ANNUAL REPORT 2010

ANNUAL REPORT 2010

In this report, 

Mercantil Servicios Financieros 

celebrates a group of Venezuelan artists 

from the early twentieth century who 

revitalized Venezuela’s art scene and 

influenced art movements for decades 

to come. These artists based their work 

on the close study of nature leaving a 

legacy of art, beauty and life. Together 

they established what became known 

as the Fine Arts Society, and later lent 

their creative spirit to the “Escuela de 

Caracas.” For five decades, these artists 

have inspired landscape painting in 

Venezuelan art and given younger 

generations the opportunity to forever 

witness the beauty and light that 

suffuses Caracas and its surrounding 

areas. The works presented in this report 

are part of the Mercantil Collection.

ANNUAL REPORT 2010 

CONTENTS 

Mercantil’s Stock Performance 4 

Financial Highligths 5 

Board of Directors and Administration 6 

Notice of Ordinary General Shareholders’ Meeting 7 

Board of Directors’ Report 9 

Statutory Auditors’ Report 21 

Financial Statements 23 

Economic Climate 29 

Strategic Positioning 33 

Management Discussion and Analysis 35 

Business Management Report 45 

Quality of Service and Operating Efficiency 59 

Human Resources 63 

Risk Management 65 

Performance of Subsidiaries 73 

Credit Ratings 81 

Prevention and Control of Money Laundering 

and Terrorist Financing (ML/TF) 83 

Internal Auditing 85 

Social Commitment 87 

Corporate Governance 91 

Report of the Board of Directors on 

Compliance with Corporate Governance 99 

Awards and Acknowledgements 100 

85 years at the service of Venezuela 103 

Management 109 

Subsidiaries and 

Corporate Contacts 115

Manuel CABRÉ 

Paisaje, 1917 

Oil on wood 

32.5 x 41 cm 

Barcelona (Spain), 1890 - Caracas, 1984 

Cabré came to Venezuela as a young boy. In 1904, he was accepted at the Caracas Academy of Fine Arts. 

He participated in the student protests of 1909 and later became one of the most prominent founding 

members of the Fine Arts Society. Around 1931, after studying in Paris, he joined the national art scene 

and became known as the “painter from Avila”. From 1942 to 1946, he served as Director of the Museum 

of Fine Arts. In 1951, he received the National Award in Painting.

Mercantil is Venezuela’s leading financial 

services provider with an equity base of Bs 8,513 million (US$ 1,985 million). It operates in 10 

countries in the Americas, Europe and Asia. Its shares are listed on the Caracas Stock 

Exchange (MVZ.A and MVZ.B) and in the over-the-counter market (OTC) in the United States 

of America through a Level 1 ADR program (MSFZY and MSFJY). 

The mission of Mercantil Servicios Financieros is "to fulfill the needs of the individuals and 

communities where Mercantil has presence by providing excellent financial products and 

services in various market segments, enhancing shareholder's value by efficiently using our 

available resources." 

Mercantil Banco Universal, founded 85 years ago (1925), is Mercantil’s main subsidiary in 

Venezuela. At December 31, 2010, it has a national network of 273 branches; one agency in 

Coral Gables, Florida, USA; a branch in Curaçao and representative offices in Bogota, Lima, 

Mexico City, Sao Paulo and New York; Mercantil Commercebank, N.A. in the USA has 15 

offices in Florida, a branch in New York, and one in Houston; Mercantil Bank (Schweiz) AG in 

Switzerland; Mercantil Bank Curaçao N.V. in Curaçao, Mercantil Bank (Panama) in Panama, 

Mercantil Bank and Trust, Limited (Cayman) in the Cayman Islands; and in Venezuela, 

Mercantil Merinvest, C.A.; Mercantil Seguros with 33 offices serving the public, and Mercantil 

Inversiones y Valores, a holding for other minority investments. 

Since its foundation, Mercantil has played an active role in the development of the different 

markets where it operates by financing trade, agriculture and industry. It consistently 

demonstrates its social commitment by helping different sectors of the community in 

Venezuela through Fundación Mercantil, and in South Florida, USA, through its subsidiary 

Mercantil Commercebank, N.A. 


3

"Caracas Stock Exchange: MVZ.A & MVZ.B 

NYSE Level 1 ADR’s: MSFZY & MSFJY" 

Year Ended 

Earnings per share (1) 

Closing Price (2) 

Class A share 

Class B share 

Market price/ Earnings per share (1) 

Class A share 

Class B share 

Book value per share (3) 

Market price / book value (3) 

Class A share 

Class B share 

Number of outstanding shares 

Class A share 

Class B share 

Daily Average Traded Volume (Shares) 

Class A share 

Class B share 

Paid Dividends 

In stock (new shares for each share held) 

In cash (Bs per share) 

Cash dividends for the year / Market price (%) 

Class A share 

Class B share 

Mercantil’s 

Stock Performance 

A n n u a l Re p o r t 2 0 1 0 

4 

2010 

US$ (4) 

6.09 

6.88 

6.88 

19.39 

0.35 


bolivars 

21.82 

29.50 

29.50 

1.4 

1.4 

83.17 

0.4 

0.4 

59,496,176 

42,860,312 

9,159 

5,899 

- 

1.50 

5.1 

5.1 

2009 

bolivars 

Market Quote for Mercantil Class A and B Shares 

vs. Caracas Stock Exchange (CSE) Index 

7.95 

18.50 

18.50 

2.3 

2.3 

47.50 

0.4 

0.4 

59,733,553 

42,992,256 

26,289 

32,049 

- 

1.36 

7.4 

7.4 

2008 

bolivars 

9.53 

17.53 

17.53 

1.8 

1.8 

39.56 

0.4 

0.4 

60,092,098 

43,275,460 

16,095 

6,476 

- 

1.02 

5.8 

5.8 

2007 

bolivars 

7.96 

31.00 

33.00 

3.9 

4.1 

32.77 

0.9 

1.0 

60,335,793 

43,645,654 

43,299 

6,792 

2 for each 5 

0.78 

2.5 

2.4 

2006 

bolivars 

5.76 

42.89 

43.26 

7.5 

7.5 

25.88 

1.7 

1.7 

41,476,057 

30,043,282 

(1) Calculated based on weighted average shares issued minus repurchased shares adjusted by stock dividend and by the conversion of 10 previous common shares to 1 new common share. 

(2) Recalculated, considering stock dividend paid in May 2007 to facilitate price comparisons for the periods reported. 

(3) Calculated based on outstanding shares issued minus repurchased shares adjusted by stock dividend and by the conversion of 10 previous common shares to 1 new common share. 

(4) Dollar figures are given as reference only and are converted at the controlled exchange rate at the end of the period (Bs 4.2893/US$), except for earnings per share which are converted at the average exchange 

rate (Bs 3.5827/US$ 1). Exchange control has been in place in Venezuela since February 2003. 

(1) No significant stock exchange activities at this time 

(1) 

56,307 

35,865 

- 

1.90 

4.4 

4.4

Earnings Consolidated 

Balance Sheet (1) 

Total Assets 

Loan Portfolio (Net) 

Deposits 

Shareholders’ Equity 

Income Statement (2) 

Net Interest Income 

Commissions and Other Income 

Operating Expenses 

Net Income 

Profitability Indicators (%) 

Net Interest Income / Average Financial Assets (NIM) 

Commissions and Other Income / Total Income 

Net Earnings for the Year / Average Equity (ROE) 

Net Earnings for the Year / Average Assets (ROA) 

Capital Adequacy Indicators (%) 

Equity / Risk-Weighted Assets (regulatory minimum 8%) (3) 

Equity / Risk-Weighted Assets (BIS) (4) 

Equity / Assets 

Financial Highlights 

(In thousands of Bs and millions of US$, except percentages and other indicators) 

Year Ended 

Loan Portfolio Quality Indicators (%) 

Past-Due and Non-Performing Loans / Gross Loan Portfolio 

Allowances for Loan Losses / Past-Due + Non-Performing Loans 

Allowances for Loan Losses / Gross Loan Portfolio 

Efficiency Indicators (%) 

Operating Expenses / Average Total Assets 

Operating Expenses / Total Income 

Liquidity Indicators (%) 

Cash and Due from Banks / Deposits 

Cash and Due from Banks and Investment Portfolio / Deposits 

Other Indicators (%) 

Gross Loans / Deposits 

Financial Assets / Total Assets 

Financial Assets / Deposits 

Number of Employees 

Employees in Venezuela 

Employees Abroad 

Banking Distribution Network 

Branches in Venezuela (6) 

Branches Abroad 

Representative Offices 

Automatic Teller Machines (ATM) 

Point of Sale Terminals (POS) (5) 


US$ (1) 

18,507 

10,008 

14,540 

1,985 

784 

901 

1,103 

607 


5 


bolivars 

79,382,962 

42,928,106 

62,366,913 

8,513,300 

2,810,196 

3,229,233 

3,950,853 

2,176,313 

7.1% 

49.2% 

31.8% 

3.2% 

20.4% 

20.4% 

10.7% 

2.9% 

110.8% 

3.2% 

5.2% 

46.7% 

19.0% 

53.6% 

71.1% 

81.5% 

103.7% 

8,206 

828 

306 

22 

6 

1,344 

40,427 

2009 

bolivars 

53,074,810 

27,137,723 

42,847,704 

4,879,810 

2,019,894 

1,380,584 

2,833,762 

795,692 

7.3% 

37.8% 

17.8% 

1.6% 

18.3% 

18.3% 

9.2% 

3.3% 

96.5% 

3.2% 

5.4% 

58.4% 

22.1% 

54.9% 

65.4% 

78.1% 

96.7% 

8,961 

872 

329 

21 

6 

1,379 

41,027 

2008 

bolivars 

46,829,877 

22,219,115 

36,211,367 

4,089,040 

2,202,576 

1,211,818 

2,545,578 

958,987 

7.9% 

35.7% 

24.9% 

2.2% 

18.5% 

18.5% 

8.7% 

2.5% 

110.6% 

2.7% 

5.6% 

57.7% 

21.4% 

61.6% 

63.1% 

79.4% 

102.6% 

9,215 

965 

356 

20 

6 

1,435 

37,655 

2007 

bolivars 

39,049,552 

19,338,492 

31,287,613 

3,407,614 

1,786,025 

1,021,098 

2,019,535 

783,333 

6.5% 

38.5% 

27.4% 

2.2% 

16.7% 

16.7% 

8.7% 

0.6% 

285.7% 

1.8% 

(1) Figures in US$ converted at the exchange rate at the close of December 31, 2010: Bs 4.2893/US$ (controlled). 

(2) Figures in US$ converted at the average exchange rate for the period: Bs 3.5827/US$. 

(3) In accordance with the standards of the National Securities Superintendency (SNV). 

(4) Calculated using Consolidated Financial Statements adjusted for inflation up to 1999, in accordance with International Accounting Standard No. 29 (IAS-29) and following the standards of the Basel 

Committee on Banking Supervision of the Bank for International Settlements. 

(5) Physical Points of Sale (POS). 

(6) Excludes internal branch for employees. 

5.4% 

61.3% 

19.6% 

56.3% 

62.9% 

79.5% 

99.2% 

9,114 

1,018 

351 

20 

6 

1,436 

32,278 

2006 

bolivars 

31,716,967 

14,572,267 

25,246,872 

2,589,423 

1,330,407 

857,851 

1,625,319 

555,734 

6.3% 

40.3% 

23.6% 

2.1% 

16.3% 

16.4% 

8.2% 

0.7% 

264.3% 

2.0% 

5.8% 

64.2% 

15.1% 

62.5% 

58.9% 

84.2% 

105.8% 

8,647 

900 

341 

21 

6 

1,222 

25,987

Principal Directors 

Alternate Directors 

Note: The Audit, Compensation and Risk Committees were 

created pursuant to the provisions of the By-laws and in 

accordance with a resolution by the Board of Directors. These 

committees are made up of Independent Directors, which are 

attended by the President and the Executive President (ex-officio). 

Board of Directors 

Secretary 

Alternate 

Secretary 

Principal 

Statutory Auditor 

Legal 

Counsel 

Alternate 

Legal Counsel 

6 

Gustavo A. Marturet 

President 

Alejandro González Sosa 

Executive President 

Gustavo J. Vollmer H. 2 

Alfredo Travieso P. 2 

Luis A. Romero M. 1 

Gustavo Vollmer A. 3 

Jonathan Coles W. 1 

Víctor J. Sierra A. 2 

Roberto Vainrub A. 3 

Miguel A. Capriles L. 3 

Luis A. Sanabria U. 2 

Oscar A. Machado K. 1 

Eduardo Mier y Terán 1 

Luis Esteban Palacios W. 2 

Gustavo Galdo C. 3 

Gonzalo Mendoza M. 2 

Germán Sánchez Myles 3 

Luis A. Marturet M. 3 

Carlos Hellmund B. 3 

Gustavo Machado C. 1 

Francisco Monaldi M. 3 

Federico Vollmer A. 1 

Claudio Dolman C. 2 

Carlos Zuloaga T. 1 

Nerio Rosales R. 

Armando Leirós R. 

Miguel A. Capriles C. 1 

Luis Pedro España N. 1 

Philip Henríquez S. 

Alberto Sosa S. 3 

Guillermo Ponce Trujillo 

Julio Peña Bacalao 

Umberto Chirico 

Manuel Martínez Abreu 

Luis Alberto Fernandes 

Paolo Rigio C. 

1 Member of the Audit Committee 

2 Member of the Compensation Committee 

3 Member of the Risk Committee 

Annual Report 2010 

Administration 

Gustavo A. Marturet * 

President 

Alejandro González Sosa * 


Nerio Rosales Rengifo * 

Global Commercial and Personal Banking Manager 

Philip Henríquez S. * 

Global Corporate and Investment Banking Manager 

Rosa M. de Costantino * 

Global Manager Private Banking 

and Wealth Management 

Alfonso Figueredo D. * 

Global Chief Financial Officer 

Millar Wilson * 

Global International Operations Manager 

Fernando Figueredo M. * 

Global Chief Risk Officer 

Armando Leirós R. * 

Global Operations and Technology Manager 

Luis Alberto Fernandes * 

Global Chief Legal Counsel 

Alberto Benshimol M. * 

Insurance and New Financial Businesses Manager 

Luis Calvo Blesa * 

Global Human Resources 

and Corporate Communications Manager 


Board of Directors Secretary 

Julio Peña Bacalao 

Alternate Secretary 

Toribio Cabeza León 

Global Audit Manager 

Anahy Espiga 

Global Strategic Planning Manager 

Luis M. Urosa Z.** 

Corporate Compliance Manager 

* Member of the Executive Committee 

** This function focuses on Mercantil Banco 

Universal and Mercantil Merinvest.

Notice of Ordinary General 

Shareholders’ Meeting 

MERCANTIL SERVICIOS FINANCIEROS, C.A. 

Authorized Capital Bs 308,811,720.00 

Subscribed and Paid-in Capital Bs 154,405,860.00 

Caracas - Venezuela 

Notice of an Ordinary General Shareholders’ Meeting by agreement of the Board of Directors to be held at the Company’s head office, 

Avenida Andrés Bello N° 1, Edificio Mercantil on March 31, 2011 at 4:00 p.m. with the following agenda: 

1. Review the Report submitted by the Board of Directors and the Company’s Audited Financial Statements at December 31, 2010, subject 

to consideration of the Statutory Auditors’ Report. 

2. Present the Board of Directors Report on the Level of Compliance with the Principles of Corporate Governance contained in Resolution 

N° 19-1-2005 of the National Securities Commission (CNV) dated February 2, 2005. 

3. Appoint the Board Members and their Alternates in keeping with the Company Bylaws and establish the fees of all the members of the Board 

of Directors. 

4. Appoint the Statutory Auditors and their Alternates and establish their fees. 

5. Consider the “Proposal for the Twenty-third Phase of the Company’s Stock Repurchase Program presented by the Board of Directors of 

Mercantil Servicios Financieros, C.A. to the Ordinary General Shareholders’ Meeting for consideration on March 31, 2011.” 

6. Consider the “Proposal to declare the dividends of Mercantil Servicios Financieros, C.A. for 2011, presented by the Board of Directors to 

the Ordinary General Shareholders’ Meeting for consideration on March 31, 2011.” 

N.B. The shareholders are hereby informed that: 1) The Balance Sheet, Income Statement, Statement of Shareholders’ Equity and Statement 

of Cash Flow for the period ended December 31, 2010, duly examined by the external auditors Espiñeira, Sheldon y Asociados; the 

Statutory Auditors’ Report and the Board of Directors’ Report; 2) The Report presented by the Board of Directors on the Level of 

Compliance with the Principles of Corporate Governance; 3) The Proposal for the Twenty-third Phase of the Company’s Stock 

Repurchase Program submitted by the Board of Directors of Mercantil Servicios Financieros, C.A. for consideration by the General 

Shareholders’ Meeting on March 31, 2011 will be available for review 15 days in advance of the Meeting, at the office of the Secretary 

of the Board of Directors of the Company at Avenida Andrés Bello N° 1, Edificio Mercantil, piso 35, Caracas. The Proposal to declare 

Mercantil Servicios Financieros, C.A.'s dividends for 2011, submitted by the Board of Directors to the Ordinary General Shareholders’ 

Meeting for consideration on March 31, 2001 is available for review at the Company Secretary’s Office, Avenida Andrés Bello N° 1, 

Edificio Mercantil, piso 35, Caracas. In keeping with the provisions of the Company Bylaws, the Shareholders are hereby informed that 

ownership of each group of Common Class A shares representing at least twenty percent (20%) of the capital subscribed by those 

shares affords the right to nominate and appoint one Director and the corresponding Alternates. 

Caracas, March 10, 2011 

On behalf of Mercantil Servicios Financieros, C.A. 


Secretary of the Board of Directors 


7

Antonio ALCÁNTARA 

Paisaje del Ávila, 1976 

Oil on masonite 

33 x 45.5 cm 

Caracas, 1898 - 1991 

Studied painting and sculpture at the Caracas Academy of Fine Arts. Was close to the members of the 

Fine Arts Circle. In 1925 he retired from painting for twenty years. He resumed his artistic activity in 1945. 

An exhibition of his work was held at the Caracas Museum of Fine Arts in 1953. Then devoted his time to 

painting landscapes of the surrounding areas of the capital Caracas, and Macuto on the coast nearby 

where he owned a house close to the Castillete de Reverón.

* Dollar figures are given for reference only. The balance sheet is 

converted at the exchange rate at the end of the period (Bs 

4.2893/US$1) and the income statement at the average exchange 

rate for the period (Bs 3.5827/US$1). Exchange control has been in 

place in Venezuela since February 2003. 

Board of 

Directors’ Report 

Caracas, March 10, 2011 

Dear Shareholders, 

We are pleased to submit Mercantil Servicios Financieros’ consolidated results and main 

activities for the second half of 2010 as well as for the whole year. 

The Financial Statements of Mercantil Servicios Financieros included in this report consolidate 

the activities of its subsidiaries and were prepared in accordance with the standards of the 

National Securities Superintendency. They are also presented in inflation-adjusted values as 

supplemental information. They have been examined by the Company’s external auditors 

Espiñeira, Sheldon y Asociados, whose report is attached hereto. 

Financial Results 

Mercantil reported Bs 2,176 million (US$ 607 million*) in net income, of which Bs 1,341 

million corresponds to the first half of the year and Bs 835 million to the second. The 

Company’s results reflect the effect of the exchange rate devaluation at the close of 2010, 

in the order of Bs 1,063 million. The main contributors to these profits were Mercantil C.A., 

Banco Universal with Bs 1,630 million; Mercantil Seguros, C.A. with Bs 409 million; 

Mercantil Merinvest, C.A. with Bs 43 million; and Mercantil on its own and other 

subsidiaries with Bs 129 million. 

The Mercantil Commercebank Florida Bancorp subsidiary obtained negative income of 

US$ 3.8 million after its loan portfolio provisioning of US$ 72.7 million, in accordance with 

the Bank’s policy, to guarantee an adequate level of reserves and cope with the unfavorable 

circumstances surrounding the U.S. economy, particularly in Florida. It should be noted 

that in December additional provisions of US$ 11.2 million were made to the originally 

budgeted figure. Also, following the reconciliation of accounts required to meet the 

applicable standards, in Mercantil Servicios Financieros’ accounting this subsidiary 

registered negative net income of Bs 35 million. The Mercantil Commercebank, N.A. 

subsidiary posted a positive result of US$ 1.2 million in 2010, reflecting a sustained 

improvement for the Bank. Mercantil Commercebank, N.A. is positioned as one of Florida’s 

five largest banks. 


9

The Stock Repurchase Program initiated in May 2000 is currently in its Twenty-second 

Phase and was approved at the September 16, 2010 Shareholders’ Meeting. Between July 1 

and December 31, 2010 a total of 262,031 shares were acquired through the Program, of 

which 170,781 are common Class A shares and 91,250 common Class B shares. At the close 

of 2010, the treasury stock was made up of 580,752 shares of which 351,046 were common 

Class A shares and 229,706 common Class B shares. 

Credit Ratings 

Fitch Ratings, in its annual review conducted in July, ratified the A1 national risk rating for 

commercial paper issues and the A2 rating for unsecured bonds, the highest an issuer in 

Venezuela can obtain. It also ratified its national rating for Mercantil Servicios Financieros at 

AA (VEN) for the long term. 

Fitch’s most recent (2009) long-term national rating for Mercantil, C.A., Banco Universal was 

AA+(ven) and its short-term rating was F1+(ven); its international ratings were B+ long term and 

B short term, with an individual D rating. These are the best ratings obtained by a private 

financial institution in Venezuela. The international ratings are largely subject to Venezuela’s 

country risk. 

The ratings of Mercantil Commercebank Florida BanCorp and Mercantil Commercebank, N.A. 

have already been affected by the economic situation in the United States, particularly in 

Florida; however they reflect financial flexibility in terms of their ability to meet their 

commitments. Fitch Ratings indicates in its report the bank’s high level of liquidity of Mercantil 

Commercebank, N.A. with a high-quality and short-term investment portfolio. 

New Legislation 

On August 17, 2010, the new Securities Market Law (Ley de Mercado de Valores), substituting the 

Capital Markets Law (Ley de Mercado de Capitales) of October 22, 1998, was published in Official 

Gazette No. 39,489 of the Bolivarian Republic of Venezuela. 

The Act introduces various changes, the main ones being the creation of the National Securities 

Superintendency which replaces the Venezuelan Securities Commission (CNV) as the new 

regulatory entity with broad discretionary powers such as the authority to: prescribe the 

technical rules governing the securities market; set criteria on the composition of Boards of 

Directors, representation and participation of shareholders, and election of the authorities of 

the entities under its control; determine minimum liquidity and equity levels; set limits on 

commissions and rates; issue the accounting standards applicable to those subject to 

regulation, standards on publication of financial statements, and rules to ensure the 

transparency and effectiveness of public securities offerings or purchases. This new Act 

eliminates the obligation under the old one to distribute dividends on at least 50% of the net 

earnings obtained in each fiscal year after amounts for corporate income tax have been set 

aside and statutory reserves deducted. 


11

* Dollar figures are given for reference only. The balance sheet is 

converted at the exchange rate at the end of the period (Bs 

4.2893/US$1) and the income statement at the average exchange 

rate for the period (Bs 3.5827/US$1). Exchange control has been in 

place in Venezuela since February 2003. 

Mercantil Servicios Financieros’ Total Assets grew 49.6% to Bs. 79,383 million (US$ 18,507 

million*) compared to December 2009 and Shareholders’ Equity increased 74.5% to Bs 8,513 

million (US$ 1,985 million*) over the same period. 

The net loan portfolio grew 58.2% to Bs 42.928 million (US$ 10,008 million*) compared with 

Bs. 27,138 million at the close of 2009. Loan portfolio quality remained at acceptable levels. 

The ratio of past-due and nonperforming loans to gross loans was 2.9%, considering the 

overall loan portfolio of Mercantil Servicios Financieros which consolidates the portfolios 

of Mercantil, C.A., Banco Universal, Mercantil Commercebank Florida BanCorp, Mercantil 

Bank (Schweiz) AG, Mercantil Bank Curaçao N.V. and Mercantil Bank (Panama) S.A. This 

ratio was 3.3% at the close of 2009. The ratio of allowances for loan losses over past-due and 

nonperforming loans was 110.8%, compared to 96.5% at the close of 2009. 

The efficiency ratio measured by calculating operating expenses as a percentage of average 

assets, was 5.2%, compared to 5.4% in 2009; while the efficiency ratio, measured by 

calculating operating expenses as a percentage of total net income was 46.7%, compared 

to 58.4% in 2009. 

The Equity/Risk-Weighted Assets ratio was 20.4% (regulatory minimum 8%). This ratio was 

18.3% in 2009. It is determined according to the guidelines of the National Securities 

Superintendency (SNV - for its abbreviation in Spanish) which are based on the standards 

of the Basel Committee on Banking Supervision of the Bank for International Settlements. 

Net income per share in 2010 was Bs 21.82 (US$ 6.09*). This was 174.5 % higher than the 

Bs 7.95 obtained in 2009. 

The third portion of the ordinary cash dividend for Bs 30,763,083.90 (Bs 0.30 per share) 

was paid in the second half of 2010. This amount, in addition to the amounts paid out in the 

first half of the year which corresponded to the first and second portions of the ordinary 

cash dividend totaling Bs 30,801,041.40 (Bs 0.15 per share) and to the extraordinary cash 

dividend totaling Bs 92,378,043.00 (Bs 0.90 per share), totaled Bs 153,942,168.30; this is 

more than sufficient to meet the statutory requirements of the repealed Capital Market 

Law on this matter. With the payment of the first and second portions of the ordinary cash 

dividend and the extraordinary cash dividend, the requirements of the repealed Capital 

Market Law on the payment of cash dividends were satisfied in 2010. 

At the close of 2010 Mercantil had no outstanding commercial paper and did not issue any 

new unsecured bonds. 

At the close of 2010, Mercantil had only Bs 80 million outstanding unsecured bonds, Bs 60 

million less than in the first half of 2010. 


10

Two more new laws, the Law on Insurance Activity (Ley de la Actividad Aseguradora) and the Law 

on Banking Sector Institutions (Ley de las Instituciones del Sector Bancario), also came into effect 

and were published in the Official Gazette on July 29 and December 28, 2010 respectively; the 

former was reprinted on August 5, 2010 due to a material error. 

The Law on Insurance Activity establishes the legal framework governing the control, oversight, 

supervision, authorization, regulation and activity of insurance companies. 

Other relevant aspects include the obligation to offer policies and underwrite contracts for 

insurance schemes and health service schemes for retirees, pensioners, disabled persons, etc; 

the general public taking part in the insurance activity; banning practices such as: cancelling 

coverage due to failure to pay timely premium installments, citing pre-existing illnesses as 

grounds for rejecting a claim, and rejecting an indemnity on generic grounds. 

The companies regulated by the new Act are required to submit their plan for adapting to the 

provisions of the new law which must be executed within no more than six months from the 

date of approval thereof. Further, Transitory Provision No. 4 on insurance and reinsurance 

companies belonging to an economic or financial group of reinsurers must take steps to 

implement the juridical separation of their administrative and financial accounting within a 

maximum of 180 days from its entry into effect. 

The Law on Banking Sector Institutions establishes the new legal framework for the 

incorporation, operation, supervision, inspection, control, regulation, oversight and sanction 

of institutions operating in the Venezuelan banking sector, whether public or private or under 

any form of organization permitted by the new Law on Banking Sector Institutions and by the 

Law on the National Financial System, passed on June 16, 2010. 

The main differences compared to the old law is that the new one defines banking as a “public 

service”; it modifies a series of rules on shareholder interest in banks, and the reasons for 

disqualifying shareholders from holding shares or posts as directors in them; on the declaration 

and payment of dividends; on the appointment of internal and external auditors; and on criteria 

regarding related parties. 

It also provides that within 135 days from the date of the new law enters into effect, any 

institutions that do not require transformation, merger or recapitalization plans must present 

to the Superintendency of Banking Sector Institutions (SUDEBAN) their plan for adjusting or 

readjustment to it. The plan must be implemented within a maximum of 180 successive days, 

extendable only once for an equal period, subject to approval of said plan by the 

Superintendency, which must be given within 15 days from its presentation. 


12

Adjustments to Reporting Lines 

At a meeting on July 12, 2010, the Board of Directors approved a resolution to make Mr 

Alejandro González Sosa responsible for several reporting lines under Gustavo A. Marturet in 

his capacity as President of the Board of Directors of Mercantil. The reporting lines are Global 

Risk Management, Legal Counsel, and Strategic Planning, and a new Global Human Resources 

and Corporate Communications Unit (the last two previously grouped under the Office of the 

President). This fully restores the separation of the functions of the President and the Executive 

President required by law and which were temporarily Gustavo A. Marturet’s responsibility. 

Succession Policy 

At the meetings of the Boards of Directors of Mercantil Servicios Financieros and Mercantil, 

C.A., Banco Universal, on October 21, 2010, in accordance with best practices, Dr Gustavo A. 

Marturet announced his decision to retire as President of the Board and President of both 

institutions at the beginning of 2011, underlined that according to Mercantil’s Succession Policy 

it was “time to make way for new generations capable of leading both institutions.” He also said 

that the Board of Directors should make the corresponding appointments in due course. He 

said that after retiring from his post he would remain linked to Mercantil in which he developed 

professionally, ratifying his full confidence in Mercantil’s qualified management and staff. This 

decision was communicated by the media. 

Following the February 24, 2011 meetings of the Boards of Directors of both institutions, the 

Boards agreed that after the Ordinary General Shareholders’ Meetings scheduled for March 31, 

2011, Gustavo J. Vollmer Acedo would be appointed President of both Boards and President of 

both Companies, as stated in a press release. 

The Boards commended Gustavo A. Marturet for his excellent performance during more than 

30 years at the helm of Mercantil as Executive President of the Company and President of the 

Board of Directors, under whose leadership Mercantil has become consolidated as a financial 

services provider operating in 10 countries in the Americas, Europe and Asia, upholding the 

principles and values that have always guided Mercantil’s performance and make it Venezuela’s 

benchmark financial corporation. 

The Boards wish Gustavo J. Vollmer Acedo every success as the Mercantil’s new President. 


13

Economic Climate 

Global 

In 2010 the global economy was back on the path to growth, largely supported by the emerging 

economies of Asia and Latin America and the upturn in the U.S. economy, despite the difficulties 

experienced by some countries in the eurozone and their weak fiscal position. In May, European 

authorities and the Central European Bank approved a resolution whereby the European 

Stabilization Mechanism (ESM) and the Securities Markets Programme (SMP) would take action 

to promote liquidity and strengthen the prices of the sovereign debt of the countries in the 

eurozone under stress. Despite this, global GDP in 2010 grew between 3.3% (ECLAC, 2010) and 

3.6% (IIF, 2010). The eurozone, led by Germany, also grew in the order of 1.7% (vs -4.1% in 2009), 

while Japan, thanks to strong external demand and fiscal stimuli, grew 4.3% in 2010 (-6.3% in 

2009). China and India saw 10% and 8.7% growth respectively. The level of dynamism seen, 

especially in the case of China, was a reaction to the fiscal and credit stimulus packages and 

growing household income. 

