Fourth Quarter - Mercantil Servicios Financieros

Transcription

Mercantil Servicios Financieros, C.A.
Financial Report Fourth Quarter 2015
Mercantil Servicios Financieros (Mercantil). Financial Report Fourth Quarter 2015
Caracas Stock Exchange (MVZ.A & MVZ.B); Level 1 ADR: MSFZY & MSFJY
Caracas, January 29, 2015. Mercantil reports its earnings for the quarter ended December 31, 2015.
Summary
Net Income: Mercantil posted Bs 4,214 million in net income in 4Q 2015, up 18.8% from Bs 3,456 million in 4Q 2014. In annual terms, net income
of 2015 reached Bs 14,092 million, reflecting Bs 4,238 million (43.0%) year-on-year growth from Bs 9,854 million.
 Net earnings per share in 4Q 2015 were Bs 42 (Bs 36 in 4Q 2014). Net earnings per share in 2015 were Bs 142 (Bs 99 in 2014).
 ROE and ROA in 4Q 2015 reached 44.4% and 3.6%, respectively (52.2% and 4.9% in 4Q 2014). At year-end 2015 these indicators were 37.1%
and 3.0%, respectively (36.3% and 3.4% in 2014, respectively).
 Class "A" and "B" share prices closed at Bs 5,000 each, compared to Bs 4,250 and Bs 4,200 shares “A” and “B, respectively at September
30, 2015 and Bs 1,400 each at December 31, 2014.
The main variations in net quarterly income are:
 Net Interest Income reached Bs 13,657 million, Bs 6,961 million (104.0%) more that the Bs 6,696 million reached in 4Q 2015, due mainly to the
increase in financial assets and liabilities. The financial intermediation ratio (loans-to-deposits) was 66.3% at the close of 4Q 2015 (69.2% at
December 31, 2015).
 Commissions and other income totaled Bs 5,524 million, reflecting a Bs 2,736 million (98.1%) year-on-year increase from Bs 2,788 million in
4Q 2014, mainly due to Bs 2,414 million increase in income from commissions on the use of credit and debit cards, income from financing
insurance policies, as well as other commissions from clients transactions, among others.
 Personnel and Operating Expenses reached Bs 12,341 million, Bs 6,211 million (101.3%) up from Bs 6,130 million in 4Q 2014, due to
increases of Bs 819 million (45.6%) in personnel expenses, Bs 773 million (77.7%) in expenses for contributions to regulatory entities, and Bs
4,619 million (138.4%) in operating expenses.
 Current and Deferred Income Tax reached Bs 2,714 million, Bs 3,344 million (530.8%) up from Bs -630 million of income, due mainly to the
exclusion of financial and insurance activities from the inflation adjustment system as a result of changes in Venezuela fiscal regulations.
Personnel and operating expenses have been affected by the high level of inflation in Venezuela, which was 141.5% over the last 12 months at
September 30, 2015.
Summary of Financial Statements and Ratios 2
(In Million Bolivars, except percentages)
December
September
2015
2015
December
2014
QUARTERLY RESULTS
Net Interest Income
Allowance for losses on loan portfolio
Commissions and other income
Insurance premiums, net of claims
Salaries and Operating Expenses
Net Income – Quarter
Net Income – 12 months
13,657
1,735
5,524
1,825
12,341
4,214
14,092
11,066
1,530
3,950
987
9,680
2,916
6,696
1,228
2,788
792
6,130
3,546
9,854
KEY FINANCIAL INDICATORS
Income per share – Quarter Bs / share
Income per share – 12 months Bs / share
Market price A share
Market price B share
Book value per share
Net Income (quarter) / Average Assets (ROA)
Net Income (quarter) / Average Equity (ROE)
42
142
5,000
5,000
436
3.6%
44.4%
29
36
99
1,400
1,400
318
4.9%
52.2%
4,250
4,200
399
2.7%
32.0%
∆ Dec. 15
vs. Sep. 15
%
23.4
13.4
39.8
84.9
27.5
44.5
∆ Dec. 15
vs. Dec. 14
%
104.0
41.3
98.1
130.4
101.3
18.8
43.0
44.6
18.8
43.0
257.1
257.1
36.9
(26.5)
(14.9)
17.5
19.0
9.0
33.3
38.8
Contact: Investor Relations. Phone: 58-212-503.1335. e-mail: [email protected]. website: www.msf.com.
1
Assets: In 4Q 2015 total assets registered Bs 112,743 million (21.6%) quarter-over-quarter growth to Bs 634,325 million, Bs 278,757 million
(78.4%) year-on-year growth.
The variations for this item, seen individually by subsidiary, are as follows:
 Mercantil Banco Universal registered Bs 109,688 million (24.2%) quarter-over-quarter growth and Bs 270,967 million (92.8%) year-on-year
growth.
 Mercantil Commercebank registered US$ 126 million (1.6%) growth in 4Q 2015 and US$ 252 million (3.2%) year-on-year growth.
 Mercantil Seguros registered Bs 6,427 million (25.3%) quarter-over-quarter growth and Bs 16,866 million (112.6%) year-on-year growth.
Net Loan Portfolio: In 4Q 2015 net loans portfolio registered a quarter-over-quarter increase of Bs 51,631 million (17.7%), reaching Bs 344,141
million, Bs 146,759 million (74.3%) year-on-year growth.
The variations for this item, taken individually by subsidiary, are as follows:
growth.
 Mercantil Commercebank registered US$ 106 million (1.9%) growth in 4Q 2015 and US$ 309 million (5.9%) year-on-year growth.
Deposits: In 4Q 2015, deposits registered Bs 99,691 million (22.9%) quarter-over-quarter growth to Bs 534,903 million, and Bs 240,228 million
(81.5%) year-on-year growth.
growth.
 Mercantil Commercebank registered US$ 146 million (2.3%) growth in 4Q 2015 and US$213 million (3.4%) year-on-year growth.
Shareholders’ Equity: Totaled Bs 44,534 million representing Bs 3,731 million (9.1%) increase from Bs 40,803 million in the previous quarter and
Bs 11,980 million (36.8%) year-on-year growth. This quarterly variation is primarily attributable to Bs 4,214 million in net income for the period and a
decline of Bs 482 million from adjusting investments available-for-sale to their market value, among others.
Capital Ratios: Mercantil’s equity-to-assets ratio at December 31, 2015 is 7.0% and its equity to risk-weighted assets ratio is 11.4%, based on the
standards of the National Securities Superintendency (Superintendencia Nacional de Valores– SNV) versus 9.2% and 15.2%, respectively at
December 31, 2014).
 Mercantil Banco Universal, in accordance with the requirements of the Superintendency of Banking Sector Institutions (Superintendencia de
las Instituciones del Sector Bancario - SUDEBAN), has an equity-to-assets ratio of 10.0% and an equity to risk-weighted assets ratio of 12.7%
at December 31, 2015 (9.7% and 16.5% at December 31, 2014)
 Mercantil Commercebank. N.A., based on the standards of the U.S. Office of the Comptroller of the Currency (OCC), at December 31, 2015
has an equity-to-assets ratio of 9.4% and equity to risk-weighted assets ratio of 12.3% (9.3% and 13.3% at December 31, 2014).
The equity ratios of Mercantil and its subsidiaries exceed the regulatory minimums.
Summary of Financial Statements
December
September
2015
2015
Cash and due from banks
Investment Portfolio
Loan Portfolio, Net
Other assets
TOTAL ASSETS
155,661
96,020
344,141
38,504
634,325
108,794
92,189
292,510
28,089
521,582
76,902
68,867
197,382
12,369
355,520
∆ Dec. 15
vs. Sep. 15
%
43.0
4.2
17.7
37.1
21.6
Deposits
Financial Liabilities
Other Liabilities
Shareholders’ Equity
TOTAL LIABILITIES AND SHAREHOLDERS´
EQUITY
ASSETS UNDER MANAGEMENT
534,903
8,378
46,510
44,534
634,325
435,212
7,845
37,722
40,803
521,582
294,675
5,293
22,998
32,554
355,520
22.9
6.8
23.3
9.1
21.6
81.5
58.3
102.2
36.8
78.4
107,063
94,899
66,290
12.8
61.5
December
2014
∆ Dec. 15
vs. Dec. 14
%
102.4
39.4
74.3
211.3
78.4
2
Table of contents












Contribution of subsidiaries
Market share
Credit Ratings
Analysis of Consolidated Financial Statement
Operating Income

Net Interest Income

Loan Portfolio Provision

Total Commissions and Other Income

Insurance Premiums, Net of Claims

Total Operating Expenses
Efficiency Ratios
Balance Sheet

Liquidity


Financial Intermediation Activity
 Loan Portfolio
 Deposits

Total Assets

Financial Obligations


Capital Ratios
Performance of Subsidiaries in accordance to its local accounting standards
Wealth Management
Corporate Events
New Measures announced for the Venezuelan Financial Environment
Awards and Acknowledgements
 Appendix I: Summary of the accounting principles used to prepare the financial statements
 Appendix II: Financial statements of Mercantil Servicios Financieros
 Appendix III: Consolidated Loan Portfolio by Classification
 Appendix IV: Statutory percentage of loans portfolio in Venezuela
 Appendix V: Stock Performance and Summary of Financial Ratios
 Appendix VI: Financial statements of Mercantil Banco Universal
 Appendix VII: Financial statements of Mercantil Commercebank Holding Corporation
 Appendix VII: Financial statements of Mercantil Seguros
 Appendix IX: Key Macroeconomic Indicators
Page
4
5
5
6
6
7
8
8
9
10
10
11
13
14
15
16
16
16
16
19
20
20
21
22
23
28
29
30
32
34
36
38
3
Contribution of Subsidiaries
December 31, 2015
MERCANTIL SERVICIOS FINANCIEROS
(1)
Shareholders’ Equity: Bs. 44,534
Shareholders’
Equity
Mercantil (2)
Banco Universal
Bs 49,258
 Venezuelan
Main
Activity
Mercantil (2)
Commercebank
Bs 4,114

Universal
Bank

Main
Subsidiaries


U.S. Domestic
Bank & Brokerage
Mercantil
Commercebank N.A.
Mercantil
Commercebank
Investment Services
(MCIS)
Mercantil
Commercebank Trust
Company (MCTC)
Banks
Overeseas
Bs 1,732
 International
Banking
 Mercantil Bank
(Schweiz) AG.
 Mercantil Bank and
Trust Limited
(Islas Caiman)
 Mercantil Bank
(Curacao) NV
 Mercantil Bank
(Panamá) S.A.
Mercantil (2)
Seguros
Bs 6,143
 Insurance in
Mercantil
Merinvest
Bs 351
 Investment
Venezuela and
Abroad
 Mercantil
Others
Bs 493
 Other
banking, mutual
funds, trading
& brokerage
Minor
Investment

 Mercantil Merinvest,
Seguros
Panamá S.A.
Casa de Bolsa, C.A.
 Mercantil Servicios
de Inversión, C.A.
 Mercantil Sociedad

