4.4. Information on the standardized approach

4.4.1. Identification of external rating agencies

The external credit assessment institutions (ECAIs) appointed by the Group to determine the risk weightings applicable to its exposures are the following: Standard & Poor’s, Moody’s, Fitch and DBRS.

The exposures for which the ratings of each ECAI are used are those corresponding to the wholesale portfolios, basically involving "Central Governments and Central Banks" in developed countries, and "Financial Institutions".

In cases where a counterparty has ratings by different ECAIs, the Group follows the procedure laid down in Article 261 of the Solvency Regulations, which specifies the order of priority to be used in the assignment of ratings.

When two different credit ratings made by designated ECAIs are available for a rated exposure, the higher risk weighting will be applied. However, when there are more than two credit ratings for the same rated exposure, use is to be made of the two credit ratings that provide the lowest risk weightings. If the two lowest risk weightings coincide, then that weighting will be applied; if they do not coincide, the higher of the two will be applied.

4.4.2. Assignment of the credit ratings of public share issues

The number of cases and the amount of these assignments is not relevant for the Group in terms of admission and management of issuer credit risk.

4.4.3. Exposure values before and after the application of credit risk mitigation techniques

The following table presents the amounts for net exposure, prior to the application of credit risk mitigation techniques, for different risk weightings and for the different exposure categories that correspond to the standardized method, excluding securitization positions:

TABLE 29: Standardized approach: Exposure values before the application of credit risk mitigation techniques
2014

(Millions of euros)

Category of exposure	Exposure net of allowances for losses Risk weighting							Total
	0%	20%	35%	50%	75%	100%	150%
Central governments or central banks	78,440	1,009	-	6,194	-	5,223	13,043	103,909
Regional governments or local authorities	32	4,321	-	1,303	-	1,811	-	7,467
Public sector entities	115	286	-	3,275	-	1,820	-	5,496
Multilateral Development Banks	50	1	-	29	-	13	-	93
International organizations	16	-	-	-	-	-	-	16
Institutions (2)	2,839	15,018	-	1,734	-	664	89	20,344
Corporates	-	7,649	-	1,730	3,972	94,321	73	107,744
Retail	-	-	-	-	59,369	137	-	59,506
Secured by mortgages on immovable property	-	-	46,118	6,262	-	1,768	-	54,147
Exposures in default	-	-	-	-	-	5,359	512	5,870
Items associated with particularly high risk	-	32	-	-	68	249	-	349
Covered bonds	-	605	-	-	-	-	-	605
Short-term claims on institutions and corporate	-	1,765	-	5	-	289	3	2,063
Collective investments undertakings (CIU)	-	120	-	-	-	5	-	124
Other exposures	8,178	600	-	-	31	18,198	14	27,020
TOTAL (1)	89,669	31,406	46,118	20,532	63,439	129,856	13,733	394,754

(1) It does not include securitization positions. (2) Exposure with 0% weighting corresponds to institution exposure with central counterparty

2013

(Millions of euros)

Category of exposure	Exposure net of allowances for losses Risk weighting							Total
	0%	20%	35%	50%	75%	100%	150%
Central governments or central banks	72,104	714	-	4,882	1	15,801	-	93,502
Regional governments or local authorities	855	6,387	-	1,330	1	622	-	9,195
Public sector entities	1,180	1,495	0	114	3	1,694	-	4,486
Multilateral Development Banks	34	0	-	16	0	-	-	50
International organizations	8	-	-	-	0	-	-	8
Institutions (2)	593	15,641	-	2,881	3	1,570	3	20,690
Corporates	-	3,574	-	694	-	88,189	42	92,499
Retail	-	-	854	-	59,452	22	-	60,328
Secured by mortgages on immovable property	-	-	43,681	6,231	-	1,889	-	51,801
Exposures in default	-	-	-	1,684	-	5,656	3,334	10,674
Items associated with particularly high risk	-	-	-	-	11	513	594	1,118
Covered bonds	-	911	-	-	-	-	-	911
Short-term claims on institutions and corporate	-	542	-	7	114	-	1	663
Collective investments undertakings (CIU)	-	-	-	-	0	816	-	816
Other exposures	9,247	441	-	1	163	12,249	11	22,112
TOTAL (1)	84,020	29,705	44,535	17,839	59,749	129,019	3,985	368,852

(1) It does not include securitization positions. (2) Exposure with 0% weighting corresponds to institution exposure with central counterparty

The tables below show exposure amounts after the application of credit risk mitigation techniques, for different risk weightings and for the different categories of risk that correspond to the standardized method, excluding securitization positions:

TABLE 30: Standardized approach: Exposure values after the application of credit risk mitigation techniques
2014

(Millions of euros)

Category of exposure	Fully adjusted value of the exposure (1) Risk weighting							Total
	0%	20%	35%	50%	75%	100%	150%
Central governments or central banks	82,210	2,235	-	6,194	-	5,223	13,043	108,904
Regional governments or local authorities	32	4,242	-	1,302	-	1,811	-	7,387
Public sector entities	675	392	-	659	-	1,374	-	3,099
Multilateral Development Banks	50	1	-	29	-	13	-	93
International organizations	16	-	-	-	-	-	-	16
Institutions (3)	2,832	15,049	-	1,639	-	768	89	20,377
Corporates	-	7,668	-	1,723	3,183	89,500	68	102,143
Retail	-	-	-	-	57,049	135	-	57,185
Secured by mortgages on immovable property	-	6	45,002	6,197	-	1,278	-	52,482
Exposures in default	-	-	-	-	-	4,781	463	5,244
Items associated with particularly high risk	-	15	-	-	59	134	-	208
Covered bonds	-	605	-	-	-	-	-	605
Short-term claims on institutions and corporate	-	1,765	-	5	-	61	3	1,834
Collective investments undertakings (CIU)	-	46	-	-	-	5	-	51
Other exposures	13,371	1,042	46	-	31	16,965	14	31,468
TOTAL (2)	99,185	33,065	45,047	17,748	60,322	122,048	13,680	391,096

(1) It is defined as the value of the exposure net of provisions, following the application of risk mitigation techniques (2) It does not include securitization positions. (3) Exposure with 0% weighting corresponds to institution exposure with central counterparty

2013

(Millions of euros)

Category of exposure	Fully adjusted value of the exposure (1) Risk weighting							Total
	0%	20%	35%	50%	75%	100%	150%
Central governments or central banks	70,222	2,136	-	4,882	1	15,801	-	93,042
Regional governments or local authorities	875	4,024	-	1,330	1	618	-	6,847
Public sector entities	1,638	1,570	0	128	3	1,490	-	4,829
Multilateral Development Banks	34	0	-	16	0	-	-	50
International organizations	8	-	-	-	0	-	-	8
Institutions (3)	593	15,462	-	2,882	96	1,298	3	20,334
Corporates	-	3,574	-	571	-	82,673	33	86,852
Retail	-	-	851	-	56,475	20	-	57,346
Secured by mortgages on immovable property	-	-	42,850	6,178	-	1,437	-	50,465
Exposures in default	-	-	-	1,253	-	5,351	2,125	8,728
Items associated with particularly high risk	-	-	-	-	11	338	581	930
Covered bonds	-	911	-	-	-	-	-	911
Short-term claims on institutions and corporate	-	542	-	6	-	114	1	663
Collective investments undertakings (CIU)	-	-	-	-	0	261	-	261
Other exposures	14,579	839	52	1	165	11,964	11	27,612
TOTAL (2)	87,949	29,058	43,753	17,247	56,753	121,364	2,755	358,879

(1) It is defined as the value of the exposure net of provisions, following the application of risk mitigation techniques (2) It does not include securitization positions. (3) Exposure with 0% weighting corresponds to institution exposure with central counterparty

The following table presents the main variations in the period in terms of RWAs for the Credit Risk standardized approach:

TABLE 31: Variations in the period in terms of RWAs for the Credit Risk standardized approach

(Millions of euros)

	Credit Risk (SA)
RWAs Dec 13		166,188
Effects	Activity	12,847
	Changes in RW	3,800
	Regulatory changes	9,229
	Model roll-out	-13,102
	Exchange rate	-1,613
	Other	77
RWAs Dec 14		177,425

* Does not include exposure to securitizations or equity, which are explained below.

The main changes during this year are basically due to:

• Activity: General growth in the portfolios corresponding to Latin America and the United States.
• Changes in RW: Increase in the risk weightings due to downgrades in Venezuela and Argentina
• Regulatory changes: Fundamentally due to the new regulatory requirements derived from the limits associated with deferred tax assets (DTAs).
• Model roll-out: Produced by the transfer to advanced corporate portfolio models of both BBVA S.A. and Bancomer.
• Exchange rate: The variation is produced by the net effect of the general depreciation of the euro against foreign currencies except for the Venezuelan bolivar, whose trend is contrary; thus the impact on RWAs is netted as described in section 1.5.4.2 of this document.