using the equity method | F-197 | ||||
40. Fee and commission income and expense | F-198 | ||||
41. Gains (losses) on financial assets and liabilities, hedge accounting and exchange differences, net | F-199 | ||||
42. Other operating income and expense | F-200 | ||||
43. Income and expense from insurance and reinsurance contracts | F-201 | ||||
44. Administration costs | F-201 | ||||
45. Depreciation and amortization | F-205 | ||||
46. Provisions or reversal of provisions | F-205 | ||||
47. Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification | F-205 | ||||
48. Impairment or reversal of impairment of investments in joint ventures and associates | F-206 | ||||
49. Impairment or reversal of impairment on non-financial assets | F-206 | ||||
50. Gains (losses) from non-current assets and disposal groups classified as held for sale not qualifying as discontinued operations | F-206 | ||||
51. Consolidated statements of cash flows | F-207 | ||||
52. Accountant fees and services | F-207 | ||||
53. Related-party transactions | F-208 | ||||
54. Remuneration and other benefits for the Board of Directors and members of the Bank's Senior Management | F-210 | ||||
55. Other information | F-220 | ||||
56. Subsequent events | F-221 | ||||
APPENDICES
APPENDIX I. Additional information on subsidiaries and structured entities composing the BBVA Group as of December 31, 2025 | F-223 | ||||
APPENDIX II. Additional information on investments in joint ventures and associates in the BBVA Group as of December 31, 2025 | F-228 | ||||
APPENDIX III. Changes and notifications of participations in the BBVA Group in 2025 | F-229 | ||||
APPENDIX IV. Fully consolidated subsidiaries with more than 10% owned by non-Group shareholders as of December 31, 2025 | F-231 | ||||
APPENDIX V. BBVA Group’s securitization funds. Structured entities in 2025. | F-232 | ||||
APPENDIX VI. Details of the outstanding subordinated debt and preferred securities issued by the Bank or entities in the Group consolidated as of December 31, 2025, 2024 and 2023 | F-233 | ||||
APPENDIX VII Consolidated balance sheets held in foreign currency as of December 31, 2025, 2024 and 2023 | F-235 | ||||
APPENDIX VIII. Quantitative information on refinancing and restructuring operations and other requirements under Bank of Spain Circular 6/2012 | F-236 | ||||
APPENDIX IX. Additional information on risk concentration | F-246 | ||||
GLOSSARY
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Banco Bilbao Vizcaya Argentaria, S.A.:
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Banco Bilbao Vizcaya Argentaria, S.A. (the Company) as of December 31, 2025, 2024 and 2023, the related consolidated statements of income, recognized income and expense, changes in equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 20, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
F-1
Expected credit losses related to loans and advances to customers at amortized cost | |||||
Description of the Matter | As discussed in Note 7 to the consolidated financial statements, the Company’s expected credit losses (ECL) related to loans and advances to customers at amortized cost was €12,297 million as of December 31, 2025. The recognition and measurement of ECL is complex and involves the use of significant analysis and estimation, including formulation and incorporation of forward-looking economic conditions into the ECL model. Auditing the assessment of the ECL related to loans and advances to customers at amortized cost involved subjective and complex auditor judgment, as well as specialized skills and knowledge, due to the significant measurement uncertainty, including: (i) the Company’s overall methodology for estimating ECL related to loans and advances to customers, inclusive of the models and significant assumptions used to estimate the probability of default (PD), the exposure at default (EAD) and the loss given default (LGD), (ii) the need for and measurement of certain qualitative adjustments to the collective ECL, (iii) the significant assumptions used to estimate the ECL for certain individually evaluated loans, including the present value of estimated future cashflows and the estimation of the recoverable amount of collateral, (iv) the complexity of mathematical calculations of the ECL of loans collectively and individually evaluated for impairment, and (v) the determination of updated and accurate relevant underlying data and assumptions, including forward-looking information that could be affected by future economic conditions. | ||||
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s ECL assessment process related to loans and advances to customers at amortized cost, which included controls over management’s review of the data, models and assumptions used in the estimation process, including adjustments to the models. Our audit procedures, in which we involved professionals with specialized skills and knowledge, included, among others, evaluating the Company’s ECL methodology and a sample of models used in calculating the PD, EAD and LGD. We also assessed the assumptions incorporated by management into the models by inspecting model documentation and the results of the Group’s internal validation unit, and replicating the model development process for key parameters. We also replicated the ECL engine logic used to calculate the final aggregated ECL amount and recalculated the ECL from collective models for significant portfolios and a sample of loans individually evaluated for impairment, including the present value of estimated future cashflows. We also tested the accuracy of underlying data for a sample of loans by comparing them to contractual documentation and, for the forward-looking information, developing independent estimates of future economic conditions and comparing them to management’s estimates. We also evaluated the documentation related to the assessment of whether qualitative adjustments to the ECL are needed. We also involved our valuation specialists, who assisted in testing the significant assumptions used to estimate the ECL for a sample of individually evaluated loans, by comparing management’s estimated recoverable amount of collateral to an independent range of estimates for a sample of collaterals. We assessed the adequacy of the related disclosures in the Company’s consolidated financial statements, against the requirements of IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures. | ||||
Measurement of fair value of certain financial instruments | |||||
Description of the Matter | As discussed in Note 8 to the consolidated financial statements, the Company has recorded €194,842 million of financial assets measured at fair value (of which €101,949 million were classified as Level 2 and €5,763 million were classified as Level 3) and €112,297 million of financial liabilities measured at fair value (of which €78,260 million were classified as Level 2 and €3,594 million were classified as Level 3) as of December 31, 2025. Fair value measurement of Level 2 and Level 3 financial instruments is based on valuation techniques, hypothesis and observable and unobservable inputs. We identified as a critical audit matter the measurement of fair value of those financial instruments classified as Level 2 and Level 3 that require complex valuation techniques that use observable and unobservable market inputs and involve the application of management judgement, as further disclosed in note 8.1. Specifically, there was a high degree of subjectivity and judgment involved in evaluating the models and methodologies used to estimate the fair value of these financial instruments. Subjective auditor judgment was also required to evaluate the models’ significant inputs and assumptions, some of which were not directly observable in financial markets, such as certain interest rates, correlations and volatility inputs. | ||||
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s internal controls over the Company’s fair value measurement of Level 2 and Level 3 financial instruments assessment process. For example, management’s controls over the development, approval and reassessment of the Company’s valuation models and methodologies. Our audit procedures, in which we involved our valuation specialists, included, among others, evaluating the Company’s valuation models and methodologies by performing an independent valuation of a sample of Level 2 and Level 3 financial instruments, using independent models and inputs, and comparing our estimate to the Company’s fair value estimate. We assessed the adequacy of the related disclosures in the Company’s consolidated financial statements, against the requirements of IFRS 9 Financial Instruments and IFRS 13 Fair Value Measurement. | ||||
/s/ Ernst & Young, S.L.
We have served as the Company’s auditor since 2022.
Madrid, Spain
February 20, 2026
F-2
Consolidated balance sheets as of December 31, 2025, 2024 and 2023
ASSETS (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
| CASH, CASH BALANCES AT CENTRAL BANKS AND OTHER DEMAND DEPOSITS | 9 | |||||||||||||
| FINANCIAL ASSETS HELD FOR TRADING | 10 | |||||||||||||
Derivatives | ||||||||||||||
Equity instruments | ||||||||||||||
Debt securities | ||||||||||||||
Loans and advances to central banks | ||||||||||||||
Loans and advances to credit institutions | ||||||||||||||
Loans and advances to customers | ||||||||||||||
| NON-TRADING FINANCIAL ASSETS MANDATORILY AT FAIR VALUE THROUGH PROFIT OR LOSS | 11 | |||||||||||||
Equity instruments | ||||||||||||||
Debt securities | ||||||||||||||
Loans and advances | ||||||||||||||
| FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS | 12 | |||||||||||||
Debt securities | ||||||||||||||
| FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME | 13 | |||||||||||||
Equity instruments | ||||||||||||||
Debt securities | ||||||||||||||
Loans and advances | ||||||||||||||
| FINANCIAL ASSETS AT AMORTIZED COST | 14 | |||||||||||||
Debt securities | ||||||||||||||
Loans and advances to central banks | ||||||||||||||
Loans and advances to credit institutions | ||||||||||||||
Loans and advances to customers | ||||||||||||||
| DERIVATIVES - HEDGE ACCOUNTING | 15 | |||||||||||||
| FAIR VALUE CHANGES OF THE HEDGED ITEMS IN PORTFOLIO HEDGES OF INTEREST RATE RISK | 15 | ( | ( | ( | ||||||||||
| JOINT VENTURES AND ASSOCIATES | 16 | |||||||||||||
Joint ventures | ||||||||||||||
Associates | ||||||||||||||
| INSURANCE AND REINSURANCE ASSETS | 23 | |||||||||||||
| TANGIBLE ASSETS | 17 | |||||||||||||
Properties, plant and equipment | ||||||||||||||
For own use | ||||||||||||||
Other assets leased out under an operating lease | ||||||||||||||
Investment properties | ||||||||||||||
| INTANGIBLE ASSETS | 18 | |||||||||||||
Goodwill | ||||||||||||||
Other intangible assets | ||||||||||||||
| TAX ASSETS | 19 | |||||||||||||
Current tax assets | ||||||||||||||
Deferred tax assets | ||||||||||||||
| OTHER ASSETS | 20 | |||||||||||||
Insurance contracts linked to pensions | ||||||||||||||
Inventories | ||||||||||||||
Other | ||||||||||||||
| NON-CURRENT ASSETS AND DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE | 21 | |||||||||||||
| TOTAL ASSETS | ||||||||||||||
The Notes are an integral part of the Consolidated Financial Statements.
F-3
Consolidated balance sheets as of December 31, 2025, 2024 and 2023 (continued)
LIABILITIES AND EQUITY (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
| FINANCIAL LIABILITIES HELD FOR TRADING | 10 | |||||||||||||
Derivatives | ||||||||||||||
Short positions | ||||||||||||||
Deposits from central banks | ||||||||||||||
Deposits from credit institutions | ||||||||||||||
Customer deposits | ||||||||||||||
| FINANCIAL LIABILITIES DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS | 12 | |||||||||||||
Deposits from central banks | ||||||||||||||
Deposits from credit institutions | ||||||||||||||
Customer deposits | ||||||||||||||
Debt certificates issued | ||||||||||||||
Other financial liabilities | ||||||||||||||
Memorandum item: Subordinated liabilities | ||||||||||||||
| FINANCIAL LIABILITIES AT AMORTIZED COST | 22 | |||||||||||||
Deposits from central banks | ||||||||||||||
Deposits from credit institutions | ||||||||||||||
Customer deposits | ||||||||||||||
Debt certificates issued | ||||||||||||||
Other financial liabilities | ||||||||||||||
Memorandum item: Subordinated liabilities | ||||||||||||||
| DERIVATIVES - HEDGE ACCOUNTING | 15 | |||||||||||||
| FAIR VALUE CHANGES OF THE HEDGED ITEMS IN PORTFOLIO HEDGES OF INTEREST RATE RISK | 15 | |||||||||||||
| LIABILITIES UNDER INSURANCE AND REINSURANCE CONTRACTS | 23 | |||||||||||||
| PROVISIONS | 24 | |||||||||||||
Pensions and other post-employment defined benefit obligations | ||||||||||||||
Other long-term employee benefits | ||||||||||||||
Provisions for taxes and other legal contingencies | ||||||||||||||
Commitments and guarantees given | ||||||||||||||
Other provisions | ||||||||||||||
| TAX LIABILITIES | 19 | |||||||||||||
Current tax liabilities | ||||||||||||||
Deferred tax liabilities | ||||||||||||||
| OTHER LIABILITIES | 20 | |||||||||||||
| LIABILITIES INCLUDED IN DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE | 21 | |||||||||||||
| TOTAL LIABILITIES | ||||||||||||||
The Notes are an integral part of the Consolidated Financial Statements.
F-4
Consolidated balance sheets as of December 31, 2025, 2024 and 2023 (continued)
LIABILITIES AND EQUITY (CONTINUED) (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
| SHAREHOLDERS’ FUNDS | ||||||||||||||
| Capital | 26 | |||||||||||||
Paid up capital | ||||||||||||||
Unpaid capital which has been called up | ||||||||||||||
| Share premium | 27 | |||||||||||||
| Equity instruments issued other than capital | ||||||||||||||
| Other equity | ||||||||||||||
| Retained earnings | 28 | |||||||||||||
| Revaluation reserves | ||||||||||||||
| Other reserves | 28 | |||||||||||||
Reserves or accumulated losses of investments in joint ventures and associates | ( | ( | ( | |||||||||||
Other | ||||||||||||||
| Less: treasury shares | 29 | ( | ( | ( | ||||||||||
| Profit or loss attributable to owners of the parent | ||||||||||||||
| Less: Interim dividends | 4 | ( | ( | ( | ||||||||||
| ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 30 | ( | ( | ( | ||||||||||
| Items that will not be reclassified to profit or loss | ( | ( | ( | |||||||||||
Actuarial gains (losses) on defined benefit pension plans | ( | ( | ( | |||||||||||
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 | ( | ( | ( | |||||||||||
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 | ( | ( | ||||||||||||
| Items that may be reclassified to profit or loss | ( | ( | ( | |||||||||||
Hedge of net investments in foreign operations (effective portion) | ( | ( | ( | |||||||||||
Foreign currency translation | ( | ( | ( | |||||||||||
Hedging derivatives. Cash flow hedges (effective portion) | ||||||||||||||
Fair value changes of debt instruments measured at fair value through other comprehensive income | ( | ( | ( | |||||||||||
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 | ( | ( | ||||||||||||
| MINORITY INTERESTS (NON-CONTROLLING INTERESTS) | 31 | |||||||||||||
Accumulated other comprehensive income (loss) | ( | ( | ( | |||||||||||
Other items | ||||||||||||||
| TOTAL EQUITY | ||||||||||||||
| TOTAL EQUITY AND TOTAL LIABILITIES | ||||||||||||||
MEMORANDUM ITEM (OFF-BALANCE SHEET EXPOSURES) (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
Loan commitments given | 33 | |||||||||||||
Financial guarantees given | 33 | |||||||||||||
Other commitments given | 33 | |||||||||||||
The Notes are an integral part of the Consolidated Financial Statements.
F-5
Consolidated income statements for the years ended December 31, 2025, 2024 and 2023
CONSOLIDATED INCOME STATEMENTS (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
Interest and other income | 37.1 | |||||||||||||
Interest income using effective interest rate method | ||||||||||||||
Other interest income | ||||||||||||||
Interest expense | 37.2 | ( | ( | ( | ||||||||||
| NET INTEREST INCOME | ||||||||||||||
Dividend income | 38 | |||||||||||||
Share of profit or loss of entities accounted for using the equity method | 39 | |||||||||||||
Fee and commission income | 40 | |||||||||||||
Fee and commission expense | 40 | ( | ( | ( | ||||||||||
Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net | 41 | |||||||||||||
Financial assets at amortized cost | ||||||||||||||
Other financial assets and liabilities | ||||||||||||||
Gains (losses) on financial assets and liabilities held for trading, net | 41 | |||||||||||||
Reclassification of financial assets from fair value through other comprehensive income | ||||||||||||||
Reclassification of financial assets from amortized cost | ||||||||||||||
Other gains (losses) | ||||||||||||||
Gains (losses) on non-trading financial assets mandatorily at fair value through profit or loss, net | 41 | |||||||||||||
Reclassification of financial assets from fair value through other comprehensive income | ||||||||||||||
Reclassification of financial assets from amortized cost | ||||||||||||||
Other gains (losses) | ||||||||||||||
Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net | 41 | |||||||||||||
Gains (losses) from hedge accounting, net | 41 | ( | ( | |||||||||||
Exchange differences, net | 41 | ( | ||||||||||||
Other operating income | 42 | |||||||||||||
Other operating expense | 42 | ( | ( | ( | ||||||||||
Income from insurance and reinsurance contracts | 43 | |||||||||||||
Expense from insurance and reinsurance contracts | 43 | ( | ( | ( | ||||||||||
| GROSS INCOME | ||||||||||||||
Administration costs | ( | ( | ( | |||||||||||
Personnel expense | 44.1 | ( | ( | ( | ||||||||||
Other administrative expense | 44.2 | ( | ( | ( | ||||||||||
Depreciation and amortization | 45 | ( | ( | ( | ||||||||||
Provisions or reversal of provisions | 46 | ( | ( | ( | ||||||||||
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification | 47 | ( | ( | ( | ||||||||||
Financial assets measured at amortized cost | ( | ( | ( | |||||||||||
Financial assets at fair value through other comprehensive income | ( | ( | ||||||||||||
| NET OPERATING INCOME | ||||||||||||||
Impairment or reversal of impairment of investments in joint ventures and associates | 48 | ( | ||||||||||||
Impairment or reversal of impairment on non-financial assets | 49 | ( | ( | |||||||||||
Tangible assets | ( | |||||||||||||
Intangible assets | ( | ( | ( | |||||||||||
Other assets | ( | ( | ( | |||||||||||
Gains (losses) on derecognition of non-financial assets and subsidiaries, net | ||||||||||||||
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 | 50 | ( | ||||||||||||
| PROFIT (LOSS) BEFORE TAX FROM CONTINUING OPERATIONS | ||||||||||||||
Tax expense or income related to profit or loss from continuing operations | 19 | ( | ( | ( | ||||||||||
| PROFIT (LOSS) AFTER TAX FROM CONTINUING OPERATIONS | ||||||||||||||
Profit (loss) after tax from discontinued operations | 21 | |||||||||||||
| PROFIT (LOSS) | ||||||||||||||
| ATTRIBUTABLE TO MINORITY INTERESTS (NON-CONTROLLING INTERESTS) | 31 | |||||||||||||
| ATTRIBUTABLE TO OWNERS OF THE PARENT | ||||||||||||||
The Notes are an integral part of the Consolidated Financial Statements.
F-6
Consolidated income statements for the years ended December 31, 2025, 2024 and 2023 (continued)
EARNINGS (LOSSES) PER SHARE (EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
| EARNINGS (LOSSES) PER SHARE (EUROS) | 5 | |||||||||||||
Basic earnings (losses) per share from continuing operations | ||||||||||||||
Diluted earnings (losses) per share from continuing operations | ||||||||||||||
Basic earnings (losses) per share from discontinued operations | ||||||||||||||
Diluted earnings (losses) per share from discontinued operations | ||||||||||||||
The Notes are an integral part of the Consolidated Financial Statements.
F-7
Consolidated statements of recognized income and expense for the years ended December 31, 2025, 2024 and 2023
CONSOLIDATED STATEMENTS OF RECOGNIZED INCOME AND EXPENSE (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
| PROFIT (LOSS) RECOGNIZED IN INCOME STATEMENT | |||||||||||
| OTHER RECOGNIZED INCOME (EXPENSE) | ( | ( | |||||||||
| ITEMS NOT SUBJECT TO RECLASSIFICATION TO INCOME STATEMENT | ( | ( | |||||||||
Actuarial gains (losses) from defined benefit pension plans | ( | ( | ( | ||||||||
Non-current assets and disposal groups held for sale | |||||||||||
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 | ( | ||||||||||
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 | ( | ( | ( | ||||||||
Income tax related to items not subject to reclassification to income statement | |||||||||||
| ITEMS SUBJECT TO RECLASSIFICATION TO INCOME STATEMENT | ( | ( | |||||||||
| Hedge of net investments in foreign operations (effective portion) | ( | ( | |||||||||
Valuation gains (losses) taken to equity | ( | ( | |||||||||
Transferred to profit or loss | |||||||||||
Other reclassifications | |||||||||||
| Foreign currency translation | ( | ( | |||||||||
Translation gains (losses) taken to equity | ( | ( | |||||||||
Transferred to profit or loss | |||||||||||
Other reclassifications | |||||||||||
| Cash flow hedges (effective portion) | ( | ||||||||||
Valuation gains (losses) taken to equity | ( | ||||||||||
Transferred to profit or loss | |||||||||||
Transferred to initial carrying amount of hedged items | |||||||||||
Other reclassifications | |||||||||||
| Hedging instruments (non-designated elements) | ( | ||||||||||
Valuation gains or losses taken to equity | ( | ||||||||||
Transferred to profit or loss | |||||||||||
Other reclassifications | |||||||||||
| Debt securities at fair value through other comprehensive income | ( | ||||||||||
Valuation gains (losses) taken to equity | ( | ||||||||||
Transferred to profit or loss | ( | ( | ( | ||||||||
Other reclassifications | |||||||||||
| Non-current assets and disposal groups held for sale | |||||||||||
Valuation gains (losses) taken to equity | |||||||||||
Transferred to profit or loss | |||||||||||
Other reclassifications | |||||||||||
| Entities accounted for using the equity method | ( | ||||||||||
| Income tax relating to items subject to reclassification to income statements | ( | ( | |||||||||
| TOTAL RECOGNIZED INCOME (EXPENSE) | |||||||||||
Attributable to minority interests (non-controlling interests) | |||||||||||
| Attributable to the parent company | |||||||||||
The Notes are an integral part of the Consolidated Financial Statements.
F-8
Consolidated statements of changes in equity for the years ended December 31, 2025, 2024 and 2023
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (MILLIONS OF EUROS) | ||||||||||||||||||||||||||||||||||||||||||||
Capital (Note 26) | Share premium (Note 27) | Equity instruments issued other than capital | Other Equity | Retained earnings (Note 28) | Revaluation reserves | Other reserves (Note 28) | (-) Treasury shares (Note 29) | Profit or loss attributable to owners of the parent | (-) Interim dividends (Note 4) | Accumulated other comprehensive income (loss) (Note 30) | Minority interests | Total | ||||||||||||||||||||||||||||||||
2025 | Accumulated other comprehensive income (loss) (Note 31) | Other (Note 31) | ||||||||||||||||||||||||||||||||||||||||||
| Balances as of January 1, 2025 ⁽¹⁾ | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Total income/expense recognized | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Other changes in equity | ( | ( | ( | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Issuances of ordinary shares | ||||||||||||||||||||||||||||||||||||||||||||
Issuances of preferred shares | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of other equity instruments | ||||||||||||||||||||||||||||||||||||||||||||
Settlement or maturity of other equity instruments issued | ||||||||||||||||||||||||||||||||||||||||||||
Conversion of debt on equity | ||||||||||||||||||||||||||||||||||||||||||||
Capital reduction | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Dividend distribution | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Purchase of treasury shares | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Sale or cancellation of treasury shares | ||||||||||||||||||||||||||||||||||||||||||||
Reclassification of other equity instruments to financial liabilities | ||||||||||||||||||||||||||||||||||||||||||||
Reclassification of financial liabilities to other equity instruments | ||||||||||||||||||||||||||||||||||||||||||||
Transfers among components of equity | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Increase/Reduction of equity due to business combinations | ||||||||||||||||||||||||||||||||||||||||||||
Share based payments | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Other increases or (-) decreases in equity | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2025 | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
(1) Balances as of December 31, 2024 as originally reported in the Consolidated Financial Statements for the year 2024.
The Notes are an integral part of the Consolidated Financial Statements.
F-9
Consolidated statements of changes in equity for the years ended December 31, 2025, 2024 and 2023 (continued)
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (MILLIONS OF EUROS) | ||||||||||||||||||||||||||||||||||||||||||||
2024 | Capital (Note 26) | Share premium (Note 27) | Equity instruments issued other than capital | Other Equity | Retained earnings (Note 28) | Revaluation reserves | Other reserves (Note 28) | (-) Treasury shares (Note 29) | Profit or loss attributable to owners of the parent | (-) Interim dividends (Note 4) | Accumulated other comprehensive income (loss) (Note 30) | Minority interests | Total | |||||||||||||||||||||||||||||||
Accumulated other comprehensive income (loss) (Note 31) | Other (Note 31) | |||||||||||||||||||||||||||||||||||||||||||
Balances as of January 1, 2024 ⁽1⁾ | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Total income/expense recognized | ( | |||||||||||||||||||||||||||||||||||||||||||
| Other changes in equity | ( | ( | ( | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Issuances of ordinary shares | ||||||||||||||||||||||||||||||||||||||||||||
Issuances of preferred shares | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of other equity instruments | ||||||||||||||||||||||||||||||||||||||||||||
Settlement or maturity of other equity instruments issued | ||||||||||||||||||||||||||||||||||||||||||||
Conversion of debt on equity | ||||||||||||||||||||||||||||||||||||||||||||
Capital reduction | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Dividend distribution | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Purchase of treasury shares | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Sale or cancellation of treasury shares | ||||||||||||||||||||||||||||||||||||||||||||
Reclassification of other equity instruments to financial liabilities | ||||||||||||||||||||||||||||||||||||||||||||
Reclassification of financial liabilities to other equity instruments | ||||||||||||||||||||||||||||||||||||||||||||
Transfers among components of equity | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Increase/Reduction of equity due to business combinations | ||||||||||||||||||||||||||||||||||||||||||||
Share based payments | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Other increases or (-) decreases in equity | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
The Notes are an integral part of the Consolidated Financial Statements.
F-10
Consolidated statements of changes in equity for the years ended December 31, 2025, 2024 and 2023 (continued)
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (MILLIONS OF EUROS) | ||||||||||||||||||||||||||||||||||||||||||||
2023 | Capital (Note 26) | Share premium (Note 27) | Equity instruments issued other than capital | Other Equity | Retained earnings (Note 28) | Revaluation reserves | Other reserves (Note 28) | (-) Treasury shares (Note 29) | Profit or loss attributable to owners of the parent | (-) Interim dividends (Note 4) | Accumulated other comprehensive income (loss) (Note 30) | Minority interests | Total | |||||||||||||||||||||||||||||||
Accumulated other comprehensive income (loss) (Note 31) | Other (Note 31) | |||||||||||||||||||||||||||||||||||||||||||
Balances as of January 1, 2023 ⁽¹⁾ | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Effect of changes in accounting policies ⁽2) | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Adjusted initial balance | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Total income/expense recognized | ( | |||||||||||||||||||||||||||||||||||||||||||
| Other changes in equity | ( | ( | ( | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Issuances of ordinary shares | ||||||||||||||||||||||||||||||||||||||||||||
Issuances of preferred shares | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of other equity instruments | ||||||||||||||||||||||||||||||||||||||||||||
Settlement or maturity of other equity instruments issued | ||||||||||||||||||||||||||||||||||||||||||||
Conversion of debt on equity | ||||||||||||||||||||||||||||||||||||||||||||
Capital reduction | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Dividend distribution | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Purchase of treasury shares | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Sale or cancellation of treasury shares | ||||||||||||||||||||||||||||||||||||||||||||
Reclassification of other equity instruments to financial liabilities | ||||||||||||||||||||||||||||||||||||||||||||
Reclassification of financial liabilities to other equity instruments | ||||||||||||||||||||||||||||||||||||||||||||
Transfers among components of equity | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Increase/Reduction of equity due to business combinations | ||||||||||||||||||||||||||||||||||||||||||||
Share based payments | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Other increases or (-) decreases in equity | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
(1) Balances as of December 31, 2022 as originally reported in the Consolidated Financial Statements for the year 2022.
(2) Effects of the application of IFRS 17 (see Note 2.2.8).
The Notes are an integral part of the Consolidated Financial Statements.
F-11
Consolidated statements of cash flows for the years ended December 31, 2025, 2024 and 2023
CONSOLIDATED STATEMENTS OF CASH FLOWS (MILLIONS OF EUROS) | ||||||||||||||
2025 | 2024 | 2023 | ||||||||||||
| A) CASH FLOWS FROM OPERATING ACTIVITIES | ( | ( | ||||||||||||
| Of which hyperinflation effect from operating activities (see Note 2.2.18) | ||||||||||||||
| Profit for the year | ||||||||||||||
| Adjustments to obtain the cash flow from operating activities | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Other adjustments | ||||||||||||||
| Net increase/decrease in operating assets | ( | ( | ( | |||||||||||
Financial assets held for trading | ( | ( | ||||||||||||
Non-trading financial assets mandatorily at fair value through profit or loss | ( | ( | ( | |||||||||||
Other financial assets designated at fair value through profit or loss | ( | ( | ||||||||||||
Financial assets at fair value through other comprehensive income | ( | |||||||||||||
Financial assets at amortized cost | ( | ( | ( | |||||||||||
Other operating assets | ( | |||||||||||||
| Net increase/decrease in operating liabilities | ||||||||||||||
Financial liabilities held for trading | ( | |||||||||||||
Other financial liabilities designated at fair value through profit or loss | ||||||||||||||
Financial liabilities at amortized cost | ||||||||||||||
Other operating liabilities | ( | ( | ||||||||||||
| Collection/payments for income tax | ( | ( | ( | |||||||||||
| B) CASH FLOWS FROM INVESTING ACTIVITIES | ( | ( | ( | |||||||||||
| Of which hyperinflation effect from investing activities (see Note 2.2.18) | ||||||||||||||
| Investment | ( | ( | ( | |||||||||||
Tangible assets | ( | ( | ( | |||||||||||
Intangible assets | ( | ( | ( | |||||||||||
Investments in joint ventures and associates | ( | ( | ( | |||||||||||
Subsidiaries and other business units | ( | |||||||||||||
Non-current assets classified as held for sale and associated liabilities | ||||||||||||||
Other settlements related to investing activities | ||||||||||||||
| Divestments | ||||||||||||||
Tangible assets | ||||||||||||||
Intangible assets | ||||||||||||||
Investments in joint ventures and associates | ||||||||||||||
Subsidiaries and other business units | ||||||||||||||
Non-current assets classified as held for sale and associated liabilities | ||||||||||||||
Other collections related to investing activities | ||||||||||||||
| C) CASH FLOWS FROM FINANCING ACTIVITIES | ( | ( | ( | |||||||||||
| Of which hyperinflation effect from financing activities (see Note 2.2.18) | ||||||||||||||
| Payments | ( | ( | ( | |||||||||||
Dividend distribution (shareholders remuneration) | ( | ( | ( | |||||||||||
Subordinated liabilities | ( | ( | ( | |||||||||||
Treasury shares amortization | ( | ( | ( | |||||||||||
Treasury shares acquisition | ( | ( | ( | |||||||||||
Other items relating to financing activities | ( | ( | ( | |||||||||||
| Collections | ||||||||||||||
Subordinated liabilities | ||||||||||||||
Treasury shares increase | ||||||||||||||
Treasury shares disposal | ||||||||||||||
Other items relating to financing activities | ||||||||||||||
| D) EFFECT OF EXCHANGE RATE CHANGES | ( | ( | ( | |||||||||||
| E) NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS (A+B+C+D) | ( | ( | ||||||||||||
F) CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR | ||||||||||||||
G) CASH AND CASH EQUIVALENTS AT END OF THE YEAR (E+F) | ||||||||||||||
COMPONENTS OF CASH AND CASH EQUIVALENTS AT END OF THE YEAR (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
Cash | 9 | |||||||||||||
Balance of cash equivalent in central banks | 9 | |||||||||||||
Other financial assets | 9 | |||||||||||||
Less: Bank overdraft refundable on demand | ||||||||||||||
| TOTAL CASH AND CASH EQUIVALENTS AT END OF THE YEAR | ||||||||||||||
The Notes are an integral part of the Consolidated Financial Statements.
F-12
Notes to the Consolidated Financial Statements
1.Introduction, basis for the presentation of the Consolidated Financial Statements, Internal Control over Financial Reporting and other information
1.1Introduction
Banco Bilbao Vizcaya Argentaria, S.A. (hereinafter “the Bank”, "BBVA" or “BBVA, S.A.”), registered with the Company Register of Vizcaya, 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). The Bank´s purpose is to carry out all kinds of activities, operations, acts, contracts and services within the banking business or directly or indirectly related to it, which are permitted or not prohibited by the provisions in force and supplementary activities. Its corporate purpose also includes the acquisition, possession, use and disposal of securities, public offering of acquisition and sale of securities, as well as all types of holdings in any entity or company.
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.
As of December 31, 2025, in addition to the Bank, the BBVA Group had 171 consolidated entities and 38 entities accounted for using the equity method (see Notes 3 and 16 and Appendices I to IV).
The Consolidated Financial Statements of the BBVA Group for the year ended December 31, 2025, were authorized for issue on February 20, 2026.
1.2Basis for the presentation of the Consolidated Financial Statements
The BBVA Group’s Consolidated Financial Statements are presented in compliance with IFRS-IASB (International Financial Reporting Standards as issued by the International Accounting Standards Board (hereinafter “IASB”)), as well as in accordance with the International Financial Reporting Standards endorsed by the European Union (EU-IFRS) applicable as of December 31, 2025, considering the Bank of Spain Circular 4/2017, as well as its successive amendments, and any other legislation governing financial reporting which was, as of the date of preparation of such consolidated financial statements, applicable, and with the format and mark-up requirements established in the EU Delegated Regulation 2019/815 of the European Commission.
The BBVA Group’s Consolidated Financial Statements for the year ended December 31, 2025 were prepared by the Group’s Directors (through the Board of Directors meeting held on February 9, 2026) by applying the principles of consolidation, accounting policies and valuation criteria described in Note 2, so that they present fairly the Group’s total consolidated equity and financial position as of December 31, 2025, together with the consolidated results of its operations and consolidated cash flows generated during the year ended December 31, 2025.
These Consolidated Financial Statements were prepared on the basis of the accounting records kept by the Bank and each of the other entities in the Group. Moreover, they include the adjustments and reclassifications required to harmonize the accounting policies and valuation criteria used by the Group (see Note 2.2).
All effective accounting standards and valuation criteria with a significant effect on the Consolidated Financial Statements were applied in their preparation.
F-13
The amounts reflected in the Consolidated 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 Consolidated 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.
1.3Seasonal nature of income and expense
The nature of the most significant activities carried out by the BBVA Group’s entities is mainly related to typical activities carried out by financial institutions, and are not significantly affected by seasonal factors within the same year.
1.4Responsibility for the information and for the estimates made
The information contained in the BBVA Group’s Consolidated Financial Statements is the responsibility of the Group’s Directors.
Estimates were required to be made at times when preparing these Consolidated 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 7, 13, 14 and 16).
–The assumptions used in the valuation of insurance and reinsurance contracts (see Note 23) to quantify certain provisions (see Note 24) and the actuarial calculation of post-employment benefit liabilities and commitments (see Note 25).
–The useful life and impairment losses of tangible and intangible assets and impairment losses on non-current assets held for sale (see Notes 17, 18, and 21).
–The valuation of goodwill and price allocation of business combinations (see Note 18).
–The fair value of certain unlisted financial assets and liabilities (see Notes 7, 8, 10, 11, 12, 13 and 15).
–The recoverability of deferred tax assets and the estimate of the corporate income tax (see Note 19).
As a general matter, the BBVA Group is working to consider and incorporate into the models used for calculating relevant estimates how climate risk and other climate-related matters may affect the financial statements, cash flows, and the financial performance of the Group. These estimates and judgments are being considered when preparing the financial statements of the BBVA Group and, where relevant, they are mentioned in the corresponding Notes to the Consolidated Financial Statements.
The prevailing geopolitical and economic uncertainties (see Note 7.1) entail a greater complexity in developing reliable estimations and applying judgment. Estimates have been made on the basis of the best available information on the matters analyzed as of December 31, 2025. 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 2025 there were no significant changes in the estimates made as of December 31, 2024 and 2023, other than those indicated in these Consolidated Financial Statements.
1.5BBVA Group’s Internal Control over Financial Reporting
BBVA Group’s consolidated financial statements are prepared under an Internal Control over Financial Reporting (hereinafter "ICFR") model. It provides reasonable assurance with respect to the reliability and the integrity of the consolidated financial statements. It is also aimed to support that the transactions are processed in accordance with the applicable laws and regulations.
F-14
The ICFR model is compliant with the control framework established in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission (hereinafter "COSO"). The COSO 2013 framework sets out five components that constitute the basis of the effectiveness and efficiency of the internal control systems:
–The establishment of an appropriate control framework.
–The assessment of the risks that could arise during the preparation of the financial information.
–The design of the necessary controls to mitigate the identified risks.
–The establishment of an appropriate system of information to detect and report system weaknesses.
–The monitoring over the controls to support correct performance and effectiveness over time.
The ICFR model is a dynamic model that continuously evolves over time to reflect the reality of the BBVA Group’s businesses and processes, as well as the risks that may arise and the controls that mitigate them. This control system is subject to a continuous evaluation coordinated by the internal financial control units located in the different entities of BBVA Group.
In order to ensure the necessary independence of the aforementioned internal financial control units, they are integrated within the Regulation & Internal Control area. This area, whose head reports to the Board of Directors through its Committees, defines and coordinates the entire internal control model of the Group, which is structured around three lines of defense with distinct and independent functions.
Lines of Defense | Responsible Areas | Functions | ||||||
First Line of Defense | Executive areas, depending on the type of risk | Executive areas, depending on the type of risk Manage and control the risks (financial and/or non-financial, as applicable) to which the Bank and any companies in its Group are exposed in the performance of their functions, including identification, measurement, monitoring, and reporting. This management and control will be carried out in accordance with the guidelines defined in external regulations and internal rules, and taking into account the challenge carried out by the areas that perform second and third line of defense functions, in their respective areas of responsibility. | ||||||
Second Line of Defense | Global Risk Management (GRM) Regulation & Internal Control (R&IC) | Independently of the first line of defense, it must identify, measure, and monitor and report the Group's risks. Establish (or propose to the corporate bodies for approval) the management and control frameworks for financial and/or non-financial risks by all executive areas of the Bank within their respective areas of competence. Challenge the way executive areas manage and/or control the risks assigned to them throughout their life cycle. Carry out reviews of the management and control of risks within the Group. | ||||||
Third Line of Defense | Internal Audit | Carry out independent reviews on how the other executive areas perform their functions of the first and second lines of defense for the management and/or control of risks in the Group. | ||||||
Specifically, with regard to the process of preparing the Group’s financial statements, the Internal Financial Control (RCS Finance) area coordinates the various control units — first and second lines of defense — under a common and standardized methodology established at the corporate level, in accordance with the following framework:
F-15
The ICFR model includes both the controls related to the financial information generation processes, as well as those of a broader scope, designed to improve the Group's general control environment (ELC or Entity Level Control). Both types of controls are assessed on a regular basis by the Control areas and by the Group's Internal Audit unit. The result of their evaluation is reported to the Audit Committee of the Bank’s Board of Directors.
The BBVA Group also complies with the requirements of the Sarbanes-Oxley Act ("SOX") for the preparation of the consolidated financial statements, as a company with securities registered with the U.S. Securities and Exchange Commission ("SEC").
2.Principles of consolidation, accounting policies and measurement bases applied and recent IFRS pronouncements
The Glossary includes the definition of some of the financial and economic terms used in Note 2 and subsequent Notes of the Consolidated Financial Statements.
2.1Principles of consolidation
In terms of its consolidation, the Financial Statements of the BBVA Group are comprised of four types of entities: subsidiaries, joint ventures, associates and structured entities, defined as follows:
–Subsidiaries
Subsidiaries are entities controlled by the Group (for definition of control, see Glossary).
Generally, there is a presumption that a majority of voting rights gives rise to control. When the Group holds less than the majority of the voting rights or similar rights in an entity, the Group considers all relevant facts and circumstances in assessing whether it has control over the entity, including:
–Contractual arrangements with other holders of voting rights.
–The rights arising from other contractual arrangements.
–The Group's voting rights and potential voting rights.
There are certain entities that, although the Group holds less than 50% of the voting rights in them, are considered to be subsidiaries because the Group has the ability to exercise control over them (see Appendix I).
F-16
The financial statements of the subsidiaries are fully consolidated with those of the Bank through the full consolidation method, which consists of the aggregation of assets, liabilities and equity, income and expenses, of a similar nature, shown in their individual financial statements. Intragroup assets and liabilities, equity, income and expenses and cash flows related to intragroup transactions are eliminated in consolidation.
The share of non-controlling interests from subsidiaries in the Group’s consolidated total equity is presented under the heading “Minority interests (Non-controlling interests)” in the consolidated balance sheet. Their share in the profit or loss for the period or year is presented under the heading “Attributable to minority interests (non-controlling interests)” in the consolidated income statement (see Note 31).
Note 3 includes information related to the main subsidiaries in the Group as of December 31, 2025, 2024 and 2023. Appendix I includes other significant information on such entities.
–Joint ventures
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).
The investments in joint ventures are accounted for using the equity method (see Note 16). Appendix II shows the main figures for the main joint ventures accounted for using the equity method as of December 31, 2025.
–Associates
Associates are entities in which the Group is able to exercise significant influence (for definition, see Glossary), but not control or joint control. Significant influence is deemed to exist when the Group owns 20% or more of the voting rights of an investee directly or indirectly, unless it can be clearly demonstrated that this is not the case.
The Group evaluates the existence of significant influence, not only based on the voting rights but also qualitative factors such as presence on the board of directors, participation in decision-making processes, exchange of management personnel, as well as access to technical information. Regarding joint agreements, in addition to evaluating the rights and obligations of the parties thereto, other facts and circumstances are considered to determine whether an agreement is a joint venture or a joint operation. When the sale or contribution of a controlled business to an associate or joint venture occurs, the Group recognizes any retained interest at fair value. The difference between the book value of the business contributed and the fair value of the retained investment plus the corresponding disposal is fully recognized in the income statement.
Certain entities in which the Group owns 20% or more of the voting rights are not included as Group associates, since the Group does not have the ability to exercise significant influence over these entities. Investments in these entities are classified as “Non-trading financial assets mandatorily at fair value through profit or loss” (see Note 11) or "Financial assets at fair value through other comprehensive income" (see Note 13).
In contrast, some investments in entities in which the Group holds less than 20% of the voting rights are accounted for as Group associates, as the Group is considered to have the ability to exercise significant influence over these entities. As of December 31, 2025, 2024 and 2023, these entities are not significant to the Group.
Associates are valued for by the equity method. These entities are initially recognized at cost and subsequently adjusted according to the changes in the Group's share of the net assets of such entities after their acquisition (see Note 16). The Group's income statement reflects the proportion of the results generated by associates in the line "Results of entities accounted for using the equity method". The main figures of the most significant entities are shown in Appendix II.
–Structured entities
A structured entity (see Glossary) 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 the voting rights relate to administrative matters only and the relevant activities are directed by means of contractual arrangements.
F-17
In those cases where the Group sets up entities or has a holding in such entities, in order to allow its customers access to certain investments, to transfer risks or for other purposes, in accordance with internal criteria and procedures and with applicable regulations, the Group determines whether control over the entity in question actually exists and therefore whether it should be subject to consolidation.
Such methods and procedures determine whether there is control by the Group, considering how the decisions are made about the relevant activities, assessing whether the Group has control over the relevant elements, exposure to variable returns from involvement with the investee and the ability to use control over the investee to affect the amount of the investor’s returns.
– Structured entities subject to consolidation
To determine if a structured entity is controlled by the Group, and therefore should be consolidated into the Group, the existing contractual rights (different from the voting rights) are analyzed. For this reason, an analysis of the structure and purpose of each investee is performed and, among others, the following factors will be considered:
a.Evidence of the current ability to manage the relevant activities of the investee according to the specific business needs (including any decisions that may arise only in particular circumstances).
b.Potential existence of a special relationship with the investee.
c.Implicit or explicit Group commitments to support the investee.
d.The ability to use the Group´s power over the investee to affect the amount of the Group’s returns.
These types of entities include cases where the Group has a high exposure to variable returns and retains decision-making power over the investee, either directly or through an agent.
The main structured entities of the Group are the asset securitization funds, to which the BBVA Group transfers loans and advances, and other vehicles, which allow the Group’s customers to gain access to certain investments or to allow for the transfer of risks or for other purposes (see Appendices I and V).
The BBVA Group maintains the decision-making power over the relevant activities of these structured entities subject to consolidation and provides financial support through contracts, as is standard in the securitization market.
The most common ones are investment positions in equity tranches of notes; funding through subordinated debt; credit enhancements through derivative instruments or liquidity lines; management rights of defaulted securitized assets; “clean-up” call derivatives; and asset repurchase clauses by the grantor.
For these reasons, the loans and receivable portfolios related to the majority of the securitizations carried out by the Bank or Group subsidiaries are not derecognized in the books of said entity and the issuances of the related debt securities are recorded as liabilities within the Group’s consolidated balance sheet.
For additional information on the accounting treatment for the transfer and derecognition of financial instruments, see Note 2.2.2. “Transfers and derecognition of financial assets and liabilities”.
–Non-consolidated structured entities
The Group owns other vehicles also for the purpose of allowing customers access to certain investments, to transfer risks, and for other purposes, but without the Group having control of the vehicles, which are not consolidated in accordance with IFRS 10 – “Consolidated Financial Statements”. The balance of assets and liabilities of these vehicles is not material in relation to the Group’s Consolidated Financial Statements.
As of December 31, 2025, 2024 and 2023 there was no material financial support from the Bank or its subsidiaries to non-consolidated structured entities.
F-18
The Group does not consolidate any of the mutual funds it manages since the necessary control conditions are not met. Particularly, the BBVA Group does not act as arranger but as agent since it operates the mutual funds on behalf and for the benefit of investors or parties (arranger or arrangers) and, for this reason it does not control the mutual funds when exercising its authority for decision making.
The mutual funds managed by the Group are not considered structured entities (generally, retail funds without corporate identity over which investors have participations which gives them ownership of said managed equity). These funds are not dependent on a capital structure that could prevent them from carrying out activities without additional financial support, being in any case insufficient as far as the activities themselves are concerned. Additionally, the risk of the investment is absorbed by the fund participants, and the Group is only exposed when it becomes a participant, and as such, there is no other risk for the Group.
In all cases, the operating results of equity method investees acquired by the BBVA Group in a particular period only include the period from the date of acquisition to the financial statements date. Similarly, the results of entities disposed of during any year only include the period from the start of the year to the date of disposal.
The consolidated financial statements of subsidiaries, associates and joint ventures used in the preparation of the Consolidated Financial Statements of the Group have the same presentation date as the Consolidated Financial Statements. If financial statements at those same dates are not available, the most recent will be used, as long as these are not older than three months, and will be adjusted to take into account the most significant transactions. As of December 31, 2025, financial statements as of December 31 of all Group entities were utilized except in the case of the consolidated financial statements of nine non-significant entities for which financial statements as of November 30, 2025 were used.
Business combinations
A business combination is a transaction, or any other deal, by which the Group obtains control over one or more businesses, accounting for by applying the “acquisition method”.
According to this method, the acquirer has to recognize the assets acquired and the liabilities and contingent liabilities assumed, including those that the acquired entity had not accounted for. The method involves the measurement of the consideration received for the business combination and its allocation to the assets, liabilities and contingent liabilities measured according to their fair value, at the purchase date, as well as the recognition of any non-controlling participation (minority interests) that may arise from the transaction.
The acquirer shall recognize an asset in the consolidated balance sheet under the heading “Intangible assets - Goodwill” (see Note 2.2.7) if on the acquisition date there is a positive difference between:
–the sum of the consideration paid, the amount of all the minority interests and the fair value of the stock previously held in the acquired business; and
–the fair value of the assets acquired and liabilities assumed.
If this difference is negative, it shall be recognized directly in the income statement under the heading “Negative goodwill recognized in profit or loss”.
Minority interests in the acquired entity may be measured in two ways: either at their fair value; or at the proportional percentage of net assets identified in the acquired entity. The method of valuing minority interests may be elected in each business combination. BBVA Group has always elected the second method.
2.2Accounting principles and policies and applied valuation methods
The accounting principles and policies and the valuation methods applied in the preparation of the consolidated financial statements may differ from those used, at the individual level, by some of the entities that are part of the BBVA Group; This is why, in the consolidation process, the necessary adjustments and reclassifications are made to standardize such principles and criteria among themselves and bring them into line with the IFRS-IASB.
F-19
In preparing the Consolidated Financial Statements, the following accounting principles and policies and assessment criteria have been applied:
2.2.1Financial instruments
On January 1, 2018, IFRS 9, which replaced IAS 39 with respect to the classification and measurement of financial assets and liabilities, credit impairment, and hedge accounting, came into force. At that time, the Group chose to continue applying IAS 39 for hedge accounting, as permitted by IFRS 9. However, the Group then decided to apply the requirements of IFRS 9 to micro hedge accounting from January 1, 2025.
Given the lack of a specific regulatory framework for macro hedges in IFRS 9, the Group continues to apply the framework established under IAS 39 for macro hedge accounting. Thus, from January 1, 2025, the Group will apply simultaneously two standards with common characteristics for hedge accounting (IAS 39 for macro hedges and IFRS 9 for micro hedges) until the International Accounting Standards Board (IASB) concludes the project to develop a specific framework for macro hedge accounting, known as the IFRS 9. Risk Mitigation Accounting (RMA) Project.
The adoption of the accounting policy for accounting for micro hedges in accordance with the requirements set out in IFRS 9 has not had any significant impact on the Group´s Consolidated Financial Statements as of the date of its implementation.
Classification and measurement of financial assets
Classification of financial assets
IFRS 9 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 Group manages groups of financial assets and does not depend on the intention for an individual instrument. Thus, for each entity within the BBVA Group there are different business models for managing assets.
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.
–The frequency, amount and timing of sales in previous years, the reasons for such sales and expectations regarding future sales.
In this sense, the Group has established policies and has developed procedures in each geographical area 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 to satisfy liquidity needs, are compatible with the amortized cost model.
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.
F-20
The most significant judgments used by the Group 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 (e.g., 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.
F-21
–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 (e.g., securitizations) 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.
In the specific case of loans granted by the BBVA Group where the financial remuneration is linked to the compliance with certain environmental, social and governance (hereinafter "ESG") conditions and criteria, the Group considers that the impact of compliance with the ESG criteria on the interest rate applied to the transactions is very limited and, therefore, meets the condition that it has a minimal effect on cash flows. Therefore, the existence of these ESG-linked clauses would not entail non-compliance with the aforementioned SPP 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 within 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 the Group 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 Group 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.
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Measurement of financial assets
All financial instruments are initially recognized at fair value, plus, those transaction costs which are directly attributable to the 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 and other income" or "Interest expense", of the consolidated income statement of the year in which the accrual occurred (see Note 37), 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 assets.
“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 to generate short-term results. The financial assets recorded in the heading “Non-trading financial assets mandatorily at fair value through profit or loss" either have contractual cash flows that do not met the conditions of the SPPI test, or are not covered by a business model whose objective is either (i) to hold financial assets to collect contractual cash flows or (ii) achieved by collecting contractual cash flows and selling financial assets. Financial assets are classified in “Financial assets designated at fair value through profit or loss” only if such classification 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 consolidated 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 consolidated income statement (see Note 41).
"Financial assets at fair value through other comprehensive income”
–Debt instruments
Assets recognized under this heading in the consolidated 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 consolidated balance sheets (see Note 30).
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 Group's consolidated equity until the corresponding asset is derecognized from the consolidated 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 consolidated income statements (see Note 41).
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 or net gains by modification - Financial assets at fair value through other comprehensive income” (see Note 47) in the consolidated income statement for the year. Interest income on these instruments is recorded in the consolidated income statement (see Note 37). Changes in foreign exchange rates are recognized under the heading “Exchange differences, net" in the consolidated income statements (see Note 41).
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–Equity instruments
At the time of initial recognition of specific investments in equity instruments, the BBVA Group may make the irrevocable decision to present subsequent changes in fair value in other comprehensive income. Subsequent changes in this valuation will be recognized in "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" (see Note 30). Dividends received from these investments are recorded in the heading "Dividend income" in the consolidated income statement (see Note 38). These instruments are not subject to the impairment model of IFRS 9.
“Financial assets at amortized cost”
The assets under this category are subsequently measured at amortized cost, after initial recognition, using the "effective interest rate" method. In the case of floating rate instruments, including inflation-linked bonds, the periodic updates of cash flows to reflect the movement of interest rates and inflation impact the effective interest rate prospectively.
Net loss allowances of assets recorded under these headings arising in each year, calculated using the IFRS 9 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 consolidated income statement for such year (see Note 47).
Classification 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 Group’s objective is to generate gains by buying and selling these financial instruments or generate short-term results; and
–Financial liabilities that are designated at fair value through profit or loss on initial recognition under the Fair Value Option. The Group 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 consolidated income statement for the year in which the accrual occurred (see Note 37), 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.
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“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 consolidated 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 consolidated income statements (see Note 41). 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”, 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, the Group 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.
“Derivatives – Hedge Accounting” and “Fair Value Changes of the Hedged Items in Portfolio Hedges of Interest Rate Risk”
With the aim of improving the alignment between risk management and its presentation in the financial statements, the Group has decided to apply IFRS 9 for micro hedge accounting, instead of IAS 39, from January 1, 2025. Prior to the transition date, the Group was applying IAS 39 for micro hedge accounting.
The Group uses hedging derivatives as a tool for managing financial risks, mainly interest rate risk and exchange rate risk(see Note 7).
To cover these risks, the Group uses, among others, the following hedging instruments:
–Interest rate derivatives to convert interest rate exposures into fixed or variable rates.
–Foreign exchange derivatives to convert foreign currency exposures to the entity's currency and net investment exposures to the local currency.
In some hedging relationships, the Group additionally designates inflation risk as a contractually specified component of a debt instrument (e.g., inflation-linked bonds).
For these economic hedges to be recognized as hedge accounting, they must meet certain requirements established under both IAS 39 and IFRS 9. These requirements include clear identification of the hedged items and hedging instruments, an assessment of the hedge's effectiveness over time, and adequate documentation supporting the Group's intention to manage its risk through these instruments. Only when these criteria are met can financial derivatives be accounted for as hedge accounting, allowing for an accounting treatment that more accurately reflects the Group's risk management strategy (see Note 15).
Hedge accounting maintains a similar accounting scheme under both IAS 39 and IFRS 9. Hedge ineffectiveness, defined as the difference between the change in value of the hedging instrument and the hedged item attributable to the hedged risk in each period is recorded in the consolidated income statement (or other comprehensive income, if the hedging instrument hedges an equity instrument for which an entity has elected to present changes in fair value in other comprehensive income) (see Notes 15 and 41).
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The Group discontinues hedge accounting when the hedging instrument expires or is sold, or when the hedging relationship no longer meets the qualifying criteria. However, if a hedge no longer meets the qualifying criteria but the risk management objective remains unchanged, IFRS 9 allows the Group to assess whether to adjust the hedge ratio in order to re-establish compliance with the effectiveness requirements.
Under IAS 39, hedge effectiveness is assessed both retrospectively and prospectively, ensuring that it remains within a range of 80% to 125%. However, IFRS 9 eliminates the strict 80%-125% effectiveness range requirement, allowing qualitative prospective assessments if there is an economic relationship between the hedged item and the hedging instrument, and credit risk does not exert a dominant effect on changes in the value of either the hedged item or the hedging instrument. The BBVA Group has chosen to continue applying the 80%-125% range as a measure for assessing hedge effectiveness, and may rebalance the hedge without discontinuing hedges if this range is not maintained, as described below.
The variations that occur, after the designation of the hedge, in the valuation of the financial instruments designated as hedged items and the financial instruments designated as accounting hedging instruments are recorded as follows:
–In fair value hedges, the differences arising in the fair value of the derivative and the hedged instrument attributable to the hedged risk are recognized directly under the line item ‘Gains (losses) from hedge accounting, net’ in the consolidated income statement. In the specific case of interest rate hedges, interest cash flows are included under the line item ‘Interest and other income’ or under ‘Interest expense’ in the consolidated income statement), or in ’Other comprehensive income (loss)’ if it is a hedge of equity instruments measured at fair value through ’Other comprehensive income (loss)’; with the corresponding entry being recorded in the consolidated balance sheet line items in which the hedging instrument (‘Derivatives – hedge accounting’) or the hedged item is recognized, as applicable (see Note 37).
–In fair value hedges of interest rate risk on a portfolio of financial instruments (“macro hedges”), gains or losses arising from the measurement of the hedging instrument are recognized directly in the consolidated income statement with an offsetting entry made under the heading “Derivatives – Hedge accounting” and gains or losses arising from the change in the fair value of the hedged item (attributable to the hedged risk) are also recorded in the consolidated income statement (in both cases, under the heading “Gains (losses) from hedge accounting, net”), with an offsetting entry made in the heading “Fair value changes of the hedged items in portfolio hedges of interest rate risk” of the asset or liability in the consolidated balance sheet, depending on the nature of the hedged item.
–In cash flow hedges, the valuation differences arising in the effective hedge portion of the hedging items are temporarily recorded 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 consolidated balance sheet, with an offsetting entry made in the "Derivatives - Hedge accounting" headings of the asset or liability sections in the consolidated balance sheet, as applicable. These differences are recognized in the consolidated income statement when the gain or loss on the hedged item is recorded in profit or loss, when the forecast transactions are executed, or on the maturity date of the hedged item. Almost all of the Group's cash flow hedges are interest rate and inflation hedges for financial instruments, so the amount recorded in other accumulated comprehensive income will be reclassified in results under the headings "Interest and other income" or "Interest expense" in the consolidated income statement (see Note 37).
–The differences in the value of the hedging instrument corresponding to the ineffective portion of cash flow hedging transactions are recorded directly under the heading “Gains (losses) from hedge accounting, net” in the consolidated income statement (see Note 41).
–In the hedge of net investments in foreign operations, valuation differences arising in the effective portion of the hedging items are temporarily recorded under the heading "Accumulated other comprehensive income (loss) - Items that may be reclassified to profit or loss - Hedge of net investments in foreign operations (effective portion)" in the consolidated balance sheet, with an offsetting entry made under "Derivatives - Hedge accounting" in the asset or liability sections of the consolidated balance sheet, as applicable. These valuation differences are recognized in the consolidated income statement when the foreign investment is disposed of or removed from the consolidated balance sheet (see Note 41).
The other relevant new features introduced by IFRS 9 and applicable from January 1, 2025, are as follows:
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–It provides flexibility in the items that can be hedged (for example, it enables the hedging of net positions, aggregate positions, and specific risk components in non-financial items).
–It introduces the accounting treatment of "cost of hedging", allowing components of hedging instruments such as forward elements, the time value of options, or the base spread to be excluded from the hedge. These values can be recognized in other comprehensive income, thereby reducing volatility in the consolidated income statement.
–It allows for the rebalancing of hedges without the need for discontinuations in hedge accounting, provided that the relationship between the hedging instrument and the hedged item is adjusted, and that the risk management objective is maintained.
Loss allowances on financial assets
The “expected losses” impairment model is applied to financial assets valued at amortized cost, debt instruments valued at fair value with changes in accumulated other comprehensive income, financial guarantee contracts and other commitments. All financial instruments valued at fair value through profit or loss are excluded from the impairment model.
The standard classifies financial instruments into three categories, which depend on the evolution of their credit risk from the moment of initial recognition and which establish the calculation of the credit risk allowance.
Stage 1 – without significant increase in credit risk
Financial assets which are not considered to have significantly increased in credit risk have loss allowances measured at an amount equal to the expected credit loss that arises from all possible default events within 12 months following the presentation date of the financial statements (12 month expected credit losses).
Stage 2 – significant increases in credit risk
When the credit risk of a financial asset has increased significantly since the initial recognition, the loss allowances of that financial instrument is calculated as the expected credit loss during the entire life of the asset. That is, they are the expected credit losses that result from all possible default events during the expected life of the financial instrument.
Stage 3 – impaired
When there is objective evidence that the instrument is credit-impaired, the financial asset is transferred to this category in which the provision for losses of that financial instrument is calculated, as in Stage 2, as the expected credit loss during the entire life of the asset.
When the recovery of any recognized amount is considered remote, such amount is written-off on the consolidated balance sheet, without prejudice to any actions that may be taken in order to collect the amount until the rights extinguish in full either because it is time-barred debt, the debt is forgiven, or other reasons.
The BBVA Group 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.
The definition of impaired asset under IFRS 9 is currently aligned with that of default used by the Group both for internal credit risk management and for regulatory purposes, in accordance with the definitions established in the European Banking Authority (hereinafter "EBA") Guidelines and in Article 178 of Regulation (EU) No 575/2013 (CRR). This alignment facilitates the integration of both definitions in credit risk management, giving coherence and consistency in the processes.
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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:
a.Impaired assets for objective reasons or delinquency: when there are unpaid amounts of principal or interest for more than 90 days.
According to IFRS 9, the 90-days past due default is a presumption that can be rebutted in those cases where the entity considers, based on reasonable and supportable information, that it is appropriate to use a longer term. As of December 31, 2025, the Group has not used terms exceeding 90 days past due.
b.Impaired assets for subjective reasons (other than delinquency): when circumstances are identified that show, even in the absence of defaults, that it is not probable that the debtor will fully comply with its financial obligations. For this purpose, the following indicators are considered, among others:
–Significant financial difficulties of the issuer or the borrower.
–Granting by the lender or lenders to the borrower, for economic or contractual reasons related to the latter's financial difficulties, of concessions or advantages that they would not have otherwise granted.
–Breach of contractual clauses, such as events of default or default.
–Increasing probability that the borrower will go into bankruptcy or some other situation of financial reorganization.
–Disappearance of an active market for the financial asset due to financial difficulties.
–Others that may affect the committed cash flows such as the loss of the debtor's license or that it has committed fraud.
–Generalized delay in payments. In any case, this circumstance exists when, during a continuous period of 90 days prior to the reporting date, a material amount has remained unpaid.
–Sales of credit exposures of a client with a significant economic loss will imply that the rest of its operations are considered impaired.
Relating to the granting of concessions due to financial difficulties, it is considered that there is an indicator of unlikeliness to pay, and therefore the client must be considered impaired, when the refinancing or restructuring measures may result in a diminished financial obligation caused by a forgiveness or material deferral of principal, interest or fees. Specifically, unless proven otherwise, transactions that meet any of the following criteria will be reclassified to the category of impaired assets:
a.Irregular repayment schedule.
b.Contractual clauses that delay the repayment of the loan through regular payments. Among others, grace periods of more than two years for the amortization of the principal will be considered clauses with these characteristics.
c.Amounts of principal or interest written off from the balance sheet as its recovery is considered remote.
In any case, a restructuring will be considered impaired when the reduction in the net present value of the financial obligation is greater than 1%.
Credit risk management for wholesale counterparties is carried out at the customer (or group) level. For this reason, the classification of any of a client's material exposures as impaired, whether due to more than 90 days of default or due to any of the subjective criteria, implies the classification as impaired of all the client's exposures.
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Regarding retail clients, which are managed at the individual loan level, the scoring systems review their score, among other factors, in the event of a 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 Group 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 transactions involving entities related to a client enter stage 3, including entities of the same group and entities holding a relationship of economic or financial dependence, the transactions of the client will also be classified as stage 3, if reasonable doubts as to the full payment of their loans is determined to exist following the relevant analysis.
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 Note 7.2.7 for more details).
These criteria are aligned in all the geographical areas of the Group, maintaining only minor differences to facilitate the integration of management at the local level.
–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 Group 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 7.2.1):
–Quantitative criterion: the Group 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 Group's systems through rating and scoring systems or macroeconomic scenarios, so the quantitative analysis covers the majority of circumstances. The Group 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. According to IFRS 9, 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, 2025, the Group 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 still exist.
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Although the standard introduces a series of operational simplifications, also known as practical solutions, for analyzing the increase in significant risk, the Group 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 to contracts with a current annualized probability of default (PD) of less than 0.3%. 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
The measurement of expected losses must reflect:
–a considered and unbiased amount, determined by evaluating a range of possible results;
–the time value of money; and
–reasonable and supportable information that is available without undue cost or effort and that reflects current conditions and forecasts of future economic conditions.
Expected losses are measured both individually and collectively.
The individualized estimate of credit losses results from calculating the difference between the expected cash flows discounted at the effective interest rate of the transaction and the carrying amount of the instrument (see Note 7.2.1).
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 7.2.1):
–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.
–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.
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–EAD: estimate of the exposure in case of default in each future period, taking into account the changes in exposure after the closing date of the financial statements.
–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 the BBVA Group, the calculated expected credit losses are based on internal models developed for all portfolios within the IFRS 9 scope, 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
IFRS 9 requires incorporation of present, past and future information to detect any significant increase in risk and measure expected loss, 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, the Group generally evaluates the linear relationship between its estimated loss parameters (PD, LGD and EAD) with the historical and future forecasts of the macroeconomic scenarios.
Additionally, when there is no linear relation between the different future economic scenarios and their associated expected losses, more than one future economic scenario must be used for the measurement.
The approach taken by the Group 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 Group'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 for each of the geographical areas in which the Group operates are the Gross Domestic Product (hereinafter "GDP"), the real estate price index, interest rates and the unemployment rate. The main goal of the Group's approach is seeking the greatest predictive capacity with respect to the first two variables (see Note 7.2.1).
Derecognition of the balance due to impairment of 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 client involved in the operation.
Based on their procedures and particularities, the Group entities recognize financial assets 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 debt 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 a financial asset 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 7.2.5).
2.2.2Transfers 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 consolidated balance sheet when the cash flows that they generate are extinguished, when their implicit risks and benefits have been substantially transferred to third parties or 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 consolidated balance sheet, and any right or obligation retained or created as a result of the transfer is simultaneously recognized.
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Similarly, financial liabilities are derecognized from the consolidated balance sheet only if their obligations are extinguished or acquired (with a view to subsequent cancellation or renewed placement).
The Group 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.
Treatment of securitizations
The securitizations funds to which the Group entities transfer their credit portfolios are consolidated entities of the Group. For more information, refer to Note 2.1 “Principles of consolidation”.
The Group considers that the risks and benefits of the securitizations are substantially retained if the subordinated bonds are held and/ or if subordination funding has been granted to those securitization funds, which means that the credit loss risk of the securitized assets will be assumed. Consequently, the Group is not derecognizing those transferred loan portfolios.
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 Group. The Group has established the synthetic securitizations through received financial guarantees. As for the commissions paid, they are accrued during the term of the financial guarantee.
2.2.3Financial guarantees
Financial guarantees are considered to be those contracts that require their issuer to make specific payments to reimburse the holder of the financial guarantee for a loss incurred when a specific borrower breaches its payment obligations on the terms – whether original or subsequently modified – of a debt instrument, irrespective of the legal form it may take. Financial guarantees may take the form of a deposit, bank guarantee, insurance contract or credit derivative, among others.
In their initial recognition, financial guarantees are recognized as liabilities in the consolidated 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 Group simultaneously recognizes a corresponding asset in the consolidated 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 2.2.1).
The provisions recognized for financial guarantees are recognized under the heading “Provisions - Provisions for contingent risks and commitments” on the liability side in the consolidated balance sheets (see Note 24). These provisions are recognized and reversed with a charge or credit, respectively to “Provisions or reversal of provision” in the consolidated income statements (see Note 46).
Income from financial guarantees is recorded under the heading “Fee and commission income” in the consolidated income statement and is calculated by applying the rate established in the related contract to the nominal amount of the guarantee (see Note 40).
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2.2.4Tangible 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 Group and that it expects to hold for more than one year. It also includes tangible assets received by the Group 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 17).
The Group 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 45) and is the result of using the following depreciation rates:
GENERAL DEPRECIATION RATES FOR TANGIBLE ASSETS | |||||
Type of assets | Annual Percentage | ||||
Buildings for own use | |||||
Furniture | |||||
Fixtures | |||||
Office supplies and hardware | |||||
Lease use rights | |||||
At each reporting date, the Group 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 Group 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 with the offsetting entry recorded to the heading “Impairment or reversal of impairment of non-financial assets - Intangible assets” of the consolidated income statement (see Note 49).
In the BBVA Group, most of the buildings held for own use are assigned to the different Cash Generating Units (hereinafter "CGUs") to which they belong. The corresponding impairment analyses are performed for these CGUs to determine whether sufficient cash flows are generated to support the value of the assets comprised within such CGUs.
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 44.2).
Additionally, for those geographical areas with subsidiaries where the Group applies IAS 29 "Financial Reporting in Hyperinflationary Economies", this type of asset is adjusted, at each balance sheet date, to show variations in the purchasing power of the currency due to inflation from the date of acquisition or inclusion in the consolidated balance sheet (see Note 2.2.18).
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2.2.5Leases
In general, the Group 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 17), and a lease liability (its obligation to make lease payments) under ''Financial liabilities at amortized cost - Other financial liabilities'' (see Note 22.5). The BBVA Group 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 expense" (see Note 42) 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 is subsequently reduced by accumulated amortization and accumulated impairment. The Group 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 45).
The interest expense on the lease liability is recorded under the heading “Interest expense” (see Note 37.2). Variable payments not included in the initial measurement of the lease liability are recorded under the heading “Administration costs – Other administrative expense” (see Note 44.2).
Operating lease and sublease incomes are recognized in the consolidated income statements under the headings “Other operating income” (see Note 42).
On the other hand, when the Group 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 14).
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 17). 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 expense", respectively (see Note 42).
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 consolidated income statement at the time of sale (only for the effectively transmitted part).
The assets leased out under operating lease contracts to other entities in the Group are treated in the consolidated financial statements as for own use, and thus rental expense and income is eliminated in consolidation and the corresponding depreciation is recognized.
Additionally, for those geographical areas with subsidiaries where the Group applies IAS 29 "Financial Reporting in Hyperinflationary Economies", this type of asset is being adjusted to show changes in the purchasing power of the currency due to inflation from the date of acquisition or inclusion in the consolidated balance sheet (see Note 2.2.18).
2.2.6Non-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 geographical 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 Group's control, and there is sufficient evidence that the Group remains committed to its plan for sale (see Note 21), in particular, 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.
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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, 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.
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 50). Other income and expenses are classified in the income statement items according to their nature.
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).
Additionally, for those geographical areas with subsidiaries where the Group applies IAS 29 "Financial Reporting in Hyperinflationary Economies", this type of assets is being adjusted to show changes in the purchasing power of the currency due to inflation from the date of acquisition or inclusion in the consolidated balance sheet (see Note 2.2.18).
2.2.7Intangible assets
Goodwill
Goodwill represents the advance payment made by the entity for future economic benefits, from assets that have not been individually identified nor separately recognized in a business combination.
Goodwill is allocated to one or more cash-generating units (CGUs) that are expected to be the beneficiaries of the synergies derived from the business combinations. CGUs represent the smallest identifiable groups of assets that generate cash flows for the Group. Goodwill is not amortized and is periodically tested for impairment (see Note 18), comparing the carrying amount of the relevant CGU - adjusted by the amount of goodwill attributable to minority interests, in the event that the Group has not chosen to measure minority interests at fair value, with its recoverable amount.
The recoverable amount of a CGU is equal to the fair value less sale costs or its value in use, whichever is greater. Value in use is calculated as the discounted value of the cash flow projections that the unit’s management estimates and is based on the latest budgets approved for the coming years. The main assumptions used in its calculation are: a growth rate to extrapolate the cash flows indefinitely, and the discount rate used to discount the cash flows, which is equal to the cost of the capital assigned to each CGU, and equivalent to the sum of the risk-free rate plus a risk premium inherent to the CGU being evaluated for impairment. If the carrying amount of the CGU exceeds the related recoverable amount, the Group recognizes an impairment loss.
Other intangible assets
These assets may have an indefinite useful life if it is concluded that there is no foreseeable limit to the period over which the asset is expected to generate net cash flows for the consolidated entities. In all other cases they have a finite useful life (see Note 18.2).
Intangible assets with indefinite useful lives are not amortized but are tested for impairment at least annually.