Administradora de
Entidades de
Inversión Colectiva,
C.A.
Mercantil Capital
Markets (Panamá)
In millions of Bs(1)
% Assets
550,578
86.8%
50,998
8.0%
4,597
0.7%
26,982
4.3%
172
0.0%
998
0.2%
Total
634,325
100.0%
Investments
Loans (Net)
Deposits
69,461
307,412
491,737
13,904
34,931
40,104
1,567
1,798
3,062
10,887
-
114
-
87
-
96,020
344,141
534,903
3,439
12,220
7
108
(15)
(80)
674
1,463
24
66
85
315
4,214
14,092
44,214
10,947
3,146
70
48,686
-
107,063
7,229
1,018
123
1,409
44
34
9,857
Total Assets
Contribution
Income net:
Quarter
12 Months
Assets under Management
Number of Employees
1
2
Financial data presented in accordance with SNV standards (see Appendix I). Figures net of elimination of inter-company transactions.
See Summary of Subsidiaries’ performance according to their Regulatory Accounting Standards (page 16)
4
Market Share
Positioning
Commercial
and Universal
Private
Bank's
Market Share
Total
Private
Venezuela
Mercantil Banco (1)
Tourism Loans
Manufacturing Loans
Agricultural Loans
Morgtgage Loans under the mortgage Debtor Law (Ley Especial del
Deudor Hipotecario)
Microcredits Loans
Gross Loans
Savings Deposits
Total Deposits
Total Deposits + Other Demand Liabilities
Total Assets
Trust
3
4
3
2
1
2
12.0%
9.7%
13.5%
19.4%
21.0%
24.3%
5
2
6.4%
16.0%
5
3
1
3
3
4
4
4
2
1
2
2
3
2
9.6%
12.5%
22.0%
12.2%
11.7%
11.5%
7.5%
12.2%
18.2%
27.4%
17.0%
16.8%
16.7%
20.0%
Insurance
Market
2
11.5%
Mercantil Seguros (2)
Net Premiums
USA
Mercantil Commercebank (3)
Total Deposits
U.S. (3)
Florida (4)
120
15
(1) Figures according to the Unconsolidated Financial Statements Published in National newspapers at 12/31/2015.
(2) Figures according to the Venezuelan Superintendency of Insurance at 11/30/2015.
(3) Figures according to the American Bankers based on 200 Bank Holdings, Commercial Banks and Saving Institutions with more Deposits in U.S. at 03/31/2015.
(4) Figures according to the Federal Deposit Insurance Corporation (FDIC), to the Florida Stated U.S. at 06/30/2015 Total number of institutions in Florida: 254 in Florida
Credit Ratings
Mercantil Servicios Financieros
National Ratings
Long-term
Short-term
Rating for Unsecured Bonds ( Long-term in local currency)
Rating for Commercial Paper (Short-term in local currency)
Mercantil Banco Universal
National Ratings
Long-term
Short-term
International Ratings
Long-term (Foreign and local currency)
Short-term (Foreign and local currency)
Viability
Mercantil Commercebank Florida Bancorp y
Mercantil Commercebank N.A.
Long-term Deposit (Mercantil Commercebank ,N.A. only)
Long-term
Short-term
Viability
Fitch Ratings
Clave (*)
A+(Ven)
F1+(Ven)
A2
A1
A2
A1
AA-(Ven)
F1+(Ven)
CCC
C
ccc
BB+
BB
B
bb
(*) A credit rating agency in Venezuela.
5
Analysis of Consolidated Financial Statement
Operating Income
12 months
Quarter
Ended on
December
2015
Net Interest Income
Allowance for Losses on Loan Portfolio
Net Financial Margin
Commissions and Other Income
Insurance Premiums, Net of Claims
Operating Income
∆
December
2014
13,657
1,735
11,923
5,524
1,825
19,271
6,696
1,228
5,468
2,788
792
9,048
Bolivars
6,961
507
6,455
2,736
1,033
10,233
Ended on
%
December
2015
104.0
41.3
118.1
98.1
130.4
113.0
December
2014
41,658
4,924
36,733
15,424
4,488
56,645
Bolivars
20,955
2,873
18,082
8,141
2,161
28,383
20,703
2,051
18,652
7,283
2,327
28,262
%
98.8
71.4
103.2
89.5
107.7
99.6
Net Interest Income
In 4Q 2015, net interest income was Bs 13,657 million, 104.0% higher than the Bs 6.696 million registered in 4Q 2014, mainly due to an increase in
the volume of financial assets and liabilities. Interest income was Bs 19,688 million, which reflects a 102.3% year-on-year increase; this increase is
reflected in the behavior of income from the loan portfolio which grew 110.0%. Interest expenses totaled Bs 6,030 million, up 98.6% compared to
4Q 2014.
The financial intermediation ratio (loan-to-deposits) was 66.3% at the close of 4Q 2015 (66.2% at the close of December 2014).

Mercantil Banco Universal, reached Bs 13,139 million, up 109.3% from Bs 6,276 million in net interest income registered in 4Q 2014, mainly
due to a higher volume of financial assets and liabilities. The financial intermediation ratio was 63.8% in December 2015 and 65.3% in
December 2014.

Mercantil Commercebank, N.A., totaled US$45 million, 6.7% more than the US$42 million registered in 4Q 2014. The Bank continues to
hold a significant portion of its assets, US$2,206 million, more than 26%, in short-term investments and securities issued by the U.S.
government or U.S. government-backed agencies. This high level of liquidity has continued to allow the Bank ample flexibility to increase its
credit operations.
In 2015, net interest income was Bs 41,658 million, 98.8% up on Bs 20,955 million in 2014.
Mercantil's net interest margin (net interest income-to-average financial assets) at December 31, 2015 was 12.0% compared with 9.3% the
previous year.
Evolution of Net Interest Income
45,000
13.5%
(In millions of Bs)
40,000
12.0%
35,000
11.5%
30,000
10.5%
25,000
9.3%
8.5%
20,000
15,000
9.5%
8.8%
8.5%
7.8%
7.5%
10,000
6.5%
5,000
-
12.5%
5,709
8,402
13,268
20,955
41,658
2011
2012
2013
2014
2015
Net Interest Income
5.5%
Net Interest Income / Average Financial Assets
6
Loan Portfolio Provision
In 4Q 2015, expenses totaled Bs 1,735 million, Bs 507 million (41.3%) up from Bs 1,228 million registered in 4Q 2014.

Mercantil Banco Universal registered Bs 1,676 million in loan portfolio provisions in 4Q 2015 (Bs 1,199 million in 4Q 2014), aimed mainly at
provisions related to the construction, commercial and industrial sectors, as a result of loan portfolio growth during the quarter.

Mercantil Commercebank, N.A. registered US$3 million in loan portfolio provisions in 4Q 2015, mainly as loans for the commercial sector.
In 2015, provision expense totaled Bs 4,924 million, up Bs 2,051million (71.4%) from Bs 2,873 million in 2014.
The accumulated allowance amounts to Bs 10,545 million at December 31, 2015, which represents 3.0% of gross loans (the same at the closed of
September 30, 2015). This provision covers 1,273% of past-due and nonperforming loans (1,300% on September 30, 2015).
Evolution of Loan Portfolio Provision and
Asset Quality Ratios
(million of Bs)
360,000
330,000
300,000
270,000
240,000
210,000
180,000
150,000
120,000
90,000
60,000
30,000
0
4.4%
4.4%
4.0%
4.0%
3.4%
3.3%
3.3%
3.1%
3.6%
3.6%
3.0%
3.2%
3.2%
2.8%
2.8%
2.4%
2.4%
2.0%
2.0%
1.7%
1.6%
1.6%
1.2%
1.2%
0.9%
0.4%
0.8%
0.8%
0.3%
0.2%
2014
2014
2015
2015
0.4%
0.4%
0.0%
0.0%
2011
2011
2012
2012
Gross Loans
2013
2013
Past Due and Non-Performing Loans
Past Due and Non-Performing Loans / Gross Loans
Allowance for Losses on Loan Portfolio / Gross Loans
7
Total Commissions and Other Income
Composition of Total Income
In 4Q 2015, commissions and other income totaled Bs 5,524 million, Bs
2,736 million (98.1%) up from Bs 2,788 million in 4Q 2014, primarily due to:

Bs 2,414 million (87.3%) increase in earnings from commissions on the
use of debit and credit cards, insurance policy financing, as well as other
commissions on client transactions, among others.

Bs 322 million (1,341.7%) increase in earnings from securities trading
activities.
Bs 31,257 million
December 2014
Bs 61,570 million
December 2015
68%
67%
In 2015, Commissions and Other Income totaled Bs 15,424 million, up Bs
7,283 million (89.5%) from 2014, mainly due to a Bs 6,827 million (88.9%)
from commissions on the use of credit and debit cards, income from
financing insurance policies, other commissions on client transactions, and
an increase of Bs 457 million (99.3%) in earnings from securities trading.
Insurance Premiums, net of Claims
In 4Q 2015, insurance premiums, net of commissions, reinsurance and
claims, totaled Bs 1,825 million, reflecting 130.4% year-on year growth from
Bs 792 million. This improvement is attributed to the Individuals business.
7%
In 2015, Insurance Premiums, net of Commissions, Reinsurance and Claims
reached Bs. 4,488 million, up 107.7% from 2014; collected premiums reflect
a 122.9% year-on-year rise from Bs 17,504 million to Bs 39,017 million in
2015. Claims and Administration expenses reached Bs. 23,369 million, up
Bs. 12,152 million (108.3%) from 2014.
1%
6%
2014
Collected premiums for 4Q 2015 amounted to Bs 14,966 million, reflecting
Bs 8,743 million (142.1%) year-on-year growth. The Automobile business
was the main contributor to this growth. At December 31, 2015, Mercantil
Seguros was the country’s second largest insurance company in terms of
net collected premiums, with an 11.5% share of the insurance market.
Claims and administrative expenses during 4Q 2015 totaled Bs 6,967
million, up Bs 3,512 million (101.7%) compared to Bs 3,455 million in 4Q
2014. This growth was mainly attributable to the Individuals and Automobile
segments. The claims ratio was 57.0% in 4Q 2015 (59.0% in 4Q 2014). The
technical result was Bs 490 million, up from Bs 163 million (50.0%)
compared to Bs 327 million in 4Q 2014. The variation is mainly due to
increases in collected premiums.
25%
25%
1%
2015
Net Interest Income
Commissions on Transactions, Insurance Premiums net and Other
Other Income
Income on Sales Investment Securities
Earned Premiums
(12 months change)
135%
120%
105%
90%
75%
60%
45%
30%
15%
2011
2012
2013
Insurance Market
2014
Nov-2015
Mercantil
8
Quarter
12 Months
∆
Ended on
(En millones de Bs. excepto porcentajes)
December
2015
Operating Income
Operating Expenses
Personal and Employee Benefits
Other Operating expenses
Taxes Current and Deferred
Minority Interests
Net Income
December
2014
Bolivars
∆
Ended
December
2015
%
December
2014
Bolivars
%
19,271
9,048
10,223
113.0
56,645
28,383
28,262
99.6
2,617
9,724
2,714
(2)
4,214
1,798
4,332
(630)
(2)
3,546
819
5,392
3,344
0
668
45.6
124.5
530.8
0
18.8
10,053
25,498
6,996
(7)
14,092
6,274
12,466
(218)
(6)
9,854
3,779
13,032
7,214
(1)
4,238
60.2
104.5
3.309.2
(17.0)
43.0
In 4Q 2015, operating expenses totaled Bs 12,341 million, 101.3% year-on-year increase from Bs 6,130 million. This increase is mainly due to:

Bs 819 million in personnel expenses, reflecting a year-on-year rise of 45.6%. This increase in expenses is due to the application of
compensation and benefit policies according to market values. At Mercantil Banco Universal, assets per employee rose from Bs 39.7 million
in 2014 to Bs 76.2 million in 2015. At Mercantil Seguros, net collected premiums per employee rose from Bs 4.0 million in 2014 to Bs 10.7
million in 2015. In the case of overseas business, the assets per employee indicator were US$8.0 million, lower than the US$9.1 million of
2014.