United States 

The U.S. economy grew 2.9% as a result of an expansive monetary policy, growing exports and 

an upturn in private consumer spending. This monetary policy was the response to the slight 

deflation during the year (-0.3%). Private consumption of durable goods increased 6.7% and of 

services 0.6%. The asymmetry in the case of investment was similar, and while the investment 

in equipment and software grew 15,3%, in non-residential construction decreased 14.3%. This 

expansion in GDP could not prevent unemployment rising from 9.3% in 2009 to 9.6%. However, 

at year end requests for unemployment insurance fell for the first time to 409,000, below the 

2009 average of 457,000. 

House prices slumped again during the second half of the year. The huge inventory of homes 

pushed down new and used home sales with variations of -21.2% and -27.9%, respectively. 

Latin America 

After the 2.9% contraction in 2009, Latin America and the Caribbean grew 6% in 2010 and 

unemployment fell 7.2% (8.6% in 2009) while real remunerations increased in almost every 

country. 

The counter-cyclical policies applied made a decisive contribution to this growth, since 

external demand grew 25%, less than the expansion of imports (27.6%). 

Inflation rose from 4.7% in 2009 to 6.2%, driven by high energy and food prices. 

The need to offset the domestic effects of the international financial crisis, due both to the 

drop in fiscal income and to higher spending, meant that for the second year fiscal 

management closed with a deficit, this time of 0.6% of GDP (-1.1% in 2009). 


14

Venezuela 

The Venezuelan economy contracted 1.4% again (-3.3% in 2009). The only activities that grew 

were Communications (9.3%), General Government (2.6%) and Community, Social and Personal 

Services (0.6%), while the biggest falls were in Mining (-13.4%), Construction (-7.1%), Electricity 

(-6.1%) and Trade (-6.2%). Unemployment levels in 2010 (6.5%) were similar to 2009 levels 

(6.5%). In the case of domestic aggregate demand (-0.9% vs -7.9% in 2009), private consumer 

spending fell 2.3% (-3.2% in 2009) and gross fixed capital formation 4.4% (-8.2% in 2009). 

Public consumer spending grew 2.6% (2.3% in 2009). Imports were down 4.6% (-19.6% in 2009) 

and exports fell by 12.4% (-12.9% in 2009). 

Inflation was up from 25.1% in 2009 to 27.2% in 2010, due to the effect of the higher average 

rate of exchange for imports, supply restrictions due to electricity rationing and adverse 

climate conditions. 

The Venezuelan oil basket averaged US$/Bs 72.7 (US$/Bs 57 in 2009), which boosted the 

volume of oil exports invoiced by more than US$ 8 billion while imports stagnated at US$ 38 

billion, leading to a trade surplus of US$ 27,173 million (US$ 19,153 million in 2009). The Balance 

of Services deficit (-US$ 8,857 million) and the Capital and Financial Account deficit (-US$ 18,799 

million) and Errors and Omissions (-US$ 3,639 million), led to a global Balance of Payments 

deficit of US$ 8,060 million (-US$ 10,262 million in 2009), reducing the International Reserves 

by 15.7%, making the balance US$ 29,500 million. 

Fiscal spending grew a nominal 13.7% which, after taking inflation into account, means a real 

fall of 10.4% (-16.4% in 2009). Despite stronger oil prices, ordinary income grew by only 7.1%, 

making a financial deficit of Bs 50,410 million, 41.6% more than in 2009. 

Money supply grew 25.3% (21.2% in 2009), 16% below inflation (-4.5% in 2009), due to the 

restrictive effect of the Venezuelan Central Bank’s open market operations, lower real primary 

expenditure and the moderate expansion of credit, factors that more than offset the effect of 

the reduction in the marginal reserve ratio from 23% to 17%. 

Lending rates averaged 18.2% and savings and term deposit rates 12.6% and 14.1%. In real terms 

both rates returned to negative, -6.9% for lending rates and -9.7% for deposit rates. 

Products and Services 

In 2010 Mercantil Banco continued to develop new products and services to meet the needs 

of the customer base which now exceeds 3,630,000. 

Supporting the Majorities Banking strategy targeted at the unbanked sector of the 

population, during the second half of the year Mercantil Banco continued to expand its 

Mercantil Aliado network and by year end had 140 service points, made up of 46 trading desks 

and 94 trading points, in Aragua, Sucre, Vargas and Miranda states, as well as in Caracas 

(Distrito Capital), thereby reaffirming its strategy and commitment to offer products and 

services to low-income communities attracting new customers. 


15

Conserving its leadership in terms of market positioning and expansion, Mercantil Banco 

continued with its process to migrate the debit card platform to the new chip technology. It 

began replacing magnetic band credit cards to adapt them to chip technology and received 

the corresponding certification from Visa and MasterCard. 

In December Mercantil Banco completed the process of modernizing 1,319 ATMs and adapting 

them to chip technology, becoming the first institution in the country to have a nationwide 

network with this important security mechanism. 

The Internet channel continued to be the method of choice for Mercantil Banco’s clients, with 

more online transactions than the other channels and by December 2010 accounted for more 

than 46%. Customer preference for Internet banking responds to the strategy to add value 

through the ongoing supply of innovative products and services based fundamentally on 

payment and collection facilities, delivered quickly, easily and securely, 24/7. 

The audit of the maintenance and renewal of Mercantil Banco’s ISO 9001:2008 certifications 

by Fondonorma, the Venezuelan Standardization and Quality Certification Institute, which 

concluded with zero non-conformities, was highly satisfactory. Already 9 lines of service have 

been ISO 9001 certified: 2008. 

Mercantil Seguros created the Customer Service Unit to offer its clients a better service and 

handle their queries and issues. This is designed to offer a comprehensive service so 

customers can file a final appeal on decisions that fail to meet their expectations and promise 

a timely response. 

At the close of 2010 the assets of the mutual fund Portafolio de Renta Fija Fondo Mutual was 

Bs 516 million with 150,576 clients, representing 36.4% and 9.3% growth respectively. Plan 

Crecer Mercantil’s equity which is based on the programmed acquisition of investment units 

grew 46.7% in terms of equity and 13.7% in terms of the number of clients. 

In December a new branch of Mercantil Bank (Panama) opened in Colón. Its main goal is to 

offer financial services to the companies operating in the Colón Free Zone, as well as to 

executives and clients, through which all the operations currently handled by the Bank can be 

carried out. This will be the second branch of Mercantil Bank (Panama) to open there. 


16

85th Anniversary 

During the second half of the year several events were held in connection with the 85th 

anniversary of Mercantil Banco’s foundation. For example, on October 24 Espacio Mercantil 

was inaugurated in the Altamira district of Caracas. This is a space devoted entirely to art and 

culture with a view to reaching out to the community. 

Espacio Mercantil will organize a program of exhibitions and events, including talks, meet-ups 

and guided visits, specially designed to allow the public to view Colección Mercantil, a collection 

of works of art by different Venezuelan artists from the 18th century to the present day. 

Through this initiative Mercantil ratifies its reiterated vocation to reach out to the community 

through the dissemination of Venezuelan art. 

Also within the framework of its anniversary celebrations, on November 14 Mercantil’s 

employees participated on a massive scale in the Mercantil 2010 walk and on December 10 an 

event was held to present lapel pins to staff with 15, 20, 25, 30 and 35 years of service. 

Prevention and Control of Money Laundering 

Money laundering prevention and control is a priority for Mercantil and is part of our 

organizational culture. The Company has maintained the internal control and monitoring 

standards necessary to ensure early detection of money laundering operations in each of the 

activities of its subsidiaries and has stepped up staff training in this area. 

To ensure compliance with anti-money laundering legislation, Mercantil has a 

“Comprehensive Money Laundering Prevention and Control System” both in Venezuela and 

at its foreign subsidiaries, as well as Operational and Follow-Up plans, and Monitoring and 

Oversight plans. It systematically applies its “Know your Customer” policy which is the pivotal 

point of its anti-money laundering program. 

Corporate Social Responsibility 

Mercantil has always fostered, promoted and supported social development programs. 

Mercantil’s social investment, in 2010 was Bs 8.2 million, channeled mainly through Fundación 

Mercantil and its subsidiaries in Venezuela and the United States. 

Mercantil earmarked 52% of the contributions in this area for educational institutions and 

48% for social development, healthcare, cultural and religious institutions. 

In 2010, Mercantil accentuated its support for primary education in Venezuela through its 

“Give your School a Helping Hand” program which has been going strong for more than 27 

years, as well as a new program undertaken with the Fe y Alegría institution to strengthen 

the physical infrastructure of schools in Monagas, Bolívar and Anzoátegui states. 

Mercantil also supports Higher Education through its contributions to various universities: 

Católica Andrés Bello, Simón Bolívar, Carabobo, Metropolitana, Monteávila, Central de Venezuela 

and Zulia. 


17

The voluntary work of staff from the companies in Venezuela and abroad in different social 

action activities has also been growing. 

In the United States, as part of Mercantil’s social commitment, a series of programs by the 

Anti-Cancer League, March of Dimes and Miami Metrozoo were promoted in South Florida, 

the Juilliard School in New York and the Museum of Modern Art in Houston were promoted. 

Within the framework of the Community Reinvestment Act (CRA) program, backing was also 

given to a number of institutions that directly promote the social development of low-income 

communities. 

Acknowledgements 

In July 2010 The Banker magazine ranked Mercantil Servicios Financieros, C.A. number 291 on 

its list of the Top 1000 World Banks. According to the ranking Mercantil Servicios Financieros 

is the first financial institution in Venezuela and the 10th financial services company in Latin 

America. 

In April, Mercantil Servicios Financieros, C.A. was once again included among the world’s top 

2000 companies in the world by Forbes Magazine, this time at number 1,297, climbing 36 

positions since 2009. 

The Banker and Latin Finance magazines, in July and November 2010 respectively, 

acknowledged the Mercantil Banco subsidiary as the “Best Bank in Venezuela in 2010”. 

Global Finance, in its July 2010 edition, awarded the Mercantil Banco subsidiary its prize as 

“Best Trade Finance Provider in Venezuela”. 

For the second year running Mercantil Commercebank received the Top 100 Minority 

Business Award® from the Greater Miami Chamber of Commerce (GMCC). The Bank was 

also recognized in the “Community Involvement” category. 

Development and Working Environment 

The results of the organizational climate survey 2010 conducted by the Great Place to Work 

Institute showed Mercantil Seguros and Mercantil Banco at number 12 and number 13, 

respectively, on the list of the best places to work in Venezuela. Mercantil Seguros is the only 

company in the insurance sector on that list and this is the sixth year running that Mercantil 

Banco is on it. 


18

Special mention should be made of Mercantil’s effort to design and implement ongoing 

training and development programs to allow all the staff to improve their professional level 

and keep their knowledge up to date. 

Relations between bank officials and employees have continued to evolve within the 

traditional spirit of harmony and cooperation and the Board of Directors wishes to 

acknowledge them for their efficiency and dedication in carrying out their work. 

Pursuant to a Resolution passed by the National Securities Commission (CNV), the contents 

of form CNV-FG-010 shows remunerations paid to Company Directors and Executives during 

the second semester amounting to Bs 4,180,459.32. 

During 2010, a number of Alternate Directors attended Board meetings, either standing in for 

Directors in their absence, or as invitees. On the occasion of the President’s and the Executive 

President’s temporary absences, some of the Executive President’s functions were delegated 

to members of the Executive Committee. 

Yours sincerely, 



Gustavo J. Vollmer H. 

Alfredo Travieso P. 

Luis A. Romero M. 

Gustavo J. Vollmer A. 

Jonathan Coles W. 

Víctor J. Sierra A. 

Roberto Vainrub A. 

Miguel Ángel Capriles López 


19

Armando LIRA 

Valles del Tuy, 1956 

Oil on canvas 

73.5 x 90 cm 

Yungay, Chile, 1903 - Caracas, 1959 

In 1923, Lira entered the Fine Arts School of Santiago de Chile, where he graduated as a Professor of 

Drawing. Subsequently, he received a scholarship to study in Europe. In 1936, he was hired by the 

Venezuelan government to head the “Chilean Mission,” with the objective to help direct the restructuring 

of the Academy of Fine and Applied Arts. After several years abroad, he finally settled in Venezuela and 

began an intensely prolific artistic period inspired by the rural and urban landscapes of Venezuela’s 

geography.

Statutory Auditors’ Report 

To the 

Shareholders of 

Mercantil Servicios Financieros, C.A. 

Dear Shareholders, 


21 

Caracas, February 28, 2011 

In our capacity as the Company’s Statutory Auditors, and in conformity with the provisions of 

Articles 287 and 311 of the Commercial Code, and the Professional Standards relating to Statutory 

Auditors, we are pleased to inform you that we have examined the consolidated balance sheet of 

Mercantil Servicios Financieros, C.A. and its subsidiaries at December 31, 2010 and the related 

consolidated income statement, statement of shareholders’ equity and cash flows for the period 

then ended. The preparation of these financial statements and their notes is the responsibility 

of Management. Our responsibility is to express an opinion on these financial statements based 

on our audits. 

We were appointed by the Ordinary General Shareholders' Meeting which we attended on March 

26, 2010. 

Our examination was conducted in accordance with generally accepted auditing standards and 

as such included selective tests of the accounting records and other audit procedures we deemed 

necessary under the circumstances. We have also taken into account the report of external 

auditors Espiñeira, Sheldon y Asociados for the same period, which should be treated as an 

integral part of this report, with whose content we agree, and which we attach hereto. 

Based on our analysis, we can confirm that the Company maintains adequate controls over its 

loan and investment portfolios which are subject to ongoing analysis and monitoring so that the 

appropriate provisions can be created. The Company also maintains the provisions prescribed in 

its Bylaws and declares and pays the dividends to which it is obligated under its Bylaws and the 

Law. Further, the Company’s internal accounting controls and policies justify our view that there 

is no current or potential risk of conditions that are likely to weaken its financial position. 

In our opinion, the aforementioned consolidated financial statements present fairly the financial 

position of Mercantil Servicios Financieros, C.A. and its subsidiaries at December 31, 2010 and 

the results of their operations and cash flows for the period then ended, in conformity with the 

standards of the National Securities Commission. The Company presents the consolidated 

financial statements in inflation-adjusted values as supplemental information. 

Yours sincerely, 

Umberto Chirico Manuel Martínez Abreu 

Alternate Statutory Auditor Alternate Statutory Auditor 

Encl. Report of “Espiñeira, Sheldon y Asociados”.

César PRIETO 

Los Caobos, around 1948 

Oil on canvas 

50.5 x 60.5 cm 

Santa María de Ipire, State of Guárico, 1882 - Caracas, 1976 

Prieto moved to Caracas around 1900 to study at the Academy of Fine Arts. During his time at the 

Academy, he befriended several of the artists who later went on to form the Fine Arts Society. In 1936, 

he began teaching at the Academy of Fine and Applied Arts, while also spending considerable time 

painting portraits and landscapes of Caracas and its surrounding areas. In 1950, he received the National 

Award in Painting.

Financial Statements 

(In accordance with the standards of the National Securities Superintendency) 

Income Statement 

Unconsolidated 

(in thousands of Bs) 

Year Ended 

Income 

Financial Income 

Equity Investments in subsidiaries 

Total Income 

Expenses 

Operating 

Financial 

Total Expenses 

Net Income 

Alejandro González 


Balance Sheet 

Unconsolidated 

(in thousands of Bs) 

Year Ended 

Assets 

Cash and Due from Banks 

Investment Portfolio 

Other Assets 

Total Assets 

Liabilities and Shareholders’ Equity 

Unsecured Bonds and Commercial Papers 

Other Liabilities 

Total Liabilities 


Total Liabilities and Shareholders’ Equity 


bolivars 

8,848 

2,326,939 

2,335,787 

(115,699) 

(43,775) 

(159,474) 

2,176,313 

Alfonso Figueredo Davis 


2009 

bolivars 

4,018 

967,357 

971,375 

(132,360) 

(43,323) 

(175,683) 

795,692 


23 

2008 

bolivars 

15,440 

1,170,764 

1,186,204 

(159,628) 

(67,589) 

(227,217) 

958,987 

Isabel Pérez Sanchis 

Corporate Comptroller 


bolivars 

56,577 

8,877,607 

(21,678) 

8,912,506 

80,000 

319,206 

399,206 

8,513,300 

8,912,506 

2009 

bolivars 

7,682 

5,229,544 

36,751 

5,273,977 

326,009 

68,158 

394,167 

4,879,810 

5,273,977 


President 

2008 

bolivars 

15,908 

4,333,012 

66,258 

4,415,178 

191,374 

134,764 

326,138 

4,089,040 

4,415,178

Consolidated Balance Sheet 

(In thousands of Bs and millons of US$) 

Year Ended 

Assets 



Central Bank of Venezuela 

Venezuelan Banks and other Financial Institutions 

Foreing Banks and Other Financial Institutions 

Pending Cash Items 

(Allowance for Cash and Due from banks) 

Invesments Portfolio 

Invesments in Trading Securities 

Invesments in Securities Available-for-Sale 

Invesments in Securities Held-to-Maturity 

Share Trading Portfolio 

Invesments in Time Deposits and Placements 

Restricted Investments and Repos 

Financial Direct Assets 

Loan Portfolio 

Current 

Restructured 

Past-Due 

In Litigation 

(Allowance for losses on Loan Portfolio) 

Interest and Commissions Receivable 

Long-Term Investments 

Assets Available for Sale 

Property and Equipment 

Other Assets 

Total Assets 


US$ (1) 

245 

2,108 

1 

283 

119 

- 

2,756 

54 

3,984 

145 

4 

453 

394 

5,034 


24 

- 

9,881 

159 

236 

66 

10,342 

(334) 

10,008 

113 

44 

22 

161 

369 

18,507 


bolivars 

1,050,803 

9,043,256 

5,073 

1,213,412 

512,402 

- 

11,824,946 

232,550 

17,087,370 

623,040 

15,831 

1,941,999 

1,690,940 

21,591,730 

- 

42,384,693 

683,007 

1,011,526 

282,840 

44,362,066 

(1,433,960) 

42,928,106 

482,918 

188,824 

94,879 

689,246 

1,582,313 

79,382,962 

2009 

bolivars 

801,598 

7,673,511 

36,820 

557,517 

410,612 

- 

9,480,058 

71,772 

10,136,710 

456,373 

19,971 

2,029,133 

1,330,133 

14,044,092 

293,880 

27,017,149 

87,870 

854,373 

71,056 

28,030,448 

(892,725) 

27,137,723 

301,846 

153,336 

51,453 

490,039 

1,122,383 

53,074,810 

2008 

bolivars 

692,405 

6,112,488 

31,819 

559,096 

343,301 

(8) 

7,739,101 

56,581 

5,587,336 

641,453 

45,088 

8,113,010 

128,188 

14,571,656 

312,012 

22,229,944 

49,413 

541,868 

24,219 

22,845,444 

(626,329) 

22,219,115 

322,388 

92,556 

25,243 

514,814 

1,032,992 

46,829,877 

2007 

bolivars 

422,006 

5,213,551 

4,238 

110,590 

378,624 

(315) 

6,128,694 

260,393 

5,910,348 

1,096,678 

33,520 

3,995,194 

176,074 

11,472,207 

324,579 

19,545,543 

24,644 

116,978 

7,779 

19,694,944 

(356,452) 

19,338,492 

245,939 

57,318 

22,462 

426,255 

1,033,606 

39,049,552 

346,024 

2,911,146 

2,867 

60,277 

499,530 

(230) 

3,819,614 

398,438 

6,272,875 

657,125 

16,294 

4,305,053 

309,436 

11,959,221 

92,808 

14,726,303 

28,414 

103,767 

7,283 

14,865,767 

(293,500) 

14,572,267 

(1) Dollar figures are given for reference purposes only and are converted at the exchange rate at the end of the period (Bs 4.2893/US$). Exchange control has been in place in Venezuela since February 

2003. 








President 

2006 

bolivars 

186,174 

36,784 

5,068 

319,368 

725,663 

31,716,967

Consolidated Balance Sheet 


Year Ended 

Liabilities and Shareholders’ Equity 

Deposits 

Non-Interest Bearing Checking Accounts 

Interest Bearing Cheking Accounts 

Saving Deposits 

Time Deposits 

Debt Authorized by the 

National Securities Commission 

Publicly Offered 

Debt Securities 

(1) Dollar figures are given for reference purposes only and are converted at the exchange rate at the end of the period (Bs 4.2893/US$). Exchange control has been in place in Venezuela since February 

2003. 



Liabilities 

Financial Liabilities 

Obligations with Banks and Savings and Loan Institutions 

In Venezuela up to one year 

In Venezuela for more than one year 

Abroad up to one year 

Abroad for more than one year 

Financial liabilities indexed to Securities 

Liabilities Under Repurchase Agreements 

Other Liabilities up to one year 

Other Liabilities for more than one year 

Interest and Commissions Payable 

Other Liabilities 

Subordinated Debt 

Total Liabilities 

Minority Interest in Consolidated Subsidiaries 


Capital 

Paid-Up Capital 

Maintenance of Paid-In Capital 

Premium for Issuing Stock 

Capital Reserves 

Adjustment for Conversion of Net Assets 

by Subsidiaries Abroad 

Retained Earnings 

Shares Repurchased and Held by Subsidiaries 

Repurchased shares restricted 

for employees´ stock option plan 

Unrealized Gain from Adjustment at 

Market Value of Investments 

Total Shareholders’ Equity 

Total Liabilities and Shareholders’ Equity 


US$ (1) 



3,782 

4,646 

4,664 

1,448 

14,540 

16 

16 

59 

33 

128 

302 

- 

202 

6 

- 

730 

7 

1.117 

112 

16,522 


25 

1 

36 

45 

47 

39 

361 

1,381 

(4) 

(10) 

89 

1,985 

18,507 


bolivars 

16,222,179 

19,929,002 

20,004,694 

6,211,038 

62,366,913 

67,043 

67,043 

252,874 

140,000 

548,552 

1,296,441 

- 

866,439 

27,201 

2,120 

3,133,627 

29,475 

4,789,814 

478,591 

70,865,463 

4,199 

154,406 

191,709 

203,536 

166,715 

1,550,096 

5,922,273 

(16,182) 

(41,569) 

382,316 

8,513,300 

79,382,962 

2009 

bolivars 

10,398,275 

12,232,187 

13,902,051 

6,315,191 

42,847,704 

312,394 

312,394 

120,319 

- 

456 

432,673 

364,146 

722,730 

22,999 

2,137 

1,665,460 

27,138 

3,094,804 

244,656 

48,192,156 

2,844 

155,976 

191,709 

203,894 

166,715 

280,144 

3,922,188 

(29,319) 

(37,820) 

26,323 

4,879,810 

53,074,810 



2008 

bolivars 

7,789,967 

9,642,957 

11,427,879 

7,350,564 

36,211,367 

173,922 

173,922 

112,502 

- 

2,649 

325,443 

1,870,860 

776,345 

61,256 

2,904 

3,151,959 

37,751 

2,918,561 

244,656 

42,738,216 

2,621 

155,976 

191,709 

201,279 

166,715 

279,497 

3,273,354 

(16,515) 

(32,472) 

(130,503) 

4,089,040 

46,829,877 

2007 

bolivars 

6,644,492 

8,188,269 

8,777,472 

7,677,380 

31,287,613 

356,144 

356,144 

161,279 

72,000 

64,597 

80,081 

588,320 

681,983 

115,049 

3,488 

1,766,797 

47,771 

1,936,796 

244,656 

35,639,777 

2,161 

156,479 

191,709 

201,668 

166,715 

273,672 

2,447,230 

(12,900) 

(29,127) 

12,168 

3,407,614 

39,049,552 


President 

2006 

bolivars 

5,128,745 

6,221,425 

7,160,491 

6,736,211 

25,246,872 

259,087 

259,087 

267,726 

100,000 

163,367 

83,711 

395,286 

581,313 

140,046 

5,168 

1,736,617 

37,130 

1,576,382 

268,247 

29,124,335 

3,209 

107,717 

191,709 

52,304 

166,715 

267,820 

1,823,396 

(13,950) 

(25,170) 

18,882 

2,589,423 

31,716,967

Consolidated Income Statement 


Year Ended 

Interest Income 

Income from Cash and Due from Banks 

Income from Investment Portfolio 

Income from Loan Portfolio 

Income from Financial Assets 

Total Interest Income 

Interest Expenses 

Interest on Demand and Savings Deposits 

Interest on Time Deposits 

Interest on Securities issued by the institution 

Interest on Financial Liabilities 

Total Interest Expenses 


Provision for Losses on Loan Portfolio 

Expense for Devaluation of Investments in 

Available-for-Sale Securities 

Net Financial Margin 


Trust Fund Operations 

Foreing Currency Transactions 

Commissions on Customer account Transactions 

Commissions on Letters of Credit and Guarantees Granted 

Equity in Long-Term Investment 

Exchange Gains 

Income on Sale of Investments Securities 

Other income 

Total Commissions and Other Income 

Insurance Premiums. Net of Claims 

Premiums 

Claims 

Total Insurance Premiums. Net of Claims 

Operating Income 


Salaries and Employee Benefits 

Depreciation, Property and Equipment Expenses, 

Amortization of Intangibles and Other 

Fees Paid to Regulatory Agencies 

Other Operating Expenses 

Total Operating Expenses 

Net before Income taxes, Extraordinary items 

and Minority Interest 

Taxes 

Current 

Deferred 

Total Taxes 

Minority Interest 

Net Income for the Year 

(1) Dollar figures are given for reference purposes only and are converted at the average exchange rate of Bs 3.5827/US$ 1. Exchange control has been in place in Venezuela since February 2003. 






US$ (1) 

2 

286 

1,268 

1 

1,557 

(426) 

(31) 

(8) 

(38) 

(504) 

1,053 

(269) 


26 

- 

784 

16 

(2) 

76 

6 

17 

297 

160 

332 

901 

917 

(799) 

117 

1,803 

(477) 

(126) 

(136) 

(364) 

(1,103) 

700 

(77) 

(16) 

(93) 

607 

- 

607 


bolivars 

6,495 

1,025,296 

4,544,692 

1,849 

5,578,332 

(1,527,917) 

(111,867) 

(29,790) 

(135,410) 

(1,804,984) 

3,773,348 

(963,152) 

- 

2,810,196 

56,267 

(7,612) 

272,035 

22,265 

60,372 

1,063,278 

572,446 

1,190,182 

3,229,233 

3,284,696 

(2,863,982) 

420,714 

6,460,143 

(1,707,492) 

(453,031) 

(486,579) 

(1,303,751) 

(3,950,853) 

2,509,290 

(275,100) 

(56,676) 

(331,776) 

2,177,514 

(1,201) 

2,176,313 

2009 

bolivars 

11,179 

1,099,090 

3,488,723 

42,019 

4,641,011 

(1,305,262) 

(226,191) 

(124,809) 

(170,204) 

(1,826,466) 

2,814,545 

(759,658) 

(34,993) 

2,019,894 

48,265 

2,106 

230,693 

19,138 

64,774 

2,350 

198,947 

814,311 

1,380,584 

2,278,612 

(1,952,257) 

326,355 

3,726,833 

(1,370,994) 

(357,952) 

(192,011) 

(912,805) 

(2,833,762) 

893,071 

(96,890) 

- 

(96,890) 

796,181 

(489) 

795,692 



2008 

bolivars 

33,787 

957,586 

3,450,762 

31,951 

4,474,086 

(1,059,657) 

(428,639) 

(153,584) 

(156,442) 

(1,798,322) 

2,675,764 

(473,188) 

- 

2,202,576 

42,673 

3,067 

183,740 

31,113 

66,478 

(8,890) 

258,919 

634,718 

1,211,818 

1,666,930 

(1,391,018) 

275,912 

3,690,306 

(1,155,761) 

(293,118) 

(144,533) 

(952,166) 

(2,545,578) 

1,144,728 

(192,181) 

7,068 

(185,113) 

959,615 

(628) 

958,987 

2007 

bolivars 

11,525 

796,618 

2,218,304 

29,838 

3,056,285 

(532,103) 

(392,150) 

(88,407) 

(130,703) 

(1,143,363) 

1,912,922 

(126,897) 

- 

1,786,025 

40,682 

3,765 

181,808 

32,576 

41,333 

(1,537) 

184,632 

537,839 

1,021,098 

1,061,618 

(885,954) 

175,664 

2,982,787 

(904,364) 

(225,053) 

(113,320) 

(776,798) 

(2,019,535) 

963,252 

(188,552) 

9,183 

(179,369) 

783,883 

(550) 

783,333 


President 

2006 

bolivars 

16,505 

678,562 

1,585,296 

1,132 

2,281,495 

(361,659) 

(374,582) 

(29,180) 

(77,289) 

(842,710) 

1,438,785 

(108,378) 

- 

1,330,407 

38,816 

2,020 

153,105 

24,622 

32,909 

9,494 

149,389 

447,496 

857,851 

675,611 

(562,175) 

113,436 

2,301,694 

(734,526) 

(169,523) 

(77,280) 

(643,990) 

(1,625,319) 

676,375 

(124,699) 

5,938 

(118,761) 

557,614 

(1,880) 

555,734

César PRIETO 

Calle caraqueña, around 1920 

Oil on canvas 

51 x 69 cm

Elisa Elvira ZULOAGA 

Paisaje de Caracas, 1967 

Oil on canvas adhered to cardboard 

45.7 x 60.7 cm 

Caracas, 1900 - 1980 

Zuloaga began studying painting and sculpture as a young girl. Between 1918 and 1920, she completed 

her art education in Paris and later became close friends with many members of the Fine Arts Society. 

She was part of the “Escuela de Caracas,” a generation that revitalized the country’s landscape painting. 

Her landscapes were characterized by a ground-breaking style that was, at the time, completely new in 

the Venezuelan art circles. In 1948, she was named Cultural Director for the Ministry of Education. She 

also received the National Award in Painting in 1952 and the National Award in Engraving in 1968.