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Intangible assets with a finite useful life are amortized according to the duration of this useful life, using methods similar to those used to depreciate tangible assets. Finite useful life intangible assets consist mainly of IT applications acquisition costs which have a useful life, in general, of 5 years. 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 45).
Any impairment losses on the carrying amount of these assets will be recognized under the heading “Impairment or reversal of impairment on non-financial assets- Intangible assets” in the consolidated income statements (see Note 49). The criteria used to recognize the impairment losses on these assets and, where applicable, the recovery of impairment losses recognized in prior years, are similar to those used for tangible assets.
Additionally, for those geographical areas with subsidiaries where the Group applies IAS 29 "Financial Reporting in Hyperinflationary Economies", this type of asset is being adjusted to show changes in the purchasing power of the currency due to inflation from the date of acquisition or inclusion in the consolidated balance sheet (see Note 2.2.18).
2.2.8Insurance and reinsurance contracts
The Group has applied IFRS 17 to insurance contracts as from January 1, 2023. IFRS 17 superseded IFRS 4 as the accounting standard applicable to the recognition, measurement and presentation of contracts that transfer significant insurance risk.
The assets and liabilities of the BBVA Group’s insurance subsidiaries are recognized according to their nature under the corresponding headings of the consolidated balance sheet.
The heading “Insurance and reinsurance assets” in the consolidated balance sheets includes the amounts that the consolidated insurance subsidiaries are entitled to receive under the reinsurance contracts entered into by them with third parties and, more specifically, the value of reinsurance covers in respect of the insurance liabilities recognized by the consolidated subsidiaries.
The heading “Liabilities under insurance and reinsurance contracts” in the consolidated balance sheets includes the liabilities recognized due to insurance contracts recorded by the consolidated subsidiaries in accordance with IFRS 17 (see Note 23).
The income or expense reported by the BBVA Group’s consolidated insurance subsidiaries on their insurance activities is recognized, in accordance with their nature, in the corresponding items of the consolidated income statements.
Definition, grouping and classification
The Group evaluates whether a significant insurance risk from a third party is being accepted in its contracts, when agreeing to compensate the policyholder if a specified uncertain future event adversely affects the policyholder. Thus, it identifies those insurance contracts that fall within IFRS 17. This evaluation was already carried out by the Group under IFRS 4 for the classification of its contracts between insurance contracts and financial liabilities.
The BBVA Group groups insurance contracts considering the following aspects:
–Whether they are subject to similar risks and are managed jointly, separating as well direct insurance and reinsurance contracts.
–Their profitability or onerousness (in general, the Group classifies contracts by their profitability into two groups: onerous contracts, and non-onerous contracts or contracts without a significant possibility of becoming onerous1).
–Their year of issuance or cohort, grouping by this last criterion the contracts issued in the calendar year, i.e., between January 1 and December 31 of each year.
1 There is the possibility of defining three or more onerous groups.
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Since the Group chose the fair value transition approach, for long-term contracts (mainly life-risk and life-saving insurance) issued prior to the transition date of January 1, 2022, it has not been necessary to aggregate the contracts by previous cohorts. For contracts issued after the transition date, the Group classifies them by year of issuance, and therefore, the Group has not accepted the exception provided for in the adoption of the standard by the European Union on annual cohorts in products with matched cash flows2.
The Group has applied the analysis on the separation of non-insurance components only to insurance contracts falling under the scope of IFRS 17, with the entities identifying within their portfolios the existence of non-insurance components, and concluding based on expert judgment whether or not they need to separate them. In the case of non-separable investment components, they are included in the asset or liability, as appropriate, but are excluded from insurance income or expenses in the income statement.
The initial recognition date has been established as the earliest of: the beginning of the coverage period of the group of contracts, the date when the first payment from an insurance policyholder in the group became due, or in the case of a group of onerous contracts, when the group becomes onerous. From that date, the insurance and reinsurance contracts have been reflected in the consolidated financial statements and valued in accordance with the provisions of IFRS 17.
The Group derecognizes insurance contracts when the contract expires, that is, upon expiration of the contract or upon settlement of all the benefits of the contract or upon its cancellation; or when a modification is made to the terms of the contract that gives rise to derecognition.
Valuation methods
The Group carries out an analysis of the limits of insurance and reinsurance contracts under IFRS 17, separately, applying the General Model (Building Block Approach) by default to all contracts, except those eligible to be valued by the Simplified Model (Premium Allocation Approach), or the Variable Fee Approach.
The General Model requires that insurance contracts be initially valued for the total of:
–fulfillment cash flows, which comprise the estimation of future cash flows discounted to reflect the time value of money, the financial risk associated, and a risk adjustment for non-financial risk that would represent the compensation required for the uncertainty associated with the amount and timing of the expected cash flows;
–and the contractual service margin (CSM), which represents the expected unearned profit from insurance contracts, which will be recognized in the entity’s income statement as the service is provided in the future, instead of being recognized at the time of the estimation.
Subsequently, the amount recognized in the consolidated balance sheet for each group of insurance contracts measured under this model comprises the liability for remaining coverage, which includes the aforementioned fulfillment cash flows and the contractual service margin, and the liability for incurred claims, which includes the cash flows from related to claims that have occurred, but have not been paid, discounted to reflect the time value of money, the financial risk associated with future cash flows, and a risk adjustment for non-financial risk that would represent the compensation required by the uncertainty associated with the amount and timing of the expected cash flows. The Group uses the General Model for the valuation of liabilities under insurance and reinsurance contracts that correspond to long-term commitments, a portfolio that represents the majority of what is recorded in the balance sheet.
2 Article 2 of Regulation (EU) 2021/2036 of the Commission of November 19, 2021.
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The Group used the Simplified Model in the valuation of the liability for remaining coverage of contracts with a coverage period of one year or less, or in those contracts with a duration of more than one year but which are not expected to have a valuation significantly different from that of the General Model. Under this Simplified Model, the liability for remaining coverage is made up of the premiums received (collected), less the cash flows for the acquisition of the insurance paid, plus or minus the premiums or expected acquisition cash flows recorded in the income statement, respectively. The income statement recording is carried out on a linear basis throughout the coverage period of the contract, in the event that the accrual of income is also accrued. By default, the Group has chosen to defer acquisition expenses, although there is an option to recognize such expenses when they are incurred. In turn, the groups of contracts valued under this model have a liability for incurred claims calculated in a manner similar to that of the General Model. The Group has valued direct insurance contracts whose coverage period is less than one year, using the Simplified Model, the same method used for the valuation of assets for the reinsurance ceded. This model has also been used by the Group when the valuation under this Simplified Model does not differ significantly from that which would be produced by applying the General Model.
The amount of the contracts valued following the Variable Fee Approach is residual in the Group.
The BBVA Group has defined and identified for each group of contracts the hedging units to be used for the release to profit or loss of the contractual service margin, in accordance with IFRS 17, and subsequent interpretations issued by the Transition Resource Group for IFRS 17 and the related IFRIC (as defined herein).
Furthermore, the Group has chosen the accounting policy option of not changing the treatment of accounting estimates made in previous interim closings.
Discount rate
The methodology used to obtain the discount rate differs according to the entity and portfolio to which it is applied, highlighting mainly the cases of the companies in Spain and Mexico, where the Group has greater presence (see Note 23). In the first case, the top-down approach has been mainly applied and it has been verified that the Internal Rate of Return (hereinafter “IRR”) of the entity’s asset portfolio converges with the IRR of a reference portfolio from which the European Insurance and Occupational Pensions Authority (hereinafter “EIOPA”) fundamental spread is discounted for. In the second case, the top-down approach has been used for immunized portfolios (see Glossary), eliminating the spread for credit risk through the EIOPA fundamental spread. However, in non-immunized portfolios, the bottom-up approach has been used, using the swap curve as the risk-free rate.
Risk adjustment for non-financial risk
The risk adjustment for non-financial risk represents the compensation required for bearing uncertainty about the amount and timing of the associated cash flows. To estimate the non-financial risk adjustment, the Group has used its own methodologies based on calculations of the Value at Risk (VaR) of the commitments associated with the Life and Non-Life businesses, using in the case of Spain a confidence level of 80% and in the case of Mexico 70%.
Onerosity
An insurance contract is onerous at the date of initial recognition if the fulfilment cash flows allocated to the contract, any previously recognized insurance acquisition cash flows and any cash flows arising from the contract at the date of initial recognition in total are a net outflow.
The Group has classified the contracts valued under the General Model into onerous groups, considering the fulfillment cash flows, acquisition expenses and any other attributable cash flow. The evaluation is carried out, in general terms, contract by contract, except in those cases where it is possible to group into sets of homogeneous contracts.
Contracts valued under the Simplified Model, by default, are assumed to be non-onerous at their initial recognition, unless there are facts and circumstances that indicate otherwise, where the Group relies on information from existing internal reports (ratios and indicators) for monitoring business performance, adjusted to the criteria of IFRS 17, as well as market evolution expectations based on expert judgment. The granularity to carry out this evaluation may be the same as that used to monitor the business through the abovementioned internal reports.
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In the same way as the contractual service margin represents the estimated future benefit of the insurance contract, the loss component is the estimated loss of the onerous contract. The accounting record of these two concepts has a different temporality: while the margin is deferred throughout the duration of the contract according to the contractual limits, the loss component is recognized in the income statement as soon as it is known, which will result in the carrying amount of the group's liability being equal to the fulfilment cash flows and the group's contractual service margin being equal to zero.
Throughout the life of a contract, the assumptions used to project future cash flows may change and, consequently, the expected return on a contract may increase or decrease. This means that a group of contracts initially classified as onerous may become more onerous, or on the contrary, in the subsequent measurement the assumptions used to estimate the cash flows may change so much that the previously recognized loss could be reversed.
Reinsurance
In general, the Group values reinsurance covers under the Simplified Model, valuing the asset for remaining coverage of contracts with a coverage period of one year or less, or in those contracts with a duration of more than one year, but which are not expected to produce a valuation significantly different from that of the General Model. This method also includes the asset for incurred claims.
Effect on results
In general, for the presentation of the financial income or expenses from insurance contracts that arise as a result of the change in the discount rate, both due to the effect of the time value of money as well as the effect of financial risk, the Group has chosen the accounting policy option of disaggregating these financial income or expenses from insurance contracts between recording them in the "Net interest income" and in "Accumulated other comprehensive income (loss)", in order to minimize accounting asymmetries in the valuation and recognition of financial investments under IFRS 9 and insurance contracts under IFRS 17.
The Group has chosen to disaggregate the changes in the risk adjustment between financial and non-financial, so that the change in the value of the risk adjustment derived from the effect of the time value of money, and changes in it, is recorded as a financial income or expense from insurance contracts. Insurance revenue is recognized over the period the entity provides insurance coverage, excluding any investment component.
The loss component, in the case of onerous contracts, corresponds to the losses attributable to each group of contracts, both at initial recognition and at a later time.
2.2.9Tax assets and liabilities
Expenses on corporate income tax applicable to the BBVA Group’s Spanish entities and on similar income taxes applicable to consolidated foreign entities are recognized as an expense for the period in the consolidated 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 consolidated 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 19).
The "Tax Assets" line item in the consolidated 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 consolidated 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).
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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 Group 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 consolidated entities 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.
The deferred tax assets and liabilities recognized are reassessed by the consolidated entities at each balance sheet date in order to ascertain whether they still qualify as deferred tax assets and liabilities, and if it is necessary to make adjustments on the basis of the findings of the analyses performed. 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 consolidated equity that do not increase or decrease taxable income are accounted for as temporary differences.
2.2.10Provisions, contingent assets and contingent liabilities
The heading “Provisions” in the consolidated balance sheets includes amounts recognized to cover the BBVA Group’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 24). The provisions are recognized in the consolidated 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 Consolidated 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 by some of the Group entities mentioned in Note 2.2.13, 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 Group. Contingent assets are not recognized in the consolidated balance sheet or in the consolidated income statement; however, they will be disclosed, should they exist, in the Notes to the Consolidated Financial Statements, provided that it is probable they will give rise to an increase in resources embodying economic benefits (see Note 34).
Contingent liabilities are possible obligations of the Group 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 Group. They also include the existing obligations of the Group 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 consolidated balance sheet or the income statement (excluding contingent liabilities from business combinations) but are disclosed in the Notes to the Consolidated Financial Statements, unless the possibility of an outflow of resources embodying economic benefits is remote (see Note 34).
2.2.11Treasury shares
The value of common stock issued by the BBVA Group’s entities and held by them - basically, shares and derivatives on the Bank’s shares held by some consolidated entities that comply with the requirements to be recognized as equity instruments - are recognized as a decrease to net equity, under the heading "Shareholders’ funds - Treasury shares" in the consolidated balance sheets (see Note 29).
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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 - Other reserves” in the consolidated balance sheets (see Note 28).
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 22.5 and 28).
2.2.12Equity-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” in the consolidated 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 consolidated 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 consolidated income statement with the corresponding increase in total consolidated equity.
2.2.13Pensions 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 BBVA Group entities (see Note 25).
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 consolidated income statement (see Note 44.1).
Post-employment benefits – Defined-contribution plans
The Group 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 BBVA Group entities are charged and recognized under the heading “Administration costs – Personnel expense– Defined-contribution plan expense” of the consolidated income statement (see Note 44.1).
Post-employment benefits – Defined-benefit plans
Some Group entities maintain 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, some of the Spanish Group entities 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, certain Group entities provide welfare and medical benefits which extend beyond the date of retirement of the employees entitled to the benefits.
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All of these commitments are quantified based on actuarial valuations, with the amounts recorded under the heading “Provisions – Provisions for pensions and similar obligations” in the consolidated balance sheet 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 consolidated financial statements (see Note 25).
Current service cost is charged and recognized under the heading “Administration costs – Personnel expense – Defined-benefit plan expense” of the consolidated income statement (see Note 44.1).
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 consolidated income statement (see Note 37).
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 consolidated income statement (see Note 46).
Other long-term employee benefits
In addition to the above commitments, certain Group entities provide 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. This heading also includes the commitments related to the termination of employment contracts according to the collective layoff procedure carried out in BBVA, S.A. in 2021.
These commitments are quantified based on actuarial valuations and the amounts recorded under the heading “Provisions – Other long-term employee benefits” of the consolidated balance sheet (see Note 24).
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 BBVA Group 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 consolidated income statement for the period in which they arise (see Note 46). 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 consolidated balance sheet (see Note 30).
2.2.14Termination benefits
2.2.15Recognition of income and expense
The most significant policies used by the BBVA Group to recognize its income and expense are as follows.
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–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 consolidated 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 be added to the gross carrying amount of the debt instrument.
b.The interest income accrued after the initial recognition will be added to 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.
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 Group 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.
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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 consolidated 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.
2.2.16Sales of assets and income from the provision of non-financial services
The heading “Other operating income” in the consolidated income statements includes the proceeds of the sales of assets and income from the services provided by the Group entities that are not financial institutions. In the case of the Group, these entities are mainly real estate and service entities (see Note 42).
2.2.17Foreign-currency transactions and exchange differences
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”.
Conversion to euros of the balances held in foreign currency is performed in two consecutive stages:
–conversion of the foreign currency to the entity’s functional currency (currency of the main economic environment in which the entity operates); and
–conversion to euros of the balances held in the functional currencies of the entities whose functional currency is not the euro.
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Conversion of the foreign currency to the entity’s functional currency
Transactions denominated in foreign currencies carried out by the consolidated entities (or entities accounted for using the equity method) are initially accounted for in their respective currencies. Subsequently, the monetary balances in foreign currencies are converted to their respective functional currencies using the exchange rate at the close of the financial year. In addition,
–Non-monetary items valued at their historical cost are converted to the functional currency at the exchange rate applicable on the purchase date.
–Non-monetary items valued at their fair value are converted at the exchange rate in force on the date on which such fair value was determined.
–Monetary items are converted to the functional currency at the closing exchange rate.
–Income and expense are converted at the period’s average exchange rates for all the operations carried out during the year, except in those geographical areas where IAS 29 “Financial Reporting in Hyperinflationary Economies” applies (see Note 2.2.18). When applying this criterion the BBVA Group considers whether significant variations have taken place in exchange rates during the year which, owing to their impact on the statements as a whole, may require the application of exchange rates as of the date of the transaction instead of such average exchange rates.
The exchange differences produced when converting the balances in foreign currency to the functional currency of the consolidated entities are generally recognized under the heading "Exchange differences, net" in the consolidated income statements (see Note 41). 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 be reclassified to profit or loss - Fair value changes of equity instruments measured at fair value through other comprehensive income” in the consolidated balance sheets (see Note 30).
Conversion of functional currencies to euros
The balances in the financial statements of consolidated entities whose functional currency is not the euro are converted to euros as follows:
–Assets and liabilities: at the closing spot exchange rates as of the date of each of the consolidated balance sheets.
–Income and expense and cash flows are converted by applying the exchange rate applicable on the date of the transaction, and the average exchange rate for the financial year may be used, unless it has undergone significant variations during the year.
–Equity items: at the historical exchange rates.
The exchange differences arising from the conversion to euros of balances in the functional currencies of the consolidated entities whose functional currency is not the euro are recognized under the heading “Accumulated other comprehensive income (loss) – Items that may be reclassified to profit or loss - Foreign currency translation” in the consolidated balance sheets (see Notes 30 and 31 respectively). Meanwhile, the differences arising from the conversion to euros of the financial statements of entities accounted for by the equity method are recognized under the heading “Accumulated other comprehensive income (loss) - Items that may be reclassified to profit or loss - Share of other recognized income and expense of investments in joint ventures and associates" (see Note 30), until the item to which they relate is derecognized, at which time they are recognized in the income statement.
The financial statements of companies of hyperinflationary economies are restated for the effects of changes in prices before their conversion to euros following the provisions of IAS 29 "Financial Reporting in Hyperinflationary Economies" (see Note 2.2.18). Both these adjustments for inflation and the exchange differences that arise when converting the financial statements of companies into hyperinflationary economies are accounted for in “Accumulated other comprehensive income (loss) – Items that may be reclassified to profit or loss - Foreign currency translation”.
The breakdown of the main consolidated balances in foreign currencies, with reference to the most significant foreign currencies, is set forth in Appendix VII.
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Venezuela
Local financial statements of the Group subsidiaries in Venezuela are expressed in Venezuelan bolivar and converted into euros for the consolidated financial statements. Venezuela is a country with strong exchange restrictions that has different rates officially published, and, since December 31, 2015, the Board of Directors considers that the use of official exchanges rates for converting bolivars into euros in preparing the Consolidated Financial Statements does not reflect the true picture of the financial statements of the Group and the financial position of the Group subsidiaries in this country. Therefore, since the year ended December 31, 2015, the exchange rate for converting bolivars into euros is an estimation whose calculation incorporates available market references, in order to obtain a more representative approximation of the prevailing financial conditions (see Note 2.2.18).
2.2.18Entities and branches located in countries with hyperinflationary economies
In accordance with the criteria established in IAS 29 "Financial Reporting in Hyperinflationary Economies”, to determine whether an economy has a high inflation rate the country's economic situation is examined, analyzing whether certain circumstances are fulfilled, such as whether the population prefers to keep its wealth or savings in non-monetary assets or in a relatively stable foreign currency, whether prices can be set in that currency, whether interest rates, wages and prices are pegged to a price index or whether the accumulated inflation rate over three years approaches or exceeds 100%. The fact that any of these circumstances is fulfilled will not be a decisive factor in considering an economy hyperinflationary, but it does provide some reasons to consider it as such.
Since 2022, 2018 and 2009, the economies of Turkey, Argentina and Venezuela, respectively, have been considered hyperinflationary under the above criteria. As a result, the financial statements of the BBVA Group’s entities located in such geographical areas have been adjusted to correct for the effects of inflation.
As a consequence of the application of IAS 29 "Financial Reporting in Hyperinflationary Economies", the Group applies the following criteria in the financial statements of the Group companies that operate in these three geographical areas:
–The historical cost of non-monetary assets and liabilities (see Notes 17, 18 and 21), assets contractually linked to changes in prices and various headings in equity are adjusted to reflect changes in the purchasing power of the currency due to inflation from their date of acquisition or inclusion in the consolidated balance sheet, or if this is later, with the limit of its recoverable value. The restatement has been made using the Consumer Price Index with "Accumulated other comprehensive income (loss)" as counterparty.
–Consequently, the different lines of the income statement, within equity, are adjusted by the inflation index since their inception, with a corresponding entry under the heading "Accumulated other comprehensive income (loss)".
–The loss of the net monetary position, which represents the loss of purchasing power of the entity due to maintaining an excess of monetary assets not linked to inflation (mainly loans, credits and bonds) over monetary liabilities, is recorded in the line "Other operating expense" in the income statement and with a credit to "Accumulated other comprehensive income (loss)".
–All the components of the financial statements of the subsidiaries are converted at the closing exchange rate, recording the conversion differences to the euro within "Accumulated other comprehensive income (loss)" as stated in IAS 21 "Effects of Changes in Foreign Exchange Rates".
Turkey
The combined result derived from the application of the above criteria amounted to a loss of €1,305 million in 2025, of which €1,120 million is attributable to owners of the parent (€1,498 million and €2,242 million loss attributable to owners of the parent in 2024 and 2023, respectively). This impact includes mainly the loss of the net monetary position, which amounts to a gross amount of €878 million and is recorded in the line “Other operating expense” in the consolidated income statement (€1,512 million and €2,118 million in 2024 and 2023, respectively), and it was partially offset by the positive impact of the revaluation of certain bonds linked to inflation, for a gross amount of €674 million (€1,164 million and €1,202 million in 2024 and 2023, respectively), given that, under IAS 29 "Financial Reporting in Hyperinflationary Economies", these types of bonds are considered protective assets (see Note 42).
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In addition, during 2025 the impact on equity of Group entities located in Turkey derived from the application of IAS 29 and the conversion to the euro (IAS 21) amounted to €-898 million (€1,253 million in 2024), of which €-781 million (€1,072 million in 2024) have been recorded within “Equity – Accumulated other comprehensive income (loss)”, and €-117 million (€181 million in 2024) have been recorded within “Minority interests – Accumulated other comprehensive income (loss)”, respectively (see Notes 30 and 31).
According to the Turkish Statistical Institute (Turkstat), accumulated inflation in 2025 stood at 30.9% (44.4% and 64.8% in 2024 and 2023, respectively) and the exchange rate used as of December 31, 2025 was 50.48 Turkish lira per euro (36.74 and 32.65 in 2024 and 2023, respectively).
Argentina
The combined result derived from the application of the above criteria amounted to a loss of €494 million, of which €331 million is attributable to owners of the parent in 2025 (€810 million and €1,574 million loss attributable to owners of the parent in 2024 and 2023, respectively). This impact includes mainly the loss of the net monetary position, which amounts to a gross amount of €356 million and is recorded in the line “Other operating expense” in the consolidated income statement in 2025 (€1,419 million and €1,062 million in 2024 and 2023, respectively).
Furthermore, during 2025, the impact on equity of Group entities located in Argentina derived from the application of IAS 29 and the conversion to the euro (IAS 21) amounted to €-417 million (€1,115 million and €-634 million in 2024 and 2023, respectively) of which €-278 million (€745 million and €-428 million in 2024 and 2023, respectively) have been recorded within “Equity – Accumulated other comprehensive income (loss)”, and €-140 million (€370 million and €-206 million in 2024 and 2023, respectively) have been recorded within “Minority interests – Accumulated other comprehensive income (loss)” (see Notes 30 and 31).
Accumulated inflation estimated by the National Census Institute of Argentina (INDEC) and BBVA Research for the year 2025 was 30.5% (118% and 215% in 2024 and 2023, respectively) and the exchange rate used as of December 31, 2025 was 1,714.81 Argentine pesos per euro (1,072.66 and 892.81 in 2024 and 2023, respectively).
Venezuela
The combined result derived from the application of the above criteria amounted to a loss of €75 million, of which €41 million is attributable to owners of the parent in 2025 (€20 million and €10 million attributable to owners of the parent in 2024 and 2023, respectively). This impact includes mainly a loss of the net monetary position and certain protective assets which offset such loss, which together amounts to a gross amount of €183 million, recorded in the line “Other operating expense” in the consolidated income statement in 2025 (€9 million and €28 million in 2024 and 2023, respectively).
During 2025, 2024 and 2023 the impact on equity of Group entities located in Venezuela derived from the application of IAS 29 and the conversion to the euro (IAS 21) amounted to €-81 million, €-1 million and €-22 million respectively, of which €-44 million, €-1 million and €-12 million have been recorded within "Equity – Accumulated other comprehensive income (loss)" and €-37 million, €0 million and €-10 million have been recorded within “Minority interests – Accumulated other comprehensive income (loss)" (see Notes 30 and 31).
2.3Recent IFRS pronouncements
Standards and interpretations that became effective in 2025
In 2025, various amendments to the IFRS standards or their interpretations or modifications (amendments) (hereinafter “IFRIC” or "interpretation") became effective, among which the following should be highlighted:
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Amendment to IAS 21: "The Effects of Changes in Foreign Exchange Rates"
On August 15, 2023, the IASB issued a series of amendments to IAS 21 - The Effects of Changes in Foreign Exchange Rates. The standard has a dual objective: first, to provide guidance on when one currency is convertible into another and, second, how to determine the exchange rate to use in accounting when it is concluded that such convertibility does not exist.
Regarding the first objective, a currency is convertible into another when an entity can obtain the other currency within a timeframe that allows for a normal administrative delay; and through markets or exchange mechanisms in which an exchange transaction creates enforceable rights and obligations. If the entity determines that convertibility between the currencies does not exist, it must estimate an exchange rate. The standard does not establish a specific estimation technique for these rates, but rather establishes guidelines for determining them, allowing for the use of an unadjusted observable rate or an estimation technique.
The amendment to the standard came into effect on January 1, 2025, and had no impact on the BBVA Group's consolidated financial statements.
Standards and interpretations issued but not yet effective as of December 31, 2025
The following new IFRS standards and interpretations or amendments had been published at the date of preparation of the Consolidated Financial Statements, but were not mandatory as of December 31, 2025. The Group is currently evaluating the potential effects of each of these new standards or amendments. Although in some cases the IASB allows early adoption of new standards, interpretations and amendments before their effective date, the BBVA Group has not proceeded with this option for any such changes.
IFRS 18 "Presentation and Disclosures in Financial Statements"
On April 9, 2024, the IASB issued IFRS 18 "Presentation and Disclosures in Financial Statements" which introduces new requirements to improve the quality of information presented in financial statements and to promote analysis, transparency and comparability of companies' performance.
Specifically, IFRS 18 introduces three predefined expense categories (operating, investing and financing) and two subtotals ("operating profit" and "profit before financing and income taxes") to provide a consistent structure in the income statement and facilitate the analysis of the income statement. Additionally, it introduces disclosure requirements for management-defined performance measures (MPMs). Finally, it establishes requirements and provides guidance on aggregation/disaggregation of the information to be provided in the primary financial statements.
This new standard will come into force on January 1, 2027, with early application permitted once it is adopted by the European Union.
Amendments to IFRS 9 and IFRS 7: Amendments to the classification and measurement of financial instruments
On May 30, 2024 the IASB issued amendments to IFRS 9 and IFRS 7 to clarify, among others, how to assess the contractual cash flow characteristics of financial assets that include contingent features such as the achievement of Environmental, Social and Governance targets. Additionally, they clarify that a financial liability should be derecognized on the 'settlement date' and introduce an accounting policy option to derecognize before that date financial liabilities that are settled using an electronic payment system. Finally, additional disclosures are required by IFRS 7 for financial instruments with contingent characteristics and equity instruments classified at fair value through other comprehensive income.
The amendments came into force on January 1, 2026. No significant impacts on the BBVA Group's consolidated financial statements are expected from the entry into force of the amendments.
Annual improvements applied to International Financial Reporting Standards (IFRS)
The IASB issued in July 2024 a number of minor amendments and improvements to various IFRSs to clarify their wording or correct minor effects, oversights or conflicts between the requirements of the Standards. The Standards affected are: IFRS 1 "First-time adoption of International Financial Reporting Standards", IFRS 7 "Financial instruments, disclosures", IFRS 9 "Financial instruments", IFRS 10 "Consolidated financial statements" and IAS 7 "Statement of cash flows".
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These modifications came into force on January 1, 2026, and a significant impact on the BBVA Group's financial statements is not expected.
IFRS 19 "Subsidiaries without Public Accountability: Disclosures"
On May 9, 2024, the IASB issued IFRS 19 "Subsidiaries without Public Accountability: Disclosures" which allows certain eligible entities to elect to apply the reduced disclosure requirements of IFRS 19 while continuing to apply the requirements of recognition, valuation and presentation of other IFRS accounting standards.
This new standard will enter into force on January 1, 2027, allowing early application once it is adopted by the European Union. The Group has no entities that fall within the scope of this standard, so no significant impact on the BBVA Group´s financial statements is expected.
Amendments to IFRS 19: "Subsidiaries without Public Accountability: Disclosures"
As stated above, IFRS 19, issued in May 2024, allows certain eligible entities to elect to apply the reduced disclosure requirements of IFRS 19 while continuing to apply the requirements of recognition, valuation and presentation of other IFRS accounting standards (including IFRS 18). With these amendments, IFRS 19 reflects the changes in IFRS that will come into effect by January 1, 2027, the date on which IFRS 19 will become applicable. In the future, IFRS 19 will be amended simultaneously with the publication or revision by the IASB of other accounting standards.
This amendment is pending approval by the European Union. No significant impact on the BBVA Group´s financial statements is expected.
Amendments to IFRS 9 and IFRS 7: Contracts that refer to nature-dependent electricity
On December 18, 2024, the IASB issued amendments to IFRS 9 and IFRS 7 to address the accounting for renewable electricity purchase agreements. The amendments include guidance on the "own use" exemption for electricity purchasers and requirements for applying hedge accounting to these agreements.
The amendments came into force on January 1, 2026. No significant impacts on the BBVA Group´s financial statements are expected from the entry into force of the amendments.
Amendments to IAS 21 "The Effects of Changes in Foreign Exchanges Rates"
On November 13, 2025, the IASB issued a set of amendments to IAS 21 – The Effects of Changes in Foreign Exchange Rates. These amendments address how companies should translate financial information from a non-hyperinflationary functional currency to a hyperinflationary presentation currency.
Specifically, it states that a company with a non-hyperinflationary functional currency but with a hyperinflationary presentation currency must translate all amounts in the financial statements (including comparatives) using the closing exchange rate at the end of the reporting period.
The amendments also require entities to disclose and provide details of the financial information related to their foreign operations affected by the proposed translation method.
The amendments will become effective on January 1, 2027, once adopted by the European Union, and will be applied retrospectively. The implementation of the amendments is not expected to have any impact on the BBVA Group’s financial statements.
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3.BBVA Group
The BBVA Group is an international diversified financial group with a significant presence in retail banking, wholesale banking and asset management. The Group also operates in the insurance sector.
The following information is detailed in the appendices of these consolidated financial statements of the Group for the year ended December 31, 2025:
–Appendix I shows relevant information related to the consolidated subsidiaries and structured entities.
–Appendix II shows relevant information related to investments in joint ventures and associates accounted for using the equity method.
–Appendix III shows the main changes and notification of investments and divestments in the BBVA Group.
–Appendix IV shows fully consolidated subsidiaries with more than 10% of their capital owned by non-Group shareholders.
The following table sets forth information related to the Group’s total assets as of December 31, 2025, 2024 and 2023, broken down by the Group’s entities according to their activity:
CONTRIBUTION TO CONSOLIDATED GROUP TOTAL ASSETS. ENTITIES BY MAIN ACTIVITIES (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Banking and other financial services | |||||||||||
Insurance and pension fund managing companies | |||||||||||
Other non-financial services | |||||||||||
| Total | |||||||||||
The total assets and results of operations broken down by operating segments are included in Note 6.
The BBVA Group’s activities are mainly located in Spain, Mexico, Turkey and South America, with active presence in other areas of Europe, the United States and Asia:
–Spain. The Group’s activity in Spain is mainly carried out through Banco Bilbao Vizcaya Argentaria, S.A. The Group also has other entities that mainly operate in Spain’s financial sector, insurance sector and asset management sector.
–Mexico. The BBVA Group operates in Mexico, not only in the banking sector, but also in the insurance sector and the asset management sector, through BBVA Mexico.
–Turkey. The Group’s activity in Turkey is mainly carried out through the Garanti BBVA Group in the financial, insurance and asset management sectors.
–South America. The BBVA Group’s activities in South America are mainly focused on the banking, financial and insurance sectors, in the following countries: Argentina, Colombia, Peru, Uruguay, Chile, Venezuela and Brazil, the latter focused on the CIB (Corporate & Investment Banking). The Group owns more than 50% of most of the Group entities based in these countries. Appendix I shows entities in respect of which the BBVA Group owns less than 50% as of December 31, 2025 (see Note 2.1). The Group also has representative offices in Sao Paulo (Brazil) and in Santiago (Chile).
–Rest of Europe. Group's activity in Europe (excluding Spain) is carried out by banking and financial institutions, mainly in Switzerland, the Netherlands and Romania, and through branches, mainly the BBVA Bank's branches in Germany, Belgium, France, Italy, Portugal, the United Kingdom, and the Garanti BBVA Bank's branch in Malta, as well as the Group's digital banks in Italy and Germany.
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–The United States. The Group's activity in the United States is mainly carried out by the branch of Banco Bilbao Vizcaya Argentaria, S.A. in New York, the agency of BBVA Mexico in Houston, participations in technology companies through funds and investment vehicles and the broker-dealer business BBVA Securities Inc. Additionally, in 2024, a representative office of Banco Bilbao Vizcaya Argentaria, S.A. was opened in Houston.
–Asia. The Group's activity in Asia is conducted through the Bank's branches (Taipei, Tokyo, Hong Kong, Singapore and Shanghai) and representative offices (Beijing, Seoul, Mumbai, Abu Dhabi and Jakarta).
Significant transactions in the Group in 2025, 2024 and 2023
4.Shareholder remuneration system
Shareholder Remuneration Policy
BBVA announced in November 2021 by means of Relevant Information the amendment of the Group's shareholder remuneration policy, which establishes 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).
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 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 Shareholders’ 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 financial year, for an amount equal to €0.31 gross (€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 other than BBVA, S.A., amounted to €1,857 million.
–The Board of Directors, at its meeting held on September 27, 2023, resolved the payment of a cash interim dividend, for the 2023 financial year, of €0.16 gross (€0.1296 net of withholding tax) per outstanding BBVA share entitled to participate in this distribution, which was paid on October 11, 2023. The total amount paid, excluding dividends paid in respect of treasury shares held by the Group's companies other than BBVA, S.A., amounted to €951 million.
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Shareholder remuneration during financial year 2024
Cash distributions
During the 2024 financial year, BBVA's General Shareholders' Meeting and Board of Directors approved the following cash payments:
–The Annual General Shareholders' Meeting held on March 15, 2024 approved, in item 1.3 of its Agenda, a cash distribution charged to the results of the 2023 financial year as a final dividend for the 2023 financial year, in the amount of €0.39 gross (€0.3159 net of withholding tax) per each outstanding BBVA share entitled to participate in this distribution, which was paid on April 10, 2024. The total amount paid, excluding dividends paid in respect of treasury shares held by the Group's companies other than BBVA, S.A., amounted to €2,245 million.
–By means of an inside information notice (información privilegiada) dated September 26, 2024, that the Board of Directors of BBVA had agreed to pay an amount on account of the dividend for the 2024 financial year, in the amount of €0.29 gross (€0.2349 net of withholding tax) per each outstanding BBVA share entitled to participate in this distribution, which was paid on October 10, 2024. The total amount paid, excluding dividends paid in respect of treasury shares held by the Group's companies other than BBVA, S.A., amounted to €1,668 million.
Shareholder remuneration during financial year 2025
Cash distributions
During the 2025 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 21, 2025, approved, under item 1.3 of the Agenda, such cash distribution against the 2024 results as a final dividend for the 2024 financial year, for an amount equal to €0.41 gross (€0.3321 net of withholding tax) per outstanding BBVA share entitled to participate in this distribution, which was paid on April 10, 2025. The total amount paid, excluding dividends paid in respect of treasury shares held by the Group's companies other than BBVA, S.A., amounted to €2,357 million.
–By means of an inside information notice (información privilegiada) dated September 29, 2025, BBVA announced that the Board of Directors had approved the payment of a cash interim dividend of €0.32 gross (€0.2592 net of withholding tax) per each outstanding BBVA share entitled to participate in this distribution, which was paid on November 7, 2025. The total amount paid, excluding dividends paid in respect of treasury shares held by the Group's companies other than BBVA, S.A., amounted to €1,840 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, was the following:
AVAILABLE AMOUNT FOR INTERIM DIVIDEND PAYMENTS (MILLIONS OF EUROS) | |||||
| August 31, 2025 | |||||
Profit of BBVA, S.A., after the provision for income tax | |||||
Constitution of legal reserve ⁽¹⁾ | ( | ||||
| Maximum amount distributable | |||||
| Amount of proposed interim dividend ⁽¹⁾ | |||||
| BBVA cash balance available to the date | |||||
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Other shareholder remuneration
On February 5, 2026, BBVA announced by means of an inside information notice filing with the CNMV that a cash distribution in the amount of €0.60 gross (€0.4860 net of withholding tax) per each of the outstanding shares entitled to receive said distribution, expected to be paid in April 2026 as the final dividend for the year 2025, was planned to be proposed to the corresponding governing bodies for consideration as ordinary remuneration to shareholders for 2025.
Share buyback programs
Share buyback program in 2023
On February 1, 2023, BBVA announced, among others, that it planned to submit for the consideration of the corresponding BBVA governing bodies the execution of a €422 million share buyback program, subject to obtaining the corresponding regulatory authorizations and to the communication of the specific terms and conditions of the share buyback program before its execution. 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 Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse and Commission Delegated Regulation (EU) No. 2016/1052 of March 8, 2016 ("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 aforementioned share buyback program and which were held in treasury shares (see Notes 26, 27, 28 and 29).
On July 28, 2023, BBVA announced, by means of an Inside Information notice, its request to the ECB for the correspondent supervisory authorization in order to carry out a share buyback program of 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 buyback 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 €62,490,986.25 and the consequent redemption, charged to unrestricted reserves, of the 127,532,625 own shares of €0.49 par value each acquired derivatively by BBVA in execution of the aforementioned extraordinary share buyback program and which were held in treasury shares (see Notes 26, 27, 28 and 29).
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Share buyback program in 2024
On January 30, 2024, BBVA announced, among other matters, that it planned to submit for the consideration of the corresponding BBVA governing bodies the execution of a €781 million share buyback program, subject to obtaining the corresponding regulatory authorizations and to the communication of the specific terms and conditions of the share buyback program before its execution. On March 1, 2024, after receiving the required authorization from the ECB, BBVA announced by means of an Inside Information notice the execution of a time-scheduled buyback program for the repurchase of own shares, all in accordance with the Regulations, for a maximum monetary amount of €781 million. The execution was carried out externally by Citigroup Global Markets Europe AG.
By means of an Other Relevant Information notice dated April 9, 2024, BBVA announced the completion of the share buyback program upon reaching the maximum monetary amount, having acquired a total of 74,654,915 own shares, between March 4 and April 9, 2024, representing, approximately, 1.28% of BBVA's share capital as of such date.
On May 24, 2024, BBVA notified through an Other Relevant Information notice the partial execution of the share capital reduction resolution adopted by the Annual General Shareholders’ Meeting of BBVA held on March 15, 2024, under item 3 of the Agenda, through the reduction of BBVA’s share capital in a nominal amount of €36,580,908.35 and the consequent redemption, charged to unrestricted reserves, of the 74,654,915 own shares of €0.49 par value each acquired derivatively by BBVA in execution of the share buyback program and which were held as treasury shares (see Notes 26, 27, 28 and 29).
Share buyback programs in 2025
On January 30, 2025, BBVA announced, among other matters, the execution of a share buyback program of BBVA shares, with the purpose of reducing BBVA’s share capital, for a monetary amount of €993 million, subject to obtaining the corresponding regulatory authorizations and to the communication of the specific terms and conditions of the share buyback program before its execution.
On October 30, 2025, after receiving the required authorization from the ECB, BBVA announced by means of an Inside Information notice the execution of a time-scheduled buyback program for the repurchase of own shares, with the purpose of reducing BBVA's share capital, all in accordance with the Regulations, for a maximum monetary amount of €993 million. The execution was carried out externally by Citigroup Global Markets Europe AG. By means of an Other Relevant Information notice dated December 10, 2025, BBVA announced the completion of the share buyback program upon reaching the maximum monetary amount, having acquired a total of 54,316,765 BBVA shares, between October 31 and December 10, 2025, representing, approximately, 0.93% of BBVA's share capital as of such date. On December 23, 2025, BBVA notified through an Other Relevant Information notice the partial execution of the share capital reduction resolution adopted by the Annual General Shareholders’ Meeting of BBVA held on March 21, 2025, under item 3 of the Agenda, through the reduction of BBVA’s share capital in a nominal amount of €26,615,214.85 and the consequent redemption, charged to unrestricted reserves, of the 54,316,765 BBVA shares of €0.49 par value each acquired derivatively by BBVA in execution of the aforementioned BBVA share buyback program and which were held as treasury shares (see Notes 26, 27, 28 and 29).
On December 19, 2025, and after receiving the required authorization from the ECB, BBVA announced, by means of an Inside Information notice, that the Board of Directors of BBVA, at its meeting on December 18, 2025, had agreed to carry out the execution of a framework share buyback program for the repurchase of BBVA shares, all in accordance with the Regulations. This program will be executed in several tranches for a maximum monetary amount of €3,960 million, with the purpose of reducing BBVA's share capital (the "Framework Program"), without prejudice to the possibility of suspending or terminating the Framework Program early if circumstances warrant. It also announced that the Board of Directors agreed to execute a first tranche of the Framework Program in compliance with the Regulations, for the purpose of reducing BBVA's share capital for a maximum monetary amount of €1,500 million. The execution of this tranche started on December 22, 2025, and is carried out externally by J.P. Morgan SE. Between December 22, 2025 and February 13, 2026, J.P. Morgan SE has acquired 51,166,012 BBVA shares within this program.
Proposal on allocation of earnings of BBVA, S.A. for 2025
In accordance with current mercantile regulations, the earnings subject to distribution correspond to the individual result of Banco Bilbao Vizcaya Argentaria, SA, the parent company of the BBVA Group.
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Below is the distribution of the earnings of Banco Bilbao Vizcaya Argentaria, S.A. for the 2025 financial year, which the Board of Directors will submit for approval to the Annual General Shareholders’ Meeting:
ALLOCATION OF EARNINGS (MILLIONS OF EUROS) | |||||
2025 | |||||
| Profit (loss) of BBVA, S.A. for the year | |||||
| Distribution | |||||
Interim dividends | |||||
Final dividend | |||||
Reserves / Accumulated gains | |||||
5.Earnings per share
Basic and diluted earnings per share are calculated in accordance with the criteria established by IAS 33 "Earnings per share". For more information see Glossary.
The calculation of earnings per share is as follows:
BASIC AND DILUTED EARNINGS PER SHARE | |||||||||||
2025 | 2024 | 2023 | |||||||||
| Numerator for basic and diluted earnings per share (millions of euros) | |||||||||||
Profit attributable to parent company | |||||||||||
Adjustment: Additional Tier 1 securities ⁽¹⁾ | ( | ( | ( | ||||||||
| Profit adjusted (millions of euros) (A) | |||||||||||
Profit (loss) from continued operations (net of remuneration of Additional Tier 1 capital instruments) | |||||||||||
Profit (loss) from discontinued operations (net of non-controlling interests) (B) | |||||||||||
Denominator for basic earnings per share (number of shares outstanding, in millions) ⁽²⁾ | |||||||||||
Weighted average number of shares outstanding | |||||||||||
Average treasury shares | ( | ( | ( | ||||||||
Share buyback program (average) | ( | ( | ( | ||||||||
| Adjusted number of shares - Basic earnings per share (C) | |||||||||||
| Adjusted number of shares - diluted earnings per share (D) | |||||||||||
| Earnings (losses) per share | |||||||||||
Basic earnings (losses) per share from continuing operations (Euros per share) A-B/C | |||||||||||
Diluted earnings (losses) per share from continuing operations (Euros per share) A-B/D | |||||||||||
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 22.4).
As of December 31, 2025, 2024 and 2023, 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.
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6.Operating segment reporting
Operating segment reporting represents a basic tool in the oversight and management of the BBVA Group’s various activities. The BBVA Group compiles reporting information on disaggregated business activities. These business activities are then aggregated in accordance with the organizational structure determined by the BBVA Group's Management and, ultimately, into the reportable operating segments themselves.
As of December 31, 2025, the structure of the information by operating segments and the Corporate Center reported by the BBVA Group remains the same as that as of the closing of the 2024 financial year.
The BBVA Group's areas or operating segments are summarized below:
–Spain includes mainly the banking, insurance and asset management businesses that the Group carries out in Spain.
–Mexico includes the banking, insurance and asset management businesses in this country as well as the activity that BBVA Mexico carries out through its agency in Houston.
–Turkey reports the activity of the Garanti BBVA group that is mainly carried out in this country and, to a lesser extent, in Romania and the Netherlands.
–South America includes the banking, finance, insurance and asset management businesses carried out mainly in Argentina, Chile, Colombia, Peru, Uruguay and Venezuela.
–Rest of Business mainly includes the wholesale activity carried out in Europe (excluding Spain), the United States and (through BBVA branches located therein) Asia, as well as the Group's digital banks in Italy and Germany.
The Corporate Center performs centralized Group functions, including: the costs of the head offices with a corporate function for the consolidated BBVA Group, management of structural exchange rate positions; certain portfolios, such as financial and industrial holdings; stakes in Funds & Investment Vehicles in tech companies; certain tax assets and liabilities; funds for employee commitments; goodwill and other intangible assets, as well as the financing of such portfolios and assets.
The breakdown of the BBVA Group’s total assets by operating segment and the Corporate Center as of December 31, 2025, 2024 and 2023 is as follows:
TOTAL GROUP ASSETS BY OPERATING SEGMENT (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 ⁽¹⁾ | 2023 ⁽¹⁾ | |||||||||
Spain | |||||||||||
Mexico | |||||||||||
Turkey | |||||||||||
South America | |||||||||||
Rest of Business | |||||||||||
| Subtotal Assets by Operating Segment | |||||||||||
Corporate Center and adjustments | ( | ( | ( | ||||||||
| Total Assets BBVA Group | |||||||||||
(1) In the first quarter of 2025 certain immaterial balance sheet amounts related to specific activities undertaken by the business units were reallocated between the operating segments and the Corporate Center. As a result, certain expenses were reallocated, in particular, between Spain, Rest of Business and the Corporate Center. In order to make the period-on-period comparison homogeneous, the figures for the years 2024 and 2023 have been revised, which has not affected the consolidated financial information of the Group.
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The following table sets forth certain summarized information relating to the results of each operating segment and the Corporate Center for the years ended December 31, 2025, 2024 and 2023:
MAIN MARGINS AND PROFIT BY OPERATING SEGMENT (MILLIONS OF EUROS) | |||||||||||||||||||||||
Operating Segments | |||||||||||||||||||||||
BBVA Group | Spain | Mexico | Turkey | South America | Rest of Business | Corporate Center and adjustments | |||||||||||||||||
| 2025 | |||||||||||||||||||||||
Net interest income | ( | ||||||||||||||||||||||
Gross income | ( | ||||||||||||||||||||||
Operating profit (loss) before tax | ( | ||||||||||||||||||||||
Attributable profit (loss) | ( | ||||||||||||||||||||||
2024 (1) | |||||||||||||||||||||||
Net interest income | ( | ||||||||||||||||||||||
Gross income | ( | ||||||||||||||||||||||
Operating profit (loss) before tax | ( | ||||||||||||||||||||||
Attributable profit (loss) | ( | ||||||||||||||||||||||
2023 (1) | |||||||||||||||||||||||
Net interest income | ( | ||||||||||||||||||||||
Gross income | ( | ||||||||||||||||||||||
Operating profit (loss) before tax | ( | ||||||||||||||||||||||
Attributable profit (loss) | ( | ||||||||||||||||||||||
7.Risk management
7.1Risk 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 and the alteration of the institutional environment of the countries in which it operates, and is exposed to sovereign debt, particularly in Spain, Mexico and Turkey.
The global economy is undergoing significant changes, due in part to the policies of the U.S. administration. Uncertainty surrounding their consequences is exceptionally high, substantially increasing geopolitical, economic, and financial risks.
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The increase in U.S. tariffs on imports from its trading partners has triggered financial market volatility, reinforcing global-wide risks. High uncertainty regarding the final level and duration of these tariffs could negatively impact the global economy, worsening the macroeconomic environment. As a result of adopted or announced tariffs, global growth could decelerate significantly.
While fiscal and monetary policies could partially offset the effects of global protectionism, notably in the Eurozone, where significant public spending increases have been announced, the impact of higher U.S. tariffs could be amplified by the adoption of retaliatory measures by other countries, sustained uncertainty, weakened confidence, and financial volatility, among other factors.
Rising tariffs also increase the risk of inflation in the United States and the Eurozone, which could further slow private demand and, at the same time, constrain the Federal Reserve’s and the ECB’s ability to lower rates if warranted by activity.
Beyond import tariffs, tighter controls on migration flows could also affect the labor market in the United States, add to inflationary pressures, and weigh on economic growth. The U.S. administration’s fiscal, monetary, regulatory, industrial, and foreign policies could likewise contribute to financial and macroeconomic volatility. This is compounded by concerns that the Federal Reserve’s independence in decision-making may be weakened by political considerations.
Amid growing uncertainty surrounding U.S. policies and the widening fiscal deficit, the U.S. risk premium could continue to rise, pushing up long-term sovereign yields and further weakening the U.S. dollar. These developments could trigger episodes of volatility, especially given the high public debt levels in both developed and emerging economies. Additionally, the relatively high valuations of AI-related assets constitute an additional source of uncertainty, with potential implications in the financial markets.
The rise of trade protectionism and the growing rivalry between the United States and China could further intensify geopolitical tensions, especially against the backdrop of ongoing conflicts in Ukraine and the Middle East, recent tensions in Latin America and Iran, and the Greenland crisis. In response to these risks and to changes in U.S. foreign policy, the European Union has taken steps to increase military spending, which could support growth but also add upward pressure on inflation and interest rates in the region.
Overall, rising global geopolitical tensions are increasing uncertainty about the global economy and the likelihood of economic and financial disruptions, including a recession.
The Group is exposed to, among others, the following general risks related to the economic and institutional environment in the countries where it operates: a deterioration in economic activity, including potential recession scenarios; inflationary pressures that could lead to a tightening of monetary conditions; stagflation triggered by intense or prolonged supply shocks, including as a result of a protectionist escalation or an increase in oil and gas prices; exchange rate volatility; adverse developments in real estate markets; changes in the institutional environment of the countries where the Group operates, which could lead to sudden and pronounced GDP contractions and/or shifts in regulatory or government policy, including capital controls, dividend restrictions, or the imposition of new taxes or levies; high levels of public debt or external deficits, which could lead to sovereign credit rating downgrades or even defaults or debt restructurings; the impact of the policies adopted by the current U.S. administration, about which significant uncertainty remains; and episodes of financial market volatility, such as those observed recently, that could result in significant losses for the Group.
In Spain, political, regulatory, and economic uncertainty could negatively impact activity. In Mexico, considerable uncertainty persists regarding the impact of the recently approved constitutional reforms, as well as the policies of the U.S. administration and the outcome of the review of the United States-Mexico-Canada free trade agreement (USMCA). In Turkey, despite the gradual improvement in macroeconomic conditions, the situation remains relatively unstable, marked by pressure on the Turkish lira, high inflation, a significant trade deficit, relatively low central bank foreign exchange reserves, and high external financing costs. Recent political and social tensions could also generate renewed bouts of financial volatility and macroeconomic risks. Moreover, uncertainty remains over the impact on Turkey of the geopolitical situation in the Middle East. In South America, ongoing and potential interventionist actions by the United States in some of its countries constitute a significant source of risk. In Argentina, despite the improvement in prospects following significant fiscal, monetary and exchange rate adjustments, the risk of economic and financial turmoil persists. Lastly, in Colombia and Peru, meteorological events, political tensions, and a deterioration of public finances could weigh on economic performance.
Any of these factors may have a significant adverse impact on the Group’s business, financial condition and results of operations.
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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 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 (see section "Environmental, social and governance (“ESG”) risks may adversely impact the Group"). 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, 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. In this sense, digital transformation is a priority for the Group, which includes among its commitments the development of advanced Next Gen technological capabilities, artificial intelligence, and continuous improvement of the customer experience.
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.
Model risk: it is possible that a model used in critical processes presents deficiencies in its design, implementation, use, or interpretation, generating incorrect estimations that affect risk granting, solvency, the financial statements, regulatory compliance, or the Group’s reputation. This risk arises mainly from the use of inadequate assumptions, limitations in data quality or errors in model coding, and is especially relevant in an environment of growing complexity and dependence on models. BBVA is exposed to this risk due to the intensive use of models in essential areas such as credit risk measurement, the calculation of provisions for contingencies, and the valuation of other financial instruments, and the magnitude of this exposure is increased by the volume and diversity of the portfolios, data heterogeneity, and the incorporation of macroeconomic scenarios in certain metrics.
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.
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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.
There are also claims before the Spanish courts challenging the validity of certain revolving credit card agreements. Rulings in these types of proceedings, whether against the Bank or other financial institutions, could negatively affect the Group.
Additionally, in relation to the ESG area, factors that may affect these new business, operational and legal risks have been identified (see "Environmental, social and governance ("ESG") risks may 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, 2025 and December 31, 2024, the Group had €805 million and €791 million, respectively, in provisions for the proceedings it is facing (included in the line "Provisions for taxes and other legal contingencies" in the consolidated balance sheet) (see Note 24), of which €583 million and €610 million, respectively, correspond to legal contingencies and €222 million and 181 million, respectively, to tax related matters (see Note 19). However, the uncertainty arising from these proceedings (including those for which no provisions have been made, either because the probability of an unfavorable outcome for the Group is estimated to be remote, or because it is not possible to estimate them or for other reasons) makes it impossible to guarantee that the possible losses arising from the resolution of 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 which may otherwise affect the Group, whether 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 employees of the Group, as well as former directors and officers, 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.
By order of the Criminal Chamber of the National High Court, the pre-trial phase ended on January 29, 2024. On June 20, 2024, the Judge issued an order authorizing the continuation of abbreviated criminal proceedings against the Bank and certain current and former employees of the Bank, as well as against some former directors and officers, for alleged facts which could constitute bribery and revelation of secrets. 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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Environmental, social and governance (ESG) risks may adversely impact the Group
ESG factors present risks associated with (i) climate change, including physical risks and transition risks (linked, among others, to changes in regulations, technologies, and market preferences associated with the transition to a less carbon-dependent economy); (ii) other environmental factors, such as biodiversity loss, water stress and other nature-related factors; (iii) social factors, such as human rights, inclusion, diversity and workplace safety; and (iv) corporate governance matters, such as the governance of environmental and social risks.
ESG risks include short, medium and long-term risks that may adversely affect the Group and its customers or counterparties. ESG is an area of significant public debate and focus for governments and regulators, investors, the Group’s customers and counterparties, and other stakeholders, and, as a result, ESG risks are expected to continue to evolve, and may increase, over time.
Among others, ESG risks include the following:
- Physical risks. The activities of the Group or those of its customers or counterparties could be adversely affected by the physical risks (including acute and chronic) arising from climate change or other environmental challenges. For example, extreme weather events and chronic shifts in the climate may damage or destroy properties and other assets of the Group or those of its customers or counterparties, make the insurance against certain risks more expensive or unfeasible, 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 granted as collateral to the Group. The Group is also exposed to potential long-term physical risks arising from climate change and other environmental challenges, such as any ensuing deterioration in economic conditions that results in credit-related costs, or potential impacts on the Group’s assets and operations. The Group could also be required to change its business models in response to the foregoing.
- Legal and regulatory risks. The ESG legal and regulatory landscape is increasingly fragmented. While legislatures and regulatory authorities in many jurisdictions continue to impose extensive requirements for financial institutions to integrate ESG considerations into their risk management and reporting frameworks, others are taking a different approach, with regulatory developments moving in the opposite direction, and a reduced emphasis on climate-related risk supervision, adding further complexity and uncertainty to the compliance environment. Legal and regulatory changes related to how banks consider and manage climate and other ESG risks or otherwise affecting banking practices or disclosure of information have resulted, and may continue to result, in higher compliance, operational and credit risks and costs. The Group’s customers and counterparties may be exposed to similar legal and regulatory changes, increasing their own compliance and operational risks and costs. Further, legal and regulatory changes have resulted, and may continue to result, in legal uncertainty and the existence of overlapping or conflicting regulatory or other requirements. They may also give rise to regulatory asymmetries whereby some persons, including the Group and its customers and counterparties, are more heavily regulated than others, placing such persons at a disadvantage. The Group or its customers or counterparties may be unable to meet any new requirements on a timely basis or at all, including new product and service specifications, governance frameworks and practices and disclosure requirements and standards. We expect ESG-related legal and regulatory requirements to continue to evolve in the coming years. In the case of banks in particular, such evolving laws and regulations could include further requirements or restrictions related to lending, investing, capital and liquidity adequacy and operational resilience. The incorporation of ESG risks in the existing prudential framework is still developing and may result in increased risk weighting of certain assets. Moreover, there are significant risks and uncertainties inherent in the development of adequate risk assessment and modeling capabilities with respect to ESG-related matters and the collection and use 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 based on incorrect or insufficient customer, third-party or other data, any of which could adversely affect the Group’s disclosure and financial reporting. Further, increased and/or divergent regulation arising from climate change and other ESG-related challenges could result in increased litigation by different stakeholders (including non-governmental organizations (NGOs)) 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 the Group’s 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 loan portfolios.
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- 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 other things, increased ESG concern, on the one hand, or an opposing sentiment, on the other. These changes could impact the demand for our products and services, as well as for those of our customers and counterparties, and investor interest in our securities. Further, the funding costs of businesses that are perceived to be more exposed to climate change or to other ESG-related risks 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 or other ESG-related factors, 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 and other ESG-related matters as a risk and an appropriate consideration in business and investment decisions, by society, shareholders, customers, governments and other stakeholders (including NGOs), continues to evolve, including in relation to the financial sector’s activities. This may result in increased scrutiny of the Group’s activities, as well as its ESG-related policies, goals, decisions, disclosures or communications. The Group’s reputation and ability to attract or retain customers may be harmed if its response to concerns regarding ESG-related matters is deemed to be insufficient or inappropriate 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. At the same time, the Group may refrain from undertaking lending or investing activities or other services that would otherwise have been profitable in order to fulfill its ESG obligations or goals or to avoid reputational harm. 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 ESG-related policies, goals, decisions, disclosures and communications, may result in litigation and investigations and supervisory actions (including potential greenwashing or greenhushing claims). The Group has disclosed certain aspirational ESG-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 regulation and policy, the pace of technological change and innovation and the actions of governments and the Group’s customers and competitors. Potential greenwashing claims arising from ESG-related statements, disclosure and/or actions of the Group may also give rise to reputational risks.
Any of these factors may have a material adverse effect on the Group’s business, financial condition and results of operations.
7.2Credit risk
Credit risk is the potential loss assumed by the Group as a result of the failure by the Group´s counterparties to meet their contractual obligations.
The general principles governing credit risk management in the BBVA Group 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 Group 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 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.
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–Help our clients in the transition towards a sustainable future, with a focus on climate change and inclusive and sustainable social development.
Credit risk management in the Group has an integrated structure for all its functions, allowing decisions to be taken objectively and independently throughout the life cycle of the risk.
–At Group level: frameworks for action and standard rules of conduct are defined for handling risk, specifically, the channels, procedures, structure and supervision.
–At the business area level: they are responsible for adapting the Group's criteria to the local realities of each geographical area and for direct management of risk according to the decision-making channel:
a.Retail risks: in general, the decisions are formalized according to the scoring tools, within the general framework for action of each business area, with regard to risks. The changes in weighting and variables of these tools must be validated by the Global Risk Management (hereinafter "GRM") area.
b.Wholesale risks: in general, the decisions are formalized by each business area within its general framework for action with regard to risks, which incorporates the delegation rule and the Group's corporate policies.
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.
In addition, credit risk is affected by climate change risk, mainly through physical and transition risks that may impact the payment capacity of counterparties and the valuation of the collateral used and, therefore, expected credit losses (see "Environmental, social and governance (“ESG”) risks may adversely impact the Group").
Since 2024, the Group has begun incorporating climate risk factors into the process of calculating expected credit losses for loan portfolios through statistical models that consider both potential damage to collateral and the effect on customers' ability to pay due to physical and transition risks in the Group's main geographies. In particular, transition risk has been assessed using an approach that allows capturing its effect on the probability of default (PD) and the impact on customers' provisions in Stage 2 as well as a transfer of exposures from Stage 1 to Stage 2 for corporate portfolios. For physical risk, an approach has been used that would allow estimating the potential deterioration in the value of collateral (real estate assets in corporate and retail portfolios) and its effect on LGD. As of December 31, 2025 and 2024, the impact recorded for these risks was not significant. The Group will continue working to incorporate in these models the information available from time to time.
7.2.1Measurement of Expected Credit Loss
IFRS 9 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 entire Group. Within this common framework, each geographical area makes the necessary adaptations to capture its particularities. The methodology, assumptions and observations used by each geographical area 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 IFRS 9, each geographical area performs the grouping based on the information available, its representativeness or relevance and compliance with the necessary statistical requirements.
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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.
–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 the BBVA Group, the expected losses calculated are based on the internal models developed for all the Group's 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 Group 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 Group consists of continuously monitoring the risks to which it is exposed, which guarantees their proper classification in the different categories of IFRS 9. 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.
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Within this credit risk management framework, the Group 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 Group 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 (e.g., 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 so warrant.
Additionally, the Group 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 Group has Workout Committees, both local and corporate, 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 Group undertakes 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 geographical area determines the minimum amount of a client's exposure whose expected losses must be estimated individually taking into account the following:
–For clients with exposures in stage 3. The analysis of clients with total risk above this threshold implies analyzing at least 40% of the total risk of the wholesale portfolio in stage 3. Although the calibration of the threshold is done on the wholesale portfolio, clients of other portfolios must be analyzed if they exceed the threshold, staying in stage 3.
–For all other situations. The analysis of clients with total risk above this threshold implies analyzing at least 20% of the total risk of the Watch List wholesale portfolio. Although the threshold calibration is carried out on the exposure classified as Watch List, wholesale clients or clients belonging to other portfolios that have exposures classified in stage 2 and whose total exposure exceeds the mentioned threshold must be analyzed individually, considering both the exposures classified in stage 1 as in stage 2.
Regarding the methodology for the individual estimation of expected losses, it should be mentioned, firstly, that these are measured as the difference between the asset’s carrying amount and the estimated future cash flows discounted at the financial asset’s effective interest rate.
The estimated recoverable amount should correspond to the amount calculated under the following method:
–the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate; and
–the estimation of the recoverable amount of a collateralized exposure reflects the cash flows that may result from the settlement of the collateral, as well as prospective information the analyst may implicitly include in the analysis.
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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 2.2, the criteria for identifying the significant increase in risk are applied consistently throughout the Group, distinguishing between quantitative reasons or by comparison of probabilities of default and qualitative reasons (more than 30 days of default, Watch List consideration or non-impaired refinancing).
To manage credit risk, the Group 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 Group regarding the price of operations or distribution by geographical areas, 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.
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This set of information is the basis for determining the rating and scoring (see Note 7.2.4 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 common methodology, and in accordance with the provisions of IFRS 9 and the EBA guidelines on credit risk management practices, each geographical area 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: IFRS 9 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 variation thresholds are consistently established for each geographical area and for each portfolio, taking into account their particularities and based on the principles described. The thresholds set by each geographical area are included within the annual review process and, generally speaking, are in the range of 130% to 250% 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. For BBVA Mexico, the relative threshold for the wholesale portfolio is between 180% and 200% and the absolute threshold is between 30 basis points and 80 basis points. For the majority of the retail portfolio, the relative threshold is in the range of 170% and 250% and the absolute threshold between 10 and 100 basis points.
The establishment of absolute and relative thresholds, as well as their different levels, comply with the provisions of IFRS 9 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.
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For existing contracts before the implementation of IFRS 9, given the limitations in the information available on them, the thresholds are calibrated based on the PDs obtained from the prudential or economic models for calculating capital.
Risk Parameters Adjusted by Macroeconomic Scenarios
Expected Credit Loss (ECL) must include forward-looking information, in accordance with IFRS 9, which states that the comprehensive credit risk information must incorporate not only historical information but also all relevant credit information, also including forward-looking macroeconomic information. BBVA uses the typical credit risk parameters PD, LGD and EAD in order to calculate the ECL for the credit portfolios.
BBVA methodological approach in order to incorporate the forward-looking information aims to determine the relation between macroeconomic variables and risk parameters following three main steps:
–Step 1: Analysis and transformation of time series data.
–Step 2: For each dependent variable find conditional forecasting models that are economically consistent.
–Step 3: Select the best conditional forecasting model from the set of candidates defined in Step 2, based on their forecasting capacity.
How economic scenarios are reflected in 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 BBVA Group estimates these parameters using a proxy indicator derived from the set of variables included in the macroeconomic scenarios provided by BBVA Research.
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
IFRS 9 requires calculating an unbiased probability weighted measurement of ECL by evaluating a range of possible outcomes, including forecasts of future economic conditions.
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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 (Internal Capital Adequacy Assessment Process) and Risk Appetite Framework, stress testing, recovery plan, etc.
Additionally, BBVA Research produces alternative scenarios to the baseline scenario so as to meet the requirements under the IFRS 9 standard.
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 judgement.
–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. These areas are not symmetric with respect to the baseline scenario, as the methodology used to generate alternative scenarios explicitly incorporates the asymmetry of macroeconomic risks. In this regard, BBVA selects those quartiles of the distribution that allow for the capture of events that are sufficiently differentiated from the central scenario, while remaining plausible and consistent with the forward-looking forecasting framework, thereby excluding extreme scenarios typically associated with stress-testing exercises.
–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. This non-linearity overlay ratio is calculated on a differentiated basis by accounting stage and risk segment, with the objective of appropriately reflecting the varying sensitivity of expected credit losses to macroeconomic conditions across portfolios. In addition, floors are applied to this ratio in order to prevent the consideration of negative values, thereby ensuring that the use of multiple scenarios does not artificially reduce expected credit losses relative to those estimated under the baseline scenario.
–BBVA Group establishes equally weighted scenarios, being the probability 34% for the baseline scenario, 33% for the unfavorable alternative scenario and 33% for the favorable alternative scenario.
The approach in the BBVA Group is based on the use of the most likely scenario, which is the baseline scenario, consistent with other internal processes (ICAAP, budgeting, etc.). The impact of the use of multiple scenarios is subsequently incorporated, calculated on the basis of the probability-weighted expected loss determined for each scenario.
On the other hand, the BBVA Group 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.