Bs 773 million (77.7%) increase in expenses for contributions to regulatory agencies.

Bs 376 million (155.3%) growth of expenses for taxes and contributions.

Bs 4,243 million (137.1%) rise in operating expenses.

Bs 3,344 million (530.8%) increase in income tax expenses, mainly due to the exclusion of financial and insurance activities from the
adjustment inflation system resulting from changes in Venezuelan fiscal regulations.
In 2015, Operating Expenses totaled Bs 35,550 million, up 89.7% from Bs 18,740 million in 2014, mainly due to an increase of Bs 3,779 million in
Personnel Expenses and of Bs 13,032 million in Other Operating Expenses; the latter include larger depreciation expenses, fixed assets expenses,
amortization of intangibles and other expenses for Bs 3,002 million, increase in expenses for contributions to regulatory agencies of Bs 2,509,
increase of Bs 1,090 million in expenses for taxes and contributions, and Bs 6,430 million rise in others operating expenses. Income tax expenses
increased in Bs 7,214 million in comparison with 2014.
Operating expenses include taxes and fiscal contributions according to Venezuelan regulations, for a total of Bs 10,412 million, representing 40.3%
of total operating expenses.
Composition of Net Income by
Business Line
Years
(In millions of Bolivars)
Δ + 203.0%
35,550
1.2%
1.8%
10,053
86.8%
11,740
11.4%
Δ +89.7%
88.4%
10.4%
14,940
6,274
Year 2015
Year 2014
11,732
4,314
7,419
4,623
5,843
1,779
1,016
3,334
1,713
4,715
Dec. 2013
Dec. 2014
Dec. 2015
Banking
Insurance
Wealth Management
Salaries and employee benefits
Other operating expenses
Fees paid to regulatory agencies
Depreciation, Property and equipment, Amortization of intangibles and others expenses
9
Efficiency Ratios
The efficiency ratio measured by calculating operating expenses to
average assets was 6.4% in December 2015 versus 5.3% in
December 2014. The ratio of operating expenses to total income
was 48.3% in December 2015 (49.1% in December 2014).
Personnel and Operating Expenses have been affected by the high
level of inflation in Venezuela, which was 141.5% over the last 12
months at September 30, 2015.
141.5%
147.0%
6.6%
6.4%
6.2%
6.0%
5.8%
5.6%
5.4%
5.2%
5.0%
4.8%
4.6%
4.4%
4.2%
132.0%
6.4%
117.0%
102.0%
87.0%
5.4%
5.3%
5.3%
5.3%
56.1%
68.5%
72.0%
57.0%
50.6%
47.7%
42.0%
27.0%
27.6%
47.4%
49.1%
48.3%
2013
2014
2015
20.1%
12.0%
2011
2012
Inflation in Venezuela annual (at September 2015)
Operating Expenses / Total Income
Operating Expenses / Average Assets
Balance Sheet
The principal Balance Sheet variations during 4Q 2015 are reviewed below and commented on with respect to the prior quarter. The main year-onyear variations are also indicated for the purpose of comparison.
Summary of Balance Sheet and Assets under Management
(In millions of Bolivars, except percentages)
∆
December
2015
September
2015
December
2014
∆
Dec. 15 vs. Sep. 15
Bolivars
%
Dec 15 vs. Dec. 14
Bolivars
%
Cash and due from banks
Loan Portfolio, Net
Total Assets
155,661
96,020
344,141
634,325
108,794
92,189
292,510
521,582
76,902
68,867
197,382
355,520
46,867
3,830
51,631
112,743
43.0
4.2
17.7
21.6
78,759
27,153
146,759
278,805
102.4
39.4
74.3
78.4
Deposits
Shareholders´ Equity
534,903
44,534
435,212
40,803
294,675
32,554
99,691
3,731
22.9
9.1
240,228
11,980
81.5
36.8
Asset Management
107,063
94,899
66,290
12,164
12.8
40,773
61.5
Liquidity
Liquidity
At the close of 4Q 2015, cash and due from banks (cash and the reserve
requirements in Venezuela) plus investments in time deposits and
placements, included in the investment portfolio, increased 41.9% to Bs
163.058 million, up Bs 48,136 million from the Bs 114,922 million recorded
in the previous quarter . This growth is observed mainly in the accounts
held at the Venezuelan Central Bank.
163,058
42,491
114,922
24,079
81,715
Compared to December 31, 2014, cash and due from banks plus
investments in time deposits and placements rose Bs 81,343 million
(99.5%), from Bs 81,715 million to Bs 163,058 million.
The liquidity ratio calculated by dividing total cash and due from banks by
deposits was 29.1%; and the ratio calculated by dividing total cash and
investments by deposits was 47.1%, compared with 25.0% and 46.2%
respectively in September 2015, and 26.1% and 49.5% respectively at the
close of 4Q 2014.
Δ +99.5%
Δ +41.9%
113,169
21,858
84,716
55,044
4,813
Dec. 2014
6,127
Sep. 2015
7,397
Dec. 2015
Cash and Due from Banks - Legal Reserves
Legal Reserves
Investments in Time Deposits and Placements
10
Investments Portfolio
At the close of 4Q 2015, the investment portfolio totaled Bs 96.020 million,
reflecting Bs 3,830 million (4.2%) quarter-over-quarter growth from Bs 92,189
million. This increase is mainly due to investments issued by the Venezuelan
government, state-owned companies and decentralized entities.
Δ +39.4%
96,020
92.189
Compared to December 31, 2014, the investment portfolio grew Bs 27,153
million (39.4%), from Bs 68,867 million to Bs 96,020 million.
Δ+4.2%
The variations for this item, seen individually by subsidiary, are as follows:
67.867
Dec. 2014
(In millions,
except percentages)
Mercantil Seguros
Mercantil Commercebank
Bs
December
September
2015
2015
81,542
11,694
2,198
Bs
US$
74,013
13,862
2,168
Sep. 2015
Dec. 2015
∆
Abs.
%
7,529
(2,168)
31
10.2
(15.6)
1.4
Investments by maturity and yield at the close of 4Q 2015 are broken down as follows:
Investments by Maturity and Yield
Available
for Sale
Trading
Years
Less Than 1
Bs 1
1
%3
Bs 2
Shares
%3
6,173
8.6
3,730
4.2
7,557
8.5
4,282
4.9
6
25,044
8.5
39,792
5.8
7
38,774
From 1 to 5
Over 5
Bs 1
Held to
Maturity
47,805
Government bonds issued by the Venezuelan State account for
0.57 times Mercantil's equity and 4.0% of its assets (0.63 and
5.0% respectively in September 2015). At Mercantil Banco
Universal, these securities represent 0.39 times the equity and
3.5% of assets (0.45 times and 4.1%, respectively in September
2015).
At December 31, 2015, the Mercantil, C.A. Banco Universal
subsidiary, in line with a regulation issued by the executive
branch, purchased Bs 47,243 million in Mortgage Bonds, CDs,
Agricultural Bonds and Stocks. This represents 68.2% of the
bank's investment portfolio and 1.3 times its equity (Bs 44,271
million representing 69.6% of its investment portfolio and 1.4
times its shareholders' equity on September 30, 2015).
Bs 1
Time Deposits
and Placements
Bs 1
%
Bs 1
%3
4
9.9
1,630
3.7
18,931
1
13.4
11,840
20
2.7
65,249
7,397
380
387
7,397
2
3
1,651
TOTAL
96,020
Breakdown of Investments by Issuer
December 2014
September 2015
December 2015
80%
75%
70%
65%
60%
55%
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Venezuelan Central Bank US Government & US Gov.
Guaranteed Agencies
1
Trust Fund and
Restricted
Investments
Private
Venezuelan Government
and Public Entities
Registered at Market Value
Amortized cost
The yield of securities is based on amortized cost at the end of the period. Yield is calculated by dividing income investments (including premium amortization or discounts) by the amortized cost
or market value.
11
Financial Intermediation Activity
Loan Portfolio
Loan Portfolio
Δ + 74,3%
At the close of 4Q 2015, the net loan portfolio totaled Bs 344,141 million,
reflecting 17.7% growth from Bs 292,510 million in 3Q 2015.
344.141
292,510
Compared to December 31, 2014, the loan portfolio increased Bs 146,759
million (74.3%), from Bs 197,382 million to Bs 344,141 million.
Δ+17,7%
197,382
(In millions,
except percentages)
December
September
2015
2015
307,416
5,559
256,360
5,453
∆
Abs.
%
Dec. 2014
Bs
US$
51,057
106
Sep. 2015
Dec. 2015
19.9
1.9
The ratio of past-due and nonperforming loans to gross loans was 0.2%, the
same as the close of September 2015. The ratio by subsidiary is as follows:
Loan Portfolio by
Economic Activity
 Mercantil Banco Universal 0.2% compared with 0.3% for the Venezuelan
financial system.
December 2015
 Mercantil Commercebank, N.A. 0.3% in comparison with 0.2% in the
previous quarter. Non-accrual loans reached 1.2% of the total loan portfolio,
the same as in the previous quarter.
Commercial 44%
Credit Cards 20%
Agricultural 14%
At December 31, 2015, 99.6% of Mercantil’s loan portfolio is outstanding. The
allowance for losses on loan portfolio covers 1,273% of past-due and
nonperforming loans (1,300% on September 30, 2015); this indicator is 1,467%
at Mercantil Banco Universal (1,466% at the close of September 30, 2015) and
480% at Mercantil Commercebank (557% at the close of September 30, 2015).
Industrial 5%
Services 5%
Residential mortgage 3%
Foreign trade 1%
Construction 1%
Car loans 1%
Other 6%
The analysis of Mercantil's main subsidiaries and their positioning in the market are shown on Pages 5 and 16.
Appendix III shows the distribution of the loan portfolio, broken down by economic activity, maturity, country and type of risk.
The statutory percentage Mercantil Banco Universal´s loans by economic sector and interest rates are shown in Appendix IV.
Distribution of Loan Portfolio
by Client Segment
(In millions of bolivars)
Individuals
Large Corporation
SME's
360,000
330,000
300,000
270,000
240,000
210,000
180,000
150,000
120,000
90,000
60,000
30,000
0
37%
16%
34%
30%
27%
26%
47%
33%
24%
43%
27%
Dec. 2011
Dec. 2012
Dec. 2013
43%
21%
47%
45%
Dec. 2014
Dec. 2015
12
Deposits
Deposits
At the close of 4Q 2015 deposits were Bs 534,903 million, representing a
quarter-over quarter increase of Bs 99,691 million (22.9%) from Bs 435,212
million.
Δ + 81.5%
534,903
Compared to December 31, 2014, deposits grew Bs 240,228 million (81.5%)
from Bs 294,675 million to Bs 534,903 million.
435.212
Dec. 2014
(In millions,
except percentages)
Bs
US$
Δ +22.9%
294,675
Demand deposits were the main component of total deposits, which reached
Bs 368,136 million, up 21.8% from the previous quarter and representing
68.8% of total deposits. Saving and time deposits increased Bs 32,542 million
(26.5%) and Bs 1,190 million (11.8%), respectively, compared to the previous
quarter.
Sep. 2015
Dec. 2015
∆
December
September
2015
2015
Abs.
%
492,826
6,508
394,381
6,361
98,445
146
25.0
2.3
The analysis of Mercantil's main subsidiaries and their positioning in the market can be found on Pages 5 and 16.
Distribution of Deposits
by Client Segment
(In millions of bolivars)
Individuals
Large Corporation
SME's
550,000
500,000
450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
49%
48%
22%
56%
26%
56%
19%
25%
Dec. 2011
56%
20%
24%
24%
26%
26%
Dec. 2012
Dec. 2013
Dec. 2014
29%
Dec. 2015
13
Total Assets
At the close of 4Q 2015 total assets registered 21.6% growth to Bs 634,325
million, up Bs 112,743 million compared to Bs 521,582 million in the previous
quarter. This is the result of the combined behavior of the total cash and due
from banks and the loan portfolio, which grew Bs. 48,867 million and Bs
51,631 million respectively. The ratio of performing assets to total assets was
72.0%, up Bs 57,868 million (14.5%) from the previous quarter.
Consolidated Total Assets
Δ +78,4%
634,325
521,582
Compared to December 31, 2014, assets grew Bs 278,805 million (78.4%)
from Bs 355,520 million to Bs 634,325 million.
355,520
Dec. 2014
(In millions,
except percentages)
Mercantil Seguros
Bs
Bs
US$
December
September
2015
2015
563,053
31,839
8,130
453,365
25,412
8,004
Δ+21,6%
Sep. 2015
Dec. 2015
∆
Abs.
109,688
6,427
126
%
24.2
25.3
1.6
The analysis of Mercantil's main subsidiaries and their positioning in the market is shown on Pages 5 and 16.
The loan portfolio remained the principal component (54.3%) of the total assets, cash and due from bank accounts for 24.5%, while the investment
portfolio accounted for 15.1% and the end of the quarter.
Assets Distribution
Total Bs. 634,325 million
December 2015
Investment Portfolio 15.1%
Cash and Due from Banks 24.5%
Loan Portfolio, Net 54.3%
Venezuelan Central Bank 0.3%
Venezuelan Govermment 11.4%
US Govermment. 1.0%
Private Sector 1.8%
US Govermment Guaranteed Agencies 0.6%
Other Assets 6.1%
14
Financial Obligations
At the close of 4Q 2015, total financial obligations reached Bs 9,972 million, up 11.9% compared to Bs 8,910 million in the previous quarter,
compared to December 31, 2014, obligations rose 50.9%.
(Expresado en millones de Bs.)
Títulos valores de deuda objeto de
oferta pública emitidos por la institución
Obligaciones Subordinadas
Otros pasivos financieros*
December
2015
September
2015
December
2014
Bs
Bs
Bs
888
706
1,594
8,378
9,972
359
706
1,065
7,845
8,910
620
696
1,316
5,293
6,609
* Includes, funds received for special financing programs, letters of credit and securities loan agreements.
At the close of 4Q 2015, shareholders' equity reached Bs 44,534 million, Bs
3,731 million (9.1%) increase from Bs 40,803 million in the previous quarter
and 36.8% up from Bs 32,554 million registered in 4Q 2014.
The variation in 4Q 2015 is mainly due to Bs 4,214 million in net income for
the period and Bs 482 million decline as a result of adjusting investments
available for sale to their market value.
Evolution of Shareholders´Equity
Δ +36.8%
44,534
40,803
32,554
Compared to December 31, 2014 the variation is primarily due to Bs 14,092
million in net income, and Bs 327 million decline from adjusting available-forsale investments to their market value.
Δ+9.1%
Dec. 2014
Sep. 2015
Dec. 2015
Capital Ratios
Mercantil’s equity-to-assets ratio on December 31, 2015 is 7.0% and its
equity to risk-weighted assets ratio is 11.4%, based on the standards of the
SNV versus 9.2% and 15.2% on December 31, 2014.

