Risks

BBVA Group has a general risk management and control model (hereinafter referred to as the “Model”) adapted to its business model, organizational system and the geographic areas in which it operates, enabling it to carry out its activities within the framework of the risk management and control strategy and policy defined by the Bank's corporate bodies, and adapt to a changing economic and regulatory environment, addressing risk management in a global manner and adapted to the circumstances of each moment. The Model establishes an appropriate risk management system in relation to the entity’s risk profile and strategy.

This Model is applied comprehensively in the Group and is made up of the basic elements set out below:

• Governance and organization
• Risk Appetite Framework
• Decisions and processes
• Evaluation, monitoring and reporting
• Infrastructure

The Group promotes the development of a risk culture that ensures the consistent application of the Risk Management and Control Model within the Group and guarantees that the risk function is understood and permeates throughout all the levels of the organization.

Further details of this Model’s components are included in section 3. Also in section 3 there is a detailed description of the main inherent risks of BBVA Group: credit and dilution risk (includes counterparty and credit valuation adjustment risk), market risk, structural risks, liquidity risk and operational risk.