ANNUAL REPORT 2010

* 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.
Mercantil Servicios Financieros
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