ANNUAL REPORT 2010

Loan Portfolio by
Business Segment
Bs 42,928 million
(US$ 10,008 million) 1
Year 2010
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$1 at December 31,
2009). Exchange control has been in place in Venezuela since
February 2003.
2 Commercial and full-service banks may not reduce the percentage
of total credits earmarked for manufacturing at December 31, 2009;
this percentage must not be lower than 10%.
3 Includes the Agricultural Bonds issued by the Venezuelan State
in accordance with the regulations on portfolio compliance.
Loan Portfolio
At the close of 2010, Net Loans reached Bs 42,928 million (US$ 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.
Mercantil Servicios Financieros
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.