Mercantil Servicios Financieros, C. A. Financial Report First Quarter
Transcription
Mercantil Servicios Financieros, C. A. Financial Report First Quarter
Mercantil Servicios Financieros, C. A. Financial Report First Quarter 2013 Mercantil Servicios Financieros (Mercantil). First Quarter 2013 Caracas Stock Exchange (MVZ.A & MVZ.B); Level 1 ADR: MSFZY & MSFJY Caracas, April 30, 2013. Mercantil Servicios Financieros (Mercantil) reports its earnings for the quarter ended March 31, 2013. Summary Net Income: Mercantil posted Bs 2,039 million (US$ 363 million)1 in net income in 1Q 2013, 156.3% up on the Bs 796 million (US$ 185 million) 1 registered in 1Q 2012. Net earnings per share in 1Q 2013 were Bs 20.57, US$ 3.661 (Bs 8.02, US$ 1.871 in the first quarter of 2012). ROE and ROA in 1Q 2013 reached 47.9% and 5.2%, respectively (27.7% and 3.0% in 1Q 2012). The price of Mercantil’s Class “A” and “B” common shares closed at Bs 210 and Bs 202, respectively, compared to Bs 140 and Bs 135 at the end of December 2012 and Bs 71 and Bs 75 at the end of March 2012. The main variations in net quarterly income are: Net Interest Income reached Bs 2,591 million (US$ 461 million)1, Bs 870 million (50.6%) more than the Bs 1,721 million (US$ 401 million)1 reached in 1Q 2012, mainly due to growth of financial assets and liabilities. The financial intermediation ratio (loans-to-deposits) was 68.6% at the close of 1Q 2013 (75.7% at the close of the first quarter of 2012). Loan Portfolio Provision registered Bs 143 million (US$ 25 million)1 in expenditure, which reflects a Bs 39 million (21.4%) year-on-year decline from Bs 182 million (US$ 42 million)1. The provision represents 3.1% of the gross loan portfolio (3.4% at March 31, 2012) and covers 306.4% of past-due and nonperforming loans (235.9% at March 31, 2012). Commission and income reached Bs 1,924 million (US$ 342 million)1, up Bs 1,077 million (127.1%) from Bs 847 million (US$ 197 million) 1 registered in 1Q 2012, which stemmed from Bs 717 million income growth resulting from exchange differences due to the change from Bs 4.2893/US$1 to Bs 6.2842/US$1 in the exchange rate set by the Venezuelan Central Bank for the valuation of assets and liabilities in foreign currency; Bs 99 million earnings growth from securities trading; and Bs 261 increase in income from commissions on customer transactions; among other factors. Insurance premiums, net of claims reached Bs 235 million (US$ 42 million)1, up Bs 60 million (34.3%) year-on-year from Bs 175 million (US$ 41 million)1. Net earned premiums during the quarter reached Bs 2,099 million and reflected Bs 464 million (28.4%) year-on-year growth. Personnel and Operating Expenses reached Bs 2,359 million (US$ 420 million)1,, Bs 674 million (40.0%) more than the Bs 1,684 million (US$ 393 million)1 registered in 1Q 2012, due to increases of Bs 246 million (35.6%) in personnel expenses, Bs 144 million (56.9%) in expenses for contributions to regulatory entities and Bs 284 million in expenses for commissions for using the point-of-sale network, ATMs and other banking facilities. Personnel and Operating Expenses are affected by inflation in Venezuela which averaged 25.1% over the last 12 months, as well as by the effect of devaluation on expenses in Venezuela, and the conversion of the expenses of the overseas subsidiaries. The efficiency ratio measured by calculating operating expenses as a percentage of average assets, was 5.0% in March 2013 versus 5.4% in March 2012. Summary of the Financial Statements and Ratios 2 (In millions of Bolivars, except percentages) March December 2013 2012 QUARTERLY RESULTS Net Interest Income Allowance for losses on loan portfolio Commissions and other income Insurance premiums, net of claims Salaries and Operating Expenses Net Income – Quarter KEY FINANCIAL INDICATORS Income per share – Quarter Bs / share Market price A share Market price B share Book value per share Net Income (quarter) / Average Assets (ROA) Net Income (quarter) / Average Equity (ROE) 1 2 March 2012 ∆ Mar 13 vs. Dec 12 ∆ Mar 13 vs. Mar 12 2,591 143 1,924 235 2,359 2,039 2,502 280 1,378 400 2,129 1,508 1,721 182 847 175 1,684 796 % 3.6 (48.9) 39.7 (41.3) 10.8 35.4 % 50.6 (21.4) 127.1 34.3 40.0 156.3 20.57 210.00 202.00 174.74 5.2% 47.9% 15.20 140.00 135.00 147.49 5.0% 47.6% 8.02 71.00 75.00 114.04 3.0% 27.7% 35.3 50.0 49.6 18.5 4.0 0.6 156.5 195.8 169.3 53.2 73.3 72.8 Dollar figures are given for reference purposes only. Balance Sheet figures are translated at the closing exchange rate and income statement figures at the average exchange rate for the period. See exchange rates in Appendix VI. Exchange control in place in Venezuela since February 2003. See Appendix III Summary of the Financial Statements and Ratios (in Dollars). Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 1 Assets: In 1Q 2013 total assets registered Bs 26,197 million (18.4%) quarter-over-quarter growth to Bs 168,839 million (US$ 26,869 million)1, and Bs 59,425 million, (54.3%) year-on-year growth. The variations for this item, taken individually by subsidiary, are as follows: Mercantil Banco Universal registered Bs 11,672 million (11.1%) growth in 1Q 2013 and Bs 43,222 million (58.8%) year-on-year growth. Mercantil Commercebank registered a US$ 94 million (1.4%) decline in 1Q 2013 and US$ 88 million (1.3%) decline compared to March 2012. Mercantil Seguros registered Bs 1,219 million (17.8%) growth in 1Q 2013 and Bs 2,481 million (44.3%) growth compared to March 2012. Loan Portfolio In 1Q 2013, total loans registered Bs 12,145 million (15.6%) quarter-over-quarter growth to Bs 90,031 million (US$ 14,327 million)1, and Bs 27,227 million (43.4%) year-on-year growth. The variations for this item, taken individually by subsidiary, are as follows: Mercantil Banco Universal registered Bs 2,971 million (5.1%) growth in 1Q 2013 and Bs 16,423 million (37.1%) growth compared to March 2012. Mercantil Commercebank registered a US$27 million (0.6%) decline in 1Q 2013 and US$ 234 million (5.7%) growth compared to March 2012. Deposits: In 1Q 2013 deposits registered Bs 20,792 million (18.1%) quarter-over-quarter growth to Bs 135,397 million (US$ 21,545 million)1, and Bs 49,531 million (57.7%) year-on-year growth. The variations for this item, taken individually by subsidiary, are as follows: Mercantil Banco Universal registered Bs 9,923 million (10.9%) growth in 1Q 2013 and Bs 37,975 million (60.4%) growth compared to March 2012. Mercantil Commercebank, N.A. registered US$ 50 million (0.9%) growth in 1Q 2013 and US$ 31 million (0.6%) growth compared to March 2012. Shareholders’ Equity: Totaled Bs 17,861 million (US$ 2,842 million)1, up Bs 2,785 million (18.5%) quarter over quarter from Bs 15,076 million (US$ 3,515 million)1 and Bs 6,204 million (53.2%) year-on-year growth. The quarterly variation can be primarily attributed to Bs 2,039 million in net income for the period; Bs 1,441 million growth due to the effect of converting the net assets of overseas subsidiaries, and reductions of Bs 664 million for provisions for dividends declared by the General Meeting of Shareholders (see page 22) and Bs 31 million from adjusting available-forsale investments to their market value. Capital Ratios: Mercantil’s equity/assets ratio at March 31, 2013 is 10.6% and its equity/risk-weighted assets ratio is 19.5%, based on the standards of the National Securities Superintendency-SNV, for its abbreviation in Spanish (10.7% and 18.5% at March 31, 2012). Mercantil Banco Universal, in accordance with the requirements of the Superintendency of Banking Sector Institutions (SUDEBAN, for its abbreviation in Spanish), has an equity/assets ratio of 10.2% and an equity/risk-weighted assets ratio of 19.6% at March 31, 2013 (10.1% and 16.3% at March 31, 2012). Mercantil Commercebank, N.A., based on the standards of the U.S. Office of the Comptroller of the Currency (OCC), at March 31, 2013 the equity/assets ratio is 10.1% and the equity/risk-based assets ratio 17.3%, (9.2% and 17.1% at March 31, 2012). The equity ratios of Mercantil and its subsidiaries exceed the regulatory minimums. Summary of the Financial Statements (In millions of Bolivars, except percentages) March December 2013 2012 Cash and due from banks Investment Portfolio Loan Portfolio, Net Other assets TOTAL ASSETS ASSETS UNDER MANAGEMENT Deposits Financial Liabilities Other Liabilities Shareholders’ Equity TOTAL LIABILITIES AND SHAREHOLDERS´ EQUITY 1 30,444 42,624 90,031 5,740 168,839 27,557 32,621 77,885 4,579 142,642 16,468 26,305 62,804 3,837 109,414 ∆ Mar 13 vs. Dec 12 % 10.5 30.7 15.6 25.4 18.4 28,673 22,566 18,823 27.1 52.3 135,397 3,523 12,058 17,861 168,839 114,605 2,683 10,278 15,076 142,642 85,866 2,894 8,997 11,657 109,414 18.1 31.3 17.3 18.5 18.4 57.7 21.7 34.0 53.2 54.3 March 2012 ∆ Mar 13 vs. Mar 12 % 84.9 62.0 43.4 49.6 54.3 Dollar figures are given for reference purposes only. Balance Sheet figures are translated at the closing exchange rate and income statement figures at the average exchange rate for the period. See exchange rates in Appendix VI. Exchange control in place in Venezuela since February 2003. Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 2 Table of contents Contribution of subsidiaries Market share Credit Ratings Management discussion and analysis Operating Income Net Interest Income Loan Portfolio Provision Total Commissions and Other Income Insurance Premiums, Net of Claims Total Operating Expenses Balance Sheet Liquidity Investment Portfolio Financial Intermediation Activity Loan Portfolio Deposits Total Assets Financial Obligations Shareholders’ Equity Capital Ratios Assets and Liabilities in Foreign Currency Summary of Subsidiaries’ performance according to their Regulatory Accounting Standards Private Banking and Wealth Management Corporate Events New Measures announced for the Venezuelan Economy Awards and Acknowledgements Global Economic Climate U.S. Economic Climate Venezuelan Economic Climate Appendix I: Summary of the accounting principles used to prepare the financial statements Appendix II: Financial statements Mercantil Servicios Financieros, C.A. Appendix III: Summary of the Financial Statements and Ratios (in Dollars) Appendix IV: Consolidated Loan Portfolio by Classification Appendix V: Statutory percentage of Mercantil Banco Universal loans by economic sector and interest rates Appendix VI: Summary of Financial Indicators – Mercantil Servicios Financieros Appendix VII: Financial statements Mercantil Banco Universal Appendix VIII: Financial statements Mercantil Commercebank Holding Corporation Appendix IX: Financial statements Mercantil Seguros Appendix X: Key Macroeconomic Indicators Page 4 5 5 6 6 7 8 8 9 10 11 13 14 15 16 16 16 17 18 21 22 22 23 23 23 24 26 27 32 33 34 35 37 39 41 43 Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 3 Contribution of the Subsidiaries March 31, 2013 MERCANTIL SERVICIOS FINANCIEROS (1) (In millions of Bolivars and Dollars (2), except percentages) Patrimonio: Bs. 17.861 (US$ 2.842) Shareholders’ Equity (3) Venezuelan Main Activity (3) Mercantil Banco Universal Bs. 8.368 US$ 1.949 Universal Bank Main Subsidiaries Mercantil Commercebank Bs. 2.631 US$ 613 U.S.A Domestic Bank & Brokerage Mercantil Commercebank N.A. Mercantil Commercebank Investment Services (MCIS) Mercantil Commercebank Trust Company (MCTC) (3) (3) Bank Overseas Mercantil Merinvest Bs. 89 US$ 21 Mercantil Seguros Bs. 1.794 US$ 418 Bs. 764 US$ 178 International Banking Others Bs. 155 US$ 36 Investment Insurance In Venezuelan Mercantil Bank Other banking, mutual funds, trading & brokerage in Venezuelan Minor Investments Mercantil Merinvest, (Schweiz) AG. (Suiza) Mercantil Bank and Trust Limited (Islas Caiman) Mercantil Bank Curacao, NV Mercantil Bank Panamá, S.A. Casa de Bolsa, C.A. Mercantil Servicios de Inversión, C.A. Mercantil Sociedad Administradora de Entidades de Inversión Colectiva, C.A. In millions of Bs.(1) Total Assets % Assets Investments Loans (Net) Deposits Contribution Income net: Quarter Assets Management In millions of US$(2) Total Assets Investments Loans (Net) Deposits Contribution Income net: Quarter 115,265 68.3% 23,613 60,727 99,680 41,973 24.9% 12,539 27,308 32,804 3,678 2.2% 1,183 1,996 2,913 7,478 4.4% 5,197 - 73 0.0% 29 - 373 0.2% 63 - Total 168,839 100.0% 42,624 90,031 135,397 1,761 63 (1) 195 15 6 2,039 11,780 10,967 2,688 40 3,198 - 28,673 18,344 3,758 9,663 15,861 6,679 1,995 4,345 5,220 585 188 318 463 1,190 827 - 12 5 - 59 10 - 26,869 6,784 14,327 21,545 313 11 - 35 3 1 363 1,875 1,745 428 6 509 - 4,563 7,228 780 91 1,592 37 22 9,750 Assets Management Number of Employees 1 Financial data presented in accordance with SNV standards (see Appendix I). Figures net of elimination of inter-company transactions. Dollar figures are given for reference purposes only. Balance Sheet figures are translated at the closing exchange rate and income statement figures at the average exchange rate for the period. See exchange rates in Appendix VI. Exchange control has been in place in Venezuela since February 2003. 3 See Summary of Subsidiaries’ performance according to their Regulatory Accounting Standards (page 18). 