Mercantil Banco Universal, in accordance with the requirements of the
SUDEBAN, has an equity-to-assets ratio on December 31, 2015 of
10.0% and equity to risk-weighted assets ratio of 12.7% (9.7% and
16.5%, respectively on December 31, 2014).

Mercantil Commercebank, N.A., based on the standards of the U.S.
Office of the Comptroller of the Currency (OCC), has an equity-toassets ratio of 9.4% at December 31, 2015, and equity to risk-weighted
assets ratio of 12.3% (9.3% and 13.3%, respectively on December 31,
2014).
The equity ratios of Mercantil and its subsidiaries exceed the regulatory
minimums.
Capital Structure
December 2015
Capital stock 2%
Capital reserve 1%
Traslation adjustments of net assets of subsidiaries abroad 6%
Retained earnings 90%
Unrealized gain fron adjustments of investments to market value 1%
15
Performance of Subsidiaries in accordance to its local accounting standards
Mercantil Banco Universal’s total assets grew Bs 107,969 million
(24.4%) compared with September 2015. During 4Q 2015, net loans
grew Bs 51,053 million (19.9%) and total deposits rose Bs 98,426
million (24.7%), to Bs 307,412 million and Bs 497,093 million,
respectively. Loan portfolio quality remains very favorable, with a 0.2%
ratio of past-due and non-performing loans to gross loans compared to
0.3% for the Venezuelan financial system as a whole. The loan portfolio
provision covers 1,467% of past-due and nonperforming loans (1,466%
on September 30, 2015).
Mercantil C.A., Banco Universal
Consolidated
(In million of Bs)
Total Assets
Loan Portfolio
Deposits
Net Income Quarter
Net Income 12 Months
Dec.
2015
Sep.
2015
Dec.
2014
551,055
69,387
307,412
497,093
37,339
3,568
12,162
443,086
63,677
256,359
398,667
31,053
2,611
287,893
44,623
162,619
258,084
24,256
3,492
9,431
On December 31, 2015, the Mercantil Banco Universal subsidiary ranks
fourth in the Venezuelan financial system in terms of total assets with
11.5% of the market. The leading institution has an 18.9% share and
Venezuela’s four main banks account for 58.8% of the country’s Historic figures in accordance with the standards of the Venezuelan Superintendency of Banking
financial system. It is also the leading bank in the private financial Sector Institutions (SUDEBAN).
system in terms of manufacturing loans, with 21.0% of the market. In
terms of tourism, agricultural and mortgage loans, and gross portfolio,
the bank ranks second with market shares in the private financial system of 19.4%, 24.3%, 16.0% and 18.2%, respectively. Mercantil is
Venezuela's leading bank in terms of savings deposits with 22.0% of the market.
Shareholders’ equity grew Bs 6,286 million (20.2%) quarter-over-quarter growth to Bs 37,339 million. This increase mainly includes Bs 3,568
million in net quarterly income, an increase to Bs 2,890 million as a result of Non-capitalized capital contributions, and a Bs 173 million decrease
from adjusting available-for-sale investments to their market value. The equity-to-assets ratio as of December 31, 2015 is 10.0% (minimum
requirement 9%) and the equity to risk-weighted assets ratio, according to the standards of the SUDEBAN, is 12.7% (minimum requirement is
12%).
In 4Q 2015, net earnings of Bs 3,568 million reflected Bs 76 million (2.2%) year-on-year growth, mainly due to a Bs 6,834 million rise in net
interest income as a result of an increase in financial assets and liabilities; Bs 2,340 million in net income from commissions on the use of credit
and debit cards and well as commissions from other client transactions; Bs 490 million increase in loan portfolio provisions; rises of Bs 5,506 million
in personnel and operating expenses; Bs 571 million in contributions to regulatory agencies. The corporate income tax increase Bs 2,531 million,
mainly due to the exclusion of financial activities from the adjustments inflation system resulting for changes in Venezuela fiscal policy.
In annual terms, net earnings were Bs 12,162 million and represented a Bs 2,731 million (29.9%) year-on-year growth. This growth is mainly
associated with an increase of Bs 20,394 million in net interest income; a Bs 5,833 million rise in net income from commissions on the use of credit
and debit cards and other income; a Bs 2,040 million increase in loan portfolio provisions; a Bs 13,253 million rise in personnel and operating
expenses; a Bs 1,944 million increase in contributions to regulatory entities; and a Bs 6,259 million increase in corporate tax expenditures, due to
changes in fiscal regulations in Venezuela.
Mercantil Banco Universal has paid taxes and fiscal
contributions according to the current legislation during
the year 2015 totaling Bs. 14,563 million, representing
40.3% of operating expenses.
Evolution of Net Interest Income
45,000
15.0%
40,000
35,000
10.9%
11.1%
12.0%
10.8%
10.9%
12.0%
30,000
9.0%
25,000
20,000
15,000
4.4%
4.1%
6.0%
3.5%
3.3%
3.7%
10,000
5,000
3.0%
4,881
7,352
11,646
19,134
39,528
2011
2012
2013
2014
2015
0
0.0%
Operating Expenses / Average Total Assets
Net Interest Income
Net Interest Margin
16
Mercantil Commercebank, N.A.
Total assets of Mercantil Commercebank as of December 31, 2015
registered a quarter-over-quarter growth of US$127 million (1.6%) and a
US$249 million (3.2%) year-on-year growth. The loan portfolio was
US$5,556 million, up US$105 million from the previous quarter and
6.2% higher than in 4Q 2014. At December 31, 2015, the Bank holds
US$2,206 million (26.4% of total assets) mainly in short-term
investments and bonds issued or guaranteed by the U.S. government or
U.S. government-backed agencies. The Bank´s deposits totaled
US$6,563 million at the close of December 2015, which reflects a
quarter-over-quarter growth of US$ 167 million (2.6%) and a 3.9% yearon-year growth.
Consolidated
(In million of US$)
Dec.
2015
Total Assets
Loan Portfolio
Deposits
Net Income Quarter
8,153
2,206
5,556
6,563
748
4
21
Sep.
2015
8,025
2,278
5,451
6,397
755
4
Non-performing assets (non-accrual loans and assets received in lieu of
payment) grew US$25 million compared to December 2014. Non- Figures presented according to accounting principles generally accepted in
performing assets accounted for 0.8% of total assets versus 0.6% in (USGAAP )
December 2014. The ratio of nonperforming loans to total loans reached
1.2% at the close of December 2015 in comparison with to 0.8% over the same period.
Assets Quality Ratios
10.0%
50.0%
45.6%
8.0%
6.0%
40.0%
7.1%
30.0%
Dec.
2014
7,903
2,379
5,233
6,318
746
8
28
the United States
At December 31, 2015 the Bank’s equity grow to US$748 million,
similar to the previous quarter, which includes US$4 million in quarterly
income, a US$9 million decline from adjusting available-for-sale
investments to their market value, and US$1.5 million from dividends
payment. At December 31, 2015 the equity-to-assets ratio is 9.4% and
the equity to risk-weighted assets ratio is 12.3% (9.3% and 13.3%,
respectively on December 31, 2014), based on the standards of the
Office of the Comptroller of the Currency (OCC).
5.8%
18.7%
4.0%
20.0%
13.5%
2.9%
9.3%
2.0%
1.9%
0.0%
2011
2012
1.2%
7.7%
1.1%
0.7%
0.8%
2013
2014
Non-Accrual Loans / Gross Loans
Total Class Loans / Gross Loans
1.7%
10.0%
1.2%
0.0%
2015
In 4Q 2015, the US$4 million recorded in net income was US$4 million
(51.8%) less than the amount registered in 4Q 2014. This variation is
mainly attributable to a US$3 million increase in net interest income,
US$1 million reduction in commissions and other income, the increase
of personnel and operating expenses by US$8 million, mainly due to
regulations associated with the BSA (Bank Secrecy Act) applicable to
banks operating in the U.S.. Corporate Income tax decreased by US$2
million in comparison with 4Q 2014.
Total Class Loans + OREO / Tier 1+ Allowance for Loan Losses
In annual terms, the US$21 million in net income recorded reflects US$7 million (25.5%) decrease compared to 2014. This variation is due to the
US$20 million increase in net interest income, a US$3 million increase in the loan portfolio provision requirement, a US$1 million increase from
commissions and other income, and a US$30 million increase in personnel and operating expenses. Corporate income tax declined by US$7
million in comparison with 2014.
17
Mercantil Seguros
Net collected premiums in 4Q 2015 grew 142.1% to Bs 14,966 million
year-on-year from Bs 6,183 million. At December 31, 2015, this
subsidiary was the country’s second insurance company in terms of
collected premiums, with a market share of 11.5%.
Total Assets stood at Bs 45,708 million at year end, reflecting 58.3%
quarter-over-quarter growth. The Company registered Bs 23,232 million
in shareholders´ equity, which complies with the statutory solvency
requirements.
The figures presented include all the mandatory and voluntary reserves
required to guarantee the company’s operations, including outstanding
claims reserves and end-of-period payments.
100%
95.7%
95.6%
Total Assets
Investments suitable for representing
Investments not-suitable for representing
Technical Reserves
Net Income Quarter
Premiums Received Quarter
Premiums Received 12 months
Dec.
2015
Sep.
2015
Dec.
2014
45,708
28,586
28.867
18.768
16.233
9.854
6,795
23,232
843
2,200
14,966
39,017
4.700
10.572
385
3.509
5.452
745
1.614
6.183
17.504
9.797
Historic figures in accordance with the standards of the Venezuelan Superintendency of