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BBVA Research forecasts a maximum of five years for the macroeconomic variables. The following forecasts (positive base and negative scenarios) of the GDP growth, unemployment rate and House Price Index (HPI), for the most relevant countries where they represent a significant factor, provided by BBVA Research, were used for the calculation of the ECL as of December 31, 2025:
POSITIVE SCENARIO OF GDP, UNEMPLOYMENT RATE AND HPI FOR THE MAIN GEOGRAPHICAL AREAS | ||||||||||||||||||||||||||||||||
Spain | Mexico | Turkey | ||||||||||||||||||||||||||||||
Date | GDP | Unemployment | HPI | GDP | Unemployment | HPI | GDP | Unemployment | ||||||||||||||||||||||||
2025 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
2026 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
2027 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
2028 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
2029 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
2030 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
Peru | Argentina | Colombia | ||||||||||||||||||||||||
Date | GDP | Unemployment | GDP | Unemployment | GDP | Unemployment | ||||||||||||||||||||
2025 | % | % | % | % | % | % | ||||||||||||||||||||
2026 | % | % | % | % | % | % | ||||||||||||||||||||
2027 | % | % | % | % | % | % | ||||||||||||||||||||
2028 | % | % | % | % | % | % | ||||||||||||||||||||
2029 | % | % | % | % | % | % | ||||||||||||||||||||
2030 | % | % | % | % | % | % | ||||||||||||||||||||
BASE SCENARIO OF GDP, UNEMPLOYMENT RATE AND HPI FOR THE MAIN GEOGRAPHICAL AREAS | ||||||||||||||||||||||||||||||||
Spain | Mexico | Turkey | ||||||||||||||||||||||||||||||
Date | GDP | Unemployment | HPI | GDP | Unemployment | HPI | GDP | Unemployment | ||||||||||||||||||||||||
2025 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
2026 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
2027 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
2028 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
2029 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
2030 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
Peru | Argentina | Colombia | ||||||||||||||||||||||||
Date | GDP | Unemployment | GDP | Unemployment | GDP | Unemployment | ||||||||||||||||||||
2025 | % | % | % | % | % | % | ||||||||||||||||||||
2026 | % | % | % | % | % | % | ||||||||||||||||||||
2027 | % | % | % | % | % | % | ||||||||||||||||||||
2028 | % | % | % | % | % | % | ||||||||||||||||||||
2029 | % | % | % | % | % | % | ||||||||||||||||||||
2030 | % | % | % | % | % | % | ||||||||||||||||||||
F-70
NEGATIVE SCENARIO OF GDP, UNEMPLOYMENT RATE AND HPI FOR THE MAIN GEOGRAPHICAL AREAS | ||||||||||||||||||||||||||||||||
Spain | Mexico | Turkey | ||||||||||||||||||||||||||||||
Date | GDP | Unemployment | HPI | GDP | Unemployment | HPI | GDP | Unemployment | ||||||||||||||||||||||||
2025 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
2026 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
2027 | ( | % | % | ( | % | ( | % | % | % | % | % | |||||||||||||||||||||
2028 | ( | % | % | ( | % | % | % | % | % | % | ||||||||||||||||||||||
2029 | ( | % | % | ( | % | % | % | % | % | % | ||||||||||||||||||||||
2030 | ( | % | % | ( | % | % | % | % | % | % | ||||||||||||||||||||||
Peru | Argentina | Colombia | ||||||||||||||||||||||||
Date | GDP | Unemployment | GDP | Unemployment | GDP | Unemployment | ||||||||||||||||||||
2025 | % | % | % | % | % | % | ||||||||||||||||||||
2026 | % | % | % | % | % | % | ||||||||||||||||||||
2027 | % | % | ( | % | % | % | % | |||||||||||||||||||
2028 | % | % | ( | % | % | % | % | |||||||||||||||||||
2029 | % | % | ( | % | % | % | % | |||||||||||||||||||
2030 | % | % | ( | % | % | % | % | |||||||||||||||||||
The estimate for the then-following five years of the following rates, used in the measurement of the expected loss as of December 31, 2024, consistent with the latest estimates made public at that date, was:
POSITIVE SCENARIO OF GDP, UNEMPLOYMENT RATE AND HPI FOR THE MAIN GEOGRAPHICAL AREAS | ||||||||||||||||||||||||||||||||
Spain | Mexico | Turkey | ||||||||||||||||||||||||||||||
Date | GDP | Unemployment | HPI | GDP | Unemployment | HPI | GDP | Unemployment | ||||||||||||||||||||||||
2024 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
2025 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
2026 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
2027 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
2028 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
2029 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
Peru | Argentina | Colombia | ||||||||||||||||||||||||
Date | GDP | Unemployment | GDP | Unemployment | GDP | Unemployment | ||||||||||||||||||||
2024 | % | % | ( | % | % | % | % | |||||||||||||||||||
2025 | % | % | % | % | % | % | ||||||||||||||||||||
2026 | % | % | % | % | % | % | ||||||||||||||||||||
2027 | % | % | % | % | % | % | ||||||||||||||||||||
2028 | % | % | % | % | % | % | ||||||||||||||||||||
2029 | % | % | % | % | % | % | ||||||||||||||||||||
BASE SCENARIO OF GDP, UNEMPLOYMENT RATE AND HPI FOR THE MAIN GEOGRAPHICAL AREAS | ||||||||||||||||||||||||||||||||
Spain | Mexico | Turkey | ||||||||||||||||||||||||||||||
Date | GDP | Unemployment | HPI | GDP | Unemployment | HPI | GDP | Unemployment | ||||||||||||||||||||||||
2024 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
2025 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
2026 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
2027 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
2028 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
2029 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
F-71
Peru | Argentina | Colombia | ||||||||||||||||||||||||
Date | GDP | Unemployment | GDP | Unemployment | GDP | Unemployment | ||||||||||||||||||||
2024 | % | % | ( | % | % | % | % | |||||||||||||||||||
2025 | % | % | % | % | % | % | ||||||||||||||||||||
2026 | % | % | % | % | % | % | ||||||||||||||||||||
2027 | % | % | % | % | % | % | ||||||||||||||||||||
2028 | % | % | % | % | % | % | ||||||||||||||||||||
2029 | % | % | % | % | % | % | ||||||||||||||||||||
NEGATIVE SCENARIO OF GDP, UNEMPLOYMENT RATE AND HPI FOR THE MAIN GEOGRAPHICAL AREAS | ||||||||||||||||||||||||||||||||
Spain | Mexico | Turkey | ||||||||||||||||||||||||||||||
Date | GDP | Unemployment | HPI | GDP | Unemployment | HPI | GDP | Unemployment | ||||||||||||||||||||||||
2024 | % | % | % | % | % | % | % | % | ||||||||||||||||||||||||
2025 | % | % | % | ( | % | % | % | % | % | |||||||||||||||||||||||
2026 | ( | % | % | ( | % | ( | % | % | % | % | % | |||||||||||||||||||||
2027 | ( | % | % | ( | % | % | % | % | % | % | ||||||||||||||||||||||
2028 | ( | % | % | ( | % | % | % | % | % | % | ||||||||||||||||||||||
2029 | ( | % | % | ( | % | % | % | % | % | % | ||||||||||||||||||||||
Peru | Argentina | Colombia | ||||||||||||||||||||||||
Date | GDP | Unemployment | GDP | Unemployment | GDP | Unemployment | ||||||||||||||||||||
2024 | % | % | ( | % | % | % | % | |||||||||||||||||||
2025 | % | % | % | % | % | % | ||||||||||||||||||||
2026 | % | % | ( | % | % | % | % | |||||||||||||||||||
2027 | % | % | ( | % | % | % | % | |||||||||||||||||||
2028 | % | % | ( | % | % | % | % | |||||||||||||||||||
2029 | % | % | ( | % | % | % | % | |||||||||||||||||||
F-72
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 for the Group and the main portfolios and geographical areas is shown below:
EXPECTED LOSS VARIATION AS OF DECEMBER 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||
BBVA Group | Spain | Mexico | Turkey | |||||||||||||||||||||||||||||||||||||||||||||||
GDP | Total Portfolio | Retail | Companies | Debt securities | Total Portfolio | Companies | Retail | Total Portfolio | Companies | Retail | Total Portfolio | Companies | Retail | |||||||||||||||||||||||||||||||||||||
- 100 bps | ||||||||||||||||||||||||||||||||||||||||||||||||||
+100 bps | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
| Housing price | ||||||||||||||||||||||||||||||||||||||||||||||||||
- 100 bps | ||||||||||||||||||||||||||||||||||||||||||||||||||
+100 bps | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
EXPECTED LOSS VARIATION AS OF DECEMBER 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||
BBVA Group | Spain | Mexico | Turkey | |||||||||||||||||||||||||||||||||||||||||||||||
GDP | Total Portfolio | Retail | Companies | Debt securities | Total Portfolio | Companies | Retail | Total Portfolio | Companies | Retail | Total Portfolio | Companies | Retail | |||||||||||||||||||||||||||||||||||||
- 100 bps | ||||||||||||||||||||||||||||||||||||||||||||||||||
+100 bps | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
| Housing price | ||||||||||||||||||||||||||||||||||||||||||||||||||
- 100 bps | ||||||||||||||||||||||||||||||||||||||||||||||||||
+100 bps | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Estimation models and additional adjustments to expected loss measurement
The Group periodically reviews its individual estimates and its models for collective estimates of expected losses, as well as the impact of macroeconomic scenarios considered for such purposes. It should be noted that, although these updates incorporate the best information available at any given time, they may not fully reflect the most recent developments in the economic environment, especially in contexts of high uncertainty and volatility or with respect to very recent events still underway. Furthermore, the Group may supplement such expected losses to incorporate effects that may not be included therein, either because it considers that there are additional risk factors, or because of the need to reflect sectoral particularities or those that may affect a set of operations or borrowers. Those adjustments are made according to a formal internal approval process established for this purpose, including, among others, the relevant committees of the Global Risk Management Committee (hereinafter, "GRMC").
F-73
7.2.2Credit risk exposure
BBVA Group’s credit risk exposure by headings in the consolidated balance sheets as of December 31, 2025, 2024 and 2023 is provided below. It does not consider the loss allowances and the availability of collateral or other credit enhancements to enable compliance with payment obligations. The details are broken down by category of financial instruments:
MAXIMUM CREDIT RISK EXPOSURE (MILLIONS OF EUROS) | |||||||||||||||||
Notes | December 2025 | Stage 1 | Stage 2 | Stage 3 | |||||||||||||
| Financial assets held for trading | |||||||||||||||||
Equity instruments | 10 | ||||||||||||||||
Debt securities | 10 | ||||||||||||||||
Loans and advances | 10 | ||||||||||||||||
| Non-trading financial assets mandatorily at fair value through profit or loss | |||||||||||||||||
Equity instruments | 11 | ||||||||||||||||
Debt securities | 11 | ||||||||||||||||
Loans and advances | 11 | ||||||||||||||||
| Financial assets designated at fair value through profit or loss | 12 | ||||||||||||||||
| Derivatives (trading and hedging) | |||||||||||||||||
| Financial assets at fair value through other comprehensive income | |||||||||||||||||
Equity instruments | 13 | ||||||||||||||||
Debt securities | |||||||||||||||||
Loans and advances | |||||||||||||||||
| Financial assets at amortized cost | |||||||||||||||||
Debt securities | |||||||||||||||||
Loans and advances to central banks | |||||||||||||||||
Loans and advances to credit institutions | |||||||||||||||||
Loans and advances to customers | |||||||||||||||||
| Total financial assets risk | |||||||||||||||||
| Total loan commitments and financial guarantees | |||||||||||||||||
Loan commitments given | 33 | ||||||||||||||||
Financial guarantees given | 33 | ||||||||||||||||
Other commitments given | 33 | ||||||||||||||||
| Total maximum credit exposure | |||||||||||||||||
F-74
MAXIMUM CREDIT RISK EXPOSURE (MILLIONS OF EUROS) | |||||||||||||||||
Notes | December 2024 | Stage 1 | Stage 2 | Stage 3 | |||||||||||||
| Financial assets held for trading | |||||||||||||||||
Equity instruments | 10 | ||||||||||||||||
Debt securities | 10 | ||||||||||||||||
Loans and advances | 10 | ||||||||||||||||
| Non-trading financial assets mandatorily at fair value through profit or loss | |||||||||||||||||
Equity instruments | 11 | ||||||||||||||||
Debt securities | 11 | ||||||||||||||||
Loans and advances | 11 | ||||||||||||||||
| Financial assets designated at fair value through profit or loss | 12 | ||||||||||||||||
| Derivatives (trading and hedging) | |||||||||||||||||
| Financial assets at fair value through other comprehensive income | |||||||||||||||||
Equity instruments | 13 | ||||||||||||||||
Debt securities | |||||||||||||||||
Loans and advances | 13 | ||||||||||||||||
| Financial assets at amortized cost | |||||||||||||||||
Debt securities | |||||||||||||||||
Loans and advances to central banks | |||||||||||||||||
Loans and advances to credit institutions | |||||||||||||||||
Loans and advances to customers | |||||||||||||||||
| Total financial assets risk | |||||||||||||||||
| Total loan commitments and financial guarantees | |||||||||||||||||
Loan commitments given | 33 | ||||||||||||||||
Financial guarantees given | 33 | ||||||||||||||||
Other commitments given | 33 | ||||||||||||||||
| Total maximum credit exposure | |||||||||||||||||
F-75
MAXIMUM CREDIT RISK EXPOSURE (MILLIONS OF EUROS) | |||||||||||||||||
Notes | December 2023 | Stage 1 | Stage 2 | Stage 3 | |||||||||||||
| Financial assets held for trading | |||||||||||||||||
Equity instruments | 10 | ||||||||||||||||
Debt securities | 10 | ||||||||||||||||
Loans and advances | 10 | ||||||||||||||||
| Non-trading financial assets mandatorily at fair value through profit or loss | |||||||||||||||||
Equity instruments | 11 | ||||||||||||||||
Debt securities | 11 | ||||||||||||||||
Loans and advances | 11 | ||||||||||||||||
| Financial assets designated at fair value through profit or loss | 12 | ||||||||||||||||
| Derivatives (trading and hedging) | |||||||||||||||||
| Financial assets at fair value through other comprehensive income | |||||||||||||||||
Equity instruments | 13 | ||||||||||||||||
Debt securities | |||||||||||||||||
Loans and advances | 13 | ||||||||||||||||
| Financial assets at amortized cost | |||||||||||||||||
Debt securities | |||||||||||||||||
Loans and advances to central banks | |||||||||||||||||
Loans and advances to credit institutions | |||||||||||||||||
Loans and advances to customers | |||||||||||||||||
| Total financial assets risk | |||||||||||||||||
| Total loan commitments and financial guarantees | |||||||||||||||||
Loan commitments given | 33 | ||||||||||||||||
Financial guarantees given | 33 | ||||||||||||||||
Other commitments given | 33 | ||||||||||||||||
| Total maximum credit exposure | |||||||||||||||||
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 consolidated 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 in which the criterion described below applies.
–The maximum credit risk exposure on financial commitments and guarantees granted is the maximum that the Group 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, 2025, there are no financial assets classified as purchased or originated credit-impaired in the consolidated balance sheets of the BBVA Group.
F-76
The breakdown by geographical area and stage of the maximum credit risk exposure, the accumulated allowances recorded and the carrying amount of the loans and advances to customers recorded at amortized cost as of December 31, 2025, 2024 and 2023 is shown below:
DECEMBER 2025 (MILLIONS OF EUROS) | ||||||||||||||||||||||||||||||||||||||||||||
Gross exposure | Accumulated allowances | Carrying amount | ||||||||||||||||||||||||||||||||||||||||||
Total | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | |||||||||||||||||||||||||||||||||
Spain (1) | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Mexico | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Turkey (2) | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
South America (3) | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Others | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Total (4) | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Of which: individual | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Of which: collective | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
(2) Turkey includes all countries in which Garanti BBVA operates.
(3) In South America, BBVA Group operates mainly in Argentina, Colombia, Peru and Uruguay.
(4) The amount of the accumulated allowances 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, 2025, the remaining balance was €76 million). These valuation adjustments are recognized in the consolidated income statement during the residual life of the relevant instruments or value corrections are made when the losses materialize.
DECEMBER 2024 (MILLIONS OF EUROS) | ||||||||||||||||||||||||||||||||||||||||||||
Gross exposure | Accumulated allowances | Carrying amount | ||||||||||||||||||||||||||||||||||||||||||
Total | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | |||||||||||||||||||||||||||||||||
Spain (1) | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Mexico | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Turkey (2) | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
South America (3) | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Others | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Total (4) | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Of which: individual | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Of which: collective | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
(1) Spain includes all countries where BBVA, S.A. operates.
(2) Turkey includes all countries in which Garanti BBVA operates.
(3) In South America, BBVA Group operates mainly in Argentina, Colombia, Peru and Uruguay.
(4) The amount of the accumulated allowances 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, 2024 the remaining balance was €107 million). These valuation adjustments are recognized in the consolidated income statement during the residual life of the relevant instruments or value corrections are made when the losses materialize.
F-77
DECEMBER 2023 (MILLIONS OF EUROS) | ||||||||||||||||||||||||||||||||||||||
Gross exposure | Accumulated allowances | Carrying amount | ||||||||||||||||||||||||||||||||||||
Total | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | |||||||||||||||||||||||||||
Spain (1) | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Mexico | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Turkey (2) | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
South America (3) | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Others | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Total ⁽⁴⁾ | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Of which: individual | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Of which: collective | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
(2) Turkey includes all countries in which Garanti BBVA operates.
(3) In South America, BBVA Group operates mainly in Argentina, Colombia, Peru and Uruguay.
(4) The amount of the accumulated allowances 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 remaining balance was €142 million). These valuation adjustments are recognized in the consolidated income statement during the residual life of the operations or are applied to the value corrections when the losses materialize.
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, 2025, 2024 and 2023 is shown below:
DECEMBER 2025 (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 | |||||||||||||||||||||||||||||||||
General governments | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Other financial corporations | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Non-financial corporations | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Households | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Loans and advances to customers | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
DECEMBER 2024 (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 | |||||||||||||||||||||||||||||||||
General governments | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Other financial corporations | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Non-financial corporations | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Households | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Loans and advances to customers | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
F-78
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 | |||||||||||||||||||||||||||||||||
General governments | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Other financial corporations | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Non-financial corporations | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Households | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Loans and advances to customers | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
The breakdown by type of counterparty and product, net of loss allowances, and the gross carrying amount by type of counterparty as of December 31, 2025, 2024 and 2023 is shown below:
DECEMBER 2025 (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 | ||||||||||||||||||||||||||
Credit card debt | — | |||||||||||||||||||||||||
Commercial debtors | ||||||||||||||||||||||||||
Finance leases | ||||||||||||||||||||||||||
Reverse repurchase loans | ||||||||||||||||||||||||||
Other term loans | ||||||||||||||||||||||||||
Advances that are not loans | ||||||||||||||||||||||||||
| LOANS AND ADVANCES | ||||||||||||||||||||||||||
By secured loans | ||||||||||||||||||||||||||
Of which: mortgage loans collateralized by immovable property | ||||||||||||||||||||||||||
Of which: other collateralized loans | ||||||||||||||||||||||||||
By purpose of the loan | ||||||||||||||||||||||||||
Of which: credit for consumption | ||||||||||||||||||||||||||
Of which: lending for house purchase | ||||||||||||||||||||||||||
By subordination | ||||||||||||||||||||||||||
Of which: project finance loans | ||||||||||||||||||||||||||
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DECEMBER 2024 (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 | ||||||||||||||||||||||||||
Credit card debt | ||||||||||||||||||||||||||
Commercial debtors | ||||||||||||||||||||||||||
Finance leases | ||||||||||||||||||||||||||
Reverse repurchase loans | ||||||||||||||||||||||||||
Other term loans | ||||||||||||||||||||||||||
Advances that are not loans | ||||||||||||||||||||||||||
| LOANS AND ADVANCES | ||||||||||||||||||||||||||
By secured loans | ||||||||||||||||||||||||||
Of which: mortgage loans collateralized by immovable property | ||||||||||||||||||||||||||
Of which: other collateralized loans | ||||||||||||||||||||||||||
By purpose of the loan | ||||||||||||||||||||||||||
Of which: credit for consumption | ||||||||||||||||||||||||||
Of which: lending for house purchase | ||||||||||||||||||||||||||
By subordination | ||||||||||||||||||||||||||
Of which: project finance loans | ||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||
Credit card debt | ||||||||||||||||||||||||||
Commercial debtors | ||||||||||||||||||||||||||
Finance leases | ||||||||||||||||||||||||||
Reverse repurchase loans | ||||||||||||||||||||||||||
Other term loans | ||||||||||||||||||||||||||
Advances that are not loans | ||||||||||||||||||||||||||
| LOANS AND ADVANCES | ||||||||||||||||||||||||||
By secured loans | ||||||||||||||||||||||||||
Of which: mortgage loans collateralized by immovable property | ||||||||||||||||||||||||||
Of which: other collateralized loans | ||||||||||||||||||||||||||
By purpose of the loan | ||||||||||||||||||||||||||
Of which: credit for consumption | ||||||||||||||||||||||||||
Of which: lending for house purchase | ||||||||||||||||||||||||||
By subordination | ||||||||||||||||||||||||||
Of which: project finance loans | ||||||||||||||||||||||||||
7.2.3Mitigation of credit risk, collateralized credit risk and other credit enhancements
In certain cases, maximum credit risk exposure is reduced by collateral, credit enhancements and other actions which mitigate the Group’s exposure. The BBVA Group 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 Group 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.
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The policy of accepting risks is therefore organized into three different levels in the BBVA Group:
–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 Group’s wholesale and retail banking are included in the Specific Collateral Rules.
The methods used to value the collateral are in line with the best market practices and imply the use of appraisal of real estate collateral, the market price in market securities, the trading price of shares in mutual funds, etc. All the collaterals received must be correctly assigned and entered in the corresponding register. They must also have the approval of the Group’s legal units.
The valuation of the collateral is taken into account in the calculation of the expected losses. The Group 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).
–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, 2025 is presented in Note 7.4.2.
–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, 2025, 2024 and 2023, the BBVA Group had no significant credit risk exposure of impaired financial assets at fair value through other comprehensive income (see Note 7.2.2).
–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 reverse repurchase agreements (reverse repos).
F-81
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 7.2.5), shown by type of collateral, as of December 31, 2025, 2024 and 2023, 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 2025 | ||||||||||||||||||||
December 2024 | ||||||||||||||||||||
December 2023 | ||||||||||||||||||||
The value of guarantees received as of December 31, 2025, 2024 and 2023, is the following:
GUARANTEES RECEIVED (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
| Value of collateral | |||||||||||
Of which: guarantees normal risks under special monitoring | |||||||||||
Of which: guarantees non-performing risks | |||||||||||
| Value of other guarantees | |||||||||||
Of which: guarantees normal risks under special monitoring | |||||||||||
Of which: guarantees non-performing risks | |||||||||||
| Total value of guarantees received | |||||||||||
The maximum credit risk exposure of impaired financial guarantees and other commitments as of December 31, 2025, 2024 and 2023 amounts to €676 million, €791 million and €1,030 million, respectively (see Note 7.2.2).
7.2.4Credit quality of financial assets that are neither past due nor impaired
The BBVA Group 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 Group 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.
F-82
There are three types of scoring, based on the information used and on its purpose:
–Reactive scoring: measures the risk of a transaction requested by an individual using variables relating to the requested transaction and to the customer’s socio-economic data available at the time of the request. The new transaction is approved or rejected depending on the score.
–Behavioral scoring: scores transactions for a given product in an outstanding risk portfolio of the entity, enabling the credit rating to be tracked and the customer’s needs to be anticipated. It uses transaction and customer variables available internally. Specifically, variables that refer to the behavior of both the product and the customer.
–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 BBVA Group 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.
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The table below outlines the distribution of the gross carrying amount of loans and advances, contingent risk and commitments, in percentage terms, of the BBVA Group, based on their probability of default within 12 months and internal rating used in the calculation of the expected loss under IFRS 9, and their stages, as of December 31, 2025, 2024 and 2023:
PROBABILITY OF DEFAULT (BASIS POINTS) AND INTERNAL RATING | |||||||||||||||||||||||||||||
2025 | 2024 | 2023 | |||||||||||||||||||||||||||
Subject to 12 month ECL (stage 1) | Subject to lifetime ECL (stage 2) | Subject to 12 month ECL (stage 1) | Subject to lifetime ECL (stage 2) | Subject to 12 month ECL (stage 1) | Subject to lifetime ECL (stage 2) | ||||||||||||||||||||||||
Internal rating | PDs | % | % | % | % | % | % | ||||||||||||||||||||||
AAA | 0 to 2 | ||||||||||||||||||||||||||||
AA+ to AA- | 2 to 5 | ||||||||||||||||||||||||||||
A+ to A- | 5 to 11 | ||||||||||||||||||||||||||||
BBB+ to BBB- | 11 to 39 | ||||||||||||||||||||||||||||
BB+ to BB- | 39 to 194 | ||||||||||||||||||||||||||||
B+ to B- | 194 to 1,061 | ||||||||||||||||||||||||||||
CCC+ to CCC- | 1,061 to 2,121 | ||||||||||||||||||||||||||||
CC+ to C | > 2,121 | ||||||||||||||||||||||||||||
| Total | |||||||||||||||||||||||||||||
7.2.5Impaired loan risks
The breakdown of loans and advances within financial assets at amortized cost by type of counterparty, including their respective gross carrying amount, impaired amount and accumulated impairment as of December 31, 2025, 2024 and 2023 is as follows:
DECEMBER 2025 (MILLIONS OF EUROS) | |||||||||||
Gross carrying amount | Impaired loans and advances | Accumulated impairment | |||||||||
Central banks | ( | ||||||||||
General governments | ( | ||||||||||
Credit institutions | ( | ||||||||||
Other financial corporations | ( | ||||||||||
Non-financial corporations | ( | ||||||||||
Households | ( | ||||||||||
| LOANS AND ADVANCES | ( | ||||||||||
DECEMBER 2024 (MILLIONS OF EUROS) | |||||||||||
Gross carrying amount | Impaired loans and advances | Accumulated impairment | |||||||||
Central banks | ( | ||||||||||
General governments | ( | ||||||||||
Credit institutions | ( | ||||||||||
Other financial corporations | ( | ||||||||||
Non-financial corporations | ( | ||||||||||
Households | ( | ||||||||||
| LOANS AND ADVANCES | ( | ||||||||||
DECEMBER 2023 (MILLIONS OF EUROS) | |||||||||||
Gross carrying amount | Impaired loans and advances | Accumulated impairment | |||||||||
Central banks | ( | ||||||||||
General governments | ( | ||||||||||
Credit institutions | ( | ||||||||||
Other financial corporations | ( | ||||||||||
Non-financial corporations | ( | ||||||||||
Households | ( | ||||||||||
| LOANS AND ADVANCES | ( | ||||||||||
F-84
The changes during the years 2025, 2024 and 2023 of impaired financial assets and guarantees given are as follows:
CHANGES IN IMPAIRED FINANCIAL ASSETS AND GUARANTEES GIVEN (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
| Balance at the beginning | |||||||||||
Additions | |||||||||||
Decreases (1) | ( | ( | ( | ||||||||
| Net additions | |||||||||||
Amounts written-off | ( | ( | ( | ||||||||
Exchange differences and other | ( | ( | ( | ||||||||
| Balance at the end | |||||||||||
The changes during the years 2025, 2024 and 2023 in financial assets derecognized from the consolidated 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 | 2025 | 2024 | 2023 | |||||||||||
| Balance at the beginning | ||||||||||||||
Companies held for sale | ||||||||||||||
Increase | ||||||||||||||
Decrease: | ( | ( | ( | |||||||||||
Re-financing or restructuring | ( | ( | ( | |||||||||||
Cash recovery | 47 | ( | ( | ( | ||||||||||
Foreclosed assets | ( | ( | ( | |||||||||||
Sales (1) | ( | ( | ( | |||||||||||
Debt forgiveness | ( | ( | ( | |||||||||||
Time-barred debt and other causes | ( | ( | ( | |||||||||||
Net exchange differences | ( | ( | ||||||||||||
| Balance at the end | ||||||||||||||
(1) Includes principal and interest.
As indicated in Note 2.2.1, although they have been derecognized from the consolidated balance sheet, the BBVA Group 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.
F-85
7.2.6Gross carrying amount and loss allowances
Movements, measured over a 12-month period, in gross accounting balances and accumulated loss allowances during 2025, 2024 and 2023 are recorded on the consolidated balance sheet as of December 31, 2025, 2024 and 2023 in order to cover the estimated impairment or reversal of impairment on loans and advances at fair value with changes through other comprehensive income and in loans and advances at amortized cost:
CHANGES IN GROSS CARRYING AMOUNT OF LOANS AND ADVANCES AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME AND AT AMORTIZED COST. YEAR 2025 (MILLIONS OF EUROS) | ||||||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | |||||||||||
| Balance at the beginning | ||||||||||||||
Transfers of financial assets: | ( | |||||||||||||
from stage 1 to stage 2 | ( | |||||||||||||
from stage 2 to stage 1 | ( | |||||||||||||
to stage 3 | ( | ( | ||||||||||||
from stage 3 | ( | |||||||||||||
Net annual origination of financial assets | ( | |||||||||||||
Becoming write-offs | ( | ( | ( | ( | ||||||||||
Changes in model / methodology | ||||||||||||||
Foreign exchange | ( | ( | ( | ( | ||||||||||
Modifications that do not result in derecognition | ( | |||||||||||||
Other | ( | ( | ||||||||||||
| Balance at the end | ||||||||||||||
CHANGES IN ALLOWANCES OF LOANS AND ADVANCES AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME AND AT AMORTIZED COST. YEAR 2025 (MILLIONS OF EUROS) | ||||||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | |||||||||||
| Balance at the beginning | ( | ( | ( | ( | ||||||||||
Transfers of financial assets: | ( | ( | ( | |||||||||||
from stage 1 to stage 2 | ( | ( | ||||||||||||
from stage 2 to stage 1 | ( | |||||||||||||
to stage 3 | ( | ( | ||||||||||||
from stage 3 | ( | ( | ||||||||||||
Net annual origination of allowances | ( | ( | ( | ( | ||||||||||
Becoming write-offs | ||||||||||||||
Changes in model / methodology | ||||||||||||||
Foreign exchange | ||||||||||||||
Modifications that do not result in derecognition | ( | ( | ( | |||||||||||
Other | ||||||||||||||
| Balance at the end | ( | ( | ( | ( | ||||||||||
For the year ended December 31, 2025, 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 €6,073 million (€5,745 million and €4,428 million for the years ended December 31, 2024 and 2023, respectively) (see Note 47).
F-86
CHANGES IN GROSS CARRYING AMOUNT OF LOANS AND ADVANCES AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME AND AT AMORTIZED COST. YEAR 2024 (MILLIONS OF EUROS) | ||||||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | |||||||||||
| Balance at the beginning | ||||||||||||||
Transfers of financial assets: | ( | |||||||||||||
from stage 1 to stage 2 | ( | |||||||||||||
from stage 2 to stage 1 | ( | |||||||||||||
to stage 3 | ( | ( | ||||||||||||
from stage 3 | ( | |||||||||||||
Net annual origination of financial assets | ( | |||||||||||||
Becoming write-offs | ( | ( | ( | ( | ||||||||||
Foreign exchange | ( | ( | ( | ( | ||||||||||
Modifications that do not result in derecognition | ||||||||||||||
Other | ( | ( | ||||||||||||
| Balance at the end | ||||||||||||||
During 2024, the criteria for identifying significant increases in credit risk were reviewed and updated. As part of this update, certain very short-term portfolio transactions, as well as those meeting the expanded definition of the low credit risk exception (see Note 2.2.1), were exempted from the transfer based on quantitative criteria. These modifications resulted in a significant reduction in the Stage 2 balance at the Group level during the last quarter of 2024, with the impact of these measures primarily concentrated in BBVA, S.A.
CHANGES IN ALLOWANCES OF LOANS AND ADVANCES AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME AND AT AMORTIZED COST. YEAR 2024 (MILLIONS OF EUROS) | ||||||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | |||||||||||
| Balance at the beginning | ( | ( | ( | ( | ||||||||||
Transfers of financial assets: | ( | ( | ( | |||||||||||
from stage 1 to stage 2 | ( | ( | ||||||||||||
from stage 2 to stage 1 | ( | |||||||||||||
to stage 3 | ( | ( | ||||||||||||
from stage 3 | ( | ( | ||||||||||||
Net annual origination of allowances | ( | ( | ( | |||||||||||
Becoming write-offs | ||||||||||||||
Foreign exchange | ||||||||||||||
Modifications that do not result in derecognition | ( | ( | ||||||||||||
Other | ||||||||||||||
| Balance at the end | ( | ( | ( | ( | ||||||||||
CHANGES IN GROSS CARRYING AMOUNT OF LOANS AND ADVANCES AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME AND AT AMORTIZED COST. YEAR 2023 (MILLIONS OF EUROS) | ||||||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | |||||||||||
| Balance at the beginning | ||||||||||||||
Transfers of financial assets: | ( | |||||||||||||
from stage 1 to stage 2 | ( | |||||||||||||
from stage 2 to stage 1 | ( | |||||||||||||
to stage 3 | ( | ( | ||||||||||||
from stage 3 | ( | |||||||||||||
Net annual origination of financial assets | ( | |||||||||||||
Becoming write-offs | ( | ( | ( | ( | ||||||||||
Foreign exchange | ( | ( | ( | ( | ||||||||||
Modifications that do not result in derecognition | ( | ( | ||||||||||||
Other | ( | ( | ( | ( | ||||||||||
| Balance at the end | ||||||||||||||
F-87
CHANGES IN ALLOWANCES OF LOANS AND ADVANCES AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME AND AT AMORTIZED COST. YEAR 2023 (MILLIONS OF EUROS) | ||||||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | |||||||||||
| Balance at the beginning | ( | ( | ( | ( | ||||||||||
Transfers of financial assets: | ( | ( | ( | |||||||||||
from stage 1 to stage 2 | ( | ( | ||||||||||||
from stage 2 to stage 1 | ( | |||||||||||||
to stage 3 | ( | ( | ||||||||||||
from stage 3 | ( | ( | ||||||||||||
Net annual origination of allowances | ( | ( | ( | ( | ||||||||||
Becoming write-offs | ||||||||||||||
Foreign exchange | ( | |||||||||||||
Modifications that do not result in derecognition | ( | ( | ||||||||||||
Other | ||||||||||||||
| Balance at the end | ( | ( | ( | ( | ||||||||||
The loss allowances recorded in the balance sheet to cover the impairment estimated in the debt securities amounted to €94 million, €169 million and €166 million as of December 31, 2025, 2024 and 2023, respectively. The variation is mainly due to changes in credit risk variations, mainly in Garanti BBVA, BBVA, S.A. and BBVA Argentina.
Additionally, the loss allowances recorded in the balance sheet to cover the impairment estimated in the commitments and guarantees given amounted to €725 million, €670 million and €770 million as of December 31, 2025, 2024 and 2023, respectively (see Note 24). The variation is mainly driven by changes due to origination and acquisition in Garanti BBVA.
7.2.7Refinancing and restructuring transactions
Group policies and principles with respect to refinancing and restructuring transactions
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.
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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, with 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.
The Group generally 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, ii) the time when the exposure was classified as deteriorated, iii) the end of any grace period included in restructuring agreements.
–The customer does not have past due payments and objective criteria, demonstrating the borrower´s ability to pay, have been verified.
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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. They may be reclassified to normal risk as long as the significant increase in credit risk has been reversed within two years, although they must remain identified as refinanced/restructured until the minimum two-year trial period ends.
–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%.
For quantitative information on refinancing and restructuring transactions see Appendix VIII.
7.2.8Risk concentration
Policies for preventing excessive risk concentration
In order to prevent the build-up of excessive risk concentrations at the individual, sector, portfolio and geography levels, BBVA Group maintains updated maximum permitted risk concentration indices which are tied to the various observable variables related to concentration risk.
Together with the limits for individual concentration, the Group uses the Herfindahl index to measure the concentration of the Group's portfolio and the banking group's subsidiaries. At the BBVA Group level, the index reached implies a "very low" degree of concentration.
The limit on the Group’s exposure or financial commitment to a specific customer therefore depends on the customer’s credit rating, the nature of the risks involved, and the Group’s presence in a given market, based on the following guidelines:
–The aim is, as much as possible, to reconcile the customer's credit needs (commercial/financial, short-term/long-term, etc.) with the interests of the Group.
–Any legal limits that may exist concerning risk concentration are taken into account (relationship between risks with a customer and the capital of the shareholder´s entity that assumes them), the markets, the macroeconomic situation, etc.
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–The aim is to seek inter and intra-sector diversification in coherence with the metrics defined in the RAF for the Group and for the banking group's subsidiaries.
Risk concentrations by geographical area
The breakdown of the main figures in the most significant foreign currencies in the consolidated balance sheets is set forth in Appendix IX.
Sovereign risk concentration
Sovereign risk management
The identification, measurement, control and monitoring of risk associated with sovereign risk transactions is carried out by a centralized unit within the BBVA Group's Risk Area. Its basic functions are preparing reports (called financial programs) on the countries with which it maintains cross-border risks (i.e. risks taken in a foreign currency from outside the country with borrowers in the country, whether public or private) and sovereign risks (i.e. risks with the local Sovereign of the country where the risk-taking unit is located), monitoring those risks, establishing risk limits, assigning ratings to the countries analyzed and, in general, supporting the Group in any information request regarding this type of transaction. The risk policies established in the financial programs are approved by the relevant risk committees.
The country risk unit tracks the evolution of the risks associated with the various countries to which the Group are exposed (including sovereign risk) on an ongoing basis in order to adapt its risk and mitigation policies to any macroeconomic and political changes that may occur. Moreover, it regularly updates its internal ratings and forecasts for these countries. The methodology is based on the assessment of quantitative and qualitative parameters which are in line with those used by certain multilateral organizations (the International Monetary Fund (IMF), the World Bank, etc.) rating agencies and export credit organizations.
For additional information on sovereign risk see Appendix IX.
Policies for Risk related to the developer and Real Estate sector in Spain
Policies and strategies established by the Group to deal with risks related to the developer and real estate sector
BBVA Group 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 risk teams, but throughout the handling, commercial, problem risks and legal, etc. It also includes the research department of the BBVA Group (BBVA Research), which helps determine the medium/long-term vision needed to manage this portfolio. The 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 within a sector is highly cyclical.
Specific policies for analysis and granting of new developer risk transactions
In the analysis of new transactions, the assessment of the commercial operation in terms of the economic and financial viability of the project has been one of the constant. The monitoring of the work, sales prospects and the legal situation of the project are essential aspects for the admission and follow-up of new real estate transactions. With regard the participation of the Risk Acceptance teams, they have a direct link and participate in the committees of areas such as Valuation, Legal, BBVA Research and Recoveries. This guarantees coordination and exchange of information in all the processes.
In this context, and within the current Real Estate cycle, the strategy with clients 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.
Risk monitoring policies
The base information for analyzing the real estate portfolios is updated monthly. There is a systematic monitoring of developments under close monitoring with the evolution of works and sales.
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Policies applied in the management of real estate assets in Spain
The internal Rules on Real Estate Financing, which establish recommendations for financing a new housing development business, are reviewed and updated annually.
The recommendations represent guidelines about how to manage the credit admission activity of BBVA Group entities based on best practices of markets in which this activity is performed. It is expected that a high percentage of the current transactions will be in compliance with the latter.
Risk concentration related to the developer and Real Estate sector in Spain
As of December 31, 2025, there is no risk concentration in the developer and real estate sector, taking into account that its weight in total wholesale risks in Spain was approximately 10%, while compared with the total risks in the portfolio (wholesale and retail), the Real Estate risk assumed was around 4%.
For quantitative information about the risk related to the developer and real estate sector in Spain see Appendix IX.
7.3Structural 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 Group, the following types of structural risks are defined, according to their nature: interest rate risk, credit spread risk, exchange rate risk, equity risk, and actuarial risk.
The scope of structural risks in the Group excludes market risks in the trading book that are clearly delimited and separated and are part of the Market Risks category.
The Assets and Liabilities Committee (ALCO) is the main responsible body for the management of structural risks regarding liquidity/ funding, interest rate, credit spread, currency, equity and solvency. Every month, with the participation of the CEO and representatives from the areas of Finance, Risks and Business Areas, this committee monitors the structural risks and is presented with proposals with regard to action plans related with its management for its approval. These management proposals are made by the Finance area with a forward-looking focus, maintaining the alignment with the Risk Appetite Framework, trying to guarantee the recurrence of results and financial stability, as well as to preserve the solvency of the entity. All balance sheet management units have a local ALCO, which is permanently attended by members of the Corporate Center, and there is a corporate ALCO where management strategies are monitored and presented in the Group's subsidiaries.
The GRM area acts as an independent unit, ensuring adequate separation between the management and risk control functions, and is responsible for ensuring that the structural risks in the Group are managed according to the strategy approved by the Board of Directors.
Consequently, GRM deals with the identification, measurement, monitoring and control of those risks and their reporting to the corresponding corporate bodies. Through the 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.
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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.
7.3.1Interest 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 and credit spreads movements is a risk inherent to the development of the banking business, which is also, in turn, an opportunity to create economic value. Therefore, these risks must be effectively managed so that they are limited in accordance with the entity’s equity and in line with the expected economic result.
In BBVA, the purpose of IRRBB risk management is to maintain the recurrent generation of earnings in the event of market interest rate fluctuations, through the contribution to the net interest income and the control of the potential impacts on the mark-to-market of the fair value accounted portfolios, as well as to limit the capital consumption due to structural interest rate risk. Likewise, the spread risk management in the banking book is aimed at limiting the equity impact of market credit spread movements on the valuation of the structural balance sheet, mainly associated with fixed income instruments which are used in balance sheet risk management. The objective is to keep this risk at levels consistent with the equity of the Group, while controlling the effect on earnings through net interest income and the mark-to-market of instruments accounted for at fair value.
These functions fall to the Global Asset & Liability Management (hereinafter "ALM") unit, within the Finance area, which, through ALCO, aims to guarantee the recurrence of results and preserve the solvency of the entity, always adhering to the risk profile defined by the management bodies of the BBVA Group.
IRRBB management is decentralized, and is carried out in each entity included in the structural balance sheet (banking book) of the BBVA Group with the supervision and coordination from the corporate unit of Global ALM, keeping the exposure to interest rates and credit spreads movements aligned with the strategy and the target risk profile of the Group, and in compliance with the regulatory requirements of the EBA guidelines.
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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 IRRBB and CSRBB in the banking book 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 Group, backed-up by assumptions that aim to characterize the behavior 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 run separately for each currency to which the Group is exposed, considering, at a later stage, the diversification effect among currencies and business units.
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. In order to provide the required dynamism to enhance the accuracy of assumptions and reflect specific market or management circumstances, risk models and metrics may incorporate parameters or adjustments based on expert judgment, subject to the internal governance measures established in this regard. Assumptions are regularly subject to a sensitivity analysis to assess and understand the impact of the modelling on the risk metrics.
The approval and update of the IRRBB behavioral models is subject to the corporate governance under the scope of GRM Analytics. Thus, all the models must be duly inventoried and catalogued and comply with the requirements for their development, updating and changes management set out in the internal procedures. They are also subject to the corresponding internal validations and follow-up requirements established based on their relevance, as well as to backtesting procedures against experience to ratify the validity of the assumptions applied.
In view of the heterogeneity of the financial markets, customers and products in the multiple jurisdictions, each one of the entities of the Group is responsible for determining the local behavior assumptions to be applied to the balance sheet items, always under the guidelines and the applicability of the corporate models existing in the Group.
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 (see Glossary).
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.
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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. 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.
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.
The tables below shows the profile of average structural interest rate risk and credit spread risk of the fixed income portfolio in the banking book classified as "Financial assets at fair value through other comprehensive income" in terms of sensitivities of the main currencies for the BBVA Group in 2025 and 2024:
SENSITIVITY TO INTEREST RATE AND CREDIT SPREAD ANALYSIS. YEAR 2025 | ||||||||||||||||||||
Interest rate risk | Credit spread | |||||||||||||||||||
Impact on net interest income (1) | Impact on economic value (2) | Impact on economic value (2) | ||||||||||||||||||
100 basis point increase | 100 basis point decrease | 100 basis point increase | 100 basis point decrease | 100 basis point increase | ||||||||||||||||
Euro | ||||||||||||||||||||
Mexican peso | ||||||||||||||||||||
U.S. dollar | ||||||||||||||||||||
Turkish lira | ||||||||||||||||||||
Other | ||||||||||||||||||||
| BBVA Group | ||||||||||||||||||||
(1) Percentage of "12 months" net interest income for the BBVA Group.
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SENSITIVITY TO INTEREST RATE AND CREDIT SPREAD ANALYSIS. YEAR 2024 | ||||||||||||||||||||
Interest rate risk | Credit spread | |||||||||||||||||||
Impact on net interest income (1) | Impact on economic value (2) | Impact on economic value (2) | ||||||||||||||||||
100 basis point increase | 100 basis point decrease | 100 basis point increase | 100 basis point decrease | 100 basis point increase | ||||||||||||||||
Euro | ||||||||||||||||||||
Mexican peso | ||||||||||||||||||||
U.S. dollar | ||||||||||||||||||||
Turkish lira | ||||||||||||||||||||
Other | ||||||||||||||||||||
| BBVA Group | ||||||||||||||||||||
(1) Percentage of "12 months" net interest income for the BBVA Group.
(2) Percentage of CET1 December 2024 (Fully Loaded) for BBVA Group.
At an aggregate level, BBVA seeks to maintain a moderate risk profile, in accordance with the established objective within an environment of a cycle shift towards lower interest rates, having positive sensitivity to interest rate hikes in the net interest income.
The year 2025 was influenced by the geopolitical context, notably the increase in U.S. tariffs, as well as developments and expectations regarding inflation and central bank actions. In the United States, there were declines across the entire interest rate curve due to the deceleration signs and greater prospects for interest rate cuts by the Federal Reserve. In contrast, Europe saw a rebound in yields, particularly at the long end of the curve, mainly due to the change of course in Germany's fiscal policy. The peripheral curves are still supported, with spreads against German bonds narrowing over the year. In Mexico, the sovereign curve fell in line with U.S. rates. In Turkey, yield curves were more volatile as a result of both the political situation and inflation trends and expectations. However, it is worth noting the favorable performance of Credit Default Swaps ("CDS") and sovereign bonds denominated in hard currency since March 2025. Lastly, in South America, the curves showed mixed performance, with upturns in some regions, such as Colombia, and downturns in others, such as Peru. Overall, ALCO portfolios performed positively in 2025.
In 2024, the actual and expected evolution of inflation, as well as the response of central banks to it, in addition to geopolitical events, were the focus of the market's attention. In this sense, expectations regarding the number of rate cuts and their speed changed throughout the year, with some episodes of certain volatility.
While the ECB began its cycle of rate cuts in June 2024 and continued at its September 2024, October 2024 and December 2024 meetings, the Federal Reserve cut rates in September 2024 with an initial 50 basis points, followed by an additional 25 basis points at its November 2024 meeting. Over 2024 as a whole, yield curves steepened, generally with falls in the short end and rises in the longer end. Spreads on peripheral curves continued to be well supported and narrowed during 2024. The positivity observed in the American and European curves also carried over to Mexico and much of South America. Turkey, for its part, experienced a rebound in both real and nominal rates during 2024. All in all, the Group's debt security portfolios performed heterogeneously during 2024, with a notable increase in valuations in Spain, while they fell in Turkey.
With respect to 2025, the most relevant aspects of the main geographic areas where the Group operates were the following:
–Spain had a balance sheet characterized by a lending portfolio with a high proportion of variable-rate loans (mortgages and corporate lending) and liabilities composed mainly by customer demand deposits. The ALCO portfolio acted as a management lever and hedge for the balance sheet, mitigating its sensitivity to interest rate fluctuations. The exposure of net interest income to movements in interest rates remained limited. The ECB cut interest rates by a total of 100 basis points throughout the year until its meeting in July 2025, due to the convergence of inflation towards the target, and kept them unchanged in its last meeting in December 2025. Thus, the benchmark interest rate in the euro area stood at 2.15% at the end of December 2025, the rate on the deposit facility at 2.00% and the rate on the marginal lending facility at 2.40%.
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–Mexico continued to show a balance between fixed and variable interest rates balances, which resulted in a limited sensitivity to interest rates fluctuations. Among the assets that were most sensitive to interest rate changes, the commercial portfolio stood out, while consumer and mortgage portfolios were mostly at a fixed rate. With regard to customer deposits, the high proportion of non-interest bearing deposits, which are insensitive to interest rate movements, should be highlighted. The ALCO portfolio was invested primarily in fixed-rate sovereign bonds with limited durations. The monetary policy rate stood at 7.0% at the end of December 31, 2025, 300 basis points below the end of 2024.
–In Turkey, the sensitivity of net interest income to rates remained limited in both local and foreign currencies thanks to the low repricing gap between loans and deposits. The Central Bank of the Republic of Turkey has continued its monetary easing process supported by improved inflation, setting the monetary policy rate at 38.0% at the end of December 2025, which represents a decrease of 950 basis points since the end of December of the previous year.
–In South America, the sensitivity of net interest income continued to be limited, since most of the countries in the area had a fixed/variable balance composition between assets and liabilities. In addition, in balance sheets with several currencies, the interest rate risk is managed for each of the currencies, showing a very low level of exposure. Regarding benchmark interest rates, in Argentina, the central bank abandoned the official interest rate as a monetary anchor and began to regulate the monetary base using other tools such as setting reserve requirements or intervening in the foreign exchange market. In Colombia, the reference rate stood at 9.25%, 25 basis points below the end of 2024. In Peru, the official monetary policy rate closed at 4.25%, 75 basis points below the previous year's closing level.
7.3.2Structural exchange rate risk
Structural exchange rate risk is defined as the possibility of impacts on solvency, equity value and results driven by fluctuations in the exchange rates due to exposures in foreign currencies.
Structural exchange rate risk is inherent to the business of international banking groups, such as BBVA, that develop their activities in different geographical areas and currencies. At a consolidated level, structural exchange rate risk arises from the consolidation of holdings in subsidiaries with functional currencies other than the euro. Its management is centralized in order to optimize the joint management of permanent foreign currency exposures, taking diversification into account.
The purpose of structural exchange rate risk management is protecting solvency by limiting volatility of the consolidated CET1 ratio and income to consolidate denominated in a currency other the euro in the Group, as well as to limit the capital requirements under exchange rate fluctuations to which the Group is exposed due to its international diversification. The ALM Global corporate unit, through the ALCO, is responsible for the management of this risk all through an active hedging policy, deliberately taken for each objective, and fully aligned with the management strategy.
At the corporate level, the risk monitoring metrics included in the limits framework are aligned with the Risk Appetite Framework, and are targeted to control the effects on the solvency through the economic capital metric and the fluctuations in the Common Equity Tier I fully loaded (CET1 fully loaded) consolidated ratio, as well as the maximum deviation in the Group's attributable profit. The probabilistic metrics make it possible to estimate the joint impact of exposure to different currencies taking into account the different variability in exchange rates and their correlations. These metrics are supplemented with additional assessment indicators.
The suitability of these risk assessment metrics is reviewed on a regular basis through backtesting exercises. The final element of structural exchange rate risk control is the stress and scenario analysis aimed to assess the vulnerabilities of foreign currency structural exposure not contemplated by the risk metrics and to serve as an additional tool when making management decisions. The scenarios are based both on historical situations simulated by the risk model and on the risk scenarios provided by BBVA Research.
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The purpose of the exchange rate risk management of BBVA's long-term investments, which arises mainly from its foreign subsidiaries, is to preserve the capital ratios of the Group and to maintain the stability of the profits. During 2025, the U.S. dollar depreciated significantly against the euro (-11.6%). This depreciation was concentrated in the first half of the year, when the aggressiveness of the U.S. tariff policy generated a climate of distrust towards the dollar. Among emerging market currencies, the Mexican peso stood out with an appreciation (+2.0% against the euro), supported by the perception of Mexico as a relative winner of the trade war. The Turkish lira was heavily penalized in 2025 (-27.2%), reflecting high inflation, which is nevertheless gradually declining. Regarding the performance of South American currencies, the Peruvian sol weakened against the euro (-1.2%), the Colombian peso appreciated (+3.8%), while the Chilean peso depreciated by -2.9%. Finally, the Argentine peso experienced a very significant depreciation (-37.4%), in an environment still marked by macroeconomic adjustments and high financial volatility, despite progress in the economic stabilization process.
BBVA maintains active management policies for its main investments in emerging countries with the objective of achieving, on average, a hedging level of between 40% and 50% of the aggregate attributable profit in non-euro currencies that the Group expects to generate over the next twelve months; and between 50% and 70% of the aggregate excess capital in non-euro currencies within CET1. With respect to this solvency ratio, the sensitivities estimated as of December 31, 2025 to 10% currency depreciations are as follows: Mexican peso (-14 basis points), Turkish lira (-3 basis points) and U.S. dollar (+12 basis points).
For the years 2025, 2024 and 2023, the estimated sensitivities (in absolute terms) of the result attributable to the parent company are shown below, taking into account the coverage, against depreciations and appreciations of 1% of the average rate in the main currencies. To the extent that hedging positions are periodically modulated, the sensitivity estimate attempts to reflect an average (or effective) sensitivity in the year:
SENSITIVITY TO 1% CHANGE (MILLIONS OF EUROS) | |||||||||||
Currency | 2025 | 2024 | 2023 | ||||||||
Mexican peso | |||||||||||
Turkish lira | |||||||||||
Peruvian sol | |||||||||||
Chilean peso | |||||||||||
Colombian peso | |||||||||||
Argentine peso | |||||||||||
U.S. dollar | |||||||||||
7.3.3Equity 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.
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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.
For the third consecutive year, global equity markets posted significant gains in 2025, with double-digit increases in both Europe and the United States. Following an optimistic start to the year, supported by a presumed pro-market orientation of the U.S. administration, equity markets experienced a sharp setback in April after the United States announced substantial import tariffs during the so-called “Liberation Day.” Nevertheless, the potential import tariff escalation subsequently subsided, paving the way for a strong equity rally that continued uninterrupted through year-end. In the United States, the communications and technology sectors led the advances, while in Europe the banking sector delivered a strong performance, topping European markets for the second year in a row. From a geographical perspective, the Spanish stock market was among the strongest performers in Europe, also driven by the financial sector, enabling it to surpass its historical peak for the first time since 2007.
Structural equity risk, measured in terms of economic capital, has not experienced any material changes over the past year. 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 €-27 million as of December 31, 2025, the same as at December 31, 2024. 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.
7.3.4 Actuarial risk
Actuarial risk comprises the deviations that may arise between the assumptions used to measure the commitments arising from insurance or social security products and the actual experience observed. This risk encompasses underwriting risk, given that insurance liabilities have a probabilistic nature insofar as they depend on the behavior of insured events. Thus, the risk emerges when there are deviations in the estimation of claims, whether in terms of the number or amount of such claims or the timing of their occurrence.
The Group carries out appropriate risk identification, measurement and monitoring, and develops risk policies, including the definition and application of capital-measurement models. Within underwriting risk, biometric risk is also probabilistic, as it depends on deviations from the expected behavior of policyholders’ survival. In order to mitigate biometric risk, the Group monitors the evolution of mortality rates across its main insured portfolios and performs back-testing of economic assumptions used to estimate liability cash flows.
BBVA Group manages actuarial risk through a policy aligned with the applicable regulatory framework, which includes, among others, tasks aimed at assessing assumptions and estimates and verifying the adequacy of technical provisions. Likewise, the assessment of the technical information used to calculate the Minimum Capital Requirement (MCR), the Own Risk and Solvency Assessment (ORSA), the underwriting policy and reinsurance agreements forms part of its responsibilities. The insurance activity is fully integrated into the BBVA Group's risk management framework. From the definition of the risk appetite to the management limits, the governance model, the admission process, the organizational scheme and the development of computer systems/models, everything is designed with a global approach and under consistent and homogeneous criteria, aligned with other financial business of the BBVA Group (see Note 23).
Additionally, for employee pension commitments, actuarial risk is managed through external funds and insurance contracts whose investments are subject to diversified asset and insurance investment policies. These are aligned with the maturities of the commitments and allow, together with the contributions made, the payment of benefits when due and the mitigation of existing risks in the plans (see Note 25).
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7.4Market 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 Group'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 and credit spread, exchange rate and equity (see Note 7.3).
Additionally, market risk may be affected by ESG factors due to the effect they may have on the Group, clients and counterparties (see Note 7.1).
7.4.1Market risk in trading portfolios
The main risks in the trading portfolios can be classified as follows:
–Interest rate risk: This arises as a result of exposure to movements in the different interest rate curves involved in trading. Although the typical products that generate sensitivity to the movements in interest rates are money-market products (deposits, interest rate futures, call money swaps, etc.) and traditional interest rate derivatives (swaps and interest rate options such as caps, floors, swaptions, etc.), practically all the financial products are exposed to interest rate movements due to the effect that such movements have on the valuation of the financial discount.
–Equity risk: This arises as a result of movements in share prices. This risk is generated in spot positions in shares or any derivative products whose underlying asset is a share or an equity index. Dividend risk is a sub-risk of equity risk, arising as an input for any equity option. Its variation may affect the valuation of positions and it is therefore a factor that generates risk on the books.
–Exchange rate risk: This is caused by movements in the exchange rates of the different currencies in which a position is held. As in the case of equity risk, this risk is generated in spot currency positions, and in any derivative product whose underlying asset is an exchange rate. In addition, the quanto effect (operations where the underlying asset and the instrument itself are denominated in different currencies) means that in certain transactions in which the underlying asset is not a currency, an exchange rate risk is generated that has to be measured and monitored.
–Credit spread risk: Credit spread is an indicator of an issuer's credit quality. Spread risk occurs due to variations in the levels of spread of both corporate and government issues, and affects positions in bonds and credit derivatives.
–Volatility risk: This occurs as a result of changes in the levels of implied price volatility of the different market instruments on which derivatives are traded. This risk, unlike the others, is exclusively a component of trading in derivatives and is defined as a first-order convexity risk that is generated in all possible underlying assets in which there are products with options that require a volatility input for their valuation.
–Other less relevant risks for the Group include inflation risk, correlation risk and market liquidity risk (see Glossary).
The metrics developed to control and assess market risk in the BBVA Group 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 Group'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 (see Glossary).
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With respect to the risk measurement models used by the BBVA Group, the Supervisor has authorized the use of the internal market risk model to determine bank capital requirements deriving from risk positions on the BBVA, S.A. and BBVA Mexico trading book, which jointly accounted for around 73%, 66% and 76% of the Group’s trading-book market risk as of December 31, 2025, 2024 and 2023. For the rest of the geographical areas where the Group operates (applicable mainly to the Group´s South America subsidiaries and Garanti BBVA), bank capital for the risk positions in the trading book is calculated using the Standardized Approach defined by the Basel Committee on Banking Supervision (which is referred to herein as the "standard model”).
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 Group’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.
The VaR figures are estimated based on the VaR without smoothing methodology, 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. The VaR stress metric is obtained in an analogous way (99% percentile, with 1-day loss), with a fixed window of 1 year within the established stress period, subject to revision and being specific to each geographical area to represent its stress period.
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 (Collateralized Debt Obligations) 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 Group. 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).
Backtesting is performed at the trading floor level as an additional control measure in order to carry out a more specific monitoring of the validity of the measurement models.
Market risk in 2025
The Group’s market risk related to its trading portfolio remained in 2025 at low levels compared to other risks managed by BBVA, particularly credit risk. This is due to the nature of the business. In 2025, the average VaR was €33 million, below the figure of 2024, with a maximum level in the year reached on April 28, 2025 of €44 million. The evolution in the BBVA Group’s market risk during 2025, measured as VaR with a 99% confidence level and a 1-day horizon (shown in Millions of Euros) is as follows:
By type of market risk assumed by the Group's trading portfolio, the main risk factor for the Group continued to be that linked to interest rates, with a weight of 69% of the total as of December 31, 2025 (this figure includes the spread risk). The relative weight of this risk decreased by 8 percentage points compared with the close of 2024. Exchange rate risk accounted for 17% of the total risk, which implies an increase of 6 percentage points compared with the close of 2024, while equity risk accounted for 3%, maintaining its weight compared with the close of 2024. The volatility and correlation risk accounted for 11%, which implies an increase of 3 percentage points compared with the close of 2024.
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As of December 31, 2025, 2024 and 2023 the VaR was €29 million, €34 million and €36 million, respectively, with the following breakdown:
VaR BY RISK FACTOR (MILLIONS OF EUROS) ⁽¹⁾ | ||||||||||||||||||||
Interest/Spread risk | Currency risk | Stock-market risk | Vega/Correlation risk | Diversification effect ⁽²⁾ | Total | |||||||||||||||
| 2025 | ||||||||||||||||||||
VaR average in the year | ( | |||||||||||||||||||
VaR max in the year | ( | |||||||||||||||||||
VaR min in the year | ( | |||||||||||||||||||
| End of period VaR | ( | |||||||||||||||||||
| 2024 | ||||||||||||||||||||
VaR average in the year | ( | |||||||||||||||||||
VaR max in the year | ( | |||||||||||||||||||
VaR min in the year | ( | |||||||||||||||||||
| End of period VaR | ( | |||||||||||||||||||
| 2023 | ||||||||||||||||||||
VaR average in the year | ( | |||||||||||||||||||
VaR max in the year | ( | |||||||||||||||||||
VaR min in the year | ( | |||||||||||||||||||
| End of period VaR | ( | |||||||||||||||||||
(1) The maximum and minimum VaR figures show the VaR figures for the day on which said maximum and minimum VaRs occurred in the relevant year, by type of risk.
(2) The diversification effect is the difference between the sum of the average individual risk factors and the total VaR figure that includes the implied correlation between all the variables and scenarios used in the measurement.
Validation of the internal market risk model
The internal market risk model is validated on a regular basis by backtesting in both, BBVA, S.A. and Global Markets Mexico (in BBVA Mexico). 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 results of those entities and the risk measurements generated by the internal market risk model. These tests showed that the internal market risk model of both, BBVA, S.A. and Global Markets Mexico is adequate and precise.
Two types of backtesting have been carried out in 2025, 2024 and 2023:
–"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 years ended December 31, 2025, 2024 and 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 was no negative exception neither in BBVA, S.A nor in BBVA Mexico.
At the end of these years the comparison showed the internal VaR calculation model was working correctly, thus validating the internal VaR calculation model, as has been the case each year since the internal market risk model was approved for the Group.
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Stress testing analysis
A number of stress tests are carried out on the BBVA Group's trading portfolios. First, global and local historical scenarios are used that replicate the behavior of an extreme past event, such as the collapse of Lehman Brothers or the Tequilazo crisis. These stress tests are complemented with simulated scenarios, where the aim is to generate scenarios that have a significant impact on the different portfolios, but without being anchored to any specific historical scenario. Finally, for some portfolios or positions, fixed stress tests are also carried out that have a significant impact on the market variables affecting these positions.
Historical scenarios
The historical benchmark stress scenario for the BBVA Group is Lehman Brothers, whose sudden collapse in September 2008 led to a significant impact on the behavior of financial markets at a global level. The following are the most relevant effects of this historical scenario:
–Credit shock: reflected mainly in the increase of credit spreads and downgrades in credit ratings.
–Increased volatility in most of the financial markets giving rise to a great deal of variation in the prices of different assets (currency, equity, debt).
–Liquidity shock in the financial systems, reflected by a major movement in interbank curves, particularly in the shortest sections of the euro and dollar curves.
Simulated scenarios
Unlike the historical scenarios, which are fixed and therefore not suited to the composition of the risk portfolio at all times, the scenario used for the exercises of economic stress is based on resampling methodology. This methodology is based on the use of dynamic scenarios that are recalculated periodically depending on the main risks affecting the trading portfolios. On a data window wide enough to collect different periods of stress (data are taken from January 1, 2008 until the date of the assessment), a simulation is performed by resampling of historic observations, generating a distribution of losses and gains that serve to analyze extreme market events within 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).
The impact of the stress test under multivariable simulation of the risk factors of the portfolio based on the expected shortfall (expected shortfall calculated at a 97.5% confidence level, 20 days) as of December 31, 2025 is as follows:
IMPACT OF THE STRESS TEST (MILLIONS OF EUROS) | |||||||||||||||||||||||
Europe | Mexico | Peru | Venezuela | Argentina | Colombia | Turkey | |||||||||||||||||
Expected shortfall | ( | ( | ( | ( | ( | ( | |||||||||||||||||
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7.4.2Financial instruments offset
Financial assets and liabilities may be netted in certain cases. In particular, they are presented for a net amount on the consolidated balance sheet only when the Group's entities satisfy the provisions of 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 Group has presented as gross amounts assets and liabilities on the consolidated 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 of 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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A summary of the effect of offsetting (via netting and collateral) for derivatives and securities operations is presented below as of December 31, 2025, 2024 and 2023:
EFFECT OF OFFSETTING FOR DERIVATIVES AND SECURITIES OPERATION (MILLIONS OF EUROS) | |||||||||||||||||||||||
Gross amounts not offset in the consolidated balance sheets | |||||||||||||||||||||||
Notes | Gross amounts recognized (A) | Gross amounts offset in the consolidated balance sheets (B) | Net amount presented in the consolidated balance sheets (C=A-B) | Financial instruments | Cash collateral received/ pledged | Net amount ⁽¹⁾ | |||||||||||||||||
| December 2025 | |||||||||||||||||||||||
Trading and hedging derivatives | 10 / 15 | ||||||||||||||||||||||
Reverse repurchase, securities borrowing and similar agreements | |||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||
Trading and hedging derivatives | 10 / 15 | ||||||||||||||||||||||
Repurchase, securities lending and similar agreements | |||||||||||||||||||||||
| Total liabilities | |||||||||||||||||||||||
| December 2024 | |||||||||||||||||||||||
Trading and hedging derivatives | 10 / 15 | ||||||||||||||||||||||
Reverse repurchase, securities borrowing and similar agreements | |||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||
Trading and hedging derivatives | 10 / 15 | ||||||||||||||||||||||
Repurchase, securities lending and similar agreements | |||||||||||||||||||||||
| Total liabilities | |||||||||||||||||||||||
| December 2023 | |||||||||||||||||||||||
Trading and hedging derivatives | 10 / 15 | ||||||||||||||||||||||
Reverse repurchase, securities borrowing and similar agreements | |||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||
Trading and hedging derivatives | 10 / 15 | ||||||||||||||||||||||
Repurchase, securities lending and similar agreements | |||||||||||||||||||||||
| Total liabilities | |||||||||||||||||||||||
(1) It corresponds to the aggregation of the net amounts presented in the balance sheet, less the gross amount which is not offset in the balance sheet, corresponding to each Group entity that records a deficit in this regard.
Financial assets and liabilities are offset, and consequently are presented in the consolidated balance sheet at their net value under the relevant captions (i.e., derivatives, repurchase agreements and reverse repurchase agreements), where the Group maintains netting agreements and there is an intention to settle their net amount. Regarding certain repurchase agreements and reverse repurchase agreements, since 2024, the Group fulfils both conditions. Where netting agreements do not exist, the market value of the relevant products is recorded in the balance of the repurchase agreements and reverse repurchase agreements captions.
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7.5Liquidity and Funding risk
Liquidity and funding risk is defined as the incapacity of a bank in meeting its payment commitments due to lack of funds or that, to face those commitments, should have to make use of funding under burdensome terms.
7.5.1Liquidity and Funding Strategy and Planning
The BBVA Group 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 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 (hereinafter "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 support the suitability of the Group's financial structure and its evolution, within the framework of the economic situation, the markets and regulatory changes.
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 effectiveness 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.
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7.5.2Governance, 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 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 of each LMU and proposes to the 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 with the responsible areas in each LMU 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 Group 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 Group has been configured as a single, global function, independent of the management areas.
Additionally, the Group 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 Group’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 for the entire Group and for each individual LMU. The internal levels required are aimed at efficiently meeting the regulatory requirement, at a 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 for each of the LMU which make up the BBVA Group, taking into account that maintaining an adequate volume of stable customer funds is key to achieving an appropriate 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 from the LMU 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 in each LMU and provide an optimal funding structure reference in terms of risk appetite, the corporate Structural Risks unit of GRM identifies and assesses the economic and financial variables that condition the funding structures in the different geographical areas.
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 at LMU level, with the aim of ensuring a correct diversification of both the counterparty and type of instrument.
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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 the BBVA Group. According to the principle of auto-sufficiency of the Group's subsidiaries, each LMU is responsible for maintaining a buffer of liquid assets which complies with the regulatory requirements applicable under each jurisdiction. In addition, the liquidity buffer of each LMU 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, seeking 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 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, 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.
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 assist in 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.
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–The structural gap projection, as a result of assessing the funding needs generated both from the credit gap and by the securities portfolio in the banking book, together with the rest of on-balance-sheet wholesale funding needs, excluding trading portfolios. This gap therefore needs to be funded with customer funds that are not considered stable or on wholesale markets.
As a result of these funding needs, the BBVA Group plans the target wholesale funding structure according to the tolerance set in each LMU target.
Thus, once the structural gap has been identified and after resorting to wholesale markets, the amount and composition of wholesale structural funding is established in subsequent years, in order to maintain a diversified funding mix and guarantee that there is not a high reliance on short-term funding (short-term wholesale funding plus volatile customer funds).
In practice, the execution of the principles of planning and self-funding at the different LMU results in the Group’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 in the BBVA Group, 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.
7.5.3Liquidity and funding performance
The BBVA Group maintains a dynamic funding structure with a predominantly retail nature, where customer resources represent the main source of funding.
During 2025, liquidity conditions remained adequate in all the countries where the BBVA Group operates.
The performance of the indicators show that the funding structure remained steady during 2025, 2024 and 2023, in the sense that all LMU held self-funding levels with stable customer resources above the requirements.
LtSCD BY LMU | |||||||||||
2025 | 2024 | 2023 | |||||||||
| Group (average) | % | % | % | ||||||||
BBVA, S.A. | % | % | % | ||||||||
BBVA Mexico | % | % | % | ||||||||
Garanti BBVA | % | % | % | ||||||||
Other LMU | % | % | % | ||||||||
With respect to LCR, the Group has maintained a liquidity buffer at both a consolidated and individual level in 2025. As a result, the ratio has remained above 100%, with the consolidated ratio as of December 31, 2025 standing at 143%.
Although this requirement is only established at a Group level, for banks in the Eurozone, the minimum level required was exceeded in all subsidiaries.
It should be noted that the calculation of the Consolidated LCR does not allow the transfer of liquidity between, or with, subsidiaries located outside the Eurozone, so no excess liquidity may be transferred from these entities for the purpose of calculating the consolidated ratio.
If the impact of these highly liquid assets was considered, the LCR would be 169%, or 26 basis points above the required level.
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LCR MAIN LMU | |||||||||||
2025 | 2024 | 2023 | |||||||||
| Group | % | % | % | ||||||||
BBVA, S.A. | % | % | % | ||||||||
BBVA Mexico | % | % | % | ||||||||
Garanti BBVA | % | % | % | ||||||||
One of the key elements in BBVA's Group liquidity and funding management is the targeted maintenance of large high quality liquidity buffers in all business areas where the group operates.
Each entity maintains a liquidity buffer at the individual level for BBVA, S.A. and for each of its subsidiaries, such as BBVA Mexico, Garanti BBVA and the Latin American subsidiaries.
In this respect, the Group has maintained for the last 12 months an average volume of high quality liquid assets (HQLA) amounting to €134,046 million, of which 98% correspond to maximum quality assets (LCR level 1).
The table below shows the liquidity available by instrument as of December 31, 2025, 2024 and 2023 for the most significant entities based on prudential supervisor’s information (Commission Implementing Regulations (EU) 2021/451 of December 17, 2020):
LIQUIDITY AVAILABLE BY INSTRUMENT (MILLIONS OF EUROS) | ||||||||||||||||||||||||||||||||||||||||||||||||||
BBVA, S.A. | BBVA Mexico | Garanti BBVA | Other | |||||||||||||||||||||||||||||||||||||||||||||||
2025 | 2024 | 2023 | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||||||||
Cash and withdrawable central bank reserves | ||||||||||||||||||||||||||||||||||||||||||||||||||
Level 1 tradable assets | ||||||||||||||||||||||||||||||||||||||||||||||||||
Level 2A tradable assets | ||||||||||||||||||||||||||||||||||||||||||||||||||
Level 2B tradable assets | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other tradable assets | ||||||||||||||||||||||||||||||||||||||||||||||||||
Non-tradable assets eligible for central banks | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Cumulated counterbalancing capacity | ||||||||||||||||||||||||||||||||||||||||||||||||||
The Net Stable Funding Ratio (NSFR), defined as the result between the amount of stable funding available and the amount of stable funding required, requiring banks to maintain a stable financing profile in relation to the composition of their assets and off-balance sheet activities. This ratio should be at least 100% at all times. The NSFR ratio of the BBVA Group, stood at 126% as of December 31, 2025.
The NSFR of BBVA Group and its main LMU as of December 31, 2025, 2024 and 2023, was the following:
NSFR MAIN LMU | |||||||||||
2025 | 2024 | 2023 | |||||||||
| Group | % | % | % | ||||||||
BBVA, S.A. | % | % | % | ||||||||
BBVA Mexico | % | % | % | ||||||||
Garanti BBVA | % | % | % | ||||||||
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Below is a matrix of residual maturities by contractual periods based on supervisory prudential reporting as of December 31, 2025, 2024 and 2023:
DECEMBER 2025. 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 | |||||||||||||||||||||||||||||||||||
Deposits in credit entities | |||||||||||||||||||||||||||||||||||
Deposits in other financial institutions | |||||||||||||||||||||||||||||||||||
Reverse repo, securities borrowing and margin lending | |||||||||||||||||||||||||||||||||||
Loans and advances | |||||||||||||||||||||||||||||||||||
Securities' portfolio settlement | |||||||||||||||||||||||||||||||||||
DECEMBER 2025. 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 | |||||||||||||||||||||||||||||||||||
Deposits from financial institutions | |||||||||||||||||||||||||||||||||||
Deposits from other financial institutions and international agencies | |||||||||||||||||||||||||||||||||||
Customer deposits | |||||||||||||||||||||||||||||||||||
Security pledge funding | |||||||||||||||||||||||||||||||||||
Derivatives, net | ( | ( | ( | ||||||||||||||||||||||||||||||||
DECEMBER 2024. 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 | |||||||||||||||||||||||||||||||||||
Deposits in credit entities | |||||||||||||||||||||||||||||||||||
Deposits in other financial institutions | |||||||||||||||||||||||||||||||||||
Reverse repo, securities borrowing and margin lending | |||||||||||||||||||||||||||||||||||
Loans and advances | |||||||||||||||||||||||||||||||||||
Securities' portfolio settlement | |||||||||||||||||||||||||||||||||||
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DECEMBER 2024. 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 | |||||||||||||||||||||||||||||||||||
Deposits from financial institutions | |||||||||||||||||||||||||||||||||||
Deposits from other financial institutions and international agencies | |||||||||||||||||||||||||||||||||||
Customer deposits | |||||||||||||||||||||||||||||||||||
Security pledge funding | |||||||||||||||||||||||||||||||||||
Derivatives, net | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||
Deposits in credit entities | |||||||||||||||||||||||||||||||||||
Deposits in other financial institutions | |||||||||||||||||||||||||||||||||||
Reverse repo, securities borrowing and margin lending | |||||||||||||||||||||||||||||||||||
Loans and advances | |||||||||||||||||||||||||||||||||||
Securities' portfolio settlement | |||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||
Deposits from financial institutions | |||||||||||||||||||||||||||||||||||
Deposits from other financial institutions and international agencies | |||||||||||||||||||||||||||||||||||
Customer deposits | |||||||||||||||||||||||||||||||||||
Security pledge funding | |||||||||||||||||||||||||||||||||||
Derivatives, net | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||
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 receives a better treatment.