2 Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 4 Market Share Positioning Commercial and Universal Private Bank's Market Share Venezuela Mercantil Banco (1) Tuorism Loans Industrial Loans Agricultural Loans Morgtgage Loans under the mortgage Debtor Law (Ley Especial del Deudor Hipotecario) Microcredits Loans Gross Loans Savings Deposits Total Deposits Total Deposits + Other Demand Liabilities Total Assets Trust Mercantil Seguros 3 2 3 2 1 2 12.9% 14.2% 14.2% 3 1 9.3% 4 3 1 3 3 4 4 2 2 1 2 2 3 2 8.3% 14.5% 20.7% 13.7% 12.0% 11.6% 8.1% 3 11.7% 15 1.2% (2) Net Premiums U.S.A. Mercantil Commercebank (3) Total Deposits (1) Source: Summary of Unconsolidated Financial Statements Published in National newspapers. (2) Source: Venezuelan Superintendency of Insurance at February 28, 2013. (3) Source: Federal Deposit Insurance Corporation (FDIC), to the Florida Stated USA, at June 30, 2012, total number of institutions: 292 in Florida Credit Ratings Mercantil Servicios Financieros National Ratings Long-term Short-term Rating for Unsecured Bonds ( Long-term in local currency) Rating for Commercial Paper (Short-term in local currency) Mercantil Banco Universal National Ratings Long-term Short-term International Ratings Long-term (Foreign and local currency) Short-term (Foreign and local currency) Viability Mecantil Commercebank Florida Bancorp y Mercantil Commercebank N.A. Long-term Deposit (Mercantil Commercebank ,N.A. only) Long-term Short-term Viability Fitch Ratings Clave (*) AA(Ven) F1+(Ven) A2 A1 A2 A1 AA+(Ven) F1+(Ven) B+ B b+ BB+ BB B bb (*) A credit rating agency in Venezuela Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 5 Management Discussion and Analysis Operating Income Quarter Ended on ∆ US$ 1 Mar.2013 (In millions of Bolivars and millions of US$, except percentages) Net Interest Income Allowance for Losses on Loan Portfolio Net Financial Margin Commissions and Other Income Insurance Premiums, Net of Claims Operating Income 461 25 436 342 42 820 March 2013 March 2012 2,591 143 2,447 1,924 235 4,606 Bolivars 1,721 182 1,539 847 175 2,561 870 (39) 908 1,077 60 2,045 % 50.6 (21.4) 59.0 127.1 34.3 79.9 Net Interest Income In 1Q 2013, net interest income was Bs 2,591 million (US$ 461 million)1, 50.6% higher than the Bs 1,721 million (US$ 401 million)1 registered in 1Q 2012, due to an increase in the volume of financial assets and liabilities. Interest income was Bs 3,698 million, a 50.7% year-on-year increase, both in growth of loan portfolio income by 50.0% and investment portfolio income by 54.1%. Financial expenses totaled Bs 1,107 million, up 51.1% compared to 1Q 2012. The financial intermediation ratio (loan-to-deposits) was 68.6% at the close of 1Q 2013, 75.7% at the close of March 2012. Mercantil Banco Universal, reached Bs 2,227 million, 54.3% up on the Bs 1,444 million in interest income registered in 1Q 2012, mainly due to a higher volume of financial assets and liabilities. The financial intermediation ratio was 62.6% in March 2013 and 73.5% in March 2012. Mercantil Commercebank, N.A., totaled US$ 36 million, similar to the US$ 37 million registered in 1Q 2012. The Bank continues to hold a significant portion of its assets, US$ 2,170 million (more than 32%), in short-term investments and securities issued by the US government or US government-sponsored bodies. This high level of liquidity has continued to give the Bank ample flexibility to increase its credit operations. Mercantil's net interest margin (income/average financial assets) at March 31, 2013 was 8.4% compared to 7.9% the previous year. Evolution of Net Interest Income (Million of Bs) 3,000 8.6% 2,500 8.5% 9.0% 8.4% 8.1% 7.9% 8.0% 2,000 7.5% 1,500 7.0% 1,000 6.5% 500 - 6.0% 1,721 1,948 2,230 2,502 2,591 IQ2012 IIQ2012 IIIQ2012 IVQ2012 IQ2013 Net Interest Income 1 8.5% 5.5% Net Interest Income / Average Financial Assets Dollar figures are given for reference purposes only. Balance Sheet figures are translated at the closing exchange rate and income statement figures at the average exchange rate for the period. See exchange rates in Appendix VI. Exchange control has been in place in Venezuela since February 2003. Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 6 Loan Portfolio Provision In 1Q 2013, expenses totaled Bs 143 million (US$ 25 million)1, Bs 39 million (21.4%) down from Bs 182 million (US$ 42 million)1 in 1Q 2012. Mercantil Banco Universal registered Bs 138 million in loan portfolio provisions in 1Q 2013 (Bs 144 million in 1Q 2012), aimed mainly at provisions related to the commercial, construction and services sector and the result of loan portfolio growth during the quarter. Mercantil Commercebank, N.A. registered US$ 0.1 million in loan portfolio provisions, US$ 8 million (99.2%) less compared to 1Q 2012, mainly for credits related to the commercial and construction sectors. This brings the accumulated allowance to Bs 2,893 million (US$ 460 million) 1 at March 31, 2013 and represents 3.1% of gross loans (3.4% at March 31, 2012). This provision covers 306.4% of the past-due and nonperforming loan portfolio (235.9% at March 31, 2012). Evolution of Loan Portfolio and Asset Quality Ratios (Millions of Bs) 100,000 90,000 3.4% 3.3% 80,000 3.3% 3.3% 70,000 3.1% 60,000 50,000 40,000 30,000 1.3% 1.4% 20,000 1.1% 10,000 0.9% 1.0% 0 2008 2008 Gross Loans 2009 2009 2010 2010 2011 4.2% 4.0% 3.9% 3.6% 3.6% 3.2% 3.3% 3.0% 2.8% 2.7% 2.4% 2.4% 2.1% 2.0% 1.8% 1.6% 1.5% 1.2% 0.9% 0.8% 0.6% 0.4% 0.3% 0.0% 2012 Past Due and Non-Performing Loans Past Due and Non-Performing Loans / Gross Loans Allowance for Losses on Loan Portfolio / Gross Loans 1 Dollar figures are given for reference purposes only. Balance Sheet figures are translated at the closing exchange rate and income statement figures at the average exchange rate for the period. See exchange rates in Appendix VI. Exchange control has been in place in Venezuela since February 2003. Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 7 Total Commissions and Other Income Composition of Total Income In 1Q 2013, commissions and other income totaled Bs 1,924 million (US$ 342 million)1, Bs 1,077 million (127.1%) up from Bs 847 million (US$ 197 million)1registered in 1Q 2012, primarily due to: Bs. 2,743 million 1 US$ 640 million March 2012 Bs 717 million (11,950.0%) increase in earnings from exchange difference due to the new exchange rate set by the Venezuelan Central Bank for the valuation of assets and liabilities in foreign currency (adjusted from Bs 4.2893/US$1 to Bs 6.2842/US$1). Bs. 4,750 million 1 US$ 845 million March 2013 63% Bs 261 million (43.0%) growth of earnings from commissions on debit and credit cards, insurance policy financing, other commissions on customer operations, and other income. 55% Bs 99 million (42.3%) growth of earnings from securities trading activities. Insurance Premiums, net of Claims 21% 19% En 1Q 2013, insurance premiums, net of commissions, reinsurance and claims, totaled Bs 235 (US$ 42 million)1, reflecting 34.3% year-on-year growth from Bs 175 million (US$ 41 million)1. This improvement is attributed to the Property & Casualty business. 17% 9% 9% 7% IQ 2012 IQ 2013 Net Interest Income Commissions on Transactions, Insurance Premiums net and Other Exchange Gains and Losses and Other Income Income on Sales Investment Securities Net earned premiums for 1Q 2013 amounted to Bs 2,099 million (US$ 374 million)1, reflecting Bs 464 million (28.4%) year-on-year growth. The main contributors to this variation were the Health (30%) and Automobile (25%) businesses. At February 28, 2013, Mercantil Seguros was the country’s third largest insurance company in terms of net earned premiums, with 11.7% of the insurance market. Claims during 1Q 2013 totaled Bs 1,439 million (US$ 256 million)1, up Bs 319 million (28.4%) compared to Bs 1,121 million (US$ 261 million) in 1Q 2012. The claims ratio was 65.8% in 2013 (63.8% in 2012). The technical result was Bs 43 million (US$ 8 million)1, similar to Bs 44 million (US$ 10 million)1registered in the first quarter 2012. Composition of Total Income by Business Segments 1.1% 1.4% Net Earned Premiums 88.2% 86.0% (12 months change) 10.7% 12.6% 60% 50% IQ 2012 40% Banking IQ 2013 Insurance Asset Management 30% 20% 10% 0% IQ 2012 IIQ 2012 IIIQ 2012 Insurance Market IVQ 2012 feb 2013 Mercantil 1 Dollar figures are given for reference purposes only. Balance Sheet figures are translated at the closing exchange rate and income statement figures at the average exchange rate for the period. See exchange rates in Appendix VI. Exchange control has been in place in Venezuela since February 2003. Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 8 Total Operating Expenses Quarter ∆ Ended on US$ 1 (In millions of Bolivars and US$, except percentages) Mar. 2013 Operating Income Operating Expenses Salaries and Employee Benefits Other Operating expenses Taxes Current and Deferred Net Income Operating Income March 2013 March 2012 Bolivars % 820 4,606 2,561 2,045 79.9 167 253 37 0 363 937 1,422 207 (1) 2,039 691 993 80 (1) 796 246 429 127 0 1,243 35.6 43.2 158.8 0.0 156.3 In 1Q 2013, operating expenses totaled Bs 2,359 million (US$ 420 million)1, a 40.0% year-on-year increase from Bs 1,684 million (US$ 393 million)1. This increase is mainly due to: Bs 246 million in personnel expenses, a year-on-year rise of 35.6%. The application of wage increase policies in Venezuela contributed to higher expenses as well as the effects of the new Labor Law in effect since May 2012 At Mercantil Banco Universal, assets per employee rose from Bs 10.5 million in 2012 to Bs 16.0 million in 2013. At Mercantil Seguros, net earned premiums per employee rose from Bs 1.1 million in 2012 to Bs 1.3 million in 2013. In the case of the overseas business, the assets per employee indicator remained at US$ 8.7 million in 2013. Bs 144 million (56.9%) rise in expenses for contributions to regulatory agencies. Bs 57 million (81.5%) increase in expenses for taxes and contributions. Bs 227 million (33.9%) increase in expenses for commissions for using the point-of-sale and ATM network and other facilities. The efficiency ratio measured by calculating operating expenses as a percentage of average assets, was 5.0% in March 2013, versus 5.4% in March 2012. The ratio of operating expenses to total income was 41.3% in March 2013 (52.3% in March 2012). Personnel and operating expenses are affected by inflation in Venezuela which averaged 25.1% over the last 12 months, as well as by the effect of devaluation on expenses in Venezuela, and the conversion of the expenses of the overseas subsidiaries. Total Operating Expenses Efficiency Ratios and Inflation in Venezuela Quarters (In millions of Bolivars) Δ +40.0% 57.7% 2,359 937 708 5.4% 603 5.7% 5.5% 5.4% 5.3% 31.0% 5.0% 24.3% Δ +26.4% 25.1% 24.6% 305 138 191 185 IQ 2012 IVQ 2012 IQ 2013 Salaries and employee benefits Other operating expenses Fees paid to regulatory agencies Depreciation, Property and equipment, Amortization of intangibles and others expenses 1 41.3% 5.5% 841 396 252 5.9% 47.7% 5.3% Δ +10.8% 925 49.8% 44.3% 37.7% 691 6.1% 50.4% 51.0% 2,129 1,684 52.3% 17.7% 21.3% 18.0% 5.1% 4.9% 4.7% 20.1% 11.0% 4.5% IQ 2012 IIQ 2012 IIIQ 2012 Inflation in Venezuela IVQ 2012 IQ 2013 Operating Expenses / Total Income Operating Expenses / Average Assets Dollar figures are given for reference purposes only. Balance Sheet figures are translated at the closing exchange rate and income statement figures at the average exchange rate for the period. See exchange rates in Appendix VI. Exchange control has been in place in Venezuela since February 2003. Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 9 Balance Sheet The principal balance sheet variations during 1Q 2013 are reviewed below and commented on with respect to the prior quarter. The main year-onyear variations are also indicated for comparison purposes. Summary of Balance Sheet and Assets in Trust (In millions of Bolivars and Dollars, except percentages) ∆ US$ 1 Mar.2013 Cash and due from banks March 2013 30,444 December 2012 March 2012 ∆ Mar 13 vs. Dec 12 Bolivars % Mar 13 vs. Mar 12 Bolivars % Investment Portfolio Loan Portfolio, Net Total Assets 4,844 6,784 14,327 26,869 42,624 90,031 168,839 27,557 32,621 77,885 142,642 16,468 26,305 62,804 109,414 2,887 10,003 12,145 26,197 10.5 30.7 15.6 18.4 13,976 16,319 27,227 59,425 84.9 62.0 43.4 54.3 Deposits Shareholders´ Equity 21,545 2,842 135,397 17,861 114,605 15,076 85,866 11,657 20,792 2,785 18.1 18.5 49,531 6,204 57.7 53.2 4,563 28,673 22,566 18,823 6,107 27.1 9,850 52.3 Asset Management Liquidity At the close of 1Q 2013, total cash and due from banks (cash and the reserve ratio in Venezuela) plus investments in time deposits and placements, which are included in the investment portfolio, increased 11.1% to Bs 34,872 million (US$ 5,549 million)1, exceeding the Bs 31,394 million (US$ 7,319 million) recorded in the previous quarter by Bs 3,478 million This growth is attributed mainly to accounts held at the Central Bank of Venezuela. Compared to March 31, 2012, cash and due from banks plus investments in time deposits and placements grew Bs 16,229 million (87.1%), from Bs. 18,643 million to Bs 34,872 million. Liquidity (In millions of Bolivars) Δ +87.1% 34,872 31,394 17,403 16,065 18,642 7,886 Δ +11.1% Δ +68.4% 11,492 13,041 8,581 2,175 3,837 4,428 IQ 2012 IVQ 2012 IQ 2013 Cash and Due from Banks - Legal Reserves Legal Reserves Investments in Time Deposits and Placements The liquidity ratio calculated by dividing total cash and due from banks by deposits was 22.5%; and the ratio calculated by dividing total cash and investments by deposits was 54.0%, compared with 24.0% and 52.5%, respectively in December 2012 and 19.2% and 49.8%, respectively at the close of 1Q 2012. 1 Dollar figures are given for reference purposes only. Balance Sheet figures are translated at the closing exchange rate and income statement figures at the average exchange rate for the period. See exchange rates in Appendix VI. Exchange control has been in place in Venezuela since February 2003. Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 10 Investment Portfolio At the close of 1Q 2013, the investment portfolio totaled Bs 42,624 million (US$ 6,784 million)1, reflecting a quarter-over-quarter increase of Bs 10,003 million (30.7%) from Bs 32,621 million (US$ 7,606 million)1. This growth is observed mainly in investments issued by the Venezuelan state, state-owned companies and decentralized entities to fund social housing construction projects. Investments Portfolio (In million of Bolivars) Δ +62.0% 42,624 32,621 Compared to March 31, 2012, the investment portfolio grew Bs 16,319 million (62.0%) from Bs 26,305 million to Bs 42,624 million. 26,305 Δ + 30.7% The variations for this item, seen individually by subsidiary, are as follows: Mar. 2012 (In millions, except percentages) Mercantil Banco Universal Mercantil Seguros Mercantil Commercebank, N.A. Bs. Bs. Us$ March December 2013 2012 24,302 5,473 1,995 Dec. 2012 Mar. 2013 ∆ Abs. 18,413 4,681 2,122 % 5,889 792 (127) 32.0 16.9 (6.0) Investments by maturity and yield at the close of 1Q 2013 are broken down as follows: Investments by Maturity and Yield (In millions of Bolivars, except percentages) Available for Sale Trading Years Bs. 2 Bs. Less Than 1 Bs. 2 Held to Maturity %4 Bs. 3 %4 1,624 10.2 From 1 to 5 4,308 12.2 3,824 5.3 Over 5 8,233 14.8 4,666 4.2 8 513 13.2 98 4.7 From 1 to 5 51 1,386 5.5 324 3.1 Over 5 49 12,276 4.9 66 2.0 107 28,339 US$ Less Than 1 Time Deposits and Placements Shares Bs. 2 Bs. 2 4,384 8,978 5 Restricted Investments % Bs. 2 %4 5.6 6 6.1 6,400 2 11.1 8,134 392 21 TOTAL 12,920 38 3 6 24 4,428 0.1 0.6 314 3.7 972 17 2.8 1,778 23 3.6 12,421 748 42,624 1 Dollar figures are given for reference purposes only. Balance Sheet figures are translated at the closing exchange rate and income statement figures at the average exchange rate for the period. See exchange rates in Appendix VI. Exchange control in place in Venezuela since February 2003. Registered at Market Value 3 Amortized cost 4 The yield of securities is based on amortized cost at the end of the period. Yield is calculated by dividing income from (including Premium amortization or discounts) by amorti zed cost or market value. 