Insurance Activity (SUDEASEG)
Evolution of Collected Premiums and Combined Ratio1
95%
Mercantil Seguros C.A.
Consolidated
(In millions of Bs)
95.6%
92.4%
At December 31, 2015 the company’s investment portfolio was Bs
35,381 million, 50.8% up on the previous quarter. Total investments
representing technical reserves reached Bs 28,586 million (52.3%
higher than the figure for the previous quarter and 190.1% more than at
the close of December 2014), while liquidity levels amply meet all the
statutory requirements on commitments towards policyholders,
insurance brokers and reinsurers.
89.8%
90%
85%
80%
5,234
7,166
10,379
17,504
39,017
2011
2012
2013
2014
2015
In annual terms, the technical result closed at Bs 727 million, with a
combined operating ratio of 97.4%. Net earnings for 2015 totaled Bs
2,200 million, 36.3% up on the figure for 2014. The claims ratio was
64.0% in 2015 (62.1% at December 31, 2014).
Premiums Received
Combined Ratio
1
In 4Q 2015, the technical result closed at Bs 490 million, with a
combined operating ratio1 of 94.3%. Net income for 4Q 2015 totaled
Bs 843 million (98.0% up from the net result of 4Q 2014). The claims
ratio was 57.0% (59.0% in 2014).
Combined ratio = (incurred claims + commissions + operating expenses)/ earned premiums
18
Wealth Management
The Wealth Management business comprised: trust services, securities brokerage, mutual funds and portfolio management services. Net assets
under management recorded off the balance sheet at December 31, 2015 reached Bs 107,063 million, representing a 12.8% quarter-over-quarter
increase and 61.5% year-on-year growth. They are broken down as follows:
TOTAL ASSETS UNDER MANAGEMENT
December
2015
September
2015
December
2014
∆ Dec. 15
vs. Sep.15
%
∆ Dec. 15
vs. Dec. 14
%
Trust Funds
32,053
29,512
24,643
8.6
30.1
Mutual Fund
2,684
2,496
2,156
7.5
24.5
52,534
44,189
23,276
18.9
125.7
3,688
3,667
3,883
0.6
(5.0)
16,104
15,035
12,332
7.1
21.9
107,063
94,899
66,290
12.8
61.5
Brokerage
Financial Advisory
Custody of Securities Trading
Total Assets under
Management Bs
At the close of 4Q 2015, the Trust Fund managed Bs 32,053 million in assets, which reflects 8.6% quarter-over-quarter growth and 30.1% year-onyear growth. At December 31, 2015, Mercantil's trust fund ranked second in the private banking sector and fourth in the fiduciary market in
Venezuela.
At the close of December 2015, Mercantil maintained its position as Venezuela's mutual fund industry leader. Mutual Fund assets under
management grew 7.5% and 24.5% compared to the September 2015 and December 2014, respectively, reaching Bs 2,684 million.
Mercantil offers its clients investment products and services (as broker-dealers and investment advisers) in global financial markets. At the close of
December 2015, the total value of client assets was Bs 56.222 million, 17.5% up at the close of September 2015 (107.0% year-on-year increase).
19
Corporate Events
th
40 Anniversary of Mercantil Bank (Curaçao)
Mercantil Bank (Curaçao) is a subsidiary of Mercantil Servicios Financieros, which had been founded on December 31, 1975 on this island of the
Netherlands Antilles, registered by license of the Bank van de Nederlandse Antillen (Central Bank). The subsidiary began operating in February
1976, to provide financial services to international clients.
Mercantil presents the new Mercantil Móvil Empresas App
The new app Mercantil Móvil Empresas (Mercantil Mobile Business) provides businesses with access to Mercantil Banco services and products via
mobile phones or tablets. Users will be able to check their balance, make transfers, manage payroll and request Pronto Crédito Empresarial en
Línea (Online Early Business Credit) at any time and place. The new app places Mercantil in the leading position in digital banking, as the first
financial institution in the country to provide this app to businesses.
New Measures announced for the Venezuelan Financial Environment
SUDEBAN issues:
The “Regulations regarding the Characteristics and Risk Rating of the System of Finances for Micro, Small and Medium-Sized
Businesses.”
The regulations establishes the characteristics and risk ratings of the Micro-financial System and Small and Medium-Sized Businesses sectors
according to the number of employees, annual income and goals of their activities; loans to the micro-financial sector will be for periods under five
years, and the gross loan portfolio of micro-credits must be directed towards commercial activities (40% maximum), public transportation (40%
maximum) and other activities such as arts and crafts (20% minimum). It also includes the maximum parameters (in Tax Units) for granting microloans or other finances, and allows micro-credits by credit card. Banks must comply with the regulations within 180 days of the publication date.
"Regulations Regarding the Adequate Comprehensive Liquidity Risk Management for Banks”
The regulations establish that Banks must implement procedures for the management and administration of liquidity risks, which must include:
strategies, policies and procedures to identify, measure, evaluate, monitor, limit, control, report and disclose the levels of liquidity risk; indications
regarding the structure of assets and liabilities; internal controls and systems for the management and administration of liquidity risks; measurement
and monitoring tools; and liquidity contingency plans. Similarly, the regulations expressly indicate functions and responsibilities of the Board of
Directors, the Risk Committee, the Comprehensive Risk Management Unit, the Assets and Liabilities Management Committee, and the Treasury
Department, regarding the management of liquidity risk. On the other hand, it also establishes the obligation of at least developing and
implementing at least the following methodologies: Structural Liquidity Ratio (RALE), Adjusted Structural Liquidity Ratio (RALEA), Concentrated
Public Liquidity Ratio (RACOCAP) and GAP Analysis, and provides details for calculating liquidity risk indexes and for scenario analyses regarding
exposure to liquidity risks. Banks must adjust to these regulations within a period of 180 days from the publication date.
Circular Letter (memorandum) granting the exception to exclude 100% of legal reserves from total assets
A regulatory exception was granted to exclude, from total assets, 100% of the monthly balance in the 112.01 “BCV reserves account” as indicated
in the Bank Accounting Manual. The exception is valid for financial statements from October 2015 onwards, and may be modified or suspended by
SUDEBAN as required by financial market conditions.
The Office of the President promulgated:
The Income Tax Law
The executive branch issued the Income Tax Law, which dictates that net income originating in banking, financial, insurance or reinsurance
activities, obtained by legal persons established in the country will pay a proportional 40% tax. It excludes from the fiscal inflation adjustment
system those taxpayers qualified as special passive subjects, and establishes that income will be considered available from the moment that
operations take place that give rise to them, with the exceptions established by Law. It also eliminates regulations that granted reductions of the tax
due to new investments, and the regulation that allowed said reductions to be transferred to up to three subsequent fiscal years..
The Large Financial Transactions Tax Law
The Decree with Rank, Value and Force of Large Financial Transactions Tax Law issued by the executive branch will apply to financial transactions
by legal persons and economic entities without legal person status qualified as “Special Passive Subjects” by SENIAT (National Integrated Tax
Administration Service) a 0.75% tax on the taxable base, applicable, among others, to debits on bank accounts, and operations without financial
intermediation. This Decree will enter into force in February 1st, 2016.
20
Law of the Stock Market
The National Executive issued the Decree with Rank, Value and Force of Law of the Stock Market, where includes as subjects under this law,
societies managing collective investment societies, independent public accountant firms, and brokerage companies and stock market agencies.
Brokerage companies and stock market agencies must have at least 3 shareholders and at least 25% of its equity must belong to a public
securities broker; brokerage companies and stock market agencies must be identified as limited or universal, depending on their social capital and
the activities they are licensed for. It also introduces the definition of bonds and participation securities, and title societies; includes the requirement
of an authorization by SNV in order to sell or transfer shares, to change the object of the company, and for transformations or fusions. It reduces
the period for publishing monthly balances and establishes that the publication must be made in the SNV web page; the Law grants a 90-day period
from its publication in order to present a plan for adjusting to the new regulations.
The Law of the Venezuelan Central Bank (BCV)
The executive branch issued the Decree Law of the BCV with the following items: a) The President of the Republic will designate the President of
the BCV and the members of the board without a requirement of consideration by the National Assembly; b) the BCV may suspend operations of