Economic Climate 


29 

Global 

During 2010, the global economy was back 

on the growth path, thanks largely to the strong economic scenario of Asia and Latin America 

and a firm upturn in the U.S. economy. Contributions to the growth of the economic blocks 

have certainly not been homogeneous and it would be well to point out that at year end even 

some of the eurozone countries experienced acute difficulties in their fiscal position (and in 

their financial commitments), a deterioration in the valuation of their foreign debt and falling 

economic growth rates. Concern over the impact on the banking sector affected the price of 

other assets, such as shares and corporate bonds, especially in May and June. In May the 

European authorities and the Central European Bank approved action through the European 

Stabilization Mechanism (ESM) and the Securities Markets Programme (SMP) to promote 

liquidity and strengthen the prices of the sovereign debt of the countries in the eurozone 

that were under stress. Despite the difficulties in the eurozone, global GDP in 2010 grew 

between 3.3% (ECLAC, 2010) and 3.6% (IIF, 2010) which more than offset the 0.6% contraction 

seem in 2009. The eurozone, led by Germany, even experienced positive GDP variations in the 

order of 1.7% (vs -4.1% in 2009). Japan, whose dynamism was based on strong external 

demand (which explains around 51% of its economic growth) and a decisive fiscal stimulus 

policy, grew 4.3% in 2010 (as opposed to -6.3% in 2009). Dynamic trading in the Asia/Pacific 

economy led to around 9% growth at year end (compared to the already robust expansion of 

6.6% in 2009). China and India (with 10% and 8,7% growth respectively), given the size of 

their economies, still account for the bulk of that growth. That level of dynamism, especially 

in the case of China, is a response to the fiscal and credit stimulus packages and growing 

household income. 

United States 

The U.S. economy, supported by the drawn out expansive monetary policy, vigorous export 

growth and a sustained upturn in private consumer spending, grew 2.9% in 2010, slightly below 

the long-term trend estimated at 3%. The Federal Reserve’s monetary policy to anchor shortterm 

interest rates (at 0.3%) registered no variations in 2010 and towards the end of the year 

the Fed even announced the implementation of a second “quantitative flexibility” mechanism 

designed to foster a heightened expectation of inflation (and greater household spending), 

thereby fueling the credit-generating potential of the banks. This strength of this monetary policy 

lies in the slightly deflationary levels registered in the U.S. economy. In effect average annualized 

inflation in 2010 measured by the consumer price index was -0.3%. Private consumer spending 

on durable goods expanded by a surprising 6.7% during the year, while spending on services by 

private agents only grew 0.6%. The same type of asymmetry occurred in the expansion of 

business investment by the private sector. While investment in hardware and software grew 

15.3%, investment in non-residential construction dropped 14.3%. However, GDP expansion was 

not sufficient to prevent unemployment at year end (9.6%) from exceeding the previous year’s 

figure (9.3%). Nevertheless, at year end requests for unemployment insurance dropped for the 

first time to 409,000, below the 2009 average of 457,000.

The recovery of world markets was not reflected in other markets such as real estate. In the 

second half of the year house prices fell yet again and by October the Case-Shiller Price Index was 

down 1%. High housing inventories during the year led to severe drops in the sale of new homes 

and used homes which in November registered interannual variations of -21.2% and -27.9%, 

respectively. 

Latin America 

In 2010 the region was back on track and growing again after a 2.9% contraction in 2009. The 

GDP of Latin America and the Caribbean expanded an aggregate 6% and 4.8% per capita over the 

same period. The unemployment rate fell to 7.2% (8.6% in 2009) and real remunerations increased 

in the majority of these countries. The weight of the counter-cyclical policies developed by the 

region’s governments made a decisive contribution to the recovery of economic growth, since 

although external demand was stronger than in 2009 (25%), imports grew more than exports 

(27.6%). The progress made in the past due to successive primary fiscal surpluses, price stability 

and exchange rate flexibility, made it possible in 2010 to convert fiscal policy into the pivotal 

point of the recovery without jeopardizing basic equilibriums. 

Inflation rose, closing at 6.2% (4.7% in 2009) due to the domestic transmission of higher 

international energy and food prices. 

The recovered dynamism of the world economy, despite its fluctuations, reinforced the region’s 

external position, reflected by a global balance of payments surplus of US$ 62,169 million, a 

nominal 34% higher than in 2009. 

The need to offset the domestic effects of the international financial crisis, both due to the drop 

in fiscal income and higher spending, meant that for the second year fiscal management would 

close with a deficit, this time of 0.6% of GDP (-1.1% in 2009). 

Venezuela 

For the second year running Venezuela's GDP contracted 1.4% (-3.3% in 2009), more 

pronounced in tradable activities (-3.1%) than in non-tradable activities (-1.4%), despite 

exchange adjustments at the beginning of the year and the sustained rise in oil prices. The 

activities that grew, despite the overall tendency towards contraction, just as in 2009, were 

Communications 9.3%, General Government 2.6% and Community, Social and Personal 

Services 0.6%. The activities that contracted the most were Mining -13.4%, Construction - 

7.1%, Electricity -6.1% and Trade -6.19%. Unemployment levels in 2010 (6.5%) were similar to 

2009 levels (6.5%). In the case of domestic aggregate demand (-0.9% vs -7.9% in 2009), its 

fundamental component, private consumer spending fell 2.3% (-3.2% in 2009), while gross 

fixed capital formation shrunk 4.4% (-8.2% in 2009). The only component to experience a 

positive variation was public consumer spending with 2.6% (2.3% in 2009). The external 

components of aggregate supply and demand also fell. Imports were down 4.6% (-19.6% in 

2009) and exports 12.4% (-12.9% in 2009). 

Inflation rose from 25.1% in 2009 to 27.7% in 2010, due to the effect of the higher average 

rate of exchange for imports, supply restrictions due to electricity rationing and adverse 

climate conditions. 

Oil basket prices continued to recover in 2010 from their most recent minimum value 

(December 2008) of US$ 31.6/bbl. Last year they averaged US$/72.7/bbl compared to 

US$ 57/bbl in 2009. Despite lower production and export volumes, these sound prices have 

raised the volume of oil exports invoiced by more than US$ 8 billion, which with imports 

stagnant at US$ 38 billion, produced a balance of trade surplus of US$ 27,173 million (compared 


30

Summary of Economic Performance 2009 2010 

Percentage variation of Gross 

Domestic Product % 

Total -3.3 -1.9 

Oil Sector -7.2 -2.2 

Non Oil Sector -2.0 -1.8 

Exchange Rate. Bs/US$ 

End of Period 2.15 2.60-4.30 

Average 2.15 2.60-4.30 

Exchange Rate Variation % 

End of Period - 20.9%-100% 

Average - 20.9%-100% 

Inflation 

Cumulative Variation 25.1 27.2 

Annualized Variation 22.1 24.0 

Interest Rate - End of Period 

Average Lending Rates (6 main Banks) 18.9 17.8 

90 day Time Deposits (6 main Banks) 15.0 14.7 

Source: Central Bank of Venezuela (BCV) and in-house calculations 

with +US$ 19,153 million in 2009). The Balance of Services deficit (-US$ 8,857 million) and the 

Capital and Financial Account deficits (-US$ 18,799 million), plus Errors and Omissions 

(-US$ 3,639 million), led to a global Balance of Payments deficit of US$ 8,060 million 

(-US$ 10,262 million in 2009). International reserves in the hands of the Central Bank closed 

at US$ 29,500 million, 15.7% down compared to 2009. 

Fiscal spending continued to drop while spending grew a nominal 13.7% which, after taking 

inflation into account, means a real fall of 10.4% (-16.4% in 2009). Despite stronger oil prices, 

ordinary income grew by only 7.1%, below the rate of spending, making the financial deficit 

Bs 50,410 million, 41.6% more than the previous year. 

Money supply grew 25.3% (21.2% in 2009) which, after taking inflation into account, means a 

real reduction of 1.6% (-4.5% in 2009). This new demonetization was, on the one hand, the 

result of the restrictive effect of the Venezuelan Central Bank’s (BCV) open market operations, 

despite the reduction of the marginal reserve ratio from 23% to 17%, the fall in real primary 

spending and the slowdown in bank lending, or credit crunch. 

The monetary policy had a slightly contractionary net effect , in the order of Bs 1,494 million 

versus the expansionary net effect of Open Market Operations, Bs 15,098 million in 2009, 

leading to an increase in the accumulated stock of securities issued by the BCV of 9.6% which 

is 3.8% of money in the hands of the public (M2). 

The lending rates of the commercial and full-service banks continued to drop against the 

23.2% average in 2008, and in 2010 they were down again 253 basis points (18.2%), similar to 

the 20.7% reduction of 2009. Deposit rates for savings and term deposit averaged 12.6% and 

14.1% respectively, which is 90 and 130 basis points less that the return on these financial 

instruments in 2009. Real interest rates turned negative again, for the ninth year running in 

the case of deposit rates and for the fifth in the case of lending rates. The real lending rate 

averaged -6.9% in 2010 (-5% in 2009) and -9.7% for the real deposit rate (-8.6% in 2009). 


31


Paisaje con niñas, 1954 

Oil on canvas 

64.7 x 50 cm

Mission 

To fulfill the needs of individuals and 

communities where Mercantil has 

presence, by providing excellent 

financial products and services in 

various market segments, enhancing 

shareholder’s value by efficiently using 

our available resources. 

Vision 

To be the independent financial 

institution of reference in the areas of 

banking, asset management and 

insurance in the markets we serve. 

Strategic 

Positioning 

Mercantil bases its strategic guidelines on its 

corporate mission, long-term strategic vision and its principles and values. 

Principles and Values 

• To be the best financial services provider measured by the degree to which customers’ needs and 

expectations are met, through products and services considered by them as the best in the market. 

• To be the financial institution of reference in terms of excellent service quality. 

• To be recognized for having sound and proven ethical principles. 

• To be an integral institution and an important factor in the development of the community and 

places in which it is involved. 

• To have the best and most capable group of human resources. 

• To exercise optimum risk management along with an excelent assets and liabilities management. 

• To maintain a constant focused approach to the operating efficiency of the organization as a 

whole, using technology to support the overall exercise of its management. 

• To be a modern and innovative institution, capable of anticipating the requirements of its 

customers and the organization’s response. 

• To be an institution with a broad shareholder base, governed by the best principles of 

transparency and access to information that our shareholders and the securities market expect. 

Mercantil continues to implement a global business strategy based on the development of 

client value differentiation to satisfy all their banking, insurance and wealth management needs. 

In 2010, Mercantil focused its efforts on the continuous improvement of processes and 

products to meet financing needs in different segments, following established risk parameters, 

such as a wider offer of electronic and self-service products in line with its aim to improve the 

quality of customer service through different channels. 

Within the framework of the differentiated value proposals, Mercantil continued to implement 

the Mercantil Aliado network targeted at the Majority Market. All of this enhanced Mercantil’s 

knowledge of and contact with its clients and its ability to customize the product offering and 

mix to their financial needs. 

In our international network through an approach based on client value differentiation to meet 

the financial clients’ needs, we continue to strengthen our activity in the United States, Latin 

America, Europe and Asia. Hence we have continued with our growth and diversification 

strategy to boost domestic activity in the United States and Panama. We have also 

strengthened our activity in Switzerland as a key factor in developing the Private Banking and 

Wealth Management business. 

All of this has been undertaken in strict compliance with the regulations applicable in the 

countries where we operate, with strong capitalization and with the principles of transparency 

and sound management which are key to Mercantil’s strategic positioning, the nature of the 

institution and its day-to-day activity. 


33

Federico Brandt 

Azotea, around 1924 

Oil on canvas 

45.5 x 59.5 cm 

Caracas, 1878 - 1932 

Brandt is considered one of the greatest Venezuelan landscape painters of the first half of the twentieth 

century. He attended the Academy of Fine Arts and studied at Arturo Michelena’s Art Studio, as well as 

in renowned schools and art studios in Germany and France. Although he did not become a professional 

painter, his passion for art led him to dedicate the majority of his free time to painting. He joined the Fine 

Arts Society and forged lasting friendships with many of its members.

Management 

Discussion and Analysis 

Summary of Consolidated 

Balance Sheet 

Year end 

(In thousands of Bs and millions of US$ 

except percentages) 

Total Assets 


Loan Portfolio, Net 

Deposits 


Trust Fund Assets 

Assets by Currency 

Bs. 79,383 million 

(US$ 18,507 million) 

Year 2010 

Bolivars 58% 

US Dollar 42% 

Balance Sheet 

A summary balance sheet for 2010 is shown 

below and the main variations by comparison with 2009 are commented on: 

The audited financial statements and their notes can be found in the inside back cover of this Report. 

The accounting standards used are summarized at the end of this chapter. 

Total Assets 

Total assets were Bs 79,383 million (US$ 18,507 million) 1 , representing 49.6% annual growth. 

This variation includes: a) 18.9% growth of the domestic operation, b) 4.2% growth of the 

overseas operation in dollar terms, and c) 26.5% increase (Bs 14,073 million) due to currency 

translation effects. 

The total consolidated assets of Mercantil Banco Universal, including overseas agencies, grew 

Bs 9,306 million (24.9%) from Bs 37,333 million (US$ 17,408 million) 1 at December 31, 2009 to 

Bs 46,639 million (US$ 10,873 million) 1 at year end. At December 31, 2010 Mercantil Banco 

Universal ranks fourth in the Venezuelan financial system in terms of total assets with 11.4% 

of the market. The leading institution has a 13.2% market share while the four largest banks 

in the country account for 49.5%. 

The Mercantil Commercebank Florida Bancorp subsidiary (Mercantil Commercebank, N.A.’s 

holding company) had US$ 6,433 million1 (Bs 27,593 million) in total assets which represents 

US$ 485 million growth (8.2% in dollar terms and 116.3% in terms of bolivars for the purpose 

of consolidation) compared to US$ 5,948 million1 (Bs 12,756 million) in December 2009. 

At December 31, 2010 Mercantil Seguros’ assets accounts totaled Bs 3,350 million (US$ 781 

million) 1 , Bs 1,166 million (53,3%) more than the Bs 2,184 million (US$ 1,019 million) 1 registered 

in December 2009. Swiss subsidiary Mercantil Bank (Schweiz) A.G. had US$ 334 million1 (Bs 1,431 million) in assets at December 31, 2010, US$ 3 million (1.0%) more than the US$ 330 

million1 (Bs 708 million) registered in December 2009. 

35 


US$ (1) 

18,507 

5,034 

10,008 

14,540 

1,985 

2,247 


bolivars 

79,382,962 

21,591,730 

42,928,106 

62,366,913 

8,513,300 

9,638,196 

2009 

bolivars 

53,074,810 

14,044,092 

27,137,723 

42,847,704 

4,879,810 

9,699,922 


2008 

bolivars 

46,829,877 

14,571,656 

22,219,115 

36,211,367 

4,089,040 

8,605,247 

2010 Vs. 2009 

Increase/ 

(Decrease) 

bolivars % 

26,308,152 

7,547,638 

15,790,383 

19,519,209 

3,633,490 

(61,726) 

49.6 

53.7 

58.2 

45.6 

74.5 

(0.6) 


Increase/ 

(Decrease) 

bolivars % 

32,553,085 

7,020,074 

20,708,991 

26,155,546 

4,424,260 

1,032,949 

1 Dollar figures in US$ are given for reference purposes only; the balance sheet is converted at the exchange rate at the end of the period (Bs 4.2893/US$1 versus Bs 2.1446/US$1 at December 31, 2009). Exchange 

control has been in place in Venezuela since February 2003. 

69.5 

48.2 

93.2 

72.2 

108.2 

12.0

Investments in Securities 

by Issuer 

Bs 21,592 million 

(US$ 5,034 million) 1 


Venezuelan Central Bank 14.1% 

U.S. Government 

U.S. Government 

33.0% 

Sponsored Agencies 12.2% 

International Private Sector 10.3% 

Venezuelan Government 28.6% 

Venezuelan Private Sector 1.8% 

2 Market value 

3 Amortized cost. 

4 Yield based on the amortized cost at the end of the period. This is 

obtained by dividing the income from securities (including 

amortization of premiums or discounts) by the amortized cost or 

market value. 

5 Bs 1,439 million correspond to Central Bank loans maturing at 60 

days. 

1 Dollar figures in US$ are given for reference purposes only; the 

balance sheet is converted at the exchange rate at the end of the 

period (Bs 4.2893/US$1 versus Bs 2.1446/US$1 at December 31, 

2009). Exchange control has been in place in Venezuela since 

February 2003. 

6 Bs 887 million include foreign exchange indexation clauses. 

Mercantil Bank (Panama), S.A. had US$ 129 million1 (Bs 555 million) in assets at the close of 

December 2010, US$ 50 million (62.1%) more than the US$ 80 million1 (Bs 171 million) 

registered in December 2009. 


At the close of 2010, investments totaled Bs 21,592 million (US$ 5,034 million) 1 , which 

represents Bs 7,548 million (53.7%) growth over the Bs 14,044 (US$ 6,549 million) 1 recorded at 

December 2009. This variation includes: a) 12.9% growth of the domestic operation, b) 3.2% 

reduction in the overseas operation in dollar terms, and c) 44.0% increase (Bs 6,180 million) 

due to currency translation effects. 

Total investments in securities issued or guaranteed by the Venezuelan nation (excluding the 

BCV) represent 0.7 times Mercantil’s equity and 7.8% of its assets. These securities are 0.8 

times Mercantil Banco Universal’s equity and account for 8.1% of its assets. Mercantil holds 

2.5% of the public debt securities issued by the Venezuelan State, according to information 

obtained from the Ministry of Economics and Finance at December 31, 2010. Investments by 

maturity and yield at December 31, 2010 are broken down as follows: 

Maturity 

(years) 

Bs Less than 1 

From 1 to 5 

Over 5 

US$ Less than 1 

From 1 to 5 

Over 5 


36 

Investments by Maturity and Yield 

(in millions of Bs except percentages) 

Breakdown of Investments by Issuer and Currency at December 31, 2010 

(In millions of Bolivars and US$, except percentages) 

Bolivars 

Mercantil Banco Universal 

Mercantil Seguros and others 

Total Bs 

US Dólares 


Mercantil Commercebank 

Florida Bancorp 

Mercantil Seguros and others 

Total US$ 

Breakdown % 

Trading 

Bs 2 

233 

233 

Available for 

Sale 

Bs 2 

996 

3,715 

748 

369 

2,179 

9,079 

17,087 

% 4 

9.2% 

13.6% 

14.8% 

5.8% 

4.1% 

5.0% 

Venezuelan 

Central 

Bank 

3,050 

3,050 

0 

14.1% 

Held to 

Maturity 

Bs 3 

320 

63 

220 

20 

623 

U.S. U.S. Agencies 

Government 

0 

39 

1,522 

100 

1,661 

33.0% 

% 4 

9.6% 

1.6% 

2.8% 

10.0% 

Shares 

Bs 2 

15 

1 

16 

0 

41 

518 

54 

613 

12.2% 

Time Deposits 

and Placements 

Bs 2 

1,764 5 

140 

13 

25 

1,942 

Int’l 

Private 

25 

72 

97 

40 

251 

204 

495 

10.3% 

% 

5.0% 

0.5% 

2.5% 

0.4% 

Venezuelan 

Government 

3,964 6 

1,676 

5,640 

34 

19 

74 

127 

28.6% 

Restricted 

Investments 

Bs 2 

1,612 

30 

9 

41 

1,691 

% 4 

6.0% 

0.1% 

2.2% 

4.4% 

Venezuelan 

Private 

9 

377 

386 

1 

1 

1.8% 

TOTAL 

Totals 

Bs 

4,372 

3,715 

1,083 

835 

2,421 

9,166 

21,592 

Investments at December 2010 by company, by issuer and by currency are distributed as follow: 

7,048 

2,125 

9,173 

Totals 

US$ 1 

153 

2,309 

433 

2,895 

100.0%

Loan Portfolio by 

Business Segment 


(US$ 10,008 million) 1 


Large Corporations 28% 

SME’s 46% 

Individuals 26% 

1 Dollar figures in US$ are given for reference purposes only; the 

balance sheet is converted at the exchange rate at the end of the 

period (Bs 4.2893/US$1 versus Bs 2.1446/US$1 at December 31, 

2009). Exchange control has been in place in Venezuela since 

February 2003. 

2 Commercial and full-service banks may not reduce the percentage 

of total credits earmarked for manufacturing at December 31, 2009; 

this percentage must not be lower than 10%. 

3 Includes the Agricultural Bonds issued by the Venezuelan State 

in accordance with the regulations on portfolio compliance. 


At the close of 2010, Net Loans reached Bs 42,928 million (US$ 10,008 million) 1 which 

represents an increase of Bs 15,790 million (58.2%) over the Bs 27,138 (US$ 12,654 million) 1 

recorded at December 2009. This variation includes: a) 24.1% growth of the domestic 

operation, b) 7.9% growth of the overseas operation in dollar terms, and c) 26.2% increase 

(Bs 7.1 billion) due to currency translation effects. 

The ratio of Past-due and Nonperforming Loans to Gross Loans was 2.9%. At Mercantil Banco 

Universal this indicator is 0.9%, compared with 3.4% for the Venezuelan financial system and 

6.5% at Mercantil Commercebank (8.3% of nonperforming loans). At December 31, 2010, 95.5% 

of Mercantil’s loan portfolio was outstanding. The allowance for losses on loan portfolio 

covers 110.8% of past-due and nonperforming loans; this indicator is 489.1% at Mercantil 

Banco Universal and 24.2% at Mercantil Commercebank. 

Mercantil Banco Universal is Venezuela's leading bank in terms of manufacturing and 

mortgage loans under the Mortgage Debtor Law (Ley Especial del Deudor Hipotecario), with 

market shares of 18.6% and 14.7% respectively. Mercantil Banco Universal ranks second in 

Venezuela’s financial system in terms of gross loans and agricultural loans, with 14.5% and 

13.4% of those markets respectively. The Bank is Venezuela’s third largest for microcredits 

and loans to the tourism sector, with market shares of 14.3% and 10.6% respectively. 

Mercantil Banco Universal’s net consolidated loans at the close of the 2010 were Bs 26,703 

million (US$ 6,226 million) 1 , 33.2% more than the Bs 20,040 million (US$ 9,345 million) 1 

recorded at the close of December 2009. 

Statutory percentage of Mercantil Banco Universal loans 

by economic sector and interest rates 

Dec-10 

Interest rates applicable 

Sector Percentage of Compliance % 

% at December 2010 

reached required 

Agriculture 

Mortgage 

Microcredits 

Tourism 

Manufactured 

goods 

Calculated on the average gross loans 

portfolio at December 31, 2009 and 

December 31, 2008. Monthly 

Compliance. Maximum per client: 5% 

of the current portfolio. Requires a 

minimum annual number of new 

clients, and the loan portfolio must be 

distributed quarterly into priority and 

non-priority items as stipulated by the 

Ministry of Agriculture and Land. 

Calculated on the gross loan portfolio 

at December 31, 2009, made up as follows: 

5.8% long-term and 4.2% shortterm 

loans. Annual Compliance. 

Includes other considerations for certain 

other items. 

3% calculated on the gross loan portfolio 

at June 30, 2010. Monthly Compliance: 

Calculated on the average gross loan 

portfolio at December 31, 2009 and December 

31, 2008. In February 2010 the 

Ministry of Tourism stipulated that 

banks must earmark 3% of their loan 

portfolio. Compliance must be achieved 

by December 31, 2010 at the latest (1.5% 

semi-annually). Includes other considerations 

for certain items. 

Calculated on the gross loan portfolio 

at December 31 2009. Monthly Compliance. 


37 

26.3% 3 

12.3% 

3.4% 

3.2% 

14.2% 

21.0% 

10.0% 

3.0% 

3.0% 

11.0% 2 

Set weekly by the Venezuelan 

Central Bank. As of December 31, 

2010 it is 13%. 

Set semi-annually by the Ministry 

of Housing and Habitat, based on 

the weighted average lending rate 

of Venezuela’s largest banks. The 

“social interest rate” is currently set 

according to the family income of 

the borrowers and ranges from 

4.66% to 14.39% 

Within minimum and maximum 

rates set by the Venezuelan Central 

Bank. As of December 31, 2010 the 

maximum rate applicable is 24%. 

Each month the Venezuelan Central 

Bank sets a preferential rate for 

the sector. At December 31, 2010 it 

is 13%; in some cases it can be reduced 

to 10% subject to the provisions 

of the Tourism Sector Credit 

Act. 

Set at 19% by the Venezuelan 

Central Bank.


Classified by Status 

Year end 

(In thousands of Bs except percentages) 

Current 

Restructured 

Past Due 

In Litigation 

Total Gross Loans 

Deposits by 

Business Segment 


(US$ 14,540 million) 1 

Año 2010 

Large Corporations 20% 

SME’s 24% 


At the close of 2010, Mercantil Commercebank Florida Bancorp’s net loans totaled US$ 3,702 

million1 (Bs 15,879 million). This was 13.7% or Bs 447 million1 more than the US$ 3,255 million1 (Bs 6,981 million) recorded at the end of 2009. This portfolio is focused mainly on the 

commercial loans and mortgages to buy or build homes. 


bolivars 

42,384,693 

683,007 

1,011,526 

282,840 

44,362,066 

Deposits 

% 

95.6 

1.5 

2.3 

0.6 

100.0 

At the close of 2010, deposits totaled Bs 62,367 million (US$ 14,540 million) 1 and represented 

45.6% growth compared to Bs 42,848 (US$ 19,980 million) 1 at December 2009. This variation 

includes: a) 16.5% growth of the domestic operation, b) 3.6% growth of the overseas operation 

in dollar terms, and c) 25.5% increase (Bs 10,881 million) due to currency translation effects. 

Mercantil Banco Universal in Venezuela is the country’s leading bank in terms of savings 

deposits with 20.1% of the market, and second in terms of total deposits plus investments 

sold under repurchase agreement with a market share of 13.2%. 

Mercantil Banco Universal’s net consolidated deposits at the close of 2010 were Bs 39,383 

million (US$ 9,182 million) 1 , 22.3% more than the Bs 32,197 million (US$ 15,013 million) 1 

recorded in December 2009. 

Mercantil Commercebank’s deposits at December 31, 2010 totaled US$ 5,116 million1 (Bs 21,944 

million), US$ 387 million1 (8.2%) higher than the US$ 4,729 million1 (Bs 10,142 million) 

registered in December 2009. 


At December 31, 2010 shareholders’ equity totaled Bs 8,513 million (US$ 1,985 million) 1 , 74.5% 

more than the Bs 4,880 million (US$ 2,275 million) 1 recorded at the end of 2009. This variation 

mainly includes Bs 2,176 million in net earnings for 2010, Bs 1,270 million increase due to the 

effect of translating the net assets of subsidiaries abroad and Bs 358 million increase from 

adjusting available-for-sale investments to their market value, which includes exchange rate 

effects during the period. 

Mercantil’s Equity/Assets ratio at December 31, 2010 is 10.7% and its Equity/Risk-Weighted 

Assets ratio is 20.4%, based on the standards of the National Securities Superintendency (9.2% 

and 18.3% at December 31, 2009). Mercantil Banco Universal’s Equity/Assets ratio at December 

31, 2010 is 11.2% 2 and its Equity/Risk-Weighted Assets ratio 17.6% (10.2% and 17.0% at December 

31, 2009) in keeping with the standards of the Superintendency of Banking Sector Institutions. 


38 

2009 

bolivars 

27,017,149 

87,870 

854,373 

71,056 

28,030,448 

% 

96.4 

0.3 

3.0 

0.3 

100.0 

2008 

bolivars 

22,229,944 

49,413 

541,868 

24,219 

22,845,444 

% 

97.3 

0.2 

2.4 

0.1 

100.0 

(1) Dollar figures in US$ are given for reference purposes only; the balance sheet is converted at the exchange rate at the end of the period 

(Bs 4.2893/US$1 versus Bs 2.1446/US$1 at December 31, 2009). Exchange control has been in place in Venezuela since February 2003. 

(2) Obtained by dividing equity by total assets less investments in public debt securities.

Financial Margin 

Year Ended 



Interest Income 

Interest Expense 


Provision for losses on loan Portfolio 

Expenses for Devaluation of 

Available-for-Sale Securities 


For Mercantil Commercebank, N.A. these indicators are 9.3% and 18.1% respectively, based on 

the standards of the Office of the Comptroller of the Currency, OCC (10.5% and 22.1% at 

December 31, 2009). The equity ratios of Mercantil and its subsidiaries exceed the regulatory 

minimums. 

Profit and Loss 

The main variations between the figures for December 31, 2010 and December 31, 2009 are 

summarized below: 


US$ (1) 

1,557 

(504) 

1,053 

(269) 

- 

784 


bolivars 

5,578,332 

(1,804,984) 

3,773,348 

(963,152) 

- 

2,810,196 


4,641,011 

(1,826,466) 

2,814,545 

(759,658) 

(34,993) 

2,019,894 

Net Interest Income during 2010 was Bs 3,773 million (US$ 1,053 million) 1 , 34.1% higher than the 

Bs 2,815 million (US$ 1,313 million) 1 recorded in 2009. This increase includes mainly: a) 17.6% 

growth of the domestic operation, b) 7.9% growth of the overseas operation in dollar terms, and 

c) an 8.6% (Bs 245 million) increase due to currency translation effects. Growth of Venezuela’s 

net interest income is mainly due to the increased rate of financial intermediation which rose 

from 65.4% at the end of 2009 to 71.1% at the close of December 2010. 

The ratio of net interest income to average financial assets in 2010 was 7.1% compared to 7.3% 

in 2009. 

(1) Dollar figures in US$ are given for reference purposes only; the balance sheet is converted at the exchange rate at the end of the period (Bs 4.2893/US$1 versus Bs 2.1446/US$1 at December 31, 2009). Exchange 

control has been in place in Venezuela since February 2003. 


39 

2009 

bolivars 

2008 

bolivars 

4,474,086 

(1,798,322) 

2,675,764 

(473,188) 

- 

2,202,576 


Increase/ 

(Decrease) 

bolivars % 

937,321 

(21,482) 

958,803 

203,494 

(34,993) 

790,302 

20.2 

(1.2) 

34.1 

26.8 

(100.0) 

39.1 


Increase/ 

(Decrease) 

bolivars % 

1,104,246 

6,662 

1,097,584 

489,964 

- 

607,620 

24.7 

0.4 

41.0 

103.5 

- 

27.6

Commissions, Other Income and 

Insurance Premius 

Year Ended 





Insurance Premiums, Net of Claims 

Operating Income 

Loan Portfolio Provision 

During 2010, expenses for Loan Portfolio provisions were recorded at Bs 963 million (US$ 269 

million) 1 . This brings the accumulated provision to Bs 1,434 million (US$ 334 million) 1 as of 

December 31, 2010 and represents a 3.2% increase in total loans and 110.8% coverage of pastdue 

and nonperforming loans. Write-offs for the year were Bs 237 million in Venezuela and US$ 

90 million abroad. 

The Mercantil Banco Universal subsidiary recorded Bs 687 million (US$ 192 million) 1 in loan loss 

provisions during 2010 due to loan portfolio growth; these are intended to increase the 

allowances for the agricultural and construction sectors, compared to Bs 477 million recorded 

at the close of 2009. 

The Mercantil Commercebank subsidiary recorded US$ 73 million1 (Bs 260 million) in loan loss 

provisions during 2010, mainly for commercial loans and mortgages for construction and 

housing, compared to US$ 132 million at the close of 2009. 

Commissions, Other Income and Insurance Premiums, Net of Claims 


US$ (1) 

784 

901 

117 

1,803 

Commissions and Other Income increased 133.9% (Bs 1,849 million) in 2010 compared to 2009. 