5 Bs. 3,690 million are Central Bank placements with maturity under 30 days. 6 Consists of Repos with the Central Bank of Venezuela with maturity under 30 days 2 Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 11 Investments at the close of 1Q 2013, by company, issuer and currency, are broken down as follows: Breakdown of Investments by Issuer and Currency at March 31, 2012 (In millions of Bolivars and Dollars, except percentages) Venezuelan US Gov. Government Venezuelan US Guaranteed and Public Central Bank Government Agencies Int’I Private Entities Bolivars Mercantil Banco Universal Mercantil Seguros & Others Total Bs. 4,076 4,076 - - - Venezuelan Private 19,079 3,552 33 715 23,187 4,267 22,6312 748 27,454 Total US$1 US Dollars Mercantil Banco Universal Mercantil Commercebank Florida Bancorp Mercantil Seguros & Others 12 22 13 20 68 1,050 60 795 29 114 106 36 156 1,995 351 Total US$ 1,123 846 233 212 - 2,414 16.6% 12.5% 3.4% 56.2% 1.7% 100.0% Breakdown % 1 2 Total Bs 9.6% Dollar figures given for reference purposes only and are translated al the closing exchange rate. See Exchange rates in Appendix VI. Exchange control has been in place in Venezuela since February 2003. Bs. 1.385 million include US$ indexation clause Government bonds issued by the Venezuelan State account for 0.9 times Mercantil's equity and 9.2% of its assets (0.6 and 6.8%, respectively in December 2012). At Mercantil Banco Universal, these securities represent 1.0 times the equity and 9.1% of the assets (0.6% and 5.6%, respectively in December 2012). Mercantil holds 2.2% of the public debt securities in national and foreign currency issued by the Venezuelan nation according to official figures obtained from the Ministry of Planning and Finance at December 31, 2012. At March 31, 2013, the Mercantil, C.A. Banco Universal subsidiary, in line with a regulation issued by the executive, purchased Bs 8,639 million in Agricultural Bonds, Mortgage Bonds and Participation Certificates, accounting for 36.7% of the bank's investment portfolio and 0.8 times its shareholders' equity (Bs 7,517 million representing 42.1% of its investment portfolio and 0.8 times its shareholders' equity at December 31, 2012). Breakdown of Investments by Issuer March 2012 December 2012 March 2013 60% 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Venezuelan Central Bank US Government Private Venezuelan Government and Public Entities US Gov. Guaranteed Agencies Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 12 Financial Intermediation Activity Loan Portfolio Loan Portfolio At the close of 1Q 2013, net loans were Bs 90,031 million (US$ 14.327 million)1, reflecting 15.6% growth over 4Q 2012 when they totaled Bs 77,885 million (US$ 18,158 million)1. (In million of Bolivars) Δ + 43.4% 90,031 77,885 Compared to March 31, 2012, the loan portfolio grew Bs 27,227 million (43.4%) from Bs 62,804 million to Bs 90,031 million. 62,804 Δ + 15.6% At March 31, 2013, consumer and commercial loans account for 58.6% of the loan portfolio which totaled Bs 54,497 million, reflecting 17.9% quarter-over-quarter growth and 54.1% year-on-year growth. The variations for this item, taken individually by subsidiary, are as follows: Mar. 2012 (In millions, except percentages Mercantil Banco Universal Mercantil Commercebank, N A Bs. Us$ March December 2013 2012 60,727 4,345 Dec. 2012 Mar. 2013 ∆ Abs. 57,756 4,372 % 2,971 (27) 5.1 (0.6) The ratio of past-due and nonperforming loans to gross loans was 1.0% (0.9% at December 2012). The ratio by subsidiary is as follows: Mercantil Banco Universal 0.8% compared with 1.0% for the Venezuelan financial system. Mercantil Commercebank, N.A. 1.5%, similar to the 1.6% registered at the close of December 2012 (1.8% non-accrual loans, 1.9% at December 31, 2012). At March 31, 2013, 98.4% of Mercantil’s loan portfolio is outstanding. The allowance for losses on loan portfolio covers 306.4% of past-due and nonperforming loans 372.6% at December 31, 2012); this indicator is 496.1% at Mercantil Banco Universal (611.1% at December 31, 2012) and 105.2% at Mercantil Commercebank (92.2% at December 31, 2012). The analysis of Mercantil's main subsidiaries and their positioning in the market are shown on Pages 5 and 18. Annex IV shows the distribution of the loan portfolio, broken down by economic activity, maturity, country and type of risk. The statutory percentage of Mercantil Banco Universal loans by economic sector and interest rates is shown in Annex V. Loan Portfolio by Business Segment (In millions of bolivars) SME's Large Corporation Individuals 100,000 90,000 80,000 31% 70,000 29% 31% 33% 24% 24% 24% 47% 47% 45% 43% 43% Mar. 2012 Jun. 2012 Sep. 2012 Dec. 2012 Mar. 2013 60,000 50,000 40,000 28% 25% 26% 30,000 20,000 10,000 0 1 Dollar figures given for reference purposes only and are translated al the closing exchange rate. See Exchange rates in Appendix VI. Exchange control has been in place in Venezuela since February 2003. Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 13 Deposits Deposits (In million of Bolivars) At the close of 1Q 2013, deposits were Bs 135,397 million (US$ 21,545 million)1, representing a quarter-over quarter increase of Bs 20,792 million (18.1%) compared to Bs 114,605 million (US$ 26,720 million)1. Δ + 57.7% 135,397 Compared to March 31, 2012, deposits grew Bs 49,531 million (57.7%) from Bs 85,866 million to Bs 135,397 million. 114,605 85,866 Δ +18.1% Checking accounts were the main component of deposits which totaled Bs 81,419 million, up 17.0% from the previous quarter, and represented 60.1% of total deposits. Savings deposits increased Bs 6,404 million (16.4%) and time deposits Bs 2,586 million (43.3%) compared to the previous quarter. The variations for this item, taken individually by subsidiary, are as follows: (In millions, except percentages) Mercantil Banco Universal Mercantil Commercebank, N.A. Bs. Us$ March December 2013 2012 100,863 5,380 Mar. 12 Mar. 13 ∆ Abs. 90,940 5,330 Dec. 2012 % 9,923 50 10.9 0.9 The financial intermediation (loan-to-deposit) ratio is 68.6%, compared to 70.3% in December 2012. An analysis of Mercantil's main subsidiaries and their positioning in the market can be seen on Pages 5 and 18. Breakdown Deposits by Business Segment (In millions of bolivars) Individuals Large Corporation SME's 140,000 130,000 120,000 110,000 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 1 55% 55% 52% 52% 56% 21% 23% 24% 20% 19% 26% 25% 24% 24% 24% Mar. 2012 Jun. 2012 Sep. 2012 Dec. 2012 Mar. 2013 Dollar figures given for reference purposes only and are translated at the closing exchange rate. See Exchange rates in Appendix VI. Exchange control has been in place in Venezuela since February 2003. Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 14 Total Assets At the close of 1Q 2013, total assets registered 18.4% growth to Bs 168,839 million (US$ 26,869 million)1, up Bs 26,197 million compared to Bs 142,642 million (US$ 33,258 million)1 in the previous quarter. This is the result of the combined behavior of the investment portfolio and the loan portfolio, which grew Bs 10,003 million and Bs 12,145 million, respectively. The ratio of performing assets to total assets was 79.7%, up Bs 22,153 million (19.7%) on the previous quarter. Total Assets Consolidated (In million of Bolivars) 168,839 142,642 109,414 Compared to March 31, 2012, assets grew Bs 59,425 million (54.3%) from Bs 109,414 million to Bs 168,839 million. The variations for this item, taken individually by subsidiary, are as follows: Mar. 2012 (In millions, except percentages) Mercantil Banco Universal Mercantil Seguros Mercantil Commercebank, N.A. Bs. Bs. Us$ March December 2013 2012 116,668 8,083 6,693 104,996 6,864 6,787 Dec. 2012 Mar. 2013 ∆ Abs. % 11,672 11.1% 1,219 17.8% (94) (1.4) The analysis of Mercantil's main subsidiaries and their positioning in the market are shown on Pages 5 and 18. The loan portfolio remained the principal component (53.3%) of total assets, and the investment portfolio increased its share to 25.2%, while total cash and due from banks at the end of the quarter accounted for 18.0%. Assets Distribution Total Bs. 168,839 million 1 (US$ 26,869 million) March 2013 Composition of Assets Breakdown of Assets by Sudsidiaries (In millions of Bolivars) (In millions of Bolivars) Investment Portfolio 25% Cash and Due from Banks 18% Loan Portfolio, Net 53% Venezuelan Central Bank 3% Mercantil Banco Universal 68.3% Mercantil Commercebank 24.9% Venezuelan Govermment 14% Mercantil Seguros 4.4% US Govermment. 4% Others Countries 2.2% Private Sector 1% Other Subsidiaries (Venezuela) 0.2% US Govermment Guaranteed Agencies 3% Other Assets 4% 1 Dollar figures are given for reference purposes only. Balance Sheet figures are translated at the closing exchange rate and income statement figures at the average exchange rate for the period. See exchange rates in Appendix VI. Exchange control has been in place in Venezuela since February 2003. Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 15 Financial Obligations At the close of 1Q 2013, total financial obligations were 4,320 million (US$ 788 million)1, 29.4% up compared to Bs 3,338 million (US$ 779 million)1 in the previous quarter, while compared to March 31, 2012, obligations rose 28.1%. (In million of bolivars and dollars) Publicly Traded Debt Securities Issued by Mercantil Subordinated debt Other Financial Liabilities * * 1 US$ 15 112 227 561 788 March 2013 December 2012 March 2012 Bs. Bs. Bs. 96 701 797 3,523 4,320 176 479 655 2,683 3,338 479 479 2,894 3,373 Includes liabilities under repurchase agreements with BCV, funds received for special financing programs, liabilities with credit cards, letters of credit and securities loan agreements. Shareholders’ Equity At the close of 1Q 2013, shareholder's equity reached Bs 17,861 million (US$ 2,842 million)1, 18.5% up from Bs 15,076 million (US$ 3,515 million)1in the previous quarter and 53.2% up from Bs 11,657 million (US$ 2,719 million)1in 1Q 2012. The variation in the first quarter is primarily due to Bs 2,039 million in net income for the period, a Bs 1,441 increase from conversion adjustments of net assets of subsidiaries abroad, and a reduction of Bs 664 million in provisions for dividends declared by the Shareholders' Meeting (see Page 22) and Bs 31 million from adjusting available-for-sale investments to their market value. Evolution of Shareholders´ Equity (In million of Bolivars) 17,861 15,076 11,657 Mar. 2012 Dec. 2012 Mar. 2013 Capital Ratios Mercantil’s equity/assets ratio at March 31, 2013 is 10.6% and its equity/riskweighted assets ratio is 19.5%%, based on the standards of the National Securities Superintendency-SNV (10.7% and 18.5% at March 31, 2012). Mercantil Banco Universal, in accordance with the requirements of the Superintendency of Banking Sector Institutions (SUDEBAN), the equity/assets ratio at March 31, 2013 is 10.2% and its equity/riskweighted assets ratio 19.6% (10.1% and 16.3% at March 31, 2012). Mercantil Commercebank, N.A., based on the standards of the U.S. Office of the Comptroller of the Currency (OCC), at March 31, 2013, the equity/assets ratio is 10.1% and the equity/risk-based assets ratio 17.3%, (9.2% and 17.1% at March 31, 2012). Capital Structure March 2013 Capital Stock 2% The equity ratios of Mercantil and its subsidiaries exceed the regulatory minimums. Capital Reserve 1% Share Premium 1% Traslation Adjustments of net Assets of Subsidiaries Abroad 17% Retained Earnings 74% Unrealized Gain fron Adjustments of Investments to Market Value 5% 1 Dollar figures are given for reference purposes only. Balance Sheet figures are translated at the closing exchange rate and income statement figures at the average exchange rate for the period. See exchange rates in Appendix VI. Exchange control has been in place in Venezuela since February 2003. Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 16 Assets and Liabilities in Foreign Currency Mercantil has US$ 8,024 million and US$ 6,578 million in assets and liabilities in foreign currency, respectively at March 31, 2013. The estimated effect of each Bs 0.10/US$1 increase in the exchange rate of 6.2842/US$1 at March 31, 2013, would be a rise of Bs 802 million in assets, and Bs 145 million in liabilities, of which Bs 32 million would be recorded as income for the period. Assets by Currency Bs. 109,414 million (US$ 25,509 million1) March 2012 Bs. 168,839 million 1 (US$ 26,869 million ) March 2013 70.5% 69.1% 30.9% 29.5% Bolivars US$ At March 31, 2013, Mercantil’s shareholders’ equity was Bs 17,861 million, equivalent to US$ 2,842 million1, which is partially covered in US dollars by the following net assets: Allocation by Company: Assets US$ 1.455 100% 80% Mercantil Commercebank Florida Bancorp and Subsidiaries (43%) 60% Other Foreing Subsidiaries (9%) Assets by subsidiaries in Venezuela (40%) Cash and Due from Banks (Foreing Banks), 28.7% 40% US Treasuries, 3.1% US$ denominated bonds issued by the Venezuelan government (*), 28.1% Subsidiaries in Venezuelan (40%) 20% Loan Portfolio & Other Assets, 2.3% Overseas Branch and Agencies (8%) 0% 1 Dollar figures are given for reference purposes only. Balance Sheet figures are translated at the closing exchange rate and income statement figures at the average exchange rate for the period. See exchange rates in Appendix VI. Exchange control has been in place in Venezuela since February 2003. Principal and Interest Covered Bonds (Ticc), 37.8% * Issued in US$ or under indexation clause (see Investment Portfolio, page 11) Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 17 Summary of Subsidiaries’ performance according to their Regulatory Accounting Standards Mercantil Banco Universal Mercantil Banco Universal’s total assets grew Bs 11,470 million (11.0%) compared with December 2012. During 1Q 2013 net loans grew Bs 2,971 million (5.1%) and total deposits rose Bs 10,320 million (11.2%) quarter over quarter to Bs 60,727 million and Bs 102,820 million, respectively. Loan portfolio quality remains very favorable, with a 0.8% ratio of past-due and nonperforming loans to gross loans compared to 1.0% for the Venezuelan financial system as a whole. The loan portfolio provision covers 496.1% of ´past-due and nonperforming loans (372.6% at December 31, 2012). Mercantil C.A., Banco Universal Consolidated (In millions of Bs and US$) US$ Mar. 2013 18,455 3,775 9,663 16,362 1,636 196 Total Assets Investments Portfolio Loan Portfolio Deposits Shareholders´ Equity Mar. 2013 Dec. 2012 Mar. 2012 115,984 23,724 60,727 102,820 10,279 1,100 104,514 18,038 57,756 92,500 9,233 1,224 73,175 12,492 44,303 64,721 6,608 666 At March 31, 2013, the Mercantil Banco Universal subsidiary ranks fourth in the Venezuelan financial system in terms of total assets with 11.6% of the market. The leading institution has a 15.3% share and figures in accordance with the standards of the Venezuelan Superintendency of Banking Venezuela’s four main banks account for 51.9% of the country’s Historic Sector Institutions (SUDEBAN). financial system. It is also the leading bank in the private financial system in terms of mortgage and manufacturing loans, with market shares of 9.3% and 14.2%, respectively. The bank also ranks second in terms of gross loans and microcredits, tourism and agricultural loans with 14.5%, 8.3%,12.9% and 14.2% of the market, respectively. Mercantil is Venezuela's leading bank in terms of savings deposits with 20.7% of the market. Shareholders’ Equity registered Bs 1,045 million (11.3%) quarter-over-quarter growth to Bs 10,279 million. This increase mainly includes Bs 1,100 million in net quarterly income, Bs 927 million increase registered in exchange differences using the new exchange rate set by the Venezuelan Central Bank for the valuation of assets and liabilities in foreign currency, which went from Bs 4.2893/USS$1 to Bs 6.2842/US$1, reduction of Bs 479 million from adjusting investments available for sale to their market value, and Bs 469 million in dividends paid in cash. The equity/assets ratio as of March 31, 2012 is 10.2% (minimum requirement 8%) and the equity/risk-weighted assets ratio, according to the standards of the Superintendency of Banking Sector Institutions in Venezuela, is 19.6% (minimum requirement 12%). In the first quarter of 2013, the Bs 1,100 million in net earnings reflected Bs 433 million (65.1%) year-on-year growth, mainly due to a Bs 651 million rise in net interest income as a result of higher financial assets and liabilities; Bs 373 million in net income from commissions on credit and debit cards and other income; Bs 18 million decrease in loan portfolio provisions; rises of Bs 407 million in personnel and operating expenses; Bs 134 million in contributions to regulatory agencies; and Bs 67 million in corporate income tax, among others. Evolution of Gross Loans Portfolio Venezuela Evolution of Net Interest Income 2,500 13.0% 10.9% 10.6% 11.0% 11.1% 10.2% 2,000 20.0% 17.0% 16.0% 15.7% 15.4% 11.0% 16.0% 15.7% 16.7% 16.0% 14.5% 9.0% 1,500 14.0% 12.0% 12.3% 7.0% 1,000 4.3% 4.5% 4.4% 4.2% 3.8% 5.0% 8.0% 11.9% 13.0% 9.1% 8.5% 12.0% 6.8% 500 1,531 1,694 1,890 2,236 4.0% 1.0% 0.0% 5.7% 5.4% 4.2% 4.9% IQ 2013 11.0% 10.0% 2,182 0 IQ 2012 IIQ 2012 IIIQ 2012 IVQ 2012 Net Interest Income Net Interest Margin Operating Expenses / Average Total Assets 3.0% 15.0% 9.0% IQ 2012 IIQ 2012 IIIQ 2012 Venezuelan Financial System IVQ 2012 Mercantil IQ 2013 Market Share Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 18 Mercantil Commercebank N.A. At March 31, 2013, total assets reached US$ 6,724 million, similar to the US$ 6,820 million registered in the previous quarter. Total loans reached US$ 4.342 million, similar to the previous quarter and 5.7% more than in 1Q 2012. Commercial and industrial loans registered 22.4% year-onyear growth. At March 31, 2013, the bank holds US$ 2,170 million (32.3% of total assets) mainly in short-term investments and bonds issued or guaranteed by the US government. Deposits and investments sold under repurchase agreement totaled US$ 5,431 million at the close of March 2013, which reflects quarter-over-quarter growth of 0.9% and year-on-year growth 0.7 %. Assets Quality Ratios 8% Total Assets Investments Portfolio Loan Portfolio Deposits Investments Sold under Repurchase Agreements Shareholders´ Equity Income net Quarter Dec. 2012 Mar. 2012 6,724 2,170 4,342 5,407 6,820 2,253 4,371 5,366 6,816 2,474 4,107 5,138 24 727 10 15 719 10 255 690 6 40% 32% 5.80% 23.41% 24% 4.88% 4% Mar. 2013 Figures presented according to accounting principles generally accepted in the United States (USGAAP ) 39.56% 31.30% 6% Mercantil Commercebank N.A. Consolidated (In millions of US$) 18.71% 4.62% 3.84% 3.77% 2.82% 2% 14.47% 16% 2.85% 2.33% 1.94% 1.77% 0% 8% 0% IQ 2012 IIQ 2012 IIIQ 2012 NA(w/o Commitments) /Total Lns. Total Class Lns /Total Lns. Total Class+OREO /Tier 1+ALLL IVQ 2012 IQ 2013 Nonperforming assets (non-interest earning loans and assets received in lieu of payment) fell US$ 10 million during the quarter and US$ 135 million compared to March 2012. Nonperforming assets accounted for 1.3% of total assets, 0.1% down on the previous quarter. The ratio of nonperforming loans to total loans declined from 1.9% in 4Q 2012 to 1.8% in 1Q 2013, and the bank registered US$ 0.1 million in loan provisioning, 99.2% lower than in 4Q 2012. The bank's equity at March 31, 2013 was US$ 727 million, US$ 8 million (1.1%) up on the prior quarter, mainly attributable to the quarterly result of US$ 10 million. At March 31, 2013, the equity/assets ratio is 10.1% and the equity/risk-based assets ratio 17.3% (9.2% and 17.1% at March 31, 2012), based on the standards of the Office of the Comptroller of the Currency (OCC). In 1Q 2013, net earnings totaled US$ 10 million, US$ 4 million (63.8%) up on 1Q 2012, mainly attributable to US$ 8 million (99.2%) reduction in loan portfolio provisioning and US$ 2 million (10.1%) year-on-year decline in commissions and other income. Additionally, corporate income tax expenditure registered a US$ 2 million (63.8%) year-on-year rise to US$ 6 million in 1Q 2013. Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 19 Mercantil Seguros In 1Q 2013, premium income registered 28.4% growth to Bs 2,099 million from Bs 1,635 million at the close of 1Q 2012. At the close of February 2013, Mercantil Seguros was the country’s third insurance company in terms of net collected premiums, with 11.7% of the insurance market. Total Assets stood at Bs 7,475 million at March 31, 2013 reflecting 12.1% quarter-over-quarter growth. The company registered Bs 2,163 million in equity, thus complying with statutory solvency requirements. The figures presented include all the mandatory and voluntary reserves required to guarantee the company’s operations, including outstanding claims reserves and end-of-period payments. Evolution of Net Collected Premiums and Technical Result 2,099 1,635 1,470 1,563 33.0% 30.6% 33.1% 21.2% 17.2% 44 IQ 2012 82 54 IIQ 2012 135 IIIQ 2012 Premiums Received Net IVQ 2012 US$ Mar. 2013 Total Assets Investments suitable for representing Technical Reserves Investments not-suitable for representing Technical Reserves Shareholders´ Equity Income net Quarter Premiums Received Net Quarter Mar. 2013 Dec. 2012 Mar. 2012 1,189 7,475 6,671 5,181 722 4,534 4,724 3,641 302 344 34 1,898 2,163 193 1,000 2,236 319 853 1,428 109 374 2,099 2,498 1,635 Historic figures in accordance with the standards of the Venezuelan Superintendency of Insurance Activity (Sudeseg) 2,498 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Mercantil Seguros C.A. Consolidated (In million of Bs. and US$) 43 IQ 2013 At March 31, 2013, the company’s investment portfolio was Bs 6,432 million (12.4% up on the previous quarter). Total investments representing technical reserves reached Bs 4,534 million (4.0% below the figure for the previous quarter and 24.5% less than at the close of March 2012), while liquidity levels meet all the statutory requirements on commitments towards policyholders, insurance brokers and reinsurers. In the first quarter of 2013, the technical result closed at Bs 43 million, with a combined operating ratio of 97.6%. Net income for 1Q 2013 registered 76.3% year-onyear growth to Bs 193 million. The claims ratio was 65.8% (63.8% in 2012). Technical Result Technical Result / Total Income Mercantil Merinvest At March 31, 2013, Mercantil Merinvest reached Bs 144 million in total consolidated assets, representing 16.1% quarter-over-quarter growth and a 26.3% year-on-year increase. In 1Q 2013, net earnings reached Bs 15 million, reflecting 47.6% growth from Bs 10 million in 1Q 2012. Mercantil Merinvest C.A. Consolidated (In millions of Bs and US$) US$ Mar. 2013 Total Assets Investments Portfolio Shareholders´ Equity Income net Quarter 23 14 20 3 Mar. 2013 144 87 128 15 Dec. 2012 124 56 98 7 Mar. 2012 114 55 102 10 Figures presented according to the standards of the Venezuelan Securities and Exchange Commission (SNV) Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 20 Private Banking and Wealth Management The Private Banking and Wealth Management business is comprised of: trust services, securities brokerage, mutual funds and portfolio management services. Net assets under management recorded off-balance sheet at March 31, 2013 stood at Bs 28,673 million (US$ 4,563 million)1, representing a 27.1% quarter-over-quarter increase and 52.3% year-on-year growth. They are broken down as follows: TOTAL ASSETS UNDER MANAGEMENT (In millions of Bolivars and Dollars, except percentages) March 2013 March 2012 ∆ Mar 13 vs. Dec 12 ∆ Mar 13 vs. Mar 12 15,104 1,302 13,026 1,217 11,093 914 % 16.0 7.0 % 36.2 42.5 Brokerage 9,592 6,696 5,432 43.2 76.6 Financial Advisory 2,675 1,627 1,384 64.4 93.3 Total Private Banking and Wealth Management Bs. 28,673 22,566 18,823 27.1 52.3 Total Private Banking and Wealth Management US$ 4,5631 5,2611 4,3881 (13.3) 4.0 Trust Funds Mutual Fund 1 December 2012 Dollar figures are given for reference purposes only. Balance Sheet figures are translated at the closing exchange rate and income statement figures at the average exchange rate for the period. See exchange rates in Appendix VI. Exchange control has been in place in Venezuela since February 2003. During the first quarter of 2013, the Trust Fund managed Bs 15,104 million in assets, which reflects quarter-over-quarter growth of 16.0% and yearon-year growth of 36.2%. At March 31, 2012, Mercantil's trust fund ranked second in the private banking sector and fourth in the fiduciary market in Venezuela. At the close of March 2013, Mercantil maintained its position as Venezuela's mutual fund industry leader. Mutual Fund assets under management grew 7.0% and 42.5% compared to December and March 2012, respectively, reaching Bs 1,302 million. Mercantil offers its clients investment products and services (as broker-dealers and investment advisers) in global financial markets. At the close of March 2013, the total value of client assets was Bs 12,267 million, 47.4% up on the close of December 2012 (up 80.0% year-on-year). Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 21 Corporate Events Shareholders’ Meetings The Shareholders’ Meetings of Mercantil Servicios Financieros and its subsidiaries in Venezuela and abroad were held during the first quarter of 2013. They approved the reports presented by the Board of Directors for consideration by the shareholders, the audited financial statements and Statutory Auditors Report as of December 31, 2012, the proposal made in accordance with the bylaws to appoint the members of the Board of Directors, the Statutory Auditors and set their remunerations. On behalf of Mercantil's Board of Directors and shareholders, the president of Mercantil, Gustavo J. Vollmer A. thanked Alejandro González Sosa for his brilliant overall performance during over 32 years and his valuable contribution as Executive President of the Corporation, adding that he will remain on the Board of Directors. Share Repurchase Program The Shareholders’ Meeting authorized the Twenty-seventh Phase of Mercantil Servicios Financieros’ Stock Repurchase Program, which started from April 11, 2013, giving continuity to the program initiated in May 2000 to add value to the company. Dividends The Shareholders’s Meeting of Mercantil Servicios Financieros held in March 2013 approved a cash dividend of Bs 6.50 per common share, payable as follows: two ordinary cash dividends for each Class A and B outstanding share at the rate of Bs 1.00 per common share, payable on April 10 and October 10, 2013, respectively, and an extraordinary cash dividend at the rate of Bs 4.50 per common share, payable on May 10, 2013. Changes in the organizational structure of Mercantil Servicios Financieros and its subsidiaries In February 2013, the Board of Directors approved Mercantil's new organizational structure whose purpose is to adapt to the evolution of the corporation's activities in Venezuela and the countries where it has a presence. Under the new structure, Gustavo Vollmer A. holds the positions of President and Executive President of Mercantil Servicios Financieros, in accordance with the bylaws of the company. Furthermore, two Executive Management Director positions were created, reporting directly to the President and Executive President of Mercantil. Nerio Rosales Rengifo was appointed Global Executive Director of Mercantil Servicios Financieros and National Business, and Millar Wilson as Executive Director of International Business. In addition, Millar Wilson, who had served as President & Chief Executive Officer (CEO) of Commercebank since 2009, has been appointed Vice Chairman & Chief Executive Officer (CEO) of the company. Gustavo A. Vollmer continues to be Chairman of Commercebank N.A. In March 2013, the Board of Directors of Mercantil Banco Universal appointed Nelson Pinto Alves as Executive President of the company. He has been with Mercantil Banco Universal for more than thirty years, and held the position of Manager of Personal and Commercial Banking. Gustavo Vollmer A. thanked Nerio Rosales Rengifo, who is undertaking new responsibilities, for his