institutions that don’t provide the information on economic transactions or other information required by the BCV; c) the BCV may finance the
Government and public or private institutions in the case of domestic or foreign threats to security, or other harm to the public interest, as qualified
by the President of the Republic or by unanimous approval by the Board; d) the BCV Board may classify information as secret or confidential; f) any
order for the transfer of funds and/or securities between participants in the national payroll system must be authorized by the BCV; g) the BCV will
coordinate with the executive branch “the scheme for providing information during domestic or foreign circumstances that may threaten National
Security and the economic stability of the Nation;” and h) the BCV must authorize the inflow and outflow of any currency representing the bolivar.
Law of Insurance Activity
The executive branch issued the Decree with Rank, Value and Force of Law of Insurance Activity whose mainly changes and inclusions are: a)
modifying the amounts of the collateral that companies in the Insurance Sector must constitute; b) increase the minimum equity required; c)
includes a new annual contribution up to 5% of earnings in the fiscal year by companies in the sector, to be dedicated to research and development
of Insurance Activity; d) establishes that companies in the sector must have an annual contribution to the National Public Health System between
1% and 3% of the premiums of health insurance policies, health plans premiums, income from remunerations for risk management contracts and
any other insurance policies; e) modifies conditions for using technical reserves in investments; f) establishes the obligation to attend to and resolve
complaints presented by policyholders, insured, beneficiaries or contractors and users or affiliates; and g) increases penalties for companies in the
Insurance Sector if they breach the law (fines are between one thousand and 48 thousand tax units).
Awards and Acknowledgements
Mercantil Banco Universal acknowledged as “2015 Bank of the Year” in Venezuela
The Banker financial magazine granted Mercantil Banco Universal the “2015 Bank of the Year” award for Venezuela. The institution gained the
award after an analysis of its results indicated solid financial profitability, sustained growth of deposits, an adequate diversification of clients and
constant innovation in order to satisfy clients within an appropriate risk-management policy.
Mercantil Servicios Financieros and Mercantil Seguros in Venamcham’s 2015 “Top 100 Companies”
The Venezuelan-American Chamber of Commerce and Industry (VenAmCham) presented its “Top 100 Companies”, were Mercantil Servicios
Financieros ranked four in the global ranking and first in the financial sector. Likewise, Mercantil Seguros ranked number 10th and second in the
insurance sector. The list includes the most successful companies in the country, with capital either domestic or foreign, and ranked based on total
income at the close of 2014.
Mercantil Servicios Financieros also leads the Social Investment ranking. Social investment is considered as non-compulsory expenditures to
finance projects to improve living standards of employees and their families, as well as those of the local community and society in general
Mercantil Banco in the 250 Latin American Banks ranking of the AméricaEconomía magazine
Mercantil Banco ranked 169 among the 250 Latin American Banks of the AméricaEconomía magazine, the 4th Venezuelan bank on the list. The
ranking includes state-owned banks and is prepared according to assets size by the close of June 2015.
Mercantil Servicios Financieros among the “Top 200 Latin American Banks 2015” according to The Banker
Mercantil Servicios Financieros ranked as the first Venezuelan institution in The Banker’s Top 200 financial institutions in Latin America. According
to the results, Mercantil Servicios Financieros is ranked No. 10, up 5 places over the previous year.
21
APPENDIX I
Summary of the Accounting Principles used to prepare the Financial Statements
Financial statements are presented in accordance with the accounting standards of the SNV, in bolivars. A summary of some of the main
accounting principles applied is given below:
Securities Held for Trading - Unrealized gains or losses resulting from differences in market value due to market fluctuations are included in the
results for the period. Available-for-Sale Securities – Recorded at their market value. Unrealized gains or losses resulting from differences in market
value and exchange rate fluctuations are included in shareholders’ equity. Held-to-Maturity Securities – Recorded at their acquisition cost, adjusted
for amortization of premiums or discounts. For all portfolio investments, permanent losses in market value are recorded as a charge to income in
the period in which they occur. Permanent investments – are investments that represent 20% to 50% stock ownership. Those greater than 50%
are recorded as an equity interest and consolidated, except when control is likely to be temporary.
Loan Portfolio
Loans are classified as overdue 30 days after their maturity. Allowances for loan portfolio losses are determined through a collectability assessment
that quantifies the amount that must 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 assessing loans for small amounts of the same nature, these are grouped
together to determine the provisions required.
Recognition of income and expenditure
Income, costs and expenses are recorded as they are earned or incurred. Interest earned on past-due loan portfolios is recorded as income when
collected. Fluctuations in the market value of derivatives are recognized as income in the period in which they occur. Insurance premiums are
recorded as income when earned.
Consolidation
The consolidated financial statements include the accounts of Mercantil and its more than 50%-owned subsidiaries and other institutions in which
Mercantil has a controlling interest. See the principal subsidiaries on page 4 and the conciliation of its accounting standards with SNV regulations
on pages 32, 34, 36.
Inflation Adjustment
According to SNV standards, Mercantil’s financial statements, as of December 31, 1999 must be presented in historic figures. Since then Mercantil
has ceased to adjust for inflation in its primary financial statements. As a result, fixed and other assets are shown at their inflation-adjusted value up
to December 31, 1999. The market value determined by independent assessments is higher than the inflation cost adjusted for inflation indicated
above. New additions are being recorded at their acquisition value.
Assets and Liabilities in foreign currency
Mercantil applies the controlled official exchange rate of Bs. 6.2842 / US$ 1 for the translation of the foreign currency balances of its subsidiaries in
Venezuela and the financial statements of its subsidiaries abroad. The effects of foreign exchange rate fluctuations are recorded in the results, with
the exception of foreign exchange rate fluctuations of available-for-sale debt investments and trading portfolio of shares included in equity.
Differences between the accounting standards of the SNV and SUDEBAN
The main accounting differences for the reconciliation of items under SNV and SUDEBAN for Mercantil Servicios Financieros are:
 Amortization of premiums or discounts of securities carried out on a straight-line basis under SUDEBAN standards and in accordance with the
constant amortization rate under SNV standards.
 Foreign exchange rate fluctuations are recorded in the results, with the exception of those that SUDEBAN indicates to be included in equity
and are subsequently recorded in the results when SUDEBAN authorized.
Differences between the accounting standards of the SNV and International Financial Reporting Standard (IFRS)
The main accounting differences for Mercantil Servicios Financieros between the SNV standards indicated above and IFRS are:
 Deferred Income Tax: IFRS allows deferred tax to be recognized for the total amount of loan portfolio loss allowances, while SNV standards
only allow recognition of allowances for loans classified as high risk and unrecoverable.
 Provision for assets received in lieu of payment: SNV standards stipulate a 100% allowance for real property received in lieu of payment after
one year from the date of incorporation; under IFRS no amortization deadlines are established.
 Foreign Currency: The balances in foreign currency are valued according to the best estimates of expected future cash flow of bolivars using
legally established procedures.
22
APPENDIX II
MERCANTIL SERVICIOS FINANCIEROS, C.A.
CONSOLIDATED BALANCE SHEET
UNAUDITED FIGURES
∆
December
2015
CASH AND DUE FROM BANKS
Cash
Venezuelan Central Bank
Venezuelan Banks and Other Financial
Institutions
Foreign Banks and Other Financial Institutions
Pending Cash Items
September
2015
December
2014
∆
Dec. 15 vs. Sep. 15
Bolivars
%
Dec. 15 vs. Dec. 14
Bolivars
%
8,541
137,641
5,995
91,794
4,364
66,235
2,546
45,848
42.5
49.9
4,178
71,407
95.8
107.8
288
1,664
7,526
327
1,745
8,933
921
1,642
3,740
(96)
(81)
(1,407)
(29.4)
(4.6)
(15.8)
(690)
22
3,786
(74.9)
1.4
101.2
155,661
108,794
76,902
46,867
43.0
78,759
102.4
7
38,774
47,805
387
7,397
1,651
9
40,191
44,459
313
6,127
1,090
12
