Analysis of the Main Banking Risks and Management Strategies in BBVA
Analysis of the Main Banking Risks and Management Strategies in BBVA

Author(s): Rodrigo Gallas
Subject(s): Economy, Business Economy / Management, Financial Markets
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: banking risk management; credit risk; market risk; liquidity risk; operational risk
Summary/Abstract: This report examines the main risks faced by BBVA and how the bank manages them in today’s financial environment. BBVA operates in both stable and emerging markets, which exposes it to different levels of uncertainty, including inflation, interest-rate changes and geopolitical tensions. The analysis focuses on the bank’s risk management framework, which follows key regulatory requirements such as ICAAP, ILAAP and the stress tests carried out by the European Banking Authority. BBVA also uses internal models to measure credit, market, liquidity and operational risks more accurately. The bank maintains solid capital levels, with a CET1 ratio above regulatory expectations, and strong liquidity positions shown by high LCR and NSFR values. The report also highlights the importance of BBVA’s risk culture and governance structure. Decisions are supported by the “three lines of defence” model, which helps ensure that risks are properly identified, monitored and reviewed. Specific challenges, such as credit risk in countries with high volatility like Türkiye or the growing exposure to cyber threats, are analysed together with the strategies BBVA uses to reduce them. Overall, the findings show that BBVA applies a clear, disciplined and forward-looking approach to risk, helping the bank remain stable and resilient over time.

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