The most relevant aspects related to the main geographical areas are the following:
–In Spain, BBVA, S.A. maintained a strong position with a large high-quality liquidity buffer, maintaining at all times the regulatory liquidity metrics well above the set minimums. During 2025, commercial activity showed dynamism in attracting customer deposits, mainly from wholesale clients, supported equally by retail clients and the new digital bank in Germany. Regarding lending activity, there was a significant boost from wholesale business units. Growth in both areas has resulted in a narrowing of the credit gap.
–BBVA Mexico showed an adequate liquidity situation, with a credit gap that improved over the year, mainly due to strong deposit growth in local currency. In addition, the liquidity situation was reinforced by wholesale debt issuances carried out in both Mexican pesos and U.S. dollars.
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–In Turkey, Garanti BBVA maintained an adequate liquidity situation in 2025. The lending gap decreased significantly in foreign currencies due to a strong rise in deposits. On the other hand, there was an increase in the credit gap in Turkish lira due to the strong growth in lending, which exceeded that of deposits. Wholesale issuances in foreign currency supported liquidity.
–In South America, the liquidity situation has also remained adequate throughout the region in 2025. In BBVA Argentina, at a constant exchange rate, the credit gap improved in Argentine pesos due to the impulse in time deposits despite strong loan growth. In the U.S. dollar balance sheet, at a constant exchange rate, the growth of loans exceeded fund gathering, thus widening the credit gap in this currency. In BBVA Colombia, the liquidity situation was comfortable, even though the credit gap widened in 2025, with a sustained growth of loans that slightly exceeded the volume of fund gathering. At BBVA Peru, the liquidity situation remained solid, with a credit gap that widened during the year due to the dynamism of lending activity, especially in U.S. dollars.
The main wholesale financing transactions carried out by the BBVA Group during 2025 are listed below:
Issuer | Type of issue | Date of issue | Nominal (millions) | Currency | Coupon | Early redemption | Maturity date | ||||||||||||||||
BBVA, S.A. | AT1 | Jan-25 | USD | 7.750% | Jan-32 | Perpetual | |||||||||||||||||
Tier 2 | Feb-25 | EUR | 4.000% | Feb-32 | Feb-37 | ||||||||||||||||||
Senior non-preferred | Jul-25 | EUR | 3.125% | _ | Jul-30 | ||||||||||||||||||
Senior non-preferred | Aug-25 | EUR | 3.750% | _ | Aug-35 | ||||||||||||||||||
AT1 | Nov-25 | EUR | 5.625% | Nov-32 | Perpetual | ||||||||||||||||||
In relation to liability management, on May 10, 2025, BBVA, S.A. redeemed early and in full an issue of senior preferred bonds made in May 2023 for €1 billion; in January 2025, it redeemed early and in full a €1 billion Tier 2 issue made in January 2020 and maturing in 2030; and in March 2025, it redeemed in full a Contingent Convertible Preferred Securities (AT1) issue for USD 1000 billion issued in 2019. On September 14, 2025, BBVA, S.A. redeemed early and in full an issue of senior non-preferred bonds made in September 2022 for USD 1 billion (see Note 22.4).
After the closing date of the 2025 financial year, on January 7, 2026, BBVA, S.A. issued €2 billion in senior non-preferred debt, structured in two tranches: the first, for €750 million, with a coupon fixed set at three-month Euribor plus 55 basis points, and the second, for €1.25 billion, with a fixed coupon of 3.75%. On January 15, 2026, BBVA, S.A. carried out the early redemption of a green AT1 issue made on July 15, 2020, for a combined nominal amount of €1 billion, a decision that was communicated to the market on December 17, 2025 (see Note 22.4).
BBVA Mexico issued in February 2025 USD 1 billion of Tier 2 subordinated debt with a coupon of 7.625%. In addition, a senior debt issue was carried out in March 2025 for 15 billion Mexican pesos (approximately €692 million), and another in September 2025 in two tranches: the first for 14,434 million Mexican pesos (approximately €666 million) and the second for USD 158 million.
Throughout 2025, Garanti BBVA issued a total of USD 3,847 million of short-term senior MTN in order to roll over maturities and generate liquidity. In June 2025, it renewed 100% of a sustainable syndicated loan in two tranches for a total amount of USD 440 million. In July 2025, Garanti BBVA completed the issuance of subordinated bonds for a total amount of USD 500 million. In October 2025, another subordinated bond issue was made for USD 700 million. In November 2025, Garanti BBVA issued Turkey's first biodiversity bond, worth USD 20.22 million. Finally, in December 2025, Garanti BBVA formalized a sustainability focused syndicated loan for a total amount of USD 428 million.
In 2025, through successive placements of debt securities, BBVA Argentina issued a total of 244 billion Argentine pesos and USD 192 million. The euro equivalent of these issues was €306 million.
In April 2025, BBVA Colombia issued a subordinated biodiversity bond, subscribed by the International Finance Corporation (IFC), for an amount of USD 45 million.
In Peru, BBVA issued USD 200 million in the form of a gender social bond aimed at women entrepreneurs, executed in two tranches during the first and the third quarters of 2025, in partnership with IDB Invest, FMO (Dutch Entrepreneurial Development Bank) and COFIDE (Corporación Financiera de Desarrollo, S.A.).
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7.5.4Asset encumbrance
As of December 31, 2025, 2024 and 2023, the encumbered (those provided as collateral for certain liabilities) and unencumbered assets are broken down as follows:
ENCUMBERED AND UNENCUMBERED ASSETS (MILLIONS OF EUROS) | |||||||||||||||||||||||||||||||||||||||||
Encumbered assets | Unencumbered assets | ||||||||||||||||||||||||||||||||||||||||
Book value | Fair value | Book value | Fair value | ||||||||||||||||||||||||||||||||||||||
2025 | 2024 | 2023 | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||||||||||||
Equity instruments | |||||||||||||||||||||||||||||||||||||||||
Debt securities | |||||||||||||||||||||||||||||||||||||||||
Loans and advances and other assets | |||||||||||||||||||||||||||||||||||||||||
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 22.4) 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, 2025, 2024 and 2023, 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 certificates issued | Fair value of collateral received or own debt certificates issued available for encumbrance | Fair value of collateral received or own debt certificates issued not available for encumbrance | |||||||||||||||||||||||||||||||||
2025 | 2024 | 2023 | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | |||||||||||||||||||||||||||
| Collateral received | |||||||||||||||||||||||||||||||||||
Equity instruments | |||||||||||||||||||||||||||||||||||
Debt securities | |||||||||||||||||||||||||||||||||||
Loans and advances and other assets | |||||||||||||||||||||||||||||||||||
Own debt certificates issued other than own covered bonds or ABSs | |||||||||||||||||||||||||||||||||||
The guarantees received in the form of reverse repurchase agreements or security lending transactions are committed by their use in repurchase agreements, as is the case with debt securities.
As of December 31, 2025, 2024 and 2023, 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 certificates issued other than covered bonds and ABSs encumbered | ||||||||||||||||||||||
2025 | 2024 | 2023 | 2025 | 2024 | 2023 | ||||||||||||||||||
| Book value of financial liabilities | |||||||||||||||||||||||
Derivatives | |||||||||||||||||||||||
Deposits | |||||||||||||||||||||||
Outstanding subordinated debt | |||||||||||||||||||||||
| Other sources | |||||||||||||||||||||||
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8.Fair value of financial instruments
Framework and processes control
The process for determining the fair value established in the Group seeks to ensure that financial assets and liabilities are properly recorded following the IFRS 13 principles, 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 are members of these committees.
These areas seek 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 complying with the governance of BBVA Group's official models.
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 consolidated 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 Group, 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 are 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.
–Level 3: valuation of financial instruments with valuation techniques that use significant unobservable inputs in the market. As of December 31, 2025, the affected instruments at fair value accounted for approximately 0.70% of financial assets and 0.47% of the Group’s financial liabilities. Model selection and validation is undertaken by control areas outside the business areas.
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8.1Fair 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, 2025, 2024 and 2023:
FAIR VALUE OF FINANCIAL INSTRUMENTS RECOGNIZED AT FAIR VALUE BY LEVELS. DECEMBER 2025 (MILLIONS OF EUROS) | |||||||||||||||||
Notes | Book value | Fair value | |||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||
| ASSETS | |||||||||||||||||
| Financial assets held for trading | 10 | ||||||||||||||||
Derivatives | |||||||||||||||||
Equity instruments | |||||||||||||||||
Debt securities | |||||||||||||||||
Loans and advances | |||||||||||||||||
| Non-trading financial assets mandatorily at fair value through profit or loss | 11 | ||||||||||||||||
Equity instruments | |||||||||||||||||
Debt securities | |||||||||||||||||
Loans and advances | |||||||||||||||||
| Financial assets designated at fair value through profit or loss | 12 | ||||||||||||||||
Debt securities | |||||||||||||||||
| Financial assets at fair value through other comprehensive income | 13 | ||||||||||||||||
Equity instruments | |||||||||||||||||
Debt securities | |||||||||||||||||
Loans and advances | |||||||||||||||||
| Derivatives – Hedge accounting | 15 | ||||||||||||||||
| LIABILITIES | |||||||||||||||||
| Financial liabilities held for trading | 10 | ||||||||||||||||
Trading derivatives | |||||||||||||||||
Short positions | |||||||||||||||||
Deposits | |||||||||||||||||
| Financial liabilities designated at fair value through profit or loss | 12 | ||||||||||||||||
Deposits from credit institutions | |||||||||||||||||
Customer deposits | |||||||||||||||||
Debt certificates issued | |||||||||||||||||
Other financial liabilities | |||||||||||||||||
| Derivatives – Hedge accounting | 15 | ||||||||||||||||
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FAIR VALUE OF FINANCIAL INSTRUMENTS RECOGNIZED AT FAIR VALUE BY LEVELS. DECEMBER 2024 (MILLIONS OF EUROS) | |||||||||||||||||
Notes | Book value | Fair value | |||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||
| ASSETS | |||||||||||||||||
| Financial assets held for trading | 10 | ||||||||||||||||
Derivatives | |||||||||||||||||
Equity instruments | |||||||||||||||||
Debt securities | |||||||||||||||||
Loans and advances | |||||||||||||||||
| Non-trading financial assets mandatorily at fair value through profit or loss | 11 | ||||||||||||||||
Equity instruments | |||||||||||||||||
Debt securities | |||||||||||||||||
Loans and advances | |||||||||||||||||
| Financial assets designated at fair value through profit or loss | 12 | ||||||||||||||||
Debt securities | |||||||||||||||||
| Financial assets at fair value through other comprehensive income | 13 | ||||||||||||||||
Equity instruments | |||||||||||||||||
Debt securities | |||||||||||||||||
Loans and advances | |||||||||||||||||
| Derivatives – Hedge accounting | 15 | ||||||||||||||||
| LIABILITIES | |||||||||||||||||
| Financial liabilities held for trading | 10 | ||||||||||||||||
Trading derivatives | |||||||||||||||||
Short positions | |||||||||||||||||
Deposits | |||||||||||||||||
| Financial liabilities designated at fair value through profit or loss | 12 | ||||||||||||||||
Deposits from credit institutions | |||||||||||||||||
Customer deposits | |||||||||||||||||
Debt certificates issued | |||||||||||||||||
Other financial liabilities | |||||||||||||||||
| Derivatives – Hedge accounting | 15 | ||||||||||||||||
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FAIR VALUE OF FINANCIAL INSTRUMENTS RECOGNIZED AT FAIR VALUE BY LEVELS. DECEMBER 2023 (MILLIONS OF EUROS) | |||||||||||||||||
Notes | Book value | Fair value | |||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||
| ASSETS | |||||||||||||||||
| Financial assets held for trading | 10 | ||||||||||||||||
Derivatives | |||||||||||||||||
Equity instruments | |||||||||||||||||
Debt securities | |||||||||||||||||
Loans and advances | |||||||||||||||||
| Non-trading financial assets mandatorily at fair value through profit or loss | 11 | ||||||||||||||||
Equity instruments | |||||||||||||||||
Debt securities | |||||||||||||||||
Loans and advances | |||||||||||||||||
| Financial assets designated at fair value through profit or loss | 12 | ||||||||||||||||
Debt securities | |||||||||||||||||
| Financial assets at fair value through other comprehensive income | 13 | ||||||||||||||||
Equity instruments | |||||||||||||||||
Debt securities | |||||||||||||||||
Loans and advances | |||||||||||||||||
| Derivatives – Hedge accounting | 15 | ||||||||||||||||
| LIABILITIES | |||||||||||||||||
| Financial liabilities held for trading | 10 | ||||||||||||||||
Trading derivatives | |||||||||||||||||
Short positions | |||||||||||||||||
Deposits | |||||||||||||||||
| Financial liabilities designated at fair value through profit or loss | 12 | ||||||||||||||||
Deposits from credit institutions | |||||||||||||||||
Customer deposits | |||||||||||||||||
Debt certificates issued | |||||||||||||||||
Other financial liabilities | |||||||||||||||||
| Derivatives – Hedge accounting | 15 | ||||||||||||||||
The following table sets forth the main valuation techniques, hypothesis and inputs used in the estimation of fair value of the financial instruments recognized 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, 2025, 2024 and 2023.
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FAIR VALUE OF FINANCIAL INSTRUMENTS BY LEVELS (MILLIONS OF EUROS) | |||||||||||
ASSETS | Valuation techniques in Levels 2 and 3 | Observable inputs in Levels 2 and 3 | Unobservable inputs in Levels 2 and 3 | ||||||||
| Financial assets held for trading | |||||||||||
Equity instruments | Net asset value | - Market operations - NAVs published | |||||||||
Debt securities | (Discounted future cash flows) Observed prices in non-active markets | - Current market interest rates - Non active markets prices | - Issuer´s credit risk - Recovery rates | ||||||||
Loans and advances | (Discounted future cash flows) | - Current market interest rates - Funding interest rates observed in the market or in consensus services - Exchange rates | - Issuer´s credit risk - Recovery rates - Funding interest rates not observed in the market or in consensus services | ||||||||
Derivatives | |||||||||||
Interest rate | Caps/Floors: Black 76 and SABR Bond options: Black 76 Swaptions: Black, SABR and LGM Other Interest rate Options: Black, SABR, Libor Market Model and QGM. Constant Maturity Swaps: SABR | - 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 | - Implicit correlations between tenors - interest rates volatility | ||||||||
Equity | Equity Options: Local Volatility, Momentum adjustment and Heston | - Implicit assets correlations - Long term implicit correlations - Implicit dividends and long term repos | |||||||||
Foreign exchange and gold | Foreign exchange Options: Local volatility, momentum adjustment | - Implicit assets correlations - Long term implicit correlations | |||||||||
Credit | - Credit spread - Recovery rates - Interest rate yield - Default volatility | ||||||||||
Commodities | |||||||||||
| Non-trading financial assets mandatorily at fair value through profit or loss | |||||||||||
Equity instruments | Net asset value | - Market operations - NAVs published | |||||||||
Debt securities | (Discounted future cash flows) | - Current market interest rates | - Issuer credit risk - Recovery rates | ||||||||
Loans and advances | - Interest rates | ||||||||||
| Financial assets designated at fair value through profit or loss | |||||||||||
Debt securities | Present-value method (Discounted future cash flows) | - Issuer credit risk - Current market interest rates | |||||||||
| Financial assets at fair value through other comprehensive income | |||||||||||
Equity instruments | Net asset value | - Market operations - NAVs published | |||||||||
Debt securities | (Discounted future cash flows) Observed prices in non-active markets | - Current market interest rates - Non active market prices | - Issuer credit risk - Recovery rates | ||||||||
| Hedging derivatives | |||||||||||
Interest rate | Caps/Floors: Black 76 and SABR Bond options: Black 76 Swaptions: Black, SABR and LGM Other Interest rate Options: Black, SABR and 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 | - Implicit correlations between tenors - interest rates volatility | ||||||||
Equity | Equity Options: Local volatility, Black 76, Momentum adjustment and Heston | - Implicit assets correlations - Long term implicit correlations - Implicit dividends and long term repos | |||||||||
Foreign exchange and gold | Foreign exchange Options: Local volatility, momentum adjustment | - Implicit assets correlations - Long term implicit correlations | |||||||||
Credit | - Credit spread - Recovery rates - Interest rate yield - Default volatility | ||||||||||
Commodities | |||||||||||
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FAIR VALUE OF FINANCIAL INSTRUMENTS BY LEVELS | |||||||||||
LIABILITIES | Valuation techniques in Levels 2 and 3 | Observable inputs in Levels 2 and 3 | Unobservable inputs in Levels 2 and 3 | ||||||||
| Financial liabilities held for trading | |||||||||||
Deposits | (Discounted future cash flows) | - Funding interest rates observed in the market or in consensus services - Exchange rates | |||||||||
Derivatives | |||||||||||
Interest rate | Caps/Floors: Black 76 and SABR Bond options: Black 76 Swaptions: Black 76, SABR and LGM Other Interest rate Options: Black, SABR, Libor Market Model and QGM. Constant Maturity Swaps: SABR | - 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 | - Correlation between tenors - Interest rates volatility | ||||||||
Equity | Future and Equity forward: Discounted future cash flows Equity Options: Local volatility, momentum adjustment and Heston | - Assets correlation | |||||||||
Foreign exchange and gold | Foreign exchange Options: Black 76, Local volatility, momentum adjustment | - Assets correlation | |||||||||
Credit | - Credit spread - Recovery rates - Interest rate yield - Default volatility | ||||||||||
Commodities | |||||||||||
Short positions | (Discounted future cash flows) | - Issuer´s credit risk - Current market interest rates | |||||||||
| 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´s credit risk - Current market interest rates | ||||||||
| Derivatives – Hedge accounting | |||||||||||
Interest rate | Caps/Floors: Black 76 and SABR Bond options: Black 76 Swaptions: Black 76, SABR and LGM Other Interest rate Options: Black, SABR and 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 | - Implicit correlations between tenors - interest rates volatility | ||||||||
Equity | Equity Options: Local volatility, momentum adjustment and Heston | - Implicit assets correlations - Long term implicit correlations - Implicit dividends and long term repos | |||||||||
Foreign exchange and gold | Foreign exchange Options: Black 76, Local Volatility, momentum adjustment | - Implicit assets correlations - Long term implicit correlations | |||||||||
Credit | - Credit spread - Recovery rates - Interest rate yield - Default volatility | ||||||||||
Commodities | |||||||||||
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.
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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.
–LGM (Linear Gaussian Model): the model, commonly used for the valuation of interest rate instruments, assumes that the evolution of the yield curve is driven by a single stochastic factor following a linear Gaussian process. Under this framework, instantaneous rates evolve continuously with a volatility proportional to the level of rates, allowing for a parsimonious and stable description of the dynamics of bond prices and interest rate swap derivatives. Unlike more complex or multifactor models, the LGM retains a simple analytical structure that facilitates calibration to market-implied swaption volatilities.
–QGM (Quasi Gaussian Model): an advanced pricing model for the valuation of callable products. It is a valuation framework based on Monte Carlo simulations that employs a local volatility parameterization to model interest rates, designed to price exotic derivatives with cancellable features. The model uses a quasi-Gaussian approach to represent the dynamics of interest rates, leveraging a combination of variables and an auxiliary matrix to capture the evolution of forward rates.
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–Local volatility: in the local volatility models, the volatility, instead of being static, evolves deterministically over time according to the level of moneyness (i.e. probability that the option has a positive value on its date of expiration) of the underlying, capturing the existence of volatility smiles. The volatility smile of an option is the empirical relationship observed between its implied volatility and its strike price. These models are appropriate for options whose value depends on the historical evolution of the underlying which use Monte Carlo simulation technique for their valuation.
Unobservable inputs
Quantitative information of unobservable inputs used to calculate level 3 valuations is presented below as of December 31, 2025, 2024 and 2023.
UNOBSERVABLE INPUTS. DECEMBER 2025 | ||||||||||||||||||||
Financial instrument | Valuation technique(s) | Significant unobservable inputs | Min | Average | Max | Units | ||||||||||||||
Debt Securities | Present value method | Credit spread | bp | |||||||||||||||||
Recovery rate | % | % | % | % | ||||||||||||||||
Comparable Pricing | % | % | % | % | ||||||||||||||||
Equity/Fund instruments (1) | Net Asset Value | |||||||||||||||||||
Comparable Pricing | ||||||||||||||||||||
Loans and advances | Present value method | Repo funding curve | % | % | % | % | ||||||||||||||
Credit Derivatives | Gaussian Copula | Correlation default | % | % | % | % | ||||||||||||||
Black 76 | Price volatility | Vegas | ||||||||||||||||||
Equity Derivatives | Option models on equities, baskets of equity, funds | Dividends (2) | ||||||||||||||||||
Correlations | ( | %) | % | % | % | |||||||||||||||
Volatility | Vegas | |||||||||||||||||||
FX Derivatives | Option models on FX underlyings | Volatility | Vegas | |||||||||||||||||
IR Derivatives | Option models on IR underlyings | Beta | % | % | % | % | ||||||||||||||
Correlation rate/credit | ( | %) | % | |||||||||||||||||
Correlation rate/inflation | % | % | % | % | ||||||||||||||||
(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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UNOBSERVABLE INPUTS. DECEMBER 2024 | ||||||||||||||||||||
Financial instrument | Valuation technique(s) | Significant unobservable inputs | Min | Average | Max | Units | ||||||||||||||
Debt Securities | Present value method | Credit spread | bp | |||||||||||||||||
Recovery rate | % | % | % | % | ||||||||||||||||
Comparable Pricing | % | % | % | % | ||||||||||||||||
Equity/Fund instruments (1) | Net Asset Value | |||||||||||||||||||
Comparable Pricing | ||||||||||||||||||||
Loans and advances | Present value method | Repo funding curve | % | % | % | % | ||||||||||||||
Credit Derivatives | Gaussian Copula | Correlation default | % | % | % | % | ||||||||||||||
Black 76 | Price volatility | Vegas | ||||||||||||||||||
Equity Derivatives | Option models on equities, baskets of equity, funds | Dividends (2) | ||||||||||||||||||
Correlations | ( | %) | % | % | % | |||||||||||||||
Volatility | Vegas | |||||||||||||||||||
FX Derivatives | Option models on FX underlyings | Volatility | Vegas | |||||||||||||||||
IR Derivatives | Option models on IR underlyings | Beta | % | % | % | % | ||||||||||||||
Correlation rate/credit | ( | %) | % | |||||||||||||||||
Correlation rate/inflation | % | % | % | % | ||||||||||||||||
(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 2023 | ||||||||||||||||||||
Financial instrument | Valuation technique(s) | Significant unobservable inputs | Min | Average | Max | Units | ||||||||||||||
Debt securities | Present value method | Credit spread | bp | |||||||||||||||||
Recovery rate | % | % | % | % | ||||||||||||||||
Comparable pricing | % | % | % | % | ||||||||||||||||
Equity/Fund instruments (1) | Net asset value | |||||||||||||||||||
Comparable pricing | ||||||||||||||||||||
Loans and advances | Present value method | Repo funding curve | % | % | % | % | ||||||||||||||
Credit derivatives | Gaussian Copula | Correlation default | % | % | % | % | ||||||||||||||
Black 76 | Price volatility | Vegas | ||||||||||||||||||
Equity derivatives | Option models on equities, baskets of equity, funds | Dividends (2) | ||||||||||||||||||
Correlations | ( | %) | % | % | % | |||||||||||||||
Volatility | Vegas | |||||||||||||||||||
FX derivatives | Option models on FX underlyings | Volatility | Vegas | |||||||||||||||||
IR derivatives | Option models on IR underlyings | Beta | % | % | % | % | ||||||||||||||
Correlation rate/credit | ( | %) | % | % | ||||||||||||||||
Correlation rate/inflation | % | % | % | % | ||||||||||||||||
(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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Adjustments to the valuation
Under IFRS 13, the entity must estimate the value taking into account the assumptions and conditions that market participants would have when setting the price of the asset or liability on the valuation date.
In order to comply with the fair value requirements, the entity applies adjustments to the fair valuation considering inherent and counterparties´ default criteria, funding valuation risk and valuation risks due to valuation uncertainty and related to the prudent valuation criteria. The above is aligned with the regulatory requirements (EBA CRR 105.10) 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 Group makes valuation adjustments for credit risk in the estimates of the fair value of its assets and liabilities.
These adjustments are calculated by estimating Exposure At Default, Probability of Default and Loss Given Default, which are based on the recovery levels for all derivative products on any instrument, deposits and repos at the legal entity level (all counterparties under a same master agreement), in which BBVA has exposure.
Credit Valuation Adjustment (hereinafter “CVA”) and Debit Valuation Adjustments (hereinafter “DVA”) are included in the valuation of derivatives, both assets and liabilities, to reflect the impact on the fair value of the counterparty credit risk and its own, respectively. The Group incorporates in its valuation, for all exposures classified in any of the categories valued at fair value, both the counterparty credit risk and its own. In the trading portfolio, and in the specific case of derivatives, credit risk is recognized through such adjustments.
As a general rule, the calculation of CVA is the sum of the expected positive exposure in time t, the probability of default between t-1 and t, and the Loss Given Default of the counterparty. Consequently, the DVA is calculated as the sum of the expected negative exposure in time t, the probability of default of BBVA between t-1 and t, and the Loss Given Default of BBVA. Both calculations are performed throughout the entire period of potential exposure.
The calculation of the expected positive and negative exposure is done through a Montecarlo simulation of the market variables involved in all trades’ valuation under the same legal netting set.
The information needed to calculate the probability of default and the loss given default of a counterparty comes from the credit markets. The counterparty’s Credit Default Swaps are used if liquid quotes are available. If a market price is not available, BBVA has implemented a mapping process based on the sector, rating and geography of the counterparty to assign probabilities of default and loss given default calibrated directly to market.
An additional adjustment for Own Credit Adjustment (hereinafter "OCA") is applied to the instruments accounted for by applying the Fair Value Option permitted by IFRS 9. The related amounts recognized in the consolidated balance sheet as of December 31, 2025 and 2024, related to OCA were €459 million and €393 million, respectively.
The amounts recognized in the consolidated balance sheets as of December 31, 2025, 2024 and 2023 related to the valuation adjustments incorporated to the credit assessment derivative assets amounted to €-140 million, €-205 million and €-133 million, respectively as Credit Valuation Adjustments (CVA), and amounted to €87 million, €116 million and €91 million, respectively as Debit Valuation Adjustment (DVA). The impact recorded under “Gains (losses) on financial assets and liabilities held for trading, net” in the consolidated income statement was €62 million for the year ended December 31, 2025 and €17 million and €26 million in 2024 and 2023, respectively.
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Valuation adjustments for financing risk
The fair value of the positions recorded at fair value must reflect the entity's financing risk. Taking into account the above, the Group makes adjustments for financing risk valuation (Funding Valuation Adjustment, hereinafter "FVA") in the estimates of the fair value of its assets and liabilities.
The adjustment to the valuation for financing risk incorporates the cost of financing implicit in the valuation of positions at fair value. This adjustment reflects the cost of funding for non-collateralized or partially collateralized operations.
Additionally, as of December 31, 2025, 2024 and 2023, €-10 million, €-19 million and €-16 million related to the FVA were recognized in the consolidated balance sheet, being the impact on results not significant.
Collateral Valuation Adjustments on Bond-Collateralized Agreements
Non-standard collateral valuation adjustments (hereinafter, “ColVA”) are incorporated into the valuation of both asset and liability derivatives to reflect, in their fair value, the impact of uncertainty in the discount curve associated with collateralized positions in bonds. A standard collateral agreement for a derivative is understood to be one that requires daily posting of collateral reflecting changes in the derivative’s market value, in the same currency as the derivative, and remunerated at the standard collateral rate. When the collateral agreement permits the delivery of bonds as collateral, an adjustment is required to capture the specific characteristics of the eligible collateral that cause the valuation of the transaction to differ from that under a standard cash collateralization in the deal’s currency of denomination. These adjustments account for the cost (or benefit) of funding the bond collateral that covers the Expected Positive Exposure (EPE) or Expected Negative Exposure (ENE) of a derivatives portfolio over time, using the market rehypothecation curve of the posted collateral.
ColVA adjustments are typically considered a component of FVA.
Valuation adjustments for valuation uncertainty
The fair value of the positions recorded at fair value must reflect the valuation risk derived from the uncertainty in the valuation for concepts of pure uncertainty of prices, liquidity risk and model risks. This adjustment is aligned with the regulatory requirements for prudent valuation via valuation adjustments with an impact on CET1, and meets the requirements of EBA CRR 105.10 for this purpose.
The adjustment to the valuation for liquidity incorporates an adjustment for Bid / Offer spreads in the valuation of 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, 2025 corresponding to the mentioned adjustments was a net impact of €-59 million, (€-53 million in 2024). An adjustment was also made as of December 31, 2025 on financial assets at fair value through other comprehensive income for a total of €-10 million (€-17 million and €-15 million in 2024 and 2023, respectively).
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Financial assets and liabilities classified as level 3
The changes in the balance of level 3 financial assets and liabilities included in the consolidated balance sheets are as follows:
FINANCIAL ASSETS LEVEL 3: CHANGES IN THE YEAR (MILLIONS OF EUROS) | ||||||||||||||||||||||||||
2025 | 2024 | 2023 | ||||||||||||||||||||||||
Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | |||||||||||||||||||||
| Balance at the beginning | ||||||||||||||||||||||||||
Changes in fair value recognized in profit and loss ⁽¹⁾ | ( | |||||||||||||||||||||||||
Changes in fair value not recognized in profit and loss | ( | |||||||||||||||||||||||||
Acquisitions, disposals and liquidations | ( | |||||||||||||||||||||||||
Net transfers to level 3 | ( | ( | ( | |||||||||||||||||||||||
Exchange differences and others | ( | ( | ( | |||||||||||||||||||||||
| Balance at the end | ||||||||||||||||||||||||||
(1) Profit or loss that is attributable to gains or losses relating to those financial assets and liabilities held as of December 31, 2025, 2024 and 2023. Valuation adjustments are recorded under the heading “Gains (losses) on financial assets and liabilities (net)”.
During 2025, there was an increase in level 3 asset positions (+19%), resulting in equal parts from market price evolution and decreased observability. This increase is primarily distributed between the derivatives portfolio and equity cash trading.
During 2024, there was an increase in positions classified as level 3, mainly concentrated in cash fixed-income positions due to unobservability in market prices applied in their fair valuation. No significant changes were observed in other positions, such as derivatives, reverse repurchase agreements and cash variable-income positions.
In 2023, as a result of the implementation of the multifactor criteria in the classification, which considered all the risk factors of the exposures, their observability and uncertainty, there was a reduction in exposure to level 3 derivatives, offset by an increase in exposure classified at level 3 in repurchase agreements positions due to unobservability in the inputs used in their valuation. The increase in level 3 exposure was mainly related to cash positions of variable income and fixed income due to unobservability in their prices.
For the years ended December 31, 2025, 2024 and 2023, 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, in collaboration with the Group, has established the rules for an appropriate financial instruments held for trading classification according to the fair value hierarchy defined by IFRS.
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.
The financial instruments transferred among the different levels of measurement for the years ended December 31, 2025, 2024 and 2023 are at the following amounts in the consolidated balance sheets as of December 31, 2025, 2024 and 2023:
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TRANSFERS AMONG LEVELS. DECEMBER 2025 (MILLIONS OF EUROS) | |||||||||||||||||||||||
From: | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
To: | Level 2 | Level 3 | Level 1 | Level 3 | Level 1 | Level 2 | |||||||||||||||||
| ASSETS | |||||||||||||||||||||||
Financial assets held for trading | |||||||||||||||||||||||
Non-trading financial assets mandatorily at fair value through profit or loss | |||||||||||||||||||||||
Financial assets designated at fair value through profit or loss | |||||||||||||||||||||||
Financial assets at fair value through other comprehensive income | |||||||||||||||||||||||
Derivatives – Hedge accounting | |||||||||||||||||||||||
| Total | |||||||||||||||||||||||
| LIABILITIES | |||||||||||||||||||||||
Financial liabilities held for trading | |||||||||||||||||||||||
Financial liabilities designated at fair value through profit or loss | ( | ( | |||||||||||||||||||||
Derivatives – Hedge accounting | |||||||||||||||||||||||
| Total | ( | ( | |||||||||||||||||||||
TRANSFER AMONG LEVELS (MILLIONS OF EUROS) | |||||||||||||||||||||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||||
Non-trading financial assets mandatorily at fair value through profit or loss | |||||||||||||||||||||||||||||||||||||||||
Financial assets designated at fair value through profit or loss | |||||||||||||||||||||||||||||||||||||||||
Financial assets at fair value through other comprehensive income | |||||||||||||||||||||||||||||||||||||||||
Derivatives – Hedge accounting | |||||||||||||||||||||||||||||||||||||||||
| Total | |||||||||||||||||||||||||||||||||||||||||
| LIABILITIES | |||||||||||||||||||||||||||||||||||||||||
Financial liabilities held for trading | |||||||||||||||||||||||||||||||||||||||||
Financial liabilities designated at fair value through profit or loss | |||||||||||||||||||||||||||||||||||||||||
Derivatives – Hedge accounting | |||||||||||||||||||||||||||||||||||||||||
| Total | |||||||||||||||||||||||||||||||||||||||||
In 2025, transfers between the different levels of the fair value hierarchy at a Group level were very limited and did not represent a significant change in any of the categories. However, in the banking book, there were significant transfers from level 1 to level 2 in the portfolio of ‘Financial assets designated at fair value through profit or loss’ due to decreased observability, which were only partially offset by transfers from level 2 to level 1 in the portfolio of ‘Financial assets at fair value through other comprehensive income’.
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The amount of the financial instruments at fair value that were transferred among the different valuation levels during 2024 showed a stable performance in relation to the evolution of market observability in the inputs applied in their valuation. No significant level transfers were made from level 1 to level 3, with the most significant volumes of transfers concentrated between level 1 and level 2, and level 2 and level 3. In both cases, the changes were solely due to the observability conditions of market inputs.
The amount of the financial instruments at fair value portfolio that were transferred among the different valuation levels during 2023 correspond mainly, with respect to level 1 to level 2, to the review of the classification among levels due to the implementation of the short-term maturities model valuation of the listed options 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 the transfer of certain positions from level 3 to level 2, mainly in cash positions in debt securities, equities and loans and advances.
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, 2025, 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:
FINANCIAL INSTRUMENTS LEVEL 3: SENSITIVITY ANALYSIS (MILLIONS OF EUROS) | ||||||||||||||||||||||||||
Potential impact on consolidated income statement | Potential impact on other comprehensive income | |||||||||||||||||||||||||
Most favorable hypothesis | Least favorable hypothesis | Most favorable hypothesis | Least favorable hypothesis | |||||||||||||||||||||||
2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||||
| Financial assets held for trading | ( | ( | ||||||||||||||||||||||||
Loans and advances | ( | ( | ||||||||||||||||||||||||
Debt securities | ( | ( | ||||||||||||||||||||||||
Equity instruments | ( | ( | ||||||||||||||||||||||||
Derivatives | ( | ( | ||||||||||||||||||||||||
| Non-trading financial assets mandatorily at fair value through profit or loss | ( | ( | ||||||||||||||||||||||||
Loans and advances | ( | |||||||||||||||||||||||||
Debt securities | ( | |||||||||||||||||||||||||
Equity instruments | ( | ( | ||||||||||||||||||||||||
Financial assets designated at fair value through profit or loss | ||||||||||||||||||||||||||
| Financial assets at fair value through other comprehensive income | ( | ( | ||||||||||||||||||||||||
| Total | ( | ( | ( | ( | ||||||||||||||||||||||
| LIABILITIES | ||||||||||||||||||||||||||
Financial liabilities held for trading | ( | ( | ||||||||||||||||||||||||
| Total | ( | ( | ||||||||||||||||||||||||
8.2Fair value of financial instruments recognized at amortized cost according to valuation method
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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, these financial assets will be valued by discounting future cash flows using the interest rate curve adjusted by the market spread at the time of valuation and considering any behavioral hypothesis considered to be relevant (early prepayments, optionality, etc.). Therefore, their valuations will be conditioned by the interest rates and spreads of the portfolios and their durations.
–Debt securities: generally, fair value is 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 considered to be relevant (early repayments, optionalities, etc.).
–Debt certificate (Issuances): the fair value estimation of these liabilities is based on the availability of market prices or the present value method: discount of future cash flows, using market interest rates at valuation time and taking into account the credit spread.
The table below shows the fair value of the Group's financial instruments recognized at amortized cost in the consolidated balance sheets, broken down according to the valuation method used to determine their fair value, and their respective book value, as well as the main valuation techniques and inputs used for financial instruments classified in level 2 and level 3 as of December 31, 2025, 2024 and 2023:
FAIR VALUE OF FINANCIAL INSTRUMENTS RECOGNIZED AT AMORTIZED COST BY LEVELS. DECEMBER 2025 (MILLIONS OF EUROS) | |||||||||||||||||||||||
Notes | Book value | Fair value | |||||||||||||||||||||
Carrying amount presented as fair value ⁽¹⁾ | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| ASSETS | |||||||||||||||||||||||
| Cash, cash balances at central banks and other demand deposits | 9 | ||||||||||||||||||||||
| Financial assets at amortized cost | 14 | ||||||||||||||||||||||
Debt securities | |||||||||||||||||||||||
Loans and advances | |||||||||||||||||||||||
| LIABILITIES | |||||||||||||||||||||||
| Financial liabilities at amortized cost | 22 | ||||||||||||||||||||||
Deposits | |||||||||||||||||||||||
Debt certificates issued | |||||||||||||||||||||||
Other financial liabilities | |||||||||||||||||||||||
(1) Financial instruments whose book value is presented as an approximation to their fair value, mainly short-term financial instruments.
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FAIR VALUE OF FINANCIAL INSTRUMENTS RECOGNIZED AT AMORTIZED COST BY LEVELS. DECEMBER 2024 (MILLIONS OF EUROS) | |||||||||||||||||||||||
Notes | Book value | Fair value | |||||||||||||||||||||
Carrying amount presented as fair value ⁽¹⁾ | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| ASSETS | |||||||||||||||||||||||
| Cash, cash balances at central banks and other demand deposits | 9 | ||||||||||||||||||||||
| Financial assets at amortized cost | 14 | ||||||||||||||||||||||
Debt securities | |||||||||||||||||||||||
Loans and advances | |||||||||||||||||||||||
| LIABILITIES | |||||||||||||||||||||||
| Financial liabilities at amortized cost | 22 | ||||||||||||||||||||||
Deposits | |||||||||||||||||||||||
Debt certificates issued | |||||||||||||||||||||||
Other financial liabilities | |||||||||||||||||||||||
(1) Financial instruments whose book value is presented as an approximation to their fair value, mainly short-term financial instruments.
FAIR VALUE OF FINANCIAL INSTRUMENTS RECOGNIZED AT AMORTIZED COST BY LEVELS. DECEMBER 2023 (MILLIONS OF EUROS) | |||||||||||||||||||||||
Notes | Book value | Fair value | |||||||||||||||||||||
Carrying amount presented as fair value ⁽¹⁾ | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
| ASSETS | |||||||||||||||||||||||
| Cash, cash balances at central banks and other demand deposits | 9 | ||||||||||||||||||||||
| Financial assets at amortized cost | 14 | ||||||||||||||||||||||
Debt securities | |||||||||||||||||||||||
Loans and advances | |||||||||||||||||||||||
| LIABILITIES | |||||||||||||||||||||||
| Financial liabilities at amortized cost | 22 | ||||||||||||||||||||||
Deposits | |||||||||||||||||||||||
Debt certificates issued | |||||||||||||||||||||||
Other financial liabilities | |||||||||||||||||||||||
(1) Financial instruments whose book value is presented as an approximation to their fair value, mainly short-term financial instruments.
The fair value of the “Financial assets at amortized cost” has been estimated mainly using the valuation techniques of the Present-value method (discounted future cash flows). The main inputs considered for Levels 2 and 3 are the interest rate yield, the prepayment rates and the credit spread.
In the case of “Financial liabilities at amortized cost”, the fair value is also obtained mainly through the Present-value method (discounted future cash flows). The main inputs considered for, at levels 2 and 3, the issuer's credit risk, the interest rate yield and the prepayment rate.
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9.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 consolidated balance sheets is as follows:
CASH, CASH BALANCES AT CENTRAL BANKS AND OTHER DEMAND DEPOSITS (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
Cash on hand | ||||||||||||||
Cash balances at central banks ⁽¹⁾ | ||||||||||||||
Other demand deposits | ||||||||||||||
| Total | 8.2 | |||||||||||||
(1) The variation is mainly due to the evolution of the balances held in the Bank of Spain.
10.Financial assets and liabilities held for trading
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10.1Breakdown of the balance
The breakdown of the balance under these headings in the consolidated balance sheets is as follows:
FINANCIAL ASSETS AND LIABILITIES HELD FOR TRADING (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
| ASSETS | ||||||||||||||
Derivatives | ||||||||||||||
| Equity instruments | 7.2.2 | |||||||||||||
Credit institutions | ||||||||||||||
Other sectors | ||||||||||||||
| Debt securities | 7.2.2 | |||||||||||||
Issued by central banks | ||||||||||||||
Issued by public administrations | ||||||||||||||
Issued by financial institutions | ||||||||||||||
Other debt securities | ||||||||||||||
| Loans and advances | 7.2.2 | |||||||||||||
Loans and advances to central banks | ||||||||||||||
Reverse repurchase agreements | ||||||||||||||
Loans and advances to credit institutions | ||||||||||||||
Reverse repurchase agreements ⁽¹⁾ | ||||||||||||||
Loans and advances to customers | ||||||||||||||
Reverse repurchase agreements | ||||||||||||||
Total assets | 8.1 | |||||||||||||
| LIABILITIES | ||||||||||||||
| Derivatives | ||||||||||||||
| Short positions | ||||||||||||||
| Deposits | ||||||||||||||
Deposits from central banks | ||||||||||||||
Repurchase agreements | ||||||||||||||
Deposits from credit institutions | ||||||||||||||
Repurchase agreements ⁽¹⁾ | ||||||||||||||
Customer deposits | ||||||||||||||
Repurchase agreements | ||||||||||||||
Total liabilities | 8.1 | |||||||||||||
(1) The variation is mainly due to the evolution of "Reverse repurchase agreements" of BBVA, S.A. partially offset by the evolution of "Repurchase agreements" principally of BBVA, S.A.
As of December 31, 2025, 2024 and 2023 “Short positions” include €12,531 million, €13,010 million and €14,914 million, respectively, held with general governments.
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10.2Derivatives
The derivatives portfolio arises from the Group’s need to manage the risks it is exposed to in the normal course of business and also to market products amongst the Group’s customers. As of December 31, 2025, 2024 and 2023, most of the derivatives were mainly contracted in over-the-counter (OTC) markets, with counterparties, consisting primarily of credit institutions and other financial institutions. These derivatives are linked to foreign-exchange rate risk, interest rate risk and changes in equity instruments.
Below is a breakdown by type of risk and market, of the fair value and notional amounts of financial derivatives recognized in the consolidated balance sheets, divided into organized and OTC markets:
DERIVATIVES BY TYPE OF RISK AND BY PRODUCT OR BY TYPE OF MARKET (MILLIONS OF EUROS) | |||||||||||||||||||||||||||||||||||
2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
Assets | Liabilities | Notional amount - Total | Assets | Liabilities | Notional amount - Total | Assets | Liabilities | Notional amount - Total | |||||||||||||||||||||||||||
| Interest rate | |||||||||||||||||||||||||||||||||||
OTC | |||||||||||||||||||||||||||||||||||
Organized market | |||||||||||||||||||||||||||||||||||
| Equity instruments | |||||||||||||||||||||||||||||||||||
OTC | |||||||||||||||||||||||||||||||||||
Organized market | |||||||||||||||||||||||||||||||||||
| Foreign exchange and gold | |||||||||||||||||||||||||||||||||||
OTC | |||||||||||||||||||||||||||||||||||
Organized market | |||||||||||||||||||||||||||||||||||
| Credit | |||||||||||||||||||||||||||||||||||
Credit default swap | |||||||||||||||||||||||||||||||||||
Credit spread option | |||||||||||||||||||||||||||||||||||
Total return swap | |||||||||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||||||
| Commodities | |||||||||||||||||||||||||||||||||||
| DERIVATIVES | |||||||||||||||||||||||||||||||||||
Of which: OTC - credit institutions | |||||||||||||||||||||||||||||||||||
Of which: OTC - other financial corporations | |||||||||||||||||||||||||||||||||||
Of which: OTC - other | |||||||||||||||||||||||||||||||||||
11.Non-trading financial assets mandatorily at fair value through profit or loss
The breakdown of the balance under this heading in the consolidated balance sheets is as follows:
NON-TRADING FINANCIAL ASSETS MANDATORILY AT FAIR VALUE THROUGH PROFIT OR LOSS (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
Equity instruments | 7.2.2 | |||||||||||||
Debt securities | 7.2.2 | |||||||||||||
Loans and advances | 7.2.2 | |||||||||||||
| Total | 8.1 | |||||||||||||
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The equity instruments included in this heading mainly comprised financial assets related to the insurance activity of the BBVA Group, including investments associated with life insurance products where the investment risk is assumed by the policyholder, such as the Unit-link products.
12.Financial assets and liabilities designated at fair value through profit or loss
The breakdown of the balance under these headings in the consolidated balance sheets is as follows:
FINANCIAL ASSETS AND LIABILITIES DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
| ASSETS | ||||||||||||||
Debt securities | 7.2.2 | |||||||||||||
| Total assets | 8.1 | |||||||||||||
| LIABILITIES | ||||||||||||||
Customer deposits | ||||||||||||||
Debt certificates issued | ||||||||||||||
Other financial liabilities: Unit-linked products | ||||||||||||||
| Total liabilities | 8.1 | |||||||||||||
This heading includes mainly liabilities linked to insurance products where the risk is assumed by the policyholder (Unit-link) products. Since the liabilities linked to insurance products in which the policyholder assumes the risk are valued the same way as the assets associated with such insurance products, there is no credit risk borne by the Group in relation to these liabilities.
In addition, debt securities are included in these headings to reduce inconsistencies (asymmetries) in the valuation of such operations and those operations used to manage the risk associated with them.
13.Financial assets at fair value through other comprehensive income
13.1Breakdown of the balance
The breakdown of the balance of financial assets at fair value through other comprehensive income by type of financial instrument as of December 31, 2025, 2024 and 2023 is as follows:
FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
Equity instruments | 7.2.2 | |||||||||||||
Debt securities | ||||||||||||||
Loans and advances | 7.2.2 | |||||||||||||
| Total ⁽¹⁾ | 8.1 | |||||||||||||
Of which: loss allowances of debt securities | ( | ( | ( | |||||||||||
Of which: loss allowances of loans and advances | ( | |||||||||||||
(1) During financial years 2025, 2024 and 2023, there have been no significant reclassifications from the heading “Financial assets at fair value through other comprehensive income” to other headings or from other headings to “Financial assets at fair value through other comprehensive income”.
F-135
13.2Equity instruments
The breakdown of the balance under the heading "Equity instruments" of the consolidated balance sheets as of December 31, 2025, 2024 and 2023 is as follows:
FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME. EQUITY INSTRUMENTS (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
| Listed equity instruments | |||||||||||
Spanish companies shares | |||||||||||
Foreign companies shares | |||||||||||
Mexico | |||||||||||
The United States | |||||||||||
Turkey | |||||||||||
Other countries | |||||||||||
| Subtotal listed equity instruments | |||||||||||
| Unlisted equity instruments | |||||||||||
Spanish companies shares | |||||||||||
Foreign companies shares | |||||||||||
| Subtotal unlisted equity instruments | |||||||||||
| Total | |||||||||||
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13.3Debt securities
The breakdown of the balance under the heading “Debt securities” of the consolidated financial statements as of December 31, 2025, 2024 and 2023, broken down by issuers, is as follows:
FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME. DEBT SECURITIES (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
| Domestic debt securities | |||||||||||
Government and other government agency | |||||||||||
Credit institutions | |||||||||||
Other issuers | |||||||||||
| Subtotal | |||||||||||
| Foreign debt securities | |||||||||||
| Mexico | |||||||||||
Government and other government agency | |||||||||||
Credit institutions | |||||||||||
Other issuers | |||||||||||
| The United States | |||||||||||
Government and other government agency | |||||||||||
Credit institutions | |||||||||||
Other issuers | |||||||||||
| Turkey | |||||||||||
Government and other government agency | |||||||||||
Other issuers | |||||||||||
| Other countries | |||||||||||
Other foreign governments and government agency | |||||||||||
Central banks | |||||||||||
Credit institutions | |||||||||||
Other issuers | |||||||||||
| Subtotal | |||||||||||
| Total | |||||||||||
The credit ratings of the issuers of debt securities as of December 31, 2025, 2024 and 2023 are as follows:
DEBT SECURITIES BY RATING | ||||||||||||||||||||||||||
2025 | 2024 | 2023 | ||||||||||||||||||||||||
Fair value (Millions of Euros) | % | Fair value (Millions of Euros) | % | Fair value (Millions of euros) | % | |||||||||||||||||||||
AAA | % | % | % | |||||||||||||||||||||||
AA+ | % | % | % | |||||||||||||||||||||||
AA | % | % | % | |||||||||||||||||||||||
AA- | % | % | % | |||||||||||||||||||||||
A+ | % | % | % | |||||||||||||||||||||||
A | % | % | % | |||||||||||||||||||||||
A- | % | % | % | |||||||||||||||||||||||
BBB+ | % | % | % | |||||||||||||||||||||||
BBB | % | % | % | |||||||||||||||||||||||
BBB- | % | % | % | |||||||||||||||||||||||
BB+ or below | % | % | % | |||||||||||||||||||||||
Unclassified | % | % | % | |||||||||||||||||||||||
| Total | % | % | % | |||||||||||||||||||||||
F-137
13.4Gains/losses
The changes in the gains/losses (net of taxes) in 2025, 2024 and 2023 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 consolidated balance sheets are as follows:
OTHER COMPREHENSIVE INCOME - CHANGES IN GAINS (LOSSES) (MILLIONS OF EUROS) | ||||||||||||||||||||||||||
Debt securities | Equity instruments | |||||||||||||||||||||||||
Notes | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | ||||||||||||||||||||
| Balance at the beginning | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||
Valuation gains and losses | ( | ( | ||||||||||||||||||||||||
Amounts transferred to income | ||||||||||||||||||||||||||
Amounts transferred to Reserves | ||||||||||||||||||||||||||
Income tax and other | ( | ( | ( | ( | ( | |||||||||||||||||||||
| Balance at the end | 30 | ( | ( | ( | ( | ( | ( | |||||||||||||||||||
In 2025, 2024 and 2023, equity instruments presented a €76 million loss, a €228 million gain and a €80 million gain, respectively, in the heading “Accumulated other comprehensive income (loss) - 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 mainly by the evolution of interest rates.
F-138
14.Financial assets at amortized cost
14.1Breakdown of the balance
The breakdown of the balance under this heading in the consolidated balance sheets, according to the nature of the financial instrument, is as follows:
FINANCIAL ASSETS AT AMORTIZED COST (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
| Debt securities | ||||||||||||||
Central banks | ||||||||||||||
General governments | ||||||||||||||
Credit institutions | ||||||||||||||
Other financial corporations | ||||||||||||||
Non-financial corporations | ||||||||||||||
| Loans and advances to central banks | ||||||||||||||
| Loans and advances to credit institutions | ||||||||||||||
Reverse repurchase agreements | ||||||||||||||
Other loans and advances | ||||||||||||||
| Loans and advances to customers | 7.2.2 | |||||||||||||
General governments | ||||||||||||||
Other financial corporations | ||||||||||||||
Non-financial corporations | ||||||||||||||
Other | ||||||||||||||
| Total | 8.2 | |||||||||||||
Of which: impaired assets of loans and advances to customers | 7.2.2 | |||||||||||||
Of which: loss allowances of loans and advances | 7.2.5 | ( | ( | ( | ||||||||||
Of which: loss allowances of debt securities | ( | ( | ( | |||||||||||
During 2025, the Group made a payment corresponding to the Interest Margin and Commission Tax (“IMIC”, by its acronym in Spanish) for the year ended December 31, 2024, regulated by the Ninth Final Provision of Law 7/2024. However, given that such payment was made but considered undue with respect to such year under the existing legal framework, as of December 31, 2025, an asset for the amount disbursed (€295 million) was recorded under the “General governments” heading within the "Financial assets at amortized cost - Loans and advances to customers" item in the balance sheet.
F-139
14.2Debt securities
The breakdown of the balance under the heading “Debt securities” in the consolidated balance sheets, according to the issuer of the debt securities, is as follows:
FINANCIAL ASSETS AT AMORTIZED COST. DEBT SECURITIES (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
| Domestic debt securities | |||||||||||
Government and other government agencies | |||||||||||
Credit institutions | |||||||||||
Other issuers | |||||||||||
| Subtotal | |||||||||||
| Foreign debt securities | |||||||||||
| Mexico | |||||||||||
Government and other government agencies | |||||||||||
Central banks | |||||||||||
Credit institutions | |||||||||||
Other issuers | |||||||||||
| The United States | |||||||||||
Government and other government agencies | |||||||||||
Credit institutions | |||||||||||
Other issuers | |||||||||||
| Turkey | |||||||||||
Government and other government agencies | |||||||||||
Credit institutions | |||||||||||
Other issuers | |||||||||||
| Other countries | |||||||||||
Other foreign governments and other government agency | |||||||||||
Central banks | |||||||||||
Credit institutions | |||||||||||
Other issuers | |||||||||||
| Subtotal | |||||||||||
| Total | |||||||||||
As of December 31, 2025, 2024 and 2023, 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 | ||||||||||||||||||||||||||
2025 | 2024 | 2023 | ||||||||||||||||||||||||
Carrying amount (Millions of Euros) | % | Carrying amount (Millions of Euros) | % | Carrying amount (Millions of Euros) | % | |||||||||||||||||||||
AAA | % | % | % | |||||||||||||||||||||||
AA+ | % | % | % | |||||||||||||||||||||||
AA | % | % | % | |||||||||||||||||||||||
AA- | % | % | % | |||||||||||||||||||||||
A+ | % | % | % | |||||||||||||||||||||||
A | % | % | % | |||||||||||||||||||||||
A- | % | % | % | |||||||||||||||||||||||
BBB+ | % | % | % | |||||||||||||||||||||||
BBB | % | % | % | |||||||||||||||||||||||
BBB- | % | % | % | |||||||||||||||||||||||
BB+ or below | % | % | % | |||||||||||||||||||||||
Unclassified | % | % | % | |||||||||||||||||||||||
| Total | % | % | % | |||||||||||||||||||||||
F-140
14.3Loans and advances to customers
The breakdown of the balance under this heading in the consolidated balance sheets, according to their nature, is as follows:
LOANS AND ADVANCES TO CUSTOMERS (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
On demand and short notice | |||||||||||
Credit card debt | |||||||||||
Trade receivables | |||||||||||
Finance leases | |||||||||||
Reverse repurchase agreements | |||||||||||
Other term loans | |||||||||||
Advances that are not loans | |||||||||||
| Total | |||||||||||
The following table sets forth a breakdown of the gross carrying amount "Loans and advances to customers" with maturity greater than one year by fixed and variable rate as of December 31, 2025, 2024 and 2023:
LOANS AND ADVANCES MATURING IN MORE THAN ONE YEAR BY FIXED AND VARIABLE RATE (MILLIONS OF EUROS) | |||||||||||||||||||||||||||||||||||
2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
Domestic | Foreign | Total | Domestic | Foreign | Total | Domestic | Foreign | Total | |||||||||||||||||||||||||||
Fixed rate | |||||||||||||||||||||||||||||||||||
Variable rate | |||||||||||||||||||||||||||||||||||
| Total | |||||||||||||||||||||||||||||||||||
As of December 31, 2025, 2024 and 2023, 55%, 54% and 52%, respectively, of "Loans and advances to customers" with maturity greater than one year have fixed-interest rates and 45%, 46% and 48%, respectively, have variable interest rates.
This heading also includes certain loans that have been securitized. The balances recognized in the consolidated balance sheets corresponding to these securitized loans are as follows:
SECURITIZED LOANS (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Securitized mortgage assets | |||||||||||
Other securitized assets | |||||||||||
| Total | |||||||||||
15.Derivatives – Hedge accounting and fair value changes of the hedged items in portfolio hedges of interest rate risk
The breakdown of the balance of these headings in the consolidated balance sheets is as follows:
F-141
DERIVATIVES – HEDGE ACCOUNTING AND FAIR VALUE CHANGES OF THE HEDGED ITEMS IN PORTFOLIO HEDGE OF INTEREST RATE RISK (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
| ASSETS | |||||||||||
Derivatives - Hedge accounting | |||||||||||
Fair value changes of the hedged items in portfolio hedges of interest rate risk | ( | ( | ( | ||||||||
| LIABILITIES | |||||||||||
Derivatives - Hedge accounting | |||||||||||
Fair value changes of the hedged items in portfolio hedges of interest rate risk | |||||||||||
As of December 31, 2025, 2024 and 2023, the main positions hedged by the Group 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 debt securities is hedged using interest rate derivatives (fixed-variable swaps) and forward sales.
b.Long-term fixed-interest debt certificates issued by the Bank: the interest rate risk of these debt 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 30).
Note 7 analyzes the Group’s main risks that are hedged using these financial instruments.
F-142
The details of the net positions by hedged risk of the fair value of the hedging derivatives used by the Group as of December 31, 2025, 2024 and 2023, and which are recorded under the headings of "Derivatives - hedge accounting" of both assets and liabilities of the consolidated balance sheet are as follows:
DERIVATIVES - HEDGE ACCOUNTING. BREAKDOWN BY TYPE OF RISK AND TYPE OF HEDGE (MILLIONS OF EUROS) | |||||||||||||||||||||||||||||
Notes | 2025 | 2024 | 2023 | ||||||||||||||||||||||||||
Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | ||||||||||||||||||||||||
| Interest rate | |||||||||||||||||||||||||||||
OTC | |||||||||||||||||||||||||||||
Organized market | |||||||||||||||||||||||||||||
| Equity | |||||||||||||||||||||||||||||
OTC | |||||||||||||||||||||||||||||
Organized market | |||||||||||||||||||||||||||||
| Foreign exchange and gold | |||||||||||||||||||||||||||||
OTC | |||||||||||||||||||||||||||||
Organized market | |||||||||||||||||||||||||||||
| Credit | |||||||||||||||||||||||||||||
| Commodities | |||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||
| FAIR VALUE HEDGES | |||||||||||||||||||||||||||||
| Interest rate | |||||||||||||||||||||||||||||
OTC | |||||||||||||||||||||||||||||
Organized market | |||||||||||||||||||||||||||||
| Equity | |||||||||||||||||||||||||||||
| Foreign exchange and gold | |||||||||||||||||||||||||||||
OTC | |||||||||||||||||||||||||||||
Organized market | |||||||||||||||||||||||||||||
| Credit | |||||||||||||||||||||||||||||
| Commodities | |||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||
| CASH FLOW HEDGES | |||||||||||||||||||||||||||||
| HEDGE OF NET INVESTMENTS IN A FOREIGN OPERATION | |||||||||||||||||||||||||||||
| PORTFOLIO FAIR VALUE HEDGES OF INTEREST RATE RISK | |||||||||||||||||||||||||||||
| PORTFOLIO CASH FLOW HEDGES OF INTEREST RATE RISK | |||||||||||||||||||||||||||||
| DERIVATIVES-HEDGE ACCOUNTING | 8 | ||||||||||||||||||||||||||||
of which: OTC - credit institutions | |||||||||||||||||||||||||||||
of which: OTC - other financial corporations | |||||||||||||||||||||||||||||
F-143
Below there is a breakdown of the items covered by fair value hedges (mainly for the interest rates hedging) for years 2025 and 2024:
HEDGED ITEMS AND HEDGES. DECEMBER 2025 (MILLIONS OF EUROS) | |||||||||||||||||
| Notional | Hedged item amount | Accumulated fair value adjustments on the hedged item | Carrying amount of the hedging instrument | ||||||||||||||
Assets | Liabilities | ||||||||||||||||
| Fair value hedges | ( | ||||||||||||||||
| Financial assets measured at fair value through other comprehensive income | ( | ||||||||||||||||
Debt securities | ( | ||||||||||||||||
Equity instruments | ( | ||||||||||||||||
Loans and advances | |||||||||||||||||
| Financial assets measured at amortized cost | ( | ||||||||||||||||
Debt securities | ( | ||||||||||||||||
Loans and advances | ( | ||||||||||||||||
| Financial liabilities measured at amortized costs | |||||||||||||||||
Debt certificates issued | |||||||||||||||||
Deposits | ( | ||||||||||||||||
HEDGED ITEMS AND HEDGES. DECEMBER 2024 (MILLIONS OF EUROS) | |||||||||||||||||
| Notional | Hedged item amount | Accumulated fair value adjustments on the hedged item | Carrying amount of the hedging instrument | ||||||||||||||
Assets | Liabilities | ||||||||||||||||
| Fair value hedges | ( | ||||||||||||||||
| Financial assets measured at fair value through other comprehensive income | ( | ||||||||||||||||
Debt securities | ( | ||||||||||||||||
| Financial assets measured at amortized cost | ( | ||||||||||||||||
| Debt securities | ( | ||||||||||||||||
Loans and advances | |||||||||||||||||
| Financial liabilities measured at amortized costs | |||||||||||||||||
| Debt certificates issued | |||||||||||||||||
Deposits | ( | ||||||||||||||||
In 2025 and 2024, the inefficiencies of the fair value hedges amounted to €0 and €8 million, respectively, and are recognized in the " Gains (losses) from hedge accounting, net " item of the consolidated income statement. (See Note 41).
Below is a breakdown of the items covered by cash flow hedges (mainly for the interest rates hedging) for years 2025 and 2024:
F-144
HEDGED ITEMS AND HEDGES. DECEMBER 2025 (MILLIONS OF EUROS) | |||||||||||||||||
| Notional | Hedged item amount | Carrying amount of the hedging instrument | Profit (loss) recognized in Other Comprehensive Income | ||||||||||||||
Assets | Liabilities | ||||||||||||||||
Cash flow hedges | |||||||||||||||||
| Financial assets measured at fair value through other comprehensive income | |||||||||||||||||
Debt securities | |||||||||||||||||
| Financial assets measured at amortized cost | |||||||||||||||||
Debt securities | |||||||||||||||||
Loans and advances | |||||||||||||||||
| Financial liabilities measured at amortized costs | ( | ||||||||||||||||
Debt certificates issued | ( | ||||||||||||||||
Deposits | ( | ||||||||||||||||
HEDGED ITEMS AND HEDGES. DECEMBER 2024 (MILLIONS OF EUROS) | |||||||||||||||||
| Notional | Hedged item amount | Carrying amount of the hedging instrument | Profit (loss) recognized in Other Comprehensive Income | ||||||||||||||
Assets | Liabilities | ||||||||||||||||
| Cash flow hedges | |||||||||||||||||
| Financial assets measured at fair value through other comprehensive income | |||||||||||||||||
Debt securities | |||||||||||||||||
| Financial assets measured at amortized cost | |||||||||||||||||
Debt securities | |||||||||||||||||
| Financial liabilities measured at amortized costs | ( | ( | |||||||||||||||
Debt certificates issued | ( | ||||||||||||||||
Deposits | ( | ( | |||||||||||||||
In 2025 and 2024, the inefficiencies of the cash flow hedges amounted to €-2 and €-3 million, respectively, and are recognized in the " Gains (losses) from hedge accounting, net " item of the consolidated income statement. (See Note 41).
Below is a breakdown of the items covered by foreign currency hedges for the years 2025 and 2024:
HEDGED ITEMS AND HEDGES (MILLIONS OF EUROS) | ||||||||||||||
| Carrying amount of the hedged item | Hedge of net investments in foreign operations (effective portion) | Carrying amount of the hedging instrument | ||||||||||||
| Assets | Liabilities | |||||||||||||
| Hedge of net investments in foreign operations 2025 | ( | |||||||||||||
Hedge of net investments in foreign operations 2024 | ( | |||||||||||||
As of December 31, 2025 and 2024, no inefficiencies were recorded in the hedge of net investments in foreign transactions.
F-145
The following is the breakdown, by their notional maturities, of the hedging instruments as of December 31, 2025:
CALENDAR OF THE NOTIONAL MATURITIES OF THE HEDGING INSTRUMENTS (MILLIONS OF EUROS) | |||||||||||||||||
Up to 3 months | From 3 months to 1 year | From 1 to 5 years | More than 5 years | Total | |||||||||||||
| FAIR VALUE HEDGES | |||||||||||||||||
Of which: Interest rate | |||||||||||||||||
| CASH FLOW HEDGES | |||||||||||||||||
Of which: Interest rate | |||||||||||||||||
| HEDGE OF NET INVESTMENTS IN A FOREIGN OPERATION | |||||||||||||||||
| PORTFOLIO FAIR VALUE HEDGES OF INTEREST RATE RISK | |||||||||||||||||
| PORTFOLIO CASH FLOW HEDGES OF INTEREST RATE RISK | |||||||||||||||||
| DERIVATIVES-HEDGE ACCOUNTING | |||||||||||||||||
In 2025, 2024 and 2023, there was no reclassification in the consolidated income statements of any amount that was previously recognized in equity (see Note 41). The amount of the derivatives designated as accounting hedges that did not pass the effectiveness test in the years ended December 31, 2025, 2024 and 2023 was not material.
16.Investments in joint ventures and associates
16.1Joint ventures and associates
The breakdown of the balance of “Joint ventures and associates” in the consolidated balance sheets is as follows:
JOINT VENTURES AND ASSOCIATES. BREAKDOWN BY ENTITIES (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
| Joint ventures | |||||||||||
Altura Markets, S.V., S.A. | |||||||||||
RCI Colombia | |||||||||||
Other | |||||||||||
| Subtotal | |||||||||||
| Associates | |||||||||||
Metrovacesa, S.A. | |||||||||||
BBVA Allianz Seguros y Reaseguros, S.A. | |||||||||||
Atom Holdco Limited | |||||||||||
Servicios Electrónicos Globales S.A. de C.V. | |||||||||||
Other | |||||||||||
| Subtotal | |||||||||||
| Total | |||||||||||
Details of the joint ventures and associates as of December 31, 2025 are shown in Appendix II.
The following is a summary of the changes in the years ended December 31, 2025, 2024 and 2023 under this heading in the consolidated balance sheets:
F-146
JOINT VENTURES AND ASSOCIATES. CHANGES IN THE YEAR (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
| Balance at the beginning | ||||||||||||||
Acquisitions and capital increases | ||||||||||||||
Disposals and capital reductions | ( | ( | ( | |||||||||||
Transfers and changes of consolidation method | ( | |||||||||||||
Share of profit and loss | 39 | |||||||||||||
Exchange differences | ( | |||||||||||||
Impairment / reversal of impairment ⁽¹⁾ | ( | |||||||||||||
Dividends, valuation adjustments and other | ( | ( | ( | |||||||||||
| Balance at the end | ||||||||||||||
(1) See Note 16.3.
During the year 2025, there were no significant changes under the heading "Joint ventures and associates".
During the year 2024, the most significant changes under the heading "Joint ventures and associates" correspond to Solaris and Compañía Española de Financiación del Desarrollo S.A. (Cofides) that left the scope of the consolidation perimeter in the first half of the year when the Group ceased to have significant influence in either entity.
During the year 2023, the most significant change under the heading "Joint ventures and associates" corresponds to a capital increase in Atom Holdco Limited.
Appendix III 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.
F-147
16.2Other information about associates and joint ventures
If these entities had been consolidated rather than accounted for using the equity method, the change in each of the lines of balance sheet and the consolidated income statement would not be significant.
As of December 31, 2025, 2024 and 2023 there was no financial support agreement or other contractual commitment to associates and joint ventures entities from the holding or the subsidiaries that are not recognized in the financial statements (see Note 53.2).
As of December 31, 2025, 2024 and 2023 there was no contingent liability in connection with the investments in joint ventures and associates (see Note 53.2).
16.3Impairment
As required by IAS 36, the book value of the associates and joint venture entities has been compared with their recoverable amount, with the latter being calculated as the higher between the value in use and the fair value minus the cost of sale. For the year ended December 31, 2025, a net reversal of impairment was recorded for €32 million; for the year ended December 31, 2024, a net reversal of impairment was recorded for €63 million; for the year ended December 31, 2023, a net impairment was recorded for €9 million (see Note 48).