36,684
26,404
307
4,813
647
(2)
(1,417)
3,346
74
1,270
561
(18.9)
(3.5)
(7.5)
23.6
20.7
51.5
(5)
2,090
21,401
80
2,584
1,004
(39.2)
5.7
(81.1)
26.1
53.7
155.2
96,020
92,189
68,867
3,830
4.2
27,153
39.4
LOAN PORTFOLIO
Current
Rescheduled
Past Due
Litigation
353,347
511
777
51
300,348
514
694
2
202,742
501
531
9
52,999
(3)
83
49
17.6
(0.6)
12.0
2,450.0
150,605
10
246
42
74.3
2.0
46.3
466.7
354,685
(10,545)
301,558
(9,048)
203,783
(6,401)
53,127
(1,497)
17.6
16.5
150,902
(4,144)
74.1
64.7
344,141
292,510
197,382
51,631
17.7
146,759
74.3
5,053
1,614
378
5,349
26,110
3,635
518
285
5,404
18,247
2,481
339
28
2,045
7,476
1,418
1,096
93
(55)
7,863
39.0
211.6
32.6
(1.0)
43.1
2,572
1,275
350
3,304
18,634
103.7
376.1
1,250.0
161.6
249.3
634,325
521,582
355,520
112,743
21.6
278,805
78.4
INVESTMENT PORTFOLIO
Investments in Trading Securities
Investments in Securities Available for Sale
Investments in Securities Held to Maturity
Share Trading Portfolio
Investments in Time Deposits and Placements
Restricted Investments
INTEREST AND COMMISSIONS RECEIVABLE
LONG-TERM INVESTMENTS
ASSETS AVAILABLE FOR SALE
PROPERTY AND EQUIPMENT
OTHER ASSETS
TOTAL ASSETS
23
APPENDIX II
CONSOLIDATED BALANCE SHEET
UNAUDITED FIGURES
December
2015
DEPOSITS
Non-interest Bearing
Interest-Bearing
Savings Deposits
Time Deposits
September
2015
December
2014
∆
∆
Dec. 15 vs. Sep. 15
Bolivars
%
Dec. 15 vs. Dec. 14
Bolivars
%
190,707
177,429
155,483
11,284
153,053
149,124
122,941
10,094
94,245
101,176
91,069
8,185
37,597
28,305
32,542
1,190
24.6
19.0
26.5
11.8
96,406
76,253
64,414
3,099
102.3
75.4
70.7
37.9
534,903
435,212
294,675
99,691
22.9
240,228
81.5
888
359
620
529
147.4
268
43.2
8,378
154
44,738
706
589,767
7,845
170
36,467
706
480,759
5,293
94
21,572
696
322,981
533
(7)
8,271
0
109,008
6.8
(9.4)
22.7
0.0
22.7
3,085
69
23,166
10
266,818
58.3
73.4
107.4
1.4
82.6
24
20
16
4
20.0
8
50.0
664
192
167
664
192
167
664
192
167
0
0
0
0.0
0.0
0.0
0
0
0
0.0
0.0
0.0
2,983
39,914
(235)
(505)
2,987
35,283
(231)
(93)
2,982
27,055
(92)
(93)
(4)
4,631
(4)
(412)
(0.1)
13.1
1.7
443.0
1
12,859
(143)
(412)
0.0
47.5
155.4
443.0
1,352
1,834
1,679
(482)
(26.3)
(327)
(19.5)
44,534
40,803
32,554
3,731
9.1
11,980
36.8
634,325
521,582
355,520
112,743
21.6
278,805
78.4
DEPOSITS AUTHORIZED BY THE VENEZUELAN
SECURITIES AND EXCHANGE COMMISSION
Publicly Traded Debt Securities Issued
FINANCIAL LIABILITIES
INTEREST AND COMMISSION PAYABLE
OTHER LIABILITIES
SUBORDINATED DEBT
TOTAL LIABILITIES
MINORITY INTEREST IN CONSOLIDATED
SUBSIDIARIES
SHAREHOLDERS’ EQUITY
Paid in Capital
Capital Inflation Adjustment
Capital Reserves
Translation Adjustments of net Assets of Subsidiaries
Abroad
Retained Earnings
Shares repurchased and held by Subsidiary
Pension Plan Remeasurement
Unrealized Gain (Loss) from Adjustment on Investments
Available For Sale to Market Value
TOTAL SHAREHOLDERS´ EQUITY
TOTAL LIABILITIES AND SHAREHOLDERS´ EQUITY
24
APPENDIX II
CONSOLIDATED INCOME STATEMENT
UNAUDITED FIGURES
Quarter
Ended on
December
2015
Income from Cash and Due from Banks
12 Months
Ended on
∆
December
2014
Bolivars
December
2015
%
∆
December
2014
Bolivars
%
251
114
137
120,2
464
216
248
1,473
1,066
407
38.2
5,418
4,677
741
15.8
17,963
8,552
9,411
110.0
52,963
25,247
27,716
109.8
19,688
9,732
9,955
102.3
58,844
30,140
28,705
95.2
5,726
2,956
2,770
93.7
16,454
8,858
7,596
85.8
Interest for Time Deposits
32
26
6
23.1
146
111
35
31.5
Interest for Securities Issued by the Bank
19
15
4
26.7
55
31
24
77.4
253
39
214
548.7
532
185
347
187.6
6,030
3,036
2,994
98.6
17,186
9,185
8,002
87.1
NET INTEREST INCOME
13,657
6,696
6,961
104.0
41,658
20,955
20,703
98.8
Provision for losses on loan portfolio
1,735
1,228
507
41.3
4,924
2,873
2,051
71.4
11,923
5,468
6,455
118.1
36,733
18,082
18,652
103.2
Trust Fund Operations
75
67
8
11.9
251
167
84
50.3
Foreign Currency Transactions
14
13
1
7.7
31
36
(5)
(13.9)
1,330
496
834
168.1
3,347
1,419
1,928
135.9
(20.0)
Income from Investment Securities
Income from Loan Portfolio
INTEREST INCOME
Interest for Demand and Savings Deposits
Interest on Financial Liabilities
INTEREST EXPENSE
NET FINANCIAL MARGIN
Commissions on Transactions
Commissions on Letters of Credit and
Guarantees Granted
Equity in Long-Term Investments
Exchange Gains and Losses
Income (Loss) on Sale of Investment
Securities
114.8
5
11
(6)
(54.5)
24
30
(6)
174
116
58
50.0
329
239
90
37.5
(3)
0
(3)
0.0
271
90
181
200.1
346
24
322
1,341.7
917
460
457
99.3
Other Income
TOTAL COMMISSIONS AND OTHER
INCOME
3,582
2,061
1,521
73.8
10,253
5,699
4,554
79.9
5,524
2,788
2,736
98.1
15,424
8,141
7,283
89.5
Total insures premiums, net of claims
1,825
792
1,033
130.4
4,488
2,161
2,327
107.7
19,271
9,048
10,223
113.0
56,645
28,383
28,262
99.6
Salaries and employee benefits
Depreciation, Property and Equipment
Expenses, Amortization of Intangibles and
Others
OPERATING INCOME
2,617
1,798
819
45.6
10,053
6,274
3,779
60.2
1,826
565
1,261
223.2
4,715
1,713
3,002
175.2
Fees paid to regulatory agencies
1,768
995
773
77.7
5,843
3,334
2,509
75.3
Other operating expenses
6,129
2,772
3,357
121.1
14,940
7,419
7,521
101.4
12,341
6,130
6,211
101.3
35,550
18,740
16,811
89.7
6,931
2,918
4,013
137.5
21,095
9,643
11,451
118.8
2,714
(630)
3,344
530.8
6,996
(218)
7,214
3,309.2
TOTAL OPERATING EXPENSES
INCOME BEFORE TAXES
AND MINORITY INTEREST
Total Current and Deferred Taxes
Minority Interests
NET INCOME
(2)
(2)
0
0.0
(7)
(6)
(1)
(17.0)
4,214
3,546
668
18.8
14,092
9,854
4,238
43.0
25
APPENDIX II
CONSOLIDATED STATEMENT OF CASH FLOWS
UNAUDITED FIGURES
(In Millions of Bolivars)
Quarter ended on
December
2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net income
Adjustments to reconcile net income to net cash provided
Operating activities Allowance for losses on the loan portfolio
Depreciation and amortization
Provision for interest receivable and other assets
Gain on equity in long-term investment
Minority interest expense
Deferred Income Tax
Accrual for employee termination benefits
Payment of employee termination benefits
Net change in operating assets and liabilities Interest and commissions receivables
Interest and commissions payables
Available for sale and other assets
Other liabilities
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Net change in investments securities
Loans granted
Loans collected
Additions to fixed assets, net of depreciation and write-offs
Net cash flows from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in
Deposits
Short-term financial liabilities
Debt securities by Mercantil
Subordinated Debt
Long-term financial liabilities received
Long-term financial liabilities paid
Cash dividends
Repurchased shares
Net cash flows from financing activities
CASH AND CASH EQUIVALENTS 1
Net increase for the period
At the beginning of the period
At the end of the period
1
12 Months ended on
December
2014
December
2015
December
2014
4,214
3,546
14,092
9,854
1,735
390
211
(174)
2
(158)
499
(311)
1,228
192
13
(116)
2
(584)
325
(161)
4,924
1,058
281
(329)
7
(442)
1,946
(1,512)
2,873
540
36
(237)
6
(314)
1,317
(1,002)
(1,418)
(16)
(8,151)
8,286
5,111
(53)
22
(617)
1,169
4,967
(2,512)
61
(19,231)
22,723
21,007
(800)
39
(3,075)
7,084
16,324
(3,969)
(87,488)
34,122
(193)
(57,528)
(1,046)
(31,637)
5,582
(770)
(27,872)
(25,841)
(297,676)
145,993
(3,953)
(181,477)
(7,931)
(153,223)
74,784
(1,212)
(87,583)
99,691
289
529
0
243
1
(197)
(3)
100,553
40,732
1,089
19
0
(684)
432
(148)
(5)
41,436
240,228
2,967
268
10
118
0
(1,635)
(143)
241,813
98,758
1,624
421
0
98
(10)
(1,086)
(32)
99,774
48,136
114,921
163,057
18,520
63,194
81,715
81,342
81,715
163,057
28,515
53,200
81,715
Includes: Cash and Cash Equivalents, Cash and Due from banks, Investments in time deposits and placements within 90 days maturity.
26
APPENDIX II
Statement of Shareholders’ Equity
UNAUDITED FIGURES
Capital
stock
Balance as of December 31, 2014
Net income
Cash dividends
Share repurchased 1
Unrealized income on Investments available for sale
Translation effect of net assets in subsidiaries abroad
Balance as of March 31, 2015
Net income
Cash dividends
Share repurchased
Balance as of June 30, 2015
Net income
Share repurchased
Balance as of September 30, 2015
Net income
Cash dividends
Pension Plans Remeasurement
Share repurchased
Balance as of December 31, 2015
664
Capital
inflation
adjustment
192
Capital
Reserves
Translation
adjustment of
the assets in
subsidiaries
Abroad
167
2,982
Retained
earnings
27,055
3,605
(1,687)
Shares
repurchased
held by
subsidiary
(92)
Pension
Plans
Remeasurement
Unrealized
Gain
(loss) from
adjustments on
investments
Available for
sale to market
value
(93)
1,679
(4)
(392)
664
192
167
5
2,987
28,974
3,356
37
(96)
(93)
1,287
(49)
394
664
192
167
11
2,999
32,367
2,916
(145)
(93)
1,680
(86)
154
664
192
167
(12)
2,987
35,283
4,214
6
411
(231)
(93)
1,834
(411)
(3)
664
192
167
(1)
(4)
2,983
(481)
39,914
(235)
(505)
1,352
Total
32,554
3,605
(1,687)
(4)
(392)
5
34,082
3,356
37
(49)
394
11
37,831
2,916
(86)
154
(12)
40,803
4,214
6
0
(3)
(482)
(4)
44,534
27
APPENDIX III
Consolidated Loan Portfolio by Classification
By Economic Activity
Commercial
Credit Cards
Agricultural
Industrial
Services
Residential mortgage
Foreign trade
Construction
Car loans
Other
By Maturity
Up to six months
Six months to one year
One to two years
Two to three years
Three to four years
Four to five years
Over five years
By Geographical Location of the Debtor
Venezuela
United States of America