dedication as Executive President during the past five years. The Board of Directors of Mercantil Seguros appointed María Silvia Rodríguez Feo as Executive President of the company. She held the position of General Manager and has been with Mercantil for twenty-five years. Alberto Benshimol continues to be President of Mercantil Seguros. In addition, the Board of Directors of Commercebank appointed Alberto (Al) Peraza as President and Chief Operating Officer (COO), who has been with Mercantil for over 20 years and served as Chief Financial Officer (CFO) of the Bank. Peraza joins the Mercantil Commercebank, N.A. Board of Directors. New Measures announced for the Venezuelan Economy The Ministry of Planning and Finance established a new exchange rate In February 2013, the Executive branch and the Central Bank of Venezuela amended Exchange Agreement N° 14, establishing the fixed bid exchange rate at Bs 6.2842/US$1 and the fixed ask exchange rate at Bs 6.30/US$1, effective from that date. In February 2013, the BCV suspended the purchase and sale of securities through SITME, the Foreign Currency Transactions System. The Executive Office of the President created the Superior Body for the Optimization of the Exchange System The Executive Office of the President of the Republic created the Superior Office for the Optimization of the Exchange System under the Ministry of Planning and Finance, the Central Bank and the Ministry of Petroleum and Mining. The purpose of this body will be to design, plan and execute the state's exchange strategies by setting priorities for the allocation of foreign currency, the equilibrium of total currency flows, and the coordination of foreign currency inflows from hydrocarbons and other sources, among others. The Ministry of Planning and Finance issued an Exchange Agreement on special currency auctions The Ministry of Planning and Finance issued an Exchange Agreement authorizing the Superior Body for the Optimization of the Exchange System to regulate the terms and conditions governing the special currency auctions of oil revenue in foreign currency that will be earmarked for imports for the real sector of the national economy, through the Complementary Exchange Administration System (SICAD). This system is managed by the Central Bank of Venezuela and in accordance with auction notices sent out for that purpose. Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 22 The Ministry of Planning and Finance and the Ministry of Agriculture and Land established the minimum monthly percentages and the conditions applicable to compulsory agricultural loans during financial year 2013 The Ministry of Planning and Finance and the Ministry of Agriculture and Land established the minimum loan portfolio percentages that all banks must earmark each month for the agricultural sector during financial year 2013 at between 21% and 25%. Additionally, the percentage corresponding to June, September, October, November and December 2013 was reduced and the percentage corresponding to February was increased. The different percentages for the financing of strategic items will continue to be established, setting maximum or minimum limits depending on the particular case; and the number of new borrowers (individuals) under the agricultural portfolio must be increased by at least 30% compared with the total number of borrowers at the close of the immediately preceding year. The Ministry of Housing and Habitat established the minimum percentage for the mortgage portfolio The Ministry of Housing and Habitat established the minimum percentage of the annual gross loan portfolios that banking sector institutions must earmark out of their own funds for residential real estate loans for the construction, purchase, refurbishment, expansion or self-construction of main dwellings at 20% and modified the distribution of the percentages to be earmarked for long-term loans for home purchase; or short term loans for home construction, refurbishment, expansion and self-construction. Awards and Acknowledgements Mercantil Servicios Financieros among Forbes’ Global 2000 ranking In April 2013, Mercantil Servicios Financieros is among the world's biggest 2000 public companies, according to Forbes magazine's ranking based on sales, profits, assets and market capitalization. Mercantil Servicios Financieros was number 1,148 on the list and is the only Venezuelan company in the ranking, having risen 245 positions compared with the previous year. Global Economic Climate The threats and challenges looming over global economic growth and stability during much of 2012 have not disappeared. The global economy is still dependent on the growth demonstrated by the emerging countries, given that numerous mature economies in Europe and especially Japan are showing difficulties to achieve economic growth. The performance of big emerging countries like China, India and Brazil continues to be key in this regard. The major players in the global economy are beginning to show some improvement, starting with stable economic growth in the USA and the economic expansion of China, which slightly exceeded general expectations. China's first-quarter GDP appears to have been in the region of 7.7%. In March the Management Purchases Index exceeded 50 points for the fifth consecutive month, reaffirming the view of more significant growth in recent months. Inflation, one of the greatest threats, remained low in January and an average year-on-year variation of 2.4% is expected. Asian economic growth was solid in South Korea and slightly less so in Japan. Less dynamism was observed however in other countries, India for example. The Brazilian economy grew 2.7% in 2012, at a slower pace than in 2011 (7.5%), the relatively weak tone being attributable to the loss in the significance of net exports (due to exchange appreciation) and lower stocks. Inflation has picked up again, spurred on by rising food prices. January's figure stood at 6.2%, almost two percentage points above the central target of the Monetary Policy Committee (4.5%). Renewed inflationary tensions have once again pushed the monetary authority against the ropes and complicate the use of further reductions in the reference interest rate of the Special Settlement and Custody System (Selic) in order to boost the country’s depressed activity. It has been confirmed that in the eurozone GDP shrank by 0.5% in the fourth quarter, a greater decline than expected. The symptoms of weak economic activity were widespread, even though there was ample evidence of financial tensions abating somewhat in the European periphery countries. However, the financial crisis that reared its head in Cyprus in mid-March has rather changed the financial outlook for Europe. Although the eurozone countries have agreed to a 10 billion euro bailout for Cyprus to avoid default (largely triggered by the crisis in Greece), some to-ing and fro-ing regarding the scope of the measures agreed caused panic in European financial markets, affecting the stability of the euro. In March, the banks in Cyprus reopened their offices after remaining closed for thirteen days (to avoid a massive run on deposits) and received 5 billion euros in financial aid from the European Central Bank. U.S. Economic Climate During the first quarter the US economy continued to grow, thereby avoiding another sharp economic turndown. The best news this quarter was in relation to private consumer spending, retail sales in particular which registered 4.6% year-on-year growth at the end of February. The International Council of Shopping Centers and Goldman Sachs reported that chain store sales in March were up 2.6% from their February level. Consumer spending in the first part of the year is confirmed by the Consumer Confidence Index reported by the University of Michigan which reached 78.6 points in March (vs. 76.2 averaged over 2012). Increased consumer confidence was also reflected by the strength of the consumer credit index which rose 5.8% to US$ 16.1 billion since January 2012. Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 23 The expansion of economic activity in the first quarter was reflected by substantial improvements in the job market. Unemployment closed at 7.6% in March, against the 2012 average of 8.1%. Even though, January and February were good months in terms of job creation with average increases of more than 200,000 jobs per month, in March they slowed down with a net creation of just 88,000 jobs. Job creation in the public sector is continuing to fall, although this factor is more than offset in the private sector. Amid a scenario of recovering employment, there is some uncertainty as to how the fiscal adjustment program under way might affect the course of the economy in the short term. A conservative tone of the fiscal policy and the need to maintain some incentives for growth, partially explain the Federal Reserve's monetary policy to continue to anchor the short-term interest rate (at 0.13%). The stance of the monetary authorities can also partly be explained by the still low minimum inflationary pressures shown by the US economy. In the first quarter, annualized inflation may close around 2.1%, relatively in line with its behavior in 2012. In the real estate market there are still clear signs of a recovery. In February, 7.9% more homes were built and sales of new homes picked up in the first two months of the year to more than 400,000 homes per annum (against an average of 366,000 in 2012) and sales of used homes reached 4,980,000 in February, equivalent to 10.5% growth in one year. All of this has contributed to a continuous improvement in house prices. In January, the Case-Shiller home price index showed that prices in 20 cities had risen 8.1% year-on-year. Treasury Rate 10 Years Source: Bloomberg 4.6% 4.3% 4.0% 3.7% 3.4% 3.1% 2.8% 2.5% 2.2% 1.9% 1.6% 1.3% IQ13 IVQ12 IIQ12 IIIQ12 IQ12 IIIQ11 IVQ11 IIQ11 IQ11 IVQ10 IIQ10 IIIQ10 IQ10 IIIQ09 IVQ09 IQ09 IIQ09 IVQ08 IIQ08 IIIQ08 IQ08 1.0% Venezuelan Economic Climate Economic activity During the first quarter of 2013, despite the fact that the global economy was slightly more robust this year, above all due to China's slower economic growth and the improvements foreseen in the US job market, persistent doubts over Europe's economic performance may and in fact have counteracted upward pressure on the principal prices of crude oil in the first months of the year compared to the close of the first quarter of 2012. Despite high oil prices, less currency being available from the Foreign Currency Administration System (CADIVI) and the fact that no resources have been transferred from the Central Bank of Venezuela (BCV) to the National Development Fund ((FONDEN), the Central Bank's level of international reserves declined in the first three months of the year. On the fiscal front, central government’s performance during the first quarter was marked by an increase in the income it received, due fundamentally to the higher bolivar value of the oil industry’s contribution to the national treasury in reaction to the new rate of exchange, as well as more net income from domestic borrowing, in the context of an electoral scenario. On the monetary front, a slight increase in money supply was reported, explained mainly by higher public spending as a result of the availability of less currency through Cadivi, the increase in the secondary creation of money through loans, despite the net restrictive effect of Open Market Operations on payment systems. All these steps caused a slowdown in the growth of domestic prices. Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 24 Oil Sector, Reserves The price of the Venezuelan oil basket averaged US$103.8/bbl in the first quarter, 5.6% more than in the previous quarter. However this was 7.4% down on the first quarter of 2012. Venezuelan oil production averaged 2,858 mbd in the first quarter, down 2 mbd compared to the previous quarter. However, compared to the first quarter of 2012 it was up 23.2%. Notwithstanding, international reserves fell an accumulated US$ 2,852 million, closing at US$ 27,035 million in March, their lowest level since December 2012. The executive branch represented by the Ministry of Planning and Finance and the Central Bank of Venezuela, announced an amendment to Exchange Agreement N° 14 through Decree N° 9,381 of February 8, 2013 which adjusted the official exchange rate from Bs 4.30/US$1 to Bs 6.30/US$1 and created a new superior body in charge of the exchange system and policies. The Superior Body for the Optimization of the Exchange System (OSOSC - for its abbreviation in Spanish) will come under the Ministry of Planning and Finance and the Central Bank of Venezuela and the office of Petroleum and Mining, but its decisions will be reached by consensus between the Ministry and the Central Bank. Their attributions include setting priorities for the allocation of foreign currency and guidance on applications for non-production and insufficient production certificates. Monetary Policy In the fiscal area, primary spending by the National Treasury stood at Bs 108.2 billion, representing a 27% year-on-year increase. Stripping out the high level of inflation for the period, this makes an increase of 3.7%, which contrasts clearly with the real decline of 26.3% in the first quarter of 2012. In the area of the national debt, assignments of Government Bonds and Treasury Bills amounted to Bs 45.2 billion which, together with shorter maturities, resulted in Bs 14.7 billion in net positive domestic indebtedness, reflecting a 72.5% year-on-year increase in positive domestic indebtedness. In the money market, money in the hands of the public (M2) increased 6% in the first quarter, 30 basis points above the 5.7% increase reported in 1Q 2012. With respect to the handling of the monetary policy, in the first quarter, the Venezuelan Central Bank was more actively involved in open market operations than in the same period of last year which restricted the net effect of open market operations on payment systems by Bs 5.2 billion, 1.1 times above the Bs 2.6 billion contraction in the first quarter of 2012. Inflation Accumulated domestic inflation was 5% in the first two months of the year1 which is almost double the figure for the first two months of 2012 (2.6%). Broken down by group, the highest above-average price increases