F-148
17.Tangible assets
The breakdown of, and changes in, the balances under this heading in the consolidated 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 2025 (MILLIONS OF EUROS) | |||||||||||||||||||||||||||||
Land and buildings | Work in progress | Furniture, fixtures and vehicles | Right to use asset | Investment Properties | Assets leased out under an operating lease | Total | |||||||||||||||||||||||
Notes | Own use | Investment Properties | |||||||||||||||||||||||||||
| Cost | |||||||||||||||||||||||||||||
| Balance at the beginning | |||||||||||||||||||||||||||||
Additions | |||||||||||||||||||||||||||||
Retirements | ( | ( | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||
Acquisition of subsidiaries in the year | |||||||||||||||||||||||||||||
Disposal of entities in the year | |||||||||||||||||||||||||||||
Transfers | ( | ( | ( | ( | |||||||||||||||||||||||||
Exchange difference and other | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||
| Balance at the end | |||||||||||||||||||||||||||||
| Accrued depreciation | |||||||||||||||||||||||||||||
| Balance at the beginning | |||||||||||||||||||||||||||||
Additions | 45 | ||||||||||||||||||||||||||||
Additions transfer to discontinued operations | |||||||||||||||||||||||||||||
Retirements | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||
Acquisition of subsidiaries in the year | |||||||||||||||||||||||||||||
Disposal of entities in the year | |||||||||||||||||||||||||||||
Transfers | ( | ( | ( | ( | |||||||||||||||||||||||||
Exchange difference and other | ( | ( | ( | ( | ( | ||||||||||||||||||||||||
| Balance at the end | |||||||||||||||||||||||||||||
| Impairment | |||||||||||||||||||||||||||||
| Balance at the beginning | |||||||||||||||||||||||||||||
Additions | 49 | ( | ( | ( | |||||||||||||||||||||||||
Additions transfer to discontinued operations | |||||||||||||||||||||||||||||
Retirements | |||||||||||||||||||||||||||||
Acquisition of subsidiaries in the year | |||||||||||||||||||||||||||||
Disposal of entities in the year | |||||||||||||||||||||||||||||
Transfers | |||||||||||||||||||||||||||||
Exchange difference and other | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||
| Balance at the end | |||||||||||||||||||||||||||||
| Net tangible assets | |||||||||||||||||||||||||||||
| Balance at the beginning | |||||||||||||||||||||||||||||
| Balance at the end | |||||||||||||||||||||||||||||
F-149
TANGIBLE ASSETS. BREAKDOWN BY TYPE OF ASSETS AND CHANGES IN THE YEAR 2024 (MILLIONS OF EUROS) | |||||||||||||||||||||||||||||
Right to use asset | |||||||||||||||||||||||||||||
Notes | Land and buildings | Work in progress | Furniture, fixtures and vehicles | Own use | Investment properties | Investment properties | Assets leased out under an operating lease | Total | |||||||||||||||||||||
| Cost | |||||||||||||||||||||||||||||
| Balance at the beginning | |||||||||||||||||||||||||||||
Additions | |||||||||||||||||||||||||||||
Retirements | ( | ( | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||
Acquisition of subsidiaries in the year | |||||||||||||||||||||||||||||
Disposal of entities in the year | |||||||||||||||||||||||||||||
Transfers | ( | ( | ( | ( | |||||||||||||||||||||||||
Exchange difference and other | ( | ( | ( | ( | |||||||||||||||||||||||||
| Balance at the end | |||||||||||||||||||||||||||||
| Accrued depreciation | |||||||||||||||||||||||||||||
| Balance at the beginning | |||||||||||||||||||||||||||||
Additions | 45 | ||||||||||||||||||||||||||||
Additions transfer to discontinued operations | |||||||||||||||||||||||||||||
Retirements | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||
Acquisition of subsidiaries in the year | |||||||||||||||||||||||||||||
Disposal of entities in the year | |||||||||||||||||||||||||||||
Transfers | ( | ( | ( | ||||||||||||||||||||||||||
Exchange difference and other | ( | ( | ( | ( | |||||||||||||||||||||||||
| Balance at the end | |||||||||||||||||||||||||||||
| Impairment | |||||||||||||||||||||||||||||
| Balance at the beginning | |||||||||||||||||||||||||||||
Additions | 49 | ( | ( | ( | |||||||||||||||||||||||||
Additions transfer to discontinued operations | |||||||||||||||||||||||||||||
Retirements | |||||||||||||||||||||||||||||
Acquisition of subsidiaries in the year | |||||||||||||||||||||||||||||
Disposal of entities in the year | |||||||||||||||||||||||||||||
Transfers | ( | ( | |||||||||||||||||||||||||||
Exchange difference and other | ( | ( | ( | ||||||||||||||||||||||||||
| Balance at the end | |||||||||||||||||||||||||||||
| Net tangible assets | |||||||||||||||||||||||||||||
| Balance at the beginning | |||||||||||||||||||||||||||||
| Balance at the end | |||||||||||||||||||||||||||||
F-150
TANGIBLE ASSETS. BREAKDOWN BY TYPE OF ASSETS AND CHANGES IN THE YEAR 2023 (MILLIONS OF EUROS) | |||||||||||||||||||||||||||||
Right to use asset | Investment properties | Assets leased out under an operating lease | Total | ||||||||||||||||||||||||||
Notes | Land and buildings | Work in progress | Furniture, fixtures and vehicles | Own use | Investment properties | ||||||||||||||||||||||||
| Cost | |||||||||||||||||||||||||||||
| Balance at the beginning | |||||||||||||||||||||||||||||
Additions | |||||||||||||||||||||||||||||
Retirements | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||
Acquisition of subsidiaries in the year | |||||||||||||||||||||||||||||
Disposal of entities in the year | |||||||||||||||||||||||||||||
Transfers | ( | ( | ( | ||||||||||||||||||||||||||
Exchange difference and other | ( | ( | ( | ( | ( | ||||||||||||||||||||||||
| Balance at the end | |||||||||||||||||||||||||||||
| Accrued depreciation | |||||||||||||||||||||||||||||
| Balance at the beginning | |||||||||||||||||||||||||||||
Additions | 45 | ||||||||||||||||||||||||||||
Additions transfer to discontinued operations | |||||||||||||||||||||||||||||
Retirements | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||
Acquisition of subsidiaries in the year | |||||||||||||||||||||||||||||
Disposal of entities in the year | |||||||||||||||||||||||||||||
Transfers | ( | ( | ( | ( | |||||||||||||||||||||||||
Exchange difference and other | ( | ( | ( | ||||||||||||||||||||||||||
| Balance at the end | |||||||||||||||||||||||||||||
| Impairment | |||||||||||||||||||||||||||||
| Balance at the beginning | |||||||||||||||||||||||||||||
Additions | 49 | ( | |||||||||||||||||||||||||||
Additions transfer to discontinued operations | |||||||||||||||||||||||||||||
Retirements | |||||||||||||||||||||||||||||
Acquisition of subsidiaries in the year | |||||||||||||||||||||||||||||
Disposal of entities in the year | |||||||||||||||||||||||||||||
Transfers | |||||||||||||||||||||||||||||
Exchange difference and other | ( | ( | ( | ( | ( | ||||||||||||||||||||||||
| Balance at the end | |||||||||||||||||||||||||||||
| Net tangible assets | |||||||||||||||||||||||||||||
| Balance at the beginning | |||||||||||||||||||||||||||||
| Balance at the end | |||||||||||||||||||||||||||||
The right to use asset consists mainly of the rental of commercial real estate premises for central services and the network branches located in the countries where the Group operates whose average term is between 5 and 20 years. The clauses included in rental contracts correspond to a large extent to rental contracts under normal market conditions in the country where the property is rented.
As of December 31, 2025, 2024 and 2023, the cost of fully amortized tangible assets that remained in use were €3,096 million, €3,186 million and €2,796 million respectively while its recoverable residual value was not significant.
The following table shows the detail of the net carrying amount of the tangible assets corresponding to Spanish and foreign subsidiaries as of December 31, 2025, 2024 and 2023:
TANGIBLE ASSETS BY SPANISH AND FOREIGN SUBSIDIARIES. NET ASSETS VALUES (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
BBVA and Spanish subsidiaries | |||||||||||
Foreign subsidiaries | |||||||||||
| Total | |||||||||||
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18.Intangible assets
18.1Goodwill
The breakdown of the balance under this heading in the consolidated balance sheets, according to the CGU to which goodwill has been allocated, is as follows:
GOODWILL. BREAKDOWN BY CGU AND CHANGES OF THE YEAR (MILLIONS OF EUROS) | |||||||||||||||||
Mexico | Colombia | Chile | Other | Total | |||||||||||||
| Balance as of December 31, 2022 | |||||||||||||||||
Additions | |||||||||||||||||
Exchange difference | ( | ||||||||||||||||
Impairment | |||||||||||||||||
Companies held for sale | |||||||||||||||||
| Balance as of December 31, 2023 | |||||||||||||||||
Additions | |||||||||||||||||
Exchange difference | ( | ( | ( | ( | ( | ||||||||||||
Impairment | |||||||||||||||||
Companies held for sale | |||||||||||||||||
| Balance as of December 31, 2024 | |||||||||||||||||
Additions | |||||||||||||||||
Exchange difference | ( | ||||||||||||||||
Impairment | |||||||||||||||||
Companies held for sale | |||||||||||||||||
| Balance as of December 31, 2025 | |||||||||||||||||
Goodwill in business combinations
There were no significant business combinations during 2025, 2024 and 2023.
Impairment Test
As mentioned in Note 2.2.7, the CGU to which goodwill has been allocated, are periodically tested for impairment by including the allocated goodwill in their carrying amount.
This analysis is performed at least annually and whenever there is any indication of impairment. Furthermore, it is analyzed whether certain changes in the valuation assumptions used could give rise to differences in the result of the impairment test.
The BBVA Group performs estimations on the recoverable amount of certain CGU by calculating the value in use through the discounted value of future cash flows method.
The main hypotheses used for the value in use calculation are the following:
–The forecast cash flows, including net interest margin and cost of risk, estimated by the Group's management, and based on the latest available budgets for the next 5 years, considering the macroeconomic variables of each CGU, regarding the existing balance structure as well as macroeconomic variables such as the evolution of interest rates and the GDP of the geographical area where the CGU is located, among others.
–The constant growth rate for extrapolating cash flows, starting in the fifth year, beyond the period covered by the budgets or forecasts.
–The discount rate on future cash flows, which coincides with the cost of capital assigned to each CGU, and which consists of a risk-free rate plus a premium that reflects the inherent risk of each of the businesses evaluated.
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The focus used by the Group's management to determine the values of the assumptions is based both on its projections and past experience. These values are verified and use external sources of information, wherever possible.
Goodwill - Mexico CGU
The Group’s most significant goodwill corresponds to the CGU in Mexico, the most relevant assumptions used in the impairment test of this CGU as of December 31, 2025, 2024 and 2023 are as follows:
IMPAIRMENT TEST ASSUMPTIONS CGU GOODWILL IN MEXICO | |||||||||||
2025 | 2024 | 2023 | |||||||||
Discount rate (1) | % | % | % | ||||||||
Growth rate | % | % | % | ||||||||
(1) After tax discount rates.
In accordance with paragraph 33.c of IAS 36, as of December 31, 2025, the Group used a growth rate of 5.2 % based on the real GDP growth rate of Mexico, the expected inflation rate and the potential growth of the banking sector in Mexico.
The assumptions with a greater relative weight and whose volatility could have a greater impact in determining the present value of the cash flows starting on the fifth year are the discount rate and the growth rate. The table below shows, in a simplified way, the relative variation by which the CGU recoverable amount would increase (or decrease) as a result of a reasonable variation (in basis points) of each of the key assumptions, considered in isolation as of December 31, 2025, where, in each case, their value in use would continue to exceed their book value:
SENSITIVITY ANALYSIS FOR MAIN ASSUMPTIONS - MEXICO | ||||||||
Increase of 50 basis points (1) | Decrease of 50 basis points (1) | |||||||
Discount rate | ( | % | % | |||||
Growth rate | % | ( | % | |||||
(1) The use of very different discount or growth rates would be inconsistent with the macroeconomic assumptions under which the Unit builds its business plan, such as inflation assumptions or interest rate curves used to determine cash flows.
Goodwill - Other CGUs
The impairment tests carried out on the rest of the CGUs have not detected significant impairment. Likewise, the sensitivity analysis on the main assumptions carried out for the rest of the CGU of the Group indicate that their value in use would continue to exceed their book value.
18.2Other intangible assets
The breakdown of the balance and changes of this heading in the consolidated balance sheets, according to the nature of the related items, is as follows:
OTHER INTANGIBLE ASSETS (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Computer software acquisition expense | |||||||||||
Other intangible assets with an infinite useful life | |||||||||||
Other intangible assets with a definite useful life | |||||||||||
| Total | |||||||||||
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The changes of this heading during the years ended December 31, 2025, 2024 and 2023, are as follows:
OTHER INTANGIBLE ASSETS (MILLIONS OF EUROS) | ||||||||||||||||||||||||||||||||||||||
Notes | Computer software | Other intangible assets | Total of intangible assets | |||||||||||||||||||||||||||||||||||
2025 | 2024 | 2023 | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||
| Balance at the beginning | ||||||||||||||||||||||||||||||||||||||
Additions | ||||||||||||||||||||||||||||||||||||||
Amortization in the year | 45 | ( | ( | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||
Amortization transfer to discontinued operations | ||||||||||||||||||||||||||||||||||||||
Exchange differences and other | ( | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||
Impairment | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Balance at the end | ||||||||||||||||||||||||||||||||||||||
19.Tax assets and liabilities
19.1Consolidated tax group
Pursuant to current legislation, BBVA consolidated tax group in Spain includes the Bank (as the parent company) and its Spanish subsidiaries that meet the requirements provided for under Spanish legislation regulating the taxation regime for the consolidated profit of corporate groups.
The Group’s non-Spanish banks and subsidiaries file tax returns in accordance with the tax legislation in force in each country.
19.2Years open for review by the tax authorities
As of December 31, 2025, the BBVA consolidated tax group in Spain has the year 2021 and subsequent years subject to inspection, with respect to the main taxes applicable to it. Without prejudice to the foregoing, BBVA, S.A. and BBVA Seguros, S.A., de Seguros y Reaseguros are being audited with regard to Value Added Taxes for the financial years 2021 to 2024, inclusive.
The remainder of the Spanish consolidated entities in general have the last four years open for inspection by the tax authorities (the Tax Administration) for the main taxes applicable, except for those in which there has been an interruption of the limitation period due to the start of an inspection.
With regard to the BBVA consolidated tax group in Spain, in 2025, as a result of tax audits conducted by the tax authorities, inspection reports were issued for the financial years 2017 to 2020. These reports were signed by BBVA “in agreement” with the tax authorities' findings, except for those related to Corporate Income Tax for financial years 2017 and 2018, for which partial disagreement was expressed. At the close of the financial year, the reports signed "in agreement" with the tax authorities became final. The closure of the tax audit and the subsequent reassessment of tax risk coverage needs has had a net positive effect on the Group's effective tax rate (see Note 19.3) and has affected the evolution in the Group's deferred tax assets during the year (see Note 19.5). Notwithstanding the foregoing, the conclusion of the aforementioned inspections had no material impact on the Group’s consolidated financial statements. Furthermore, in relation to the Value Added Tax, due to criteria that have been established, the Group has revised the pro rata portion of BBVA, S.A. for the 2025 financial year and certain prior years (see Note 44.2).
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In addition, in the 2024 financial year, the temporary levy on credit institutions of BBVA, S.A. corresponding to the 2023 financial year was audited by the Tax Administration. In the 2025 financial year, the tax assessment initiated by the Tax Administration was signed by BBVA “in disagreement" and appealed, suspension of payment was requested, and the amount claimed has been secured by a guarantee.
Additionally, the temporary levy on credit institutions of BBVA, S.A. corresponding to the 2024 financial year is being audited by the Tax Administration.
On the other hand, in relation to the main jurisdictions in which the Group has a presence and carries out its activity, in the case of Mexico, during the 2025 financial year the review process corresponding to the Corporate Income Tax for the 2017 financial year was completed, as the Appeal for Reconsideration filed by BBVA México, S.A. was resolved, with no material impact on the Group’s consolidated financial statements.
In addition, with respect BBVA México, S.A., the review process corresponding to the Corporate Income Tax for the 2018 financial year has continued and the review procedure corresponding to the 2019 and 2020 financial years with relation to Corporate Income Tax and Value Added Tax has been initiated.
With regard to the coverage, if applicable, of tax risks identified in the consolidated financial statements, it may involve either the recording of a provision or a lower deferred tax asset to the extent that the risk being hedged had previously given rise to the registration of a deferred tax asset or tax credit.
In this regard, on the terms indicated in the previous paragraph (taking into account the provisions of Note 7.1, as well as in Note 19.5 with regard to the Group's deferred tax assets), the Group has established provisions that, without prejudice to the uncertainty associated with any ongoing processes, it considers appropriate taking into account the identified risks to be covered (in accordance with the relevant evaluation and estimation possibilities of such risks) and that, in no case, are considered individually significant.
Without prejudice to the foregoing, due to the possible different interpretations that may be given to certain tax regulations, the results of the inspections that, where appropriate, are carried out by the tax authorities are likely to reveal other contingent tax liabilities, the amount of which It is not possible to quantify objectively at the present time. However, the Group estimates that the possibility of these contingent liabilities materializing is remote and, in any case, the tax debt that could arise from them would not significantly affect the accompanying consolidated financial statements of the Group.
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19.3Reconciliation of the tax expense
The reconciliation of the Group’s corporate income tax expense resulting from the application of the Spanish corporation income tax rate and the income tax expense recognized in the consolidated income statements is as follows:
RECONCILIATION OF TAXATION AT THE SPANISH CORPORATION TAX RATE TO THE TAX EXPENSE RECORDED FOR THE YEAR (MILLIONS OF EUROS) | ||||||||||||||||||||
2025 | 2024 | 2023 | ||||||||||||||||||
Amount | Effective tax % | Amount | Effective tax % | Amount | Effective tax % | |||||||||||||||
| Profit or (-) loss before tax | ||||||||||||||||||||
From continuing operations | ||||||||||||||||||||
From discontinued operations | ||||||||||||||||||||
Taxation at Spanish corporation tax rate 30% | ||||||||||||||||||||
Lower/higher effective tax rate from foreign entities ⁽¹⁾ | ||||||||||||||||||||
Mexico | ( | % | ( | % | ( | % | ||||||||||||||
Chile | ( | % | ( | % | ( | % | ||||||||||||||
Colombia | % | ( | % | ( | % | |||||||||||||||
Peru | ( | % | ( | % | ( | % | ||||||||||||||
Turkey | % | % | % | |||||||||||||||||
USA | ( | % | ( | % | % | |||||||||||||||
Others | ( | ( | ||||||||||||||||||
Revenues with lower tax rate (dividends/capital gains) | ( | ( | ( | |||||||||||||||||
Equity accounted earnings | ( | ( | ( | |||||||||||||||||
Other effects ⁽²⁾ | ||||||||||||||||||||
| Income tax | ||||||||||||||||||||
Of which: Continuing operations | ||||||||||||||||||||
Of which: Discontinued operations | ||||||||||||||||||||
(1) Calculated by applying the difference between the tax rate in force in Spain and the one applied to the Group’s earnings in each jurisdiction.
On the other hand, regarding 2024, it shows the net impact of several tax effects that include, among others, (i) the accounting record of the impact associated with the declaration of unconstitutionality of certain measures relating to the Spanish Corporate Income Tax introduced by Royal Decree-Law 3/2016, as well as the impact of some of the measures introduced by Law 7/2024 on Corporate Income Tax that, in particular, are aimed at reinstating the measures declared unconstitutional, (ii) the non-deductibility of the temporary taxation of credit institutions recorded for accounting purposes in the year 2024 (see Note 19.6), and (iii) the effects of the limitation of the exemption on intra-group dividends and the withholding taxes associated with them.
The effective income tax rate for the Group in the years ended December 31, 2025, 2024 and 2023 is as follows:
EFFECTIVE TAX RATE (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
| Income from: | |||||||||||
Consolidated tax group in Spain | |||||||||||
Other Spanish entities | ( | ||||||||||
Foreign entities | |||||||||||
| Gains (losses) before taxes from continuing operations | |||||||||||
Tax expense or income related to profit or loss from continuing operations ⁽¹⁾ | |||||||||||
| Effective tax rate | % | % | % | ||||||||
(1) In 2025, 4,598 million and 502 million corresponded to current tax expenses and deferred tax expenses, respectively. In 2024, €3,970 million and €860 million corresponded to current tax expenses and deferred tax expenses, respectively.
In 2025, in general terms, there have been no changes in the nominal Corporate Income Tax rate in the main countries in which the Group is present compared to those existing in the previous period. In 2024, in general terms, and in the main countries where the Group has a presence, there were also no changes in the nominal Corporate Income Tax rate, compared to those existing in the previous period. In 2023, the changes in the nominal tax rate in Corporate Income Tax, with respect to those existing in the previous year in the main countries in which the Group is present, were Turkey (from 25% to 30%) and Colombia (from 38% to 40%).
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19.4Income tax recognized in equity
Regardless of the income tax expense recognized in the consolidated income statements, the Group has recognized income tax charges in the consolidated total equity in 2025, 2024 and 2023 of €92 million (credit), €543 million (debit) and €285 million (debit), respectively, mainly due to debt securities, actuarial gains and losses and cash flow hedges.
19.5Tax assets and liabilities
The balance under the heading "Tax assets" in the consolidated balance sheets includes the balances receivable from the tax authorities relating to current and deferred tax assets. The balance under the “Tax liabilities” heading includes the balances payable in respect of the Group’s various current and deferred tax liabilities. The details of the mentioned tax assets and liabilities are as follows:
TAX ASSETS AND LIABILITIES (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
| Tax assets | |||||||||||
Current tax assets ⁽¹⁾ | |||||||||||
Deferred tax assets | |||||||||||
Pensions | |||||||||||
Financial Instruments | |||||||||||
Loss allowances | |||||||||||
Other | |||||||||||
Secured tax assets | |||||||||||
Tax losses | |||||||||||
| Total | |||||||||||
| Tax liabilities | |||||||||||
Current tax liabilities ⁽¹⁾ | |||||||||||
Deferred tax liabilities | |||||||||||
Financial Instruments | |||||||||||
Other | |||||||||||
| Total | |||||||||||
(1)The decrease in current tax assets in 2025 compared to 2024 is due, among other things, to a lower Mexican tax receivable related to corporate income tax, as the installment payments made in 2024 were particularly high. The increase in current tax liabilities in 2025 compared to 2024 is mainly due to the Spanish Interest Margin and Commission Tax (IMIC) for the 2025 financial year, as well as the increase in the Mexican tax liability related to the estimated corporate income tax for the 2025 financial year.
On the other hand, the increase in current tax assets in 2024 compared to 2023 corresponds mainly to a higher tax receivable of the tax group in Spain, as well as in Mexico and Colombia, in relation to the Corporate Income Tax for the year 2024 related to the installment payments made in the year. On the other hand, the decrease in current tax liabilities in 2024 compared to 2023, corresponds mainly to the decrease in the tax payable in Mexico and Argentina in relation to the estimated income tax for the year 2023.
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The most significant variations of the deferred tax assets and liabilities in the years 2025, 2024 and 2023 were derived from the following items:
DEFERRED TAX ASSETS AND LIABILITIES. ANNUAL VARIATIONS (MILLIONS OF EUROS) | ||||||||||||||||||||
2025 | 2024 | 2023 | ||||||||||||||||||
Deferred assets | Deferred liabilities | Deferred assets | Deferred liabilities | Deferred assets | Deferred liabilities | |||||||||||||||
| Balance at the beginning | ||||||||||||||||||||
Pensions | ||||||||||||||||||||
Financials instruments | ( | ( | ||||||||||||||||||
Loss allowances | ||||||||||||||||||||
Others | ( | ( | ||||||||||||||||||
Secured tax assets | ( | ( | ( | |||||||||||||||||
Tax losses | ( | ( | ( | |||||||||||||||||
| Balance at the end | ||||||||||||||||||||
The changes in deferred tax assets and liabilities in 2025 were mainly attributable to:
–The decrease in secured tax assets as a result of the expected offsetting of such assets based on the estimate of the Corporate Income Tax of the BBVA consolidated tax group in Spain corresponding to 2025. The balance of secured tax assets was also affected by the closure of the Corporate Income Tax inspection process of the BBVA consolidated tax group in Spain covering the financial years 2017 to 2020, as well as by the reassessment carried out by the Group of the coverage needs for the identified tax risks.
–The decrease in tax assets due to tax losses in the 2025 financial year was moderate because, although the tax group in Spain generated a positive taxable income that allowed the offsetting of tax losses and deductions, the evolution of its balance was affected, as referred to in Note 19.2 and Note 19.3 above, by (i) on the one hand, the result of the Corporate Income Tax inspection process of the BBVA consolidated tax group in Spain covering the financial years 2017 to 2020, as well as the reassessment carried out by the Group of the coverage needs for the identified tax risks, and (ii) on the other hand, the recognition of certain deferred tax assets corresponding to the group in Spain, which were not previously recorded in the financial statements. This decision was based on the ability and acceleration observed in the absorption process of these assets, historical results —including for the 2025 financial year—, the sustained capacity of the Group to generate value and profit projections that support their recognition.
–As regards the evolution of deferred tax assets (other than secured tax assets and those linked to tax losses) net of deferred tax liabilities, it was mainly driven by the effects associated with the valuation of financial instruments, the very operation of the Corporate Income Tax which, due to the differences between accounting and taxation rules, results in constant movements in deferred taxes, as well as by the effect of exchange rates.
Of the deferred tax assets and liabilities shown above, those included in Note 19.4 above have been recognized against the entity's equity, and the rest against earnings for the year or reserves.
As of December 31, 2025, 2024 and 2023, the estimated amount of temporary differences associated with investments in subsidiaries, joint ventures and associates, which were not recognized as deferred tax liabilities in the consolidated balance sheets, amounted to €413 million, €230 million and €96 million, respectively.
With respect to the deferred tax assets shown above, the table below shows the amounts guaranteed by the Spanish government, broken down by the items that originated the relevant assets:
SECURED TAX ASSETS (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Pensions | |||||||||||
Loss allowances | |||||||||||
| Total | |||||||||||
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As of December 31, 2025, non-guaranteed net deferred tax assets amounted to €3,443 million (€3,918 million and €4,430 million as of December 31, 2024 and 2023, respectively). The breakdown by major geographical areas was as follows:
–Spain: net deferred tax assets recognized in Spain totaled €1,319 million as of December 31, 2025 (€1,421 million and €1,805 million as of December 31, 2024 and 2023, respectively). €713 million of the figure recorded in the year ended December 31, 2025 for net deferred tax assets related to tax credits and tax loss carry forwards and €606 million relate to temporary differences.
–Mexico: net deferred tax assets recognized in Mexico amounted to €1,721 million as of December 31, 2025 (€1,798 million and €1,899 million as of December 31, 2024 and 2023, respectively). Practically all of deferred tax assets as of December 31, 2025 relate to temporary differences.
–South America: net deferred tax assets recognized in South America amounted to €206 million as of December 31, 2025 (€245 million and €213 million as of December 31, 2024 and 2023, respectively). Of the figure recorded at year-end 2025 for net deferred tax assets, €73 million relate to tax credits for tax loss carryforwards and €133 million have arisen as temporary differences.
–Turkey: net deferred tax assets recognized in Turkey amounted to €191 million as of December 31, 2025 (€443 million and €499 million as of December 31, 2024 and 2023, respectively). All of the deferred tax assets have arisen as temporary differences.
Based on the information available as of December 31, 2025, including historical levels of benefits and projected results available to the Group, the Group has carried out an analysis of its recovery of deferred tax assets and liabilities and it is considered that there is sufficient positive evidence, in excess of the negative evidence, that sufficient positive taxable income will be generated for the recovery of the aforementioned unsecured deferred tax assets when they become deductible in accordance with tax legislation. In this respect, in the specific case of the tax Group in Spain, the Group estimates that it will be able to generate sufficient taxable income to offset the tax loss carryforwards and deductions recorded for accounting purposes within a period under 10 years.
On the other hand, the Group has not recognized for accounting purposes (or, as the case may be, has been subject to a valuation adjustment) certain deferred tax assets (tax loss carryforwards, deductions and temporary differences) for which, in general, there is no legal period for offsetting, amounting to approximately €1,969 million (in terms of quota), which mainly arise from the integration of Catalunya Banc in the case of Spain, in accordance with the following breakdown by each of the jurisdictions in which the Group is located and carries on its business activities: (i) Spain: €1,871,758 thousand; (ii) United States: €31,281 thousand; (iii) Mexico: €31,769 thousand; (iv) Colombia: €12,275 thousand; (v) Peru: €6,427 thousand; (vi) Turkey: €5,672 thousand; (vii) Portugal: €4,567 thousand; (viii) Japan: €2,849 thousand; (ix) Netherlands: €902 thousand; (x) China: €799 thousand; (xi) Hong Kong: €487 thousand; (xii) Singapore: €327 thousand; (xiii) Uruguay: €314 thousand; and (xiv) Curacao: €4 thousand.
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 other things, may 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 Group company that is a shareholder of the entity being dissolved and liquidated, as a result of the disclosure of tax losses pending deduction associated with the shareholding of the company which, as the case may be, is dissolved and liquidated.
19.6Other contributions and taxes
Interest Margin and Commission Tax of certain financial institutions in Spain
On December 21, 2024, Law 7/2024 was published in the Official State Gazette, the ninth Final Provision of which regulates a new tax on the net interest margin and commissions of certain financial entities including BBVA, S.A. The tax is levied on the net interest margin and commissions obtained by credit institutions from the activity they carry out in Spanish territory and is applicable to the first three consecutive tax periods that begin on January 1, 2024.
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Subsequently, Royal Decree-Law 9/2024, which came into force on December 25, 2024, modified certain aspects of the tax approved by Law 7/2024, among other things, the tax period and the accrual of the new tax. However, this Royal Decree-Law was not ratified by the Congress of Deputies and was therefore repealed on January, 23 2025.
No impact associated with this tax was recorded in the Consolidated Financial Statements for the year ended December 31, 2024.
During 2025, the Group made the payment corresponding to the IMIC for the 2024 financial year. However, since this payment is not required under the applicable legal framework, an asset for the amount paid (€295 million) has been recorded under the heading "General Governments" of the item "Financial assets at amortized cost - Loans and advances to customers" in the balance sheet (see Note 14).
As of December 31, 2025, current tax liabilities include approximately €318 million corresponding to the accrual, for the 2025 financial year, of the IMIC of certain Group financial entities, which was recognized under the heading of “Tax expense or income related to profit or loss from continuing operations”, in accordance with the nature of this income tax under IAS 12, given its characteristics as a direct tax, the taxable event of which is the generation within Spanish territory of a positive net interest margin and commissions during the tax period.
Temporary levy on credit institutions in Spain
On December 28, 2022, the Law for the establishment of the temporary levy on credit entities and financial credit establishments was published in the Official State Gazette.
This law establishes the obligation to satisfy a public contribution with a non-tax nature during the years 2023 and 2024 for credit institutions operating in Spanish territory whose sum of income from interest and commissions corresponding to the year 2019 is equal to or greater than €800 million.
The amount of the public, non-tax nature contribution payable is calculated by applying a rate of 4.8% to the sum of the interest margin and the income and expenses from commissions derived from the activity carried out in Spain and shown in the income statement of the tax consolidation group to which the credit institution belongs, corresponding to the calendar year prior to the year in which the payment obligation arises. The payment obligation arises on the first day of the calendar year 2023 and 2024.
For the 2023 and 2024 financial years, the impact of €215 million and €285 million, respectively, was recorded under the "Other operating expenses" item in the consolidated income statement (see Note 42).
Top-up tax to ensure a global minimum taxation for multinational groups and large domestic groups (Pillar Two)
On December 20, 2024, Law 7/2024 of December 20, 2024 was approved in Spain, establishing a Top-up Tax to guarantee an overall minimum level of taxation for multinational groups and large domestic groups, a Tax on the net interest income and fee and commission of certain financial institutions and a Tax on liquids for electronic cigarettes and other tobacco-related products, and amending other tax regulations.
This law transposed Council Directive (EU) 2022/2523 of December 15, 2022, which incorporates the Pillar Two rules into the European legal framework.
The aforementioned law was approved with effect for tax periods beginning on or after December 31, 2023. Consequently, from the year 2024, inclusive, the Group is subject to the Pillar Two rules.
In compliance with current legislation, the Group has calculated the estimated impact of the Top-up Tax based on the Transitional Safe Harbour analysis and on the basis of the figures used in the preparation of the Group's consolidated financial statements in each of its constituent jurisdictions.
As a result of this estimated calculation, it has been determined that most of the jurisdictions in which the Group operates, with the exception of a small number of countries representing an immaterial percentage of the BBVA Group's profit (loss) before tax, exceed the 15% minimum effective tax rate and, therefore, do not accrue a Top-up Tax. For those jurisdictions that do not meet this threshold, BBVA, S.A., as the ultimate parent company of the Group, as of December 31, 2025, has recognized as a current tax expense the corresponding estimated Top-up Tax associated with those jurisdictions, the amount of which is not material.
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Finally, it should be noted that the BBVA Group applies the mandatory exception to the recognition and disclosure of deferred tax assets and liabilities in relation to Pillar Two.
20.Other assets and liabilities
The breakdown of the balances of these headings of the consolidated balance sheets is as follows:
OTHER ASSETS AND LIABILITIES (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
| ASSETS | |||||||||||
Inventories ⁽¹⁾ | |||||||||||
Transactions in progress | |||||||||||
Accruals | |||||||||||
Other items | |||||||||||
| Total | |||||||||||
| LIABILITIES | |||||||||||
Transactions in progress | |||||||||||
Accruals | |||||||||||
Other items | |||||||||||
| Total | |||||||||||
21.Non-current assets and disposal groups classified as held for sale and liabilities included in disposal groups classified as held for sale
The composition of the balances under the headings “Non-current assets and disposal groups classified as held for sale” and “Liabilities included in disposal groups classified as held for sale” in the consolidated balance sheets, broken down by the origin of the assets, is as follows:
NON-CURRENT ASSETS AND DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE AND LIABILITIES INCLUDED IN DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE. BREAKDOWN BY ITEMS (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
| ASSETS | |||||||||||
Foreclosures and recoveries | |||||||||||
Other assets from tangible assets ⁽¹⁾ | |||||||||||
Companies held for sale | |||||||||||
Accrued amortization ⁽²⁾ | ( | ( | ( | ||||||||
Impairment losses ⁽¹⁾ | ( | ( | ( | ||||||||
| Total | |||||||||||
| LIABILITIES | |||||||||||
Companies held for sale | |||||||||||
| Total | |||||||||||
(1) The variation is mainly due to sales of properties by the companies Tree Inversiones Inmobiliarias, SOCIMI, S.A. and Banco Bilbao Vizcaya Argentaria, S.A.
(2) Corresponds to the accumulated depreciation of assets before their classification as "Non-current assets and disposal groups classified as held for sale".
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Non-current assets and disposal groups classified as held for sale
The changes in the balances of “Non-current assets and disposal groups classified as held for sale” in 2025, 2024 and 2023, are as follows:
NON-CURRENT ASSETS AND DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE (MILLIONS OF EUROS) | |||||||||||||||||||||||||||||||||||||||||
Notes | Foreclosed assets | Property, Plant and Equipment (1) | Companies held for sale | Total | |||||||||||||||||||||||||||||||||||||
2025 | 2024 | 2023 | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||
Cost (a) | |||||||||||||||||||||||||||||||||||||||||
| Balance at the beginning | |||||||||||||||||||||||||||||||||||||||||
Additions | |||||||||||||||||||||||||||||||||||||||||
Contributions from merger transactions | |||||||||||||||||||||||||||||||||||||||||
Retirements (sales and other decreases) | ( | ( | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||
Transfers, other movements and exchange differences | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
Disposals by companies held for sale | |||||||||||||||||||||||||||||||||||||||||
| Balance at the end | |||||||||||||||||||||||||||||||||||||||||
| Impairment (b) | |||||||||||||||||||||||||||||||||||||||||
| Balance at the beginning | |||||||||||||||||||||||||||||||||||||||||
Additions | 50 | ||||||||||||||||||||||||||||||||||||||||
Additions transfer to discontinued operations | |||||||||||||||||||||||||||||||||||||||||
Contributions from merger transactions | |||||||||||||||||||||||||||||||||||||||||
Retirements (sales and other decreases) | ( | ( | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||
Other movements and exchange differences | ( | ( | |||||||||||||||||||||||||||||||||||||||
Disposals by companies held for sale | |||||||||||||||||||||||||||||||||||||||||
| Balance at the end | |||||||||||||||||||||||||||||||||||||||||
| Balance at the end of net carrying value (a)-(b) | |||||||||||||||||||||||||||||||||||||||||
As indicated in Note 2.2.6, “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 carrying amount. As of December 31, 2025, 2024 and 2023 practically all of the carrying amount of the assets recorded at fair value on a non-recurring basis equals their fair value.
Assets from foreclosures or recoveries
As of December 31, 2025, 2024 and 2023, assets from foreclosures and recoveries, net of impairment losses, by nature of the asset, amounted to €356 million, €404 million and €460 million in assets for residential use; €139 million, €169 million and €154 million in assets for tertiary use (industrial, commercial or office) and €28 million, €31 million and €26 million in assets for agricultural use, respectively.
During the years 2025, 2024 and 2023, certain sale transactions for these assets were financed by Group companies. The amount of loans granted to the buyers of these assets in those years amounted to €17 million, €12 million and €22 million, respectively; with an average financing of 43% of the sales price during 2025.
As of December 31, 2025, 2024 and 2023, the amount of the profits arising from the sale of assets financed by Group companies that are not recognized in the consolidated income statement is not significant.
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22.Financial liabilities at amortized cost
22.1Breakdown of the balance
The breakdown of the balance under these headings in the consolidated balance sheets is as follows:
FINANCIAL LIABILITIES MEASURED AT AMORTIZED COST (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
| Deposits | |||||||||||
Deposits from central banks | |||||||||||
Demand deposits | |||||||||||
Time deposits and other | |||||||||||
Repurchase agreements | |||||||||||
Deposits from credit institutions | |||||||||||
Demand deposits | |||||||||||
Time deposits and other | |||||||||||
Repurchase agreements | |||||||||||
Customer deposits | |||||||||||
Demand deposits | |||||||||||
Time deposits and other | |||||||||||
Repurchase agreements | |||||||||||
Debt certificates issued | |||||||||||
| Other financial liabilities | |||||||||||
| Total | |||||||||||
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22.2Deposits from credit institutions
The breakdown by geographical area and the nature of the related instruments of this heading in the consolidated balance sheets is as follows:
DEPOSITS FROM CREDIT INSTITUTIONS (MILLIONS OF EUROS) | ||||||||||||||
Demand deposits | Time deposits and other (1) | Repurchase agreements | Total | |||||||||||
| December 2025 | ||||||||||||||
Spain | ||||||||||||||
Mexico | ||||||||||||||
Turkey | ||||||||||||||
South America | ||||||||||||||
Rest of Europe | ||||||||||||||
Rest of the world | ||||||||||||||
| Total | ||||||||||||||
| December 2024 | ||||||||||||||
Spain | ||||||||||||||
Mexico | ||||||||||||||
Turkey | ||||||||||||||
South America | ||||||||||||||
Rest of Europe | ||||||||||||||
Rest of the world | ||||||||||||||
| Total | ||||||||||||||
| December 2023 | ||||||||||||||
Spain | ||||||||||||||
Mexico | ||||||||||||||
Turkey | ||||||||||||||
South America | ||||||||||||||
Rest of Europe | ||||||||||||||
Rest of the world | ||||||||||||||
| Total | ||||||||||||||
(1) Subordinated deposits are included amounting to €104 million, €48 million and €35 million as of December 31, 2025, 2024 and 2023, respectively.
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22.3Customer deposits
The breakdown by geographical area of this heading in the consolidated balance sheets, by type of instrument, is as follows:
CUSTOMER DEPOSITS (MILLIONS OF EUROS) | ||||||||||||||
Demand deposits | Time deposits and other ⁽¹⁾ | Repurchase agreements | Total | |||||||||||
| December 2025 | ||||||||||||||
Spain | ||||||||||||||
Mexico | ||||||||||||||
Turkey | ||||||||||||||
South America | ||||||||||||||
Rest of Europe | ||||||||||||||
Rest of the world | ||||||||||||||
| Total | ||||||||||||||
| December 2024 | ||||||||||||||
Spain | ||||||||||||||
Mexico | ||||||||||||||
Turkey | ||||||||||||||
South America | ||||||||||||||
Rest of Europe | ||||||||||||||
Rest of the world | ||||||||||||||
| Total | ||||||||||||||
| December 2023 | ||||||||||||||
Spain | ||||||||||||||
Mexico | ||||||||||||||
Turkey | ||||||||||||||
South America | ||||||||||||||
Rest of Europe | ||||||||||||||
Rest of the world | ||||||||||||||
| Total | ||||||||||||||
(1) The balances corresponding to subordinated deposits under this heading were not significant in any of the years presented.
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22.4Debt certificates issued
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) | |||||||||||
2025 | 2024 | 2023 | |||||||||
| In Euros | |||||||||||
Promissory bills and notes | |||||||||||
Non-convertible bonds and debentures | |||||||||||
Covered bonds | |||||||||||
Hybrid financial instruments ⁽¹⁾ | |||||||||||
Securitization bonds | |||||||||||
Wholesale funding | |||||||||||
Subordinated liabilities | |||||||||||
Convertible perpetual certificates | |||||||||||
Other non-convertible subordinated liabilities | |||||||||||
| In foreign currencies | |||||||||||
Promissory bills and notes | |||||||||||
Non-convertible bonds and debentures | |||||||||||
Covered bonds | |||||||||||
Hybrid financial instruments ⁽¹⁾ | |||||||||||
Securitization bonds | |||||||||||
Wholesale funding | |||||||||||
Subordinated liabilities | |||||||||||
Convertible perpetual certificates | |||||||||||
Other non-convertible subordinated liabilities | |||||||||||
| Total | |||||||||||
(1) Corresponds to structured note issuances with embedded derivatives that have been segregated according to IFRS 9.
22.4.1Subordinated liabilities
The breakdown of this heading in the consolidated balance sheets is as follows:
MEMORANDUM ITEM: SUBORDINATED LIABILITIES AT AMORTIZED COST (MILLIONS OF EUROS) | ||||||||||||||
2025 | 2024 | 2023 | ||||||||||||
Subordinated deposits | ||||||||||||||
Subordinated certificates | ||||||||||||||
Compound convertible financial instruments | ||||||||||||||
Other non-convertible subordinated liabilities | ||||||||||||||
| Total | ||||||||||||||
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 (CoCo), 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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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 throughout the financial years 2023, 2024 and 2025:
–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.
–On June 13, 2024, BBVA carried out an issuance of perpetual contingent convertible securities with exclusion of shareholders' pre-emptive subscription rights, for a total nominal amount of €750 million. 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 January 14, 2025, 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.
–On November 11, 2025, 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 on the Global Exchange Market of Euronext Dublin 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 2023, 2024 and 2025 the Bank has early redeemed the following issues:
–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.
–On March 29, 2024, the Bank early redeemed the issuance of contingently convertible preferred securities (which qualified as additional tier 1 instruments) carried out by the Bank on March 29, 2019, for an amount of €1 billion on the First Reset Date and once the prior consent from the Regulator was obtained.
–On March 5, 2025, 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 5, 2019, for an amount of USD 1 billion on the First Reset Date and once the prior consent from the Regulator was obtained.
Additionally, on December 17, 2025, the Bank announced its irrevocable decision to redeem in full the issuance of green contingently convertible preferred securities (which qualified as additional tier 1 instruments) carried out by the Bank on July 15, 2020, for an amount of €1 billion. The redemption was executed on January 15, 2026 (the First Reset Date of said issuance), once the prior consent from the Regulator had been obtained.
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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 (CoCo) 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 this power 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 Annual General Shareholders' Meeting, described in Note 26, 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 of preparation of these Consolidated Financial Statements, the Bank has not made use of the authority granted by the BBVA Annual General Shareholders' Meeting held on March 18, 2022.
22.5Other financial liabilities
The breakdown of the balance under this heading in the consolidated balance sheets is as follows:
OTHER FINANCIAL LIABILITIES (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Lease liabilities | |||||||||||
Creditors for other financial liabilities | |||||||||||
Collection accounts | |||||||||||
Creditors for other payment obligations ⁽¹⁾ | |||||||||||
| Total | |||||||||||
A breakdown of the maturity of the lease liabilities, due after December 31, 2025 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 | |||||||||||||
Leases | |||||||||||||||||
23.Assets and liabilities under insurance and reinsurance contracts
The Group has insurance subsidiaries mainly in Spain, Latin America (mostly in Mexico) and Turkey. Specifically, the insurance entities located in Spain and Mexico together accounted for approximately 95% in terms of total liabilities under insurance and reinsurance contracts as of December 31, 2025.
The main product offered by the insurance subsidiaries is life insurance to cover the risk of death (risk insurance) and life-savings insurance. Within life and accident insurance, a distinction is made between freely sold products and those offered to customers who have taken mortgage or consumer loans, which cover the principal of those loans in the event of the customer’s death. There are two types of savings products: individual insurance, which seeks to provide the customer with savings for retirement or other events, and group insurance, which is taken out by employers to cover their commitments to their employees.
F-168
The insurance business is affected by different risks, including those that are related to the BBVA Group such as credit risk, market risk, liquidity risk and operational risk and the methodology for risk measurement, control and follow-up applied in the insurance activity is similar (see Note 7), although it has a differentiated management due to the particular characteristics of the insurance business, such as the coverage of contracted obligations and the long term of the commitments.
Additionally, the insurance business generates certain specific risks, of a probabilistic nature:
–Technical risk: arises from deviations in the estimation of the casualty rate of insurances, either in terms of numbers, the amount of such claims and the timing of its occurrence.
–Longevity risk: is the risk of incurring higher benefit payments than expected due to an increase in the life expectancy of the insured persons.
The insurance activity is fully integrated into the BBVA Group's risk management framework. From the definition of the risk appetite to the management limits, the governance model, the admission process, the organizational scheme and the development of computer systems/models, everything is designed with a global approach and under consistent and homogeneous criteria, aligned with other financial business of the BBVA Group. This also means that control activities and information flow are fully integrated into internal processes, from local reporting to the corporate bodies of the BBVA Group.
The insurance industry is highly regulated in each geographical area. In this regard, it should be noted that the insurance industry is undergoing a gradual regulatory transformation through new accounting and risk-based capital regulations, which have already been published in several countries.
The amounts that the consolidated insurance entities are entitled to receive from reinsurance contracts they maintain with third parties are recognized under the heading “Assets under reinsurance and insurance contracts” in the consolidated balance sheets. As of December 31, 2025, 2024 and 2023, the balance under this heading amounted to €198 million, €191 million and €211 million, respectively.
The heading “Liabilities under insurance and reinsurance contracts” in the consolidated balance sheets includes the liabilities recorded under insurance contracts of the consolidated insurance entities in accordance with IFRS 17 (see Note 2.2.8). The breakdown of the balance of this heading as of December 31, 2025, 2024 and 2023 is as follows:
LIABILITIES UNDER INSURANCE AND REINSURANCE CONTRACTS (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
| Insurances | |||||||||||
Liabilities for remaining coverage | |||||||||||
Estimates of the present value of cash flows | |||||||||||
Risk adjustment | |||||||||||
Cost service margin | |||||||||||
Liabilities for incurred claims | |||||||||||
Estimates of the present value of cash flows | |||||||||||
Risk adjustment | |||||||||||
| Reinsurance | |||||||||||
| Total | |||||||||||
In addition, the breakdown of “Liabilities under insurance and reinsurance contracts” in the consolidated balance sheets by type of product as of December 31, 2025, 2024 and 2023, excluding insurance contracts valued following the Simplified Model, is shown in the table below:
F-169
LIABILITIES UNDER INSURANCE AND REINSURANCE CONTRACTS BY TYPE OF PRODUCT (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
| Liabilities for remaining coverage | |||||||||||
Life insurance | |||||||||||
Individuals life insurance ⁽¹⁾ | |||||||||||
Group insurance ⁽²⁾ | |||||||||||
Non-life insurance | |||||||||||
| Liabilities for incurred claims | |||||||||||
| Total | |||||||||||
(1) Provides coverage in the event of death, disability and serious illness.
(2) The insurance policies purchased by employers (other than BBVA Group) on behalf of their employees.
The variation in liabilities under insurance and reinsurance contracts analyzed by liability for the remaining coverage and liability for incurred claims for the years 2025, 2024 and 2023 is shown below:
VARIATION IN LIABILITIES UNDER INSURANCE AND REINSURANCE CONTRACTS ANALYZED BY LIABILITIES FOR THE REMAINING COVERAGE AND THE LIABILITIES FOR INCURRED CLAIMS. DECEMBER 2025 (MILLIONS OF EUROS) | |||||||||||
Liability for remaining coverage | Liability for incurred claims | Total | |||||||||
| Initial balance | |||||||||||
Result from insurance service | ( | ( | |||||||||
Insurance revenue | ( | ( | |||||||||
Insurance expense | |||||||||||
Financial income/ expenses from insurance contracts | |||||||||||
Exchange differences | |||||||||||
Cash flows | ( | ||||||||||
| Final balance | |||||||||||
VARIATION IN LIABILITIES UNDER INSURANCE AND REINSURANCE CONTRACTS ANALYZED BY LIABILITIES FOR THE REMAINING COVERAGE AND THE LIABILITIES FOR INCURRED CLAIMS. DECEMBER 2024 (MILLIONS OF EUROS) | |||||||||||
Liability for remaining coverage | Liability for incurred claims | Total | |||||||||
| Initial balance | |||||||||||
Result from insurance service | ( | ( | |||||||||
Insurance revenue | ( | ( | |||||||||
Insurance expense | |||||||||||
Financial income/ expenses from insurance contracts | ( | ( | |||||||||
Exchange differences | ( | ( | ( | ||||||||
Cash flows | ( | ||||||||||
| Final balance | |||||||||||
VARIATION IN LIABILITIES UNDER INSURANCE AND REINSURANCE CONTRACTS ANALYZED BY LIABILITIES FOR THE REMAINING COVERAGE AND THE LIABILITIES FOR INCURRED CLAIMS. DECEMBER 2023 (MILLIONS OF EUROS) | |||||||||||
Liability for remaining coverage | Liability for incurred claims | Total | |||||||||
| Initial balance | |||||||||||
Result from insurance service | ( | ( | |||||||||
Insurance revenue | ( | ( | |||||||||
Insurance expense | |||||||||||
Financial income/ expenses from insurance contracts | |||||||||||
Exchange differences | |||||||||||
Cash flows | ( | ||||||||||
| Final balance | |||||||||||
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The variation of liabilities under insurance and reinsurance contracts, distinguishing between their different valuation components, excluding contracts valued under the Simplified Model, for the years 2025, 2024 and 2023 is shown below:
VARIATION IN LIABILITIES UNDER INSURANCE AND REINSURANCE CONTRACTS ANALYZED BY VALUATION COMPONENT. DECEMBER 2025 (MILLIONS OF EUROS) | ||||||||||||||
Estimated present value of future cash flows | Risk adjustment | Contractual service margin | Total | |||||||||||
| Initial balance | ||||||||||||||
Insurance service result | ( | ( | ( | |||||||||||
Changes that relate to current services | ( | ( | ( | ( | ||||||||||
Changes that relate to future services | ( | ( | ||||||||||||
Changes that relate to past services | ||||||||||||||
Financial income/ expenses from insurance contracts | ||||||||||||||
Exchange rate differences | ( | |||||||||||||
Cash flows | ||||||||||||||
| Final balance | ||||||||||||||
VARIATION IN LIABILITIES UNDER INSURANCE AND REINSURANCE CONTRACTS ANALYZED BY VALUATION COMPONENT. DECEMBER 2024 (MILLIONS OF EUROS) | ||||||||||||||
Estimated present value of future cash flows | Risk adjustment | Contractual service margin | Total | |||||||||||
| Initial balance | ||||||||||||||
Insurance service result | ( | ( | ( | |||||||||||
Changes that relate to current services | ( | ( | ( | ( | ||||||||||
Changes that relate to future services | ( | ( | ||||||||||||
Changes that relate to past services | ||||||||||||||
Financial income/ expenses from insurance contracts | ( | ( | ||||||||||||
Exchange rate differences | ( | ( | ( | ( | ||||||||||
Cash flows | ||||||||||||||
| Final balance | ||||||||||||||
VARIATION IN LIABILITIES UNDER INSURANCE AND REINSURANCE CONTRACTS ANALYZED BY VALUATION COMPONENT. DECEMBER 2023 (MILLIONS OF EUROS) | ||||||||||||||
Estimated present value of future cash flows | Risk adjustment | Contractual service margin | Total | |||||||||||
| Initial balance | ||||||||||||||
Insurance service result | ( | ( | ( | |||||||||||
Changes that relate to current services | ( | ( | ( | ( | ||||||||||
Changes that relate to future services | ( | |||||||||||||
Changes that relate to past services | ||||||||||||||
Financial income/ expenses from insurance contracts | ||||||||||||||
Exchange rate differences | ||||||||||||||
Cash flows | ||||||||||||||
| Final balance | ||||||||||||||
The maturity of “Liabilities under insurance and reinsurance contracts” is as follows:
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MATURITY OF THE LIABILITIES UNDER INSURANCE AND REINSURANCE CONTRACTS (MILLIONS OF EUROS) | |||||||||||||||||
Up to 1 year | 1 to 3 years | 3 to 5 years | Over 5 years | Total | |||||||||||||
2025 | |||||||||||||||||
2024 | |||||||||||||||||
2023 | |||||||||||||||||
The classification and valuation models used to calculate the liabilities under insurance and reinsurance contracts are detailed in Note 2.2.8 of these Consolidated Financial Statements.
In general, in estimating compliance flows valued under the General Model, the Group has used tables based on the companies' own experience to estimate discounted future cash flows for all units of account, except for those cases in which the entity has not had sufficient historical data for the construction of the assumptions, so in such cases, regulatory tables have been used.
24.Provisions
The breakdown of the balance under this heading in the consolidated balance sheets, based on type of provisions, is as follows:
PROVISIONS. BREAKDOWN BY CONCEPTS (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
Provisions for pensions and similar obligations | 25 | |||||||||||||
Other long-term employee benefits ⁽¹⁾ | 25 | |||||||||||||
Provisions for taxes and other legal contingencies | 7.1 | |||||||||||||
Provisions for contingent risks and commitments | ||||||||||||||
Other provisions ⁽²⁾ | ||||||||||||||
Total | ||||||||||||||
(1) It includes commitments undertaken under the collective layoff procedure that was carried out at Banco Bilbao Vizcaya Argentaria, S.A. in 2021.
(2) Individually non-significant provisions for various concepts and corresponding to different geographical areas.
The change in provisions for pensions and similar obligations for the years ended December 31, 2025, 2024 and 2023 is as follows:
PROVISIONS FOR PENSIONS AND OTHER POST-EMPLOYMENT OBLIGATIONS FOR DEFINED BENEFIT PLANS, AND OTHER LONG-TERM EMPLOYEE BENEFITS. CHANGES OVER THE YEAR (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
Balance at the beginning | ||||||||||||||
Charges to income for the year | ||||||||||||||
Interest expense and similar charges | 25 | |||||||||||||
Personnel expense | ||||||||||||||
Provision expense | ||||||||||||||
Charges (credits) to equity ⁽¹⁾ | 25 | |||||||||||||
Transfers and other changes | ( | ( | ( | |||||||||||
Benefit payments | ( | ( | ( | |||||||||||
Employer contributions | ( | ( | ( | |||||||||||
Balance at the end | ||||||||||||||
(1) Correspond to actuarial losses (gains) arising from certain post-employment defined-benefit commitments for pensions recognized in “Equity” (see Note 2.2.13).
F-172
PROVISIONS FOR TAXES, LEGAL CONTINGENCIES AND OTHER PROVISIONS. CHANGES OVER THE YEAR (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Balance at beginning | |||||||||||
Additions | |||||||||||
Acquisition of subsidiaries | |||||||||||
Unused amounts reversed during the year | ( | ( | ( | ||||||||
Amount used and other variations | ( | ( | ( | ||||||||
Balance at the end | |||||||||||
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, 2025, 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 the resolution of such proceedings will not have, individually, a significant adverse effect on the Group's business, financial situation or results of operations.
25.Post-employment and other employee benefit commitments
The Group entities have assumed commitments with employees including short-term employee benefits (see Note 44.1), defined contribution and defined benefit plans (see Glossary), healthcare and other long-term employee benefits (see Note 2.2.13).
The Group sponsors defined-contribution plans for the majority of its active employees, with the plans in Spain and Mexico being the most significant. Most defined benefit plans are closed to new employees, with liabilities relating largely to retired employees, the most significant being those in Spain, Mexico and Turkey. In Mexico, the Group provides medical benefits to a closed group of employees and their family members, both in active service and retirement.
F-173
The breakdown of the net defined benefit liability recorded on the balance sheet as of December 31, 2025, 2024 and 2023 is provided below:
NET DEFINED BENEFIT LIABILITY (ASSET) ON THE CONSOLIDATED BALANCE SHEET (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
Pension commitments | ||||||||||||||
Early retirement commitments | ||||||||||||||
Medical benefits commitments | ||||||||||||||
Other long-term employee benefits | ||||||||||||||
Total commitments | ||||||||||||||
Pension plan assets | ||||||||||||||
Medical benefit plan assets | ||||||||||||||
Total plan assets (1) | ||||||||||||||
Total net liability / asset | ||||||||||||||
Of which: Net asset on the consolidated balance sheet (2) | ||||||||||||||
Of which: Net liability on the consolidated balance sheet for provisions for pensions and similar obligations (3) | 24 | |||||||||||||
Of which: Net liability on the consolidated balance sheet for other long-term employee benefits | 24 | |||||||||||||
(1) In Turkey, the foundation responsible for managing the benefit commitments holds an additional asset of €237 million as of December 31, 2025 which, in accordance with IFRS regarding the asset ceiling, has not been recognized in the Consolidated Financial Statements, because although it could be used to reduce future pension contributions it could not be immediately refunded to the employer. As of December 31, 2024 and 2023, this amount amounted to €123 million and €153 million, respectively.
(2) Recorded under the heading “Other Assets - Other” of the consolidated balance sheet (see Note 20).
(3) Recorded under the heading “Provisions - Provisions for pensions and similar obligations” of the consolidated balance sheet.
The impact relating to benefit commitments on the consolidated income statement for the years 2025, 2024 and 2023 is as follows:
CONSOLIDATED INCOME STATEMENT IMPACT (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
| Interest income and expense | ||||||||||||||
Interest expense | ||||||||||||||
Interest income | ( | ( | ( | |||||||||||
| Personnel expense | ||||||||||||||
Defined contribution plan expense | 44.1 | |||||||||||||
Defined benefit plan expense | 44.1 | |||||||||||||
Other expense | ||||||||||||||
| Provisions or (reversal) of provisions | 46 | |||||||||||||
Early retirement expense | ||||||||||||||
Past service cost expense | ||||||||||||||
Remeasurements (1) | ( | ( | ( | |||||||||||
Other provision expense | ||||||||||||||
Total impact on consolidated income statement: expense (income) | ||||||||||||||
(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 statements (see Note 2.2.13).
F-174
The amounts relating to post-employment benefits charged to the consolidated balance sheet correspond to the actuarial gains (losses) on remeasurement of the net defined benefit liability relating to pension and medical commitments before income taxes as of December 31, 2025, 2024 and 2023 are as follows:
EQUITY IMPACT (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Defined benefit plans | |||||||||||
Post-employment medical benefits | ( | ||||||||||
Total impact on equity: debit (credit) | |||||||||||
In 2025, the aggregate impact of this heading amounted to a debit of €375 million, which is mainly explained by: the variation of the main commitments for long-term remuneration in Mexico (debit of €448 million, mainly due to the variation of financial assumptions and expected return on the plan assets); Turkey (debit of €31 million, mainly due to the variation of financial assumptions, expected return on the plan assets and experience); and Spain (credit of €97 million, mainly due to the variation of financial assumptions).
In 2024, the aggregate impact of this heading amounted to a debit of €132 million driven by the variation in the main long-term remuneration commitments in Mexico (debit of €55 million, mainly due to the variation of financial assumptions and expected profitability of plan assets), Turkey (debit of €32 million due to the variation of financial assumptions, expected profitability of plan assets and experience), Spain (debit of €28 million, essentially due to the variation in financial assumptions) and Portugal (debit of €16 million due to the expected profitability of the plan assets and experience).
In 2023, the aggregate impact of this heading amounted to a debit of €314 million driven by the variation in financial assumptions, losses of €71 million from commitments in Spain, and losses of €170 million for commitments in Mexico. These amounts are offset by other minor effects of actuarial experience in these geographical areas and financial, demographic and experience effects in other geographical areas.
25.1Defined benefit plans
Defined benefit commitments relate mainly to employees who have already retired or taken early retirement, certain closed groups of active employees still accruing defined benefit pensions, and in-service death and disability benefits provided to most active employees. For the latter, the Group pays the required premiums to fully insure the related liability. The change in these pension commitments during the years ended December 31, 2025, 2024 and 2023 is presented below:
F-175
DEFINED BENEFITS (MILLIONS OF EUROS) | |||||||||||||||||||||||||||||
2025 | 2024 | 2023 | |||||||||||||||||||||||||||
Defined benefit obligation | Plan assets | Net liability (asset) | Defined benefit obligation | Plan assets | Net liability (asset) | Defined benefit obligation | Plan assets | Net liability (asset) | |||||||||||||||||||||
Balance at the beginning | |||||||||||||||||||||||||||||
Current service cost | |||||||||||||||||||||||||||||
Interest income/expense | |||||||||||||||||||||||||||||
Contributions by plan participants | |||||||||||||||||||||||||||||
Employer contributions | ( | ( | ( | ||||||||||||||||||||||||||
Past service costs (1) | |||||||||||||||||||||||||||||
Remeasurements | ( | ( | |||||||||||||||||||||||||||
Return on plan assets (2) | ( | ( | ( | ||||||||||||||||||||||||||
From changes in demographic assumptions | ( | ( | |||||||||||||||||||||||||||
From changes in financial assumptions | ( | ( | |||||||||||||||||||||||||||
Other actuarial gains and losses | |||||||||||||||||||||||||||||
Benefit payments | ( | ( | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||
Settlement payments | ( | ( | ( | ( | ( | ||||||||||||||||||||||||
Business combinations and disposals | ( | ( | |||||||||||||||||||||||||||
Effect on changes in foreign exchange rates | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||
Conversions to defined contributions | |||||||||||||||||||||||||||||
Other effects | ( | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||||
Balance at the end | |||||||||||||||||||||||||||||
Of which: Spain | |||||||||||||||||||||||||||||
Of which: Mexico | |||||||||||||||||||||||||||||
Of which: Turkey | |||||||||||||||||||||||||||||
(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 consolidated balance sheet as of December 31, 2025 includes €182 million relating to post-employment benefit commitments to former members of the Board of Directors and the Bank’s Management (see Note 54).
The most significant commitments are those in Spain and Mexico and, to a lesser extent, in Turkey. The remaining commitments are located mostly in Portugal and South America. Unless otherwise required by local regulation, all defined benefit plans have been closed to new entrants, who instead are able to participate in the Group´s defined contribution plans.
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 achieve the good governance of these plans, the Group 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, 2025, 2024 and 2023:
ACTUARIAL ASSUMPTIONS (%) | |||||||||||||||||||||||||||||
2025 | 2024 | 2023 | |||||||||||||||||||||||||||
Spain | Mexico | Turkey | Spain | Mexico | Turkey | Spain | Mexico | Turkey | |||||||||||||||||||||
Discount rate | % | % | % | % | % | % | % | % | |||||||||||||||||||||
Rate of salary increase | % | % | % | % | % | % | |||||||||||||||||||||||
Rate of pension increase | % | % | % | % | % | % | |||||||||||||||||||||||
Medical cost trend rate | % | % | % | % | % | % | |||||||||||||||||||||||
Mortality tables | |||||||||||||||||||||||||||||
F-176
In Spain, the discount rate shown as of December 31, 2025, corresponds to the discount rate for long-term commitments, with the discount rate used for short-term commitments being 2.75%.
Discount rates used to value future benefit cash flows have been determined by reference to high quality corporate bonds (see Note 2.2.13) denominated in Euro in the case of Spain and Mexican peso for Mexico, and government bonds denominated in Turkish Lira for Turkey. 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, the contractually agreed age in the case of early retirements in Spain or by using retirement rates.
Changes in the main actuarial assumptions may affect the valuation of the commitments. The table below shows the sensitivity of the benefit obligations to changes in the key assumptions:
SENSITIVITY ANALYSIS (MILLIONS OF EUROS) | |||||||||||||||||||||||
Basis points change | 2025 | 2024 | 2023 | ||||||||||||||||||||
Increase | Decrease | Increase | Decrease | Increase | Decrease | ||||||||||||||||||
Discount rate | ( | ( | ( | ||||||||||||||||||||
Rate of salary increase | ( | ( | ( | ||||||||||||||||||||
Rate of pension increase | ( | ( | ( | ||||||||||||||||||||
Medical cost trend rate | ( | ( | ( | ||||||||||||||||||||
Change in obligation from each additional year of longevity | |||||||||||||||||||||||
The sensitivities provided above have been determined at the date of these consolidated financial statements, and reflect solely the impact of changing one individual assumption at a time, keeping the rest of the assumptions unchanged, thereby excluding the effects which may result from combined assumption changes.
In addition to the commitments to employees shown above, the Group has other less material long-term employee benefits. These include leaves and long-service awards, which consist of either an established monetary award or some vacation days granted to certain groups of employees when they complete a given number of years of service. Additionally, a fund related to the collective layoff procedure that was carried out in Banco Bilbao Vizcaya Argentaria, S.A. was created in 2021. As of December 31, 2025, 2024 and 2023, the actuarial liabilities for the outstanding awards amounted to €332 million, €384 million and €435 million, respectively. These commitments are recorded under the heading "Provisions - Other long-term employee benefits" of the consolidated balance sheet (see Note 24).
25.1.1Post-employment commitments and similar obligations
These commitments relate mostly to pension payments, and which have been determined based on salary and years of service. For most plans, pension payments are due on retirement, death and long-term disability.
Additionally, there are commitments with early retired personnel from Spanish companies of the Group. These commitments include the compensation and indemnities due as well as the contributions payable to external pension funds during the early retirement period. As of December 31, 2025, 2024 and 2023, the value of these commitments amounted to €173 million, €271 million and €412 million, respectively.
F-177
The change in the benefit plan obligations and plan assets during the year ended December 31, 2025 was as follows:
POST-EMPLOYMENT COMMITMENTS 2025 (MILLIONS OF EUROS) | ||||||||||||||
Spain | Mexico | Turkey | Rest of the world | |||||||||||
| Defined benefit obligation | ||||||||||||||
| Balance at the beginning | ||||||||||||||
Current service cost | ||||||||||||||
Interest income or expense | ||||||||||||||
Contributions by plan participants | ||||||||||||||
Employer contributions | ||||||||||||||
Past service costs (1) | ||||||||||||||
Remeasurements | ( | ( | ||||||||||||
Return on plan assets (2) | ||||||||||||||
From changes in demographic assumptions | ||||||||||||||
From changes in financial assumptions | ( | ( | ||||||||||||
Other actuarial gains and losses | ( | |||||||||||||
Benefit payments | ( | ( | ( | ( | ||||||||||
Settlement payments | ||||||||||||||
Business combinations and disposals | ||||||||||||||
Effect on changes in foreign exchange rates | ( | ( | ||||||||||||
Conversions to defined contributions | ||||||||||||||
Other effects | ( | |||||||||||||
| Balance at the end | ||||||||||||||
Of which: Vested benefit obligation relating to current employees | ||||||||||||||
Of which: Vested benefit obligation relating to retired employees | ||||||||||||||
| Plan Assets | ||||||||||||||
| Balance at the beginning | ||||||||||||||
Current service cost | ||||||||||||||
Interest income or expense | ||||||||||||||
Contributions by plan participants | ||||||||||||||
Employer contributions | ||||||||||||||
Past service costs (1) | ||||||||||||||
Remeasurements | ( | ( | ||||||||||||
Return on plan assets (2) | ( | ( | ||||||||||||
From changes in demographic assumptions | ||||||||||||||
From changes in financial assumptions | ||||||||||||||
Other actuarial gains and losses | ||||||||||||||
Benefit payments | ( | ( | ( | ( | ||||||||||
Settlement payments | ||||||||||||||
Business combinations and disposals | ||||||||||||||
Effect on changes in foreign exchange rates | ( | |||||||||||||
Conversions to defined contributions | ||||||||||||||
Other effects | ( | |||||||||||||
| Balance at the end | ||||||||||||||
| Net liability (asset) | ||||||||||||||
| Balance at the beginning | ||||||||||||||
Current service cost | ||||||||||||||
Interest income or expense | ||||||||||||||
Contributions by plan participants | ||||||||||||||
Employer contributions | ( | ( | ( | |||||||||||
Past service costs (1) | ||||||||||||||
Remeasurements | ( | ( | ||||||||||||
Return on plan assets (2) | ( | ( | ||||||||||||
From changes in demographic assumptions | ||||||||||||||
From changes in financial assumptions | ( | ( | ||||||||||||
Other actuarial gains and losses | ( | |||||||||||||
Benefit payments | ( | ( | ( | |||||||||||
Settlement payments | ||||||||||||||
Business combinations and disposals | ||||||||||||||
Effect on changes in foreign exchange rates | ( | ( | ||||||||||||
Conversions to defined contributions | ||||||||||||||
Other effects | ( | |||||||||||||
| Balance at the end | ||||||||||||||
(1) Including gains and losses arising from settlements.
(2) Excluding interest, which is recorded under "Interest income or expense".
F-178
The change in net liabilities (assets) during the years ended December 31, 2024 and 2023 was as follows:
POST-EMPLOYMENT COMMITMENTS (MILLIONS OF EUROS) | ||||||||||||||||||||||||||
2024: Net liability (assets) | 2023: Net liability (assets) | |||||||||||||||||||||||||
Spain | Mexico | Turkey | Rest of the world | Spain | Mexico | Turkey | Rest of the world | |||||||||||||||||||
| Balance at the beginning | ||||||||||||||||||||||||||
Current service cost | ||||||||||||||||||||||||||
Interest income or expense | ||||||||||||||||||||||||||
Contributions by plan participants | ||||||||||||||||||||||||||
Employer contributions | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||
Past service costs (1) | ||||||||||||||||||||||||||
Remeasurements | ||||||||||||||||||||||||||
Return on plan assets (2) | ( | ( | ( | |||||||||||||||||||||||
From changes in demographic assumptions | ( | ( | ( | |||||||||||||||||||||||
From changes in financial assumptions | ( | ( | ( | |||||||||||||||||||||||
Other actuarial gains and losses | ( | ( | ||||||||||||||||||||||||
Benefit payments | ( | ( | ( | ( | ( | ( | ||||||||||||||||||||
Settlement payments | ( | |||||||||||||||||||||||||
Business combinations and disposals | ( | |||||||||||||||||||||||||
Effect on changes in foreign exchange rates | ( | ( | ( | ( | ||||||||||||||||||||||
Conversions to defined contributions | ||||||||||||||||||||||||||
Other effects | ( | ( | ||||||||||||||||||||||||
| Balance at the end | ||||||||||||||||||||||||||
(1) Includes gains and losses from settlements.
(2) Excludes interest which is reflected in the line item “Interest income and 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.
In the Spanish entities these commitments are covered by insurance contracts which meet the requirements of the accounting standard regarding the non-recoverability of contributions. However, a significant number of the insurance contracts are with BBVA Seguros, S.A. (a consolidated subsidiary and related party) and consequently these policies cannot be considered plan assets under IAS 19. 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 consolidated balance sheet (see Note 24), while the related assets held by the insurance company are included within the Group´s consolidated assets (recorded according to the classification of the corresponding financial instruments). As of December 31, 2025 the value of these separate assets was €1,371 million, (€1,553 million and €1,631 million as of December 31, 2024 and 2023, respectively) representing direct rights of the insured employees held in the consolidated balance sheet, hence these benefits are effectively fully funded.
On the other hand, some pension commitments have been funded through insurance contracts with insurance companies not related to the Group. In this case the consolidated balance sheet reflects the value of the obligations net of the fair value of the qualifying insurance policies. As of December 31, 2025, 2024 and 2023, the value of the aforementioned insurance policies (€96 million, €114 million and €130 million, respectively) exactly matches the value of the corresponding obligations and therefore no amount for this item has been recorded in the consolidated balance sheet.
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 (see Glossary) and interest rate risk (see Note 7.3.1).
In Mexico, there is a defined benefit plan for employees hired prior to 2001. Other employees participate in a defined contribution plan. External funds/trusts have been constituted locally to meet benefit payments as required by local regulation.
In 2008, the Turkish government passed a law to unify the different existing pension systems under a single umbrella Social Security system. Such system provides for the transfer of the various previously established funds. The financial sector is in this stage at present, maintaining these pension commitments managed by external pension funds (foundations) established for that purpose.
F-179
The foundation that maintains the assets and liabilities relating to employees of Garanti BBVA in Turkey, as per the local regulatory requirements, has recognized an obligation amounting to €259 million as of December 31, 2025 pending future transfer to the Social Security system. Furthermore, Garanti BBVA has set up a defined benefit pension plan for employees, additional to the social security benefits, reflected in the consolidated balance sheet.