This was mainly due to: 

• Bs 1,061 million (45,145.9%) increase due to exchange difference after the Central Bank of 

Venezuela adjusted the exchange rate used to value assets and liabilities in foreign currency 

from Bs 2.1446/US$ to Bs 4.2893/US$ in January 2010. 

• Bs 373 million (187.7%) increase in earnings from investment trading activities and the sale 

of securities. 

• Bs 173 million (28.2%) in commissions on credit cards, client accounts and other 

commissions. 

• Bs 46 million (69.2%) growth of income from financing insurance policies. 


40 


bolivars 

2,810,196 

3,229,233 

420,714 

6,460,143 

2009 

bolivars 

2,019,894 

1,380,584 

326,355 

3,726,833 

2008 

bolivars 

2,202,576 

1,211,818 

275,912 

3,690,306 


Increase/ 

(Decrease) 

bolivars % 

790,302 

1,848,649 

94,359 

2,733,310 

39.1 

133.9 

28.9 

73.3 


Increase/ 

(Decrease) 

bolivars % 

607,620 

2,017,415 

144,802 

2,769,837 


27.6 

166.5 

52.5 

75.1

Distribution of Total Income 


(US$ 2,072 million) 1 


2010 2009 

Financial Margin 51% 62% 

Commissions and Insurance Premiums, Net 18% 22% 

Earnings on sale of Investments in Securities 8% 4% 

Exchange Differences 14% 0% 

Other Income 9% 12% 


Year ended 



Earnings from Financial Operation 


Personal Expenses 

Taxes (Current and Deferred) 

Minority Interests 

Net Income for the Year 

Insurance premiums, net of commissions, reinsurance and claims totaled Bs 421 million (US$ 117 

million) 1 in 2010, reflecting a 28.9% increase compared with Bs 326 million (US$ 152 million) 1 in 

2009. Net collected premiums in 2010 totaled Bs 4,013 million (US$ 1,120 million) 1 which 

represents a year-on-year increase of Bs 1,211 million or 43.2%. This growth was mainly in the 

automobile business (52.1%). Mercantil Seguros is the country’s second largest insurance 

company in terms of net collected premiums, with a market share of 11.5% at December 31, 2010. 

Claims totaled Bs 2,864 million (US$ 799 million) 1 , reflecting a year-on-year increase of Bs 912 

million (46.7%). This growth was principally in the healthcare and fire business. 


US$ (1) 

1,803 

(626) 

(477) 

(93) 

- 

607 


bolivars 

6,460,143 

(2,243,361) 

(1,707,492) 

(331,776) 

(1,201) 

2,176,313 


41 

2009 

bolivars 

3,726,833 

(1,462,768) 

(1,370,994) 

(96,890) 

(489) 

795,692 

2008 

bolivars 

3,690,306 

(1,389,817) 

(1,155,761) 

(185,113) 

(628) 

958,987 


Increase/ 

(Decrease) 

bolivars % 

2,733,310 

780,593 

336,498 

234,886 

712 

1,380,622 


73.3 

53.4 

24.5 

242.4 

145.6 

173.5 


Increase/ 

(Decrease) 

bolivars % 

2,769,837 

853,544 

551,731 

146,663 

573 

1,217,327 

75.1 

61.4 

47.7 

79.2 

91.2 

126.9


Operating and personnel expenses rose 39.4% (Bs 1,117 million) year on year due mainly to: 

• Bs 336 million increase in personnel expenses, 24.5% compared to 2009, due to the application 

of wage increase policies in Venezuela. In Venezuela, at Mercantil Banco Universal assets per 

employee rose from Bs 4.9 million in 2009 to Bs 7.0 million in 2010. At Mercantil Seguros, the 

net collected premium per employee went from Bs 1.9 million in 2009 to Bs 2.7 in 2010. In the 

case of the overseas business, this indicator increased from US$ 7.5 million in assets per 

employee in 2009 to US$ 8.6 million in assets per employee in 2010. 

• Bs 295 million (153.4%) increase in expenses for contribution to regulatory bodies, mainly due 

to the increase in the semi-annual contribution that financial institutions must make to Fogade; 

which increased from 0.50% of total deposits in 2009 to 1.25% in 2010. 

• Bs 486 million (38.2%) increase in general and administrative expenses. This increase is due 

mainly to Bs 160 million (39.2%) recorded for commissions on services, transfers and 

communications and others; Bs 95 million (26.6%) due to higher expenditure on depreciation 

plant, property and equipment, amortization of intangibles and others; Bs 56 million (123.5%) 

in provisions for realizable and others assets, and Bs 30 million (22.6%) in expenses for taxes 

and contributions, among others. 

The efficiency ratio measured by calculating Operating Expenses as a percentage of Average 

Assets, was 5.2% in December 2010, versus 5.4% in December 2009. The ratio of operating 

income to total income was 46.7% in December 2010 versus 58.4% in December 2009. 

Over the last 12 months Venezuela registered 27.2% inflation. This variable has a significant 

effect on Mercantil’s operating costs. 

Taxes and Contributions 

For the year ended December 31, 2010 Mercantil and its subsidiaries reported significant 

expenses for various types of taxes and contributions. 

Domestic transactions included: Bs 323.2 million in estimated corporate income tax payable, 

which includes accounting entries for adjusting Bs 56.7 million in deferred corporate income 

tax; Bs 152 million in valued added tax; Bs 154.8 million in municipal taxes; Bs 401.3 million in 

contributions to the Deposit Guarantee and Banking Protection Fund (FOGADE); Bs 44.0 

million in contributions to the Superintendency of Banking Sector Institutions and Bs 8.4 

million in contributions to the Superintendency of Insurance Activity. 

Overseas transactions included Bs 8.5 million in expenses for corporate income tax payable, 

Bs 4.6 million in municipal taxes and other contributions and Bs 32.9 million in contributions 

to regulatory agencies. 

Mercantil Servicios Financieros and its subsidiaries also complied with other compulsory 

contributions provided for in the pertinent legislation. 


42

Summary of the Accounting Principles 

used to prepare the Financial Statements 

National Securities Superintendency (SNV) 

Mercantil’s financial statements are presented based on SNV 

accounting standards. A summary of some of the main accounting 

principles applied is given below: 


Investments in Trading Securities: Unrealized gains or losses 

resulting from differences in their fair value due to market 

fluctuations are included in the results for the period. 

Investments in Securities Available-for-Sale: Recorded at their 

fair market value. Unrealized gains or losses resulting from 

differences in fair value and exchange rate fluctuations are 

included in shareholders’ equity. Investments Securities in 

Held-to-Maturity: Recorded at their acquisition cost, adjusted 

for amortization of premiums or discounts. For all portfolio 

investments, permanent losses resulting from decreases in fair 

market value are recorded in the results for the period in which 

they occur. Permanent investments are stock ownership 

between 20% and 50%. Those greater than 50% are recorded 

as equity participation and are consolidated except when 

control is likely to be temporary. 


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 and when they are 

earned or incurred. Interest earned on loan portfolios is 

recorded as income when collected. Fluctuation in the market 

value of derivatives is included in the income statement for the 

period. Insurance premiums are recorded as income when 

earned. 

43 

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. Its 

main subsidiaries are: 

• Mercantil, C.A. Banco Universal, universal bank in Venezuela 

and its overseas agencies. 

• Mercantil Commercebank, N.A., bank in the United States 

of America and its subsidiaries Mercantil Commercebank 

Investment Services, Inc. and Mercantil Commercebank 

Trust Company, N.A. 

• Mercantil Bank (Schweiz) AG in Switzerland and its 

subsidiary Mercantil Bank and Trust Limited (Cayman) in the 

Cayman Islands. 

• Mercantil Seguros, C.A., insurance company in Venezuela 

• Mercantil Bank Curaçao, N.V., in Curaçao, and its subsidiary 

Mercantil Bank (Panama) S.A. in Panama. 

• Mercantil Merinvest, Casa de Bolsa, C.A., a securities 

brokerage company in Venezuela, Mercantil Servicios de 

Inversión, C.A. and Mercantil Sociedad Administradora de 

Entidades de Inversión Colectiva, C.A. 

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 assets, among others, are shown at their inflationadjusted 

value up to December 31, 1999. The market value 

determined by independent assessments is higher than the 

cost adjusted for inflation indicated above. New additions 

are being recorded at their acquisition value. 

Accounting differences between SNV standards applicable 

in Venezuela and US GAAP 

The main accounting differences for the reconciliation of items 

under SNV standards and US GAAP are: 

• Deferred IncomeTax: 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: The 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. 

• Calculation of loan loss and other provisions.

Francisco FERNÁNDEZ RODRÍGUEZ 

Playa El Palmar, 1956 


45.5 x 60.8 cm 

San Fernando de Apure, 1897 - Caracas, 1990 

In 1911 attended the Academy of Fine Arts to study painting and drawing. Traveled to Barcelona, Spain 

in 1915 and then to Paris. Returned to Venezuela in 1924 where he developed his pictorial techniques and 

became a renowned follower of the tradition of the Fine Arts Circle, known as the “School of Caracas”.

Business Management Report 

Commercial and Personal Banking 

Deposits 



Companies 31% 


Loans 



Companies 64% 


Through Commercial and Personal Banking, 

in 2010 Mercantil continued with its effort to design and implement new products and 

services to meet the financial needs of its clients, both in the Venezuelan market with 

Mercantil, C.A. Banco Universal, and in the international market, highlighting the presence of 

Mercantil Commercebank in the United States where both international and local clients are 

served, particularly in South Florida. 

At the close of 2010, Commercial and Personal Banking accounted for 78% of Mercantil 

Servicios Financieros' total deposits which amounted Bs 48,931 million (US$ 11,408 million). 

In the United States, deposits underwent sustained growth, reaching US$ 4,292 million 

(Bs 18,409 million) at the close of 2010 and accounted for 91% of Mercantil Commercebank’s 

total deposits. In Venezuela growth was 29%, or Bs 30,522 million (US$ 7,116 million). 

At the end of 2010, the loan portfolio of Commercial and Personal Banking at Mercantil 

Servicios Financieros was Bs 31,973 million (US$ 7,454 million), which represents 72% of the 

total, with 35% growth of the loan portfolio in Venezuela. The loan portfolio of Commercial 

and Personal Banking in the United States accounts for 51% of Mercantil Commercebank’s 

total loans. 

Mercantil Servicios Financieros, through Personal Banking, reached Bs 33,839 million 

(US$ 7,889 million) in total deposits at the close of 2010, with 52% growth. Personal Banking 

loans totaled Bs 11,486 million (US$ 2,678 million), 43% growth compared to 2009. 

In Venezuela this growth in Personal Banking can mainly be attributed to two initiatives: a new 

24-month financing program is aimed at attending to the needs of our clients, and particularly 

of the medical sector, for working capital, and greater incentives to use the Credit Card 

product and its parallel lines through different promotions. 

During 2010 Personal Banking in Venezuela continued with its object to include the unbanked 

sector of the population through the Majorities segment, extending its Mercantil Aliado 

network to a total of 46 correspondent trading desks and 94 trading points offering a variety 

of services. The trading desks also offer specialized products such as the Tarjeta Efectivo cash 

card, Credisan Mercantil and Microcredits for entrepreneurs, thereby consolidating its 

relationship with the communities. 


45

Personal Banking 

Deposits 


Mercantil Banco Universal 59% 

Mercantil Commercebank 41% 

Personal Banking 

Loans 




In the United States, Personal Banking launched a new and simplified suite of deposit 

products in 2010, downsizing the offering from 21 products to 11. In addition price adjustments 

were made to be more competitive for the local market. 

There was a 58% increase in new accounts opened, largely due to the implementation of an 

integrated strategy to attract international clients. 

During 2010 Commercial and Personal Banking continued with the strategy aimed at learning 

more about the demographic and individual characteristics of its clients in the United States 

in each community where Mercantil Commercebank, N.A. is present. For example, it 

conducted a customer satisfaction survey which enhanced interaction between the Company 

and its clients and provided useful information for adapting sales and service strategies to 

meet their needs. 

For the benefit of its international clients, Mercantil Commercebank, N.A. is constantly 

innovating its electronic banking services, making online transactions faster, easier and more 

secure, especially in the case of I-Wires and digital accounts, with 96% and 65% of clients 

migrated respectively. 

In 2010, Mercantil in Venezuela continued with its process to incorporate chip technology 

into its debit and credit cards and received the corresponding certification from Visa and 

MasterCard. It also adapted this technology to the point-of-sale and ATM networks and in 

June was the first bank in Venezuela to adapt its ATM network 100% to this new technology. 

Its use enables us to offer advanced security benefits to our clients when carrying out 

transactions. 

The consolidated deposits of the Commercial Banking segment totaled Bs 15,092 million 

(US$ 3,519 million) at the close of 2010, of which 71% were deposits in Venezuela. This 

segment’s deposits increased considerably, in particular funds from the United States, 

especially international clients and clients captured in Venezuela through Mercantil, C.A. 

Banco Universal, 21% and 36% respectively. 

This growth of international deposits in the United States was the result of clients captured 

through various strategies, thereby covering their needs for loan placement, cash flow 

management and electronic banking services. Internet access to documentation for opening 

accounts, electronic transfers and other services are examples of the services provided. 

Commercial Banking’s loan portfolio grew 50% in 2010, reaching Bs 20,487 million (US$ 4,776 

million), driven by 32% growth in Venezuela, largely due to the launch of a working capital 

program under competitive conditions, in the second half of the year, that highlighted the 

presence and leadership of the segment in trade, manufacturing, services and other areas, as 

well as strengthening the contribution of Commercial Banking towards managed portfolio 

compliance. 


46

Commercial Banking 

Deposits 




For this segment, loan portfolio quality in the United States remained a priority during 2010, 

and new credit parameters, among other measures, were set which improved portfolio quality, 

particularly in the case of new loan approvals during the year. 

In 2010 the Real Estate segment in the United States remained focuses on the balance and 

improvement in quality of its loan portfolio. The segment also made every effort to ensure the 

timely supervision of risks and loans in order to identify factors liable to affect the Bank’s 

bottom line. This commercial real estate portfolio management allows us to offer a faster 

response to our clients’ needs while limiting the exposure to risk. The strategy initiated in 

2007 to reduce the concentration of these loans continued, reaching levels below 19% at the 

close of 2010. 

Commercial Banking in the United States joined a loan syndication program in which it 

participated selectively through rated credit facilities, lending to well-established industries 

with good credit ratings. Risk diversification and potential exposure to losses are taken into 

account before participating in these programs. 

During 2010, more than 11,000 Commercial Banking clients in Venezuela used the Pronto 

Crédito Empresarial product, thereby meeting their short and long-term financing needs and 

making cash surpluses profitable, as well as obtaining financing for specific purchases through 

corporate credit card approvals. 

Through Commercial Banking, Mercantil continued to support efforts by Venezuelan 

companies to strengthen their competitiveness by maintaining the agreement with 

Conindustria (the Venezuelan Confederation of Industries) through the approval in 2010 of 

a Bs 1 million program covering between 100 and 120 additional companies during the period 

2010-2013. This program, in force since 2003, has managed to foster the participation of 278 

companies up to 2010 with a contribution in excess of Bs 1 million. 

Commercial Banking 

Loans 





47

Global Corporate and Investment 

Banking / Loan Portfolio 


Corporate / Oil and Gas 60% 

Financial Institutions 40% 

Global Corporate and Investment Banking 

During 2010 Global Corporate and Investment Banking focused its strategy on the continuous 

improvement of quality of service for its clients around the world through the Corporate, Oil and 

Gas, and Financial Institutions segments at Mercantil Banco, Mercantil Commercebank and 

Mercantil’s other units. 

To maximize the organizational changes made, these have been complemented with actions 

aimed at improving client management, account plans and performance management, 

standardized everywhere. 

Both in Venezuela and the United States and in the different countries where Mercantil operates, 

Global Corporate and Investment Banking’s investments totaled Bs 11,815 million (US$ 2,747 

million). In terms of total deposits, Corporate and Investment Banking culminated the year with 

a total of Bs 11,630 million (US$ 2,704 million). 

At the close of 2010, Global Corporate and Investment Banking’s maintained commercial 

relations with more than 1,129 economic groups at Mercantil Banco Universal and over 462 

economic groups in the United States and Latin America served by Mercantil 

Commercebank, N.A. 

In 2010 the implementation of the segmented value proposal aimed at Corporate and Investment 

Banking’s clients continued its course, with product areas being strengthened to cover emerging 

needs through the Corporate Products, Corporate Finance and Capital Market units. 

Global Corporate and Investment Banking / 

Deposits (including investments sold under 

repurchased agreement) 



48 

Corporate / Oil and Gas 88% 

Financial Institutions 7% 

Public Sector 5%

Corporate Banking 

During 2010, the total deposits of Mercantil’s corporate clients in the different parts of the world 

where Corporate and Investment Banking provide their services, grew 19% to Bs 9,316 million at 

year end, of which 94% corresponds to Venezuelan Corporate Banking 

This enabled Venezuela’s Corporate Banking business to grow 16%, consistent with the high rate 

of growth of the market’s liquidity and a rational remuneration policy for those deposits. 

Corporate and Investment Banking’s loan portfolio in 2010 increased 66% (exchange rate impact) 

compared to 2009, closing the year at Bs 5,810 million (US$ 1,351 million). This growth was in 

keeping with the risk policies established by institution, given the existing market conditions, 

especially in the United States and Latin America at the end of 2010. 

Oil and Gas 

This segment’s activity was affected by the contraction of the oil GDP in Venezuela and falling 

oil prices. The oil sector’s loan portfolio totaled Bs 1,295 million (US$ 301 million) at the close of 

2010, which reflects 16% year-on-year growth. 

The sector’s deposits in Mercantil amounted to Bs 989 million (US$ 230 million), which represents 

a 45% reduction in US$ compared with the previous year. 

Financial Institutions and Institutional Relations 

Within the global financial environment, the Financial Institutions and International Relations 

segment Unit handled relations with correspondents in keeping with the risk parameters of 

Mercantil Servicios Financieros. In Venezuela the Unit maintained better volumes of assets and 

liabilities of Bs 131 million and Bs 702 million respectively, emphasizing cross-selling of products 

and services to insurance companies, banks and diplomatic organizations. 

Activity in the Latin American region focused on strategically increasing our level of investment, 

always in line with the risk perception of these markets. This effort led to the closure of US$ 1,066 

million in loans, which represents 14% growth compared to 2009 while also maintaining 

impeccable loan portfolio ratios. 

Management was able to maintain important credit facilities in the case of Mercantil Services 

Financieros’ legal vehicles around the world, enabling it to continue to fully meet all its clients’ 

requirements with respect to foreign trade operations. 

The International Relations Unit also held seminars and conference for Mercantil’s customers 

and officers to help pinpoint opportunities and threats for their business and activities. 

Public Sector 

The Public Sector Unit focused its efforts during 2010 on optimizing the public sector’s client 

portfolio. This led to a reorganization that amounted to the optimization of relations with the 

client portfolio already traditionally handled by this segment. 

During 2010 emphasis was placed on automating the processes of State companies and 


49

institutions which resulted in a preference for electronic channels which benefited the parties by 

reducing the operating risks associated with the volumes handled and substantially lowering the 

transaction costs associated with these clients, all of which increased profitability per client. 

At the close of 2010, Mercantil Banco Universal’s Public Sector Deposits amounted to Bs 555 

million, of which 1.4 % were accounted for by the institution’s total deposits and a 1.0% market 

share by government deposits in the Venezuelan financial system. 

With that level of penetration, Mercantil Banco Universal now serves more than 93 public 

administration and state institutions with a wide range of products, such as payroll services and 

payments to suppliers, domestic tax collection, investment trust funds, management and 

employee benefit trust funds. 

Corporate Finance and Capital Market 

Through the Mercantil Merinvest subsidiary, Mercantil’s Corporate Finance and Capital Market 

sector remained active in the area of fixed-income investments in the primary market where 

volumes were lower during 2010. 

Mercantil Servicios Financieros continued to receive support for the restructuring of its issues of 

short and long-term fixed income securities. The Institution’s requirements for financial advice, 

particularly management of the Share Repurchase Program were also met. 

Corporate Products 

The Corporate Products Unit continues to focus its efforts on providing a more efficient 

service, bring down costs and reduce operating risks, permanently striving to deliver a 

personalized service that sets us apart from the competition. 

The Deposit Products Unit continued with its efforts to implement the strategy designed to 

encourage customers to use electronic channels. A campaign was carried out in conjunction 

with Corporate Customer Service Unit and the business segments to automate clients’ 

transactions by introducing products offered by Mercantil’s Business Online Banking 

platform, achieving its goal 100%. The HR strategy decided on in 2009 was also executed. 


50

This made the team more consolidated, made the provision of the service more efficient and 

increased the profitability of business relationships. The Deposit Products Unit continued 

with its strategy to cross-sell products and services in the portfolios, introducing 809 new 

products and managing to increase the rate of cross-selling to 2.85 deposit products per client. 

During 2010, Mercantil continued to be a benchmark institution for Venezuelan private 

banking in terms of foreign trade. Once again through the Foreign Exchange Commission, 

Cadivi, was ranked as the country’s top foreign exchange operator: at the close of November, 

according to the latest figures available, the Bank’s participation was 19%, with three 

percentage points of advantage over our closest competitor. 

The Corporate Products Unit maintained the strategy defined by the Institution regarding 

its participation in events and sponsorship of companies in the segment, providing support 

in essential areas to strengthen Corporate Social Responsibility. The Ideas Competition was 

held again in 2010, emphasizing Mercantil’s commitment to the country’s entrepreneurial 

culture and the Unit coordinated its organization and development and Mercantil’s 

involvement in Innovex, Capital en Tecnología. 


51

Private Banking and Wealth Management 

Private Banking and Wealth Management focused its efforts on innovation in 2010 in order to 

increase the quality of service for customers and facilitate their access to Wealth Management 

products characterized by value differentiation to meet the demands of a changing environment. 

This work centered on seeking comfortable options for our customers, incorporating access to 

more Mercantil electronic channels with high levels of security and reliability. The year was also 

characterized by the smooth flow of electronic communication with clients, which simplified 

process and service times. 

Private Banking and Wealth Management is made up of the Private Banking segments and the 

Trust Fund, Mutual Funds and Brokerage businesses in Venezuela, the USA and Switzerland and 

offers clients a broad spectrum of options to satisfy their financial needs 

In Venezuela, the Securities Market underwent a major transformation from the legal point of 

view in 2010. Against this new scenario the Mercantil Securities Account (Cuenta de Valores 

Mercantil) was created as the gateway to public debt securities through Mercantil, C.A., Banco 

Universal, which has enabled clients to participate in the primary and secondary market and to 

carry out operations through the new transaction systems with securities in foreign currency 

established by the Venezuelan Central Bank (SITME and SICOTME). The Mercantil Securities 

Account offers clients the peace of mind that goes with operating strictly according to 

Venezuelan regulations, backed by a sound technological platform, keeping in contact with clients 

through communicational and operational channels such as the network of offices, and telephone 

and online banking. 

One of the main developments during 2010 was the consolidation of the Custody Management 

service offered to clients who hold securities in Mercantil. 

Through the new services offered to clients, Mercantil has again consolidated its position as a 

leader in the Venezuelan market, generating value for its clients through products and services 

adapted to the new and changing needs of the environment. 

Brokerage and Advisory services in the United States are offered through Mercantil 

Commercebank Investment Services, Inc. (MCIS), a subsidiary of Mercantil Commercebank, N.A. 

MCIS clients can buy, sell securities and investment products in multiple markets and currencies 

and keep them in custody. 

During 2010, MCIS increase the total assets of private, personal and commercial banking clients 

by 30%. From the business point of view, MCIS attained its income-from-services goal. One of the 

achievements during the period was the launch and migration of clients to automatically 

rebalanced advised portfolios. 


52

In Venezuela, Mercantil Servicios de Inversión offers a managed portfolio service that underwent 

20.8% year-on-year growth in 2010. 

The mutual fund Portafolio de Inversión Renta Fija Fondo Mutual, managed by Mercantil 

Sociedad Administradora de Entidades de Inversión Colectiva, maintains its position as the 

mutual fund leader in Venezuela. At the close of 2010 it had Bs 515.96 million in assets and a 

customer base of 150,576, reflecting 36.4% and 9.3% growth respectively. Plan Crecer 

Mercantil’s assets, which is based on the programmed acquisition of investment units, grew 

46.7% and its customer base 13.7%. 

Trust services are available to clients in Venezuela through Mercantil Banco Universal, and in the 

United States through Mercantil Commercebank Trust Company, N.A., (MCTC), a fiduciary bank 

that is regulated and supervised by the Office of the Comptroller of the Currency (OCC). 

In 2010 Fideicomiso de Mercantil Banco Universal incorporated all the employee benefit clients 

under the self-management system, which facilitates the trust fund application process for users 

and reduces response time. 

At the close of 2010, Fideicomiso de Mercantil Banco Universal managed Bs 8,421 million in 

assets, which represented a year-on-year reduction of 3.65%, while remaining Venezuela’s leading 

private fiduciary trust. Achievements in 2010 include renewal of the ISO 9001 certification, 

standardization of processes and the simplification of the technological platforms, which means 

a better quality of service and faster response times. The importance of maintaining a healthy 

portfolio was emphasized and stable behavior was achieved during the year. 

In the United States, MCTC provides financial management services to safeguard and develop its 

clients’ equity through fiduciary products and tailor-made investment strategies. It has a range 

of possible solutions in many countries and a multilingual staff. 

In 2010 MCTC continued its growth in terms of assets and volume of clients. At the end of the 

year it reported 39% managed asset growth compared with December 2009 and increased its 

customer base by 18%. 


53

Finance 

During 2010 Mercantil’s Treasury focused mainly on managing the risk factors in the market, 

especially interest and liquidity risk, taking into account market conditions and the 

vulnerability of global banking. The economic and financial environment showed signs of 

improving, through the different programs implemented by the central banks, increasing 

investors confidence levels. 

As of the third quarter, liquidity surpluses in Venezuela’s financial system grew, basically due 

to the faster rate of public spending and the Central Bank’s monetary policies. Lending and 

deposit rates remained stable during the year, without any significant changes being 

introduced by the Regulator. In the Venezuelan money market, the Mercantil Banco Universal 

subsidiary maintained its active participation through interbank operations and absorption 

instruments offered by the Central Bank of Venezuela. 

During the second half of the year, the Ministry of Economics and Finance resumed public 

auctions of 91-day Treasury Bills. The National Office of Public Credit announced the Treasury 

National Public Debt Program through auctions that included Variable and Fixed Rate Bonds 

(Vebonos and TIFs). Mercantil Banco Universal played an active part in the weekly auctions 

held and as a market maker in the secondary market for debt securities. By year end, these 

securities were yielding slightly higher returns, in line with the market trend. 

Fixed Interest Rate Securities maturing at 1 year, with an initial annual yield of 12.36%, reached 

12.56% at year end, and TIFs maturing at 3-years, yielded 13.75%, reaching 15.80% per annum 

in December 2010. It also actively participated in the emerging markets’ international 

securities market, mainly in Venezuelan government bonds, through its Mercantil Bank 

(Panama) subsidiary. During the year the Ministry held one auction of bolivar-denominated 

bonds. Mercantil participated in these processes mainly as an intermediary for its clients 

through the Venezuelan subsidiaries mentioned. During 2010 several issues of bolivardenominated 

securities were launched, amounting to US$ 6 billion. In August Sovereign Bonds 

(maturing in 2022) were issued for US$ 3 billion and another US$ 3 billion in October 

corresponding to PDVSA bonds (maturing in 2017). Mercantil participated actively in these 

processes as an intermediary for its clients. 

During 2010 governments and central banks around the world undertook to offer incentives 

to speed up the financial markets’ recovery processes. In the USA particularly, interest rates 

continued their downward trend, which created a very favorable environment for refinancing. 


54

Excess Liquidity and Interbank Market 

39,000 

36,000 

33,000 

30,000 

27,000 

24,000 

21,000 

18,000 

15,000 

Jan-10 

Feb-10 

Mar-10 

Apr-10 

May-10 

Jun-10 

Excess on Reserve Requirements 

Interbank rate 

Jul-10 

Aug-10 

Sep-10 

Oct-10 

Nov-10 


55 

Dec-10 

18% 

16% 

14% 

12% 

10% 

8% 

6% 

4% 

2% 

0% 

The Federal Reserve Bank (FRB) maintained its interest rate unchanged at 0.25% and 

announced new plans to buy U.S. securities in order to contain possible increases in longterm 

interest rates. The credit risk perception continues to improve during 2010. The five-year 

swap spread (the indicator used to measure credit conditions in general) fell 16 basis points 

at year end, which was considerably lower than the 120 basis points maximum in September 

2008. The activity related to corporate debt issues increased during 2010, new investment 

grade and high-yield bonds totaled US$ 962 and US$ 352 billion respectively. This figure 

reflects the reactivation of the debt market, particularly in high-yielding bonds. Mergers and 

acquisitions were also reactivated in 2010 and exceeded the value of transactions in 2009 by 

almost one trillion dollars. 

In the real estate market, house prices tended to stabilize in the first half of 2010, when the 

government offered fiscal credits to home buyers. The average rate on 30-year fixed-rate 

mortgages reached its minimum level in 2010, almost 4%. The process can be explained by 

foreclosures by the Federal Reserve. The mortgage foreclosure process was one of the more 

significant topics in 2010. Most of the largest banks halted their mortgage foreclosures due 

to the failure of the approval process.

Federal Reserve Interest Rates and US Treasury Bonds 

4. 5% 

4. 0% 

3. 5% 

3. 0% 

2. 5% 

2. 0% 

1. 5% 

1. 0% 

0. 5% 

0. 0% 

Jan-09 

Feb-09 

Mar-09 

Apr-09 

May-09 

Treasury 2 years* 

Treasury 10 years* 

Fed Funds** 

Jun-09 

Jul-09 

Aug-09 

Sep-09 

Oct-09 

Nov-09 

Private and institutional investors were attracted to the countries with the most favorable 

interest rate expectations. According to the International Monetary Fund (IMF), between the 

height of the financial crisis of 2009 and the third quarter of 2010, the emerging economies 

have accumulated almost US$ 1.2 trillion in currency reserves. 

In the case of Europe, the assets issued by Portugal, Italy, Ireland, Greece and Spain (PIIGS) 

were subject to price volatility owing to fiscal difficulties and the challenges those countries 

face on their road to recovery. In the case of raw materials, price levels rose during 2010, 

driven especially by demand from China and other growing economies. 

