BBVA Significantly Exceeds Its New MREL Requirement
As of April 14, 2026, BBVA will be required to maintain a buffer of 23.94 percent of the total risk-weighted assets (RWAs) for its European resolution group. With an MREL ratio of 28.89 percent at the end of December 2025, the bank is already well above this threshold and also meets the additional requirements for subordination and capital buffers.
Today, the Bank of Spain informed BBVA of its new Minimum Requirement for own funds and Eligible Liabilities (MREL requirement), the regulatory framework that requires banks to have sufficient funds to absorb losses in case of crisis and which the Single Resolution Board (SRB) reassesses annually. Specifically, based on data from December 31, 2024 and with immediate effect, BBVA must maintain a volume of eligible instruments representing 23.94 percent of the risk-weighted assets of its European resolution group¹. The increase compared to the requirement in force to date (23.13 percent) is mainly explained by the higher value of BBVA subsidiaries.
If total exposure used to calculate the European resolution group’s leverage ratio is taken into account, and not risk-weighted assets, the new MREL requirement is 8.96 percent.
Furthermore, the SRB establishes a subordination requirement, which mandates banks to meet part of their MREL requirement with a minimum percentage of subordinated instruments (those with a subordination level equal to or higher than senior non-preferred debt). In this case, BBVA must maintain a volume of subordinated eligible liabilities representing 13.50 percent of the risk-weighted assets. Again, if total exposure used to calculate the leverage ratio is taken into account, this subordination requirement stands at 5.56 percent.
Both RWA-based requirements are joined by a combined capital buffer requirement of 3.72 percent.
BBVA currently complies with all these requirements, both in terms of RWAs and its total exposure included in the leverage ratio.
What is MREL?
MREL is a requirement for European banks to have a minimum volume of own funds and liabilities capable of absorbing losses and recapitalizing the bank if it is declared non-viable.
The Bank Recovery and Resolution Directive (BRRD) created this requirement to ensure that financial institutions have sufficient own funds and eligible liabilities to first, absorb possible losses, and second, recapitalize themselves without the need to use public funds. This prevents taxpayers from having to bear the cost of possible bank bailouts.
The MREL requirement is determined on a bank-by-bank basis, taking into consideration the capital requirements, as well as other factors such as the corporate structure and resolution strategy.
In BBVA’s case, given its ‘Multiple Point of Entry’ resolution strategy (MPE), the MREL requirement does not apply to the BBVA Group’s consolidated balance sheet, but to its European resolution group, mainly composed of BBVA, S.A., the parent company under which the Group’s business in Spain is located.