ANNUAL REPORT 2010

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Loan Portfolio Classified by Status Year end (In thousands of Bs except percentages) Current Restructured Past Due In Litigation Total Gross Loans Deposits by Business Segment Bs 62,367 million (US$ 14,540 million) 1 Año 2010 Large Corporations 20% SME’s 24% Individuals 56% 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. 2010 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. Shareholders’ Equity 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. Annual Report 2010 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$1 at December 31, 2009). Exchange control has been in place in Venezuela since February 2003. (2) Obtained by dividing equity by total assets less investments in public debt securities.
Financial Margin Year Ended (In thousands of Bs and millions of US$ except percentages) Interest Income Interest Expense Net Interest Income Provision for losses on loan Portfolio Expenses for Devaluation of Available-for-Sale Securities Net Financial Margin 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: 2010 US$ (1) 1,557 (504) 1,053 (269) - 784 2010 bolivars 5,578,332 (1,804,984) 3,773,348 (963,152) - 2,810,196 Net Interest Income 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. Mercantil Servicios Financieros 39 2009 bolivars 2008 bolivars 4,474,086 (1,798,322) 2,675,764 (473,188) - 2,202,576 2010 Vs. 2009 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 2010 Vs. 2008 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
Page 1 and 2: ANNUAL REPORT 2010
Page 3 and 4: ANNUAL REPORT 2010 CONTENTS Mercant
Page 5 and 6: Mercantil is Venezuela’s leading
Page 7 and 8: Earnings Consolidated Balance Sheet
Page 9 and 10: Notice of Ordinary General Sharehol
Page 11 and 12: * Dollar figures are given for refe
Page 13 and 14: * Dollar figures are given for refe
Page 15 and 16: Adjustments to Reporting Lines At a
Page 17 and 18: Venezuela The Venezuelan economy co
Page 19 and 20: 85th Anniversary During the second
Page 21 and 22: Special mention should be made of M
Page 23 and 24: Statutory Auditors’ Report To the
Page 25 and 26: Financial Statements (In accordance
Page 27 and 28: Consolidated Balance Sheet (In thou
Page 29 and 30: César PRIETO Calle caraqueña, aro
Page 31 and 32: Economic Climate Mercantil Servicio
Page 33 and 34: Summary of Economic Performance 200
Page 35 and 36: Mission To fulfill the needs of ind
Page 37 and 38: Management Discussion and Analysis
Page 39: Loan Portfolio by Business Segment
Page 43 and 44: Distribution of Total Income Bs 7,4
Page 45 and 46: Summary of the Accounting Principle
Page 47 and 48: Business Management Report Commerci
Page 49 and 50: Commercial Banking Deposits Year 20
Page 51 and 52: Corporate Banking During 2010, the
Page 53 and 54: This made the team more consolidate
Page 55 and 56: In Venezuela, Mercantil Servicios d
Page 57 and 58: Excess Liquidity and Interbank Mark
Page 59 and 60: Available for Sale and Held to matu
Page 61 and 62: Quality of Service and Operating Ef
Page 63 and 64: Manuel CABRÉ Ávila desde San Bern
Page 65 and 66: Human Resources Many of the activit
Page 67 and 68: Risk Management Good risk managemen
Page 69 and 70: Distribution of Mercantil's loan po
Page 71 and 72: Trading in fixed-income securities
Page 73 and 74: Operational risk management in non-
Page 75 and 76: Performance of Subsidiaries Equity
Page 77 and 78: (1) Obtained from dividing sharehol
Page 79 and 80: Mercantil Commercebank Florida Banc
Page 81 and 82: Mercantil Merinvest, C.A. Consolida
Page 83 and 84: Credit Ratings Mercantil Servicios
Page 85 and 86: Prevention and Control of Money Lau
Page 87 and 88: * Prevention and Control of Money L
Page 89 and 90: Mercantil’s Social Contributions
Page 91 and 92:
Pedro Ángel GONZÁLEZ Paisaje de G
Page 93 and 94:
Corporate Governance Mercantil Serv
Page 95 and 96:
Board of Directors The Board of Dir
Page 97 and 98:
Executive Committee Mercantil has a
Page 99 and 100:
Pedro Ángel GONZÁLEZ Comenzando l
Page 101 and 102:
Report of the Board of Directors of
Page 103 and 104:
Mercantil Commercebank • In March
Page 105 and 106:
Mercantil Banco Universal: 85 years
Page 107 and 108:
In 1996 the Bank changed its status
Page 109 and 110:
Mercantil’s principles and values
Page 111 and 112:
Board of Directors Directors Gustav
Page 113 and 114:
Gustavo Galdo C. President of Inver
Page 115 and 116:
Executive Committee Gustavo Antonio
Page 117 and 118:
MERCANTIL, C.A., BANCO UNIVERSAL Av
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T h e F i n e A r t s S o c i e t y
Page 121 and 122:
Alberto EGEA LÓPEZ Ávila, hacia 1
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ANNUAL REPORT 2010

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