Dec-09 

Jan-10 

Feb-10 

Mar-10 

Apr-10 

May-10 

Jun-10 

Jul-10 


56 

Aug-10 

Sep-10 

Oct-10 

Nov-10 

Dec-10 

*Treasury 2 years and 10 years: US Treasury bonds, 2 and 10 years maturity 

**Fed Funds: Federal Reserve interest rates

Available for Sale and Held to maturity Investments 

Commercebank, NA 

Thousand of US$ 

December 2009 

December 2010 

Average 2010 

1,400,000 

1,200,000 

1,000,000 

800,000 

600,000 

400,000 

200,000 

0 

US Agencies 

Guaranteed 

Government 

Sponsored 

Enterprises 

It was in such an environment that Mercantil Commercebank had to handle the interest rate 

risk and the liquidity risk for the balance sheet. During 2010, the Treasury had its own strategy 

for diversifying the investment portfolio, increasing its positions with different Corporate 

Bond issuers. This process has been undertaken through specific credit facilities and 

investment programs. 

The investment portfolio has been managed with low levels of credit risk. The securities issued 

or guaranteed by the U.S. government constitute most of the portfolio, establishing strategies 

to optimize portfolio yield in line with the limits set by the Asset and Liability Management 

Committee (ALCO). 

Short Term 

Investments 

Other 

Investments 


57 

Private 

Mortgages

Luis Alfredo LÓPEZ MÉNDEZ 

Carretera vieja La Guaira-Caracas, 1943 

Oil on canvas 

52.7 x 60.2 cm 

Caracas, 1901-1996 

Studied at the Caracas Academy of Fine Arts. From a very early age took part in the activities of the Fine 

Arts Circle. In 1936, after a long absence, returned to Venezuela. From then on was immersed in the 

country’s cultural activities, involved in teaching, administrative work and policy making at institutions 

such as the School of Plastic and Applied Arts, the Museum of Fine Arts and the Venezuelan Congress. 

Awarded the National Prize for Painting in 1943.

Quality of Service and 

Operating Efficiency 

The distribution channels of Mercantil 

Servicios Financieros through Mercantil Banco and Mercantil Commercebank as the financial 

vehicles, at the close of 2010 are made up of 293 Banking Centers, 1,344 ATMs, 230 Call Center 

Operators, 473 IVR ports and Personal and Business Online Banking’s services. 

Major Projects in the field of operational efficiency and 

enhanced quality at Mercantil Servicios Financieros 

In 2010, Mercantil Banco Universal continued with the process to adapt debit and credit cards, 

ATMs and points of sale to chip technology which offers advanced security benefits for 

customers, protecting them from fraud when carrying out transactions using devices that have 

been adapted to the new chip technology. 

At year end, 1.3 million customers had updated their debit cards which means that more than 

82% of the transactions incorporate chip technology and over 61% of them are carried out using 

plastic and devices adapted to this technology. 

New online banking functionalities were developed during 2010 to facilitate interaction by 

customers with the Foreign Exchange Commission, Cadivi. Customers can now book an 

appointment to hand in applications for travel currency at a branch of the bank. 

There is also an option to place orders to trade securities bought at auction, to speed up the 

process. Online Business Banking also includes a new option for submitting invoices and 

collecting payments which shortens invoicing cycles for clients. 

Mercantil Online Personal Banking also incorporates a module for configuring the desired 

method for sending communications to clients interested in hearing about the Bank’s new 

promotions and offers. 

To support the customer relationship management (CRM) functionalities, Mercantil Banco 

Universal is expanding the channels for accessing the “My Messages” section, giving clients 

access to personalized communications through Mercantil Call Center’s IVR system and via 

Mercantil Mobile Internet. 


59

Another option was included in Mercantil Call Center’s IVR system to enable clients to transfer 

funds from their accounts at Mercantil to their Cash Cards and Mercantil Mobile Payment 

(Mercantil Móvil Pago), facilitating the use of these instruments. The product and services 

section was also updated to encourage clients to obtain information on these on line. 

To offer a better service to travel agencies, at the end of 2010 a new option was added to the 

Mercantil Call Center system for requesting fast and secure credit card authorizations for a 

particular airline. 

In reference to the Mercantil Commercebank subsidiary, one of the major projects introduced 

in 2010 was the implementation of CD notifications via personal online banking. Through this 

service our clients will receive secure electronic notifications of CDs. 

The third phase of the “Global Account Opening” process was launched for international clients 

and incorporates an option to register for online personal banking, electronic statements and 

telephone banking during the account opening. 

A number of e-business solutions were implemented in 2010, including a self-management 

functionality to enable clients to trade their bonds on the capital market. An additional 

functionality was expected to be rolled out during the first quarter of 2011 to allow customers 

to open a second account and update information via personal online banking. 

Personal and Business Online Banking implemented an option for companies and individuals to 

receive payments for pre-registered invoices. The strategy promotes the widespread use of this 

high value financial collection service by tax withholding agents, simplifying the collection 

process and giving them faster access to their funds. 


60

Manuel CABRÉ 

Ávila desde San Bernardino, around 1940 

Oil on canvas 

49.4 x 78.4 cm

Manuel CABRÉ 

Caneyes y Valle de San Cristóbal, 1942 

Oil on canvas 

65 x 108 cm

Human Resources 

Many of the activities in 2010 were aimed at 

improving productivity and making the labor expenses process more efficient; maintaining 

and strengthening the working environment, the quality of life of our associates and 

compliance with labor standards. Use of the new administrative platforms and the self-service 

model was consolidated in Venezuela during the year. 

At December 31, 2010, Mercantil Servicios Financieros has 9,034 employees (9,833 at the close 

of 2009), 91% of whom work for Mercantil’s companies in Venezuela and 9% abroad (most of 

them for Mercantil Commercebank in the United States). 

During the year Mercantil Banco Universal and Mercantil Seguros implemented the Collective 

Bargaining Agreements signed in 2009. To strengthen the quality of life of our associates, 

various institutional seminars, health seminars, school fairs, and recreational and sports 

activities for workers and their families were organized Also within the framework of the 

Institution’s 85th anniversary, a walk was organized in Caracas in which more than 2000 

workers and their relatives participated. Lapel pins were awarded for years of service to more 

than 400 workers with 35, 30, 25 and 20 years of service with the Company. In response to the 

climate problems towards the end of 2010, a Special Aid Plan was developed for workers 

affected by the prolonged and heavy rainfall. 

Mercantil’s training programs reached a consolidated level of 34,000 workers in their 

different categories, with emphasis on compliance, technologies and technical training. More 

than 9000 workers took part in different training events organized during the year. 

A new edition of the Organizational Climate survey was conducted with the support of the 

prestigious Great Place to Work Institute, improving the historic level of participation. In 

2010 more than 85% of the employees of Mercantil Servicios Financieros and its subsidiaries 

consider that Mercantil is a great place to work. This year’s results enabled Mercantil Banco 

and Mercantil Seguros to be ranked for the sixth and fifth year running respectively among 

the best companies to work for in Venezuela. 


63

Bernardo MONSANTO 

Paisaje, 1961 


33 x 86 cm 

Caracas, 1896-1968 

He began his art studies with his brother Antonio Edmundo Monsanto and with members of the Fine Arts 

Society. He was a professor and director at the Academy of Fine and Applied Arts of Caracas, as well as 

professor of Architectural History at the University of Central Venezuela. In 1945, he received the Second 

Award in Painting at the IV Annual Exhibition of Venezuelan Art and subsequently received the Federico 

Brandt Award at the same event the following year.

Risk Management 

Good risk management is key to Mercantil’s 

competitive strategy and its ability to generate value. In 2010, anticipating the impact of the 

crisis in global markets, Mercantil’s Risk Management Unit took various steps to mitigate its 

effect on its subsidiaries different portfolios. 

During 2010, Mercantil intensified its effort to strengthen the group’s risk culture throughout 

the organization, aligning its action and behavior to the strategic objectives set by 

consolidating their corporate values, clearly understanding risk, training staff, developing 

advanced internal models and tools, process automation and IT implementation. 


65

Credit Risk 

Breakdown of Credit Risk by Country and Type of Customer 

25% 

20% 

15% 

10% 

5% 

0% 

Other 

Companies 

Venezuela 

USA 

Other Countries 

Governments 

Individuals 

Credit risk management is conceived globally at Mercantil and its function responds to the 

common principles and organizational criteria of its different subsidiaries. A series of credit 

policies, procedures and management tools is available for developing good global risk 

management; these are constantly evolving to guarantee a better and more sophisticated 

process. 

The progress achieved in credit risk management at Mercantil was instrumental in keeping loan 

portfolio growth at an acceptable risk level. The institution’s credit risk exposure during 2010 

was Bs 55.4 billion, which is 61.2% more than the Bs 34.4 billion registered at the close of 2009. 

The following figure illustrates how total credit risk exposure (including direct, contingent and 

issuer risk) is distributed by country and type of client, and shows the breakdown of credit risk 

as of December 2010. 

BCV 

Large 

Corporations 

Mercantil Servicios Financieros’ global presence is concentrated in Venezuela with 58.5% of its 

credit risk exposure, followed by the USA with 30.4%, and other countries with 11%. 

The main variations compared to 2009 are observed in the U.S. risk which grew 52.8%, mainly in 

the Government portfolio with 67.5% and Other Companies with 58%, as a result of the effect of 

the devaluation of the bolivar, which in turn had the effect of reducing Venezuela’s share of the 

risk by 20.9%. 


66 

Financial 

USA Government 

Sponsored Agencies 

Real Estate 

Loans

Distribution of Mercantil's loan portfolio by economic activity 

Activity 

Electricity, Gas and Water 

Mining Explotation 

and Hidrocarbons 

Transportation, Warehousing 

and Telecommunications 

Social and Personal 

Community Servicies 

Non Specified Activities 

Manufacturing Industries 

Construction 

Agriculture, Fishing and Forestry 

Financial Institutions and Insurance 

Trade, Restaurants and Hotels 

0.2% 

1.4% 

2.2% 

The distribution of Mercantil’s loan portfolio by clients’ economic activity is shown below: 

4.6% 

5.6% 

8.0% 

9.8% 

10.7% 


67 

25.8% 

31.8% 

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 

An analysis of Mercantil’s loan portfolio by economic activity shows that 78.1% of the loan 

portfolio is distributed as follows: Wholesale and retail trade, Restaurants and Hotels, 31.8%; 

Financial Establishments, Insurance Companies and Others, 25.8%; Agriculture, Forestry, Fishing 

and Hunting, 10.7%, and Construction, 9.8%. 

At the close of 2010, the 20 largest debtors represent 8.3% of total loan portfolio.

Market Risk 

An institution is subject to market risk when the market conditions deteriorate and affect the 

liquidity and value of the financial instruments in its investment portfolios or contingent 

positions, resulting in a loss for that institution. There are two basic types of market risk: price risk 

and liquidity risk. 

Each market factor and its effect on the organization’s risk profile is measured daily. To accomplish 

this, Mercantil has a technological infrastructure and early warning systems. Treasury employs 

this technology to monitor and track market risk. It then produces a series of reports for 

Treasury’s risk-taking units and the corresponding management levels. 

Mercantil’s analyses use different methodologies to measure market risk: Value at Risk (VaR), 

Financial Margin Sensitivity due to interest rate changes (Repricing Gap, Risk Gains), Liquidity 

Gap and a series of other effective risk management measures and ratios. 

To complement the VaR, simulations are run, adding stress situations based on historic extreme 

market conditions to estimate Treasury’s potential loss if market conditions deteriorate. 

Market Risk in Trading Activities in 2010 

Mercantil’s trading activities were carried out in the Venezuelan fixed-income securities market 

denominated in bolivars and in fixed-income securities in emerging markets, the latter made up 

of Venezuelan government debt securities. 

Trading in the bolivar-denominated fixed-income securities market 

Fixed income securities became less volatile in 2010 with maintenance of the debt issue program 

in national and foreign currency in the primary market, at Bs 40,938 million (Bs 5,150 million in 

Treasury Bills, and Bs 35,788 million in government bonds at a fixed or variable coupon rate 

depending on Treasury Bill yield). Therefore the risk of those securities measured in terms of 

volatility went from an annual average of 3.91% in 2009 to 1.15% at the close of 2010, with less 

activity in the secondary market. The average annual yield of local bonds maturing at 4 years 

remained at an annual average of around 15.4% in 2010, versus 14.0% in 2009. 

Global trading activity on the bolivar-denominated fixed-income securities market maintained 

an average VaR of Bs 153.8 thousand in 2010 (maximum Bs 263.9 thousand and minimum Bs 51.8 

thousand) versus an average VaR of Bs 384.2 thousand in 2009 (maximum Bs 1.62 billion and 

minimum Bs 54.0 thousand). 


68

Trading in fixed-income securities in emerging markets 

As far as the sovereign debt in foreign currency is concerned, Venezuela issued US$ 3 billion in 

government bonds maturing in 2022, while PDVSA issued US$ 3 billion in amortizable bonds 

maturing in 2017. During 2010 the price of Venezuelan crude was less volatile than in 2009 (3.42% 

versus 5.52% in 2009), with an average price of US$ 71.63/bbl and a historic maximum of 

US$ 84.83/bbl in December. The greatest oil price stability translated into less volatility for bond 

yields in Venezuela, with an average bond yield of 13.74% in 2010 versus 14.40% in 2009. The 

country risk rating remains Stable according to rating agencies Moody’s, Standard & Poor’s and 

Fitch, which helped to push prices up. 

Average VaR for this activity was US$ 1.04 billion in 2010 (maximum US$ 9,077.8 thousand, 

minimum US$ 2.5 thousand), versus US$ 120.0 thousand in 2009, with a maximum of US$ 2,111.1 

thousand and a minimum of US$ 0.6 thousand. This significant increase can largely be explained 

by the auctions of US$ 6 billion worth of bonds as mentioned above. 

Market Risk in Positioning Activities in 2010 

The average VaR of Mercantil’s positioning activities (98% confidence), in aggregate terms, for 

the consolidated investment portfolio classified as available for sale was Bs 79,453 thousand 

(US$ 18.5 million) in 2010, compared with Bs 47,064.7 thousand (US$ 21.9 million) in 2009 . The 

reason for the increase in average VaR is that the VaR of fixed income positions in bolivars 

quadrupled as a result of Venezuelan public debt issues in local currency, while the valuation of 

the US$ positions was affected by the devaluation of the exchange rate from Bs/US$ 2.15 in 2009 

to Bs/US$ 4.30 in 2010. In 2010 VaR accounted for 0.8% of the total position in securities 

maintained on the balance sheet as available for sale, while this ratio reached 0.5% in 2009. 

Price Risk Positions of Interest Rate Mismatch 

The price risk involved in the mismatches between interest rates is caused by the assets and 

liabilities duration gap. When adverse changes occur in the interest rate market this gap can 

impact the institution’s financial margin. To manage this risk, Mercantil quantifies the assets 

and liabilities duration gap to take reflect the sensitivity of the financial margin to changes 

in interest rates over a 12 month period (in the Venezuelan market 100, 200, 300, 500 and 

1000 basis points are used; while in the US market it is calculated using 100 and 200 basis 

points), and then measures and compares them against the interest rate limits designed. The 

sensitivity of the financial margin to changes interest rates caused by their historic volatility, 

the economic value of the capital and an analysis of the duration are also quantified. 

Liquidity Risk 

Liquidity risk depends on the likelihood that a company will be unable to deliver funds or 

financial assets, as agreed with a client or financial market counterpart, at any time or in any 

place or currency. This risk is one of the major ones a financial institution could face in its 

intermediation activity because it can trigger a host of different risks, one of the worst being 

reputational (or franchise) risk. For Mercantil Servicios Financieros and its subsidiaries, 

managing and measuring liquidity risk is considered a priority within the organization’s global 

risk and business management. 


69

Treasury is responsible for liquidity risk, which follows the liquidity policy parameters for 

organizations outlined by the Board of Directors, through the Board of Directors Risk 

Committee, the Global Risk Committee and the Assets and Liabilities Committee. An 

organization’s global liquidity risk environment is monitored periodically and is the outcome 

of the liquidity management process exercised by the Treasury in each of the financial vehicles 

in which it participates. 

The Assets and Liabilities Committee meets monthly and must make decisions on the liquidity 

and structure of the financial balance sheet by presenting the evolution and trends of the 

main factors that affect liquidity, measured by a series of tools and reports for optimizing the 

management of assets and liabilities (analysis of liquid assets, short, medium and long-term 

liquidity gap, liquidity indicators; balance sheet structure (evolution of balance sheet items), 

among others. 

These analyses and methodologies are complemented with reports known as Contingency 

Funding Plans. These are used to evaluate an institution’s ability to meet extreme deposit 

withdrawals which are modeled using liquidity studies of the institution and the market, to 

establish primary and secondary reserve requirements and other sources of liquidity to meet 

potential withdrawals. 

Operational Risk 

Mercantil sees Operational Risk management as fundamental in attaining its objectives and 

continues to use an integrated approach to include the qualitative and quantitative aspects that 

have characterized it. 

In view of today’s dynamic financial environment and the different internal and external factors 

behind this type of risk, the Institution’s capacity to meet stakeholders’ expectations and comply 

with the demands of the regulators is constantly put to the test. Hence the identification and 

preventive analysis of risks have strengthened the comprehensive approach through corrective 

action taken to mitigate the weaknesses detected. 

During the year the Organization continued to identify and assess risks detected in its critical 

processes and provide the information necessary for decision-making, with emphasis on the 

need to follow up action plans for major risk events to minimize their occurrence. 

The comparative study of the behavior of operational risk events in time is an example of how this 

risk is managed on an ongoing basis. Using information gathered on events around the world, 

risks are quantified and scenarios analysed to help calculate economic capital, set objectives, 

and control expected losses. 

To help mitigate high-impact risks according to the needs of the environment, the Insurance 

Policy Program was updated and strengthened and the technological aspect of the Business 

Continuity Program was reinforced. 

All the companies in the financial group continued to strengthen the management side of its 

operational risk culture. 


70

Operational risk management in non-banking activities 

In 2010 the priority was always to assess business processes with high volumes of operations 

and a high degree of inherent exposure to fraud, interruptions in operations and faults in 

executing activities. Assessment of risks associated with the new electronic trading platforms 

and operations aimed at clients and providers continued. The business continuity plans of 

the different units were updated.

Alberto EGEA LÓPEZ 

Ávila, 1942 

Oil on canvas 

51 x 61.2 cm 

Caracas, 1901 - Tenerife, Spain, 1958 

Studied at the Caracas Academy of Fine Arts and the National Academy of New York. While working in 

the United States as a painter he was also an advertising designer for various magazines. In New York 

produced his most important works, such as his painting of the urban landscape of the “Big Apple”. His 

return to Venezuela in 1935 defined a change in his style of work which became more luminous.

Performance of Subsidiaries 

Equity 

Main Activity 

Main Subsidiaries 

(In thousand of Bs) (1) 

Total Assets 

Investments 


Deposits 

Net Income 

for the Year 

(In millions of US$) (2) 

Total Assets 

Investments 


Deposits 

Net Income 

for the Year 

Mercantil, C.A. 

Banco Universal 

Bs 5,003,023 

US$ (2) 1,166 

Venezuelan 

Universal 

Bank 

46,170,343 

7,703,230 

26,703,385 

39,218,115 

1,630,359 

10,764 

1,796 

6,225 

9,143 

455 

Mercantil’s global business includes the Company’s operations in Venezuela and abroad. Its 

management results are presented in the Consolidated Financial Statements Review chapter. 

A summary of Mercantil’s operations carried out through each subsidiary at December 31, 

2010, and prepared in accordance with the accounting standards of the National Securities 

Superintendency (SNV) is presented below. 

Mercantil Servicios Financieros (1) 

(In thousands of Bs and millons of US$, except percentages (2) ) 

as of December 31, 2010 

Shareholders’ Equity 8,513.301 

Shareholders’ Equity US$ (2) 1,985 

Mercantil 

Commercebank 

Florida BanCorp. 

Bs 2,270,940 

US$ (2) 529 

Commercial Bank, 

Brokerage and 

Trust 

Services 

in the USA 

Mercantil 

Commercebank 

N.A. 

Mercantil 

Commercebank 

Investment 

Services (MCIS) 

Mercantil 

Commercebank 

Trust Company 

(MCTC) 

27,532,854 

9,897,583 

15,877,988 

21,362,617 

(34,588) 

6,419 

2,308 

3,702 

4,981 

(7) 

Holding 

Mercantil 

Internacional 

Bs 585,859 

US$ (2) 137 

International 

Bank 

Mercantil Bank 

(Schweiz), AG. 

(Switzerland) 


and Trust Limited 

(Cayman) 

(Cayman Islands) 


Curaçao NV 

(Curaçao) 


(Panama) S.A. 

2,195,370 

1,525,490 

346,733 

1,786,181 

144,285 

512 

356 

81 

416 

40 


73 

Mercantil 

Seguros, C.A. 

Bs 870,657 

US$ (2) 203 

Insurance in 

Venezuela 

3,192,925 

2,306,862 

0 

0 

408,933 

744 

538 

0 

0 

114 

Mercantil 

Merinvest, C.A. 

Bs 112,317 

US$ (2) 26 

Investment 

Banking, Mutual 

Funds, Trading & 

Brokerage in 

Venezuela 

Mercantil Merinvest 

Casa de Bolsa, C.A. 

Mercantil 

Servicios de 

Inversión, C.A. 

Mercantil 

Sociedad 

Administradora 

de Entidades 

de Inversión 

Colectiva, C.A. 

Other Non 

Financial 

Businesses 

221,584 

92,100 

0 

0 

Number of Employees 

6,685 

746 

41 

1,487 

26 

49 

9,034 

(1) In accordance with the standards of the National Securities Superintendency. Figures net of elimination resulting from the consolidation process 

(2) Dollar figures are given for reference only; the balance sheet is converted at the exchange rate at the end of the period (Bs 4.2893/US$ and the income statement at the average exchange rate for the period 

(Bs 3.5827/US$). Exchange control has been in place in Venezuela since February 2003. 

69,887 

66,465 

0 

0 

42,560 

16 

15 

0 

0 

12 

Others 

Bs 29,094 

US$ (2) 7 

(15,236) 

52 

21 

0 

0 

(7) 

Total 

79,382,962 

21,591,730 

42,928,106 

62,366,913 

2,176,313 

18,507 

5,034 

10,008 

14,540 

607

Comments and a summary of the financial statements of Mercantil’s main subsidiaries are 

presented below, based on the accounting standards applicable to each of them, which explains why 

they differ from the consolidated information presented according to the accounting standards of 

the National Securities Superintendency. Mercantil C.A., Banco Universal, in accordance with the 

standards of the Superintendency of Banking Sector Institutions; Mercantil Commercebank Florida 

Bancorp, in accordance with US GAAP; Mercantil Seguros, C.A., in accordance with the 

Superintendency of Insurance Activity, and Mercantil Merinvest, C.A., in accordance with the 

standards of the National Securities Superintendency. 


Mercantil Banco Universal’s total assets grew Bs 9,661 million (26.4%) compared to December 

2009. During the year the net loan portfolio grew Bs 6,416 million (31.6%) and total deposits 

increased Bs 8,266 million (25.8%). Loan portfolio quality remains favorable, with a ratio of 

Past-due and Nonperforming Loans to Gross Loans of 0.9%, compared to 3.4% for the 

Venezuelan financial system as a whole. 

At December 31, 2010 the Mercantil Banco Universal subsidiary ranks fourth in the 

Venezuelan financial system in terms of Total Assets with an 11.4% market share. The leading 

institution has a 13.2% share and Venezuela’s four main banks account for 49.5% of the 

country’s financial system. Mercantil Banco Universal is Venezuela’s leading bank in terms of 

savings deposit with 20.1% of the market and the second in terms of investments sold under 

repurchase agreement, with a market share of 13.2%. It is also Venezuela's leading bank in 

terms of manufacturing loans and mortgages under the Mortgage Debtor Law (Ley Especial del 

Deudor Hipotecario), with market shares of 18.6% and 14.7% respectively. Mercantil Banco 

Universal ranks second in Venezuela’s financial system in terms of gross loans and agricultural 

loans, with 14.5% and 13.4% of those markets respectively. The Bank is Venezuela’s third 

largest in the tourism and microcredits sector, with market shares of 14.3% and 10.6% 

respectively. 

At of December 31, 2010 Investments in Securities are made as follows: Certificates of Deposit 

and other securities issued by the Venezuelan Central Bank with maturity under 30 days, 

41.4%; securities issued or guaranteed by the Venezuelan government, 51.0%; U.S. 

government-backed securities, 2.4%; securities issued by the Venezuelan and international 

private sector, 2.9%; U.S. government-backed agencies, 1.8%, and securities issued by other 

governments, 0.5%. 

Shareholders’ equity grew Bs 1,284 million (38.9%) year on year, reaching Bs 4,583 million at 

the close of 2010. This increase is composed mainly of Bs 1,361 million in accumulated net 

annual income; a Bs 343 million reduction in cash dividends paid out, a Bs 36 million reduction 


74

(1) Obtained from dividing shareholders equity minus goodwill’s 

amortizations by total assets minus Public Debt Securities. 

from recording available-for-sale investments at their fair market value, and Bs 302 million in 

exchange earning due to the change in the controlled exchange rate from Bs 2.1446/US$ to 

Bs 4.2893/US$, recorded in equity pursuant to instructions from the Superintendency of 

Banking Sector Institutions. 

The equity/assets ratio as of December 31, 2010 is 11.2% 1 (minimum requirement 8%) and the 

equity/risk-weighted assets, according to the standards of the Superintendency of Banking 

Sector Institutions is 17.6% (minimum requirement 12%). 

Net income in the first half of 2010 was Bs 1,361 million, reflecting a Bs 639 million (88.4%) 

year-on-year increase. This variation is due mainly to: 

• Bs 683 million (27.6%) year-on-year increase in net interest income compared to Bs 2,474 

million. This increase is mainly attributable to the increase in the rate of financial 

intermediation from 65.6% at December 31, 2009 to 69.2% at December 31, 2010. 

• Bs 210 million (44.0%) year-on-year increase in expenses for nonperforming loans and other 

accounts receivable, compared with Bs 477 million, resulting mainly from loan portfolio 

growth and higher provisions for the agricultural, commercial and construction sectors. 

• Bs 534 million in income from exchange differences due to the change in the exchange rate 

set by the Venezuelan Central Bank for the valuation of assets and liabilities in foreign 

currency from Bs 2.1446/US$ to Bs 4.2893/US$, except for TIIC dollar-linked bonds issued 

by the Venezuelan public sector whose rate of exchange remained at Bs 2.5935/US$ up to 

January 1, 2011, pursuant to the standards of the Superintendency of Banking Sector 

Institutions. 

• Bs 230 million (276.8%) increase in net earnings from the sale of investments in securities, 

as a result of trading in Venezuelan government securities. 

• Bs 175 million in net revenue from bank charges for services, 35.8% higher than at year end 

2009, due to a higher volume of operations during the period. 

• Operating Expenses rose Bs 598 million (32.5%) compared to 2009, mainly as a result of a 

Bs 282 million (172.3%) rise in expenditure on contributions to regulatory bodies due 

principally to growth of operations and the increase in the percentage payable to Fogade 

from 0.5% of total deposits in 2009 to 1.25% in 2010. The rest of the personnel and 

operating expenses varied Bs 316 million (18.9%) as follows: Bs 159 million (16.1%) in 

personnel expenses under the wage policy; Bs 15 million (13.4%) in maintenance expenses, 

and depreciation of property and equipment; Bs 20 million (152.9%) in insurance expenses; 

Bs 81 million (23.8%) in outsourced services such as securities transportation. Over the last 

12 months Venezuela registered 27.2% inflation. This variable has a significant impact on 

Mercantil Banco Universal’s operating costs. 


75

Mercantil Banco Universal, Consolidated 

Year Ended 


Total Assets 



Deposits 

Equity 

Net Earnings for the Year 

Historic figures presented in accordance with the National Securities Superintendency. 

(1) Dollar figures are given for reference purposes only; the balance sheet is converted at the exchange rate at the end of the period (Bs 4.2893/US$) and 

the income statement at the average exchange rate for the period (Bs 3.5827/US$). Exchange control has been in place in Venezuela since February 2003. 

76 


US$ (1) 

10,788 

1,717 

6,226 

9,391 

1,069 

380 

Mercantil Commercebank Florida BanCorp 

At December 31, 2010 Mercantil Commercebank Florida Bancorp registered US$ 6,487 million 

in total assets, a year-on-year increase of 8.1%. The investment portfolio totaled US$ 2,306 

million, similar to the figure at the close of December 2009. This is made up of instruments 

issued by the U.S. government or U.S. government-backed agencies, securities issued by the 

private sector and securities issued by the Venezuelan government, which account for 88.4%, 

10.8% and 0.8%, respectively. Net loans registered 13.8% year-on-year growth to US$ 3,697 

million. Total deposits at December 31, 2010 were US$ 4,715 million, representing 7.2% growth 

over the same period. 

The net results of Mercantil Commercebank Florida BanCorp improved significantly compared 

to 2009; the net negative result fell from US$ 31 to US$ 4 million in 2010. The net result of its 

main subsidiary Mercantil Commercebank, N.A. was US$ 1 million in 2010, compared to a net 

negative result of US$ 25.7 million in 2009. This improvement is mainly due to a US$ 59 million 

(45.0%), reduction in loan provisions compared to US$ 132 million in 2009. Nonperforming 

loans were down US$ 100 million (22.8%) in 2010. The past due loans ratio improved from 12.7% 

at the end of 2009 to 8.3% at the end of 2010, despite a reduction in the value of collateral on 

a segment of the loan portfolio which exceeded management’s estimates. Net interest income 

was down by US$ 16.7 million due to low interest rates and a US$ 14 million increase in tax 

expenditure. 

Mercantil Commercebank, N.A.’s main capital adequacy indicators are an equity/assets ratio 

of 9.3% and an equity/risk-weighted assets ratio of 18.1% in line with the standards of the Office 

of Comptroller of the Currency (OCC). This is more than double the regulatory equity required 

for a bank to be considered well-capitalized. 



bolivars 

46,270,966 

7,363,976 

26,703,385 

40,279,612 

4,583,203 

1,360,622 

2009 

bolivars 

36,609,791 

5,956,675 

20,287,426 

32,013,443 

3,299,517 

722,035 

2008 

bolivars 

30,181,479 

6,220,556 

15,338,403 

24,804,865 

2,708,877 

820,956

Mercantil Commercebank Florida Bancorp 

Consolidated 

Year Ended 


Total Assets 

Invesments in Securities 


Deposits 

Equity 


Mercantil Seguros 

In 2010, premium income grew 43.2% year on year to Bs 4,013 million, reflecting an outstanding 

sales effort. At the close of December 2010, Mercantil Seguros was the country’s second largest 

insurance company in terms of net collected premiums, with 11.5% of the insurance market. 

Total assets at December 31, 2010 were Bs 3,507 million, 54.9% more than at December 31, 2009. 

Shareholders’ equity was Bs 1,115 million, 61.2% more than at the close of 2009 which means that 

the Company has a margin of solvency that complies with the regulations in force. 

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. 

Guarantees and reserves total Bs 1,946 million (43.1% up on the previous year). 