25.1.2Medical benefit commitments
The change in defined benefit obligations and plan assets during the years 2025, 2024 and 2023 was as follows:
MEDICAL BENEFITS COMMITMENTS (MILLIONS OF EUROS) | |||||||||||||||||||||||||||||
2025 | 2024 | 2023 | |||||||||||||||||||||||||||
Defined benefit obligation | Plan assets | Net liability (asset) | Defined benefit obligation | Plan assets | Net liability (asset) | Defined benefit obligation | Plan assets | Net liability (asset) | |||||||||||||||||||||
| Balance at the beginning | ( | ( | ( | ||||||||||||||||||||||||||
Current service cost | |||||||||||||||||||||||||||||
Interest income or expense | ( | ( | |||||||||||||||||||||||||||
Contributions by plan participants | |||||||||||||||||||||||||||||
Employer contributions | ( | ( | ( | ||||||||||||||||||||||||||
Past service costs (1) | |||||||||||||||||||||||||||||
Remeasurements | ( | ( | ( | ( | ( | ||||||||||||||||||||||||
Return on plan assets (2) | ( | ( | ( | ||||||||||||||||||||||||||
From changes in demographic assumptions | ( | ( | |||||||||||||||||||||||||||
From changes in financial assumptions | ( | ( | |||||||||||||||||||||||||||
Other actuarial gain and losses | ( | ( | |||||||||||||||||||||||||||
Benefit payments | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||
Settlement payments | |||||||||||||||||||||||||||||
Business combinations and disposals | |||||||||||||||||||||||||||||
Effect on changes in foreign exchange rates | ( | ( | ( | ( | |||||||||||||||||||||||||
Other effects | |||||||||||||||||||||||||||||
| Balance at the end | ( | ( | ( | ||||||||||||||||||||||||||
(1) Including gains and losses arising from settlements.
(2) Excluding interest, which is recorded under "Interest income or expense".
In Mexico, there is a medical benefit plan for employees hired prior to 2007. New employees from 2007 are covered by a medical insurance policy. An external trust has been constituted locally to fund the plan, in accordance with local legislation and Group policy.
In Turkey, employees are currently provided with medical benefits through a foundation in collaboration with the Social Security system, although local legislation prescribes the future unification of this and similar systems into the general Social Security system itself.
The valuation of these benefits and their accounting treatment follow the same methodology as that employed in the valuation of pension commitments.
25.1.3Estimated benefit payments
As of December 31, 2025, the estimated benefit payments over the next ten years for all the entities in Spain, Mexico and Turkey are as follows:
ESTIMATED BENEFIT PAYMENTS (MILLIONS OF EUROS) | ||||||||||||||||||||
2026 | 2027 | 2028 | 2029 | 2030 | 2031 - 2035 | |||||||||||||||
Commitments in Spain | ||||||||||||||||||||
Commitments in Mexico | ||||||||||||||||||||
Commitments in Turkey | ||||||||||||||||||||
| Total | ||||||||||||||||||||
F-180
25.1.4Plan assets
The majority of the Group´s defined benefit plans are funded by plan assets held in external funds/trusts legally separate from the Group sponsoring entity. However, in accordance with local regulation, some commitments are not externally funded and covered through internally held provisions, principally those relating to early retirements.
Plan assets are those assets which will be used to directly settle the assumed commitments and which meet the following conditions: they are not part of the Group sponsoring entities assets, they are available only to pay post-employment benefits and they cannot be returned to the Group sponsoring entity.
To manage the assets associated with defined benefit plans, BBVA Group has established investment policies designed according to criteria of prudence and minimizing the financial risks associated with plan assets.
The investment policy consists of investing in a low risk and diversified portfolio of assets with maturities consistent with the term of the benefit obligation and which, together with contributions made to the plan, will be sufficient to meet benefit payments when due, thus mitigating the plans‘ risks.
In those countries where plan assets are held in pension funds or trusts, the investment policy is developed consistently with local regulation. When selecting specific assets, current market conditions, the risk profile of the assets and their future market outlook are all taken into consideration. In all the cases, the selection of assets takes into consideration the term of the benefit obligations as well as short-term liquidity requirements.
The risks associated with these commitments are those which give rise to a deficit in the plan assets. A deficit could arise from factors such as a fall in the market value of plan assets, an increase in long-term interest rates leading to a decrease in the fair value of fixed income securities, or a deterioration of the economy resulting in more write-downs and credit rating downgrades.
The table below shows the allocation of plan assets of the main companies of the BBVA Group as of December 31, 2025, 2024 and 2023:
PLAN ASSETS BREAKDOWN (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Cash and cash equivalents | |||||||||||
Debt securities (government bonds) | |||||||||||
Mutual funds | |||||||||||
Asset-backed securities | |||||||||||
Structured debt | |||||||||||
Insurance contracts | |||||||||||
| Total | |||||||||||
Of which: Bank account in BBVA | |||||||||||
Of which: Debt certificates issued by BBVA | |||||||||||
Of which: Property occupied by BBVA | |||||||||||
In addition to the above there are plan assets relating to the previously mentioned insurance contracts in Spain and the foundation in Turkey.
The following table provides details of investments in listed securities (level 1) as of December 31, 2025, 2024 and 2023:
INVESTMENTS IN LISTED MARKETS (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Cash and cash equivalents | |||||||||||
Debt securities (Government bonds) | |||||||||||
Mutual funds | |||||||||||
| Total | |||||||||||
Of which: Bank account in BBVA | |||||||||||
Of which: Debt certificates issued by BBVA | |||||||||||
Of which: Property occupied by BBVA | |||||||||||
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The remainder of the assets are mainly invested in Level 2 assets in in accordance with the classification established under IFRS 13 (mainly insurance contracts). As of December 31, 2025, almost all of the assets related to employee commitments corresponded to fixed income securities.
25.2Defined contribution plans
Certain Group entities sponsor defined contribution plans. Some of these plans allow employees to make contributions which are then matched by the employer.
Contributions are recognized as and when they are accrued, with a charge to the consolidated income statement in the corresponding year. No liability is therefore recognized in the consolidated balance sheet (see Note 44.1).
26.Capital
As of December 31, 2025 and 2024 BBVA’s share capital amounted to €2,797,394,663.00 and €2,824,009,877.85 divided into 5,708,968,700 and 5,763,285,465 shares, respectively. As of December 31, 2023 BBVA’s share capital amounted to €2,860,590,786.20 divided into 5,837,940,380 shares. These decreases have been the result, respectively, of the partial execution of the share capital reduction resolution adopted by the Annual General Shareholders’ Meeting of BBVA held on March 21, 2025, under agenda item three, and of the partial execution of the share capital reduction resolution adopted by the Annual General Shareholders' Meeting of BBVA held on March 15, 2024, under item 3 of the agenda, which were notified through Other Relevant Information notices on December 23, 2025 and on May 24, 2024, respectively (see Note 4).
As of December 31, 2025, 2024 and 2023, the shares were fully subscribed and paid-up, of the same class and series, of €0.49 par value each, and represented through book-entry accounts. 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, 2025, 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, through its American Depositary Shares (ADSs) on 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, 2025, State Street Bank and Trust Company, The Bank of New York Mellon, Chase Nominees and Northern Trust Company, in their capacity as international custodian/depositary banks, held 13.87%, 11.33%, 9.69%, and 3.14% of BBVA ordinary shares, 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 ordinary shares outstanding.
On February 5, 2024, BlackRock, Inc. reported to the SEC that it beneficially owned 7.2% of BBVA’s ordinary shares. On August 13, 2025, Capital Research and Management Company reported to the SEC that it indirectly had voting power over 3.1% of BBVA’s ordinary shares.
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 agreements regulating 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.
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BBVA banking subsidiaries, associates and joint ventures worldwide, are subject to supervision and regulation from a variety of regulatory bodies in relation to, among other aspects, the satisfaction of minimum capital requirements. The obligation to satisfy such capital requirements may affect the ability of such entities to transfer funds in the form of cash dividends, loans or advances. In addition, under the laws of the various jurisdictions where such entities are incorporated, dividends may only be paid out through funds legally available for such purpose. Even when the minimum capital requirements are met and funds are legally available, the relevant regulators or other public administrations could discourage or delay the transfer of funds to the Group in the form of cash, dividends, loans or advances for prudential reasons.
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 exclude shareholders' pre-emptive subscription rights, in whole or in part, 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 convertible securities (other than contingently convertible securities, envisaged to meet regulatory requirements for their eligibility as capital instruments (CoCo)) 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 preparation of these Consolidated Financial Statements, the Bank has not made use of the delegation granted by the General Shareholders' Meeting.
The Extraordinary General Shareholders' Meeting of BBVA held on July 5, 2024 resolved, under item one of the agenda, to authorize an increase in BBVA’s share capital for up to a maximum nominal amount of €551,906,524.05 by issuing and putting into circulation up to 1,126,339,845 ordinary shares with a par value of €0.49 each, of the same class and series, and with the same rights as the outstanding shares at such date, represented in book-entry form, with non-cash contributions for the purposes of covering the consideration of the voluntary tender offer for the acquisition of up to 100% of the shares of Banco de Sabadell, S.A. announced by BBVA.
BBVA's Annual General Shareholders' Meeting held on March 21, 2025 resolved, under item four of the agenda, to renew said agreement for its execution within a period of one (1) year from that date. The voluntary tender offer was terminated on October 16, 2025, after the CNMV published the results thereof and the minimum acceptance condition set by BBVA was not met; therefore, the Bank will not exercise the delegation granted by the Annual General Shareholders' Meeting.
Capital Decrease
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. Pursuant to the resolution, its implementation period ended on 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.
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In execution of said resolution, (see Note 4), BBVA has carried out 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 cancellation, charged to unrestricted reserves, of the 64,643,559 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 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 cancellation, charged to unrestricted reserves, of the 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.
BBVA's Annual General Shareholders' Meeting held on March 15, 2024 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. Pursuant to the resolution, its implementation period will end on 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 17, 2023, under agenda item three, whose executions are described above.
In execution of the resolution of the Annual General Shareholders' Meeting held on March 15, 2024, BBVA has carried out the following share capital reduction (see Note 4):
–On May 24, 2024, BBVA notified the partial execution of the resolution through the reduction of BBVA's share capital in a nominal amount of €36,580,908.35 and the consequent cancellation, charged to unrestricted reserves, of 74,654,915 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 shares.
The Annual General Shareholders' Meeting of BBVA held on March 21, 2025, in the third item of its agenda, agreed to approve the reduction of BBVA's share capital up to a maximum amount corresponding to 10% of the share capital on the date of the agreement, through the amortization of own shares that have been derivatively acquired by BBVA under the authorization conferred by the General Shareholders' Meeting of BBVA held on March 18, 2022 under its sixth item of the agenda, through any mechanism with the aim of being amortized and whose execution period was determined to be until the date of the next Annual General Shareholders' Meeting, with any unexecuted part remaining without effect as of said date. The Annual General Shareholders' Meeting authorized the Board of Directors, with powers of subdelegation, to execute all or part of the reduction of the share capital, in one or several times, leaving without effect, in its unused part, the resolution adopted by the Annual General Shareholders' Meeting held on March 15, 2024, in the third item of the agenda, whose partial executions have been described above.
In the execution of the Annual General Shareholders' Meeting held on March 21, 2025, BBVA has executed the following share capital reduction (see Note 4):
–On December 23, 2025, BBVA notified the partial execution of the aforementioned resolution through the reduction of BBVA's share capital in a nominal amount of €26,615,214.85 and the consequent cancellation, charged to unrestricted reserves, of 54,316,765 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 shares.
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Convertible and/or exchangeable securities
Note 22.4 introduces the details of the convertible and/or exchangeable securities.
27.Share premium
As of December 31, 2025, the balance under this heading in the consolidated balance sheets was €18,469 million. As of December 31, 2024 and 2023, the balance under this heading was €19,184 million and €19,769 million, respectively (see Note 4).
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 26).
28.Retained earnings and other reserves
28.1Breakdown of the balance
The breakdown of the balance under this heading in the consolidated balance sheets is as follows:
RETAINED EARNINGS AND OTHER RESERVES. BREAKDOWN BY CONCEPTS (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Legal reserve | |||||||||||
Restricted reserve | |||||||||||
Voluntary reserves | |||||||||||
| Total reserves holding company | |||||||||||
Consolidation reserves attributed to the Bank and subsidiary consolidated companies | |||||||||||
| Total | |||||||||||
28.2Legal 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.
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28.3Restricted reserves
As of December 31, 2025, 2024 and 2023, the Bank’s restricted reserves are as follows:
RESTRICTED RESERVES. BREAKDOWN BY CONCEPTS (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Restricted reserve for retired capital | |||||||||||
Restricted reserve for Parent Company shares and loans for those shares | |||||||||||
Restricted reserve for redenomination of capital in euros | |||||||||||
| Total | |||||||||||
The restricted reserve for retired capital includes the partial executions of the capital reduction resolutions adopted by BBVA's General Shareholders' Meeting held on March 21, 2025, March 15, 2024 and March 17, 2023, respectively (see Note 26).
The second heading corresponds to restricted reserves related to the amount of shares issued by the Bank in its possession at each date, as well as the amount of customer loans outstanding at those dates that were granted for the purchase of, or are secured by, the parent company shares.
Finally, pursuant to Law 46/1998 on the Introduction of the Euro, a restricted reserve is recognized as a result of the rounding effect of the redenomination of the parent company common stock in euros.
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28.4Retained earnings and other reserves by entity
The breakdown, by company or corporate group, under the headings “Retained earnings” and “other reserves” in the consolidated balance sheets is as follows:
RETAINED EARNINGS AND OTHER RESERVES. BREAKDOWN BY COMPANY OR CORPORATE GROUP (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
| Retained earnings (losses), revaluation reserves and other reserves | |||||||||||
Holding Company | |||||||||||
BBVA Mexico Group | |||||||||||
Garanti BBVA Group | |||||||||||
BBVA Provincial Group | |||||||||||
BBVA Colombia Group | |||||||||||
BBVA Argentina Group | |||||||||||
BBVA Peru Group | |||||||||||
Forum Chile Group | |||||||||||
BBVA Uruguay Group | |||||||||||
Corporación General Financiera, S.A. | |||||||||||
BV America, S.L. | |||||||||||
BBVA Leasing México, S.A. DE CV | |||||||||||
Bilbao Vizcaya Holding, S.A. | |||||||||||
Gran Jorge Juan, S.A. | |||||||||||
BBVA Technology América S.A. | |||||||||||
Anida Operaciones Singulares, S.A. | ( | ( | ( | ||||||||
Tree Inversiones Inmobiliarias, S.A. | ( | ( | ( | ||||||||
Other Real State Spanish Companies ⁽¹⁾ | ( | ( | ( | ||||||||
Other | ( | ||||||||||
Subtotal | |||||||||||
| Other reserves or accumulated losses of investments in joint ventures and associates | |||||||||||
ATOM Holdco Limited | ( | ( | ( | ||||||||
Metrovacesa, S.A. | ( | ( | ( | ||||||||
Other | |||||||||||
| Subtotal | ( | ( | ( | ||||||||
| Total | |||||||||||
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29.Treasury shares
In the years ended December 31, 2025, 2024 and 2023 the Group entities performed the following transactions with shares issued by the Bank:
TREASURY SHARES (MILLIONS OF EUROS) | ||||||||||||||||||||
2025 | 2024 | 2023 | ||||||||||||||||||
Number of Shares | Millions of Euros | Number of Shares | Millions of Euros | Number of Shares | Millions of Euros | |||||||||||||||
| Balance at beginning | ||||||||||||||||||||
+ Purchases | ||||||||||||||||||||
- Sales and other changes | ( | ( | ( | ( | ( | ( | ||||||||||||||
| Balance at the end | ||||||||||||||||||||
Of which: | ||||||||||||||||||||
Held by BBVA, S.A. | ||||||||||||||||||||
Held by Corporación General Financiera, S.A. | ||||||||||||||||||||
Held by other subsidiaries | ||||||||||||||||||||
Average purchase price in Euros | ||||||||||||||||||||
Average selling price in Euros (including other changes) | ||||||||||||||||||||
Net gains or losses on transactions (Shareholders' funds-Reserves) | ||||||||||||||||||||
In 2025, 2024 and 2023 there were transactions included in the share buyback program (see Note 4).
The percentages of treasury shares held by the Group in the years ended December 31, 2025, 2024 and 2023 are as follows:
TREASURY SHARE | |||||||||||||||||||||||||||||
2025 | 2024 | 2023 | |||||||||||||||||||||||||||
Min | Max | Closing | Min | Max | Closing | Min | Max | Closing | |||||||||||||||||||||
% treasury share | % | % | % | % | % | % | % | % | % | ||||||||||||||||||||
The number of BBVA shares accepted by the Group in pledge of loans as of December 31, 2025, 2024 and 2023 is as follows:
SHARES OF BBVA ACCEPTED IN PLEDGE | |||||||||||
2025 | 2024 | 2023 | |||||||||
Number of shares in pledge | |||||||||||
Nominal value (in Euros) | |||||||||||
% of share capital | % | % | % | ||||||||
The number of BBVA shares owned by third parties but under management of a company within the Group as of December 31, 2025, 2024 and 2023 is as follows:
SHARES OF BBVA OWNED BY THIRD PARTIES BUT MANAGED BY THE GROUP | |||||||||||
2025 | 2024 | 2023 | |||||||||
Number of shares owned by third parties | |||||||||||
Nominal value (in Euros) | |||||||||||
% of share capital | % | % | % | ||||||||
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30.Accumulated other comprehensive income (loss)
The breakdown of the balance under this heading in the consolidated balance sheets is as follows:
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS). BREAKDOWN BY CONCEPTS (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
| Items that will not be reclassified to profit or loss | ( | ( | ( | |||||||||||
Actuarial gains (losses) on defined benefit pension plans | ( | ( | ( | |||||||||||
Fair value changes of equity instruments measured at fair value through other comprehensive income | 13.4 | ( | ( | ( | ||||||||||
Fair value changes of financial liabilities at fair value through profit or loss attributable to changes in their credit risk | ( | ( | ||||||||||||
| Items that may be reclassified to profit or loss | ( | ( | ( | |||||||||||
Hedge of net investments in foreign operations (effective portion) | ( | ( | ( | |||||||||||
Mexican peso | ( | ( | ( | |||||||||||
Turkish lira | ||||||||||||||
Other exchanges | ( | ( | ( | |||||||||||
Foreign currency translation | ( | ( | ( | |||||||||||
Mexican peso | ( | ( | ( | |||||||||||
Turkish lira | ( | ( | ( | |||||||||||
Argentine peso | ( | ( | ( | |||||||||||
Venezuelan bolivar | ( | ( | ( | |||||||||||
Other exchanges | ( | ( | ( | |||||||||||
Hedging derivatives. Cash flow hedges (effective portion) | ||||||||||||||
Fair value changes of debt instruments measured at fair value through other comprehensive income | 13.4 | ( | ( | ( | ||||||||||
Hedging instruments (non-designated items) | ( | |||||||||||||
Share of other recognized income and expense of investments in joint ventures and associates | ( | ( | ||||||||||||
Total | ( | ( | ( | |||||||||||
The balances recognized under these headings are presented net of tax.
The main changes in 2025 are explained by the depreciation against the euro of some of the currencies of the main geographical areas where the Group operates against the euro, mainly the Turkish lira (27%) and the Argentine peso (37%), and the application of IAS 29 "Financial Reporting in Hyperinflationary Economies" in Turkey and Argentina (see Note 2.2.18).
31.Minority interests (non-controlling interests)
The breakdown by groups of consolidated entities of the balance under the heading “Minority interests (non-controlling interests)” of total equity in the consolidated balance sheets is as follows:
MINORITY INTERESTS (NON-CONTROLLING INTERESTS). BREAKDOWN BY SUBGROUPS (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Garanti BBVA | |||||||||||
BBVA Peru | |||||||||||
BBVA Argentina | |||||||||||
BBVA Colombia | |||||||||||
BBVA Venezuela | |||||||||||
Other entities | |||||||||||
| Total | |||||||||||
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These amounts are broken down by groups of consolidated entities under the heading “Attributable to minority interests (non-controlling interests)” in the consolidated income statements:
PROFIT ATTRIBUTABLE TO MINORITY INTERESTS (NON-CONTROLLING INTERESTS). BREAKDOWN BY SUBGROUPS (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Garanti BBVA | |||||||||||
BBVA Peru | |||||||||||
BBVA Argentina | |||||||||||
BBVA Colombia | ( | ( | |||||||||
BBVA Venezuela | |||||||||||
Other entities | ( | ||||||||||
| Total | |||||||||||
Dividends distributed to minority interests of the Group during the year 2025 related to: BBVA Peru Group €127 million, Garanti BBVA Group €88 million, BBVA Argentina Group €27 million and other Group entities €12 million.
32.Capital base and capital management
32.1Capital base
The entry into force of Regulation (EU) 2024/1623 (commonly referred to as ‘CRR3’) on January 1, 2025 brought about substantial changes in the calculation of minimum capital requirements. The impact of these changes on the Group's CET1 ratio was not significant at that date.
As of December 31, 2025, 2024 and 2023, own funds are calculated in accordance with 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 required internal capital adequacy assessment processes and the information required to be disclosed to the market.
The CET1 fully loaded ratio of the BBVA Group stood at 12.70% at the end of December 2025, which allowed it to maintain a management buffer over the Group's CET 1 requirement (9.29%3) and over the Group's target management range of between 11.5 - 12% of CET 1. With regard to the minimum total capital requirements applicable to the Group as of December 31, 2025, these amount to 13.44%3.
Following the latest decision of the SREP (Supervisory Review and Evaluation Process), which came into force on January 1, 2026, the ECB has notified the Group that the Pillar 2 requirement is maintained at 1.62% (of which 0.96% at least should be covered by CET1). In addition, the Bank of Spain has reduced the D-SIB (Domestic Systemically Important Banks) buffer requirement to 0.75% which the Group must maintain since January 1, 2026, 0.25% less than that in force on December 31, 2025. Therefore, BBVA must maintain a CET1 capital ratio of 8.98%3 and a total capital ratio of 13.13%3 at a consolidated level.
3 Considering the latest official updates to the countercyclical capital buffer and the buffer against systemic risks, applied on the basis of exposure as of September 30, 2025, and incorporating the increase in the percentage of the countercyclical capital buffer applicable to exposures located in Spain approved by the Bank of Spain and published on October 1, 2025, applied on said exposure basis.
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A reconciliation of the main figures between the accounting and regulatory own funds as of December 31, 2025, 2024 and 2023 is shown below:
ELIGIBLE CAPITAL RESOURCES (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
Capital | 26 | |||||||||||||
Share premium | 27 | |||||||||||||
Retained earnings, revaluation reserves and other reserves | 28 | |||||||||||||
Other equity instruments, net | ||||||||||||||
Treasury shares | 29 | ( | ( | ( | ||||||||||
Profit (loss) attributable to the parent company | 5 | |||||||||||||
Interim dividend | ( | ( | ( | |||||||||||
| Total equity | ||||||||||||||
Accumulated other comprehensive income (loss) | 30 | ( | ( | ( | ||||||||||
Minority interests | 31 | |||||||||||||
| Shareholders' equity | ||||||||||||||
| Goodwill and other intangible assets | ( | ( | ( | |||||||||||
| Equity not eligible at solvency level | ( | ( | ( | |||||||||||
Other adjustments and deductions ⁽¹⁾ | ( | ( | ( | |||||||||||
| Common Equity Tier 1 (CET 1) | ||||||||||||||
| Additional Tier 1 | ||||||||||||||
| Tier 2 | ||||||||||||||
| Total Capital (Total Capital = Tier 1 + Tier 2) | ||||||||||||||
Total Minimum equity required ⁽²⁾ | ||||||||||||||
(1) Other adjustments and deductions include, among others, the adjustment for non-computable minority interests, the amount of dividends pending distribution and, in 2025, the amount corresponding to the maximum limit authorized by the ECB for the repurchase of BBVA's own shares (excluding the amount corresponding to the shares already acquired as of December 31, 2025).
(2) Calculated based on total minimum capital requirements applicable in each period.
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The Group’s eligible own funds and risk-weighted assets (RWAs) in accordance with the aforementioned applicable regulation as of December 31, 2025, 2024 and 2023 are shown below:
AMOUNT OF CAPITAL CC1 (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Capital and share premium | |||||||||||
Retained earnings and equity instruments ⁽¹⁾ | |||||||||||
Other accumulated income and other reserves | ( | ( | ( | ||||||||
Minority interests | |||||||||||
Net attributable profit ⁽²⁾ | |||||||||||
| Common Equity Tier I (CET1) before other regulatory adjustments | |||||||||||
Goodwill and intangible assets | ( | ( | ( | ||||||||
Direct, indirect and synthetic holdings in own Common Equity Tier I instruments | ( | ( | ( | ||||||||
Deferred tax assets | ( | ( | ( | ||||||||
Other deductions and filters ⁽3⁾ | ( | ( | ( | ||||||||
| Total common equity Tier 1 regulatory adjustments | ( | ( | ( | ||||||||
| Common equity TIER 1 (CET1) | |||||||||||
Capital instruments and share premium accounts classified as liabilities and qualifying as Additional Tier I | |||||||||||
Qualifying Tier 1 capital included in consolidated AT1 capital issued by subsidiaries and held by third parties | |||||||||||
| Additional Tier 1 (AT 1) before regulatory adjustments | |||||||||||
Transitional Tier 1 adjustments | |||||||||||
| Total regulatory adjustments to additional Tier 1 | |||||||||||
| Additional Tier 1 (AT1) | |||||||||||
| Tier 1 (Common equity TIER 1 + additional TIER 1) | |||||||||||
Capital instruments and share premium accounted as Tier 2 | |||||||||||
Qualifying Tier 2 capital included in consolidated T2 capital issued by subsidiaries and held by third parties | |||||||||||
Credit risk adjustments | |||||||||||
| Tier 2 before regulatory adjustments | |||||||||||
| Tier 2 regulatory adjustments | ( | ( | ( | ||||||||
| Tier 2 | |||||||||||
| Total capital (Total capital = Tier 1 + Tier 2) | |||||||||||
| Total RWA | |||||||||||
CET 1 ratio | % | % | % | ||||||||
Tier 1 ratio | % | % | % | ||||||||
Total capital ratio | % | % | % | ||||||||
(1) It includes the amount of the share buyback program not recognized for accounting purposes.
(2) As of December 31, 2025, the expected total shareholder remuneration corresponding to the year 2025, subject to approval by the General Shareholders' Meeting, is deducted. As of December 31, 2024, the total shareholder remuneration corresponding to the year 2024, approved by the General Shareholders' Meeting, is deducted. As of December 31, 2023, the cash amount is deducted from the total shareholder remuneration corresponding to 2023, approved by the General Shareholders' Meeting.
(3) As of December 31, 2023, the amount of the share buyback program for the year 2023, considered as a dividend approved by the General Shareholders' Meetings, was deducted.
The BBVA Group's earnings has contributed to achieving a consolidated CET1 ratio of 12.70% as of December 31, 2025, which allows it to maintain a management buffer over the Group's CET1 requirement as of that date (9.29%4), which is also above the Group's target management range of 11.5 - 12.0% CET1.
The CET1 ratio decreased by 18 basis points, mainly due to: (i) the impact of -105 basis points from the share buyback program (SBB) announced in December 2025; (ii) the growth in risk-weighted assets (RWA) derived from the organic growth of the business in constant terms (which drained the ratio by 152 basis points) mainly as a result of the increase in the loan portfolio, partially offset by the significant risk transfer (SRT) transactions, including securitizations and sales of loan portfolios, and, to a lesser extent, debt securities and; (iii) the depreciation of the Turkish lira and, to a lesser extent, the Mexican peso against the euro affected the year-on-year decrease of the CET1 ratio.
4 Considering the latest official updates to the countercyclical capital buffer and the buffer against systemic risks, applied on the basis of exposure as of September 30, 2025, and incorporating the increase in the percentage of the countercyclical capital buffer applicable to exposures located in Spain approved by the Bank of Spain and published on October 1, 2025, applied on said exposure basis.
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The decrease was partially offset by (i) the generation of earnings in the year (265 basis points) which, net of shareholder remuneration and payment of convertible contingent instrument coupons (CoCos), generated a positive contribution of 122 basis points; (ii) other elements (61 basis points), which include the attributable prudential minority interests and the positive impact in Other Comprehensive Income (OCI) equivalent to the net monetary position loss resulting from hyperinflationary economies recorded in financial assets at fair value through other comprehensive income (corresponding to assets classified as Held to Collect and Sell (HTC&S)); (iii) the depreciation of the U.S. dollar against the euro; and (iv) the regulatory impacts which generated a positive contribution of 56 basis points, mainly due to the change in the calculation model for certain portfolios in Mexico and Spain to the standardized approach. Such change in the calculation model which led to the development by the Group of a holistic model strategy aimed at assessing the adequacy, scope, and sustainability of internal credit risk models, resulted in a partial reversion from the Advanced IRB approach to the Foundation IRB approach or to the standardized approach (subject to prior approval by the ECB).
Consolidated Additional Tier 1 (AT1) capital fully loaded stood at 1.38% as of December 31, 2025, 15 basis points lower compared to 2024. In January 2025, BBVA, S.A. issued contingent convertible instruments (CoCos) for USD 1.0 billion, and it made a further issuance in November 2025 for €1.0 billion. On the other hand, in March 2025, BBVA redeemed an issuance of contingent convertible instruments of USD 1.0 billion. Additionally, in December 2025, the redemption of another issuance of contingent convertible instruments of €1.0 billion was announced, which took place in January 2026.
The Tier 2 fully stood at 3.13% as of December 31, 2025, which represents an increase of 63 basis points compared to 2024, mainly due to the issuance of a subordinated bond in Spain (€1.0 billion) in February 2025, the issuance in Mexico of subordinated debt for an amount of USD 1.0 billion in February 2025, and the issuances in July and October 2025 of USD 500 million and USD 700 million, respectively, of subordinated debt in Turkey.
As a result of the above, the total capital ratio stood at 17.21% as of December 31, 2025.
With regard to MREL (Minimum Requirement for own funds and Eligible Liabilities) BBVA, as an MPE5, has sub-consolidated requirements, based on its resolution group6.
On June 12, 2025 the Group made public that it had received a communication from the Bank of Spain regarding its MREL requirement, established by the Single Resolution Board (“SRB”). According to this communication, BBVA must maintain, as from June 12, 2025, an MREL in RWA of 23.13%7, not taking into account the current8 combined buffer requirement (CBR) of 3.97%. In addition, BBVA must keep, also as from June 12, 2025, a volume of own funds and eligible liabilities in terms of total exposure considered for purposes of calculating the leverage ratio of 8.59% (the “MREL in LR”)9.
With respect to the MREL ratios achieved as of December 31, 2025, these were 28.89% and 10.21%, respectively for MREL in RWA and MREL in LR, reaching the subordinated ratios of both 24.67% and 8.72%, respectively.
Given the structure of the resolution group's own funds and eligible liabilities, as of December 31, 2025, the Group meets the aforementioned requirements.
5 Multiple Point of Entry established by the Single Resolution Board (SRB). Being an MPE implies that, should any of the group's subsidiaries have solvency, liquidity or operational problems, the resolution authority could liquidate/resolve that entity without affecting the rest of the companies in the banking group.
6 The resolution group is made up of Banco Bilbao Vizcaya Argentaria, S.A. and the subsidiaries belonging to the same European resolution group.
7 The subordination requirement in RWA is 13.50%.
8 Considering the latest official updates of the countercyclical capital buffer and the buffer against systemic risks, applied on the basis of exposure as of September 30, 2025, and incorporating the increase in the percentage of the countercyclical capital buffer applicable to exposures located in Spain approved by the Bank of Spain and published on October 1, 2025, applied on said exposure basis. .
9 The subordination requirement in LR is 5.66%.
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32.2Leverage ratio
The leverage ratio (LR) is a regulatory measure complementing capital designed to promote the financial strength of institutions in terms of indebtedness. This measurement can be used to estimate the percentage of the assets and off-balance sheet arrangements financed with Tier 1 capital, being the carrying amount of the assets used in this ratio adjusted to reflect the Group’s current or potential leverage of a given balance-sheet position (Leverage ratio exposure).
Breakdown of leverage ratio as of December 31, 2025, 2024 and 2023, calculated according to CCR, is as follows:
LEVERAGE RATIO | |||||||||||
2025 | 2024 | 2023 | |||||||||
Tier 1 (millions of Euros) (a) | |||||||||||
Exposure to leverage ratio (millions of Euros) (b) | |||||||||||
Leverage ratio (a)/(b) (percentage) | % | % | % | ||||||||
32.3Capital management
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 (RAF).
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 Budget and the Liquidity and Funding Plan, with which it is coordinated — all with the aim of achieving the Group's overall strategy.
Capital must be allocated optimally in order to meet the need to preserve the solvency of BBVA and the Group at all times. Together with the Group's solvency risk profile included in the RAF, this optimal allocation serves as a guide for the Group's capital management and seeks a solid capital position that makes it possible to:
–anticipate ordinary and extraordinary consumption that may occur, even under stress;
–promote the development of the Group's business and align it with capital and profitability objectives by allocating resources appropriately and efficiently;
–cover all risks —including potential risks— to which it is exposed;
–comply with regulatory and internal management requirements at all times; and
–remunerate BBVA shareholders in accordance with the Shareholder Remuneration Policy in force at any given time.
The areas involved in capital management in the Group shall follow and respect the following principles in their respective areas of responsibility:
–ensuring that capital management is integrated and consistent with the Group's Strategic Plan, RAF, 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 view), 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;
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–ensuring compliance with the solvency levels, including the MREL, required at any given time;
–compensating BBVA shareholders in an adequate and sustainable manner; and
–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.
33.Commitments and guarantees given
The breakdown of the off-balance sheet exposures is as follows:
COMMITMENTS AND GUARANTEES GIVEN (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
| Loan commitments given | 7.2.2 | |||||||||||||
Of which: impaired | ||||||||||||||
Central banks | ||||||||||||||
General governments | ||||||||||||||
Credit institutions | ||||||||||||||
Other financial corporations | ||||||||||||||
Non-financial corporations | ||||||||||||||
Households | ||||||||||||||
| Financial guarantees given | 7.2.2 | |||||||||||||
Of which: impaired (1) | ||||||||||||||
Central banks | ||||||||||||||
General governments | ||||||||||||||
Credit institutions | ||||||||||||||
Other financial corporations | ||||||||||||||
Non-financial corporations | ||||||||||||||
Households | ||||||||||||||
| Other commitments given | 7.2.2 | |||||||||||||
Of which: impaired (1) | ||||||||||||||
Central banks | ||||||||||||||
General governments | ||||||||||||||
Credit institutions | ||||||||||||||
Other financial corporations | ||||||||||||||
Non-financial corporations | ||||||||||||||
Households | ||||||||||||||
| Total | 7.2.2 | |||||||||||||
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As of December 31, 2025 and 2024, the provisions for loan commitments, financial guarantees and other commitments given, recorded in the consolidated balance sheet amounted to €482 million, €110 million and €133 million, and €372 million, €140 million and €155 million, respectively (see Note 24).
Since a significant portion of the amounts above will expire without any payment being made by the consolidated entities, the aggregate balance of these commitments cannot be considered to be the actual future requirement for financing or liquidity to be provided by the BBVA Group to third parties.
34.Other contingent assets and liabilities
As of December 31, 2025, 2024 and 2023 there were no other material contingent assets or liabilities other than those disclosed in the Consolidated Financial Statements or those referred to in these Notes.
35.Purchase and sale commitments and future payment obligations
The purchase and sale commitments of the BBVA Group are disclosed in Notes 10, 14 and 22.
Future payment obligations mainly correspond to leases payable derived from operating lease contracts, as detailed in Note 22.5, and estimated employee benefit payments, as detailed in Note 25.1.3.
36.Transactions on behalf of third parties
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) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Financial instruments entrusted to BBVA by third parties | |||||||||||
Conditional bills and other securities received for collection | |||||||||||
Securities lending | |||||||||||
| Total | |||||||||||
37.Net interest income
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37.1Interest and other income
The breakdown of the interest and other income recognized in the consolidated income statement is as follows:
INTEREST AND OTHER INCOME. BREAKDOWN BY ORIGIN (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Financial assets at fair value through profit or loss | |||||||||||
Financial assets at fair value through other comprehensive income | |||||||||||
Financial assets at amortized cost ⁽¹⁾ | |||||||||||
Adjustments of income as a result of hedging transactions | |||||||||||
Other income | |||||||||||
| Total | |||||||||||
Of which: Insurance activity | |||||||||||
(1) Includes interest on demand deposits at central banks and credit institutions.
The amounts recognized in consolidated equity in connection with hedging derivatives for the years ended December 31, 2025, 2024 and 2023 and the amounts derecognized from the consolidated equity and taken to the consolidated income statements during those years are included in the “Consolidated statements of recognized income and expense”.
37.2Interest expense
The breakdown of the balance under this heading in the consolidated income statements is as follows:
INTEREST EXPENSE. BREAKDOWN BY ORIGIN (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Financial liabilities at fair value through profit or loss | |||||||||||
Financial liabilities at amortized cost | |||||||||||
Adjustments of expense as a result of hedging transactions | |||||||||||
Cost attributable to pension funds | |||||||||||
Other expense | |||||||||||
Total | |||||||||||
Of which: Insurance activity | |||||||||||
38.Dividend income
The balances for this heading in the consolidated income statements correspond to dividends on shares and equity instruments other than those from shares in entities accounted for using the equity method (see Note 39), as shown in the breakdown below:
DIVIDEND INCOME (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Non-trading financial assets mandatorily at fair value through profit or loss | |||||||||||
Financial assets at fair value through other comprehensive income ⁽¹⁾ | |||||||||||
| Total | |||||||||||
(1) Dividend income corresponds mainly to investments held at the end of the year.
39.Share of profit or loss of entities accounted for using the equity method
Results from “Share of profit or loss of entities accounted for using the equity method” resulted in a positive impact of €62 million for the year ended December 31, 2025, compared with the positive impact of €40 million and the positive impact of €26 million recorded for the years ended December 31, 2024 and 2023, respectively (see Note 16.1).
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40.Fee and commission income and expense
The breakdown of the balance under these headings in the consolidated income statements is as follows:
FEE AND COMMISSION INCOME. BREAKDOWN BY ORIGIN (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Bills receivables | |||||||||||
Demand accounts | |||||||||||
Credit and debit cards and POS ⁽1⁾ | |||||||||||
Checks | |||||||||||
Transfers and other payment orders | |||||||||||
Insurance product commissions | |||||||||||
Loan commitments given | |||||||||||
Other commitments and financial guarantees given | |||||||||||
Asset management | |||||||||||
Securities fees | |||||||||||
Custody securities | |||||||||||
Other fees and commissions | |||||||||||
| Total | |||||||||||
(1) Points of Sale.
The breakdown of fee and commission expense under this heading in the consolidated income statements is as follows:
FEE AND COMMISSION EXPENSE. BREAKDOWN BY ORIGIN (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Demand accounts | |||||||||||
Credit and debit cards and POS ⁽1⁾ | |||||||||||
Transfers and other payment orders | |||||||||||
Commissions for selling insurance | |||||||||||
Custody securities | |||||||||||
Other fees and commissions | |||||||||||
| Total | |||||||||||
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41.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 consolidated income statements is as follows:
GAINS (LOSSES) ON FINANCIAL ASSETS AND LIABILITIES, HEDGE ACCOUNTING AND EXCHANGE DIFFERENCES, NET (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net | |||||||||||
Financial assets at amortized cost | |||||||||||
Other financial assets and liabilities | |||||||||||
Gains (losses) on financial assets and liabilities held for trading, net | |||||||||||
Reclassification of financial assets from fair value through other comprehensive income | |||||||||||
Reclassification of financial assets from amortized cost | |||||||||||
Other gains (losses) | |||||||||||
Gains (losses) on non-trading financial assets mandatorily at fair value through profit or loss, net | |||||||||||
Reclassification of financial assets from fair value through other comprehensive income | |||||||||||
Reclassification of financial assets from amortized cost | |||||||||||
Other gains (losses) | |||||||||||
Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net | |||||||||||
Gains (losses) from hedge accounting, net | ( | ( | |||||||||
| Subtotal gains (losses) on financial assets and liabilities and hedge accounting | |||||||||||
Exchange differences, net | ( | ||||||||||
| Total | |||||||||||
The breakdown of the balance (excluding exchange rate differences) under this heading in the consolidated income statements by the nature of the financial instrument is as follows:
GAINS (LOSSES) ON FINANCIAL ASSETS AND LIABILITIES AND HEDGE ACCOUNTING. BREAKDOWN BY NATURE OF THE FINANCIAL INSTRUMENT (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Debt instruments | |||||||||||
Equity instruments | |||||||||||
Trading derivatives and hedge accounting | ( | ( | |||||||||
Loans and advances to customers | ( | ||||||||||
Customer deposits | ( | ( | ( | ||||||||
Other | |||||||||||
| Total | |||||||||||
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The breakdown of the balance of the impact of the derivatives (trading and hedging) under this heading in the consolidated income statements is as follows:
DERIVATIVES - HEDGE ACCOUNTING (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
| Derivatives | ||||||||||||||
Interest rate agreements | ( | ( | ||||||||||||
Securities agreements | ( | ( | ||||||||||||
Credit derivative agreements | ( | ( | ( | |||||||||||
Foreign-exchange agreements | ( | ( | ||||||||||||
Commodity and other agreements | ( | |||||||||||||
| Subtotal | ( | ( | ||||||||||||
| Hedging derivatives ineffectiveness | ||||||||||||||
Fair value hedges | 15 | ( | ||||||||||||
Hedging derivative | ( | ( | ||||||||||||
Hedged item | ( | |||||||||||||
Cash flow hedges | 15 | ( | ( | ( | ||||||||||
| Subtotal | ( | ( | ||||||||||||
| Total | ( | ( | ||||||||||||
42.Other operating income and expense
The breakdown of the balance under the heading “Other operating income” in the consolidated income statements is as follows:
OTHER OPERATING INCOME (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Gains from sales of non-financial services | |||||||||||
Other operating income | |||||||||||
| Total | |||||||||||
The breakdown of the balance under the heading “Other operating expense” in the consolidated income statements is as follows:
OTHER OPERATING EXPENSE (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Change in inventories | |||||||||||
Contributions to guaranteed banks deposits funds ⁽¹⁾ | |||||||||||
Hyperinflation adjustment ⁽²⁾ | |||||||||||
Other operating expense ⁽³⁾ | |||||||||||
| Total | |||||||||||
(1) In 2025 and 2024, no contributions were made to the European Single Resolution Fund (SRF) since the constitution phase of the fund has been completed. Likewise, the Deposits Guarantee Fund of Credit Institutions in Spain reached in 2023 the minimum coverage level established by the European Regulation with respect to covered deposits, so no additional contributions were necessary for this purpose during 2025 and 2024.
(2) For the years ended December 31, 2025, 2024 and 2023 it includes €356 million, €1,419 million and €1,062 million related to Argentina; €204 million, €348 million and €916 million related to Turkey; and €183 million, €9 million and €28 million related to Venezuela, respectively (see Note 2.2.18).
(3) For the year ended December 2024 and 2023, it includes €285 million and €215 million, respectively, corresponding to the total annual amount disbursed under the temporary tax on credit institutions and financial credit establishments, according to Law 38/2022 of December 27, 2022.
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43.Income and expense from insurance and reinsurance contracts
The balances of the headings “Income and expense from insurance and reinsurance contracts” in the consolidated income statements stem from the insurance activity and include the following:
INCOME AND EXPENSE FROM INSURANCE AND REINSURANCE CONTRACTS (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Income from insurance and reinsurance contracts | |||||||||||
Expense from insurance and reinsurance contracts | ( | ( | ( | ||||||||
| Total | |||||||||||
The table below shows the contribution of each insurance product to the Group´s income for the years ended December 31, 2025, 2024 and 2023:
NET INCOME BY TYPE OF PRODUCT (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Life insurance | |||||||||||
Individual | |||||||||||
Group insurance | |||||||||||
Non-Life insurance | |||||||||||
Home insurance | |||||||||||
Other non-life insurance products | |||||||||||
| Total | |||||||||||
44.Administration costs
44.1Personnel expense
The breakdown of the balance under this heading in the consolidated income statements is as follows:
PERSONNEL EXPENSE (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
Wages and salaries | ||||||||||||||
Social security costs | ||||||||||||||
Defined contribution plan expense | 25 | |||||||||||||
Defined benefit plan expense | 25 | |||||||||||||
Other personnel expense | ||||||||||||||
| Total | ||||||||||||||
44.1.1 Share-based employee remuneration
The amounts recognized under the heading “Administration costs - Personnel expense - Other personnel expense” in the consolidated income statements for the year ended December 31, 2025, 2024 and 2023, corresponding to the remuneration plans based on equity instruments in each year, amounted to €25 million, €23 million and €24 million, respectively. These amounts have been recognized with a corresponding entry under the heading “Shareholders’ funds - Other equity” in the consolidated balance sheets, net of tax effect.
The characteristics of the Group's remuneration plans based on equity instruments are described below.
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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.
In 2025, 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.
Thus, according to the applicable remuneration policies, 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.
–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 the date of delivery. The foregoing shall not apply to those shares that are sold, where appropriate, in order to meet the payment of tax obligations accruing on the 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.
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–The cash amounts of the Deferred Portion of the Annual Variable Remuneration that ultimately vest will be updated by applying the consumer price index (hereinafter "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 the 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 21, 2025 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 11, 2025.
The delivery of shares in 2025 to the members of the Identified Staff is derived from the settlement of the Annual Variable Remuneration for 2024 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.
According to the remuneration policy applicable in 2024, during 2025 a total amount of 2,383,411 BBVA shares or instruments linked to BBVA shares, corresponding, mostly, to the Upfront Portion of 2024 Annual Variable Remuneration of the Identified Staff, which includes executive directors and other members of BBVA's Senior Management, as well as to other variable components of remuneration, were delivered.
Additionally, according to the remuneration policy applicable in 2019, during 2025 a total amount of 220,803 BBVA shares, corresponding mostly to the third and last payment of the Deferred Portion of 2019 Annual Variable Remuneration of the Identified Staff, which includes executive directors and other members of BBVA's Senior Management, as well as to other variable components of remuneration, were delivered.
Likewise, according to the remuneration policy applicable in 2020, during 2025 a total amount of 14,340 BBVA shares were delivered, corresponding to other variable components of remuneration. In 2020, the executive directors and other members of BBVA's Senior Management, as a gesture of responsibility and commitment in response to the exceptional circumstances arising from the COVID-19 crisis, waived their entire 2020 Annual Variable Remuneration.
In accordance with the remuneration policy applicable in 2021, during 2025 a total of 744,077 BBVA shares were delivered, the majority corresponding to the third payment of the Deferred Portion of 2021 Annual Variable Remuneration of the Identified Staff, which includes executive directors and other members of BBVA's Senior Management, as well as to other variable components of remuneration.
According to the remuneration policy applicable in 2022, during 2025 a total amount of 728,081 BBVA shares were delivered, corresponding, mainly, to the second payment of the Deferred Portion of 2022 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.
Finally, In accordance with the remuneration policy applicable in 2023, during 2025 a total of 577,686 BBVA shares were delivered, the majority corresponding to the first payment of the Deferred Portion of 2023 Annual Variable Remuneration of the Identified Staff, which includes executive directors and other members of BBVA's Senior Management, as well as to other variable components of remuneration.
F-203
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, 2025, is included in Note 54.
Lastly, in line with specific regulation applicable in Brazil and Portugal, BBVA Brazil Banco de Investimento and BBVA IFIC have identified (on an individual basis, respectively) the staff in these countries whose annual variable remuneration should be subject to a specific settlement and payment scheme established in their corresponding remuneration policies, more specifically:
–A percentage of the annual variable remuneration is subject to a three-year deferral that shall be paid yearly over the mentioned period.
–50% of the annual variable remuneration, both the upfront portion and deferred portion, shall be established in BBVA shares.
–In BBVA Brazil Banco de Investimento, both the cash amounts and share amounts of the deferred portion may be subject to update adjustments which are payable in cash.
–In BBVA IFIC the deferred portion of the annual variable remuneration may be reduced, but never increased, depending on the result of multi-year performance indicators. The cash amounts of the deferred portion that are finally paid will be subject to updating by applying the CPI measured as a year-on-year change in prices.
According to this remuneration scheme, during financial year 2025 a total of 7,376 BBVA shares corresponding to the upfront portion of 2024 annual variable remuneration were delivered to the staff of BBVA Brazil Banco de Investimento.
Additionally, during 2025 a total of 1,463 BBVA shares corresponding to the first third of the deferred portion of 2023 annual variable remuneration were delivered as well as a total of €1,053 as adjustments for updates, a total of 1,832 BBVA shares corresponding to the second third of the deferred portion of 2022 annual variable remuneration and €2,230 as adjustments for updates, and a total of 1,624 BBVA shares corresponding to the last third of the deferred portion of 2021 annual variable remuneration and €2,579 as adjustments for updates.
With regard to the BBVA IFIC group, it should be noted that the exception provided for in the remuneration policy for said year corresponding to payment in shares has been applied to the annual variable remuneration for the year 2024 of some members of this group, in line with the provisions of the regulations in force. For this reason in 2025 just 2,659 BBVA shares have been delivered to BBVA IFIC identified members corresponding to 2024 variable remuneration.
Additionally, during 2025 a total of 326 BBVA shares corresponding to the first third of the deferred portion of 2023 annual variable remuneration and a total of 3,218 BBVA shares corresponding to the last third of the deferred portion of 2021 annual variable remuneration were delivered to this group.
44.2Other administrative expense
The breakdown of the balance under this heading in the consolidated income statements is as follows:
OTHER ADMINISTRATIVE EXPENSE. BREAKDOWN BY MAIN CONCEPTS (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Technology and systems | |||||||||||
Communications | |||||||||||
Advertising | |||||||||||
Property, fixtures and materials | |||||||||||
Taxes other than income tax ⁽¹⁾ | |||||||||||
Surveillance and cash courier services | |||||||||||
Other expense | |||||||||||
| Total | |||||||||||
(1) The year-on-year variation is mainly explained by the recognition of a lower expense corresponding to the value added tax in BBVA, S.A., during the first half of 2025 as a result of the upward re-estimation of its pro-rata portion applied both to previous years and to financial year 2025 (see Note 19).
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45.Depreciation and amortization
The breakdown of the balance under this heading in the consolidated income statements for the years ended December 31, 2025, 2024 and 2023 is as follows:
DEPRECIATION AND AMORTIZATION (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
Tangible assets | 17 | |||||||||||||
For own use | ||||||||||||||
Right-of-use assets | ||||||||||||||
Investment properties and other | ||||||||||||||
Intangible assets | 18.2 | |||||||||||||
| Total | ||||||||||||||
46.Provisions or reversal of provisions
For the years ended December 31, 2025, 2024 and 2023, the net provisions recognized in this income statement line item were as follows:
PROVISIONS OR REVERSAL OF PROVISIONS (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
Pensions and other post-employment defined benefit obligations | 23 | |||||||||||||
Commitments and guarantees given | ( | |||||||||||||
Pending legal issues and tax litigation | ||||||||||||||
Other provisions | ||||||||||||||
| Total | ||||||||||||||
47.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 consolidated 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 | 2025 | 2024 | 2023 | |||||||||||
Financial assets at fair value through other comprehensive income - Debt securities | ( | |||||||||||||
Financial assets at amortized cost | ||||||||||||||
Of which: recovery of written-off assets by cash collection | 7.2.5 | ( | ( | ( | ||||||||||
| Total | ||||||||||||||
F-205
48.Impairment or reversal of impairment of investments in joint ventures and associates
The heading “Impairment or reversal of the impairment of investments in joint ventures or associates" included a net reversal of impairment of €32 million in the year ended December 31, 2025. This heading included a net impairment of €63 million for the year ended December 31, 2024, and it included a net reversal of impairment of €42 million for the year ended December 31, 2023 (see Note 16.3).
49.Impairment or reversal of impairment of non-financial assets
The impairment losses on non-financial assets broken down by the nature of those assets in the consolidated income statements are as follows:
IMPAIRMENT OR REVERSAL OF IMPAIRMENT ON NON-FINANCIAL ASSETS (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
Tangible assets | 17 | ( | ( | |||||||||||
Intangible assets | ||||||||||||||
Others | ||||||||||||||
| Total | ( | |||||||||||||
50.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 consolidated income statements are as follows:
GAINS (LOSSES) FROM NON-CURRENT ASSETS AND DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE NOT QUALIFYING AS DISCONTINUED OPERATIONS (MILLIONS OF EUROS) | ||||||||||||||
Notes | 2025 | 2024 | 2023 | |||||||||||
Gains on sale of real estate | ||||||||||||||
Impairment of non-current assets held for sale | 21 | ( | ( | ( | ||||||||||
Gains (losses) on sale of investments classified as non-current assets held for sale | ||||||||||||||
Gains on sale of equity instruments classified as non-current assets held for sale | ||||||||||||||
| Total | ( | |||||||||||||
F-206
51.Consolidated statements of cash flows
The variation between 2025, 2024 and 2023 of the financial liabilities from financing activities is the following:
LIABILITIES FROM FINANCING ACTIVITIES (MILLIONS OF EUROS) | ||||||||||||||||||||
Liabilities at amortized cost: Debt certificates | Of which: Issuances of subordinated liabilities (1) | |||||||||||||||||||
2025 | 2024 | 2023 | 2025 | 2024 | 2023 | |||||||||||||||
| Balance at the beginning | ||||||||||||||||||||
Cash flows | ||||||||||||||||||||
Non-cash changes | ( | ( | ( | ( | ||||||||||||||||
Acquisition | ||||||||||||||||||||
Disposal | ||||||||||||||||||||
Disposals by companies held for sale | ||||||||||||||||||||
Fair value changes | ||||||||||||||||||||
Foreign exchange movement and others | ( | ( | ( | ( | ||||||||||||||||
| Balance at the end | ||||||||||||||||||||
(1) There were €104 million, €56 million and €35 million of subordinated deposits as of December 31, 2025, 2024 and 2023, respectively (see Note 22.4). In addition, there were coupon payments on subordinated liabilities for €397 million, €388 million and €345 million in 2025, 2024 and 2023, respectively. Appendix VI details the outstanding subordinated debt issued by their nominal value.
52.Accountant fees and services
The details of the fees for the services contracted by entities of the BBVA Group for the year ended December 31, 2025, with their respective auditors and other audit entities are as follows:
FEES FOR AUDITS CONDUCTED AND OTHER RELATED SERVICES (1) (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Audits of the companies audited by firms belonging to the EY worldwide organization and other reports related with the audit (2) | |||||||||||
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 | |||||||||||
Fees for audits conducted by other firms | |||||||||||
(1) Regardless of the billed year.
(2) Including fees pertaining to annual audits and other financial statements (€26.7 million as of December 31, 2025).
In the year ended December 31, 2025, certain entities in the BBVA Group contracted other services (other than audits) as follows:
OTHER SERVICES RENDERED (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Firms belonging to the EY worldwide organization | |||||||||||
F-207
This total of contracted services includes the detail of the services provided by Ernst & Young, S.L. to BBVA, S.A. or its controlled companies at the date of preparation of these consolidated financial statements as follows:
FEES FOR AUDITS CONDUCTED (1) (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Legal audit of BBVA,S.A. or its companies under control | |||||||||||
Other audit services of BBVA, S.A. or its companies under control | |||||||||||
Limited Review of BBVA, S.A. or its companies under control | |||||||||||
Reports related to issuances | |||||||||||
Assurance services and other required by the regulator | |||||||||||
Other | |||||||||||
(1) Services provided by Ernst & Young, S.L. to companies located in Spain, to the branch of BBVA in New York, the branch of BBVA in London and the branch of BBVA in Frankfurt.
Audit fees disclosed in this Note are presented under local purposes and do not correspond to SEC definitions. 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 SEC.
53.Related-party transactions
BBVA and other Group companies, in their capacity as financial institutions, maintain transactions with their related parties within the ordinary course of their businesses. These transactions are of minor significance and are carried out under normal market conditions. As of December 31, 2025, 2024 and 2023, transactions with the following related parties have been identified:
53.1Transactions with significant shareholders
As of December 31, 2025, 2024 and 2023, there were no shareholders with significant influence (see Note 26).
53.2Transactions of BBVA Group entities with joint ventures and associates
The balances of the main captions in the consolidated balance sheets arising from the transactions carried out by the BBVA Group with joint ventures and associates are as follows:
BALANCES ARISING FROM TRANSACTIONS OF BBVA GROUP ENTITIES WITH JOINT VENTURES AND ASSOCIATES (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
| Assets | |||||||||||
Loans and advances to credit institutions | |||||||||||
Loans and advances to customers | |||||||||||
Debt securities | |||||||||||
| Liabilities | |||||||||||
Deposits from credit institutions | |||||||||||
Customer deposits | |||||||||||
| Memorandum accounts | |||||||||||
Financial guarantees given | |||||||||||
Other commitments given | |||||||||||
Loan commitments given | |||||||||||
F-208
The balances of the main captions in the consolidated income statements resulting from transactions with joint ventures and associates are as follows:
BALANCES OF CONSOLIDATED INCOME STATEMENT ARISING FROM TRANSACTIONS OF BBVA GROUP ENTITIES WITH JOINT VENTURES AND ASSOCIATES (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
| Income statement | |||||||||||
Interest and other income | |||||||||||
Interest expense | |||||||||||
Fee and commission income | |||||||||||
Fee and commission expense | |||||||||||
There were no other material effects in the consolidated financial statements arising from dealings with these entities, other than the effects from using the equity method (see Note 2.1), from the insurance policies to cover pension or similar commitments (see Note 25), and from the derivatives transactions arranged by BBVA Group with these entities, associates and joint ventures.
In addition, as part of its normal activity, the BBVA Group has entered into agreements and commitments of various types with shareholders of subsidiaries and associates, which have no material effects on the consolidated financial statements.
53.3Transactions 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) | ||||||||||||||||||||||||||||||||||||||||||||
2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||||||||
Directors | Related parties of Directors | Senior Management (1) | Related parties of Senior Management | Directors | Related parties of Directors | Senior Management (1) | Related parties of Senior Management | Directors | Related parties of Directors | Senior Management (1) | Related parties of Senior Management | |||||||||||||||||||||||||||||||||
Loans and credits | ||||||||||||||||||||||||||||||||||||||||||||
Bank guarantees | ||||||||||||||||||||||||||||||||||||||||||||
(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 54.
F-209
54.Remuneration and other benefits of 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 2025 and 2024 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 | ||||||||||||||||||||||||
2025 | 2024 | |||||||||||||||||||||||||||||||
José Miguel Andrés Torrecillas | ||||||||||||||||||||||||||||||||
Jaime Caruana Lacorte | ||||||||||||||||||||||||||||||||
Enrique Casanueva Nárdiz (3) | ||||||||||||||||||||||||||||||||
Sonia Dulá | ||||||||||||||||||||||||||||||||
Raúl Galamba de Oliveira | ||||||||||||||||||||||||||||||||
Belén Garijo López | ||||||||||||||||||||||||||||||||
Connie Hedegaard Koksbang | ||||||||||||||||||||||||||||||||
Lourdes Máiz Carro | ||||||||||||||||||||||||||||||||
Cristina de Parias Halcón (4) | ||||||||||||||||||||||||||||||||
Ana Peralta Moreno | ||||||||||||||||||||||||||||||||
Ana Revenga Shanklin | ||||||||||||||||||||||||||||||||
Carlos Salazar Lomelín (5) | ||||||||||||||||||||||||||||||||
Jan Verplancke | ||||||||||||||||||||||||||||||||
Total (6) | ||||||||||||||||||||||||||||||||
(1) Includes the amounts corresponding to the positions on the Board of Directors and its various Committees, the composition of which was last modified on April 26, 2024.
(2) Amounts corresponding to the positions of Deputy Chair of the Board of Directors and Lead Director.
(4) Director appointed by the General Shareholders´ Meeting held on March 15, 2024. Remuneration in 2024 corresponding to the term in office in that financial year. In addition, in 2025 and 2024, she received €30 thousand and 7,593 BBVA shares and €56 thousand and 14,697 BBVA shares, respectively, corresponding to the deferred portion of 2018 and 2019 annual variable remuneration accrued in her former condition of BBVA’s member of Senior Management, including the update of its cash portion. Likewise, in 2024, she received €72 thousand, as per diems for her attendance to the meetings of the management body of BBVA México, S.A. de C.V. and Grupo Financiero BBVA México, S.A. de C.V; positions from which she resigned in 2024.
(5) In addition, in the financial years 2025 and 2024, the director Carlos Salazar Lomelín has received €171 thousand and €113 thousand, respectively, as per diems for his attendance to the meetings of the management body of BBVA México, S.A. de C.V. and Grupo Financiero BBVA México, S.A. de C.V. and of the strategy forum of BBVA México, S.A. de C.V.
(6) The total amount reported for the 2024 financial year does not include amounts corresponding to the positions on the Board and its various Committees received by José Maldonado Ramos and Juan Pi Llorens, who ceased to hold office on March 15, 2024, and whose remuneration for those items in 2024 amounted to €85 thousand and €81 thousand, respectively.
Likewise, during financial years 2025 and 2024, €103 thousand and €112 thousand were paid out, respectively, in healthcare and casualty insurance premiums for non-executive directors.
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 General Shareholders’ Meeting held on March 18, 2006 and extended successively by resolutions of the General Shareholders’ Meetings held on 2011, 2016, 2021 and 2023.
This system is based on the annual allocation to non-executive directors of a number of theoretical shares of BBVA equivalent to 20% of the total annual fixed allowance in cash received by each director in the previous financial year, calculated according to the average closing price of the BBVA share during 60 trading sessions prior to the date of the Annual General Shareholders’ Meeting approving the 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 directorship for any reason other than serious breach of their duties.
During financial years 2025 and 2024, the following theoretical shares derived from this system were allocated:
F-210
2025 | 2024 | ||||||||||||||||
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 | |||||||||||||||||
Jaime Caruana Lacorte | |||||||||||||||||
Enrique Casanueva Nárdiz (2) | |||||||||||||||||
Sonia Dulá | |||||||||||||||||
Raúl Galamba de Oliveira | |||||||||||||||||
Belén Garijo López | |||||||||||||||||
Connie Hedegaard Koksbang | |||||||||||||||||
Lourdes Máiz Carro | |||||||||||||||||
Cristina de Parias Halcón ⁽²⁾ | |||||||||||||||||
Ana Peralta Moreno | |||||||||||||||||
Ana Revenga Shanklin | |||||||||||||||||
Carlos Salazar Lomelín | |||||||||||||||||
Jan Verplancke | |||||||||||||||||
Total (3) | |||||||||||||||||
(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 General Shareholders’ Meetings of March 21, 2025 and March 15, 2024 which were €11.45 and €8.84 per share, respectively.
(2) Directors appointed by the General Shareholders’ Meeting held on March 15, 2024, therefore the allocation of theoretical shares was made for the first time in 2025.
(3) The total number of theoretical shares allocated during the 2024 financial year does not include 7,735 and 8,157 theoretical shares allocated to José Maldonado Ramos and Juan Pi Llorens, respectively, whose terms of office ended on March 15, 2024, and who after leaving office, in application of the system, received a total of 154,609 and 156,699 BBVA shares, respectively, which is equivalent to the total theoretical shares accumulated up to that date by each of them.
Remuneration of executive directors
The remuneration of executive directors for financial years 2025 and 2024 indicated below, individually and by remuneration item, is the result of applying the BBVA Directors’ Remuneration Policies approved by the General Shareholders’ Meeting.
ANNUAL FIXED REMUNERATION (THOUSANDS OF EUROS) | ||||||||
2025 | 2024 | |||||||
Chair | ||||||||
Chief Executive Officer | ||||||||
| Total | ||||||||
In addition to the amounts indicated in the table, during the 2025 and 2024 financial years, the Chair received, each year, the amount of €41 thousand of fixed allowances for vehicle rental and others. Meanwhile, the Chief Executive Officer received, each year, the amount of €654 thousand of fixed remuneration in cash in lieu of pension (equivalent to 30% of his Annual Fixed Remuneration), as he is not entitled to receive a retirement benefit (see section on “Pension commitments with executive directors” in this Note), and the amount of €600 thousand as mobility allowance.
REMUNERATION IN KIND (THOUSANDS OF EUROS) | ||||||||
Likewise, the executive directors received remuneration in kind during the financial years 2025 and 2024, including insurance premiums and others, €132 thousand and €140 thousand, respectively, in the case of the Chair and €128 thousand, in each financial year, in the case of the Chief Executive Officer.
F-211
VARIABLE REMUNERATION | ||||||||
With regard to variable remuneration, the BBVA Directors’ Remuneration Policy approved by the General Shareholders’ Meeting in 2023 establishes a model whereby the Annual Variable Remuneration (“AVR”) of the executive directors comprises two components: a Short-Term Incentive (“STI”) and a Long-Term Incentive (“LTI”). The award of both incentives is contingent upon the achievement by the Group of the minimum profit and capital ratio thresholds approved by the Board of Directors. The sum of the STI and LTI constitutes the AVR for the year of each executive director.
The STI will be awarded once the reference year for measuring the annual indicators used for its calculation has ended. The amount of the STI will be determined based on the results of these indicators, taking into account the targets, scales of achievement and weightings established for each of them, which may range between 0% and 150% of the “Target STI”. The “Target STI” represents the amount of the STI if 100% of the pre-established targets for these indicators are achieved.
Once the aforementioned minimum profit and capital ratio thresholds have been reached, the right to the LTI will accrue, the final amount of which may range between 0% and 150% of the “Target LTI”. The “Target LTI” represents the amount of the LTI if 100% of the pre-established targets for the long-term indicators approved for its calculation are achieved. The final amount of the LTI will be determined once the last year of the measurement period of the long-term indicators has ended, based on their results and taking into account the targets, scales of achievement and weightings established for each of them.
A percentage not exceeding 40% of the AVR will vest and be paid, provided that the relevant 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 five-year period and paid, if conditions are met, at the end of each of the five years of deferral, 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 shall only begin after the end of the measurement period of the long-term indicators’ targets, to the result of which its final amount is subject. Therefore, the LTI is part of the Deferred Portion of the AVR of executive directors.
In accordance with the foregoing, in 2025 the executive directors accrued a Short-Term Incentive amounting to €2,627 thousand in the case of the Chair and €1,965 thousand in the case of the Chief Executive Officer.
In addition, the executive directors accrued the right to a Long-Term Incentive for a maximum theoretical amount of €1,929 thousand in the case of the Chair and €1,443 thousand for the Chief Executive Officer, which is equivalent, in both cases, to 150% of their "Target LTI". Once the measurement period for the long-term indicators established for their calculation has ended (at the end of 2028), their final amount will be determined, which may range between 0% and 150% of the “Target LTI”. Therefore, if 100% of the pre-established targets are met, this incentive will amount to €1,286 thousand in the case of the Chair and €962 thousand in the case of the Chief Executive Officer.
In addition, the remaining rules applicable to the Annual Variable Remuneration of the executive directors set out in the BBVA Directors’ Remuneration Policy will apply to the Annual Variable Remuneration for financial year 2025, which include: (i) a retention period of one year following 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 finally vested Deferred Portion in cash in accordance with the CPI; (iv) potential application of ex post risk adjustments; (v) malus and clawback arrangements throughout the whole periods of deferral and retention of the shares or instruments; and (vi) the limitation of variable remuneration to a maximum amount of 200% of the fixed component of total remuneration, in accordance with the resolution approved by the General Shareholders’ Meeting held in 2025.
Taking into account the above, the Upfront Portion of the AVR for the financial years 2025 and 2024 of the executive directors, which is due for payment once each of said financial years has ended, in equal parts in cash and BBVA shares, is indicated below.
F-212
ANNUAL VARIABLE REMUNERATION (AVR) | |||||||||||||||||
2025 (1) | 2024 (2) | ||||||||||||||||
In cash (thousands of Euros) | In shares | In cash (thousands of Euros) | In shares | ||||||||||||||
Chair | |||||||||||||||||
Chief Executive Officer | |||||||||||||||||
| Total | |||||||||||||||||
(1) Upfront Portion (36%) of the Annual Variable Remuneration, which represents the first payment of the Short-Term Incentive for financial year 2025 and will be paid during the first quarter of financial year 2026, in equal parts in cash and BBVA shares. The remaining amount of the 2025 Annual Variable Remuneration (which includes the Long-Term Incentive of the 2025 financial year) will be deferred over a 5-year period (40% in cash and 60% in shares and/or instruments linked to shares).
The final amount of the Deferred AVR will depend on the result of the long-term indicators to be used to calculate the Long-Term Incentive of the 2025 financial year. Likewise, and as an ex post risk adjustment mechanism, the Deferred AVR may be reduced if the capital and liquidity thresholds established to guarantee that payment occurs only if it is sustainable, in accordance with the Bank’s payment capacity, are not reached.
(2) Upfront Portion (37%) of the Annual Variable Remuneration, which represents the first payment of the Short-Term Incentive for financial year 2024 and which was paid in 2025, in equal parts in cash and BBVA shares. The remaining amount of the 2024 Annual Variable Remuneration (which includes the Long-Term Incentive for the 2024 financial year) was deferred over a 5-year period (40% in cash and 60% in BBVA shares and/or instruments linked to shares).
The final amount of the Deferred AVR will depend on the result of the long-term indicators to be used to calculate the Long-Term Incentive of the 2024 financial year. Likewise, and as an ex post risk adjustment mechanism, the Deferred AVR may be reduced if the capital and liquidity thresholds established to guarantee that payment occurs only if it is sustainable, in accordance with the Bank’s payment capacity, are not reached.
DEFERRED ANNUAL VARIABLE REMUNERATION (AVR) FROM PREVIOUS FINANCIAL YEARS | |||||||||||||||||||||||||||||
2025 (1) | 2024 (2) | ||||||||||||||||||||||||||||
Deferred AVR | In cash (thousands of Euros) | In shares | In stock-options (3) | In cash (thousands of Euros) | In shares | In stock-options (3) | |||||||||||||||||||||||
Chair | 2024 | ||||||||||||||||||||||||||||
2023 | |||||||||||||||||||||||||||||
2022 | |||||||||||||||||||||||||||||
2021 | |||||||||||||||||||||||||||||
2020 | |||||||||||||||||||||||||||||
2019 | |||||||||||||||||||||||||||||
| Subtotal | |||||||||||||||||||||||||||||
Chief Executive Officer | 2024 | ||||||||||||||||||||||||||||
2023 | |||||||||||||||||||||||||||||
2022 | |||||||||||||||||||||||||||||
2021 | |||||||||||||||||||||||||||||
2020 | |||||||||||||||||||||||||||||
2019 | |||||||||||||||||||||||||||||
| Subtotal | |||||||||||||||||||||||||||||
| Total | |||||||||||||||||||||||||||||
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(1) Deferred remuneration payable after the 2025 year-end, including the update of its cash portion. Payment to the Chair and Chief Executive Officer will take place in 2026 in accordance with the vesting and payment rules set out in the remuneration policies applicable for each financial year:
•2024 Deferred AVR: the first payment of the Deferred STI (17.9% of the Deferred Portion) is due to the executive directors. Thereafter, the second payment of the Deferred STI (17.9% of the Deferred Portion) and 2024 LTI (64.2% of the Deferred Portion), will be deferred for both executive directors. The 2024 LTI will depend on the result of the long-term indicators approved for its calculation once its measurement period has elapsed (at the end of 2027), which may range between an achievement of 0% to 150%. If the relevant conditions are met, the second payment of the Deferred STI will be made in 2027 and the three payments of the 2024 LTI will be made in 2028, 2029 and 2030.