were in: Restaurants and Hotels (8,3%), Food and Non-alcoholic Beverages (5.7%), Health, Entertainment and Culture (5.6%). According to the eleven geographical locations comprising the National Consumer Price Index, the cities that underwent higher-than-the-national-average price adjustments (5%) were: Maracay, Ciudad Guayana (6.2%), Mérida (6.1%), San Cristóbal (5.8%), Maturín (5.4%), Puerto La Cruz-Barcelona and Valencia (5.1%). Monetary Liquidity (M2) and Monetary Base (BM) (Annual Var.) Source: Central Bank of Venezuela and Own Calculation BM M2 120% 60.0% Monetary Liquidity 110% Monetary Base 100% 50.0% 90% 80% 40.0% 70% 60% 30.0% 50% 40% 20.0% 30% 20% 10.0% 10% 1 IQ13 IIIQ12 IVQ012 IIQ12 IQ12 IVQ11 IIIQ11 IQ11 IIQ11 IIIQ10 IVQ10 IIQ10 IQ10 IVQ09 IIQ09 IIIQ09 IQ09 IIIQ08 IVQ08 IIQ08 0.0% IQ08 0% Latest information available by BCV Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 25 APPENDIX I Summary of the Accounting Principles used to prepare the Financial Statements Financial statements are presented in accordance with the accounting standards of the National Securities Superintendency (SNV), in bolivars. A summary of some of the main accounting principles applied is given below: Investment Portfolio Securities Held for Trading - Unrealized gains or losses resulting from differences in market value due to market fluctuations are included in the results for the period. Available-for-Sale Securities – Recorded at their market value. Unrealized gains or losses resulting from differences in market value and exchange rate fluctuations are included in shareholders’ equity. Held-to-Maturity Securities – Recorded at their acquisition cost, adjusted for amortization of premiums or discounts. For all portfolio investments, permanent losses in market value are recorded as a charge to income in the period in which they occur. Permanent investments are investments that represent 20% to 50% stock ownership. Those greater than 50% are recorded as an equity interest and consolidated, except when control is likely to be temporary. Loan Portfolio Loans are classified as overdue 30 days after their maturity. Allowances for losses on loan portfolio are determined through a collectibility assessment that quantifies the amount to be set aside for each loan. These assessments take into account such aspects as economic conditions, credit risk by customer, credit history and the collateral received. When evaluating loans for small amounts of the same nature, these are grouped together to determine provisions. Recognition of income and expenditure Income, costs and expenses are recorded as they are earned or incurred. Interest earned on loan portfolios is recorded as income when collected. Fluctuations in the market value of derivatives are recognized in income in the period in which they occur. Insurance premiums are recorded as income when earned. Consolidation The consolidated financial statements include the accounts of Mercantil and its more than 50%-owned subsidiaries and other institutions in which Mercantil has a controlling interest. See the main subsidiaries on Page 5 and the reconciliation of their accounting standards with SNV standards on Pages 37, 39, 41. Inflation Adjustment According to SNV standards, Mercantil’s financial statements, as of December 31, 1999 must be presented in historic figures. Since then Mercantil has ceased to adjust for inflation in its primary financial statements. As a result, fixed and other assets are shown at their inflation-adjusted value up to December 31, 1999. The market value determined by independent assessments is higher than adjusted cost for inflation indicated above. New additions are being recorded at their acquisition value. Differences between the accounting standards of the Superintendency of Banking Sector Institutions in Venezuela (SUDEBAN) and US GAAP The main accounting differences for the reconciliation of items under SNV and SUDEBAN for Mercantil Servicios Financieros are: Amortization of premiums or discounts of securities carried out on a straight-line basis under SUDEBAN standards and in accordance with the constant amortization rate under SNV standards. Under SNV standards, the effects of exchange fluctuations are included in the results for the period, with the exception of exchange fluctuations from available-for-sale investments and the stock trading portfolio which are included in shareholders' equity. Under SUDEBAN standards, all fluctuations are recorded in the results, with the exception of exchange fluctuations from the stock trading portfolio and the fluctuations which, as provided by the SUDEBAN exception, must subsequently be included in income when authorized by SUDEBAN. The main accounting differences for Mercantil Servicios Financieros between the above mentioned SNV standards and SUDEBAN standards are: Deferred Income Tax: US GAAP allows deferred tax to be recognized for the total amount of loan portfolio loss allowances, while SNV standards only allow recognition of allowances for loans classified as high risk and unrecoverable. Provision for assets received in lieu of payment: SNV standards stipulate a 100% allowance for real property received in lieu of payment after one year from the date of incorporation; under US GAAP no amortization deadlines are established. (See SNV - USGAAP earnings reconciliation, Page 39). Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 26 APPENDIX II MERCANTIL SERVICIOS FINANCIEROS, C.A. CONSOLIDATED BALANCE SHEET UNAUDITED FIGURES (In millions of Bolivars and Dollars, except percentages) ∆ US$ 1 Mar. 2013 CASH AND DUE FROM BANKS Cash Banco Central de Venezuela Venezuelan Banks and Other Financial Institutions Foreign and Correspondent Banks Allowance for Cash and Due from Banks March December March 2013 2012 2012 ∆ Mar 13 vs. Dec 12 Bolivars % Mar 13 vs. Mar 12 Bolivars % 330 3,997 46 253 218 2,076 25,121 287 1,588 1,372 2,457 22,414 76 888 1,722 1,303 11,902 84 1,853 1,326 (381) 2,707 211 700 (350) (15.5) 12.1 277.6 78.8 (20.3) 773 13,219 203 (265) 46,0 59.3 111.1 241.7 (14.3) 3.5 4,844 30,444 27,557 16,468 2,887 10.5 13,976 84.9 17 4,510 1,429 4 705 119 107 28,339 8,978 24 4,428 748 88 20,192 7,364 20 3,837 1,120 437 19,430 2,880 14 2,175 1,369 19 8,147 1,614 4 591 (372) 21.6 40.3 21.9 20.0 15.4 (33.2) (330) 8,909 6,098 10 2,253 (621) (75.5) 45.9 211.7 71.4 103.6 (45.4) 6,784 42,624 32,621 26,305 10,003 30.7 16,319 62.0 LOAN PORTFOLIO Current Rescheduled Past Due Litigation 14,550 87 113 37 91,432 548 711 233 79,337 492 552 161 63,747 322 581 349 12,095 56 159 71 15.2 11.4 28.8 43.8 27,685 226 130 (116) 43.4 70.2 22.4 (33.2) Allowance for Losses on Loan Portfolio 14,787 (460) 92,924 (2,893) 80,543 (2,657) 64,999 (2,195) 12,381 (236) 15.4 8.9 27,925 (698) 43.0 31.8 14,327 90,031 77,885 62,804 12,145 15.6 27,227 43.4 182 33 10 152 537 1,141 210 60 956 3,373 895 185 49 832 2,616 670 216 141 696 2,114 246 25 11 124 757 27.5 13.5 22.4 14.9 28.9 471 (6) (81) 260 1,259 70.3 (2.8) (57.4) 37.4 59.6 26,869 168,839 142,642 109,414 26,197 18.4 59,425 54.3 INVESTMENT PORTFOLIO Investments in Trading Securities Investments in Securities Available for Sale Investments in Securities Held to Maturity Share Trading Portfolio Investments in Time Deposits and Placements Restricted Investments INTEREST AND COMMISSIONS RECEIVABLE LONG-TERM INVESTMENTS ASSETS AVAILABLE FOR SALE PROPERTY AND EQUIPMENT OTHER ASSETS TOTAL ASSETS 1 Dollar figures are given for reference purposes only. Balance Sheet figures are translated at the closing exchange rate and income statement figures at th e average exchange rate for the period. See exchange rates in Appendix VI. Exchange control has been in place in Venezuela since February 2003. Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 27 APPENDIX II MERCANTIL SERVICIOS FINANCIEROS, C.A. CONSOLIDATED BALANCE SHEET UNAUDITED FIGURES (In millions of Bolivars and Dollars, except percentages) ∆ US$ 1 Mar. 2013 DEPOSITS Non-interest Bearing Interest-Bearing Savings Deposits Time Deposits March December March 2013 2012 2012 ∆ Mar 13 vs. Dec 12 Bolivars % Mar 13 vs. Mar 12 Bolivars % 6,223 6,733 7,227 1,362 39,108 42,311 45,418 8,560 35,309 34,308 39,014 5,974 24,563 26,485 27,963 6,855 3,799 8,003 6,404 2,586 10.8 23.3 16.4 43.3 14,545 15,826 17,455 1,705 59.2 59.8 62.4 24.9 21,545 135,397 114,605 85,866 20,792 18.1 49,531 57.7 15 96 176 0 (80) (45.5) 96 100.0 561 5 1,788 112 24,026 3,523 34 11,219 701 150,970 2,683 23 9,593 479 127,559 2,894 27 8,487 479 97,753 840 11 1,626 222 23,411 31.3 47.8 16.9 46.3 18.4 629 7 2,732 222 53,217 21.7 25.9 32.2 46.3 54.4 1 8 7 5 1 14.3 3 60.0 24 31 32 27 153 192 204 167 153 192 204 167 153 192 204 167 0 0 0 0 0.0 0.0 0.0 0.0 0 0 0 0 0.0 0.0 0.0 0.0 476 2,113 (1) 2,992 13,277 (7) 1,550 11,902 (7) 1,551 8,524 (4) 1,442 1,375 0 93.0 11.6 0.0 1,441 4,753 (3) 92.9 55.8 75.0 (8) (49) (49) (48) 0 0.0 (1) 2.1 148 932 963 918 (31) (3.2) 14 1.5 2,842 17,861 15,076 11,657 2,785 18.5 6,204 53.2 26,869 168,839 142,642 109,414 26,197 18.4 59,425 54.3 DEPOSITS AUTHORIZED BY THE VENEZUELAN SECURITIES AND EXCHANGE COMMISSION Publicly Traded Debt Securities Issued FINANCIAL LIABILITIES INTEREST AND COMMISSION PAYABLE OTHER LIABILITIES SUBORDINATED DEBT TOTAL LIABILITIES MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES SHAREHOLDERS’ EQUITY Paid in Capital Capital Inflation Adjustment Share Premium Capital Reserves Translation Adjustments of net Assets of Subsidiaries Abroad Retained Earnings Shares repurchased and held by Subsidiaries Repurchased Shares Restricted for Employee Stock Option Plan Unrealized Gain (Loss) from Adjustment on Investments Available For Sale to Market Value TOTAL SHAREHOLDERS´ EQUITY TOTAL LIABILITIES AND SHAREHOLDERS´ EQUITY 1 Dollar figures are given for reference purposes only. Balance Sheet figures are translated at the closing exchange rate and i ncome statement figures at the average exchange rate for the period. See exchange rates in Appendix VI. Exchange control has been in place in Venezuela since February 2003. Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 28 APPENDIX II MERCANTIL SERVICIOS FINANCIEROS, C.A. CONSOLIDATED INCOME STATEMENT UNAUDITED FIGURES (In millions of Bolivars and Dollars, except percentages) Quarter Ended on 1 US$ Mar. 2013 Income from Cash and Due from Banks March 2013 ∆ March 2012 Bolivars % 1 4 3 1 33.3 Income from Investment Securities 117 655 425 230 54.1 Income from Loan Portfolio 541 3,039 2,026 1,013 50.0 658 3,698 2,454 1,244 50.7 186 1,047 672 375 55.7 Interest for Time Deposits 5 27 28 (1) (3.6) Interest for Securities Issued by the Bank 1 4 0 4 1.0 Interest on Financial Liabilities 5 29 32 (3) (9.4) 197 1,107 732 375 51.1 461 2,591 1,721 870 50.6 25 143 182 (39) (21.4) 436 2,447 1,539 908 59.0 NET FINANCIAL MARGIN 4 21 16 5 31.3 Trust Fund Operations 2 10 (4) 14 (350.0) Foreign Currency Transactions 27 154 106 48 (45.7) Commissions on Transactions 1 4 6 (2) (26.7) Commissions on Letters of Credit and Guarantees Granted 4 24 20 4 20.0 129 723 6 717 11.950.0 42.3 INTEREST INCOME Interest for Demand and Savings Deposits INTEREST EXPENSE NET INTEREST INCOME Provision for losses on loan portfolio Expenses from write-down of available for sale investments Equity in Long-Term Investments Exchange Gains and Losses 59 333 234 99 Income (Loss) on Sale of Investment Securities 116 654 463 191 41.3 Other Income 342 1,924 847 1,077 127.1 TOTAL COMMISSIONS AND OTHER INCOME 42 235 175 60 34.3 Total insures premiums, net of claims 820 4,606 2,561 2,045 79.9 OPERATING INCOME 167 937 691 246 35.6 33 185 138 47 34.1 Salaries and employee benefits Depreciation, Property and Equipment Expenses, Amortization of Intangibles and Others 70 396 252 144 56.9 Fees paid to regulatory agencies 150 841 603 238 39.5 Other operating expenses 420 2,359 1,684 674 40.0 TOTAL OPERATING EXPENSES INCOME BEFORE TAXES AND MINORITY INTEREST 400 2,247 877 1,370 156.3 37 207 80 127 158.8 0 (1) (1) 0 0.0 363 2,039 796 1,243 156.3 363 185 177 95.6 Total Taxes Minority Interests NET INCOME 1 Dollar figures are given for reference purposes only. Balance Sheet figures are translated at the closing exchange rate and income statement figures at the average exchange rate for the period. See exchange rates in Appendix VI. Exchange control has been in place in Venezuela since February 2003. Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 29 APPENDIX II MERCANTIL SERVICIOS FINANCIEROS, C.A. CONSOLIDATED STATEMENT OF CASH FLOWS UNAUDITED FIGURES (In millions of Bolivars) Quarter ended on March March 2013 2012 CASH FLOWS FROM OPERATING ACTIVITIES Net income Adjustments to reconcile net income to net cash provided Operating activities Allowance for losses on the loan portfolio Depreciation and amortization Provision for interest receivable and other assets Gain on equity in long-term investment Minority interest expense Deferred Income Tax Provision for available for sale assets Accrual for employee termination benefits Payment of employee termination benefits Net change in operating assets and liabilities Interest and commissions receivables Interest and commissions payables Available for sale and other assets Other liabilities Net cash provided by operating activities 2,039 796 144 61 2 (24) 1 50 0 175 (129) 182 43 19 (20) 1 2 10 81 (69) (246) 11 (841) 917 2,160 (37) 2 (214) 1,680 2,475 (8,004) (31,099) 18,810 (165) (20,458) (1,201) (14,881) 12,265 (27) (3,844) CASH FLOWS FROM FINANCING ACTIVITIES Net change in Deposits Short-term financial liabilities Debt securities by Mercantil Subordinated debt Long-term financial liabilities received Long-term financial liabilities paid Cash dividends Net cash flows from financing activities 20,791 184 (80) 223 650 6 (0) 21,773 4,032 (225) 0 0 386 (258) (1) 3,934 CASH AND CASH EQUIVALENTS 1 Net increase for the period At the beginning of the period At the end of the period 3,475 31,390 34,866 2,565 16,005 18,570 CASH FLOWS FROM INVESTING ACTIVITIES Net change in investments securities Loans granted Loans collected Additions to fixed assets, net of depreciation and write-offs Net cash flows from investing activities 1 Includes: Cash and Cash Equivalents, Cash and Due from banks, Investments in time deposits and placements within 90 days maturity Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 30 APPENDIX II MERCANTIL SERVICIOS FINANCIEROS, C.A. Statement of Shareholders’ Equity UNAUDITED FIGURES (In millions of Bolivars) Capital stock Balance as of March 31, 2012 Net income Cash paid dividend to subsidiaries Unrealized income on Investments available for sale Translation effect of net assets in subsidiaries abroad Balance as of June 30, 2012 Net income Share repurchased 1 Unrealized income on Investments available for sale Translation effect of net assets in subsidiaries abroad Balance as of September 30, 2012 Net income Unrealized income on Investments available for sale Translation effect of net assets in subsidiaries abroad Balance as of December 31, 2012 Net income Cash dividends Unrealized income on Investments available for sale Translation effect of net assets in subsidiaries abroad Balance as of March 31, 2013 153 153 Capital inflation adjustment 192 192 Paid-in Surplus 204 204 Capital Reserve s Translation adjustment of the assets In subsidiaries Abroad 167 1,551 167 (7) 1,544 Retained earnings 8,524 873 10 9,407 986 Shares repurchased held by subsidiaries (4) (4) Repurchased shares restricted for employee stock option plan (48) (49) Unrealized Gain (loss) from adjustments on investments Available for sale to market value 918 11,657 873 10 (262) (262) 656 (3) 153 153 153 192 192 192 204 204 204 167 1 1,545 167 5 1,550 167 1,441 2,992 10,394 1,508 11,902 2,039 (664) 13,277 (6) (7) (7) (49) (49) (49) Total Shareholders' Equity (7) 12,271 986 (3) 77 77 733 1 13,333 1,508 230 230 963 5 15,076 2,039 (664) (31) (31) 932 1,441 17,861 Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 31 APPENDIX III MERCANTIL SERVICIOS FINANCIEROS, C.A. Summary of the Financial Statements and Ratios (In millions Dollars 1, except percentages and figures per share) March 2013 December 2012 March 2012 ∆ Mar 13 vs. Dec 12 ∆ Mar 13 Vs. Mar 12 Cash and due from banks Investment Portfolio Loan Portfolio Net Other assets TOTAL ASSETS 4,844 6,784 14,327 914 26,869 6,425 7,606 18,158 1,066 33,255 3,840 6,133 14,642 894 25,509 % (24.6) (10.8) (21.1) (14.3) (19.2) ASSET MANAGEMENT 4,563 5,261 4,388 (13.3) 4.0 21,545 561 1,921 2,842 26,869 26,720 626 2,394 3,515 33,255 20,019 675 2,096 2,719 25,509 (19.4) (10.4) (19.7) (19.1) (19.2) 7.6 (16.9) (8.4) 4.5 5.3 461 25 342 42 420 363 583 65 321 93 496 352 401 42 197 41 393 185 (20.9) (61.5) 6.5 (54.8) (15.3) 3.1 15.0 (40.5) 73.6 2.4 6.9 96.2 3.66 33.42 32.14 27.81 5.2% 47.9% 3.54 32.64 31.47 34.39 5.0% 47.6% 1.87 16.55 17.49 26.59 3.0% 27.7% 3.4 2.4 2.1 (19.1) 4.0 0.6 95.7 101.9 83.8 4.6 73.3 72.8 Deposits Financial Liabilities Other Liabilities Shareholders’ Equity TOTAL LIABILITIES AND SHAREHOLDERS´ EQUITY % 26.1 10.6 (2.2) 2.2 5.3 INCOME – QUARTER Financial Margin Allowance for losses on loan portfolio Commissions and other income Insurance premiums, net of claims Salaries and Operating Expenses Net Income - Quarter KEY FINANCIAL INDICATORS Income per share – Quarter Bs/ share Market price A share Market price B share Book value per share Net Income (quarter) / Average Assets (ROA) Net Income (quarter) / Average Equity (ROE) 1 Dollar figures are given for reference purposes only. Balance Sheet figures are translated at the closing exchange rate and income statement figures at the average exchange rate for the period. See exchange rates in Appendix VI. Exchange control has been in place in Venezuela since February 2003. Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 32 APPENDIX IV MERCANTIL SERVICIOS FINANCIEROS, C.A. Consolidated Loan Portfolio by Classification (In millions of Bolivars, except percentages) By Economic Activity Commercial Consumer Agricultural Services Foreign trade Industrial Residential mortgage Construction Car loans Other March 2013 39,577 12,694 9,432 6,079 5,828 5,692 4,513 2,451 2,226 4,433 92,924 By Maturity Up to six months Six months to one year One to two years Two to three years Three to four years Four to five years Over five years March 2013 33,462 12,429 15,484 9,981 5,629 5,702 10,239 92,924 By Geographical Location of the Debtor Venezuela United States of America Mexico Colombia Brazil Switzerland Peru Other countries March 2013 63,831 18,189 733 393 1,379 861 2,145 5,393 92,924 By Type of Risk Normal Potential Real High Unrecoverable March 2013 89,536 903 1,551 812 122 92,924 42.6 13.7 10.1 6.5 6.3 6.1 4.9 2.6 2.4 4.8 100.0 December 2012 32,194 11,727 9,049 5,337 4,316 5,618 4,169 2,344 2,276 3,511 80,543 36.0 13.4 16.7 10.7 6.1 6.1 11.0 100.0 December 2012 29,019 12,444 13,191 8,130 4,674 4,396 8,689 80,543 68.7 19.6 0.8 0.4 1.5 0.9 2.3 5.8 100,0 December 2012 60,562 11,993 623 371 1,077 648 1,396 3,872 80,543 96.4 1.0 1.7 0.9 0.1 100.0 December 2012 77,332 887 1,509 695 120 80,543 % % % % 40.0 14.6 11.2 6.6 5.4 7.0 5.2 2.9 2.8 4.4 100.0 March 2012 26,653 7,257 7,423 4,879 3,304 4,570 3,625 2,548 1,875 2,864 64,999 36.0 15.5 16.4 10.1 5.8 5.5 10.8 100.0 March 2012 21,585 9,637 12,715 6,470 3,500 3,884 7,206 64,999 75.2 14.9 0.8 0.5 1.3 0.8 1.7 4.8 100.0 March 2012 46,764 10,790 670 470 1,424 432 1,033 3,414 64,999 96.0 1.1 1.9 0.9 0.1 100.0 March 2012 61,737 965 1,977 248 73 64,999 % % % % % 41.0 11.2 11.4 7.5 5.1 7.0 5.6 3.9 2.9 4.4 100.0 % 33.2 14.8 19.6 10.0 5.4 6.0 11.1 100.0 % 71.9 16.6 1.0 0.7 2.2 0.7 1.6 5.3 100.0 % 91.8 2.5 4.9 0.7 0.1 100.0 Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 33 APPENDIX V Statutory percentage of Mercantil Banco Universal loans by economic sector and interest rates March 2013 1 March 2013 % of Compliance Reached % of Compliance required Sector Percentages of compliance Agriculture Calculated on the average gross loans at 12/31/2012 and 12/31/2011, monthly compliance. Maximum per customer 5% of the current portfolio. It requires a minimum number of new clients. Additionally the portfolio must be quarterly classified between strategic a non-strategic sectors. The concentration in the strategic segment of the loan portfolio must not be less than 70% and medium and long-term credits less than 10% of the total agricultural loan portfolio. Interest Rates 21.6%1 21.0% Set weekly by the Central Bank (BCV). At 03/31/2012 this is 13% Mortgage Calculated on the gross loan portfolio at 12/31/2012, distributed as follows: 6.0% in long term loans and 13.0% in short-term loans. Annual Compliance. 8.0%1 - Set semi-annually by the Housing and Habitat Ministry. Set in accordance with family income of debtors, ranging between 1.40% and 11.42% Microcredits 3% Calculated on the gross loan portfolio at 12/31/2012. Monthly Compliance. 3.2% 3.0% Within minimum and maximum rates established by the Central Bank. At 03/31/2013 the rate cannot be higher than 24% Tourism It’s calculated based on the average of the Loan Portfolio figures at year-end 2012 and 2011. Compliance must be reached by December 31, 2013 (1.5% semiannually). 2.1% - The Central bank establishes a preferential rate for the sector on a monthly basis. As of March 31, 2012, the rate is 10.64% and can be as low as 7.64% in some cases in accordance with the Law for Tourism Loans. Industrial Calculated on the gross loan portfolio at 12/31/2012. Monthly Compliance. 9.5% 10.0% Set by the Central Bank at 19%. Includes Bs 1.757 million in Agricultural Bonds issued by the Venezuelan State in accordance with the agricultural portfolio, and Bs. 1.283 million in special mortgage securities issued by mortgage issued by Fondo Simón Bolivar para la Reconstrucción, S.A. attributable to mortgage portfolio growth Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 34 APPENDIX VI Summary of Financial Indicators “Caracas Stock Exchange: MVZ A & MVZ B ADR Level 1: MSFZY y MSFJY” Quarter Ended on US$ Mar 13 Net income in billions of Bolivars (millions of US$) Mar 13 363 Mar 12 2,039 796 59,401,343 59,401,343 210.00 71.00 1,559 1.2 1,848 0.6 Mercantil’s stock indicators Class A share: Number of outstanding shares3 (Issued shares minus repurchased shares) Market Price 33.42 Average daily volume (# of shares) Market Price / Book value per share Market Price / Period Net Earnings per share Dividends received in Cash / Market price A Class B share: Number of outstanding shares3 (Issued shares minus repurchased shares) Market Price Average daily volume (# of shares) 42,813,618 202.00 2,173 75.00 1,705 1.2 9.8 0.7 9.4 32.14 Dividends received in Cash / Market price B Book value per share in Bs (Equity / # of outstanding shares) 2 Total weighted outstanding shares Earnings per share (Net Result/ weighted outstanding shares) Market Quote Mercantil Class A and Class B Shares vs. Caracas Stock Exchange (CSE) Index Adjusted CSE 8.9 0.0 42,813,618 Market Price / Book value per share Market Price / Period Net Earnings per share Price MVZ/A 6 10.2 0.0 0.0 0.0 27.81 9 174.74 114.04 99,162,172 99,198,316 3.66 20.57 8.02 Composition of Net Income by Business Segments Price MVZ/B 225 1.6% 3.2% 210 195 82.3% 180 88.8% 9.6% 14.5% 165 150 135 IQ 2012 120 Banking IQ 2013 Insurance Asset Management 105 90 75 60 45 30 15 0 Mar-12 1 2 3 Jun-12 Sep-12 Dec-12 Mar-13 Figures in US$ given for reference purposes only; Balance Sheet figures translated at the closing exchange rate and income at the average exchange rate for the period. See exchange rates in Appendix VI. Exchange control has been in place in Venezuela since February 2003. Issued shares minus repurchased shares. Stock dividends paid are considered as issued shares for comparison purposes. Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 35 APPENDIX VI Summary of Financial Indicators Quarter Ended on Mar 13 Mar 12 Balance Structure indicators Gross Loans/Deposits 68.6% 75.7% Gross financial margin / Average interest earning assets Commissions and other income as a percentage of Total income 8.4% 45.5% 7.9% 37.3% Return on average assets (ROA) Return on average equity (ROE) 5.2% 47.9% 3.0% 27.7% 5.0% 41.3% 5.4% 52.3% 22.5% 54.0% 19.2% 49.8% Profitability Ratios (%): Efficiency Ratios (%): Operating expenses / Average total assets Operating expenses / Total income Liquidity Ratios (%): Cash and due from banks / Deposits Cash and due from banks and Investments Portfolio / Deposits Asset Quality Ratios (%): Non-performing loans/ Gross loans 1.0% 1.4% 306.4% 235.9% 3.1% 3.4% Equity / Assets 10.6% 10.7% Equity / Risk – Weighted Assets (regulatory minimum 8%) 19.5% 18.5% 8,869 8,530 881 849 Branches in Venezuela 302 302 Bank branches Insurance branches 268 34 269 33 Branches Abroad Representative Offices 24 5 23 5 Allowance for loan losses / Non performing loans Allowance for loan losses / Gross loans Capital Adequacy Ratios (%): Number of employees Employees in Venezuela Employees Abroad Distribution network Number of ATMs 1,398 1,307 Number of points of sale (POS) Mercantil Aliado Network: 49,415 43,785 Correspondent Desk Correspondent Trading Points 119 192 69 164 Exchange rate Bs/US$1 (Controlled since February 2003) Average Exchange Rate for the quarter (Bs/US$1) 6.2842 5.6192 4.2893 4.2893 Inflation for the last 12 months 25.1% 24.6% Exchange and inflation rates Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 36 APPENDIX VII MERCANTIL C.A. BANCO UNIVERSAL According to rules issued by SNV 1 UNAUDITED CONSOLIDATED FIGURES (In millions of Bolivars and Dollars, except percentages) US$ 1 Mar.2013 SUMMARY OF BALANCE SHEET ASSETS Cash and Cash Equivalents Investments Portfolio Loan Portfolio Properties and Equipment and Other Assets March December March 2013 2012 2012 ∆ ∆ Mar 13 vs. Dec 12 Mar 13 vs. Mar 12 Bolivars Bolivars % % 4,650 3,867 9,663 384 29,224 24,302 60,727 2,415 26,894 18,414 57,756 1,932 15,124 12,664 44,303 1,354 2,330 5,888 2,971 483 8.7 32.0 5.1 25 14,100 11,638 16,423 1,061 93.2 91.9 37.1 78.3 TOTAL ASSETS 18,565 116,668 104,996 73,446 11,672 11.1 43,222 58.8 LIABILITIES AND SHAREHOLDERS'EQUITY Deposits 3 Financial Liabilities and Other Liabilities 16,050 757 100,863 4,759 90,940 4,263 62,888 3,602 9,923 497 10.9 11.7 37,975 1,157 60.4 32.1 TOTAL LIABILITIES 16,807 105,622 95,202 66,490 10,420 10.9 39,132 58.9 1,758 11,046 9,793 6,956 1,252 12.8 4,090 58.8 18,565 116,668 104,996 73,446 11,672 11.1 43,222 58.8 SHAREHOLDERS´ EQUITY TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY Quarter ∆ Ended on US$ 2 Mar.2013 SUMMARY OF STATEMENT OF INCOME Interest Income Interest Expense Gross Financial Margin Provision for Losses on Loan Portfolio Net Financial Margin Commissions and Other Income Operating Income Operating Expenses Income before taxes Taxes NET INCOME NET INCOME IN US$ 2 March 2013 March 2012 Bolivars % 585 188 397 25 372 279 651 316 335 22 3,285 1,058 2,227 138 2,090 1,569 3,658 1,773 1,885 125 2,127 684 1,444 144 1,299 638 1,937 1,271 666 58 1,158 374 784 (7) 791 931 1,721 502 1,219 67 54.4 54.7 54.3 (4.7) 60.9 145.9 88.9 39.5 182.9 115.4 313 1,761 313 608 142 1,152 171 189.3 120.9 Conciliation of Net Income SNV and SUDEBAN (In millions of Bs.) Quarter Ended on March 2013 Net income 3 Deferred Income Tax Long term interest bearing loans, investments in securities adjusted for amortization, and other consolidation effects Net income SNV Inter-company eliminations Contribution to Mercantil's Results 1,100 0 661 1,761 0 1,761 March 2012 666 0 (58) 608 0 608 1 These financial statements are presented in accordance with SNV standards and adjusted for inflation up to December 31. 1999 (See accounting principles used). They reflect Mercantil Banco Universal’s contribution to Mercantil´s results. These Standards of the SNV are described in Appendix I. Dollar figures are given for reference purposes only. Balance Sheet figures are translated at the closing exchange rate and income statement figures at the average exchange rate for the period. See exchange rates in Appendix VI. Exchange control has been in place in Venezuela since February 2003. 3 Historic figures in accordance with the standards of the Superintendency of Banking Sector Institutions in Venezuela. 