At year end the Company’s investment portfolio totals Bs 3,025 million, 57.1% more than at 

December 31, 2009. Total investments representing technical reserves were Bs 2,741 million, 

63.5% higher than at December 31, 2009, with sufficient liquidity levels being maintained to 

diligently meet commitments with insured, insurance advisers and reinsurers. 

Net earned premiums for individual business lines grew 48.7%, from Bs 1,319 million in 2009 to 

Bs 1,961 million at December 31, 2010, represented mainly by the health and automobile 

businesses. 

The annual technical result2 at December 31, 2010 was Bs 124 million, with a combined operating 

ratio (COR) 3 of 96.2%. Net earnings in 2010 were Bs 406 million. Net earnings grew 102.3% 

compared to December 31, 2009, leveraged by positive investment income and the exchange 

rate differential. 

77 


US$ 

6,487 

2,306 

3,697 

4,715 

582 

(4) 


bolivars (1) 

27,823,102 

9,891,688 

15,859,665 

20,224,723 

2,496,934 

(13,521) 


2009 

bolivars (1) 

12,868,132 

4,990,797 

6,965,365 

9,435,191 

1,201,270 

(66,249) 

Figures according to the accounting principles generally accepted in the United States (US GAAP). 

(1) Figures in bolivars are given for reference purposes only; the balance sheet is converted at the exchange rate at the end of the period (Bs 4.2893/US$ 

versus Bs 2.1446/US$ at December 31, 2009 and 2008) and the income statement at the average exchange rate for the period (Bs 3.5827/US$ versus Bs 

2.1446/US$ at December 31, 2009 and 2008). Exchange control has been in place in Venezuela since February 2003. 

2 Technical result = Earned Premiums Received - Claims Incurred - Commissions - Administrative expenses 

3 Combined Operating Ratio (COR) = Claims + Commissions + Administrative expenses / Premiums 

2008 

bolivars (1) 

12,925,219 

5,617,216 

6,508,484 

9,351,927 

980,788 

(8,205)

Mercantil Seguros, C.A. 

Year Ended 


Total Assets 


Equity 


Net Premiums 

78 


US$ (1) 

818 

705 

260 

113 

936 

Other banks abroad 

In December 2010, the merger approved at the ordinary shareholders’ meeting held in September 

through which Mercantil Servicios Financieros was to absorb its wholly owned subsidiary Holding 

Mercantil Internacional, C.A. which would be fully and legally dissolved as a result, was finalized, 

and all the net assets represented mainly by 100% of the shares of Alvina Corporation, N.V. and 

its subsidiaries Mercantil Bank Curacao, N. V., Mercantil Bank (Panama), S.A. and Mercantil Bank 

(Schweiz) AG was absorbed. 

The activity of Mercantil Bank (Schweiz) AG, which includes its subsidiary Mercantil Bank and 

Trust Limited (Cayman) recorded US$ 334 million in total assets at December 31, 2010 

representing a 1.0% increase over December 2009. Net income for the year reached US$ 2.9 

million, an increase of 49.9% compared with US$ 1.9 million at the end of 2009. 

At December 31, 2010, Mercantil Bank (Panama) S.A. has US$ 129 millones (1) in total assets, 62.1% 

more than at the close of 2009. Net earnings for 2010 reached US$ 31.2 million, 353,9% more 

than the US$ 6.9 million recorded in December. 

Mercantil Bank Curaçao, N.V. registered US$ 224 million in total assets at December 31, 2010, 

representing a 21.9% increase over December 2009. Net results for the year reached US$ 31.0 

million, 207.8% more than the US$ 10.1 million recorded in 2009, mainly due to the results of its 

subsidiary Mercantil Bank (Panama) S.A. 

Mercantil Merinvest 

Mercantil Merinvest, C.A.’s subsidiaries include a securities brokerage company and a mutual 

fund and investment portfolio management company. 

At December 31, 2010 Mercantil Merinvest had Bs 129 million in total consolidated assets, 

3.9% less than at the close of 2009. This variation is reflected in the indexed financial asset 

operations carried out through Mercantil Merinvest, Casa de Bolsa, C.A. which were Bs 45 

million down on the previous year. 

Earnings for 2010 were Bs 43 million, a 13.8% downturn compared to Bs 49 million in 2009, 

mainly due to a new regulatory environment that has initially restricted the operations that 

these types of companies can carry out. 



bolivars 

3,506,609 

3,025,074 

1,114,939 

405,941 

4,012,857 

2009 

bolivars 

2,263,742 

1,925,918 

690,547 

200,664 

2,801,933 

2008 

bolivars 

1,697,083 

1,418,576 

507,921 

128,368 

2,029,800 

Historic figures presented in accordance with the standards of the Superintendency of Insurance Activity. 

1 Dollar figures are given for reference purposes only; the balance sheet is converted at the exchange rate at the end of the period (Bs 4.2893/US$) and the income statement at 

the average exchange rate for the period (Bs 3.5827/US$). Exchange control has been in place in Venezuela since February 2003.

Mercantil Merinvest, C.A. 

Consolidated 

Year Ended 


Total Assets 


Indexed Financial Assets 

Equity 



US$ (1) 

30 

22 

- 

26 

12 


bolivars 

128,929 

95,904 

- 

112,317 

42,560 

Other Non-Financial Business 

Mercantil Inversiones y Valores 

Mercantil Inversiones y Valores comprises Mercantil Servicios Financieros’ non-financial 

companies, such as Servibien, Almacenadora Mercantil and others that invest in securities. 

The main function of Servibien, a subsidiary of Mercantil Inversiones y Valores, is to sell real 

estate and property owned by Mercantil Servicios Financieros. In 2010 Servibien sold Bs 20 

million worth of real estate. Automotive vehicles recovered by Mercantil Seguros were sold at 

ten auctions during the year, bringing in a total of Bs 44 million. 

At December 31, 2010, Mercantil Inversiones y Valores C.A. had Bs 40 million and Bs 37 million 

in consolidated assets and equity respectively. 


79 

2009 

bolivars 

134,097 

64,647 

45,110 

118,653 

49,395 

2008 

bolivars 

265,455 

83,530 

162,888 

118,815 

38,231 

Historic figures presented in accordance with the National Securities Superintendency. 

(1) Dollar figures are given for reference purposes only; the balance sheet is converted at the exchange rate at the end of the period (Bs 4.2893/US$) and the 

income statement at the average exchange rate for the period (Bs 3.5827/US$). Exchange control has been in place in Venezuela since February 2003. 

Mercantil Inversiones y Valores , C.A. 

Consolidated 

Year Ended 


Total Assets 

Invesments in Securities 

Equity 



US$ (1) 

9 

4 

9 

(1) 


bolivars 

39,846 

17,087 

37,171 

(5,027) 

2009 

bolivars 

90,361 

60,595 

85,401 

41,762 

2008 

bolivars 

187,080 

45,834 

148,086 

77,770 

Figures in accordance with Accounting Principles Generally Accepted in Venezuela. 

(1) Dollar figures are given for reference purposes only; the balance sheet is converted at the exchange rate at the end of the period (Bs 4.2893/US$) and the 

income statement at the average exchange rate for the period (Bs 3.5827/US$). Exchange control has been in place in Venezuela since February 2003.

Marcos CASTILLO 

Desde Los Chaguaramos, around 1961 

Oil on canvas 

74.8 x 70 cm 

Caracas, 1897 - 1966 

Studied at the Caracas Academy of Fine Arts from 1917 to 1922. Traveled to Paris in 1926 where he was 

influenced by the works of the European post-impressionists. Awarded the National Prize for Painting at 

the First Official Annual Exhibition of Venezuelan Art in 1940. In 1958 represented Venezuela at the 

International Biennial in Venice, Italy. His characteristic use of color in his paintings makes him one of 

Venezuela’s greatest colorists.

Credit Ratings 

Mercantil Servicios Financieros Fitch Ratings Clave 

National Ratings 

Long Term AA (Ven) - 

Short Term F1+ (Ven) - 

Unsecured Bonds (Long Term) A2 A2 

Commercial Papers (Short Term) A1 A1 

Mercantil Banco Universal Fitch Ratings Moody’s 


Long Term AA+ (Ven) - 

Short Term F1+ (Ven) - 

International Ratings 

Long Term (foreign currency) B+ B3 

Short Term (foreign currency) B - 

Long term (Local Currency) B+ B1 

Short term (Local Currency) B - 

Individual D E+ 

Mercantil Commercebank Florida Bancorp 

and Mercantil Commercebank N.A. Fitch Ratings 


Long Term (Deposits) 

(only Mercantil Commercebank N.A.) BB+ 

Long Term BB 

Short Term B 

Individual C/D 


81 


Each year risk rating agencies Fitch Ratings 

carries out credit ratings on Mercantil Servicios Financieros (Mercantil) and its subsidiaries, 

Mercantil Banco Universal C.A., Mercantil Commercebank Florida Bancorp and Mercantil 

Commercebank, N.A. Clave, Sociedad Calificadora de Riesgo also assigns a risk rating to the 

issues of Mercantil’s Unsecured Bonds and Commercial Paper. 

The following table indicates the current credit ratings of Mercantil and its subsidiaries in the 

different countries where it operates. 

Mercantil’s ratings reflect satisfactory financial indicators. Mercantil is among the best rated 

Venezuelan issuers. According to Fitch Ratings’ scale Mercantil reflects “Very High Credit Quality” 

and “a very low expectation of credit risk and a strong capacity for timely payment of financial 

commitments”. The ratings given for Mercantil’s issues of Commercial Paper and Unsecured 

Bonds are the highest an issuing company in Venezuela can obtain. 

The national risk ratings for Mercantil Banco Universal are sustained by its franchise, stable 

deposit base, adequate performance and risk management culture, and are the best ratings given 

to a private financial institution in Venezuela. The international ratings are largely dependent on 

the country risk for Venezuela. 

The ratings of Mercantil Commercebank Florida BanCorp and Mercantil Commercebank, N.A. 

have been affected by the adverse situation in the U.S. economy, particularly in the state of 

Florida. However they reflect financial flexibility as regards the timely payment of its obligations. 

In its report Fitch Ratings indicates the bank’s level of liquidity with a high quality, short-term 

investment portfolio.

Manuel CABRÉ 

Río Guaire, 1917 

Oil on canvas 

26.5 x 48.5 cm

Prevention and Control of 

Money Laundering and 

Terrorist Financing (ML/TF) 

The mission of Mercantil’s Prevention and 

Control of Money Laundering and Terrorist Financing Unit is to ensure compliance with the 

money laundering and terrorist financing (ML/TF) legislation in force in Venezuela and in the 

countries in which Mercantil Servicios Financieros operates, supporting the organization through 

a systematic, professional approach in order to detect, follow up and manage reputational risk 

due to ML/TF by providing data, analysis and recommendations to guarantee its adherence to the 

regulations and the best international practices on the matter. These include the 

recommendations of the Financial Action Task Force (GAFI), the Caribbean Financial Action Task 

Force (GAFIC), the Wolfsberg Principles and the Customer Due Diligence for Banks document of 

the Basel Committee on Banking Supervision of the Bank for International Settlements. 


83

The control and oversight mechanisms in place, especially at Mercantil’s subsidiaries Mercantil 

Banco Universal, Mercantil Seguros, Mercantil Merinvest, Mercantil Sociedad Administradora 

de Entidades de Inversión Colectiva, Mercantil Bank Curaçao, Mercantil Bank (Panama), 

Mercantil Bank (Schweiz) AG and Mercantil Commercebank, are adequate for the timely 

detection of operations which - due to the nature of their activities - are presumed to involve 

ML/TF, and for reporting such operations to the appropriate authorities. 

The “Know your Customer” policy is crucial to the timely detection of operations presumed to 

involve ML/TF. Anti-money laundering and combating the financing of terrorism (AML/CFT) 

compliance processes are regularly reviewed by the supervisory authorities of the different 

jurisdictions in which Mercantil Servicios Financieros operates, as well as by the External and 

Internal Auditors. 

Pursuant to the provisions of current legislation the Institution has a “Comprehensive AML/CFT 

System” comprised by an AML/CFT Compliance Officer, a multidisciplinary committee, an 

AML/CFT Unit and Compliance staff responsible for areas susceptible to ML/TF risks. There are 

also Operational, Follow-up, Evaluation and Control Plans, a Code of Ethics, a Manual of AML/CFT 

Risk Management Policies and Procedures, and Training Programs. 

Its action during the year focused mainly on strengthening coverage and minimizing ML/TF risks 

by approving and setting policies, updating the Manual of AML/CFT Risk Management Policies 

and Procedures, appointing compliance staff in areas susceptible to risk, implementing new 

AML/CFT administrative and operating policies, training staff with special emphasis on the 

people for managing processes that are highly sensitive to risk, and the acquisition of state-ofthe-art 

technology. All of this has provided the Institution with an efficient and effective structure 

and highly professional risk management process, within a climate of ongoing improvements. 

Mercantil Servicios Financieros developed an extensive program of training courses and 

workshops in which 9,000 employees participated. 

Mercantil Servicios Financieros liaises constantly with the regulatory bodies wherever it is 

present and with which it maintains fluid and effective communications. 


84

* Prevention and Control of Money Laundering 

Internal Auditing 

Mercantil Servicios Financieros’ Internal 

Audit Unit works independently through a systematic approach to assess and improve the 

efficacy of risk management and internal control processes and corporate governance, and 

contribuye to the success of the Strategic Plan. This unit is clearly user-orientated, with a 

staff of multidisciplinary professionals who are well versed in the areas they cover. 

Mercantil Servicios Financieros’ Internal Audit Unit follows the International Professional 

Practices Framework (IPPF) aplicable to internal auditors and established by the Institute of 

Internal Auditors (IIA). Its work involves developing assurance activities such as evaluations 

and recommedations on improvements to the corporate governance process, risk 

management and control to ensure compliance with the objectives related to the promotion 

of Mercantil’s ethics and values; ensuring effective management and accountability for the 

Institution’s performance; supporting Mercantil’s Mission and Vision, and strengthening 

communication at the different levels to enhance the efficiency of its processes. 

Annual Audit Planning covers general and special revisions, follow up, ML/TF risk 

management and quality management. The Internal Audit Unit constantly measures, analyses 

and monitors a series of performance indicators to ascertain execution of the internal control 

of the different processes. 

Structurally speaking, Internal Audit Unit reports directly to the Mercantil Servicios 

Financieros Board of Directors Audit Committee and is made up of units at: Mercantil Banco 

Universal, Mercantil Seguros and Mercantil Commercebank, which carry out their audit 

programs separately, with the following results: 

100% 

90% 

80% 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

During 2010, Mercantil Servicios Financieros’ s Internal Audit Unit conducted 762 audits that 

helped strengthen internal controls in Mercantil’s different units, affording priority to 

processes with the highest risk impact. It also followed up the corrective actions implemented 

by Management; supported the independent auditors in checking the figures of the Financial 

Statements items; met the requirements of the regulatory bodies, made assessments on 

ML/TF Risk Management and ascertained compliance and adequacy by the units with the 

processes at Mercantil Banco Universal that received ISO 9001:2008 certification through 

Fondonorma. 

85 

885 24 70 71 1.050 

327 

75 

48 

435 

MERCANTIL 

BANCO 


5 

8 

11 

WEALTH 

MANAGEMENT 

18 

12 

40 

MERCANTIL 

SEGUROS 

2 

8 

61 

MERCANTIL 

COMMERCEBANK 

352 

83 

68 

547 

MERCANTIL 

GENERAL AND FOLLOW-UP SPECIAL QUALITY PCLC *

Pedro Ángel GONZÁLEZ 

Paisaje, 1919 

Oil on cardboard 

18.5 x 28.9 cm 

Santa Ana, State of Nueva Esparta, 1901 - Caracas, 1981 

In 1916, González moved to Caracas to study at the Academy of Fine Arts. In 1921, he met members of the 

Fine Arts Society. In 1936, he served as professor in the Caracas Academy of Fine and Applied Arts, where 

he established the Graphic Arts Studio and directed it for sixteen years. Later, between 1959 and 1960, 

he directed the Cristóbal Rojas Applied Arts Academy and was named Honorary President of the Graphic 

Arts Studio. His landscape works are numerous, with an emphasis on wide open spaces.

Mercantil’s Social Contributions 


Education 52% 

Social Welfare 27% 

Culture 6% 

Health 8% 

Religious Institutions 7% 

Social Commitment 

Since Mercantil was founded 85 years ago, it 

has fostered, promoted and supported social development programs. One of its corporate 

values is “to be an integral institution and an important factor in the development of the 

communities in which it operates.” 

Mercantil Servicios Financieros' social investment in 2010 totaled Bs 8.2 million, channeled mainly 

through Fundación Mercantil and its subsidiaries in Venezuela and the United States. This sum 

includes Bs 750,000 in contributions under the Science and Technology Act to support the 

research and development projects of Venezuelan Institutions on new technologies. 

Mercantil earmarked 52% of the contributions in this area for educational institutions and 

48% for social development, healthcare, religious and cultural institutions. 

Education 

In 2010 Mercantil accentuated its support for primary education in Venezuela through its 

“Give your School a Helping Hand” program which has been going strong for more than 27 

years. In conjunction with the Foundation for Educational Buildings (FEDE - for its 

abbreviation in Spanish) under the Ministry of Education, schools in Trujillo, Portuguesa, 

Miranda, Carabobo and Guárico states were refurbished. A new program was also 

implemented with the Fe y Alegría institution to strengthen the physical infrastructure of 

schools in Monagas, Bolívar and Anzoátegui states. 

Donations were made to the following universities in 2010: Católica Andrés Bello, Simón 

Bolívar, Carabobo, Metropolitana, Monteávila, Central de Venezuela and Zulia. Their purpose 

was to support student development and training activities and scholarship programs. 

Social Development and Healthcare Programs 

Mercantil supports various projects and initiatives by organizations that work directly with 

children, youths and senior people in need. Their purpose is to help the population from 

different areas of society and specifically through scholarship programs to give young people 

access to work training activities; through nutritional care programs; children’s programs and 

programs that provide equipment for people with physical or intellectual disabilities. 

The main beneficiary institutions include: United Nations Children’s Fund (UNICEF), Mother 

Teresa of Calcutta Comedores Madre Teresa de Calcuta (COMATEC); Asociación Venezolana para 

el Síndrome de Down; Federación de Instituciones Privadas de Atención al Niño, al Joven y a la 

Familia (FIPAN); Fundana; Asociación Provida; Sovenia; Asociación Civil Buena Voluntad; Hogar 

Vida Nueva; Centro al Servicio de la Acción Popular (CESAP); Centro El Portal, Alianza para una 

Venezuela sin Drogas and Damas Salesianas. 

Mercantil’s commitment to health is reflected in the specialized medical and hospital programs 

it supports. These help children, young people and adults in need, including the Friends of 

Children with Cancer Foundation; Fundación Cardioamigos; Hospital Ortopédico Infantil; Hospital 

San Juan de Dios; Fundahígado; Acción Solidaria; and Salud y Familia. 


87

Culture, Quality of Life and Environment 

Mercantil sees culture as a value to be fostered, and supports institutions that promote artistic 

talent in the field of music, literature and fine arts. It contributes to the Fundación Camerata de 

Caracas; the Zulia Museum of Modern Art (Maczul - for its abbreviation in Spanish); the Chamber 

Music Association (Asociación Pro Música de Cámara); the Museum of Colonial Art and the José 

Antonio and Carmen Calcaño Foundation. During 2010 Mercantil also continued to support the 

initiatives of various environmental conservation organizations. 

Support for the social work of religious institutions 

Mercantil’s Social Commitment is also channeled through its support for religious institutions 

with a view to sustaining social programs throughout the country. Prime examples are the 

pastoral programs for families; strengthening of the Mercantil-Cáritas Solidarity Fund; and 

contributions to the country’s Archdioceses and Dioceses, the John Paul II Ecclesiastical 

Education, and the Friends of the Seminary Foundation. 

Mercantil’s social commitment also included support for programs promoted by organizations 

in the United States: the Anti-Cancer League, the March of Dimes and the Miami Metrozoo, in 

South Florida; the Juilliard School in New York, and the Museum of Modern Art in Houston. A 

number of institutions that directly promote the social development of low-income communities 

also received support under the Community Reinvestment Act (CRA) program. 

Special mention should also be made of the voluntary participation of Mercantil’s staff in 

education, social development and cultural activities promoted by various community 

institutions. 


88


Paisaje de Gamboa, 1940 

Oil on canvas 

76.3 x 100 cm


Macuto, 1920 

Oil on canvas 

40.3 x 56.3 cm

Corporate Governance 

Mercantil Servicios Financieros is registered in 

Venezuela and its shares are listed on the Caracas Stock Exchange. It also has a program of 

Level 1 ADRs which are traded over the counter in the USA. Mercantil’s Corporate Governance 

structure is based on its Bylaws, the Capital Markets Law, the Code of Commerce and the 

Resolutions issued by the National Securities Superintendency on the subject. 

Ever since Mercantil was incorporated, its Administrators have maintained a close relationship 

with their shareholders, customers, creditors and employees, marked by the highest 

professional and ethical principles, with a view to guaranteeing transparent, efficient and 

proper management. The Corporate Governance structure has been designed to facilitate 

the supervision and work of the Board of Directors and Management to safeguard the 

interests of shareholders, customers, creditors and staff alike. 

In the area of Corporate Governance Mercantil has not restricted its activities to the 

legislation in force. To remain at the forefront in this field, the Board of Directors and 

Management of Mercantil study the latest trends in this field so that the Company’s 

Corporate Governance structure can be adapted to current best practices. 

The function of the Corporate Compliance Unit created in 2009 is to detect anomalies and 

manage risk from to failure to comply with regulations, and apply policies, methodologies 

and procedures that strengthen the business model and eliminate or reduce exposure to 

associated risk. This initiative is quite innovative in Venezuela’s financial environment. 

Progress in executing this unit’s Strategic Agenda went according to plan. It focused on the 

Mercantil Banco Universal subsidiary, even though follow-up tasks related to the securities 

market have begun given the prevailing circumstances. 


91

It should be noted that Mercantil Commercebank, N.A. subsidiary has had a Compliance Unit 

for many years now. 

Another very significant aspect of corporate governance is the dividend policy which gives 

shareholders greater assurance of dividends being declared and paid. In line with this policy, 

all proposals to declare dividends must be made in accordance with the Law and the Bylaws 

on the matter, heeding the rules on compliance with the regulatory equity ratios applicable, 

and the Company’s investment and development plans. A Board of Directors meeting is 

normally held each February. It reviews the dividend proposal that will be submitted to the 

first General Shareholders’ Meeting held in the first quarter of the year, for consideration and 

once approved by the Board, a press release is published. Notwithstanding, the Board of 

Directors may at any time consider any dividend proposal it deems to be in order. In 2010 an 

ordinary cash dividend was declared and paid in two portions and an extraordinary cash 

dividend was paid in a single portion. 

All Mercantil’s activities are carried out according to the strictest ethical and professional 

principles. Both Mercantil and its subsidiaries have a Code of Ethics which encompasses a 

series of ethical principles and values that guide the Company in its decision making and its 

activities. This Code covers fundamental duties such as probity, loyalty, efficiency, cofraternity, 

honesty, sincerity, dignity and law abidance. 

It also establishes standards aimed at regulating treatment in the event of conflicts of interest 

and complements the provisions of the Bylaws in this area. These Bylaws stipulate how such 

situations should be handled and ban Board Members from taking part in discussions on any 

matters in which they, or their partners in civil or mercantile companies have a personal 

interest, requiring that directors remain outside the meeting room until a final decision is 

reached. 

Mercantil’s governance structure is comprised by the Shareholders’ Meeting, followed by the 

Board of Directors, with its Audit, Risk and Compensation Committees, the Executive 

Committee, the President and Executive President, the Internal Auditor and the Compliance 

Officer. 


92


The Board of Directors must act efficiently and in the interests of its shareholders, creditors, 

clients, employees and the community at large. The Board has responsibility for defining 

corporate strategies, determining business policies and establishing and controlling the strategic 

direction of the institution. It also supervises the management of the organization’s different 

business and support areas. It evaluates results by comparing them against previously approved 

plans and strategies, performance in previous years and the general banking environment. 

In line with best corporate governance practices, the majority of the Directors on the Board of 

Directors of Mercantil Servicios Financieros are independent of Management. The presence of 

directors who are independent of Management is further proof of Mercantil’s commitment to 

international management standards and in line with best corporate government practices. 

The Directors are highly qualified and well-versed in business and finance, ensuring optimum 

performance of their functions. The Board of Directors is made up of 10 directors and 20 alternate 

directors. The Board appoints the President and Executive President from its members and these 

appointments may be held by the same person. The Board meets once a month and whenever 

else the President deems necessary. 

To ensure better transparency and control over management procedures, right from the outset 

Mercantil’s Bylaws provided for the creation of a Compensation Committee and an Audit 

Committee. The creation of these Committees was provided for in the Bylaws of its main 

subsidiary, Banco Mercantil in 1981. An Ordinary Shareholders’ Meeting held in March 2006 

approved a proposal submitted by the Board of Directors to amend a provision in them giving 

legal status to the Risk Committee, which had already been created by the Board meeting on 

May 31, 2001. It is important to point out that these Committees are comprised mainly of 

Directors who are independent from the bank’s Management. 

Consistent with the Company’s tradition of adhering to best corporate governance practices, 

the Audit Committee is subject to Bylaws governing its functions. This document describes the 

Committee’s purpose, functions and responsibilities, and the requirement that members conduct 

an annual assessment of their compliance therewith. It also states that its members must be 

independent of Management, adding that at least one of them must have considerable 

accountancy or financial management experience. 


93

Board of Directors Compensation Committee 

Members 

Gustavo Gustavo J. Vollmer H. 

(Coordinator) 

Alfredo Travieso P. 

Víctor Sierra 

Gonzalo Mendoza 

Luis Esteban Palacios W. 

Luis Alfredo Sanabria U. 

Claudio Dolman 

Gustavo Marturet (Ex oficio) 

Alejandro González Sosa (Ex oficio) 

Board of Directors Audit Committee 

Members 

LuiLuis A. Romero M. 

(Coordinator) 


Eduardo Mier y Terán 

Federico Vollmer A. 

Gustavo Machado C. 

Oscar Machado K. 

Carlos Zuloaga Travieso 

Miguel Ángel Capriles Capriles 

Luis Pedro España 



Board of Directors Risk Committee 

Members 

GuGustavo J. Vollmer A. 

(Coordinator) 

Roberto Vainrub 

Miguel Ángel Capriles L. 

Gustavo Galdo 

Luis A. Marturet 

Carlos Hellmund B. 

Alberto Sosa S. 

Germán Sánchez Myles 

Francisco Monaldi 



This Committee is responsible for setting the organization’s policy on pay and benefits, approving the remuneration of the 

President and senior management and informing the Board of Directors accordingly. In 2010 the Compensation Committee 

met nine times to review the following topics: semi-annual results of Mercantil and its subsidiaries in Venezuela and abroad; 

short and long-term management incentive programs of Mercantil and its subsidiaries in Venezuela and abroad; taxability 

of payments to staff for services rendered; considerations on per diems of Board members of Mercantil and its subsidiaries 

in Venezuela and abroad; analysis of staff movement during the year; consideration of interest rates of special financing 

programs for staff; consideration of consultancy fees on legal, fiscal and migratory issues; impact of national minimum wage 

policy; establishment of annual wage policy; results of negotiations on the 2010-2012 Collective Bargaining Agreement; 

reports on initiatives to rationalize staff expenses at subsidiaries in Venezuela and abroad; review of reports to be presented 

to the National Securities Superintendency for consideration; situation of Mercantil’s Complementary Pension Scheme (Plan 

Complementario de Pensiones de Jubilación Mercantil), actuarial results and adjustment of minimum pension under the Scheme; 

report on executive compensation and its benchmark positioning in the market; health financing program; aid plan for 

employees who lost their homes in the natural disasters; staff survey on risks in the workplace; Rules on Use of the Corporate 

Jet; mechanism for electronic queries on loans and advance on social benefits in trust fund; extension of deadline for the Share 

Purchase Program to June 30, 2011 to purchase shares under the Fourth Phase for the overseas subsidiaries. 

The Committee has responsibility for reviewing and discussing accounting and management policies, opinions and reports 

of the organization’s internal and external auditors, establishing Reserves, reviewing the Financial Statements and their 

Notes and formulating recommendations on matters incumbent upon it to the Board. It also approves the engagement and 

remuneration of the external auditors. In 2010 the Audit Committee met seven times to review the following topics: 

Consideration of the financial statements of Mercantil and its subsidiaries, opinions of the external auditors on those 

statements and the notes thereto; review of internal audit activities of Mercantil’s subsidiaries and activities connected with 

money laundering; consideration and approval of the fees of the external auditors; consideration of internal control aspects 

observed by the external auditors; Actuarial Assumptions Retirement Plan; progress on plans to issue financial statements 

according to IFRS standards. 

Approves Mercantil’s risk profile, policies and limits. It also optimizes the use of capital to support the approved risk profile. 

In 2010 the Risk Committee met seven times and dealt with the following topics: Consideration and setting of cross-border 

credit limits; consideration of adjustments and measures related to the credit risk policy, review of limits for individual 

borrowers and economic groups, provisions; status and management report on operational risk and market risk; follow up 

of the limits established for Venezuela; consideration of reports on results of loan portfolio reviews; establishment of market 

risk limits for different subsidiaries; valuation of investment portfolio; adjustment to counterpart risk limits on the occasion 

of the PDVSA 2017 Corporate Bond issue; Business Continuity Plan report; alternate computation center tests; considerations 

on SITME; situation of fraud events; situation of contingency energy saving plan; considerations on credits that exceeding 

the internal limits; adjustment of government structure in risk management as a result of the self-assessment of best risk 

practices based on the questionnaire of the Institute of International Finance’s Committee on Market Best Practices June 

2008. 


94

Executive Committee 

Mercantil has an Executive Committee comprising a President and Executive President plus ten 

senior managers from the organization’s Business and Support areas, which guarantees the 

timely implementation of Mercantil’s decisions and strategies. 

The Committee meets once a week and holds extraordinary meetings as required. It is responsible 

for evaluating options and formulating recommendations on policy matters, objectives, strategies 

and organization and submitting them to the Board of Directors for consideration, as well as 

assisting and guiding Management in its efforts to implement the policies adopted. It is also 

responsible for evaluating the outcome of their implementation. 

Chairman of the Board of Directors 

The Chairman of the Board of Directors is the President of the Company. He, or she, is responsible 

for steering the Company’s activities and its business, chairing Shareholders meetings, Board 

meetings and meetings of the Executive Committee, and providing them with assistance and 

guidance on setting policies, goals and strategies to be followed and on important decisions in 

accordance with the executive powers granted. He, or she, is also responsible for exercising the 

functions assigned by the Board of Directors and for representing the Company before political 

and administrative authorities and other public and private entities. 

The President stands in for the Executive President during temporary absences, exercising the 

same powers and attributions. 