•2023 Deferred AVR: the second payment of the Deferred STI (17.9% of the Deferred Portion) is due to the executive directors. Thereafter, 2023 LTI (64.2% of the Deferred Portion), will be deferred for both executive directors. The 2023 LTI will depend on the result of the long-term indicators approved for its calculation once its measurement period has elapsed (at the end of 2026), which may range between an achievement of 0% to 150%. If the relevant conditions are met, the three payments of the 2023 LTI will be made in 2027, 2028 and 2029.
•2022 Deferred AVR: the third payment (20% of the Deferred Portion) is due to executive directors, after having verified that no reduction had to be made according to the result of the multi-year performance indicators approved in 2022 by the Board of Directors. Thereafter, 40% of the 2022 Deferred AVR will be deferred for both executive directors, which, if the relevant conditions are met, will be paid in 2027 and 2028.
•2021 Deferred AVR: the fourth payment (20% of the Deferred Portion) is due to executive directors. Thereafter, 20% of the 2021 Deferred AVR will be deferred for both executive directors, which, if the relevant conditions are met, will be paid in 2027.
•2020 Deferred AVR: given the exceptional circumstances arising from the COVID-19 crisis, executive directors voluntarily waived the whole of their 2020 AVR.
(2) Deferred remuneration which was payable after the 2024 year-end, including the update of its cash portion. Its payment to the Chair and Chief Executive Officer took place in 2025, in accordance with the vesting and payment rules established in the remuneration policies applicable in each financial year:
•2023 Deferred AVR: in 2025, the first payment of the Deferred STI (17.9% of the Deferred Portion) was made to executive directors.
•2022 Deferred AVR: in 2025, the second payment (20% of the Deferred Portion) was made to executive directors.
•2021 Deferred AVR: in 2025, the third payment (20% of the Deferred Portion) was made to executive directors.
•2020 Deferred AVR: given the exceptional circumstances arising from the COVID-19 crisis, executive directors voluntarily waived the whole of their 2020 AVR.
•2019 Deferred AVR: in 2025, the third and final payment (20% of the Deferred Portion) was made to executive directors. Following this, the payment of the 2019 Deferred AVR to both executive directors was completed.
(3) The delivery of the stock options awarded as part of the 2023 Deferred AVR is part of the second payment of the 2023 Deferred STI, which is due after the 2025 year-end (in 2026). The delivery of the stock options awarded as part of the 2024 Deferred AVR is part of the second payment of the Deferred STI, which, if the relevant conditions are met, will be due after the 2026 year-end (in 2027).
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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 eligible 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 for the Chair, as set out 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.
A portion of 15% of this annual contribution will be based on variable components and considered “discretionary pension benefits”. It will, therefore, be subject to the conditions regarding delivery in shares, withholding, reduction 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 above, 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 in favor of the Chair to cover the contingencies of death and disability, the Bank will pay the corresponding annual insurance premiums in order to top up this coverage.
In accordance with the foregoing, in the financial year 2025, an amount of €456 thousand was recorded, comprising the agreed annual contribution to cover the retirement contingency, which is €439 thousand, and a further amount of €17 thousand relating to the adjustment of the “discretionary pension benefits” for the financial year 2024, which were declared at the end of that year and which had to be included in the accumulated fund in 2025. Likewise, an amount of €236 thousand was paid in insurance premiums for the death and disability contingencies.
As of December 31, 2025, the total accumulated fund to meet the retirement commitments with the Chair amounted to €29,821 thousand.
Of the annual contribution for the retirement contingency corresponding to the financial year 2025, 15% (€66 thousand) was recorded in that 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 2025 financial year, being determined in an amount of €76 thousand, which represents an upward adjustment of €10 thousand. These “discretionary pension benefits” will be included in the accumulated fund in the 2026 financial year and will be subject to the conditions established for them in the BBVA Directors’ Remuneration Policy.
With regard to the Chief Executive Officer, in accordance with the provisions of the BBVA Directors’ Remuneration Policy 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 2025 financial year, the Bank paid the Chief Executive Officer the amount of €654 thousand as “cash in lieu of pension”, as described in the “Remuneration of executive directors” section of this Note.
For its part, the Bank has undertaken commitments to cover the death and disability contingencies with the Chief Executive Officer. For this purpose, in 2025, €220 thousand was paid corresponding to annual insurance premiums.
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PENSION SYSTEMS (THOUSANDS OF EUROS) | |||||||||||||||||||||||
Contributions (1) | Accumulated funds | ||||||||||||||||||||||
Retirement | Death and disability | ||||||||||||||||||||||
2025 | 2024 | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||
Chair | |||||||||||||||||||||||
Chief Executive Officer | |||||||||||||||||||||||
| Total | |||||||||||||||||||||||
Payments for termination of the contractual relationship
In accordance with the BBVA Directors’ Remuneration Policy, the Bank has no commitments to make severance payments to executive directors.
Remuneration of Senior Management
The remuneration of Senior Management, excluding executive directors, for financial years 2025 and 2024 (16 members with this position as of December 31, 2025 and 2024) as indicated below, broken down by remuneration item, are the result of applying the BBVA Group’s General Remuneration Policy approved by the Board of Directors.
FIXED REMUNERATION (THOUSANDS OF EUROS) | ||||||||
2025 | 2024 | |||||||
Senior Management Total | ||||||||
In addition to the amounts indicated in the table, during the 2025 and 2024 financial years, the members of Senior Management collectively received fixed allowances for vehicle rental and others totaling €257 thousands and €347 thousands, respectively.
REMUNERATION IN KIND (THOUSANDS OF EUROS) | ||||||||
During the 2025 and 2024 financial years, remuneration in kind, including insurance premiums and others, totaling €640 thousand and €603 thousand, respectively, was collectively paid to members of Senior Management.
VARIABLE REMUNERATION | ||||||||
With regard to variable remuneration, the BBVA Group’s General Remuneration Policy establishes a model whereby the Annual Variable Remuneration (“AVR”) for members of Senior Management, like that of executive directors, comprises 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 Senior Management.
Under this model, and in the same terms set out above for the executive directors, in 2025 financial year, all members of Senior Management accrued a Short-Term Incentive for a total combined amount of €7,299 thousand.
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In addition, all members of Senior Management accrued the right to a Long-Term Incentive for a maximum theoretical amount of €5,149 thousand, which is equivalent to the sum of 150% of the “Target LTI” of each beneficiary. The final amount of the LTI of each beneficiary will be determined at the end of the measurement period of the long-term indicators established for its calculation (at the end of 2028). This final amount may range between 0% and 150% of the “Target LTI”. Therefore, if 100% of the pre-established targets are achieved, it will amount to a total of €3,433 thousand.
Moreover, the remaining rules applicable to the Annual Variable Remuneration of the members of the Senior Management established in the BBVA Group’s General Remuneration Policy will apply to the Annual Variable Remuneration for financial year 2025, which include: (i) a retention period of one year following delivery of the BBVA shares or instruments linked to BBVA shares; (ii) the prohibition of hedging strategies or insurance that may undermine the effects of alignment with prudent risk management; (iii) update of the finally vested Deferred Portion in cash in accordance with the CPI; (iv) potential application of ex post risk adjustments; (v) malus and clawback arrangements throughout the whole periods of deferral and retention of the shares or instruments; and (vi) the limitation of variable remuneration to a maximum amount of 200% of the fixed component of total remuneration, in accordance with the resolution approved by the General Shareholders’ Meeting in 2025.
Taking into account the above, the total sum of the Upfront Portion of the AVR for financial years 2025 and 2024 of the members of Senior Management, due for payment once each of said financial years has ended, in equal parts in cash and BBVA shares, is indicated below.
ANNUAL VARIABLE REMUNERATION (AVR) | |||||||||||||||||
2025 (1) | 2024 (2) | ||||||||||||||||
In cash (thousands of Euros) | In shares | In cash (thousands of Euros) | In shares | ||||||||||||||
Senior Management Total | |||||||||||||||||
(1) Upfront Portion of the Annual Variable Remuneration, which represents the first payment of the 2025 Short-Term Incentive and will be paid during the first quarter of 2026 financial year, in equal parts in cash and BBVA shares. The remaining amount of the 2025 Annual Variable Remuneration (which includes the 2025 Long-Term Incentive) will be deferred over a 5-year period (40% in cash and 60% in shares and/or instruments linked to shares).
The final amount of the Deferred AVR will depend on the result of the long-term indicators to be used to calculate the 2025 Long-Term Incentive. Likewise, and as an ex post risk adjustment mechanism, the Deferred AVR may be reduced if the capital and liquidity thresholds established to guarantee that payment occurs only if it is sustainable, in accordance with the Bank’s payment capacity, are not reached.
(2) Upfront Portion of the Annual Variable Remuneration, which represents the first payment of the Short-Term Incentive for financial year 2024 and which was paid in 2025, in equal parts in cash and BBVA shares. The remaining amount of the 2024 Annual Variable Remuneration (which includes the 2024 Long-Term Incentive) was deferred over a 5-year period (40% in cash and 60% in shares and/or instruments linked to shares). The final amount of the Deferred AVR will depend on the result of the long-term indicators to be used to calculate the 2024 Long-Term Incentive. Likewise, and as an ex post risk adjustment mechanism, the Deferred AVR may be reduced if the capital and liquidity thresholds established to guarantee that payment occurs only if it is sustainable, in accordance with the Bank’s payment capacity, are not reached.
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DEFERRED ANNUAL VARIABLE REMUNERATION (AVR) FROM PREVIOUS FINANCIAL YEARS | |||||||||||||||||||||||||||||
2025 (1) | 2024 (2) | ||||||||||||||||||||||||||||
Deferred AVR | In cash (thousands of Euros) | In shares | In stock-options (3) | In cash (thousands of Euros) | In shares | In stock-options (3) | |||||||||||||||||||||||
Senior Management Total | 2024 | ||||||||||||||||||||||||||||
2023 | |||||||||||||||||||||||||||||
2022 | |||||||||||||||||||||||||||||
2021 | |||||||||||||||||||||||||||||
2020 | |||||||||||||||||||||||||||||
2019 | |||||||||||||||||||||||||||||
| Total | |||||||||||||||||||||||||||||
(1) Deferred remuneration payable after 2025 year-end, including the update of its cash portion. Payment thereof to members of Senior Management who are beneficiaries will take place in 2026 in accordance with the remuneration policies applicable in each financial year and the vesting and payment rules set forth therein applicable to each member of Senior Management, based on when they became such a member:
•2024 Deferred AVR: the first payment of the Deferred STI is due.
•2023 Deferred AVR: the second payment of the Deferred STI is due.
•2022 Deferred AVR: the third payment of the Deferred STI is due, after having verified that no reduction had to be made according to the result of the multi-year performance indicators approved in 2022 by the Board of Directors.
•2021 Deferred AVR: the fourth payment is due.
•2020 Deferred AVR: given the exceptional circumstances arising from the COVID-19 crisis, all members of Senior Management voluntarily waived the whole of their 2020 AVR. Without prejudice to the foregoing, the third and final payment of the deferred portion of a success bonus on the sale of BBVA USA is due to one member of Senior Management, who was an executive of BBVA USA at that time.
(2) Deferred remuneration which was payable after the 2024 year-end, including the update of its cash portion. Payment thereof to members of Senior Management who were beneficiaries took place in 2025 in accordance with the vesting and payment rules set forth in the remuneration policies applicable in each financial year:
•2023 Deferred AVR: in 2025, the first payment of the Deferred STI was made.
•2022 Deferred AVR: in 2025, the second payment was made.
•2021 Deferred AVR: in 2025, the third payment was made.
•2020 Deferred AVR: given the exceptional circumstances arising from the COVID-19 crisis, all members of Senior Management voluntarily waived the whole of their 2020 AVR. Without prejudice to the foregoing, the third and final payment of the deferred portion of a success bonus on the sale of BBVA USA is due to one member of Senior Management — an executive of BBVA USA at that time.
•2019 Deferred AVR: in 2025, the third and final payment was made.
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Pension commitments with members of Senior Management
In order to meet the pension commitments made to members of Senior Management (16 members as of December 31, 2025, excluding the executive directors), a total aggregate amount of €4,411 thousand was recognized in financial year 2025 for the contingency of retirement. This amount is equivalent to the annual contribution agreed to cover the contingency of retirement, plus a further amount of €139 thousand pertaining to the adjustment of the “discretionary pension benefits” for financial year 2024, which had to be included in the accumulated fund in 2025. In addition, an aggregate total amount of €1,115 thousand was paid in insurance premiums to cover the contingencies of death and disability.
As of December 31, 2025, the total accumulated fund to meet the retirement commitments with members of Senior Management amounted to €47,281 thousand.
As in the case of executive directors, 15% of the annual contributions agreed to cover the contingency of retirement for members of Senior Management, will be based on variable components and will be considered “discretionary pension benefits”, and will therefore be subject to the conditions regarding delivery in shares, withholding, reduction and recovery established in the applicable regulations, as well as to any other conditions concerning variable remuneration that 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 recognized in the 2025 financial year, a total amount of €625 thousand was recognized in 2025 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 Annual Variable Remuneration of the members of Senior Management for the 2025 financial year. As a result, the “discretionary pension benefits” for the year, corresponding to all members of Senior Management, have been calculated at a total combined amount of €747 thousand, which represents an upward adjustment of €122 thousand. These “discretionary pension benefits” will be included in the accumulated fund in the 2026 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 regard.
PENSION SYSTEMS (THOUSANDS OF EUROS) | |||||||||||||||||||||||
Contributions (1) | Accumulated funds | ||||||||||||||||||||||
Retirement | Death and disability | ||||||||||||||||||||||
2025 | 2024 | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||
Senior Management Total | |||||||||||||||||||||||
Payments for termination of the contractual relationship
Regarding Senior Management, excluding the executive directors, in 2025 the contractual relationship of a member of Senior Management was terminated, giving rise to the right of a severance payment of €1,908 thousand. In this regard, the Senior Management contracts include, among others, the right to receive the severance payment that legally corresponds, provided that termination of the contractual relationship is not pursuant to the member's own will, retirement, disability or serious dereliction of duties, the amount of which will be calculated in accordance with the provisions in the applicable labor regulations. Likewise, the contract establishes a post-contractual non-compete agreement for a one-year term duration, which shall be compensated with an amount of €885 thousand which shall be paid on a monthly basis during the non-competition period.
In 2024 there were no terminations of contractual relationships of members of Senior Management.
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55.Other information
55.1Environmental impact
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, 2025, 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.
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56.Subsequent events
On January 15, 2026, once the prior consent from the Regulator had been obtained, the Bank redeemed the issuance of green contingently convertible preferred securities carried out on July 15, 2020, for an amount of €1 billion, on the First Reset Date of said issuance (see Note 22.4).
On February 5, 2026, BBVA announced by means of an inside information notice filing with the CNMV that a cash distribution in the amount of €0.60 gross (€0.4860 net of withholding tax) per each of the outstanding shares entitled to receive said distribution, to be paid presumably in April 2026 as the final dividend for the year 2025, was planned to be proposed to the corresponding governing bodies for consideration as ordinary remuneration to shareholders for 2025 (see Note 4).
From January 1, 2026 to the date of preparation of these Consolidated Financial Statements, no subsequent events not mentioned in these Consolidated Financial Statements have taken place that could significantly affect the Group’s earnings or its equity position.
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Appendices
F-222
APPENDIX I. Additional information on subsidiaries and structured entities composing the BBVA Group as of December 31, 2025
% share of participation (1) | Millions of Euros (2) | |||||||||||||||||||||||||
Affiliate entity data | ||||||||||||||||||||||||||
Company | Location | Activity | Direct | Indirect | Total | Net carrying amount | Equity excluding profit (loss) 31.12.2025 | Profit (loss) 31.12.2025 | ||||||||||||||||||
ADELANTE CLASSE DE INVESTIMENTO MULTIMERCADO CREDITO PRIVADO IE - RESP LIMITADA | BRAZIL | OTHER INVESTMENT COMPANIES | 100.00 | — | 100.00 | 4 | 4 | — | ||||||||||||||||||
ADQUIRA MEXICO SA DE CV | MEXICO | SERVICES | — | 100.00 | 100.00 | 10 | 7 | 3 | ||||||||||||||||||
ALCALA 120 PROMOC. Y GEST.IMMOB. S.L.(SOCIEDAD UNIPERSINAL) | SPAIN | REAL ESTATE | — | 100.00 | 100.00 | 19 | 19 | — | ||||||||||||||||||
ANIDA GRUPO INMOBILIARIO SL | SPAIN | INVESTMENT COMPANY | 100.00 | — | 100.00 | 661 | 668 | (2) | ||||||||||||||||||
ANIDA INMOBILIARIA, S.A. DE C.V. | MEXICO | INVESTMENT COMPANY | — | 100.00 | 100.00 | 11 | 11 | 1 | ||||||||||||||||||
ANIDA OPERACIONES SINGULARES, S.A.(SOCIEDAD UNIPERSONAL) | SPAIN | REAL ESTATE | — | 100.00 | 100.00 | 605 | 608 | (3) | ||||||||||||||||||
ANIDA PROYECTOS INMOBILIARIOS, S.A. DE C.V. | MEXICO | REAL ESTATE | — | 100.00 | 100.00 | 8 | 9 | — | ||||||||||||||||||
ANIDAPORT INVESTIMENTOS IMOBILIARIOS, UNIPESSOAL, LTDA | PORTUGAL | REAL ESTATE | — | 100.00 | 100.00 | 20 | 16 | 3 | ||||||||||||||||||
ANTHEMIS BBVA VENTURE PARTNERSHIP LLP | UNITED KINGDOM | INVESTMENT COMPANY | — | 100.00 | 100.00 | 11 | 13 | (1) | ||||||||||||||||||
ARRAHONA NEXUS, S.L. (SOCIEDAD UNIPERSONAL) | SPAIN | REAL ESTATE | — | 100.00 | 100.00 | 56 | 62 | — | ||||||||||||||||||
ARRELS CT FINSOL, S.A. (SOCIEDAD UNIPERSONAL) | SPAIN | REAL ESTATE | — | 100.00 | 100.00 | 56 | 72 | — | ||||||||||||||||||
ARRELS CT PROMOU SA (SOCIEDAD UNIPERSONAL) | SPAIN | REAL ESTATE | — | 100.00 | 100.00 | 14 | 27 | — | ||||||||||||||||||
BANCO BBVA ARGENTINA S.A. | ARGENTINA | BANKING | 40.01 | 26.54 | 66.55 | 158 | 1,137 | 497 | ||||||||||||||||||
BANCO BBVA PERÚ SA ⁽³⁾ | PERU | BANKING | — | 47.13 | 47.13 | 1,788 | 3,202 | 594 | ||||||||||||||||||
BANCO BILBAO VIZCAYA ARGENTARIA URUGUAY SA | URUGUAY | BANKING | 100.00 | — | 100.00 | 110 | 308 | 64 | ||||||||||||||||||
BANCO OCCIDENTAL SA | SPAIN | BANKING | 49.43 | 50.57 | 100.00 | 17 | 20 | — | ||||||||||||||||||
BANCO PROVINCIAL OVERSEAS NV | CURAÇAO | BANKING | — | 100.00 | 100.00 | 50 | 43 | 7 | ||||||||||||||||||
BANCO PROVINCIAL SA - BANCO UNIVERSAL | VENEZUELA | BANKING | 1.46 | 53.75 | 55.21 | 40 | 276 | (34) | ||||||||||||||||||
BBV AMERICA SL | SPAIN | INVESTMENT COMPANY | 99.80 | 0.20 | 100.00 | — | 760 | 13 | ||||||||||||||||||
BBVA (SUIZA) SA | SWITZERLAND | BANKING | 100.00 | — | 100.00 | 114 | 159 | 12 | ||||||||||||||||||
BBVA AGENCIA DE SEGUROS COLOMBIA LTDA | COLOMBIA | INSURANCES SERVICES | — | 100.00 | 100.00 | — | — | — | ||||||||||||||||||
BBVA ASSET MANAGEMENT ARGENTINA SAU SOCIEDAD GERENTE DE FONDOS COMUNES DE INVERSIÓN | ARGENTINA | INVESTMENT FUND MANAGEMENT | — | 100.00 | 100.00 | 49 | 18 | 31 | ||||||||||||||||||
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 | 45 | 13 | 32 | ||||||||||||||||||
BBVA ASSET MANAGEMENT SA SAF | PERU | INVESTMENT FUND MANAGEMENT | — | 100.00 | 100.00 | 10 | 6 | 5 | ||||||||||||||||||
BBVA ASSET MANAGEMENT SA SGIIC | SPAIN | INVESTMENT FUND MANAGEMENT | 100.00 | — | 100.00 | 36 | (122) | 199 | ||||||||||||||||||
BBVA ASSET MANAGEMENT SA SOCIEDAD FIDUCIARIA (BBVA FIDUCIARIA) | COLOMBIA | INVESTMENT FUND MANAGEMENT | — | 100.00 | 100.00 | 33 | 19 | 14 | ||||||||||||||||||
BBVA BOLSA SOCIEDAD AGENTE DE BOLSA S.A. | PERU | SECURITIES DEALER | — | 100.00 | 100.00 | 4 | 4 | 1 | ||||||||||||||||||
BBVA BRASIL BANCO DE INVESTIMENTO SA | BRAZIL | BANKING | 100.00 | — | 100.00 | 172 | 171 | 1 | ||||||||||||||||||
BBVA BROKER ARGENTINA SA | ARGENTINA | INSURANCES SERVICES | — | 99.96 | 99.96 | — | 2 | 7 | ||||||||||||||||||
BBVA BROKER CORREDURIA DE SEGUROS Y REASEGUROS SA | SPAIN | FINANCIAL SERVICES | 99.94 | 0.06 | 100.00 | — | 4 | 8 | ||||||||||||||||||
BBVA COLOMBIA SA | COLOMBIA | BANKING | 78.12 | 18.22 | 96.34 | 740 | 1,571 | 100 | ||||||||||||||||||
BBVA DISTRIBUIDORA DE SEGUROS S.R.L. | URUGUAY | FINANCIAL SERVICES | — | 100.00 | 100.00 | 7 | 3 | 5 | ||||||||||||||||||
BBVA FUNDOS S.GESTORA FUNDOS PENSOES SA | PORTUGAL | PENSION FUND MANAGEMENT | 100.00 | — | 100.00 | 13 | 11 | 2 | ||||||||||||||||||
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 | 19 | 19 | (12) | ||||||||||||||||||
BBVA GLOBAL WEALTH INSURANCE AGENCY, INC | UNITED STATES | FINANCIAL SERVICES | — | 100.00 | 100.00 | 1 | 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 considering the interim dividends of the year, according to the provisional financial statements of each company, generally as of December 31, 2025. 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, 2025. 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).
F-223
Additional information on subsidiaries and structured entities composing the BBVA Group as of December 31, 2025 (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) 31.12.2025 | Profit (loss) 31.12.2025 | ||||||||||||||||||
BBVA HOLDING CHILE SA | CHILE | INVESTMENT COMPANY | 61.22 | 38.78 | 100.00 | 158 | 288 | 37 | ||||||||||||||||||
BBVA INSTITUIÇAO FINANCEIRA DE CREDITO SA | PORTUGAL | FINANCIAL SERVICES | 49.90 | 50.10 | 100.00 | 39 | 65 | 3 | ||||||||||||||||||
BBVA LEASING MEXICO SA DE CV | MEXICO | FINANCIAL SERVICES | — | 100.00 | 100.00 | 51 | 287 | 31 | ||||||||||||||||||
BBVA MEDIACION OPERADOR DE BANCA-SEGUROS VINCULADO, S.A. | SPAIN | FINANCIAL SERVICES | 99.99 | 0.01 | 100.00 | 11 | (17) | 34 | ||||||||||||||||||
BBVA MEXICO SA INSTITUCION DE BANCA MULTIPLE GRUPO FINANCIERO BBVA MEXICO | MEXICO | BANKING | — | 100.00 | 100.00 | 18,942 | 14,377 | 4,565 | ||||||||||||||||||
BBVA OPERADORA MEXICO SA DE CV | MEXICO | SERVICES | 100.00 | — | 100.00 | 62 | 65 | (2) | ||||||||||||||||||
BBVA PENSIONES MEXICO, S.A. DE C.V., GRUPO FINANCIERO BBVA MEXICO | MEXICO | INSURANCES SERVICES | — | 100.00 | 100.00 | 412 | 322 | 90 | ||||||||||||||||||
BBVA PENSIONES SA ENTIDAD GESTORA DE FONDOS DE PENSIONES | SPAIN | PENSION FUND MANAGEMENT | 100.00 | — | 100.00 | 13 | (21) | 50 | ||||||||||||||||||
BBVA PERU HOLDING SAC | PERU | INVESTMENT COMPANY | 100.00 | — | 100.00 | 151 | 1,518 | 280 | ||||||||||||||||||
BBVA PREVISION AFP SA ADM.DE FONDOS DE PENSIONES | BOLIVIA | PENSION FUND MANAGEMENT | 75.00 | 5.00 | 80.00 | 2 | 4 | — | ||||||||||||||||||
BBVA PROCESSING SERVICES INC. | UNITED STATES | FINANCIAL SERVICES | — | 100.00 | 100.00 | 2 | 2 | — | ||||||||||||||||||
BBVA RE INHOUSE COMPAÑIA DE REASEGUROS, S.E. | SPAIN | INSURANCES SERVICES | 100.00 | — | 100.00 | 63 | 65 | 12 | ||||||||||||||||||
BBVA SECURITIES INC | UNITED STATES | FINANCIAL SERVICES | — | 100.00 | 100.00 | 263 | 226 | 53 | ||||||||||||||||||
BBVA SEGUROS ARGENTINA SA | ARGENTINA | INSURANCES SERVICES | 87.78 | 12.22 | 100.00 | 9 | 26 | 14 | ||||||||||||||||||
BBVA SEGUROS CA | VENEZUELA | INSURANCES SERVICES | — | 100.00 | 100.00 | 6 | 8 | (2) | ||||||||||||||||||
BBVA SEGUROS COLOMBIA SA | COLOMBIA | INSURANCES SERVICES | 94.00 | 6.00 | 100.00 | 10 | 34 | 7 | ||||||||||||||||||
BBVA SEGUROS DE VIDA COLOMBIA SA | COLOMBIA | INSURANCES SERVICES | 94.00 | 6.00 | 100.00 | 14 | 161 | 9 | ||||||||||||||||||
BBVA SEGUROS MÉXICO SA DE CV GRUPO FINANCIERO BBVA MEXICO | MEXICO | INSURANCES SERVICES | — | 100.00 | 100.00 | 998 | 341 | 657 | ||||||||||||||||||
BBVA SEGUROS SA DE SEGUROS Y REASEGUROS | SPAIN | INSURANCES SERVICES | 99.96 | — | 99.96 | 713 | 361 | 285 | ||||||||||||||||||
BBVA SEGUROS SALUD MEXICO SA DE CV GRUPO FRO. BBVA MEXICO. | MEXICO | INSURANCES SERVICES | — | 100.00 | 100.00 | 20 | 28 | (9) | ||||||||||||||||||
BBVA SERVICIOS ADMINISTRATIVOS MEXICO, S.A. DE C.V. | MEXICO | SERVICES | — | 100.00 | 100.00 | 17 | 16 | 1 | ||||||||||||||||||
BBVA SERVICIOS, S.A. | SPAIN | COMMERCIAL | — | 100.00 | 100.00 | — | — | — | ||||||||||||||||||
BBVA SOCIEDAD TITULIZADORA S.A. | PERU | OTHER ISSUANCE COMPANIES | — | 100.00 | 100.00 | 2 | 1 | — | ||||||||||||||||||
BBVA TECHNOLOGY AMERICA SA | MEXICO | SERVICES | 100.00 | — | 100.00 | 240 | 269 | 13 | ||||||||||||||||||
BBVA TECHNOLOGY SLU | SPAIN | SERVICES | 100.00 | — | 100.00 | 44 | 54 | 9 | ||||||||||||||||||
BBVA TRADE, S.A. | SPAIN | INVESTMENT COMPANY | — | 100.00 | 100.00 | 10 | 10 | — | ||||||||||||||||||
BBVA USD INVESTMENTS SA | SPAIN | INVESTMENT COMPANY | 100.00 | — | 100.00 | 2,134 | 2,089 | 33 | ||||||||||||||||||
BBVA VALORES COLOMBIA SA COMISIONISTA DE BOLSA | COLOMBIA | SECURITIES DEALER | — | 100.00 | 100.00 | 18 | 13 | 5 | ||||||||||||||||||
BILBAO VIZCAYA INVESTMENTS SA UNIPERSONAL | SPAIN | INVESTMENT COMPANY | 100.00 | — | 100.00 | 582 | 642 | (16) | ||||||||||||||||||
CARTERA E INVERSIONES SA | SPAIN | INVESTMENT COMPANY | 100.00 | — | 100.00 | 92 | 139 | — | ||||||||||||||||||
CASA DE BOLSA BBVA MEXICO SA DE CV | MEXICO | SECURITIES DEALER | — | 100.00 | 100.00 | 70 | 24 | 45 | ||||||||||||||||||
CATALUNYACAIXA IMMOBILIARIA SA (SOCIEDAD UNIPERSONAL) | SPAIN | REAL ESTATE | 100.00 | — | 100.00 | 158 | 139 | 19 | ||||||||||||||||||
CATALUNYACAIXA SERVEIS SA | SPAIN | SERVICES | 100.00 | — | 100.00 | 2 | 2 | — | ||||||||||||||||||
CIDESSA DOS, S.L. | SPAIN | INVESTMENT COMPANY | — | 100.00 | 100.00 | 2 | 2 | — | ||||||||||||||||||
CIERVANA SL | SPAIN | INVESTMENT COMPANY | 100.00 | — | 100.00 | 53 | 85 | 1 | ||||||||||||||||||
COMERCIALIZADORA CORPORATIVA SAC | PERU | FINANCIAL SERVICES | — | 50.00 | 50.00 | — | — | 1 | ||||||||||||||||||
COMERCIALIZADORA DE SERVICIOS FINANCIEROS, S.A. | COLOMBIA | SERVICES | — | 100.00 | 100.00 | 5 | 5 | — | ||||||||||||||||||
F-224
Additional information on subsidiaries and structured entities composing the BBVA Group as of December 31, 2025 (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) 31.12.2025 | Profit (loss) 31.12.2025 | ||||||||||||||||||
COMPAÑIA CHILENA DE INVERSIONES SL | SPAIN | INVESTMENT COMPANY | 99.97 | 0.03 | 100.00 | 221 | 276 | 6 | ||||||||||||||||||
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 | 6 | 5 | — | ||||||||||||||||||
CONTINENTAL DPR FINANCE COMPANY BV | NETHERLANDS | FINANCIAL SERVICES | — | 100.00 | 100.00 | — | — | — | ||||||||||||||||||
CORPORACION GENERAL FINANCIERA SAU | SPAIN | INVESTMENT COMPANY | 100.00 | — | 100.00 | 510 | 1,006 | 56 | ||||||||||||||||||
CREA MADRID NUEVO NORTE SA | SPAIN | REAL ESTATE | — | 75.54 | 75.54 | 392 | 527 | (8) | ||||||||||||||||||
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 | — | — | — | ||||||||||||||||||
DIGITAL INVESTMENTS SL | SPAIN | HOLDING THAT MANAGES MOSTLY FINANCIAL SUBSIDIARIES | 99.98 | 0.03 | 100.00 | 133 | 83 | (22) | ||||||||||||||||||
ECASA, S.A. | CHILE | FINANCIAL SERVICES | — | 100.00 | 100.00 | 15 | 13 | 1 | ||||||||||||||||||
EMPRENDIMIENTOS DE VALOR S.A. | URUGUAY | FINANCIAL SERVICES | — | 100.00 | 100.00 | 2 | 2 | (1) | ||||||||||||||||||
EUROPEA DE TITULIZACION SA SGFT . | SPAIN | NON-MORTGAGE SECURITIZATION ENTITIES | 88.24 | — | 88.24 | 2 | 20 | 3 | ||||||||||||||||||
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 | — | ||||||||||||||||||
FIAT CREDITO ARGENTINA COMPAÑIA FINANCIERA SA | ARGENTINA | FINANCIAL SERVICES | — | 50.00 | 50.00 | 18 | 36 | — | ||||||||||||||||||
FIDEICOMISO 28991-8 TRADING EN LOS MCADOS FINANCIEROS | MEXICO | FINANCIAL SERVICES | — | 100.00 | 100.00 | 5 | 4 | — | ||||||||||||||||||
FIDEICOMISO F/29764-8 SOCIO LIQUIDADOR DE OPERACIONES FINANCIERAS DERIVADAS | MEXICO | FINANCIAL SERVICES | — | 100.00 | 100.00 | 71 | 59 | 12 | ||||||||||||||||||
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 | — | 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 | — | — | — | ||||||||||||||||||
FOMENTO Y DESARROLLO DE CONJUNTOS RESIDENCIALES S.L. EN LIQUIDACION | SPAIN | IN LIQUIDATION | — | 60.00 | 60.00 | — | — | — | ||||||||||||||||||
FORUM DISTRIBUIDORA DEL PERU SA | PERU | FINANCIAL SERVICES | — | 100.00 | 100.00 | 8 | 8 | — | ||||||||||||||||||
FORUM DISTRIBUIDORA, S.A. | CHILE | FINANCIAL SERVICES | — | 100.00 | 100.00 | 379 | 367 | 10 | ||||||||||||||||||
FORUM SERVICIOS FINANCIEROS, S.A. | CHILE | FINANCIAL SERVICES | — | 100.00 | 100.00 | 238 | 201 | 28 | ||||||||||||||||||
G NETHERLANDS BV | NETHERLANDS | INVESTMENT COMPANY | — | 100.00 | 100.00 | 393 | 315 | — | ||||||||||||||||||
GARANTI BANK SA | ROMANIA | BANKING | — | 100.00 | 100.00 | 246 | 421 | 24 | ||||||||||||||||||
GARANTI BBVA AS | TURKEY | BANKING | 85.97 | — | 85.97 | 7,490 | 6,891 | 2,042 | ||||||||||||||||||
GARANTI BBVA EMEKLILIK AS | TURKEY | INSURANCES SERVICES | — | 84.91 | 84.91 | 169 | 70 | 132 | ||||||||||||||||||
GARANTI BBVA FACTORING AS | TURKEY | FINANCIAL SERVICES | — | 81.84 | 81.84 | 86 | 63 | 42 | ||||||||||||||||||
GARANTI BBVA FILO AS | TURKEY | SERVICES | — | 100.00 | 100.00 | 300 | 226 | 72 | ||||||||||||||||||
GARANTI BBVA FINANSAL TEKNOLOJILER AS | TURKEY | FINANCIAL SERVICES | — | 100.00 | 100.00 | 31 | 43 | — | ||||||||||||||||||
GARANTI BBVA LEASING AS | TURKEY | FINANCIAL SERVICES | — | 100.00 | 100.00 | 474 | 347 | 126 | ||||||||||||||||||
GARANTI BBVA PORTFOY YONETIMI AS | TURKEY | INVESTMENT FUND MANAGEMENT | — | 100.00 | 100.00 | 70 | 22 | 48 | ||||||||||||||||||
GARANTI BBVA YATIRIM AS | TURKEY | FINANCIAL SERVICES | — | 100.00 | 100.00 | 280 | 177 | 104 | ||||||||||||||||||
GARANTI DIVERSIFIED PAYMENT RIGHTS FINANCE COMPANY | CAYMAN ISLANDS | OTHER ISSUANCE COMPANIES | — | 100.00 | 100.00 | — | (10) | 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 considering the interim dividends of the year, according to the provisional financial statements of each company, generally as of December 31, 2025. 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, 2025. 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).
F-225
Additional information on subsidiaries and structured entities composing the BBVA Group as of December 31, 2025 (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) 31.12.2025 | Profit (loss) 31.12.2025 | ||||||||||||||||||
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 | 692 | 393 | — | ||||||||||||||||||
GARANTI KRIPTO VARLIK ALM SATM PLATFORMU ANONIM SIRKETI | TURKEY | FINANCIAL SERVICES | — | 100.00 | 100.00 | 43 | 39 | (8) | ||||||||||||||||||
GARANTI KULTUR AS | TURKEY | SERVICES | — | 100.00 | 100.00 | — | — | — | ||||||||||||||||||
GARANTI ODEME SISTEMLERI AS (GOSAS) | TURKEY | FINANCIAL SERVICES | — | 100.00 | 100.00 | 22 | 11 | 12 | ||||||||||||||||||
GARANTI ODEME VE ELEKTRONIK PARA HIZMETLERI ANONIM SIRKETI | TURKEY | PAYMENT ENTITIES | — | 100.00 | 100.00 | 16 | 20 | (5) | ||||||||||||||||||
GARANTI PORTFOLIO BESINCI SERBEST FON | TURKEY | INVESTMENT COMPANY | — | 83.98 | 83.98 | 74 | 88 | 12 | ||||||||||||||||||
GARANTI YATIRIM ORTAKLIGI AS ⁽³⁾ ⁽⁴⁾ | TURKEY | INVESTMENT COMPANY | — | 3.61 | 3.61 | — | 2 | — | ||||||||||||||||||
GARANTIBANK BBVA INTERNATIONAL N.V. | NETHERLANDS | BANKING | — | 100.00 | 100.00 | 1,323 | 1,100 | 119 | ||||||||||||||||||
GESCAT GESTIO DE SOL SL (SOCIEDAD UNIPERSONAL) | SPAIN | REAL ESTATE | 100.00 | — | 100.00 | 18 | 7 | 11 | ||||||||||||||||||
GESCAT LLEVANT, S.L.(SOCIEDAD UNIPERSONAL) | SPAIN | REAL ESTATE | — | 100.00 | 100.00 | 1 | — | 1 | ||||||||||||||||||
GESCAT VIVENDES EN COMERCIALITZACIO SL (SOCIEDAD UNIPERSONAL) | SPAIN | REAL ESTATE | 100.00 | — | 100.00 | 27 | 27 | — | ||||||||||||||||||
GESTION DE PREVISION Y PENSIONES SA | SPAIN | PENSION FUND MANAGEMENT | 60.00 | — | 60.00 | 9 | 16 | 6 | ||||||||||||||||||
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 | 478 | 18 | ||||||||||||||||||
GRUPO FINANCIERO BBVA MEXICO SA DE CV | MEXICO | FINANCIAL SERVICES | 99.98 | — | 99.98 | 10,072 | 17,201 | 5,368 | ||||||||||||||||||
HANS FACTORY SL | SPAIN | FINANCIAL SERVICES | — | 100.00 | 100.00 | 11 | 9 | (3) | ||||||||||||||||||
INMUEBLES Y RECUPERACIONES BBVA SA | PERU | REAL ESTATE | — | 100.00 | 100.00 | 39 | 39 | — | ||||||||||||||||||
INVERAHORRO SL | SPAIN | INVESTMENT COMPANY | 100.00 | — | 100.00 | 378 | 385 | (7) | ||||||||||||||||||
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 | 45 | 7 | ||||||||||||||||||
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 | 4 | — | ||||||||||||||||||
MOTORACTIVE IFN SA | ROMANIA | FINANCIAL SERVICES | — | 100.00 | 100.00 | 34 | 41 | 4 | ||||||||||||||||||
MOTORACTIVE MULTISERVICES SRL | ROMANIA | SERVICES | — | 100.00 | 100.00 | — | 5 | — | ||||||||||||||||||
MOVISTAR CONSUMER FINANCE COLOMBIA SAS | COLOMBIA | IN LIQUIDATION | — | 50.00 | 50.00 | — | 6 | (3) | ||||||||||||||||||
MULTIASISTENCIA, S.A. DE C.V. | MEXICO | INSURANCES SERVICES | — | 100.00 | 100.00 | 68 | 44 | 23 | ||||||||||||||||||
OPENPAY ARGENTINA SA | ARGENTINA | PAYMENT ENTITIES | — | 100.00 | 100.00 | 10 | 5 | (1) | ||||||||||||||||||
OPENPAY COLOMBIA SAS | COLOMBIA | PAYMENT ENTITIES | — | 100.00 | 100.00 | 3 | 3 | (1) | ||||||||||||||||||
OPENPAY PERÚ SA | PERU | PAYMENT ENTITIES | — | 100.00 | 100.00 | 2 | 8 | (7) | ||||||||||||||||||
OPENPAY SA DE CV | MEXICO | PAYMENT ENTITIES | — | 100.00 | 100.00 | 72 | 50 | (20) | ||||||||||||||||||
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 | 51 | 8 | ||||||||||||||||||
PECRI INVERSION SL | SPAIN | INVESTMENT COMPANY | 100.00 | — | 100.00 | 71 | 68 | 2 | ||||||||||||||||||
PROMOTORA DEL VALLES, S.L. (SOCIEDAD UNIPERSONAL) | SPAIN | REAL ESTATE | — | 100.00 | 100.00 | 13 | 19 | 7 | ||||||||||||||||||
(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 considering the interim dividends of the year, according to the provisional financial statements of each company, generally as of December 31, 2025. 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, 2025. 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%.
F-226
Additional information on subsidiaries and structured entities composing the BBVA Group as of December 31, 2025 (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) 31.12.2025 | Profit (loss) 31.12.2025 | ||||||||||||||||||
PRONORTE UNO PROCAM, S.A.(SOCIEDAD UNIPERSONAL) | SPAIN | REAL ESTATE | — | 100.00 | 100.00 | 1 | 1 | — | ||||||||||||||||||
PROPEL EXPLORER FUND I LP | UNITED STATES | INVESTMENT COMPANY | — | 99.50 | 99.50 | 39 | 36 | 2 | ||||||||||||||||||
PROPEL EXPLORER FUND II LP | UNITED STATES | INVESTMENT COMPANY | — | 99.50 | 99.50 | 22 | 21 | (1) | ||||||||||||||||||
PROPEL VENTURE PARTNERS BRAZIL US LP | UNITED STATES | INVESTMENT COMPANY | — | 99.80 | 99.80 | 12 | 13 | — | ||||||||||||||||||
PROPEL VENTURE PARTNERS GLOBAL US, LP | UNITED STATES | INVESTMENT COMPANY | — | 99.50 | 99.50 | 102 | 128 | 99 | ||||||||||||||||||
PROPEL VENTURE PARTNERS US FUND I, L.P. | UNITED STATES | VENTURE CAPITAL | — | 99.50 | 99.50 | 146 | 174 | (22) | ||||||||||||||||||
PROPEL XYZ I LP | UNITED STATES | INVESTMENT COMPANY | — | 99.40 | 99.40 | 19 | 19 | 2 | ||||||||||||||||||
PRO-SALUD, C.A. | VENEZUELA | INACTIVE | — | 58.86 | 58.86 | — | — | — | ||||||||||||||||||
PROVINCIAL DE VALORES CASA DE BOLSA CA | VENEZUELA | SECURITIES DEALER | — | 60.00 | 60.00 | 1 | 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 | — | — | — | ||||||||||||||||||
PSA FINANCE ARGENTINA COMPAÑIA FINANCIERA SA | ARGENTINA | BANKING | — | 50.00 | 50.00 | 17 | 16 | 18 | ||||||||||||||||||
RALFI IFN SA | ROMANIA | FINANCIAL SERVICES | — | 100.00 | 100.00 | 36 | 6 | — | ||||||||||||||||||
RPV COMPANY | CAYMAN ISLANDS | OTHER ISSUANCE COMPANIES | — | 100.00 | 100.00 | — | — | — | ||||||||||||||||||
SATICEM GESTIO SL (SOCIEDAD UNIPERSONAL) | SPAIN | REAL ESTATE | 100.00 | — | 100.00 | 6 | 2 | 3 | ||||||||||||||||||
SATICEM HOLDING SL (SOCIEDAD UNIPERSONAL) | SPAIN | REAL ESTATE | 100.00 | — | 100.00 | 5 | 5 | — | ||||||||||||||||||
SOCIEDAD DE ESTUDIOS Y ANALISIS FINANCIERO SA | SPAIN | SERVICES | 100.00 | — | 100.00 | 19 | 19 | — | ||||||||||||||||||
SOCIEDAD PERUANA DE FINANCIAMIENTO SAC | PERU | FINANCIAL SERVICES | — | 50.00 | 50.00 | 3 | 6 | (3) | ||||||||||||||||||
TREE INVERSIONES INMOBILIARIAS SA SOCIEDAD UNIPERSONAL | SPAIN | REAL ESTATE | 100.00 | — | 100.00 | 1,096 | 217 | 72 | ||||||||||||||||||
TRIFOI REAL ESTATE SRL | ROMANIA | REAL ESTATE | — | 100.00 | 100.00 | 1 | 1 | — | ||||||||||||||||||
UNNIM SOCIEDAD PARA LA GESTION DE ACTIVOS INMOBILIARIOS SA (SOCIEDAD UNIPERSONAL) | SPAIN | REAL ESTATE | 100.00 | — | 100.00 | 471 | 422 | 2 | ||||||||||||||||||
URBANIZADORA SANT LLORENC SA | SPAIN | INACTIVE | 60.60 | — | 60.60 | — | — | — | ||||||||||||||||||
VOLKSWAGEN FINANCIAL SERVICES COMPAÑIA FINANCIERA SA | ARGENTINA | BANKING | — | 51.00 | 51.00 | 26 | 33 | 18 | ||||||||||||||||||
(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 considering the interim dividends of the year, according to the provisional financial statements of each company, generally as of December 31, 2025. 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, 2025. The data of the companies in Turkey and Argentina are prior to the application of hyperinflation accounting.
This Appendix is part of Note 3 of the consolidated financial statements for the year ended December 31, 2025.
F-227
APPENDIX II. Additional information on investments in joint ventures and associates in the BBVA Group as of December 31, 2025
Most significant companies are included, which together represent 99.58% of the total investment in this group.
% share of participation | Millions of Euros (1) | |||||||||||||||||||||||||||||||
Affiliate entity data | ||||||||||||||||||||||||||||||||
Company | Location | Activity | Direct | Indirect | Total | Consolidated Net carrying amount | Assets 31.12.2025 | Liabilities 31.12.2025 | Equity excluding profit (loss) 31.12.2025 | Profit (loss) 31.12.2025 | ||||||||||||||||||||||
ASSOCIATES | ||||||||||||||||||||||||||||||||
ADQUIRA ESPAÑA, S.A. | SPAIN | SERVICES | — | 44.44 | 44.44 | 5 | 20 | 9 | 10 | 1 | ||||||||||||||||||||||
ATOM HOLDCO LIMITED | UNITED KINGDOM | INVESTMENT COMPANY | 49.45 | — | 49.45 | 222 | 11,656 | 11,102 | 533 | 20 | ||||||||||||||||||||||
BBVA ALLIANZ SEGUROS Y REASEGUROS, S.A. | SPAIN | INSURANCES SERVICES | — | 50.00 | 50.00 | 277 | 1,188 | 601 | 543 | 44 | ||||||||||||||||||||||
COMPAÑIA PERUANA DE MEDIOS DE PAGO SAC (VISANET PERU) | PERU | PAYMENT ENTITIES | — | 20.20 | 20.20 | 2 | 329 | 317 | 9 | 3 | ||||||||||||||||||||||
CORPORACION SUICHE 7B CA | VENEZUELA | FINANCIAL SERVICES | — | 19.80 | 19.80 | 2 | 12 | 3 | 5 | 4 | ||||||||||||||||||||||
FIDEICOMISO F/00185 FIMPE - FIDEICOMISO F/00185 PARA EXTENDER A LA SOCIEDAD LOS BENEFICIOS DEL ACCESO A LA INFRAESTRUCTURA DE LOS MEDIOS DE PAGO ELECTRONICOS | MEXICO | FINANCIAL SERVICES | — | 28.50 | 28.50 | 2 | 5 | — | 5 | 1 | ||||||||||||||||||||||
METROVACESA SA | SPAIN | REAL ESTATE | 20.85 | — | 20.85 | 282 | 2,304 | 950 | 1,357 | (4) | ||||||||||||||||||||||
PROMOCIONS TERRES CAVADES, S.A. | SPAIN | REAL ESTATE | — | 39.11 | 39.11 | 1 | 3 | — | 3 | — | ||||||||||||||||||||||
REDSYS SERVICIOS DE PROCESAMIENTO SL | SPAIN | FINANCIAL SERVICES | 24.90 | — | 24.90 | 17 | 135 | 58 | 63 | 14 | ||||||||||||||||||||||
SBD CREIXENT, S.A. | SPAIN | REAL ESTATE | — | 23.05 | 23.05 | 1 | 6 | — | 6 | — | ||||||||||||||||||||||
SEGURIDAD Y PROTECCION BANCARIAS SA DE CV | MEXICO | SERVICES | — | 26.14 | 26.14 | 1 | 5 | — | 4 | 1 | ||||||||||||||||||||||
SERVICIOS ELECTRONICOS GLOBALES SA DE CV | MEXICO | PAYMENT ENTITIES | — | 46.14 | 46.14 | 56 | 122 | — | 96 | 26 | ||||||||||||||||||||||
SISTEMAS DE TARJETAS Y MEDIOS DE PAGO SA | SPAIN | PAYMENT ENTITIES | 20.61 | — | 20.61 | 2 | 610 | 601 | 7 | 2 | ||||||||||||||||||||||
TELEFONICA FACTORING ESPAÑA SA ⁽²⁾ | SPAIN | FINANCIAL SERVICES | 30.00 | — | 30.00 | 5 | 277 | 260 | 7 | 10 | ||||||||||||||||||||||
VERIDAS DIGITAL AUTHENTICATION SOLUTIONS S.L. | SPAIN | SERVICES | — | 29.38 | 29.38 | 3 | 26 | 16 | 13 | (3) | ||||||||||||||||||||||
JOINT VENTURES | ||||||||||||||||||||||||||||||||
ALTURA MARKETS SOCIEDAD DE VALORES SA | SPAIN | SECURITIES DEALER | 50.00 | — | 50.00 | 44 | 2,107 | 2,019 | 76 | 12 | ||||||||||||||||||||||
COMPAÑIA MEXICANA DE PROCESAMIENTO SA DE CV | MEXICO | SERVICES | — | 50.00 | 50.00 | 5 | 11 | — | 12 | (1) | ||||||||||||||||||||||
CORPORACION IBV PARTICIPACIONES EMPRESARIALES, S.A. ⁽³⁾ | SPAIN | INVESTMENT COMPANY | — | 50.00 | 50.00 | 31 | 110 | 48 | 61 | — | ||||||||||||||||||||||
F/ 5356 FIDEICOMISO IRREVOCABLE DE ADM. INMOBILIARIA CON DERECHO DE REVERSIÓN- FIDEICOMISO SELVA | MEXICO | REAL ESTATE | — | 42.40 | 42.40 | 7 | 17 | — | 17 | — | ||||||||||||||||||||||
FIDEICOMISO 1729 INVEX ENAJENACION DE CARTERA ⁽³⁾ | MEXICO | REAL ESTATE | — | 44.09 | 44.09 | 5 | 96 | — | 96 | — | ||||||||||||||||||||||
INVERSIONES PLATCO CA | VENEZUELA | FINANCIAL SERVICES | — | 50.00 | 50.00 | 4 | 9 | 1 | 8 | — | ||||||||||||||||||||||
RCI COLOMBIA SA COMPAÑIA DE FINANCIAMIENTO | COLOMBIA | FINANCIAL SERVICES | — | 49.00 | 49.00 | 37 | 804 | 727 | 77 | (1) | ||||||||||||||||||||||
ROMBO COMPAÑIA FINANCIERA SA | ARGENTINA | BANKING | — | 40.00 | 40.00 | 13 | 191 | 159 | 15 | 18 | ||||||||||||||||||||||
(2) Financial Statements as of December 31, 2024.
(3) Classified as Non-current asset held for sale.
This Appendix is part of Notes 3 and 16.1 of the consolidated financial statements for the year ended December 31, 2025.
F-228
APPENDIX III. Changes and notifications of participations in the BBVA Group in 2025
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) | ||||||||
ADELANTE CLASSE DE INVESTIMENTO MULTIMERCADO CREDITO PRIVADO IE - RESP LIMITADA | FOUNDING | 100.00 | 03-Oct-25 | ||||||||
BBVA GLOBAL WEALTH INSURANCE AGENCY, INC | FOUNDING | 100.00 | 05-Feb-25 | ||||||||
FIAT CREDITO ARGENTINA COMPAÑIA FINANCIERA SA | ACQUISITION | 50.00 | 10-Dec-25 | ||||||||
GARANTI PORTFOLIO BESINCI SERBEST FON | FOUNDING | 83.98 | 01-Sep-25 | ||||||||
(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) | ||||||||
ACTIVOS MACORP SL EN LIQUIDACIÓN | LIQUIDATION | — | 16-Dec-25 | ||||||||
ARRELS CT PATRIMONI I PROJECTES, S.A.(SOCIEDAD UNIPERSONAL)EN LIQUIDACIÓN | LIQUIDATION | — | 11-Dec-25 | ||||||||
BBVA CONSUMER FINANCE ENTIDAD DE DESARROLLO A LA PEQUEÑA Y MICRO EMPRESA EDPYME SA (BBVA CONSUMER FINANCE - EDPYME) | LIQUIDATION | — | 16-Jul-25 | ||||||||
BBVA GLOBAL FINANCE LTD | LIQUIDATION | — | 31-Dec-25 | ||||||||
FORUM COMERCIALIZADORA DEL PERU SA | LIQUIDATION | — | 09-Jun-25 | ||||||||
GESCAT LLOGUERS SL | LIQUIDATION | — | 18-Apr-25 | ||||||||
LA ESMERALDA DESARROLLOS, S.L.(SOCIEDAD UNIPERSONAL EN LIQUIDACIÓN) | LIQUIDATION | — | 17-Nov-25 | ||||||||
PROVINCIAL DE VALORES CASA DE BOLSA CA | DISPOSAL | 60 | 01-Jun-25 | ||||||||
TASFIYE HALINDE GARANTI KONUT FINANSMANI DANISMANLIK HIZMETLERI ANONIM SIRKETI | LIQUIDATION | — | 30-Dec-25 | ||||||||
(1) Variations of less than 0.1% have not been considered due to immateriality.
Changes and notifications of participations in the BBVA Group in 2025 (continued)
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) | ||||||||
ALFA TECH CORE SERVICES S DE RL DE CV | FOUNDING | 20.00 | 01-Oct-25 | ||||||||
ALFATECH CORE SERVICES SL | FOUNDING | 20.00 | 01-Oct-25 | ||||||||
CIBERENTIDAD MEXICO SA DE CV | FOUNDING | 20.00 | 01-Aug-25 | ||||||||
(1) Variations of less than 0.1% have not been considered due to immateriality.
F-229
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) | ||||||||
CAMARATE GOLF, S.A. EN LIQUIDACIÓN | LIQUIDATION | — | 04-Nov-25 | ||||||||
FIDEICOMISO F/402770-2 ALAMAR | DISPOSAL | — | 28-Apr-25 | ||||||||
OPERADORA ALAMAR SA DE CV | DISPOSAL | — | 15-Dec-25 | ||||||||
(1) Variations of less than 0.1% have not been considered due to immateriality.
This Appendix is part of Notes 3 and 16.1 of the consolidated financial statements for the year ended December 31, 2025.
F-230
APPENDIX IV. Fully consolidated subsidiaries with more than 10% owned by non-Group shareholders as of December 31, 2025
% of voting rights controlled by the Bank | ||||||||||||||
Company | Activity | Direct | Indirect | Total | ||||||||||
BANCO BBVA PERÚ SA | BANKING | — | 47.13 | 47.13 | ||||||||||
BANCO PROVINCIAL SA - BANCO UNIVERSAL | BANKING | 1.46 | 53.75 | 55.21 | ||||||||||
COMERCIALIZADORA CORPORATIVA SAC | FINANCIAL SERVICES | — | 50.00 | 50.00 | ||||||||||
CREA MADRID NUEVO NORTE SA | REAL ESTATE | — | 75.54 | 75.54 | ||||||||||
F/11395 FIDEICOMISO IRREVOCABLE DE ADMINISTRACION CON DERECHO DE REVERSION | REAL ESTATE | — | 42.40 | 42.40 | ||||||||||
F/253863 EL DESEO RESIDENCIAL | REAL ESTATE | — | 65.00 | 65.00 | ||||||||||
FIAT CREDITO ARGENTINA COMPAÑIA FINANCIERA SA | FINANCIAL SERVICES | — | 50.00 | 50.00 | ||||||||||
FIDEICOMISO LOTE 6.1 ZARAGOZA | REAL ESTATE | — | 59.99 | 59.99 | ||||||||||
FOMENTO Y DESARROLLO DE CONJUNTOS RESIDENCIALES S.L. EN LIQUIDACION | IN LIQUIDATION | — | 60.00 | 60.00 | ||||||||||
GARANTI BBVA EMEKLILIK AS | INSURANCES | — | 84.91 | 84.91 | ||||||||||
GESTION DE PREVISION Y PENSIONES SA | PENSION FUND MANAGEMENT | 60.00 | — | 60.00 | ||||||||||
INVERSIONES BANPRO INTERNATIONAL INC NV | INVESTMENT COMPANY | 48.00 | — | 48.00 | ||||||||||
INVERSIONES P.H.R.4, C.A. | NO ACTIVITY | — | 60.46 | 60.46 | ||||||||||
MOVISTAR CONSUMER FINANCE COLOMBIA SAS | IN LIQUIDATION | — | 50.00 | 50.00 | ||||||||||
PRO-SALUD, C.A. | NO ACTIVITY | — | 58.86 | 58.86 | ||||||||||
PROVINCIAL DE VALORES CASA DE BOLSA CA | SECURITIES DEALER | — | 60.00 | 60.00 | ||||||||||
PSA FINANCE ARGENTINA COMPAÑIA FINANCIERA SA | BANKING | — | 50.00 | 50.00 | ||||||||||
SOCIEDAD PERUANA DE FINANCIAMIENTO SAC | FINANCIAL SERVICES | — | 50.00 | 50.00 | ||||||||||
VOLKSWAGEN FINANCIAL SERVICES COMPAÑIA FINANCIERA SA | BANKING | — | 51.00 | 51.00 | ||||||||||
This Appendix is part of Note 3 of the consolidated financial statements for the year ended December 31, 2025.
F-231
APPENDIX V. BBVA Group’s securitization funds. Structured entities in 2025
Millions of Euros | ||||||||||||||
Securitization fund (consolidated) | Company | Origination date | Total securitized exposures at the origination date | Total securitized exposures as of December 31, 2025 | ||||||||||
TDA 22 Mixto FTA | BANCO BILBAO VIZCAYA ARGENTARIA SA | 9-dic.-04 | 592 | 26 | ||||||||||
HIPOCAT 9 FTA | BANCO BILBAO VIZCAYA ARGENTARIA SA | 25-nov.-05 | 1,016 | 68 | ||||||||||
HIPOCAT 10 FTA | BANCO BILBAO VIZCAYA ARGENTARIA SA | 5-jul.-06 | 1,526 | 101 | ||||||||||
TDA 27 Mixto FTA | BANCO BILBAO VIZCAYA ARGENTARIA SA | 22-dic.-06 | 275 | 88 | ||||||||||
BBVA RMBS 1 FTA | BANCO BILBAO VIZCAYA ARGENTARIA SA | 19-feb.-07 | 2,500 | 378 | ||||||||||
HIPOCAT 11 FTA | BANCO BILBAO VIZCAYA ARGENTARIA SA | 9-mar.-07 | 1,628 | 118 | ||||||||||
BBVA RMBS 2 FTA | BANCO BILBAO VIZCAYA ARGENTARIA SA | 26-mar.-07 | 5,000 | 714 | ||||||||||
BBVA LEASING 1 FTA | BANCO BILBAO VIZCAYA ARGENTARIA SA | 24-jun.-07 | 2,500 | 84 | ||||||||||
BBVA RMBS 3 FTA | BANCO BILBAO VIZCAYA ARGENTARIA SA | 22-jul.-07 | 3,000 | 711 | ||||||||||
TDA 28 Mixto FTA | BANCO BILBAO VIZCAYA ARGENTARIA SA | 23-jul.-07 | 250 | 66 | ||||||||||
TDA TARRAGONA 1 FTA | BANCO BILBAO VIZCAYA ARGENTARIA SA | 30-nov.-07 | 397 | 36 | ||||||||||
GAT VPO | BANCO BILBAO VIZCAYA ARGENTARIA SA | 25-jun.-09 | 780 | 5 | ||||||||||
BBVA RMBS 14 FTA | BANCO BILBAO VIZCAYA ARGENTARIA SA | 24-nov.-14 | 700 | 213 | ||||||||||
BBVA Consumer Auto 2020-1 | BANCO BILBAO VIZCAYA ARGENTARIA SA | 15-jun.-20 | 1,100 | 184 | ||||||||||
BBVA CONSUMO 11 FT | BANCO BILBAO VIZCAYA ARGENTARIA SA | 12-mar.-21 | 2,500 | 271 | ||||||||||
BBVA RMBS 20 FT | BANCO BILBAO VIZCAYA ARGENTARIA SA | 14-jun.-21 | 2,500 | 1,580 | ||||||||||
BBVA RMBS 21 FT | BANCO BILBAO VIZCAYA ARGENTARIA SA | 17-mar.-22 | 12,400 | 7,910 | ||||||||||
BBVA CONSUMER AUTO 2022-1 | BANCO BILBAO VIZCAYA ARGENTARIA SA | 13-jun.-22 | 1,200 | 341 | ||||||||||
BBVA RMBS 22 FT | BANCO BILBAO VIZCAYA ARGENTARIA SA | 28-nov.-22 | 1,400 | 1,094 | ||||||||||
BBVA CONSUMO 12 FT | BANCO BILBAO VIZCAYA ARGENTARIA SA | 13-mar.-23 | 3,000 | 1,114 | ||||||||||
BBVA CONSUMER AUTO 2023-1 | BANCO BILBAO VIZCAYA ARGENTARIA SA | 8-jun.-23 | 800 | 409 | ||||||||||
BBVA LEASING 3 FT | BANCO BILBAO VIZCAYA ARGENTARIA SA | 27-nov.-23 | 2,400 | 909 | ||||||||||
BBVA CONSUMO 13 FT | BANCO BILBAO VIZCAYA ARGENTARIA SA | 11-mar.-24 | 2,000 | 1,057 | ||||||||||
BBVA CONSUMER 2024-1 | BANCO BILBAO VIZCAYA ARGENTARIA SA | 20-may.-24 | 800 | 477 | ||||||||||
BBVA RMBS 23 FT | BANCO BILBAO VIZCAYA ARGENTARIA SA | 13-jun.-24 | 5,450 | 4,672 | ||||||||||
BBVA CONSUMER AUTO 2024-1 | BANCO BILBAO VIZCAYA ARGENTARIA SA | 16-sep.-24 | 1,000 | 744 | ||||||||||
BBVA CONSUMER 2025-1 | BANCO BILBAO VIZCAYA ARGENTARIA SA | 26-may.-25 | 2,350 | 1,993 | ||||||||||
BBVA CONSUMER AUTO 2025-1 | BANCO BILBAO VIZCAYA ARGENTARIA SA | 11-sep.-25 | 1,000 | 951 | ||||||||||
F-232
APPENDIX VI. Details of the outstanding subordinated debt and preferred securities issued by the Bank or entities in the Group consolidated as of December 31, 2025, 2024 and 2023
Outstanding as of December 31, 2025, 2024 and 2023 of subordinated issues
Nominal value. Millions of Euros | ||||||||||||||||||||
Issuer entity and issued date | Currency | December 2025 | December 2024 | December 2023 | Prevailing Interest Rate as of December 31, 2025 | Maturity Date | ||||||||||||||
| BANCO BILBAO VIZCAYA ARGENTARIA S.A. | ||||||||||||||||||||
March-08 | EUR | 125 | 125 | 125 | 6.03 % | March-33 | ||||||||||||||
March-19 | EUR | — | — | 1,000 | 6.00 % | Perpetual | ||||||||||||||
July-20 | EUR | 1,000 | 1,000 | 1,000 | 6.00 % | Perpetual | ||||||||||||||
February-17 | EUR | 1,000 | 999 | 1,000 | 3.50 % | February-27 | ||||||||||||||
February-17 | EUR | 165 | 165 | 165 | 4.00 % | February-32 | ||||||||||||||
May-17 | EUR | 150 | 150 | 150 | 2.54 % | May-27 | ||||||||||||||
February-19 | EUR | — | — | 750 | 2.58 % | February-29 | ||||||||||||||
January-20 | EUR | — | 994 | 994 | 1.00 % | January-30 | ||||||||||||||
June-23 | EUR | 745 | 745 | 741 | 5.75 % | September-33 | ||||||||||||||
June-23 | EUR | 1,000 | 1,000 | 1,000 | 8.38 % | Perpetual | ||||||||||||||
February-24 | EUR | 1,248 | 1,247 | — | 4.87 % | February-36 | ||||||||||||||
June-24 | EUR | 750 | 750 | — | 6.88 % | Perpetual | ||||||||||||||
August-24 | EUR | 997 | 996 | — | 4.38 % | August-36 | ||||||||||||||
February-25 | EUR | 999 | — | — | 4.00 % | February-37 | ||||||||||||||
November-25 | EUR | 1,000 | — | — | 5.63 % | Perpetual | ||||||||||||||
Different issued | EUR | 128 | 128 | 127 | — | |||||||||||||||
November-17 | USD | 851 | 963 | 905 | 6.13 % | Perpetual | ||||||||||||||
September-19 | USD | — | 963 | 905 | 6.50 % | Perpetual | ||||||||||||||
March-17 | USD | 102 | 116 | 109 | 5.70 % | March-32 | ||||||||||||||
May-18 | USD | 253 | 287 | 269 | 5.25 % | May-33 | ||||||||||||||
September-23 | USD | 851 | 963 | 905 | 9.38 % | Perpetual | ||||||||||||||
November-23 | USD | 638 | 722 | 679 | 7.88 % | November-34 | ||||||||||||||
January-25 | USD | 851 | — | — | 7.75 % | Perpetual | ||||||||||||||
May-17 | CHF | 21 | 21 | 22 | 1.60 % | May-27 | ||||||||||||||
July-20 | GBP | 344 | 362 | 345 | 3.10 % | July-31 | ||||||||||||||
August-23 | GBP | 343 | 361 | 345 | 8.25 % | November-33 | ||||||||||||||
| Subtotal | 13,562 | 13,055 | 11,534 | |||||||||||||||||
F-233
Outstanding as of December 31, 2025, 2024 and 2023 of subordinated issues
Nominal value. Millions of Euros | ||||||||||||||||||||
Issuer entity and issued date | Currency | December 2025 | December 2024 | December 2023 | Prevailing Interest Rate as of December 31, 2025 | Maturity Date | ||||||||||||||
BBVA GLOBAL FINANCE LTD | ||||||||||||||||||||
December-95 | USD | — | 192 | 179 | 7.00 % | December-25 | ||||||||||||||
| Subtotal | — | 192 | 179 | |||||||||||||||||
| BBVA BANCOMER S.A. INSTITUCION DE BANCA MULTIPLE GRUPO FINANCIERO BBVA BANCOMER | ||||||||||||||||||||
November-14 | USD | — | — | 178 | 5.35% | November-29 | ||||||||||||||
January-18 | USD | 851 | 967 | 903 | 5.13% | January-33 | ||||||||||||||
September-19 | USD | 638 | 724 | 676 | 5.88% | September-34 | ||||||||||||||
June-23 | USD | 850 | 965 | 906 | 8.45% | June-38 | ||||||||||||||
January-24 | USD | 767 | 871 | — | 8.13% | January-39 | ||||||||||||||
February-25 | USD | 849 | — | — | 7.63% | February-39 | ||||||||||||||
| Subtotal | 3,954 | 3,528 | 2,663 | |||||||||||||||||
| BBVA COLOMBIA S.A. | ||||||||||||||||||||
September-11 | COP | 35 | 34 | 37 | 10.25% | September-26 | ||||||||||||||
February-13 | COP | 37 | 36 | 39 | 9.40% | February-28 | ||||||||||||||
November-14 | COP | 20 | 20 | 21 | 9.91% | November-29 | ||||||||||||||
November-14 | COP | 28 | 27 | 27 | 10.04% | November-34 | ||||||||||||||
April-15 | USD | — | 385 | 362 | 4.88% | April-25 | ||||||||||||||
November-24 | USD | 42 | 48 | — | 7.48% | November-34 | ||||||||||||||
April-25 | USD | 38 | — | — | 7.43% | April-35 | ||||||||||||||
| Subtotal | 201 | 550 | 486 | |||||||||||||||||
BANCO BBVA PERÚ | ||||||||||||||||||||
June-07 | PEN | 25 | 25 | 24 | 3.47% | June-32 | ||||||||||||||
November-07 | PEN | 23 | 23 | 21 | 3.56% | November-32 | ||||||||||||||
December-08 | PEN | 13 | 13 | 12 | 4.19% | December-33 | ||||||||||||||
February-08 | USD | 17 | 20 | 18 | 6.47% | February-28 | ||||||||||||||
September-14 | USD | — | — | 267 | 5.25% | September-29 | ||||||||||||||
March-24 | USD | 263 | 291 | — | 6.20% | March-34 | ||||||||||||||
| Subtotal | 341 | 372 | 342 | |||||||||||||||||
| GARANTI BBVA AS | ||||||||||||||||||||
May-17 | USD | 523 | 579 | 667 | 7.30% | May-27 | ||||||||||||||
February-24 | USD | 425 | 470 | — | 8.55% | February-34 | ||||||||||||||
December-24 | USD | 637 | 705 | — | 8.29% | January-35 | ||||||||||||||
July-25 | USD | 425 | — | — | 8.62% | January-36 | ||||||||||||||
October-25 | USD | 595 | — | — | 7.77% | April-36 | ||||||||||||||
October-19 | TRY | — | — | 8 | 46.02% | October-29 | ||||||||||||||
February-20 | TRY | — | 20 | 23 | 62.47% | February-30 | ||||||||||||||
| Subtotal | 2,604 | 1,775 | 698 | |||||||||||||||||
| Total | 20,663 | 19,472 | 15,902 | |||||||||||||||||
Additionally, the Group maintains an issuance of preferred shares in Colombia that amounts to €1 million as of December 31, 2025 and 2024.