2 Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 37 APPENDIX VII MERCANTIL C.A. BANCO UNIVERSAL 1 According to rules issued by SUDEBAN UNAUDITED CONSOLIDATED FIGURES (In millions of Bolivars and Dollars, except percentages) US$ 1 Mar.2013 SUMMARY OF BALANCE SHEET ASSETS Cash and Cash Equivalents Investments Portfolio Loan Portfolio Properties and Equipment and Other Assets March December March 2013 2012 2012 ∆ ∆ Mar 13 vs. Dec 12 Mar 13 vs. Mar 12 Bolivars Bolivars % % 4,650 3,764 9,663 378 29,224 23,656 60,727 2,377 26,894 17,970 57,756 1,895 15,124 12,436 44,303 1,312 2,330 5,686 2,971 482 8.7 31.6 5.1 25.5 14,100 11,220 16,423 1,066 93.2 90.2 37.1 81.2 TOTAL ASSETS 18,455 115,984 104,514 73,175 11,470 11.0 42,809 58.5 LIABILITIES AND SHAREHOLDERS'EQUITY Deposits Financial Liabilities and Other Liabilities 16,362 457 102,820 2,885 92,500 2,780 64,721 1,846 10,320 105 11.2 3.8 38,099 1,039 58.9 56.3 TOTAL LIABILITIES 16,819 105,705 95,281 66,567 10,424 10.9 39,138 58.8 1,636 10,279 9,233 6,608 1,045 11.3 3,671 55.6 18,455 115,984 104,514 73,175 11,470 Quarter 11.0 42,809 58.5 SHAREHOLDERS´ EQUITY TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ∆ Ended on US$ 3 Mar.2013 SUMMARY OF STATEMENT OF INCOME Interest Income Interest Expense Gross Financial Margin Allowance for Losses on Loan Portfolio Net Financial Margin Commissions and Other Income Operating Income Operating Expenses Income before taxes Taxes NET INCOME NET INCOME IN US$ 3 March 2013 March 2012 Bolivars % 584 195 389 25 364 191 555 336 219 22 3,279 1,097 2,182 138 2,044 1,072 3,116 1,890 1,225 125 2,296 765 1,531 157 1,375 699 2,074 1,350 724 58 983 332 651 (18) 669 373 1,042 541 501 67 42.8 43.4 42.5 (11.6) 48.7 53.3 50.3 40.1 69.1 115.6 196 1,100 196 666 155 433 40 65.1 26.1 Mercantil Banco Universal Indicators1 from Consolidated Financial Statements Gross financial margin / Average assets Return on average assets (ROA) 2 Return on average equity (ROE) 2 Non-performing loans / Gross loans Allowance for loan losses / Non performing loans Allowance for loan losses / Gross loans Operating expenses / average total assets Equity / Assets Equity / Assets minus Venezuelan Government Investments Equity / Risk-weighted Assets 1 2 3 System average2 7.9% 3.8% 42.7% 1.0% 329.1% 3.2% 4.6% 8.5 N.D. N.D. March 2013 March 2012 8.0% 3.9% 43.6% 0.8% 496.1% 3.9% 5.0% 7.9% 10.2% 19.6% 8.3% 3.8% 42.1% 0.7% 605.7% 4.2% 5.8% 8.1% 10.1% 16.3% Consolidated. Based on annualized figures. Dollar figures are given for reference purposes only. Balance Sheet figures are translated at the closing exchange rate and i ncome statement figures at the average exchange rate for the period. See exchange rates in Appendix VI. Exchange control has been in place in Venezuela since February 2003. N.A.: Not available Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 38 APPENDIX VIII MERCANTIL COMMERCEBANK FLORIDA BANCORP According to rules issued by SNV 1 UNAUDITED CONSOLIDATED FIGURES (In millions of Dollars, except percentages) March December March 2013 2012 2012 ∆ ∆ Mar 13 vs. Dec 12 Mar 13 vs. Mar 12 Dollars % Dollars % SUMMARY OF BALANCE SHEET ASSETS Cash and Cash Equivalents Investments Securities Loan Portfolio Properties and Equipment and Other Assets TOTAL ASSETS 186 1,995 4,345 167 6,693 145 2,122 4,372 148 6,787 376 2,107 4,111 187 6,781 41 (127) (27) 19 (94) 28.2 (6.0) (0.6) 12.8 (1.4) (190) (112) 234 (20) (88) (50.5) (5.3) 5.7 (10.9) (1.3) LIABILITIES AND SHAREHOLDERS’ EQUITY Deposits Financial Liabilities, Other Liabilities and Subordinated Debt TOTAL LIABILITIES 5,380 691 6,072 5,330 845 6,175 5,349 862 6,211 50 (153) (103) 0.9 (18,1) (1.7) 31 (170) (139) 0.6 (19,8) (2.2) 622 613 570 9 1.5 52 9.1 6,693 6,787 6,781 (94) (1.4) (88) (1.3) SHAREHOLDERS´ EQUITY TOTAL LIABILITIES AND SHAREHOLDERS´ EQUITY Quarter Ended on March 2013 ∆ March 2012 US$ % SUMMARY OF STATEMENT OF INCOME Interest Income Interest Expense 43 7 46 9 (3) (2) Gross Financial Margin 36 37 (0) (1.2) 0 8 (8) (99.2) Net Financial Margin 36 28 8 28.1 Commissions and Other Income 15 16 (2) (9.5) Operating Income Operating Expenses 51 36 45 36 6 (0) 14.4 (0.7) Income before taxes 15 8 7 81.0 4 1 2 146.9 11 7 5 66.6 Allowance for Losses on Loan Portfolio Taxes NET INCOME US$ (5.7) (23.9) Conciliation of Net Income SNV and USGAAP (In millions of dollars ) Ended on Mercantil Commercebank N.A. Consolidated - Net Income Results for the Holding and other Affiliates Mercantil Commercebank Florida Bancorp - Net Income Deferred Income Tax Provision for available for sale assets Others Contribution to Mercantil's Results1 1 Quarter March 2012 10 6 (1) (1) 9 5 2 1 1 0 (0) 1 11 7 March 2013 These financial statements are presented in accordance with rules of the SNV (see accounting principles used) to reflect the contribution of Mercantil Commercebank Florida Bancorp to the results of Mercantile. These Standards of the SNV are described in Appendix I. Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 39 APPENDIX VIII MERCANTIL COMMERCEBANK, N.A. According to USGAAP UNAUDITED CONSOLIDATED FIGURES (In millions of Dollars, except percentages) March December March 2013 2012 2012 ∆ ∆ Mar 13 vs. Dec 12 Mar 13 vs. Mar 12 Dollars % Dollars % SUMMARY OF BALANCE SHEET ASSETS Cash and Cash Equivalents Investments Securities Loan Portfolio Properties and Equipment and Other Assets TOTAL ASSETS 11 2,170 4,342 202 6,724 13 2,253 4,371 182 6,820 8 2,474 4,107 227 6,816 (2) (84) (29) 20 (95) (14.1) (3.7) (0.7) 10.8 (1.4) 3 (304) 235 (25) (91) 40.7 (12.3) 5.7 (11.1) (1.3) LIABILITIES AND SHAREHOLDERS’ EQUITY Deposits Financial Liabilities, Other Liabilities and Subordinated Debt TOTAL LIABILITIES 5,407 591 5,998 5,366 735 6,101 5,138 988 6,126 41 (144) (103) 0.8 (19,6) (1.7) 269 (397) (128) 5.2 (40,2) (2.1) 727 719 690 8 1.1 37 5.4 6,724 6,820 6,816 (95) (1.4) (91) (1.3) SHAREHOLDERS´ EQUITY TOTAL LIABILITIES AND SHAREHOLDERS´ EQUITY Quarter Ended on March 2013 ∆ March 2012 US$ % SUMMARY OF STATEMENT OF INCOME Interest Income Interest Expense Gross Financial Margin Allowance for Losses on Loan Portfolio Net Financial Margin Commissions and Other Income Operating Income Operating Expenses Income before taxes Taxes NET INCOME US$ 2 43 5 38 0 38 13 51 35 16 6 10 46 7 38 8 30 15 45 35 10 4 6 (3) (2) (0) (8) 8 (2) 6 0 6 2 4 (5.6) (28.8) (1.2) (99.2) 26.6 (10.1) 14.4 0.6 63.8 63.8 63.8 Mercantil Commercebank, N.A. Indicators Similar Group1 Gross financial margin / Average assets Return on average assets (ROA) 2 Return on average equity (ROE) 2 Non Accrual / Gross loans Allowance for loan losses / Gross loans Operating expenses / average total assets Equity / Assets Equity / Risk-weighted Assets 1 2 March 2013 3.6% 1.0% 9.1% 1.6% 1.7% 2.8% N.D. N.D. March 2012 2.3% 0.6% 5.6% 1.8% 1.6% 2.1% 10.1% 17.3% 2.4% 0.4% 3.6% 4.6% 1.5% 2.1% 9.2% 17.1% Based on September, 2012. Annualized N.A.: Not available Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 40 APPENDIX IX MERCANTIL SEGUROS According to rules issued by SNV 1 Unaudited Consolidated Figures (In millions of Bolivars and Dollars, except percentages) US$ 1 Mar.2013 SUMMARY OF BALANCE SHEET ASSETS Cash and Cash Equivalents Investments Portfolio Premiums receivable Property and equipment Other assets TOTAL ASSETS March December March 2013 2012 2012 ∆ ∆ Mar 13 vs. Dec 12 Mar 13 vs. Mar 12 Bolivars Bolivars % % 89 871 164 33 129 1,286 557 5,473 1,032 205 815 8,083 357 4,681 955 212 659 6,864 392 3,686 761 147 617 5,603 200 792 77 (7) 156 1,219 56.1 16.9 8.1 (3.3) 23.7 17.8 166 1,788 271 58 198 2,481 42.3 48.5 35.7 39.2 32.1 44.3 Uncollected Premium Reserves Financial Liabilities Accounts Payable Reinsures Other provisions and other liabilities TOTAL LIABILITIES 405 235 21 54 128 843 2,547 1,476 130 341 807 5,301 2,317 1,179 0 287 743 4,527 1,978 997 185 241 637 4,038 230 297 130 54 64 775 9.9 25.2 100.0 18.9 8.7 17.1 569 479 (55) 100 170 1,264 28.8 48.1 (29.7) 41.4 26.7 31.3 SHAREHOLDERS’ ÉQUITY 443 2,782 2,338 1,565 444 19.0 1,217 77.8 1,286 8,083 6,864 5,603 1,219 17.8 2,481 44.3 LIABILITIES AND SHAREHOLDERS’ ÉQUITY TOTAL LIABILITIES AND SHAREHOLDERS’ ÉQUITY Quarter 2 US$ Mar.2013 ∆ Ended on March March 2013 2012 Bolivars % SUMMARY OF STATEMENT OF INCOME Earned Premiums Received Claims Incurred Commissions and Acquisition Expenses Management Expenses Taxes and Contributions Technical Result Income from Investments Foreign exchange gains Taxes Contracts of excess of lost NET INCOME NET INCOME US$ 2 Conciliation of Net Income SNV and SUDESEG (In million of Bs.) 312 (205) (50) (32) (17) 8 32 5 (1) (9) 35 1,755 (1,154) (280) (179) (96) 45 180 27 (8) (49) 195 35 1,309 (832) (229) (128) (69) 50 100 0 (4) (31) 115 27 446 (322) (51) (51) (27) (5) 80 27 (5) (18) 80 8 Quarter Ended on March 2013 Mercantil Seguros (Consolidated) - Net Income Valuation of Investments Earned premiums Exchange Gains and Losses Other Contribution to Mercantil's Results 1 2 34.1 38.7 22.3 39.9 38.7 -9.3 80.3 26,500 137.1 57.3 69.1 29.1 193 0 1 0 1 195 March 2012 109 (0) 4 0 2 115 These financial statements are presented in accordance with SNV standards and adjusted for inflation up to December 31, 1999 (See accounting principles used, Appendix I). They reflect Mercantil Seguros contribution to Mercantil’s results. These Standards of the SNV are described in Appendix I. Dollar figures are given for reference purposes only. Balance Sheet figures are translated at the closing exchange rate and income statement figures at the average exchange rate for the period. See exchange rates in Appendix VI. Exchange control has been in place in Venezuela since February 2003. Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 41 APPENDIX IX MERCANTIL SEGUROS According to rules issued by SUDESEG Unaudited Consolidated Figures (In millions of Bolivars and Dollars, except percentages) US$ 1 Mar.2013 SUMMARY OF BALANCE SHEET ASSETS Cash and Cash Equivalents Investments Portfolio Premiums receivable Property and equipment Other assets TOTAL ASSETS LIABILITIES AND SHAREHOLDERS’ ÉQUITY Uncollected Premium Reserves Financial Liabilities Accounts Payable Reinsures Other provisions and other liabilities March December March 2013 2012 2012 ∆ ∆ Mar 13 vs. Dec 12 Mar 13 vs. Mar 12 Bolivars Bolivars % % 722 302 165 1,189 4,534 1,898 1,043 7,475 4,724 1,000 947 6,671 3,641 853 687 5,181 (190) 898 96 804 (4.0) 89.8 10.1 12.1 894 1,045 356 2,294 24.5 122.5 51.8 44.3 640 205 845 4,023 1,288 5,311 3,498 936 4,434 2,996 757 3,753 525 352 877 15.0 37.6 19.8 1,027 532 1,559 34.3 70.2 41.5 344 2,163 2,236 1,428 (73) (3.2) 735 51.5 1,189 7,475 6,671 5,181 805 12.1 2,294 44.3 Quarter ∆ Ended on US$ 1 Mar.2013 SUMMARY OF STATEMENT OF INCOME Earned Premiums Received Claims Incurred Commissions and Acquisition Expenses Management Expenses Taxes and Contributions Technical Result Income from Investments Foreign exchange gains Taxes Contracts of excess of lost NET INCOME NET INCOME US$2 March March 2013 2012 312 (205) (50) (32) (17) 1,754 (1,154) (282) (179) (96) 1,304 (832) (231) (128) (69) 8 32 5 (1) (9) 34 43 180 27 (8) (49) 193 34 44 100 0 (4) (31) 109 25 Bolivars 450 (322) (51) (51) (27) % 34.5 38.7 21.9 39.9 38.7 (1) (2.0) 80 80.3 27 26,500.0 (5) 137.1 (18) 57.3 83 76.3 9 34.6 KEY FINANCIAL AND OPERATING INDICATORS Mercantil Seguros (In millions of Bolivars, except percentages) Premiums Received Net Market Share Equity / Total Assets Incurred Claims / Earned Premiums (%) Commissions and Acq. Expenses / Earned Premiums (%) Administrative Expenses / Earned Premiums (%) Combined Ratio (%)3 Insured Persons 4 Quarter Ended on March March 2013 2012 2,099 1,635 11.7%2 29.0% 65.8% 16.0% 10.2% 13.7%2 27.6% 63.8% 17.7% 9.8% 97.6% 96.7% 1,503,645 1,422,790 1 Dollar figures are given for reference purposes only. Balance Sheet figures are translated at the closing exchange rate and income statement figures at the average exchange rate for the period. See exchange rates in Appendix VI. Exchange control in place in Venezuela since February 2003. Market Share at 2012/11/30 3 Combined ratio = (incurred claims + commissions + operating expenses)/ earned premiums 4 In numbers. 2 Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 42 APPENDIX X Key Macroeconomic Indicators 12 Months 2011 Gross Domestic Product. Var.% I 12 II 12 III 12 IV 12 I 13 1 Consolidated Oil activities Non-Oil activities Other Net Taxes on Products Consumer Price Index (% Change) Unemployment Rate (% Change) Wage Income Index (% Var ) Quarter 2012 2 3 4.2 0.6 4.5 5.9 5.6 1.4 5.8 9.1 5.9 2.2 6.1 8.7 5.6 1.1 6 8.2 5.5 1.1 5.6 9.5 5.5 1.1 5.4 9.8 ND ND ND ND 29 7.8 19.5 7.4 14.9 9.3 17.2 8.3 16.6 7.8 30.1 6.5 ND ND 38.3 23.6 39.5 29.4 22.7 23.6 ND 50.6 60.1 53.9 53.1 57.4 60.1 60.5 15.6 12.5 14.5 15.6 12.5 14.6 15.4 12.5 14.5 16.3 12.5 14.5 16.8 12.5 14.5 15.6 12.5 14.6 15.3 12.5 14.5 4,289.3 4,289.3 4,289.3 4,289.3 0.0 0.0 4,289.3 4,289.3 0.0 4,289.3 4,289.3 0.0 4,289.3 4,289.3 0.0 4,289.3 4,289.3 0.0 6,284.2 6,284.2 0.0 4,289.3 4,289.3 4,289.3 4,289.3 0.0 0.0 4,289.3 4,289.3 0.0 4,289.3 4,289.3 0.0 4,289.3 4,289.3 0.0 4,289.3 4,289.3 0.0 6,284.2 6,284.2 0.0 45,998 88,132 4,679 46,813 38,001 93,569 3,771 59,339 12,020 24,677 1,059 13,716 10,580 22,647 1,021 13,088 8,616 22,464 ,846 14,694 6,785 23,781 845 17,841 ND ND ND ND 29,889 3 29,887 3 27,587 3 28,424 3 25,887 3 29,887 3 27,035 3 101.1 2,263 103.4 2,545 112.0 2,313,3 103.5 2,345 100.0 2,663,3 98.3 2,860 103.8 2,858 147,443 192,340 324,726 414,000 42,843.9 85,274.0 1 Monetary Liquidity (% Change) Interest Rates (Period end) (%) 1 4 Six Main Commercial and Universal Banks Period-end Loan Rate Period-end Saving Deposit Rate Period-end Time Deposit Rate Exchange Rate (Preferential) Period end (Bs/US$) (Bid rate) 7 Annual average exchange rate (Bs/US$) Depreciation (%) 7 2 Exchange Rate (Oil) Period end (Bs/US$) (Bid rate) 7 Annual average exchange rate (Bs/US$) Depreciation (%) 7 2 External Sector (millions of US$) Trade Balance 5 Oil Exports Non-Oil Exports Imports Central Bank of Venezuela Intl. Res. FEM Oil Export Average Price (US$/b) Average Oil Production (Thousands bpd) Central Government (millions of Bs) Non-Oil Income Realized Expenses by the National Treasury 6 45,386.3 48,181.9 55,927.3 ND 86,920.1 105,093.3 136,712.9 108,204.5 1 Year-on-year variation. Annual Dec-Dec figures. Annualized quarterly figures. Annual figures for the second semester. 4 Annual figures correspond to weighted averages. 5 Balance of payments figures. 6 Does not include public debt amortization. 7 Exchange Rate US$/1 for comparison purposes. At January 1, 2008, begins the Monetary Conversion Law. ND: Not Available FEM: Macroeconomic Stabilization Fund Source: Central Bank of Venezuela (BCV). Ministry of Finance (MF). National Statistics Institute (INE) Ministry of Energy and Production (MEP). Bloomberg and own calculation 2 3 Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: inversionista@msf.com. website: www.bancomercantil.com. 43
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