The Audit Unit and the Secretariat, which report directly to the Board of Directors, report to the 

President on administrative matters. The Corporate Compliance Unit reports directly to the 

President. 


The Executive President is responsible for the executive management and coordination of the 

company; submitting to the consideration of the President, the Board of Directors and the 

Executive Committee any major policies, objectives, strategies and decisions and reporting to 

them periodically on the company's financial condition and results of operations. Other 

responsibilities include designing, establishing and developing the Company’s organizational 

structure and appointing and removing general managers, consultants and advisers as necessary. 

The Executive President stands in for the President during temporary absences, exercising the 

same powers and attributions. 

The following Global Business and Support Units report to the Executive President: Commercial 

and Personal Banking, Corporate and Investment Banking, Private Banking and Wealth 

Management, Finance, Insurance and New Business, International Operations, Operations and 

Technology, Risk Management, Legal Affairs, Strategic Planning, and Human Resources and 

Corporate Communications. The Executive President is also responsible for the executive 

coordination of all Mercantil’s subsidiaries. 


95

Internal Audit Manager 

In accordance with the regulations applicable to Mercantil and its subsidiaries, Mercantil has an 

Internal Audit Manager who works in conjunction with the Audit Committee when the overall 

operations of Mercantil and its subsidiaries are audited. 

The Internal Audit Manager heads Mercantil’s Global Internal Audit Unit, which designs 

Mercantil’s internal audit plan in conjunction with the Audit Committee. This plan is executed 

throughout the year. The results of the internal audits are reviewed and discussed periodically by 

the Audit Committee and the Board of Directors so that any corrective action may be taken. 

Anti-Money Laundering Compliance Officer 

In accordance with the regulations on the matter, Mercantil has a Compliance Officer who chairs 

the Committee on the Prevention and Control of Money Laundering and is responsible for 

designing the Annual Operating Plan for the Prevention and Control of Money Laundering, 

coordinating and supervising the Anti-Money Laundering Committee and the Money Laundering 

Prevention and Control Unit, coordinating staff training activities on anti-money laundering and 

maintaining institutional relations with the regulatory bodies on the matter. The Compliance 

Officer also advises the Audit Committee and the Board of Directors on compliance with their 

anti-money laundering obligations under current legislation. 

Disclosure of Information 

Mercantil prepares and publishes the company’s financial statements on a semi-annual basis in 

compliance with the standards of the regulatory bodies. The company also prepares a quarterly 

report containing detailed information and accurate economic and financial data, as well as other 

relevant data for the market, which is disclosed to the general public, the National Securities 

Superintendency and the Caracas Stock Exchange through nationwide distribution methods, and 

by e-mail to analysts and participants in the local and international markets. Information is 

distributed periodically to the United States Securities and Exchange Commission (the SEC) in 

accordance with its obligation to maintain Mercantil’s Level 1 ADR program in the United States 

of America. Financial information on the company is also available on the website of the Mercantil 

Banco subsidiary at www.bancomercantil.com. Thus Mercantil fulfills the regulations on 

immediate dissemination of any information that may materially affect the price of its shares. 

Last but not least, Mercantil has an Investor Relations Unit, whose functions include the timely 

disclosure of information to investors by different means, including events and presentations. 


96


Comenzando las lluvias (Cerros desde Gamboa), 1944 

Oil on canvas 

73.5 x 106.3 cm

Próspero MARTÍNEZ 

El árbol del camino, around 1920 

Oil on paper 

37.2 x 28 cm 

Caracas, 1885 - Carrizales, State of Miranda, 1966 

Between 1904 and 1909, Martínez studied at the Caracas Academy of Fine Arts. In 1909, he participated 

in the student protests that demanded changes in the curriculum of that same institution. He was a 

founding member of the Fine Arts Society and actively contributed to the exhibitions organized by this 

group. In 1959, his participation in the XX Annual Exhibition of Venezuelan Art garnered him the Arístides 

Rojas Landscape Award, initiating an avid public interest in his life and works.

Report of the Board of Directors of Mercantil Servicios Financieros on 

Compliance with the Corporate Governance Principles adopted by 

the National Securities Commission (CNV) which has been replaced 

by the National Securities Superintendency. 

Pursuant to Resolution N° 19-1-2005 of the 

Superintendency dated February 2, 2005, published in Official Gazette of the Bolivarian Republic 

of Venezuela N° 38,129 of February 17, 2005, the Board of Directors of Mercantil Servicios 

Financieros submits to the Ordinary General Shareholders’ Meeting this report on the degree of 

compliance with the Principles of Corporate Governance referred to in the Resolution. 

Independent Members of the Board of Directors 

At its meeting on March 10, 2011 the Board of Directors examined the independence of each 

director and determined that, according to the criteria on the independence of Directors, 

contained in the above-mentioned resolution, at least one fifth of the members of the Board of 

Mercantil Servicios Financieros are independent directors. Thus Mercantil Servicios Financieros 

complies with the provisions set forth in the Resolution issued by the Superintendency on the 

Principles of Corporate Governance whereby at least one fifth of the Board of Directors must be 

comprised by independent directors. 

In order to meet the level of transparency and disclosure required on this matter, the report 

distributed to the shareholders contains a brief resume on each Director. 

Audit Committee 

All the members who vote on the Audit Committee of Mercantil Servicios Financieros are 

independent directors, according to the criteria on the independence of directors contained in 

said Resolution. Gustavo A. Marturet and Alejandro González Sosa, in their capacity as President 

and Executive President of the Company respectively, assist this Committee as ex officio 

members. The Audit Committee has and exercises responsibilities in matters regarding the 

Principles of Corporate Governance. The Committee also deals with other matters. The chapter 

of the report that refers to Corporate Governance states the matters dealt with by this 

Committee in 2010. A resume of each member is included in this report. 

It can therefore be affirmed that Mercantil Servicios Financieros fulfills all the Corporate 

Governance Principles contained in that Resolution. 


99

Awards 

and Acknowledgements 

During 2010 Mercantil Servicios Financieros 

and its subsidiaries were acknowledged for their performance by various prestigious 

institutions and publications at home and abroad. 


• In April Forbes Magazine once again rated Mercantil Servicios Financieros one of the 

world’s Top 2000 companies. This time at number 1,297. It was the only Venezuelan 

company in the financial sector on the list, climbing 36 positions since 2009. 

• Following a survey conducted by The Banker magazine the July edition ranked Mercantil 

Servicios Financieros Venezuela’s leading financial institution on its list of the Top 1000 

World Banks. Mercantil Servicios Financieros ranked number 291 in the survey, and the 

tenth leading financial services company in Latin America. 


• In the Great Place to Work Institute’s fifth survey of Mercantil Banco Universal, conducted 

in April, it rated the Bank among the 15 best companies to work for in Venezuela and at 

number 10 on the ranking. It is the only financial institution to have won this recognition 

for the fifth successive year. 

• In October the maintenance and renewal audit for Mercantil Banco Universal’s ISO 

9001:2008 certifications conducted by the Venezuelan Standardization and Quality 

Certification Institute, Fondonorma, concluded with zero non-conformities, certifying 

Mercantil’s 100% compliance with the standards. Of the 9 lines evaluated, the Call Center 

(CAM) certification was renewed and maintenance was conducted on the other 8 lines: 

Teller Line; Online Banking, ATM Network, Corporate Client Securities, Credit Card 

application, printing and distribution, Home Delivery of Check Books, Préstame (Instant 

Loan) and the Management and Employee Benefit Trust Funds. 

• In November Latin Finance magazine awarded Mercantil Banco Universal its prize for Best 

Bank in Venezuela in 2010. The above-mentioned edition of the magazine stressed the fact 

that Mercantil Banco Universal’s loan portfolio has registered 36.6% interannual growth in 

a year of special circumstances for the Venezuelan government. It also pointed out that 

Mercantil is striving hard to make its services available to the broader population through 

Mercantil Aliado which is part of the Majorities Banking segment. According to Latin 

Finance Mercantil Banco Universal is the first bank to incorporate chip technology in its 

ATMs and credit and debit cards. 


100

Mercantil Commercebank 

• In March, for the second year running Mercantil Commercebank received the Top 100 

Minority Business Award® from the Greater Miami Chamber of Commerce (GMCC). In 

2010 the bank was recognized in the Community Involvement category. 

Mercantil Seguros 

• In April the Great Place to Work Institute’s fifth survey rated Mercantil Seguros as one of 

the 15 best companies to work for in Venezuela. It is the third time it has achieved this 

distinction and, at number nine, the only insurance company on the list. 


101

Banco Universal

Mercantil Banco Universal: 

85 years at the service of Venezuela 

Eighty-five years ago on March 23, 1925 the Bank that today is called Mercantil Banco 

Universal was created under the name Banco Neerlando Venezolano at the initiative of a 

group of eighty-nine Venezuelan entrepreneurs. It opened its doors to the public at La Gran 

Casa de Camejo, on a central Caracas street corner that bore the same name as the property, 

on April 3 with a share capital of Bs 3.2 million and a staff of sixteen, under the management 

of its first board of directors chaired by Francisco A. Guzmán Alfaro. 

This was the start of long history of progress for Mercantil Banco Universal. By December 31, 

2010 it had a share capital of Bs 4,582 million and Bs 46,271 million in assets; a payroll of more 

than 6,500 employees; a network of 274 banking centers in Venezuela and branches in the 

United States and Curaçao, and five Representative Offices in Bogota, Lima, Mexico City, Sao 

Paulo and New York; more than 3.6 million clients; and a technological platform that 

processes more than 44 million transactions a month. Mercantil Banco Universal is now part 

of Mercantil Servicios Financieros, a financial services provider with operations in 10 countries 

in the Americas, Europe and Asia. 

In 1926 Banco Neerlando Venezolano, as it was then called, changed its trading name to Banco 

Mercantil y Agrícola and increased its capital to 8 million bolivars. Aware at the time of the 

importance of agriculture for the country, the Board of Directors (anticipating changes in 

legislation) decided to stimulate production through agricultural credits, positioning itself 

as a prominent financial institute in this important sector. 

In 1927, the former Banco Mercantil y Agrícola was already one of the four financial 

institutions in Venezuela authorized to issue banknotes acceptable as legal tender. 

Ten years later in 1936 it expanded its Venezuelan operation and the new Valencia office in 

Carabobo state became the institution’s first branch outside the capital. 

By 1951 the bank had fourteen offices, nine of them in the metropolitan area of Caracas and 

five in the provinces. That same year the institution bought the plot occupied at the time by 

Pan Grande at Esquina San Francisco and there at number 5 it built and opened its new 

headquarters on April 25 of that same year. By the end of the sixties it had 28 branches and 

agencies throughout Venezuela and was able to meet the growing demand from clients and 

the general public with a better service. 


103

In 1960 the first electromechanical data centralization equipment was installed. 

Chase Manhattan Bank, N.A. acquired a 49% stake in the Bank in 1962. Following changes in 

Venezuelan legislation, this stake was reduced to less than 20% and then sold to a group of 

Venezuelan investors in 1980. 

In 1969, with the development of Mercantil’s technological platform, customers began to 

receive electronically processed statements. By then the Institution’s collection systems, 

exchange operations and accounting were already automated. 

In 1972 Mercantil signed the first Statutory Benefits Trust Fund Agreement, making it a 

pioneer in this field in Venezuela. 

Thanks to growing confidence in the Institution in 1973 it achieved its first billion bolivars in 

deposits. 

In order to meet the needs of its customers in other countries, in 1975 the Bank began to 

expand its international presence by opening representative offices in New York, London and 

Frankfurt. Within the framework of this expansion process, in 1981 it set up a branch in Panama 

and opened Latin American Representative Offices in Bogota and Lima. 

In 1976 the first collective bargaining agreement was entered into with the Trade Union of 

Banco Mercantil y Agrícola workers, and signed by the Bank’s president Alfredo Machado 

Gómez and the union’s general secretary José L. Milano. The economic and 

social benefits for the Institution’s employees were quite significant. 

In 1982, the Bank changed its name to Banco Mercantil, C.A. and expanded 

its portfolio of services to include personal, consumer and travel loans. It 

acquired a franchise from Diners Club de Venezuela, C.A. giving it the 

exclusive right to manage and issue Diners credit cards directly. That same 

year it opened a branch in Curaçao and representative offices in Sao Paulo 

and Quito. 

In 1983, after three decades at the Esquina de San Francisco address in 

Caracas, its head office moved to the current Avenida Andrés Bello N° 1 

address and the Institution adopted a new corporate identity. 

In 1986, Banco Mercantil bought the MasterCard franchise and began to 

offer these credit cards. 

By 1987 Mercantil was the leader in electronic banking operating under the name ABRA 24. 

It started with 20 automatic teller machines and by 1988 had 50. That year the institution was 

one of the top three private banks in Venezuela with the broadest national and international 

presence. 

Ever since it was created, the bank has supported social development organizations by 

contributing to their institutional programs. Permanent support is given to these initiatives 

through Fundación Banco Mercantil which was created in 1987 to develop and promote 

programs involving the community, such as the “Give your School a Helping Hand” program 

for Venezuela’s primary schools which it has been running for the past 28 years. 

In 1991 the Bank launched its third credit card, Visa Mercantil, on the market. This positioned 

Mercantil as the leader in the credit card business, making it the only bank to hold franchises 

for 3 out of the 4 credit cards in the Venezuelan market. That same year the representative 

office in Mexico City was opened. 


104

In 1996 the Bank changed its status from a commercial bank to a full-service bank to offer its 

clients a comprehensive mix of products and services, many of them new, including in 

particular medium and long-term financing options. That same year, with a view to increasing 

the liquidity of the shares of Banco Mercantil and Consorcio Inversionista Mercantil and 

expanding its presence to international markets, it established an 

American Depositary Receipts (ADR) program. Today this program is 

maintained through Mercantil Servicios Financieros, the Bank’s head 

office, following the corporate transformation described below. 

In 1997, in order to give the Institution a new corporate structure, 

enhance its competitiveness and take advantage of the Venezuelan 

financial sector’s opportunities for growth, Mercantil Servicios 

Financieros was created and Banco Mercantil became its principal 

subsidiary. This process was called the Corporate Transformation. 

That year the Institution became the pioneer in Internet banking in 

Venezuela when its website www.bancomercantil.com and its Mercantil 

Online Banking service were launched. 

Over the years Mercantil Banco Universal’s Internet banking service has 

grown and new functionalities and types of transaction have gradually 

been added. These include: payments with virtual cards (e-card) which 

Mercantil pioneered in the market, payment of services, and transfers. 

During 2000 Mercantil acquired Interbank, C.A. Banco Universal in a merger through which 

Interbank was absorbed and Mercantil Banco Universal took over all of its assets, liabilities 

and equity. With this process, Mercantil expanded its presence in Venezuela by incorporating 

Interbank’s offices and large widespread nationwide network of banking centers. 

In 2006 the Bank offered its credit cardholders a fully automated loan authorization system 

through a parallel credit facility called Préstame Mercantil which facilitated access by the 

general population to personal loans. 

It developed a new brand strategy in 2007 and changed its name to Mercantil Banco Universal 

under a new corporate identity. 

In 2008 Mercantil Banco Universal launched majorities banking to offer products and services 

in areas that lacked banking services. This network of service points is called Mercantil Aliado 

and consists of facilities located in densely populated areas, starting in the Greater Caracas 

area and gradually spreading to other parts of Venezuela. 


105

The following year, 2009, following guidelines on how to use state-of-the-art technology to 

provide services, the Bank introduced chip technology into its ATM network, points of sale 

and debit and credit cards, making its transactions more secure for the benefit of all its clients. 

Mercantil is its People, a key success factor 

For eight and a half decades Mercantil has never failed to respect and attend to its people, 

who in turn have learned: enhancing their working skills; developing individually and 

professionally; improving the way they serve customer and enforcing the standards set by 

the regulatory bodies. 

This process has evolved over time. Its scope has ranged from credit analysis courses through 

which generations of skilled banking staff have been trained over the past 42 years; operations 

courses held at recognized education institutes in the country; and more recently the use of 

modern technologies to train Mercantil’s employees at their work stations through distance 

education. 

Our staff has responded by working more efficiently; showing respect for the Institution’s 

principles and values; participating on a massive scale in leisure activities designed for 

employees and their families; and adopting a positive attitude to working with colleagues as 

a team, and to participating in voluntary work for the community. 

Within the framework of its human talent policies, Mercantil Banco Universal is considered 

by its workers to be an excellent company to work for in Venezuela. This has been confirmed 

in the past few years by the company that specializes in this subject, through studies on 

human resource management policies. These included surveys to find out what employees 

think about the Institution’s organizational climate. For Mercantil it has been a priority to 

stimulate the individual development of its workers in an appropriate labor environment. 

The important role that union representatives played during these years should also be 

mentioned. Together with the bank they have worked hard to strengthen and develop 

workers’ benefits within the conditions of the market, always within a framework of mutual 

respect and autonomy. 


106

Mercantil’s principles and values: 

unchanged throughout the years 

Eight-five years after it was founded, Mercantil Banco Universal - the main subsidiary of 

Mercantil Servicios Financieros in Venezuela - remains true to its Mission: 

To fulfill the needs of the individuals and communities where Mercantil has presence 

by providing excellent financial products and services in various market segments, 

enhancing shareholder's value by efficiently using our available resources. 

The principles and values that are the cornerstone of Mercantil's corporate culture are still valid 

and have guided the professionalism of various generations of people at Mercantil. These are: 

• To be the best financial services provider measured by the degree to which 

customers’ needs and expectations are met, through products and services 

considered by them as the best in the market. 

• To be the financial institution of reference in terms of excellent service 

quality. 

• To be recognized for having sound and proven ethical principles. 

• To be an integral institution and an important factor in the development of 

the community and places in which it is involved. 

• To have the best and most capable group of human resources. 

• To exercise optimum risk management, along with and excelent assets and 

liabilities management. 

• To maintain a constant focused approach to the operating efficiency of the 

organization as a whole, using technology to support the overall exercise of 

its management. 

• To be a modern and innovative institution, capable of anticipating the 

requirements of its customers and the organization’s response. 

• To be an institution with a broad shareholder base, governed by the best 

principles of transparency and access to information that our shareholders 

and the securities market expect. 

These sound principles and values that were established by its founders, combined with 

Mercantil’s Code of Ethics, guide our behavior in everything the Institution and its employees 

do, and they are one of the main reasons why millions of clients place their trust in us. 

With the satisfaction of having served the country successfully over these years, Mercantil 

Banco Universal continues to take on new challenges with every confidence in the future of 

Venezuela and its institutions. 

Mercantil impulsa tu mundo 


107

Tomás GOLDING 

Valle de Caracas desde Colinas del Tamanaco, 1939 


59.7 x 70.5 cm 

Caracas, 1909 - 1985 

Began painting at eleven under the guidance of Antonio Alcántara. From 1922 to 1924 studied at the 

Caracas Academy of Fine Arts. Traveled to New York in 1925 to study at The Cooper Union school of art. 

Upon his return to Venezuela devoted all his time to landscape painting and is now known as one of the 

most prolific representatives of the “School of Caracas”.


Directors 

Gustavo Antonio Marturet Machado 

President 

Degree in Civil Engineering from Universidad Central de Venezuela (1962), 

President and member of the Boards of Directors of Mercantil Servicios 

Financieros and Mercantil Banco Universal. Chairman of the Boards of Directors 

of Mercantil Commercebank Florida Bancorp, Mercantil Commercebank N.A., 

Mercantil Merinvest and Fundación Mercantil. Member of the Board of Directors 

of Mercantil Seguros and Mercantil Bank (Schweiz) AG. Vice President 

Venezuelan American Chamber of Commerce and Industry (VenAmCham). 

Member of the Chairman’s Advisory Council of the Council of the Americas. 

President of the John Paul II Foundation for Ecclesiastical Education (FESE). 

Former Executive President of Mercantil Servicios Financieros and Mercantil 

Banco Universal, President of the Venezuelan Bankers Association (ABV), 

National Banking Council (CBN), Member of the Board of Directors of the 

Institute of International Finance, Inc. (IIF), Council of Venezuelan American 

Entrepreneurs (CEVEU), Colombian Venezuelan Economic Integration Chamber 

(CAVECOL). Former Member of the Advisory Council of the Central Bank of 

Venezuela (BCV), Member of the Board of Directors of the Andean Development 

Corporation (CAF) and board member of various associations connected with the 

financial and production sector. 



Management 

Degree in Chemical Engineering, Universidad Metropolitana. MBA Babson 

College, Massachusetts, USA. Twenty-nine years of service at the Institution. 

Member of the Executive Committees of Mercantil Servicios Financieros, C.A., 

Mercantil C.A., Banco Universal, Mercantil Commercebank Florida BanCorp and 

Mercantil Commercebank , N.A. Member of the Boards of Directors of Mercantil 

C.A., Banco Universal, Mercantil Commercebank Holding, Mercantil 

Commercebank Florida BanCorp, Mercantil Seguros, C.A., Mercantil Merinvest, 

Casa de Bolsa, C.A., Mercantil Merinvest, C.A. and Fundación Mercantil. Chairman 

of the Board of Todo1 Services, Inc. and the Supervisory Board of Mercantil Bank 

Curaçao N.V. and Mercantil Bank (Panama), S.A. Was Executive President of 

Mercantil C.A., Banco Universal, President of Interbank C.A., Banco Universal, 

Mercantil Merinvest, C.A. and Mercantil Merinvest, Casa de Bolsa, C.A. Director 

of the National Banking Council (CBN), the Venezuelan Banking Association, the 

Venezuelan-Swiss Chamber of Commerce and Industry, the National Council for 

Investment Promotion (CONAPRI) and Educrédito, A.C. 

Gustavo J. Vollmer H. 

Former Chairman of the Board of Banco Mercantil, C.A. 

(Banco Universal) 

Degree in Civil Engineering from Cornell University (USA); Doctorate from 

Universidad Central de Venezuela (UCV). Member of the Boards of Directors of 

Mercantil Servicios Financieros, C.A. and Mercantil Banco Universal. Former 

member of the Boards of Directors of S.C. Johnson & Son de Venezuela, C.A., IBM 

de Venezuela and IBM World Trade, Americas Far East. 

Former Chairman of the Boards of Directors of Banco Mercantil, C.A. (Banco 

Universal) and Consorcio Inversionista Mercantil Cima C.A. and President and/or 

Director of a number of Venezuelan sugar, metalworking, cement, finance, 

construction, alcoholic beverage companies and several international 

corporations. 

Former President and Director of several business organizations and 

organizations and foundations in Venezuela and abroad. 


109 

Alfredo Travieso Passios 

Senior partner Tinoco, Travieso, Planchart & Núñez, 

Attorneys at Law 

Graduate and postgraduate degrees in law from Universidad Católica Andrés 

Bello (UCAB), postgraduate degree from the University of Michigan, USA. Senior 

partner of Tinoco, Travieso, Planchart & Núñez, Attorneys at Law, President of 

Grupo Emboca, C.A., Member of the Boards of Directors of Mercantil Servicios 

Financieros, C.A. and Mercantil Banco Universal, Mercantil Commercebank 

Holding Corporation, Ars Publicidad C.A., C. Hellmund & Cía., Desarrollos 

Judibana, C.A. and Centro Empresarial de Conciliación y Arbitraje (CEDCA); 

President of the Venezuelan Association of Financial Law (AVDF), Member of the 

Venezuelan Association of Tax Law (AVDT), the International Bar Association and 

the International Academy of Estate & Trust Law. 

Luis A. Romero M. 

Electrical Engineer 

Graduate of Universidad Metropolitana, MBA from Babson College, PMD and 

CEP from Harvard University, USA. Member of the Boards of Directors of 

Mercantil Servicios Financieros, C.A., Mercantil Banco Universal, Mercantil 

Commercebank Holding Corporation and Mercantil Commercebank Florida 

Bancorp. and Mercantil Commercebank, N.A. Member of the Venezuelan 

American Business Council (CEVEU). Director of Sociedad de Amigos del Árbol 

“Sadarbol”. Director of International Briquettes Holding (IBH), Director of 

Caurimare, S.A. and Desarrollos e Inversiones, S.A. Former Corporate Director of 

Strategic Planning of Siderúrgica Venezolana, SIVENSA, S.A. 

Gustavo Vollmer Acedo 

President of Grupo Palmar 

Degree in Economics from Duke University, USA; Postgraduate in Economic 

Development from Cambridge University, UK; PED in Business Administration 

from IMEDE, Switzerland. President and CEO of Corporación Palmar, S.A., 

and other companies in the Palmar Group. Chairman of the Board of Directors 

of Empresas PMC. Chairman of the Boards of Directors of: Mercantil Servicios 

Financieros, Mercantil Banco Universal, Mercantil Commercebank Holding 

Corporation, Siderúrgica Venezolana, S.A. (SIVENSA), The Pantaleon Group 

Inc., Vetra Energía, S.L., and Director of S.C. Johnson for the Andean Countries. 

Member of the Advisory Committee of the Venezuelan Confederation of 

Industry (Conindustria). Former chairman and currently member of the Board 

of Directors of Venezuela’s Institute of Advanced Studies in Administration 

(IESA) Member of the Development Council of Universidad Católica Andrés 

Bello. Former International President of the Young Presidents' Organization 

(YPO) and Alianza para una Venezuela sin Drogas.


Professor of IESA 

Graduate of Yale University, USA; MBA from Venezuela’s Institute of Advanced 

Studies in Administration (IESA). Member of the Boards of Mercantil Servicios 

Financieros and Mercantil Banco Universal. Director of Mercantil Commercebank, 

N.A. and Mercantil Commercebank Holding Corp. Member of the Boards of 

Directors of Ferretería EPA, Farmahorro and C.A. Ron Santa Teresa. Was General 

Manager, Executive President and Chairman of the Board of Mavesa, S.A.; 

Minister of Agriculture; Director of the Central Bank of Venezuela (BCV); and has 

lectured extensively at national and international institutions. Publications: 

“Reforming Agriculture”, in Lessons of the Venezuelan Experience, Woodrow 

Wilson International Center for Scholars and Johns Hopkins University (1995). 

“Inequality - Reducing Growth in Agriculture: A Market-Friendly Policy Agenda”, 

in Beyond Tradeoffs, Market Reform and Equitable Growth in Latin America, 

Inter-American Development Bank (IDB) and the Brookings Institution (1998). J. 

Coles and C. Machado, “Trayectoria de las políticas agrícolas venezolanas: 

“Aprendizajes y exigencias para el futuro,” in Agronegocios en Venezuela. 

Ediciones IESA (2002). 

Víctor J. Sierra A. 

Director of Valores y Desarrollos VADESA S.A 

Degree in Law from Universidad Central de Venezuela (UCV). Currently Director 

of Valores y Desarrollos VADESA, S.A., Vice President of Inversiones Capriles and 

Member of the Boards of Directors of Mercantil Servicios Financieros and 

Mercantil Banco Universal. Formerly Legal Counsel, Legal Representative and 

President of Cadena de Publicaciones Capriles and the Capriles group of 

companies; Director of Valinvenca, Inversiones Finalven, Sociedad Financiera 

Finalven, Servicios Finalven, Banco República, Inversiones Diversas, C.A. 

(INVERDICA), C.A. La Electricidad de Caracas and C.A. Venezolana de Guías 

(CAVEGUIAS). 

Roberto Vainrub A. 

Executive Director of Actibienes and of Holding Activalores 

PhD in Engineering (UCAB-1999 Summa Cum Laude), Master’s Degree (Stanford 

University-1981), Industrial Engineer (UCAB-1978). Professor at IESA since 1977. 

Founder of IESA’s Center for Entrepreneurship and its first coordinator. Former 

Vice President and Alternate President of IESA, member of the Board of IESA and 

the IESA Foundation. He is a full tenured professor at Universidad Católica Andres 

Bello where he taught at the School of Engineering from 1982 to 2003 ( Gold 

Medal, UCAB). Vainrub began his managerial career in the Marketing 

Department of Procter & Gamble. Former partner and Executive Vice President 

of the Venezuelan industrial group Frigilux. Was Director of Savings and Loan 

Association Prosperar, E.A.P. (1998 - 2002) and Tucarro.com (2003-2008). 

Executive Director of Actibienes and of financial group Holding Activalores. 

Member of the Boards of Directors of Mercantil Servicios Financieros, Mercantil 

Banco Universal and Mercantil Commercebank Holding Corp. Director of 

Farmatodo C.A. and President of its Audit and Risk Committee. Vainrub has 

authored many books and articles and participated in national and international 

conferences. Director of Educrédito, member of the advisory committee of 

Conciencia Activa. Former president of the National Association of 

Manufacturers of Refrigeration Equipment, director of CAFADAE and member 

of the Conciliation and Arbitration committee of the Venezuelan Jewish 

community “Union Israelita” in Caracas. 

Miguel A. Capriles L. 

President of Grupo de Empresas Capriles 

Degree in Administrative Sciences from Universidad Metropolitana. President of 

Cadena Capriles, Director of the Boards of Mercantil Servicios Financieros. 

Director of Mercantil Commercebank Holding Corp.; Chairman of the Board of 

Directors of Mantex C.A., Director of H. L. Boulton, S.A.; Member of the Board of 

the Institute of Advanced Studies in Administration (IESA); Former Director of 

C.A. La Electricidad de Caracas and Cerámicas Carabobo, C. A. 


110 

Alternate Directors 

Luis A. Sanabria U. 

Legal Adviser to Corporación Palmar 

Degree in Law from Universidad Católica Andrés Bello (UCAB); attended 

Georgetown University, Washington. Currently Director of Inversiones AEFEVE, 

C.A., C.A. Ron Santa Teresa, Constructora Alvo. Alternate Director of the Boards 

of Mercantil Servicios Financieros and Mercantil Banco Universal. 

Oscar A. Machado K. 

President of Siderúrgica Venezolana S.A., SIVENSA 

Degree in Industrial Engineering from Universidad Católica Andrés Bello, 1974 

First Vice President of the Venezuelan Confederation of Industry (Conindustria) 

and of the Board of Directors of IESA. Member of the Boards of Directors of 

Instituto Venezolano de Siderurgia (IVES), Aeropuerto Caracas, S.A. and 

Venezuela Competitiva. Alternate Director of the Boards of Directors of Mercantil 

Servicios Financieros, C.A. and Mercantil Banco Universal. Member of the 

Executive Committee of Instituto Latinoamericano del Fierro y el Acero (ILAFA). 

Secretary of the Executive Committee of the Venezuelan American Chamber of 

Commerce and Industry (VenAmCham) and Adviser to Asociación Venezolana 

de Ejecutivos (AVE). Former President of Instituto Latinoamericano del Fierro y 

el Acero (ILAFA), Instituto Venezolano de Siderurgia (IVES), Asociación 

Venezolana de Ejecutivos (AVE) and Venezuela Competitiva. 

Eduardo A. Mier y Terán 

President of Desarrollos e Inversiones, S.A. 