F-234
APPENDIX VII. Consolidated balance sheets held in foreign currency as of December 31, 2025, 2024 and 2023
BALANCE SHEETS HELD IN FOREIGN CURRENCY (MILLIONS OF EUROS) | |||||||||||||||||
U.S. dollar | Mexican peso | Turkish lira | Other foreign currencies | Total foreign currencies | |||||||||||||
| December 2025 | |||||||||||||||||
| Assets | |||||||||||||||||
Cash, cash balances at central banks and other demand deposits | 21,350 | 6,763 | 2,899 | 5,252 | 36,263 | ||||||||||||
Financial assets held for trading | 24,443 | 25,159 | 189 | 9,715 | 59,505 | ||||||||||||
Non- trading financial assets mandatorily at fair value through profit or loss | 1,266 | 8,938 | 114 | 81 | 10,400 | ||||||||||||
Financial assets at fair value through comprehensive income | 8,253 | 19,255 | 2,368 | 5,164 | 35,040 | ||||||||||||
Financial assets at amortized cost | 81,458 | 91,785 | 42,448 | 59,027 | 274,718 | ||||||||||||
Joint ventures and associates | — | 18 | — | 590 | 608 | ||||||||||||
Tangible assets | 200 | 2,295 | 1,858 | 1,214 | 5,567 | ||||||||||||
Other assets | (1,857) | 7,641 | 2,607 | 3,805 | 12,195 | ||||||||||||
| Total | 135,112 | 161,855 | 52,482 | 84,848 | 434,297 | ||||||||||||
| Liabilities | |||||||||||||||||
Financial liabilities held for trading | 18,069 | 18,608 | 245 | 4,989 | 41,910 | ||||||||||||
Financial liabilities at amortized cost | 112,567 | 96,014 | 38,508 | 65,431 | 312,520 | ||||||||||||
Other liabilities | 5,670 | 25,213 | 1,440 | 2,623 | 34,947 | ||||||||||||
| Total | 136,306 | 139,834 | 40,193 | 73,043 | 389,377 | ||||||||||||
| December 2024 | |||||||||||||||||
| Assets | |||||||||||||||||
Cash, cash balances at central banks and other demand deposits | 20,836 | 6,899 | 3,334 | 4,400 | 35,469 | ||||||||||||
Financial assets held for trading | 18,727 | 22,117 | 259 | 6,171 | 47,274 | ||||||||||||
Non- trading financial assets mandatorily at fair value through profit or loss | 1,525 | 8,002 | 85 | 165 | 9,778 | ||||||||||||
Financial assets at fair value through comprehensive income | 9,674 | 18,493 | 2,299 | 4,994 | 35,461 | ||||||||||||
Financial assets at amortized cost | 67,256 | 83,444 | 40,105 | 52,379 | 243,185 | ||||||||||||
Joint ventures and associates | — | 17 | — | 590 | 607 | ||||||||||||
Tangible assets | 168 | 2,256 | 2,013 | 1,333 | 5,770 | ||||||||||||
Other assets | (326) | 7,125 | 2,457 | 3,363 | 12,619 | ||||||||||||
| Total | 117,860 | 148,353 | 50,553 | 73,396 | 390,162 | ||||||||||||
| Liabilities | |||||||||||||||||
Financial liabilities held for trading | 14,474 | 18,660 | 268 | 2,776 | 36,178 | ||||||||||||
Financial liabilities at amortized cost | 95,613 | 88,375 | 39,187 | 55,748 | 278,923 | ||||||||||||
Other liabilities | 4,039 | 20,665 | 1,338 | 2,636 | 28,679 | ||||||||||||
| Total | 114,126 | 127,700 | 40,793 | 61,160 | 343,780 | ||||||||||||
| December 2023 | |||||||||||||||||
| Assets | |||||||||||||||||
Cash, cash balances at central banks and other demand deposits | 13,372 | 7,581 | 3,764 | 4,089 | 28,807 | ||||||||||||
Financial assets held for trading | 21,147 | 28,570 | 282 | 5,806 | 55,806 | ||||||||||||
Non- trading financial assets mandatorily at fair value through profit or loss | 1,292 | 6,596 | 5 | 186 | 8,079 | ||||||||||||
Financial assets at fair value through comprehensive income | 9,384 | 20,767 | 1,785 | 4,484 | 36,421 | ||||||||||||
Financial assets at amortized cost | 58,732 | 81,907 | 31,298 | 46,122 | 218,059 | ||||||||||||
Joint ventures and associates | 5 | 19 | — | 590 | 614 | ||||||||||||
Tangible assets | 105 | 2,609 | 1,446 | 995 | 5,155 | ||||||||||||
Other assets | (1,049) | 6,872 | 1,761 | 2,346 | 9,930 | ||||||||||||
| Total | 102,988 | 154,922 | 40,341 | 64,619 | 362,870 | ||||||||||||
| Liabilities | |||||||||||||||||
Financial liabilities held for trading | 21,204 | 17,829 | 207 | 2,705 | 41,946 | ||||||||||||
Financial liabilities at amortized cost | 78,365 | 95,685 | 30,127 | 50,900 | 255,076 | ||||||||||||
Other liabilities | 3,223 | 20,186 | 1,048 | 2,801 | 27,258 | ||||||||||||
| Total | 102,792 | 133,700 | 31,382 | 56,406 | 324,280 | ||||||||||||
This Appendix is part of Notes 2.2.17 of the consolidated financial statements for the year ended December 31, 2025.
F-235
APPENDIX VIII. Quantitative information on refinancing and restructuring operations and other requirements under Bank of Spain Circular 6/2012
a.Quantitative information on refinancing and restructuring operations
The breakdown of refinancing and restructuring operations as of December 31, 2025, 2024 and 2023 is as follows:
DECEMBER 2025 BALANCE OF FORBEARANCE (MILLIONS OF EUROS) | |||||||||||||||||||||||
TOTAL | |||||||||||||||||||||||
Unsecured loans | Secured loans | Accumulated impairment or accumulated losses in fair value due to credit risk | |||||||||||||||||||||
Maximum amount of secured loans that can be considered | |||||||||||||||||||||||
Number of operations | Gross carrying amount | Number of operations | Gross carrying amount | Real estate mortgage secured | Rest of secured loans | ||||||||||||||||||
Credit institutions | — | — | — | — | — | — | — | ||||||||||||||||
General Governments | 30 | 29 | — | — | — | — | (6) | ||||||||||||||||
Other financial corporations and individual entrepreneurs (financial business) | 267 | 14 | 18 | 4 | 2 | — | (6) | ||||||||||||||||
Non-financial corporations and individual entrepreneurs (corporate non-financial activities) | 155,874 | 3,854 | 7,306 | 1,474 | 623 | 174 | (1,851) | ||||||||||||||||
Of which: financing the construction and property (including land) | 379 | 222 | 488 | 126 | 69 | 6 | (114) | ||||||||||||||||
Other households (1) | 337,495 | 2,390 | 48,637 | 3,681 | 2,772 | 30 | (1,662) | ||||||||||||||||
| Total | 493,666 | 6,286 | 55,961 | 5,159 | 3,397 | 204 | (3,527) | ||||||||||||||||
Of which: IMPAIRED | |||||||||||||||||||||||
Unsecured loans | Secured loans | Accumulated impairment or accumulated losses in fair value due to credit risk | |||||||||||||||||||||
Maximum amount of secured loans that can be considered | |||||||||||||||||||||||
Number of operations | Gross carrying amount | Number of operations | Gross carrying amount | Real estate mortgage secured | Rest of secured loans | ||||||||||||||||||
Credit institutions | — | — | — | — | — | — | — | ||||||||||||||||
General Governments | 16 | 7 | — | — | — | — | (5) | ||||||||||||||||
Other financial corporations and individual entrepreneurs (financial business) | 154 | 12 | 13 | 4 | 2 | — | (6) | ||||||||||||||||
Non-financial corporations and individual entrepreneurs (corporate non-financial activities) | 120,364 | 2,124 | 4,202 | 805 | 259 | 25 | (1,592) | ||||||||||||||||
Of which: financing the construction and property (including land) | 280 | 220 | 340 | 80 | 32 | 3 | (111) | ||||||||||||||||
Other households (1) | 196,425 | 1,208 | 24,813 | 1,904 | 1,215 | 8 | (1,428) | ||||||||||||||||
| Total | 316,959 | 3,351 | 29,028 | 2,714 | 1,476 | 33 | (3,031) | ||||||||||||||||
(1) Number of operations does not include Garanti BBVA. Includes mortgage-backed real estate operations with loan to value ratio of greater than 1, and secured operations, other than transactions secured by real estate mortgage regardless of their loan to value ratio.
F-236
DECEMBER 2024 BALANCE OF FORBEARANCE (MILLIONS OF EUROS) | |||||||||||||||||||||||
TOTAL | |||||||||||||||||||||||
Unsecured loans | Secured loans | Accumulated impairment or accumulated losses in fair value due to credit risk | |||||||||||||||||||||
Maximum amount of secured loans that can be considered | |||||||||||||||||||||||
Number of operations | Gross carrying amount | Number of operations | Gross carrying amount | Real estate mortgage secured | Rest of secured loans | ||||||||||||||||||
Credit institutions | — | — | — | — | — | — | — | ||||||||||||||||
General Governments | 38 | 37 | 4 | 1 | — | — | (6) | ||||||||||||||||
Other financial corporations and individual entrepreneurs (financial business) | 297 | 7 | 20 | 8 | 4 | 1 | (5) | ||||||||||||||||
Non-financial corporations and individual entrepreneurs (corporate non-financial activities) | 102,661 | 3,265 | 7,726 | 1,966 | 851 | 203 | (2,067) | ||||||||||||||||
Of which: financing the construction and property (including land) | 445 | 349 | 569 | 181 | 81 | 10 | (335) | ||||||||||||||||
Other households (1) | 348,925 | 1,894 | 54,201 | 4,181 | 2,972 | 27 | (1,726) | ||||||||||||||||
| Total | 451,921 | 5,203 | 61,951 | 6,156 | 3,827 | 231 | (3,805) | ||||||||||||||||
Of which: IMPAIRED | |||||||||||||||||||||||
Unsecured loans | Secured loans | Accumulated impairment or accumulated losses in fair value due to credit risk | |||||||||||||||||||||
Maximum amount of secured loans that can be considered | |||||||||||||||||||||||
Number of operations | Gross carrying amount | Number of operations | Gross carrying amount | Real estate mortgage secured | Rest of secured loans | ||||||||||||||||||
Credit institutions | — | — | — | — | — | — | — | ||||||||||||||||
General Governments | 23 | 9 | 4 | 1 | — | — | (4) | ||||||||||||||||
Other financial corporations and individual entrepreneurs (financial business) | 179 | 4 | 13 | 4 | 1 | 1 | (5) | ||||||||||||||||
Non-financial corporations and individual entrepreneurs (corporate non-financial activities) | 77,926 | 2,072 | 4,989 | 1,093 | 395 | 26 | (1,808) | ||||||||||||||||
Of which: financing the construction and property (including land) | 332 | 347 | 429 | 121 | 31 | 7 | (328) | ||||||||||||||||
Other households (1) | 247,529 | 1,095 | 31,775 | 2,572 | 1,613 | 8 | (1,519) | ||||||||||||||||
| Total | 325,657 | 3,181 | 36,781 | 3,671 | 2,008 | 35 | (3,336) | ||||||||||||||||
F-237
DECEMBER 2023 BALANCE OF FORBEARANCE (MILLIONS OF EUROS) | |||||||||||||||||||||||
TOTAL | |||||||||||||||||||||||
Unsecured loans | Secured loans | Accumulated impairment or accumulated losses in fair value due to credit risk | |||||||||||||||||||||
Maximum amount of secured loans that can be considered | |||||||||||||||||||||||
Number of operations | Gross carrying amount | Number of operations | Gross carrying amount | Real estate mortgage secured | Rest of secured loans | ||||||||||||||||||
Credit institutions | — | — | — | — | — | — | — | ||||||||||||||||
General Governments | 50 | 31 | 24 | 7 | 5 | — | (6) | ||||||||||||||||
Other financial corporations and individual entrepreneurs (financial business) | 292 | 17 | 24 | 11 | 5 | 3 | (6) | ||||||||||||||||
Non-financial corporations and individual entrepreneurs (corporate non-financial activities) | 79,943 | 3,870 | 10,602 | 2,395 | 1,053 | 264 | (2,422) | ||||||||||||||||
Of which: financing the construction and property (including land) | 703 | 420 | 717 | 269 | 125 | 10 | (428) | ||||||||||||||||
Other households (1) | 242,532 | 1,390 | 63,320 | 4,642 | 3,380 | 20 | (1,677) | ||||||||||||||||
| Total | 322,817 | 5,308 | 73,970 | 7,055 | 4,443 | 287 | (4,111) | ||||||||||||||||
Of which: IMPAIRED | |||||||||||||||||||||||
Unsecured loans | Secured loans | Accumulated impairment or accumulated losses in fair value due to credit risk | |||||||||||||||||||||
Maximum amount of secured loans that can be considered | |||||||||||||||||||||||
Number of operations | Gross carrying amount | Number of operations | Gross carrying amount | Real estate mortgage secured | Rest of secured loans | ||||||||||||||||||
Credit institutions | — | — | — | — | — | — | — | ||||||||||||||||
General Governments | 25 | 14 | 4 | 2 | 1 | — | (4) | ||||||||||||||||
Other financial corporations and individual entrepreneurs (financial business) | 206 | 5 | 17 | 4 | 1 | 2 | (4) | ||||||||||||||||
Non-financial corporations and individual entrepreneurs (corporate non-financial activities) | 59,133 | 2,409 | 6,483 | 1,323 | 473 | 56 | (2,070) | ||||||||||||||||
Of which: financing the construction and property (including land) | 491 | 417 | 540 | 196 | 66 | 8 | (417) | ||||||||||||||||
Other households (1) | 158,595 | 900 | 36,108 | 3,001 | 1,957 | 4 | (1,519) | ||||||||||||||||
| Total | 217,959 | 3,329 | 42,612 | 4,330 | 2,432 | 62 | (3,597) | ||||||||||||||||
In addition to the restructuring and refinancing transactions mentioned in this section, loans that were not considered impaired or renegotiated have been modified based on the criteria set out in the accounting regulation that applies. These loans have not been classified as renegotiated or impaired, since they were modified for commercial or competitive reasons (for instance, to improve relationships with clients) rather than for economic or legal reasons relating to the borrower's financial situation.
The table below provides a breakdown by segments of the forbearance operations (net of provisions) as of December 31, 2025, 2024 and 2023:
FORBEARANCE OPERATIONS. BREAKDOWN BY SEGMENTS (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Credit institutions | — | — | — | ||||||||
Central governments | 23 | 32 | 32 | ||||||||
Other financial corporations and individual entrepreneurs (financial activity) | 12 | 9 | 22 | ||||||||
Non-financial corporations and individual entrepreneurs (non-financial activity) | 3,476 | 3,163 | 3,843 | ||||||||
Of which: Financing the construction and property development (including land) | 234 | 195 | 261 | ||||||||
Households | 4,408 | 4,349 | 4,354 | ||||||||
| Total carrying amount | 7,919 | 7,553 | 8,251 | ||||||||
Financing classified as non-current assets and disposal groups held for sale | — | — | — | ||||||||
F-238
NPL ratio by type of renegotiated loan
The non-performing ratio of the renegotiated portfolio is defined as the impaired balance of renegotiated loans that shows signs of difficulties as of the closing of the reporting period, divided by the total payment outstanding in that portfolio.
As of December 31, 2025 and December 31, 2024, the non-performing ratio for each of the portfolios of renegotiated loans is as follows:
NPL RATIO BY TYPE OF RENEGOTIATED LOAN | ||||||||
Ratio of impaired loans - past due | ||||||||
2025 | 2024 | |||||||
General governments | 23 | % | 28 | % | ||||
Commercial | 55 | % | 61 | % | ||||
Of which: Construction and developer | 86 | % | 88 | % | ||||
Other consumer | 51 | % | 60 | % | ||||
F-239
b.Qualitative information on the concentration of risk by activity and guarantees
Loans and advances to customers by activity (carrying amount)
DECEMBER 2025 (MILLIONS OF EUROS) | ||||||||||||||||||||||||||
Loans to customers. Loan to value | ||||||||||||||||||||||||||
Total (1) | Mortgage loans | Secured loans | 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% | |||||||||||||||||||
General governments | 25,243 | 213 | 6,530 | 923 | 2,477 | 392 | 2,513 | 438 | ||||||||||||||||||
Other financial institutions and individual entrepreneurs | 47,821 | 891 | 25,127 | 455 | 501 | 302 | 15,855 | 8,905 | ||||||||||||||||||
Non-financial institutions and individual entrepreneurs | 230,209 | 29,868 | 12,162 | 16,284 | 7,512 | 4,980 | 6,372 | 6,882 | ||||||||||||||||||
Construction and property development | 6,875 | 4,746 | 86 | 1,419 | 1,340 | 887 | 395 | 792 | ||||||||||||||||||
Construction of civil works | 7,143 | 559 | 421 | 217 | 251 | 77 | 18 | 417 | ||||||||||||||||||
Other purposes | 216,191 | 24,564 | 11,655 | 14,648 | 5,921 | 4,017 | 5,959 | 5,674 | ||||||||||||||||||
Large companies | 149,588 | 10,549 | 7,111 | 5,773 | 2,578 | 1,674 | 4,022 | 3,613 | ||||||||||||||||||
SMEs (2) and individual entrepreneurs | 66,603 | 14,015 | 4,544 | 8,875 | 3,343 | 2,343 | 1,937 | 2,061 | ||||||||||||||||||
Rest of households and NPISHs (3) | 182,405 | 100,887 | 2,641 | 24,747 | 28,608 | 33,491 | 12,963 | 3,719 | ||||||||||||||||||
Housing | 103,390 | 99,679 | 113 | 24,057 | 27,994 | 33,161 | 11,264 | 3,316 | ||||||||||||||||||
Consumption | 74,152 | 601 | 2,231 | 392 | 467 | 191 | 1,510 | 273 | ||||||||||||||||||
Other purposes | 4,864 | 607 | 297 | 298 | 147 | 139 | 190 | 131 | ||||||||||||||||||
| TOTAL | 485,678 | 131,859 | 46,460 | 42,409 | 39,098 | 39,165 | 37,703 | 19,944 | ||||||||||||||||||
MEMORANDUM ITEM: | ||||||||||||||||||||||||||
Forbearance operations (4) | 7,937 | 3,637 | 130 | 980 | 918 | 796 | 610 | 462 | ||||||||||||||||||
(1) The amounts included in this table are net of loss allowances.
(2) Small and medium enterprises.
(3) Non-profit institutions serving households.
(4) Net of provisions.
DECEMBER 2024 (MILLIONS OF EUROS) | ||||||||||||||||||||||||||
Loans to customers. Loan to value | ||||||||||||||||||||||||||
Total (1) | Mortgage loans | Secured loans | 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% | |||||||||||||||||||
General governments | 22,011 | 245 | 6,059 | 902 | 2,472 | 441 | 2,143 | 346 | ||||||||||||||||||
Other financial institutions and individual entrepreneurs | 28,150 | 683 | 16,999 | 357 | 376 | 272 | 8,469 | 8,208 | ||||||||||||||||||
Non-financial institutions and individual entrepreneurs | 203,240 | 27,815 | 11,047 | 13,453 | 7,828 | 4,865 | 4,888 | 7,828 | ||||||||||||||||||
Construction and property development | 6,572 | 4,304 | 266 | 1,947 | 1,299 | 700 | 291 | 334 | ||||||||||||||||||
Construction of civil works | 6,837 | 582 | 386 | 227 | 274 | 89 | 22 | 356 | ||||||||||||||||||
Other purposes | 189,831 | 22,929 | 10,394 | 11,278 | 6,255 | 4,077 | 4,575 | 7,138 | ||||||||||||||||||
Large companies | 128,917 | 9,955 | 6,915 | 5,166 | 2,417 | 1,906 | 2,312 | 5,070 | ||||||||||||||||||
SMEs (2) and individual entrepreneurs | 60,914 | 12,974 | 3,479 | 6,113 | 3,838 | 2,171 | 2,263 | 2,069 | ||||||||||||||||||
Rest of households and NPISHs (3) | 170,213 | 95,846 | 2,387 | 23,100 | 26,889 | 31,365 | 12,450 | 4,430 | ||||||||||||||||||
Housing | 98,560 | 94,573 | 111 | 22,569 | 26,301 | 31,099 | 10,794 | 3,920 | ||||||||||||||||||
Consumption | 67,225 | 584 | 2,004 | 242 | 440 | 136 | 1,462 | 308 | ||||||||||||||||||
Other purposes | 4,427 | 689 | 272 | 289 | 148 | 130 | 193 | 202 | ||||||||||||||||||
| TOTAL | 423,613 | 124,590 | 36,492 | 37,812 | 37,565 | 36,943 | 27,950 | 20,812 | ||||||||||||||||||
MEMORANDUM ITEM: | ||||||||||||||||||||||||||
Forbearance operations (4) | 7,553 | 4,268 | 234 | 993 | 1,005 | 900 | 702 | 902 | ||||||||||||||||||
(1) The amounts included in this table are net of loss allowances.
(2) Small and medium enterprises.
(3) Non-profit institutions serving households.
(4) Net of provisions.
F-240
DECEMBER 2023 (MILLIONS OF EUROS) | ||||||||||||||||||||||||||
Loans to customers. Loan to value | ||||||||||||||||||||||||||
Total (1) | Mortgage loans | Secured loans | 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% | |||||||||||||||||||
General governments | 23,025 | 271 | 7,104 | 1,137 | 2,911 | 429 | 2,369 | 527 | ||||||||||||||||||
Other financial institutions and individual entrepreneurs | 23,086 | 525 | 13,315 | 182 | 378 | 68 | 9,304 | 3,909 | ||||||||||||||||||
Non-financial institutions and individual entrepreneurs | 183,279 | 24,472 | 10,791 | 11,930 | 7,260 | 4,556 | 4,230 | 7,287 | ||||||||||||||||||
Construction and property development | 5,788 | 4,064 | 248 | 1,662 | 1,192 | 768 | 239 | 451 | ||||||||||||||||||
Construction of civil works | 5,173 | 554 | 382 | 231 | 191 | 87 | 37 | 390 | ||||||||||||||||||
Other purposes | 172,318 | 19,854 | 10,160 | 10,037 | 5,877 | 3,701 | 3,954 | 6,446 | ||||||||||||||||||
Large companies | 111,122 | 7,360 | 5,744 | 4,092 | 2,071 | 1,479 | 1,882 | 3,579 | ||||||||||||||||||
SMEs (2) and individual entrepreneurs | 61,196 | 12,494 | 4,416 | 5,944 | 3,806 | 2,222 | 2,072 | 2,867 | ||||||||||||||||||
Rest of households and NPISHs (3) | 157,847 | 95,040 | 2,166 | 21,700 | 25,396 | 31,265 | 13,960 | 4,886 | ||||||||||||||||||
Housing | 97,395 | 93,813 | 118 | 21,155 | 24,954 | 31,014 | 12,435 | 4,374 | ||||||||||||||||||
Consumption | 56,520 | 475 | 1,879 | 230 | 291 | 137 | 1,423 | 273 | ||||||||||||||||||
Other purposes | 3,933 | 753 | 169 | 315 | 152 | 114 | 102 | 239 | ||||||||||||||||||
| TOTAL | 387,238 | 120,308 | 33,376 | 34,949 | 35,944 | 36,319 | 29,864 | 16,609 | ||||||||||||||||||
MEMORANDUM ITEM: | ||||||||||||||||||||||||||
Forbearance operations (4) | 8,251 | 4,894 | 240 | 1,050 | 1,072 | 1,001 | 953 | 1,058 | ||||||||||||||||||
(2) Small and medium enterprises.
(3) Non-profit institutions serving households.
(4) Net of provisions.
The information for the main geographic areas is as follows:
DECEMBER 2025 (MILLIONS OF EUROS) BBVA, S.A. | ||||||||||||||||||||||||||
Loans to customers. Loan to value | ||||||||||||||||||||||||||
Total (1) | Mortgage loans | Secured loans | 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% | |||||||||||||||||||
General governments | 15,975 | 206 | — | 118 | 59 | 29 | 1 | — | ||||||||||||||||||
Other financial institutions and individual entrepreneurs | 38,969 | 871 | 24,541 | 240 | 416 | 70 | 15,808 | 8,880 | ||||||||||||||||||
Non-financial institutions and individual entrepreneurs | 129,698 | 11,919 | 2,596 | 5,306 | 4,167 | 1,751 | 1,158 | 2,133 | ||||||||||||||||||
Construction and property development | 2,018 | 1,858 | 3 | 587 | 591 | 301 | 106 | 276 | ||||||||||||||||||
Construction of civil works | 5,482 | 407 | 193 | 208 | 138 | 70 | 4 | 180 | ||||||||||||||||||
Other purposes | 122,198 | 9,654 | 2,400 | 4,510 | 3,438 | 1,380 | 1,048 | 1,677 | ||||||||||||||||||
Large companies | 96,744 | 4,261 | 1,778 | 2,062 | 1,423 | 450 | 833 | 1,272 | ||||||||||||||||||
SMEs (2) and individual entrepreneurs | 25,454 | 5,393 | 622 | 2,448 | 2,015 | 931 | 215 | 406 | ||||||||||||||||||
Rest of households and NPISHs (3) | 94,386 | 72,039 | 220 | 20,337 | 21,907 | 23,895 | 3,988 | 2,133 | ||||||||||||||||||
Housing | 73,267 | 71,434 | 72 | 20,122 | 21,747 | 23,744 | 3,874 | 2,019 | ||||||||||||||||||
Consumption | 17,787 | 40 | 80 | 45 | 21 | 25 | 12 | 17 | ||||||||||||||||||
Other purposes | 3,332 | 565 | 68 | 170 | 139 | 126 | 102 | 97 | ||||||||||||||||||
| TOTAL | 279,028 | 85,036 | 27,357 | 26,000 | 26,549 | 25,744 | 20,954 | 13,146 | ||||||||||||||||||
MEMORANDUM ITEM: | ||||||||||||||||||||||||||
Forbearance operations (4) | 5,037 | 3,015 | 36 | 803 | 794 | 665 | 378 | 412 | ||||||||||||||||||
(1) The amounts included in this table are net of loss allowances.
(2) Small and medium enterprises.
(3) Non-profit institutions serving households.
(4) Net of provisions.
F-241
DECEMBER 2025 (MILLIONS OF EUROS) BBVA MEXICO | ||||||||||||||||||||||||||
Loans to customers. Loan to value | ||||||||||||||||||||||||||
Total (1) | Mortgage loans | Secured loans | 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% | |||||||||||||||||||
General governments | 7,156 | 6 | 6,530 | 805 | 2,418 | 364 | 2,511 | 438 | ||||||||||||||||||
Other financial institutions and individual entrepreneurs | 5,468 | 12 | 363 | 209 | 83 | 22 | 35 | 25 | ||||||||||||||||||
Non-financial institutions and individual entrepreneurs | 42,293 | 9,403 | 6,241 | 8,488 | 2,378 | 1,865 | 1,481 | 1,431 | ||||||||||||||||||
Construction and property development | 1,676 | 1,490 | — | 231 | 465 | 473 | 193 | 129 | ||||||||||||||||||
Construction of civil works | 228 | 16 | 136 | 5 | 4 | 6 | 5 | 132 | ||||||||||||||||||
Other purposes | 40,390 | 7,897 | 6,104 | 8,252 | 1,909 | 1,386 | 1,284 | 1,170 | ||||||||||||||||||
Large companies | 21,288 | 3,531 | 2,542 | 3,104 | 947 | 700 | 705 | 617 | ||||||||||||||||||
SMEs (2) and individual entrepreneurs | 19,102 | 4,366 | 3,561 | 5,148 | 962 | 686 | 579 | 553 | ||||||||||||||||||
Rest of households and NPISHs (3) | 44,246 | 18,515 | 329 | 2,222 | 4,565 | 8,308 | 3,543 | 207 | ||||||||||||||||||
Housing | 18,491 | 18,491 | — | 2,112 | 4,540 | 8,253 | 3,458 | 127 | ||||||||||||||||||
Consumption | 25,731 | — | 329 | 108 | 16 | 42 | 84 | 79 | ||||||||||||||||||
Other purposes | 24 | 24 | — | 2 | 9 | 13 | — | — | ||||||||||||||||||
| TOTAL | 99,162 | 27,937 | 13,462 | 11,724 | 9,445 | 10,559 | 7,571 | 2,101 | ||||||||||||||||||
MEMORANDUM ITEM: | ||||||||||||||||||||||||||
Forbearance operations (4) | 481 | 281 | 56 | 83 | 58 | 94 | 79 | 24 | ||||||||||||||||||
(1) The amounts included in this table are net of loss allowances.
(2) Small and medium enterprises.
(3) Non-profit institutions serving households.
(4) Net of provisions.
DECEMBER 2025 (MILLIONS OF EUROS) GARANTI BBVA | ||||||||||||||||||||||||||
Loans to customers. Loan to value | ||||||||||||||||||||||||||
Total (1) | Mortgage loans | Secured loans | 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% | |||||||||||||||||||
General governments | 218 | — | — | — | — | — | — | — | ||||||||||||||||||
Other financial institutions and individual entrepreneurs | 704 | 3 | — | — | 1 | — | 3 | — | ||||||||||||||||||
Non-financial institutions and individual entrepreneurs | 23,235 | 2,554 | 466 | 1,075 | 278 | 681 | 756 | 230 | ||||||||||||||||||
Construction and property development | 1,887 | 315 | 77 | — | 106 | 51 | 39 | 196 | ||||||||||||||||||
Construction of civil works | 1,109 | 106 | — | — | 106 | — | — | — | ||||||||||||||||||
Other purposes | 20,239 | 2,132 | 389 | 1,075 | 66 | 630 | 717 | 34 | ||||||||||||||||||
Large companies | 9,820 | 503 | 241 | 31 | — | 268 | 446 | — | ||||||||||||||||||
SMEs (2) and individual entrepreneurs | 10,420 | 1,629 | 148 | 1,044 | 66 | 362 | 271 | 34 | ||||||||||||||||||
Rest of households and NPISHs (3) | 18,510 | 1,905 | 6 | 1,053 | 774 | 70 | 11 | 4 | ||||||||||||||||||
Housing | 1,907 | 1,903 | — | 1,052 | 773 | 67 | 9 | 3 | ||||||||||||||||||
Consumption | 16,332 | 1 | 6 | 1 | 1 | 3 | 2 | — | ||||||||||||||||||
Other purposes | 271 | — | — | — | — | — | — | 1 | ||||||||||||||||||
| TOTAL | 42,667 | 4,462 | 472 | 2,128 | 1,053 | 750 | 769 | 234 | ||||||||||||||||||
MEMORANDUM ITEM: | ||||||||||||||||||||||||||
Forbearance operations (4) | 1,602 | — | — | — | — | — | — | — | ||||||||||||||||||
(1) The amounts included in this table are net of loss allowances.
(2) Small and medium enterprises.
(3) Non-profit institutions serving households.
(4) Net of provisions.
F-242
DECEMBER 2025 (MILLIONS OF EUROS) OTHER ENTITIES | ||||||||||||||||||||||||||
Loans to customers. Loan to value | ||||||||||||||||||||||||||
Total (1) | Mortgage loans | Secured loans | 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% | |||||||||||||||||||
General governments | 1,893 | — | — | — | — | — | — | — | ||||||||||||||||||
Other financial institutions and individual entrepreneurs | 2,680 | 4 | 223 | 7 | 1 | 210 | 10 | — | ||||||||||||||||||
Non-financial institutions and individual entrepreneurs | 34,983 | 5,992 | 2,859 | 1,416 | 689 | 683 | 2,976 | 3,088 | ||||||||||||||||||
Construction and property development | 1,294 | 1,082 | 6 | 601 | 178 | 62 | 57 | 190 | ||||||||||||||||||
Construction of civil works | 325 | 30 | 91 | 4 | 3 | 1 | 9 | 104 | ||||||||||||||||||
Other purposes | 33,364 | 4,881 | 2,762 | 811 | 508 | 620 | 2,911 | 2,793 | ||||||||||||||||||
Large companies | 21,736 | 2,254 | 2,549 | 576 | 208 | 256 | 2,038 | 1,724 | ||||||||||||||||||
SMEs (2) and individual entrepreneurs | 11,628 | 2,627 | 213 | 234 | 300 | 364 | 872 | 1,069 | ||||||||||||||||||
Rest of households and NPISHs (3) | 25,264 | 8,427 | 2,085 | 1,135 | 1,362 | 1,218 | 5,422 | 1,375 | ||||||||||||||||||
Housing | 9,724 | 7,850 | 41 | 770 | 933 | 1,097 | 3,923 | 1,167 | ||||||||||||||||||
Consumption | 14,302 | 560 | 1,816 | 238 | 428 | 121 | 1,412 | 176 | ||||||||||||||||||
Other purposes | 1,237 | 18 | 229 | 127 | — | — | 87 | 33 | ||||||||||||||||||
| TOTAL | 64,821 | 14,424 | 5,168 | 2,558 | 2,051 | 2,112 | 8,408 | 4,463 | ||||||||||||||||||
MEMORANDUM ITEM: | ||||||||||||||||||||||||||
Forbearance operations (4) | 817 | 341 | 37 | 95 | 66 | 38 | 153 | 26 | ||||||||||||||||||
(1) The amounts included in this table are net of loss allowances.
(2) Small and medium enterprises.
(3) Non-profit institutions serving households.
(4) Net of provisions.
F-243
c.Information on the concentration of risk by activity and geographical areas
DECEMBER 2025 (MILLIONS OF EUROS) | |||||||||||||||||
TOTAL (1) | Spain | Rest of European Union | America | Other | |||||||||||||
Credit institutions | 143,686 | 24,453 | 36,190 | 47,739 | 35,303 | ||||||||||||
General governments | 167,380 | 68,664 | 25,270 | 63,390 | 10,056 | ||||||||||||
Central Administration | 142,761 | 52,409 | 24,587 | 55,950 | 9,814 | ||||||||||||
Other | 24,620 | 16,256 | 683 | 7,439 | 241 | ||||||||||||
Other financial institutions and individual entrepreneurs | 87,472 | 7,354 | 23,190 | 34,378 | 22,550 | ||||||||||||
Non-financial institutions and individual entrepreneurs | 314,130 | 93,419 | 37,423 | 113,776 | 69,512 | ||||||||||||
Construction and property development | 11,407 | 3,548 | 942 | 2,458 | 4,459 | ||||||||||||
Construction of civil works | 12,646 | 6,571 | 1,639 | 1,959 | 2,477 | ||||||||||||
Other purposes | 290,077 | 83,300 | 34,843 | 109,359 | 62,576 | ||||||||||||
Large companies | 216,732 | 56,936 | 33,853 | 78,833 | 47,110 | ||||||||||||
SMEs and individual entrepreneurs | 73,345 | 26,364 | 989 | 30,526 | 15,466 | ||||||||||||
Other households and NPISHs | 182,946 | 93,402 | 3,772 | 66,889 | 18,884 | ||||||||||||
Housing | 103,392 | 72,038 | 2,158 | 27,152 | 2,044 | ||||||||||||
Consumer | 74,152 | 17,680 | 1,350 | 38,790 | 16,332 | ||||||||||||
Other purposes | 5,403 | 3,683 | 263 | 947 | 509 | ||||||||||||
| TOTAL | 895,615 | 287,292 | 125,845 | 326,172 | 156,306 | ||||||||||||
(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 2024 (MILLIONS OF EUROS) | |||||||||||||||||
TOTAL ⁽¹⁾ | Spain | Rest of European Union | America | Other | |||||||||||||
Credit institutions | 134,618 | 20,574 | 36,788 | 44,739 | 32,516 | ||||||||||||
General governments | 148,541 | 63,146 | 15,277 | 58,857 | 11,261 | ||||||||||||
Central Administration | 127,232 | 49,454 | 14,743 | 52,035 | 11,000 | ||||||||||||
Other | 21,310 | 13,692 | 534 | 6,822 | 261 | ||||||||||||
Other financial institutions and individual entrepreneurs | 62,821 | 5,508 | 19,786 | 22,289 | 15,239 | ||||||||||||
Non-financial institutions and individual entrepreneurs | 279,097 | 86,803 | 32,185 | 100,623 | 59,487 | ||||||||||||
Construction and property development | 10,778 | 3,168 | 722 | 2,448 | 4,439 | ||||||||||||
Construction of civil works | 11,556 | 6,484 | 1,222 | 1,257 | 2,593 | ||||||||||||
Other purposes | 256,764 | 77,151 | 30,241 | 96,919 | 52,454 | ||||||||||||
Large companies | 187,984 | 51,296 | 28,984 | 71,896 | 35,808 | ||||||||||||
SMEs and individual entrepreneurs | 68,780 | 25,855 | 1,257 | 25,022 | 16,646 | ||||||||||||
Other households and NPISHs | 170,724 | 90,552 | 2,644 | 60,413 | 17,115 | ||||||||||||
Housing | 98,561 | 70,761 | 1,235 | 24,757 | 1,807 | ||||||||||||
Consumer | 67,257 | 16,271 | 1,149 | 35,055 | 14,782 | ||||||||||||
Other purposes | 4,906 | 3,520 | 259 | 600 | 526 | ||||||||||||
| TOTAL | 795,801 | 266,583 | 106,680 | 286,921 | 135,617 | ||||||||||||
F-244
DECEMBER 2023 (MILLIONS OF EUROS) | |||||||||||||||||
TOTAL (1) | Spain | Rest of European Union | America | Other | |||||||||||||
Credit institutions | 192,222 | 54,246 | 61,342 | 42,084 | 34,550 | ||||||||||||
General governments | 144,082 | 59,385 | 12,198 | 61,473 | 11,025 | ||||||||||||
Central Administration | 121,149 | 45,259 | 11,767 | 53,640 | 10,482 | ||||||||||||
Other | 22,933 | 14,125 | 431 | 7,833 | 543 | ||||||||||||
Other financial institutions and individual entrepreneurs | 54,064 | 9,564 | 18,279 | 18,097 | 8,124 | ||||||||||||
Non-financial institutions and individual entrepreneurs | 246,103 | 80,219 | 23,614 | 90,342 | 51,928 | ||||||||||||
Construction and property development | 9,256 | 2,888 | 640 | 2,573 | 3,156 | ||||||||||||
Construction of civil works | 9,524 | 5,988 | 885 | 1,558 | 1,093 | ||||||||||||
Other purposes | 227,323 | 71,344 | 22,089 | 86,211 | 47,679 | ||||||||||||
Large companies | 159,906 | 45,738 | 21,086 | 61,867 | 31,214 | ||||||||||||
SMEs and individual entrepreneurs | 67,417 | 25,606 | 1,003 | 24,344 | 16,464 | ||||||||||||
Other households and NPISHs | 158,344 | 88,561 | 2,477 | 58,686 | 8,620 | ||||||||||||
Housing | 97,395 | 70,073 | 1,302 | 24,899 | 1,120 | ||||||||||||
Consumer | 56,521 | 15,111 | 956 | 33,207 | 7,246 | ||||||||||||
Other purposes | 4,428 | 3,377 | 218 | 579 | 254 | ||||||||||||
| TOTAL | 794,814 | 291,975 | 117,910 | 270,682 | 114,247 | ||||||||||||
This Appendix is part of Note 7.2.7 of the consolidated financial statements for the year ended December 31, 2025.
F-245
APPENDIX IX. Additional information on risk concentration
a.Sovereign risk exposure
The table below provides a breakdown of exposure to financial assets (excluding derivatives and equity instruments), as of December 31, 2025, 2024 and 2023: by type of counterparty and the country of residence of such counterparty. The below figures do not take into account accumulated other comprehensive income, loss allowances or loan-loss provisions:
RISK EXPOSURE BY COUNTRIES (MILLIONS OF EUROS) | |||||||||||
Sovereign risk | |||||||||||
2025 | 2024 | 2023 | |||||||||
Spain | 68,620 | 63,277 | 59,704 | ||||||||
Italy | 14,244 | 12,264 | 10,744 | ||||||||
Turkey | 8,634 | 9,995 | 9,284 | ||||||||
Portugal | 568 | 288 | 424 | ||||||||
Germany | 129 | 195 | 142 | ||||||||
France | 8,247 | 1,366 | 182 | ||||||||
Netherlands | 1 | 10 | 14 | ||||||||
Romania | 1,135 | 791 | 587 | ||||||||
Rest of Europe | 1,718 | 1,227 | 1,187 | ||||||||
| Subtotal Europe | 103,297 | 89,413 | 82,268 | ||||||||
Mexico | 45,851 | 43,909 | 48,929 | ||||||||
The United States | 6,442 | 6,408 | 5,591 | ||||||||
Colombia | 5,482 | 4,021 | 3,540 | ||||||||
Peru | 1,293 | 1,208 | 1,526 | ||||||||
Argentina | 2,380 | 2,633 | 1,308 | ||||||||
Venezuela | — | — | — | ||||||||
Rest of countries | 2,651 | 1,337 | 1,782 | ||||||||
| Subtotal rest of countries | 64,101 | 59,517 | 62,676 | ||||||||
| Total exposure to financial instruments | 167,397 | 148,930 | 144,945 | ||||||||
The exposure to sovereign risk set out in the above table includes positions held in government debt securities in countries where the Group operates. They are used for ALCO’s management of the interest rate risk on the balance sheets of the Group’s entities in these countries, as well as for hedging of pension and insurance commitments by insurance entities within the BBVA Group.
F-246
b.Concentration of risk on activities in the real estate market in Spain
Quantitative information on activities in the real estate market in Spain
As of December 31, 2025, 2024 and 2023, the Group's exposure to the construction and real estate development sectors (excluding the mortgage portfolio) in Spain amounted to €10,602 million, €9,600 million and €9,476 million, respectively, of which €2,314 million, €2,207 million and €2,105 million, respectively, related to construction loans, real estate development activities and house purchases in Spain. Data as of December 31, 2025, 2024 and 2023 is shown below:
FINANCING ALLOCATED BY CREDIT INSTITUTIONS TO CONSTRUCTION AND REAL ESTATE DEVELOPMENT AND LENDING FOR HOUSE PURCHASE (MILLIONS OF EUROS) | |||||||||||||||||||||||||||||
Gross amount | Drawn over the guarantee value | Accumulated impairment | |||||||||||||||||||||||||||
2025 | 2024 | 2023 | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | |||||||||||||||||||||
| Financing to construction and real estate development (including land) (Business in Spain) | 2,314 | 2,207 | 2,105 | 665 | 473 | 482 | (69) | (102) | (115) | ||||||||||||||||||||
Of which: Impaired assets | 99 | 136 | 183 | 31 | 45 | 53 | (60) | (88) | (98) | ||||||||||||||||||||
Memorandum item: | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||
Write-offs | 2,100 | 2,100 | 2,097 | ||||||||||||||||||||||||||
Memorandum item: | — | — | — | ||||||||||||||||||||||||||
Total loans and advances to customers, excluding the General Governments (Business in Spain) (book value) | 199,056 | 177,946 | 168,660 | ||||||||||||||||||||||||||
Total consolidated assets (total business) (book value) | 772,402 | 775,558 | |||||||||||||||||||||||||||
Impairment and provisions for normal exposures | (5,015) | (4,841) | (4,752) | ||||||||||||||||||||||||||
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) | |||||||||||
2025 | 2024 | 2023 | |||||||||
| Without secured loan | 356 | 408 | 359 | ||||||||
| With secured loan | 1,958 | 1,799 | 1,746 | ||||||||
Terminated buildings | 837 | 832 | 857 | ||||||||
Homes | 646 | 656 | 685 | ||||||||
Other | 191 | 177 | 172 | ||||||||
Buildings under construction | 1,007 | 869 | 749 | ||||||||
Homes | 1,000 | 843 | 731 | ||||||||
Other | 7 | 26 | 18 | ||||||||
Land | 114 | 97 | 139 | ||||||||
Urbanized land | 91 | 76 | 92 | ||||||||
Rest of land | 23 | 22 | 47 | ||||||||
| Total | 2,314 | 2,207 | 2,105 | ||||||||
As of December 31, 2025, 2024 and 2023, 36.2%, 37.7% and 40.7% of loans to developers were guaranteed with buildings (77.2%, 78.8% and 79.9% are homes), and only 4.9%, 4.4% and 6.6% by land, of which 79.8%, 78.4% and 66.2% are in urban locations, respectively.
The table below provides the breakdown of the financial guarantees given as of December 31, 2025, 2024 and 2023:
FINANCIAL GUARANTEES GIVEN (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Houses purchase loans | 83 | 53 | 36 | ||||||||
Without mortgage | 2 | 2 | 3 | ||||||||
F-247
The information on the retail mortgage portfolio risk (housing mortgage) as of December 31, 2025, 2024 and 2023 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 | |||||||||||||||||||
2025 | 2024 | 2023 | 2025 | 2024 | 2023 | |||||||||||||||
Houses purchase loans | 72,631 | 71,709 | 71,144 | 2,071 | 2,889 | 3,267 | ||||||||||||||
Without mortgage | 1,313 | 1,416 | 1,415 | 10 | 9 | 10 | ||||||||||||||
With mortgage | 71,318 | 70,294 | 69,729 | 2,061 | 2,880 | 3,257 | ||||||||||||||
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 | |||||||||||||||
Gross amount December 31, 2025 | 19,309 | 21,566 | 23,824 | 4,198 | 2,421 | 71,318 | ||||||||||||||
Of which: Impaired loans | 348 | 472 | 472 | 332 | 437 | 2,061 | ||||||||||||||
Gross amount December 31, 2024 | 18,584 | 21,171 | 23,193 | 4,643 | 2,702 | 70,294 | ||||||||||||||
Of which: Impaired loans | 314 | 502 | 622 | 539 | 904 | 2,880 | ||||||||||||||
Gross amount December 31, 2023 | 17,201 | 20,302 | 22,850 | 5,856 | 3,519 | 69,729 | ||||||||||||||
Of which: Impaired loans | 307 | 464 | 642 | 617 | 1,227 | 3,257 | ||||||||||||||
Outstanding home mortgage loans as of December 31, 2025, 2024 and 2023 had an average LTV of 41%, 41% and 42% respectively.
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 ⁽¹⁾ ⁽²⁾ | Provisions | Of which: Valuation adjustments on impaired assets, from the time of foreclosure | Carrying amount | |||||||||||||||||||||||||||||||||||
2025 | 2024 | 2023 | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | 2025 | 2024 | 2023 | |||||||||||||||||||||||||||
| Real estate assets from loans to the construction and real estate development sectors in Spain | 191 | 303 | 398 | (150) | (246) | (307) | (97) | (159) | (183) | 41 | 57 | 92 | ||||||||||||||||||||||||||
Terminated buildings | 28 | 41 | 72 | (15) | (24) | (44) | (9) | (16) | (24) | 13 | 17 | 28 | ||||||||||||||||||||||||||
Homes | 16 | 19 | 31 | (8) | (10) | (16) | (4) | (6) | (7) | 8 | 9 | 15 | ||||||||||||||||||||||||||
Other | 12 | 23 | 41 | (7) | (15) | (28) | (5) | (10) | (17) | 5 | 8 | 13 | ||||||||||||||||||||||||||
Buildings under construction | 5 | 8 | 8 | (5) | (6) | (7) | (2) | (2) | (2) | — | 2 | 1 | ||||||||||||||||||||||||||
Homes | 5 | 8 | 7 | (5) | (6) | (6) | (2) | (2) | (2) | — | 2 | 1 | ||||||||||||||||||||||||||
Other | — | 1 | — | — | (1) | — | — | (1) | — | — | — | |||||||||||||||||||||||||||
Land | 158 | 254 | 318 | (130) | (216) | (256) | (86) | (141) | (156) | 28 | 38 | 62 | ||||||||||||||||||||||||||
Urbanized land | 153 | 248 | 299 | (125) | (210) | (242) | (83) | (138) | (145) | 28 | 38 | 57 | ||||||||||||||||||||||||||
Rest of land | 5 | 6 | 19 | (5) | (5) | (14) | (3) | (3) | (11) | — | 1 | 5 | ||||||||||||||||||||||||||
| Real estate assets from mortgage financing for households for the purchase of a home | 331 | 392 | 544 | (193) | (209) | (299) | (76) | (72) | (99) | 138 | 183 | 245 | ||||||||||||||||||||||||||
| Rest of foreclosed real estate assets | 214 | 283 | 364 | (149) | (195) | (231) | (46) | (61) | (76) | 65 | 88 | 133 | ||||||||||||||||||||||||||
| Total | 736 | 978 | 1,306 | (492) | (650) | (837) | (219) | (292) | (358) | 244 | 328 | 469 | ||||||||||||||||||||||||||
(1) Represents original loan value at the time of foreclosure.
(2) The value of real estate assets foreclosed or received in payment of debts should be initially recognized at the lower of the carrying amount of the financial assets and the fair value at the time of foreclosure less estimated sales costs. The gross value of the assets acquired in payment of debts is €463 million and €620 million as of December 31, 2025 and December 31, 2024, respectively.
F-248
As of December 31, 2025, 2024 and 2023, the gross book value of the Group’s real estate assets from corporate financing of real estate construction and development was €191 million, €303 million and €398 million, respectively, with an average coverage ratio of 78.5%, 81.2% and 77.0%, respectively.
The gross book value of real estate assets from mortgage lending to households for home purchase as of December 31, 2025, 2024 and 2023, amounted to €331 million, €392 million and €544 million, respectively, with an average coverage ratio of 58.3%, 53.3% and 55.0%.
As of December 31, 2025, 2024 and 2023, the gross book value of the BBVA Group’s total real estate assets (business in Spain), including other real estate assets received as debt payment, was €736 million, €978 million and €1,306 million, respectively. The coverage ratio was 66.8%, 66.5% and 64.1%, respectively.
This Appendix is part of Note 7 of the consolidated financial statements for the year ended December 31, 2025.
F-249
c.Concentration of risk by geographical areas
Below is a breakdown of the balances of financial instruments recognized in the consolidated balance sheets by their concentration in geographical areas and according to the residence of the customer or counterparty. As of December 31, 2025, 2024 and 2023 it does not take into account loss allowances or loan-loss provisions:
RISKS BY GEOGRAPHICAL AREAS. DECEMBER 2025 (MILLIONS OF EUROS) | ||||||||||||||||||||||||||
Spain | Rest of Europe | Mexico | The United States | Turkey | South America | Rest of business | Total | |||||||||||||||||||
| Derivatives | 3,210 | 16,061 | 4,721 | 5,076 | 55 | 2,091 | 1,337 | 32,551 | ||||||||||||||||||
Equity instruments (1) | 2,275 | 6,305 | 7,144 | 4,438 | 116 | 195 | 1,327 | 21,800 | ||||||||||||||||||
| Debt securities ⁽²⁾ | 56,555 | 33,777 | 43,399 | 9,659 | 8,489 | 9,714 | 1,480 | 163,073 | ||||||||||||||||||
Central banks | — | — | 1,519 | — | — | 912 | 70 | 2,501 | ||||||||||||||||||
General governments | 53,986 | 25,059 | 38,963 | 6,561 | 8,354 | 8,181 | 238 | 141,342 | ||||||||||||||||||
Credit institutions | 1,744 | 4,478 | 1,830 | 71 | 102 | 246 | 595 | 9,066 | ||||||||||||||||||
Other financial corporations | 184 | 2,378 | 361 | 1,371 | 1 | 148 | 246 | 4,689 | ||||||||||||||||||
Non-financial corporations | 641 | 1,862 | 726 | 1,655 | 33 | 226 | 331 | 5,475 | ||||||||||||||||||
| Loans and advances | 190,259 | 77,941 | 107,795 | 27,831 | 59,649 | 64,649 | 30,634 | 558,758 | ||||||||||||||||||
Central banks | 3 | 1,834 | — | — | 8,598 | 1,031 | 35 | 11,501 | ||||||||||||||||||
General governments | 14,492 | 341 | 7,457 | — | 260 | 2,507 | 869 | 25,926 | ||||||||||||||||||
Credit institutions | 3,217 | 24,592 | 3,437 | 363 | 1,782 | 3,415 | 5,576 | 42,381 | ||||||||||||||||||
Other financial corporations | 3,522 | 18,198 | 5,467 | 8,867 | 1,993 | 1,850 | 12,182 | 52,078 | ||||||||||||||||||
Non-financial corporations | 69,782 | 28,991 | 41,602 | 18,578 | 23,645 | 30,402 | 11,908 | 224,908 | ||||||||||||||||||
Households | 99,243 | 3,985 | 49,832 | 24 | 23,371 | 25,445 | 64 | 201,963 | ||||||||||||||||||
| Total risk in financial assets | 252,299 | 134,084 | 163,059 | 47,005 | 68,309 | 76,648 | 34,778 | 776,183 | ||||||||||||||||||
Loan commitments given | 38,222 | 55,254 | 29,277 | 26,268 | 51,876 | 21,253 | 5,404 | 227,554 | ||||||||||||||||||
Financial guarantees given | 2,964 | 6,365 | 63 | 4,181 | 8,637 | 945 | 1,710 | 24,865 | ||||||||||||||||||
Other commitments given | 21,587 | 15,038 | 2,295 | 6,308 | 6,677 | 3,821 | 4,433 | 60,158 | ||||||||||||||||||
| Off-balance sheet exposures | 62,773 | 76,658 | 31,635 | 36,757 | 67,190 | 26,019 | 11,546 | 312,578 | ||||||||||||||||||
| Total risks in financial instruments | 315,072 | 210,742 | 194,694 | 83,762 | 135,499 | 102,667 | 46,325 | 1,088,761 | ||||||||||||||||||
(1) Equity instruments are shown net of valuation adjustment.
(2) The debt securities of the "Financial assets at fair value through other comprehensive income" portfolio do not include gains/losses.
F-250
RISKS BY GEOGRAPHICAL AREAS. DECEMBER 2024 (MILLIONS OF EUROS) | ||||||||||||||||||||||||||
Spain | Rest of Europe | Mexico | The United States | Turkey | South America | Rest of business | Total | |||||||||||||||||||
| Derivatives | 3,391 | 19,034 | 2,269 | 6,996 | 70 | 3,044 | 1,199 | 36,003 | ||||||||||||||||||
Equity instruments ⁽¹⁾ | 2,034 | 5,850 | 6,700 | 2,782 | 103 | 214 | 310 | 17,993 | ||||||||||||||||||
| Debt securities ⁽²⁾ | 53,698 | 22,913 | 39,208 | 9,992 | 10,067 | 8,443 | 1,586 | 145,907 | ||||||||||||||||||
Central banks | — | — | — | — | — | 1,359 | 89 | 1,448 | ||||||||||||||||||
General governments | 50,854 | 15,410 | 36,667 | 6,408 | 9,756 | 6,410 | 200 | 125,705 | ||||||||||||||||||
Credit institutions | 2,040 | 3,092 | 1,527 | 64 | 153 | 302 | 408 | 7,585 | ||||||||||||||||||
Other financial corporations | 350 | 2,126 | 428 | 1,577 | 3 | 158 | 250 | 4,893 | ||||||||||||||||||
Non-financial corporations | 455 | 2,285 | 585 | 1,943 | 155 | 213 | 638 | 6,275 | ||||||||||||||||||
| Loans and advances | 179,935 | 70,972 | 95,747 | 17,794 | 52,234 | 58,668 | 18,278 | 493,628 | ||||||||||||||||||
Central banks | 18 | 1,626 | — | — | 5,876 | 1,297 | — | 8,817 | ||||||||||||||||||
General governments | 12,001 | 137 | 7,187 | — | 239 | 1,831 | 755 | 22,150 | ||||||||||||||||||
Credit institutions | 5,063 | 27,439 | 2,731 | 349 | 1,044 | 2,828 | 4,216 | 43,669 | ||||||||||||||||||
Other financial corporations | 2,926 | 15,069 | 2,106 | 2,953 | 1,987 | 1,992 | 5,463 | 32,496 | ||||||||||||||||||
Non-financial corporations | 63,409 | 23,821 | 40,016 | 14,468 | 22,812 | 27,155 | 7,778 | 199,459 | ||||||||||||||||||
Households | 96,517 | 2,879 | 43,708 | 25 | 20,275 | 23,565 | 67 | 187,037 | ||||||||||||||||||
| Total risk in financial assets | 239,058 | 118,770 | 143,924 | 37,564 | 62,473 | 70,369 | 21,372 | 693,530 | ||||||||||||||||||
Loan commitments given | 37,120 | 43,253 | 24,000 | 22,579 | 38,003 | 19,841 | 3,718 | 188,515 | ||||||||||||||||||
Financial guarantees given | 3,056 | 5,376 | 212 | 2,958 | 8,911 | 1,031 | 960 | 22,503 | ||||||||||||||||||
Other commitments given | 19,266 | 12,922 | 2,826 | 4,279 | 5,421 | 3,202 | 3,299 | 51,215 | ||||||||||||||||||
| Off-balance sheet exposures | 59,441 | 61,551 | 27,038 | 29,816 | 52,336 | 24,074 | 7,977 | 262,233 | ||||||||||||||||||
| Total risks in financial instruments | 298,500 | 180,321 | 170,962 | 67,380 | 114,809 | 94,443 | 29,349 | 955,763 | ||||||||||||||||||
(1) Equity instruments are shown net of valuation adjustment.
(2) The debt securities of the "Financial assets at fair value through other comprehensive income" portfolio do not include gains/losses.
F-251
RISKS BY GEOGRAPHICAL AREAS. DECEMBER 2023 (MILLIONS OF EUROS) | ||||||||||||||||||||||||||
Spain | Rest of Europe | Mexico | The United States | Turkey | South America | Rest of business | Total | |||||||||||||||||||
| Derivatives | 3,688 | 17,106 | 2,017 | 7,487 | 51 | 2,956 | 987 | 34,293 | ||||||||||||||||||
Equity instruments (1) | 1,424 | 2,999 | 6,418 | 2,399 | 76 | 206 | 246 | 13,768 | ||||||||||||||||||
| Debt securities | 49,620 | 19,547 | 43,825 | 9,103 | 8,932 | 7,071 | 2,502 | 140,600 | ||||||||||||||||||
Central banks | — | 15 | — | — | — | 1,179 | 80 | 1,274 | ||||||||||||||||||
General governments | 46,667 | 12,359 | 40,982 | 5,584 | 8,789 | 4,647 | 967 | 119,995 | ||||||||||||||||||
Credit institutions | 2,154 | 3,017 | 1,914 | 123 | 16 | 323 | 459 | 8,005 | ||||||||||||||||||
Other financial corporations | 442 | 2,065 | 334 | 1,223 | 2 | 680 | 222 | 4,967 | ||||||||||||||||||
Non-financial corporations | 357 | 2,091 | 596 | 2,173 | 125 | 242 | 773 | 6,357 | ||||||||||||||||||
| Loans and advances | 176,482 | 92,253 | 98,561 | 12,957 | 41,619 | 52,131 | 13,488 | 487,491 | ||||||||||||||||||
Central banks | 201 | 2,199 | — | — | 5,316 | 1,590 | 680 | 9,985 | ||||||||||||||||||
General governments | 12,394 | 145 | 7,856 | — | 496 | 2,082 | 492 | 23,466 | ||||||||||||||||||
Credit institutions | 7,141 | 53,077 | 5,759 | 636 | 1,428 | 2,391 | 3,691 | 74,122 | ||||||||||||||||||
Other financial corporations | 2,961 | 15,190 | 2,529 | 1,690 | 1,264 | 1,891 | 724 | 26,250 | ||||||||||||||||||
Non-financial corporations | 59,083 | 18,905 | 38,001 | 10,604 | 19,591 | 22,542 | 7,820 | 176,546 | ||||||||||||||||||
Households | 94,703 | 2,737 | 44,415 | 27 | 13,525 | 21,634 | 81 | 177,121 | ||||||||||||||||||
| Total risk in financial assets | 231,214 | 131,905 | 150,821 | 31,948 | 50,678 | 62,364 | 17,223 | 676,153 | ||||||||||||||||||
Loan commitments given | 34,931 | 42,914 | 24,811 | 17,773 | 20,883 | 9,600 | 1,956 | 152,868 | ||||||||||||||||||
Financial guarantees given | 2,694 | 5,542 | 69 | 2,338 | 6,587 | 991 | 618 | 18,839 | ||||||||||||||||||
Other commitments given | 17,187 | 8,191 | 2,812 | 3,135 | 5,057 | 2,991 | 3,205 | 42,577 | ||||||||||||||||||
| Off-balance sheet exposures | 54,812 | 56,646 | 27,691 | 23,245 | 32,527 | 13,581 | 5,780 | 214,283 | ||||||||||||||||||
| Total risks in financial instruments | 286,026 | 188,551 | 178,512 | 55,193 | 83,205 | 75,946 | 23,002 | 890,436 | ||||||||||||||||||
(1) Equity instruments are shown net of valuation adjustment.
The breakdown of the main figures in the most significant foreign currencies in the consolidated balance sheets is set forth in Appendix VII.
F-252
The breakdown of loans and advances in the heading of “Loans and advances”, impaired by geographical area as December 31, 2025, 2024 and 2023.
IMPAIRED FINANCIAL ASSETS BY GEOGRAPHICAL AREAS (MILLIONS OF EUROS) | |||||||||||
2025 | 2024 | 2023 | |||||||||
Spain | 6,633 | 7,581 | 8,068 | ||||||||
Rest of Europe | 105 | 104 | 99 | ||||||||
Mexico | 2,817 | 2,517 | 2,472 | ||||||||
South America | 2,200 | 2,260 | 2,176 | ||||||||
Turkey | 2,587 | 1,749 | 1,631 | ||||||||
Rest of business | 3 | 2 | — | ||||||||
| IMPAIRED RISKS | 14,346 | 14,213 | 14,446 | ||||||||
This Appendix is part of Note 7.2.8 of the consolidated financial statements for the year ended December 31, 2025.
F-253
Glossary
Actuarial risk | Arising from deviations in the biometric or behavioral variables used in the valuation of future commitments (such as mortality, longevity, disability, or persistence) which may negatively affect the technical balance of insurance or social security products. | ||||
Additional Tier 1 Capital | Includes: Preferred stock and convertible perpetual securities and deductions. | ||||
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 insurance and reinsurance contracts. This model is used by default and it applies to contracts with coverage periods of more than one year and not classified as contracts with direct participation, being mandatory except when the conditions to apply the other two methods are met: 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. | ||||
CGU | The smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. | ||||
Commissions | Income and expenses relating to commissions and similar fees are recognized in the income statement using criteria that vary according to their nature. The most significant income and expense items in this connection are: · Fees and commissions relating linked to financial assets and liabilities measured at fair value through profit or loss, which are recognized when collected. · Fees and commissions arising from transactions or services that are provided over a period of time, which are recognized over the life of these transactions or services. · Fees and commissions generated by a single act are accrued upon execution of that act. | ||||
Consolidation method | Method used for the consolidation of the accounts of the Group’s subsidiaries. The assets and liabilities of the Group entities are incorporated line-by-line on the consolidate balance sheets, after conciliation and the elimination in full of intragroup balances, including amounts payable and receivable. Group entity income statement income and expense headings are similarly combined line by line into the consolidated income statement, having made the following consolidation eliminations: a) income and expenses in respect of intragroup transactions are eliminated in full. b) profits and losses resulting from intragroup transactions are similarly eliminated. The carrying amount of the parent's investment and the parent's share of equity in each subsidiary are eliminated. | ||||
Contingencies | Current obligations of the entity arising as a result of past events whose existence depends on the occurrence or non-occurrence of one or more future events independent of the will of the entity. | ||||
Contingent commitments | Possible obligations of the entity that arise from past events and whose existence depends on the occurrence or non-occurrence of one or more future events independent of the entity’s will and that could lead to the recognition of financial assets. | ||||
Control | An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. An investor controls an investee if and only if the investor has all the following: a.Power; An investor has power over an investee when the investor has existing rights that give it the current ability to direct the relevant activities, i.e. the activities that significantly affect the investee’s returns. b.Returns; An investor is exposed, or has rights, to variable returns from its involvement with the investee when the investor’s returns from its involvement have the potential to vary as a result of the investee’s performance. The investor’s returns can be only positive, only negative or both positive and negative. c.Link between power and returns; An investor controls an investee if the investor not only has power over the investee and exposure or rights to variable returns from its involvement with the investee, but also has the ability to use its power to affect the investor’s returns from its involvement with the investee. | ||||
Correlation risk | Correlation risk is related to derivatives whose final value depends on the performance of more than one underlying asset (primarily, stock baskets) and indicates the existing variability in the correlations between each pair of assets. | ||||
Credit Valuation Adjustment (CVA) | An adjustment to the valuation of OTC derivative contracts to reflect the creditworthiness of OTC derivative counterparties. | ||||
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. | ||||
F-254
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 - Hedge accounting | 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 of BBVA Group entities domiciled in Spain, which reflect the BBVA Group’s domestic activities; the allocation of assets and liabilities is based on the domicile of the Group entity at which the relevant asset or liability is accounted for. | ||||
Early retirements | Employees that no longer render their services to the entity but which, without being legally retired, remain entitled to make economic claims on the entity until they formally retire. | ||||
Economic capital | Methods or practices that allow banks to consistently assess risk and attribute capital to cover the economic effects of risk-taking activities. | ||||
Effective interest rate (EIR) | Discount rate that exactly equals the value of a financial instrument with the cash flows estimated over the expected life of the instrument based on its contractual period as well as its anticipated amortization, but without taking the future losses of credit risk into consideration. | ||||
Employee expenses | All compensation accrued during the year in respect of personnel on the payroll, under permanent or temporary contracts, irrespective of their jobs or functions, irrespective of the concept, including the current costs of servicing pension plans, own share based compensation schemes and capitalized personnel expenses. Amounts reimbursed by the state Social Security or other welfare entities in respect of employee illness are deducted from personnel expenses. | ||||
Equity | The residual interest in an entity's assets after deducting its liabilities. It includes owner or venturer contributions to the entity, at incorporation and subsequently, unless they meet the definition of liabilities, and accumulated net profits or losses, fair value adjustments affecting equity and, if warranted, non-controlling interests. | ||||
Equity instruments | An equity instrument that evidences a residual interest in the assets of an entity, that is after deducting all of its liabilities. | ||||
Equity instruments issued other than capital | Includes equity instruments that are financial instruments other than “Capital” and “Equity component of compound financial instruments”. | ||||
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: 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. | ||||
F-255
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”). | ||||
IFRS (International Financial Reporting Standards) | For the purposes of these Financial Statements, "International Financial Reporting Standards" include International Accounting Standards (IAS), International Financial Reporting Standards (IFRS) and related interpretations (SIC interpretations/IFRIC interpretations), as may be developed or adopted by the International Accounting Standards Board (IASB, International Accounting Standard Board). | ||||
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. | ||||
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.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. | ||||
Inflation risk | Risk arising from the adverse impact that unexpected changes in inflation ratios may have on the Group's income, costs, fair value or present value of assets and liabilities, as well as on the risk-adjusted profitability of its exposures. | ||||
F-256
Inside Information | Type of filing made with the CNMV that contains information which by its nature may affect the price of one or more securities, or the market as a whole, and which has not yet been the subject of publicity or dissemination. | ||||
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. | ||||
Market liquidity risk | Risk that the Group may not be able to unwind or hedge a position in a financial instrument at its fair value due to insufficient market depth. | ||||
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. | ||||
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 either have contractual cash flows that do not comply with the SPPI test conditions, or are not covered by a business model whose objective is (i) maintaining financial assets to obtain cash flows, or (ii) obtaining contractual cash flows and selling financial assets. | ||||
Option risk | Risks arising from options, including embedded options. | ||||
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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 Relevant Information | Type of filing with the CNMV that contains a news item or piece of information that may influence investors' decisions on a given security, with a consequent impact on the share price. | ||||
Other reserves | This heading is broken down as follows: i) Reserves or accumulated losses of investments in subsidiaries, joint ventures and associates: 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 insurance and reinsurance contracts. This is a simplification of the general method (BBA) in the valuation of the provision for the remaining coverage, which can be adopted if the coverage period of the group of contracts is less than or equal to one year, according to the limits of the contract, or if the liability for the remaining coverage obtained does not differ materially from that produced under the general method. | ||||
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. | ||||
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. | ||||
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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 developed a two-prong approach: –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. –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; b.material transactions between the entity and its investee; c.interchange of managerial personnel; or d.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. | ||||
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 cash equivalents. When preparing these financial statements the following definitions have been used: · Cash flows: Inflows and outflows of cash and cash equivalents. · Operating activities: The typical activities of credit institutions and other activities that cannot be classified as investment or financing activities. · Investing activities: The acquisition, sale or other disposal of long-term assets and other investments not included in cash and cash equivalents or in operating activities. · Financing activities: Activities that result in changes in the size and composition of the 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 “Accumulated other comprehensive income”, are included in the Group’s total equity net of tax effect, which has been recognized as deferred tax assets or liabilities, as appropriate. | ||||
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Statements of recognized income and expense | The statement of recognized income and expenses reflect the income and expenses generated in each financial 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 and 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. | ||||
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 interests. | ||||
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. | ||||
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 the methodology of 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 compliance limits of the risk. | ||||
Variable Fee Approach (VFA) | This is one of the three measurement models for the valuation of insurance and reinsurance contracts. Applies to those insurance contracts in which the requirements established by IFRS 17 par.B101 are met: fully identified underlying assets, significant participation of the policyholder in the profitability of the underlying assets and that the payment of future benefits is significantly related to the value of the underlying assets. | ||||
Watch List (WL) | Watch List is defined as such risk that, derived from an individualized credit assessment, involves a significant increase in credit risk from the moment of origination, due to economic or financial difficulties or because it has suffered, or is estimated to suffer, adverse situations in its environment, without meeting the criteria for its classification as non-performing. | ||||
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. | ||||
Yield curve risk | Risks arising from changes in the slope and the shape of the yield curve. | ||||
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FAQ
What does BBVA’s 2025 Form 20-F report cover for investors?
BBVA’s 2025 Form 20-F presents its audited consolidated financial statements under IFRS, key risk disclosures, and business overview. It explains geographic exposures, capital and liquidity framework, segment reporting revisions, and major programs such as recent share buybacks and hyperinflation accounting in certain countries.
How many BBVA shares were outstanding at December 31, 2025?
At December 31, 2025, BBVA had 5,708,968,700 ordinary shares outstanding with a par value of €0.49 per share. This figure underpins ownership calculations, capital metrics and context for the bank’s announced and executed share buyback programs during 2025.
Which markets and securities does BBVA list according to the filing?
BBVA lists American Depositary Shares and ordinary shares on the New York Stock Exchange, plus several senior preferred, non‑preferred, Tier 2 and Additional Tier 1 instruments. It also lists certain preferred Tier 1 securities on the Irish Stock Exchange, broadening its access to international investors.
What share buyback programs does BBVA describe in the 2025 report?
BBVA details a €993 million buyback completed in 2025, repurchasing 54,316,765 shares, about 0.93% of share capital, later cancelled via capital reduction. It also announces a new €3,960 million share buyback program executed externally by J.P. Morgan SE.
How significant are Spain, Mexico and Turkey in BBVA’s risk profile?
BBVA highlights Spain, Mexico and Turkey as core markets with sizeable asset and loan exposure. As of December 31, 2025, these countries account for major portions of assets and total risk in financial assets, making their political and macroeconomic conditions central to BBVA’s overall risk profile.
How does BBVA handle hyperinflation in some of its operations?
BBVA treats Turkey, Argentina and Venezuela as hyperinflationary under IAS 29. Local financial statements are restated and then converted at period‑end exchange rates, with resulting differences recorded in accumulated other comprehensive income, affecting reported equity and comparability across regions.
What ESG and climate-related risks does BBVA emphasize?
BBVA outlines environmental, social and governance (ESG) risks, including physical and transition climate risks, evolving regulation, data and modeling challenges, and reputational concerns. It notes potential impacts on clients’ creditworthiness, funding costs, litigation exposure and its own long‑term strategic goals and disclosures.
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