Degree in Civil Engineering from Universidad Católica Andrés Bello, MSc from 

Stanford University. Currently Chairman of the Boards of Caurimare S.A. and 

Desarrollos e Inversiones S.A., Director of Moore de Venezuela, S.A., H.L. Boulton 

& Co, S.A. and Fundación John Boulton. Alternate Director of Mercantil Banco 

Universal and Mercantil Servicios Financieros. Former General Manager of 

Inversiones Tacoa, C.A. and President of Educrédito. 

Luis Esteban Palacios W. 

Founding Partner of law firm Palacios, Ortega y Asociados 

PhD in Law from Universidad Central de Venezuela and postgraduate degree 

from New York University, MCJ. 1958. Founding Partner of Palacios, Ortega y 

Asociados; Director of Fundación Scout; Alternate Director of Mercantil 

Banco Universal and Mercantil Servicios Financieros; Vice President of the 

Venezuelan Arbitration Committee. 

Adviser on corporate law, banking law and capital markets. Has participated 

in numerous financing transactions through banking syndicates and Project 

financing. 

Former member of the Foreign Investment Advisory Council of the 

Superintendency of Foreign Investments (SIEX); Director of CANTV, Secretary 

of the Board of Directors of the Bar Association of the Federal District of 

Caracas and President of Montepío de Abogados de Venezuela. Was Professor 

of Labor Law at Universidad Central de Venezuela and assistant to the 

President of the Central Bank of Venezuela (BCV).

Gustavo Galdo C. 

President of Inversora Parnaso, S.A. 

Degree in Civil Engineering from Universidad Católica Andrés Bello (UCAB), MSc 

in Civil Engineering Management and MSc in Industrial Engineering Economic 

Systems Planning and Honorary Alumnus of the Department of Management 

Science and Engineering of Stanford University, USA. Director of Fe y Alegría, 

Alternate Member of the Boards of Mercantil Servicios Financieros and Mercantil 

Banco Universal. His public sector appointments from 1983 to 1985 were as 

General Sectoral Director of Public Finance with the Ministry of Finance, Director 

of Banco Industrial de Venezuela, and Member of the Advisory Committee on 

the Negotiation of the External Public Debt . His private sector appointments 

from 1987 to 1998 were as President of Inversiones Finalven, S.A., Sociedad 

Financiera Finalven, S.A., and Sociedad Financiera Valinvenca, S.A. 

Gonzalo A. Mendoza M. 

Chairman of the Board of Negroven, S.A. 

Degree in Civil Engineering from Universidad Santa María with an MS in Civil 

Engineering Management from Stanford University, USA. Chairman and Director 

of the Boards of Negroven, S.A., Kamequin, C.A., Director of Tripoliven, C.A. and 

Valores Químicos (Valquímica), C.A.. Alternate Director of the Boards of Directors 

of Mercantil Servicios Financieros and Mercantil Banco Universal. Former 

President of the Venezuelan Association of the Chemical and Petrochemical 

Industry (ASOQUIM) and of the Venezuelan Ecuadorian Chamber of Commerce 

(CAVENEC). 

Germán E. Sánchez Myles 

Dentist, Director General of Grupo COR Dental 

Degree in Dentistry from Universidad Central de Venezuela with specializations 

in Buccal Surgery, Cosmetic Dentistry, Prostheses and Management. Formerly 

Assistant in the Surgical Area of the Puerto Ayacucho Central Hospital and of the 

Eudoro González Hospital. Director of the Restorative Dental Center 1997-2002. 

Currently Director General of Grupo COR Dental and Director of Inversiones 

Arisan C.A., as well as Alternate Director of the Boards of Mercantil Servicios 

Financieros and Mercantil Banco Universal. 

Luis A. Marturet M. 

Computer Engineer 

Degree in Computer Engineering from Universidad Simón Bolívar (USB), with 

a postgraduate in business management from the same university. Intensified 

his management skills at Wharton, the University of Pennsylvania’s Business 

School and through various advanced technology programs. Developed and 

managed the Information Technology Planning area of C.A. La Electricidad 

de Caracas. Member of the Board of Directors of C.A. Ed. Marturet & Co. Scrs., 

and Alternate Director of Mercantil Servicios Financieros and Mercantil Banco 

Universal. Director of an international mailbox, shipping and messaging 

franchise and currently developing new business in the field of production of 

audiovisual content for the media and entertainment industries and storage 

of structured information in digital format. 

Carlos Hellmund Blohm 

Executive President of Empresas Casa Hellmund 

Degree in Industrial Engineering from Northeastern University, USA, with a 

Master’s in Business Administration (MBA) from the London Business School, 

UK. Executive President of C. Hellmund & Cía., S.A., President of Laboratorios 

Rapid Fot, C.A., President of OPC Operadora, C.A.; Director of the Caracas 

Chamber of Commerce and Service, the Venezuelan-Japanese Chamber (CAVEJA) 

and the Venezuelan Chamber of the Photography Industry (CAVIFOT); Alternate 

Director of the Boards of Directors of Mercantil Servicios Financieros and 

Mercantil Banco Universal and Member of the Board of Trustees of the London 

Business School; and Member of the Marketing Committee of VenAmCham. 


111 

Gustavo Machado Capriles 

Economist 

Degree in Economics from Universidad Central de Venezuela (UCV). Specialized 

Studies at Universidad de Navarra, Pamplona, Spain. Specialization courses in 

International Banking at Manufacturers Hanover Trust in New York. Alternate 

Director of the Boards of Mercantil Servicios Financieros and Mercantil Banco 

Universal. 

Francisco J. Monaldi M. 

Coordinator of the International Center for Energy and 

Environmental Studies, IESA 

Degree in Economics (Cum Laude) from Universidad Católica Andrés Bello 

(UCAB), with a Master’s in Economics from Yale University and a PhD in Political 

Economy from Stanford University. Director of the International Center for 

Energy and Environmental Studies of the Institute of Advanced Studies in 

Administration (IESA). Degree in Economics from Universidad Católica Andrés 

Bello. From 2008 to 2009 was a Visiting Professor at Stanford University and a 

National Fellow at the Hoover Institution. Has been a consultant to public and 

private institutions, such as: the World Bank, the Inter-American Development 

Bank, the Andean Development Corporation (CAF) and Cambridge Energy 

Research Associations (CERA). Director of Siderúrgica Venezolana, S.A. (Sivensa), 

Inversiones Tacoa, C.A. and Alternate Director of the Board of Mercantil Servicios 


Federico Vollmer Acedo 

Vice President of Industrias Palmar 

BSc in Agribusiness from Middle Tennessee State University, USA; Master’s 

degree in Agricultural Economics (MPS Agriculture) from Cornell University, USA. 

President of Asesoría Agriplus, C. A., Director of Empresas PMC, Member of the 

Executive Committee and the Board of Directors of Inversiones AEFEVE, 

President of Venazúcar, Director of Fundacaña, Director of Inversiones Porcinas, 

S.A., Director of Cavidea. Alternate Director of the Boards of Mercantil Servicios 


Claudio Dolman C. 

Director of Holding Activalores 

Degree in Industrial Engineering from Universidad Católica Andrés Bello. 

Currently President and Director of ActiBienes. Director of Holding Activalores. 

Director and Vice President of Rattan Group. Alternate Director of the Boards of 

Directors of Mercantil Servicios Financieros and Mercantil Banco Universal. 

President and Director of Promotora Itaca 2000, C.A. Was Director of Seguros 

PanAmerican. Director of Corimon and General Manager of Grupo Osiris. 

Carlos Zuloaga Travieso 

Senior partner Tinoco, Travieso, Planchart & Núñez, 

Attorneys at Law 

Degree in law from Universidad Católica Andrés Bello (UCAB) and Master’s 

degree in Commercial Law from American University in Washington, D.C., USA. 

Formerly foreign associate for the Department of Foreign Investment of Holland 

& Knight LLP in Miami, USA. Alternate Director of the Boards of Directors of 

Mercantil Servicios Financieros and Mercantil Banco Universal, of Janus Capital 

Inc. and former Director of Transportes Marítimos del Caribe (Crowley Group) 

and Corporación Digitel C.A. Member of the International Bar Association (IBA) 

and the American Bar Association (ABA).

Nerio Rosales Rengifo 


Degree in Economics from Universidad Católica Andrés Bello. Executive President 

of Mercantil Banco Universal, Global Manager Commercial and Personal Banking, 

member of the Executive Committees of Mercantil Banco Universal and 

Mercantil Servicios Financieros. Director of Mercantil Banco Universal Director 

of Mercantil Commercebank Holding Corporation Director of Mercantil Seguros. 

Director of Mastercard International Latin American Region. Director of Mercantil 

Bank Curaçao N.V. and Mercantil Bank (Panama), S.A. Alternate Director of 

Mercantil Servicios Financieros. 



Degree in Economics from Universidad Católica Andrés Bello. Has been with 

Mercantil for over 30 years. Currently Global Operations and Technology 

Manager, Member of the Executive Committees of Mercantil Servicios 

Financieros and Mercantil Banco Universal, Director of Todo1 Services, Director 

of Mercantil Commercebank, N.A. and Alternate Director of Mercantil Servicios 

Financieros. Has held various positions at Mercantil Servicios Financieros, in 

particular as Manager of Corporate Banking, Manager of Corporate and 

Institutional Banking, Executive President of Arrendadora Mercantil, C.A. and 

Banco de Inversión Mercantil, C.A., Director of Fondo Mercantil and Banco 

Hipotecario Mercantil. 

Miguel Ángel Capriles Capriles 

Vice President of Valores y Desarrollos VADESA S.A. 

and Inversiones Capriles C.A. 

Degree in Administrative Sciences from Universidad Metropolitana, option 

Management (1988) and option Banking and Finance (1991). Currently Vice 

President/Non-executive Director of Valores y Desarrollos VADESA, S.A. and Vice 

President/Director of Inversiones Capriles, C.A. Director of Mantex, S.A., and of 

Grabados Nacionales C.A. Alternate Director of the Boards of Mercantil Servicios 

Financieros and Mercantil Banco Universal. Former Finance Manager of 

Inversiones Capriles, C.A.; Director of C.A. La Electricidad de Caracas and 

President of Distribuidora Samtronic de Venezuela, C.A. 


112 

Luis Pedro España Navarro 

Director of the UCAB Economic and Social Research Institute 

(IIES-UCAB) 

Degree in Sociology from Universidad Católica Andrés Bello (UCAB) and a 

Master’s in Political Science from Universidad Simón Bolívar (USB). Currently 

Director of the Economic and Social Research Institute of UCAB Alternate 

Director of the Boards of Mercantil Servicios Financieros and Mercantil Banco 

Universal. Member of the Advisory Council of the newspaper El Mundo Economía 

y Negocios published by Cadena Capriles. Former banking, insurance and 

marketing adviser to low-income sectors for Arthur D. Little and Cantv, and 

Adviser on Social Programs for institutions such as the United Nations 

Development Programme (UNDP); World Bank-Ministry of the Family; UNICEF- 

Children’s Foundation; governments of Germany and the Netherlands, and 

national and regional public institutions. Has coordinated various publications, 

including Venezuela: Un acuerdo para alcanzar el desarrollo, UCAB, USB, UCV; IESA 

(2006) and Detrás de la Pobreza. Diez Años Después (2009). 

Philip R. Henríquez S. 


Degree in Economics from Universidad Católica Andrés Bello (1986) with an MBA 

from Columbia University, New York (1991). Since 2004 has been a Member of 

the Executive Committees of Mercantil Servicios Financieros, Mercantil Banco 

Universal (Venezuela) and Mercantil Commercebank (USA). Former President of 

Citibank N.A. and Citigroup Country Officer in Venezuela (2000-2004); Executive 

Vice President of Banca Mayorista Global; Member of the Board of Directors of 

Banco Venezuela-Grupo Santander and President of Valores Santander Casa de 

Bolsa (1997-2000), responsible for the Treasury, Fixed Income, Derivatives, 

Corporate Finance, Analysis, Capital Market, Trust Fund and Custody business. 

Joined Citibank N.A., Venezuela in 1991 in the Treasury and Derivatives area. 

Appointed Vice President of Treasury in Venezuela in 1993. Began his career at 

Banco Exterior where he had managerial responsibility in the field of corporate 

banking. Member of the Board of Directors of the Venezuelan Council for 

Investment Promotion (CONAPRI) and the Venezuelan Association of Executives 

(AVE). Former member of the Boards of VenAmCham (2001-2004), Venezuelan 

National Banking Council (2001-2004), Caracas Stock Excchange (1998-2000) 

and the Venezuelan National Gallery of Art (2001-2003), Venezuelan Institute of 

Financial Executives (IVEF) (2001-2007) and the Venezuelan Anti-Diabetes 

Foundation (2000-2008). 

Alberto José Sosa Schlageter 

Executive Director Corporación Digitel, C.A. 

B.A. in International Business from Ohio Wesleyan University and MBA in 

International Management from the University of Denver, Colorado. Executive 

President of Corporación Digitel, C.A. Currently President of the Executive 

Committee of Corimon, Alternate Director of the Boards of Mercantil Servicios 

Financieros and Mercantil Banco Universal. Formerly President of Seguros La 

Seguridad and President of Cerámica Carabobo, S.A.C.A. Currently member of 

the Boards of Directors of: H.L. Boulton, C.A. Central Azucarero Portuguesa, 

Produvisa, S.A., and Fundación Venezuela Sin Limites. Was a member of the 

Caracas Chamber of Commerce, Caracas Stock Exchange, National Council of 

Insurance (Consejo Nacional de Seguros), Inversora Seguridad, Invercapital, 

Bancaracas Consorcio Inversionista.

Executive Committee 

Gustavo Antonio Marturet Machado 

President 

See CV under Management (Board of Directors Section) 




Nerio Rosales Rengifo 



Philip R. Henríquez S. 



Rosa M. de Costantino 

Global Manager Private Banking and Wealth Management 

Degree in Economics from Universidad Central de Venezuela. Has been with the 

Institution for 31 years where she has held several positions in the Finance and 

Commercial Banking areas. Manager of Private Banking and Wealth Management 

and Member of the Executive Committees of Mercantil Banco Universal, 

Mercantil Commercebank Holding Corporation and Mercantil Servicios 

Financieros. Member of the Board of Directors of Mercantil Commercebank Trust 

Company, and director and member of the Executive Committee of Mercantil 

Commercebank Investment Services with a Broker-Dealer license in the USA. 

Chairman of the Boards of Mercantil Sociedad Administradora de Entidades de 

Inversión Colectiva and Portafolio Mercantil de Inversión, Director of Mercantil 

Seguros, Mercantil Bank Curaçao N.V., Mercantil Bank (Panama), S.A. and 

Mercantil Bank (Schweiz) AG. 



Certified Public Accountant with a master’s degree in Business Administration 

from Universidad Católica Andrés Bello. Twenty-three years of service with 

Mercantil Banco Universal. Global Chief Risk Officer of Mercantil Banco Universal 

and Mercantil Servicios Financieros Member of the Executive Committees of 

Mercantil Servicios Financieros, Mercantil Banco Universal and Mercantil 

Commercebank. Member of the Boards of several subsidiary companies; chaired 

the Comptrollers’ Committee of the Venezuelan Banking Association. Worked 

for Espiñeira, Sheldon y Asociados (PriceWaterhouseCoopers) for 7 years. 


113 

Millar Wilson 

Global International Operations Manager 

Degree in Business and Administrative Studies from Bradford University, UK 

(1973). Has been with Mercantil for 32 years. Wilson began his financial career 

with Mercantil Banco Universal in 1977, moving to the United States in 1982 to 

open a branch in Miami. From 1984 to 2004 was Executive President of Mercantil 

Commercebank, N.A. and from 2004 to 2008 was Global Chief Risk Officer of 

Mercantil. Wilson is currently Global International Operations Manager of 

Mercantil Servicios Financieros. Executive President and Director of Mercantil 

Commercebank Florida Bancorp, Inc., Mercantil Commercebank, N.A., Mercantil 

Commercebank Investment Services, Inc. and Mercantil Commercebank Trust 

Company, N.A., and also Country Manager of Mercantil in the United States. 

Chairman of the Boards of BMC Bank & Trust Ltd., Mercantil Bank (Panama), S.A. 

and Mercantil Bank Curaçao N.V. Member of the Executive Committees of 

Mercantil Servicios Financieros and Mercantil Banco Universal; Member of the 

Board of Directors of Mercantil Seguros, Fundación Mercantil and Mercantil 

Internacional Holding Limited. Graduated from the Harvard Business School 

Management Development Program (1992). Was Chairman of the Board of the 

Greater Miami and Keys Chapter of the American Red Cross (2001-2002) and 

Director and Treasurer of the Miami Dade College Foundation (1999-2004). 

Fernando Figueredo M. 

Global Chief Risk Officer 

Degree in Law from Universidad Católica Andrés Bello; MBA from Columbia 

University, New York, with a dual specialization in Finance and Marketing. 

Member of the Executive Committees of Mercantil Servicios Financieros, 

Mercantil Banco Universal (Venezuela) and Mercantil Commercebank (USA). 

Formerly Credit and Operational Risk Manager of Corporate and Investment 

Banking at Mercantil Servicios Financieros. Prior to joining Mercantil, was Head 

of Financial Institutions at Citibank N.A., Venezuela, where he was responsible for 

the transactional clients segment and corporate client services. Formerly a 

manager in the Oil and Gas sector of Banco Venezuela and in the Corporate 

Finance area of Santander Investment. 




Luis Alberto Fernandes 

Global Chief Legal Counsel 

Degree in Law from Universidad Católica Andrés Bello, with a Master of Laws in 

Corporate and Mercantile Law from the University of London. Currently Global 

Chief Legal Counsel of Mercantil Servicios Financieros and Mercantil Banco 

Universal. Formerly Legal Manager for Financial and Corporate Affairs of 

Mercantil. Director of Mercantil Seguros and Mercantil Merinvest Casa de Bolsa. 

Member of the Advisory Board of Mercantil Bank Curaçao N.V. and Director of 

Mercantil Bank (Panama), S.A. Before joining Mercantil held various positions at 

the Central Bank of Venezuela (BCV), including General Counsel, Alternate Legal 

Counsel for Financial Affairs and Legal Adviser on Monetary and Financial Affairs. 

Former Adviser to the Financial Emergency Board. Was Professor of Banking Law 

and National and International Regulation of Financial Services, Financial 

Contracts and Oversight of Financial Services at postgraduate level at 

Universidad Católica Andrés Bello (UCAB) and Universidad Central de Venezuela 

(UCV). Participated as negotiator and adviser for Venezuela on financial services 

within the framework of the World Trade Organization and the Andean 

Community of Nations. Participant and speaker at national and international 

seminars and events. Studies in arbitration and negotiation.

Alberto Benshimol M. 

Insurance and New Financial Business Manager 

Degree in Civil Engineering from Universidad Católica Andrés Bello, MSc from 

the University of Illinois. Graduate of the Stanford Executive Program, Stanford 

University. Has been with the institution for 17 years. Manager of Insurance and 

New Business of Mercantil Servicios Financieros, C.A., Member of the Executive 

Committee of Mercantil Servicios Financieros, C.A., and President of Mercantil 

Seguros, C.A. Formerly General Manager of Inversiones Polar, C.A., and Director 

of a number of industrial and financial companies. 

Luis Calvo Blesa 

Global Human Resources 

and Corporate Communications Manager 

Degree in Media Studies from Universidad Católica Andrés Bello. Has been with 

Mercantil for 31 years. Currently Global Manager of Human Resources and 

Corporate Communications of Mercantil Banco Universal and Mercantil Servicios 

Financieros; General Manager and member of the Board of Directors of 

Fundación Mercantil and General Manager of Fundación BMA. Member of the 

Executive Committee of Mercantil Servicios Financieros, C.A. and Member of the 

Board of Directors of Mercantil Seguros. Member of the Committees of the Social 

Alliance of VenAmCham and Dividendo Voluntario para la Comunidad. Former 

Chairman of the Venezuelan Banking Association’s Human Resources Committee 

and Member of the Latin American Human Resources Development Committee 

of the Latin American Banking Federation (FELABAN). 


114

MERCANTIL, C.A., BANCO UNIVERSAL 

Avenida Andrés Bello, N° 1 

Edificio Mercantil 

Caracas 1050, Venezuela 

Phone: (58-212) 503.1111 

Télex 27002/27003 BMERVC 

PO BOX 789, Caracas 1010-A 

Venezuela. 

mercan24@bancomercantil.com 

www.bancomercantil.com 

Call Center Centro de Atención Mercantil (CAM): 

Phone: 0-500-600 2424/ 0-500-503 2424 

(58-212) 600.2424 -(58-212) 503 2424 


CORAL GABLES AGENCY 

220 Alhambra Circle, Coral Gables, 

Fl. 33134, U.S.A. 

Phone: (1-305) 460.8500 

Fax: (1-305) 460.8595 

Télex: 681278 BMER UW 

asala@mercantilcb.com 


CURAÇAO BRANCH 

Abraham Mendez Chumaceiro Boulevar 1 

Willemstad, Curaçao. Netherlands Antilles 

Phone: (5999) 461.8241 / 1706 

Fax: (5999) 461.1974 

fgirigori@bancomercantilcu.com 

MERCANTIL COMMERCEBANK N.A. 

220 Alhambra Circle, Coral Gables, 

Fl. 33134, U.S.A. 

Phone: (1-305) 460.4000 

Fax: (1-305) 629.1400 

www.mercantilcb.com 

MERCANTIL COMMERCEBANK TRUST COMPANY, N.A. 

220 Alhambra Circle,11th floor, Coral Gables, 

Fl. 33134, U.S.A. 

Phone: (1-305) 441.5555 

Fax: (1-305) 441.5560 

www.mercantilctc.com 

MERCANTIL COMMERCEBANK 

INVESTMENT SERVICES, Inc. 

220 Alhambra Circle, Penthouse, Coral Gables, 

Fl. 33134, U.S.A. 

Phone: (1-305) 460.8599 

Fax: (1-305) 460.8598 

www. mercantilcis.com 

MERCANTIL BANK (SCHWEIZ) AG 

Talackerstrasse 42 

CH-8001 Zurich, Switzerland, P.O. Box 9758 

CH-8036 Zurich, Switzerland 

Phone: (41 - 433) 444 555 master 

Fax: (41 - 433) 444 550 

www.mercantilsuiza.com 

MERCANTIL MERINVEST, C.A. 


Edificio Mercantil, Piso 24 


Phone: (58-212) 503.2700 

Fax: (58-212) 503.2757 

Subsidiaries 

MERCANTIL SEGUROS, C.A. 

Av. Libertador con calle Isaías 

“Látigo” Chávez, 

Edificio Mercantil Seguros, Chacao. 


Phone: (58-212) 276.2000 

Fax: (58-212) 276.2001 

www.segurosmercantil.com 

MERCANTIL INVERSIONES Y VALORES 


Edificio Mercantil, Piso 20 


Phone: (58-212) 503.3361 / 3644 / 1353 

Fax: (58-212) 503.7086 

csuarez@bancomercantil.com 

MERCANTIL BANK (PANAMÁ) 

Torre de las Américas, Planta Baja 

Local No 8-A. Punta Pacífica 

P.O. Box 0819-05811 Panamá, 

República de Panamá 

Phone: (507) 282 7000 Fax: (507) 282 7040 

asubero@mercantilcb.com 

MERCANTIL BANK & TRUST, LIMITED 

Harbour Place, 4th floor 

103 South Church Street 

P.O. Box 1034 

Grand Cayman, KY1-1102 

Cayman Islands 

Phone: (1-345) 949-8455 

Fax: (1- 345)949-8499 

MERCANTIL BANK CURAÇAO N.V. 

Abraham Mendez Chumaceiro Boulevar 1 

Willemstad, Curaçao. Netherlands Antilles 

Phone: (5999) 461.1566 / 1669 

Fax: (5999) 461.1974 

fgirigori@bancomercantilcu.com 


Representative Offices 

BOGOTA 

Av. 82, Nº 12-18, Piso 8, Ofc. 805 

Edificio Interbolsa. La Cabrera 

Bogotá, D.C. Colombia 

Phone: (57-1) 635.0035 

Fax: (57-1) 623.7701 

jrequena2@mercantilcb.com 

LIMA 

Av. Canaval y Moreyra N° 452 

Edificio Standard Chartered, Piso 15 

San Isidro, Lima 27, Perú 

Phone: (51 1) 442 5100 Anexo 232 

Fax: (51 1) 442 5100 Anexo 237 

rafael.alcazar@rebaza-alcazar.com 

MEXICO 

Eugenio Sue N° 58, Colonia Polanco 

Chapultepec, Delegación Miguel Hidalgo 

C.P. 11560, México, D.F. 

Phone: (52-55) 5282.2300 

Fax: (52-55) 5280.9418 

mercvenmex@prodigy.net.mx 


115 

SAO PAULO 

Av. Paulista, N° 1842, 3° andar, CJ. 37 

Edf. Cetenco Plaza, Torre Norte-Cep 01310-200 

Sao Paulo, SP, Brasil 

Phone: (55-11) 3285.4647 - 3284.0206 

Fax: (55-11) 3289-5854 

mercansp@uol.com.br 

NUEVA YORK 

11 East 51st. Street, New York 

NY, 10022-5903, U.S.A. 

Phone: (1-212) 891.7400 

Fax: (1-212) 891.7419 

ljordan@bancomercantilny.com 

Corporate Contacts 



Edificio Mercantil, Caracas 1050, Venezuela 

Phone: (58-212) 503.1111 

Télex 27002/27003 BMERVC 


Venezuela 

Mercan24@bancomercantil.com 

www.bancomercantil.com 

Centro de Atención Mercantil (CAM): 

Telf. 0-500-600 2424/ 0-500-503 2424 

(58-212) 600.2424 -(58-212) 503 2424 

INVESTOR RELATIONS 

Caracas 

Av. Andrés Bello, N° 1, Edificio Mercantil 

Piso 25, Caracas 1050, Venezuela 


Phone: (58-212) 503.1335 

Fax: (58-212) 503.1075 

inversionista@bancomercantil.com 

Nueva York 

11 East 51 st. Street, New York 

NY, 10022-5903, U.S.A. 

Phone: (1-212) 891.7405 

Fax (1-212) 891.7419 

Office of the Presidency 




Phone: (58-212) 503.0782 / 0783 

Fax: (58.212) 503.0709 

presidencia@bancomercantil.com 

Corporate Communications 




Phone: (58-212) 503.1670 

mcomunicacionesc@bancomercantil.com


Marina, 1939 


36.3 x 40.3 cm

T h e F i n e A r t s S o c i e t y a n d 

t h e E s c u e l a d e C a r a c a s 

Early in the twentieth century, landscape painting in Venezuela was introduced as a genre that 

has remained a cherished part of Venezuela’s artistic progression to this day. It was in Caracas, 

in 1912, where the Fine Arts Society was born– a cultural movement that challenged the Academy 

of Fine Arts and the obsolete teachings it imparted. The group included several young artists 

who revitalized the national art scene through their innovative study of nature, eventually leaving 

behind a great legacy of art, beauty and life. This creative spirit was amplified by the Escuela de 

Caracas, driven by the artists who formed the Society and their followers. These pioneering artists 

secured the continuity of landscape painting in Venezuela for five decades. The selections 

included here offer a window into this tradition, featuring exemplary works of this genre that 

are part of the Mercantil Collection.

T h e F i n e A r t s S o c i e t y a n d 

t h e E s c u e l a d e C a r a c a s 

Mercantil Colection 

Federico BRANDT 

Azotea, hacia 1924 

Oil on canvas 

45.5 x 59.5 cm 

César PRIETO 

Iglesia de Maiquetía, hacia 1950 

Oil on canvas 

53.5 x 62.8 cm 

César PRIETO 

Los Caobos, hacia 1948 

Oil on canvas 

50.5 x 60.5 cm 

César PRIETO 

Calle caraqueña, hacia 1920 

Oil on canvas 

51 x 69 cm 

Próspero MARTÍNEZ 

El árbol del camino, hacia 1920 

Oil on paper 

37.2 x 28 cm 

Manuel CABRÉ 

Ávila desde San Bernardino, hacia 1940 

Oil on canvas 

49,4 x 78,4 cm 

Manuel CABRÉ 

Río Guaire, 1917 

Oil on canvas 

26.5 x 48.5 cm 

Manuel CABRÉ 

Caneyes y Valle de San Cristóbal, 1942 

Oil on canvas 

65 x 108 cm 

Manuel CABRÉ 

Paisaje, 1917 

Oil on wood 

32.5 x 41 cm 

Manuel CABRÉ 

Fragmento del Ávila, 1914 

Oil on canvas 

22.5 x 32.9 cm 

Bernardo MONSANTO 

Paisaje, 1961 


33 x 86 cm 


Ávila, hacia 1940 

Oil on canvas 

54 x 73 cm 


Playa El Palmar, 1956 


45.5 x 60.8 cm 


Barranco de Sarría, 1947 

Oil on canvas 

60.2 x 81 cm 

Marcos CASTILLO 

Desde Los Chaguaramos, hacia 1961 

Oil on canvas 

74.8 x 70 cm 

Antonio ALCÁNTARA 

Paisaje del Ávila, 1976 


33 x 45.5 cm 


Paisaje de Caracas, 1967 


45.7 x 60.7 cm 


Paisaje con niñas, 1954 

Oil on canvas 

64.7 x 50 cm


Ávila, hacia 1945 


35.4 x 45.1 cm 


Ávila, 1942 

Oil on canvas 

51 x 61.2 cm 

Luis Alfredo LÓPEZ MENDEZ 

Carretera vieja La Guaira-Caracas, 1943 

Oil on canvas 

52.7 x 60.2 cm 


Paisaje de Gamboa, 1940 

Oil on canvas 

76.3 x 100 cm 


San José desde San Bernardino, 1942 

Oil on canvas 

46.2 x 54.4 cm 


Macuto, 1920 

Oil on canvas 

40.3 x 56.3 cm 


Paisaje, 1919 

Oil on cardboard 

18.5 x 28.9 cm 


Comenzando las lluvias (Cerros desde Gamboa), 1944 

Oil on canvas 

73.5 x 106.3 cm 


El cerro desde la quebrada, 1945 

Oil on canvas 

50.4 x 65.1 cm 

Armando LIRA 

Valles del Tuy, 1956 

Oil on canvas 

73.5 x 90 cm 

Armando LIRA 

El Ávila desde Sarría, sin fecha 

Oil on canvas 

130.3 x 160.3 cm 


Valle de Caracas desde Colinas del Tamanaco, 1939 


59.7 x 70.5 cm 


Marina, 1939 


36.3 x 40.3 cm 


Puerto Azul, 1940 

Oil on wood 

50.3 x 41.8 cm 


Los Dos Caminos, 1941 


62.6 x 45 cm

General Production: Corporate Communications Management 

Artwork Photography: Mercantil Collection / Walter Otto 

Graphic Design: Arte Impreso H.M., C.A. 

Printing: La Galaxia • Caracas, Venezuela, March 2011

ANNUAL REPORT 2010

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