Mexico
Colombia
Brazil
Switzerland
Peru
Other countries
By Type of Risk
Normal
Potential
Real
High
Unrecoverable
December
2015
154,827
71,467
48,962
19,206
18,639
9,830
2,760
4,506
3,253
2,236
354,685
December
2015
108,690
98,961
35,801
41,346
12,946
13,326
43,615
354,685
December
2015
319,086
26,888
821
958
963
659
618
4,693
354,685
December
2015
350,838
1,240
1,404
1086
117
354,685
43.6
20.1
13.8
5.4
5.3
2.8
0.8
1.3
0.9
6.0
100.0
September
2015
129,919
56,681
41,652
22,629
15,339
9,026
3,525
4,199
2,043
16,547
301,558
30.6
27.9
10.1
11.7
3.6
3.8
12.3
100.0
September
2015
89,315
77,924
37,073
38,062
12,822
11,952
34,410
301,558
89.9
7.6
0.2
0.3
0.3
0.2
0.2
1.3
100.0
September
2015
266,638
25,681
817
936
1,178
714
772
4,823
301,558
98.8
0.3
0.4
0.3
0.0
100.0
September
2015
298,070
1,175
1,372
547
394
301,558
%
%
%
%
%
43.0
18.8
13.8
7.5
5.1
3.0
1.2
1.4
0.7
5.5
100.0
%
33.8
14.0
20.3
13.0
5.4
3.8
9.7
100.0
December
2014
81,868
38,680
27,602
17,651
11,369
7,127
5,103
3,057
1,804
9,522
203,783
December
2014
66,003
37,110
36,724
26,018
9,097
8,070
20,761
79.5
12.9
0.8
0.5
1.0
0.6
1.1
3.5
100.0
98.8
0.4
0.5
0.2
0.1
100.0
December
2014
200,962
966
1,222
597
36
203,783
%
40.2
19.0
13.5
8.7
5.6
3.5
2.5
1.5
0.9
4.6
100.0
%
32.4
18.2
18.0
12.8
4.5
4.0
10.1
203,783
December
2014
170,327
22,088
1,499
860
1,489
922
1,288
5,310
203,783
%
%
100.0
%
83.6
10.8
0.7
0.4
0.7
0.5
0.6
2.7
100.0
%
98.6
0.5
0.6
0.3
0.0
100.0
28
APPENDIX IV
Statutory percentage of loan portfolio in Venezuela
December
2015
1
2
% of
Compliance
Reached
% of
Compliance
required
December
2015
Sector
Percentages of compliance
Agriculture
Calculated on the average gross loans at
12/31/2014
and
12/31/2013.
Monthly
compliance. Maximum per customer 5% of the
current portfolio. It requires a minimum
number of new clients (10%). Additionally, the
portfolio must be quarterly classified among
areas: strategic sectors (75%), non-strategic
sectors (5%), agribusiness investment (15%)
and trading (5%), according to the Ministry of
Agriculture and Lands. 20% of the portfolio
must be allocated to medium and long-term
credits.
38.4%1
25.0%
Set weekly by the Venezuelan Central Bank.
At 12/31/2015 the maximum is 13%.
Mortgage
Calculated on the gross loan portfolio at
12/31/2014, distributed as follows: 7.6% for
home purchase, 0.4% for self-construction,
improvements and expansion, and 12% for
self-construction of main dwellings, from the
latter 9.0% should be allocated for the
purchase of bonds and 3% for construction.
Annual Compliance.
17.1%2
20.0%
Set by the Housing and Habitat Ministry. Set
in accordance with family income of debtors,
ranging between 4.66% and 10.66%.
Microcredits
3% calculated on the gross loan portfolio at
06/30/2015. Monthly Compliance
4.9%
3.0%
Within minimum and maximum rates
established by the Venezuelan Central Bank.
At 12/31/2015 the rate cannot be higher than
24%.
Tourism
Calculated on the average gross loans at
12/31/2014 and 12/31/2013. The Tourism
Ministry set in 4.25% the percentage that fullservice banks have to earmark to the tourism
sector in 2015. Compliance must be achieved
at 12/31/2015.
4.25%
The Venezuelan Central Bank establishes a
preferential rate for the sector on a monthly
basis. As of 12/31/2015, the maximum rate is
10.73% and, in some cases, could be
decreased in 3 bps (minimum 7.73%) in
accordance with the Law for Tourism Loans.
Manufacturing
Calculated on the gross loan portfolio at
12/31/2014. The percentage of compliance
must be earmarked to strategic development
sectors in 60% and to the financing of SME,
joint ventures, community and state-owned
companies in 40%.
10.0%
Set by the Venezuelan Central Bank at 18%.
For SME, state-owned industries, community
industries and joint ventures, the applicable
interest rate may not exceed 90% of the rate
set by the Venezuelan Central Bank. At
12/31/2015 this is equivalent to 16.2%.
5.5%1
11.4%
Interest Rates
Includes Bs 1,257 million in Agricultural Bonds issued by the Venezuelan State and Government Entities valid for the compulsory agricultural portfolio; and Bs 207 million in Class "B" shares of
the company guaranteeing the loans of tourism SMEs "Sociedad de Garantías Recíprocas para la Pequeña y Mediana empresa " applicable for compliance with the tourism portfolio.
Includes Bolivarian Mortgage Securities 2015-II
29
APPENDIX V
Stock Performance
Quarter
Ended on
Dec. 15
Net income in billions of Bolivars
12 Months
Ended on
Dec. 14
4,214
3,546
59,401,343
59,401,343
5,000.00
1,400.00
Average daily volume (# of shares)
5,618
57,357
Market Price / Book value per share
11.5
4.4
118.2
-
42,813,618
5,000.00
42,813,618
42,813,618
1,400.00
Average daily volume (# of shares)
731
41,488
Market Price / Book value per share
11.5
4.4
118.2
435,69
318,49
99,635,524
42.30
Dec. 15
Dec. 14
14,092
9,854
2,517
33,665
39.1
35.3
14.1
0.1
0.3
0.8
3,180
17,440
39.1
35.3
14.1
0.1
0.3
0.8
99,118,607
99,416,137
99,141,881
35.77
141.75
99.40
Mercantil’s stock indicators
Class A share:
Number of outstanding shares (Issued shares minus repurchased shares)
Market Price
Market Price / Period Net Earnings per share
Dividends received in Cash / Market price A
Class B share:
Number of outstanding shares (Issued shares minus repurchased shares)
Market Price
Market Price / Period Net Earnings per share
Dividends received in Cash / Market price B
Book value per share in Bs (Equity / # of outstanding shares)1
Total weighted outstanding shares
Earnings per share (Net Result / weighted outstanding shares)
Market Quote Mercantil Class A and Class B Shares
vs. Caracas Stock Exchange (CSE) Index
Price MVZ/A
6,000
5,700
5,400
5,100
4,800
4,500
4,200
3,900
3,600
3,300
3,000
2,700
2,400
2,100
1,800
1,500
1,200
900
600
300
0
Dec-14
Adjusted CSE
Mar-15
Price MVZ/B
Jun-15
Sep-15
Dec-15
1
Issued shares minus repurchased shares
30
APPENDIX V
Summary of Financial Ratios
Quarter
Ended on
Dec. 15
12 Months
Ended on
Dec. 14
Dec. 15
Dec. 14
Balance Structure indicators
Gross Loans/Deposits
66.3%
69.2%
Net Interest Income / Average Financial Assets (NIM)
15.7%
11.9%
12.0%
9.3%
Commissions and other income / Total income
35.0%
34.8%
32.3%
33.2%
Profitability Ratios (%):
Return on average assets (ROA)
3.6%
4.9%
3.0%
3.4%
Return on average equity (ROE)
44.4%
52.2%
%
37.1%
36.3%
Efficiency Ratios (%):
Operating expenses / Average total assets
9.0%
7.1%
6.4%
5.3%
50.3%
50.0%
48.3%
49.1%
Cash and due from banks / Deposits
29.1%
26.1%
Cash and due from banks and Investments Portfolio / Deposits
47.1%
49.5%
6.2842
6.2842
Operating expenses / Total income
Liquidity Ratios (%):
Asset Quality Ratios (%):
Non-performing loans/ Gross loans
Allowance for loan losses / Non-performing loans
Allowance for loan losses / Gross loans
0.2%
0.3%
1,273.3%
1,186.9%
3.0%
3.1%
Capital Adequacy Ratios (%):
Shareholders equity / Assets
7.0%
9.2%
11.4%
15.2%
Employees in Venezuela
8.696
8.850
Employees Abroad
1.161
1.003
298
299
264
264
34
35
34
30
SNV-Risk based capital (minimum required 8%)
Number of employees
Distribution network
Branches in Venezuela
Bank branches
Insurance branches
Branches Abroad
Representative Offices
5
5
1,333
1,379
53,023
50,903
109
125
72
122
Exchange rate Bs/US$1 (Controlled since February 2003)
6.2842
6.2842
Average Exchange Rate for the quarter (Bs/US$1)
6.2842
6.2842
141.5%*
68.5%
Number of ATMs
Number of points of sale (POS)
Mercantil Aliado Network:
Correspondent Desk
Correspondent Trading Points
Exchange and inflation rates
12 months accumulated inflation
* At September 30, 2015
31
APPENDIX VI
MERCANTIL C.A. BANCO UNIVERSAL
According to rules issued by SNV 1
UNAUDITED CONSOLIDATED FIGURES
December
2015
September
2015
December
2014
∆
∆
Dec. 15 vs. Sep. 15
Bolivars
%
Dec. 15 vs. Dec. 14
Bolivars
%
SUMMARY OF BALANCE SHEET
ASSETS
Cash and Cash Equivalents
Loan Portfolio
Properties and Equipment and Other Assets
154,145
81,542
307,416
19,949
107,207
74,103
256,360
15,784
74,867
48,783
162,619
5,816
46,938
7,529
51,057
4,166
43.8
10.2
19.9
26.4
79,218
32,579
144,797
14,133
105.9
67.2
89.0
243.0
TOTAL ASSETS
563,053
453,365
292,085
109,688
24.2
270,967
92.8
LIABILITIES AND SHAREHOLDERS'EQUITY
Deposits
Financial Liabilities and Other Liabilities
492,826
20,968
394,381
17,702
253,709
9,795
98,445
3,267
25.0
18.5
239,117
11,174
94.2
114.1
TOTAL LIABILITIES
513,794
412,083
263,504
101,712
24.7
250,291
95.0
49,258
41,282
28,582
7,976
19.3
20,676
72.3
563,053
453,365
292,085
109,688
24.2
270,967
92.8
SHAREHOLDERS´ EQUITY
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
Quarter
12 Months
∆
Ended on
December
2015
SUMMARY OF INCOME STATEMENT
Interest Income
Interest Expense
Net Interest Income
Provision for Losses on Loan Portfolio
Operating Income
Operating Expenses
Income before taxes
Taxes
NET INCOME
December
2014
∆
Ended on
Bolivars
December
2015
%
December
2014
Bolivars
%
18,870
5,731
13,139
1,676
11,463
4,621
16,083
10,072
6,011
2,553
9,240
2,693
6,276
1,199
5,078
2,305
7,383
4,002
3,381
(75)
9,630
2,768
6,863
477
6,385
2,315
8,700
6,070
2,630
2,628
104.2
93.4
109.3
39.8
125.7
100.4
117.8
151.7
77.8
3,486.3
56,094
16,476
36,618
4,804
34,815
12,486
47,301
28,762
9,964
6,578
27,827
8,888
18,939
2,780
16,160
7,470
23,630
13,665
8,574
122
28,267
7,588
20,679
2,024
18,655
5,016
23,671
15,097
5,944
6,456
101.6
85.4
109.2
72.8
115.4
67.1
100.2
110.5
86.1
5,295.3
3,458
3,456
2
0.1
11,961
9,842
2,118
21.5
Conciliation of Net Income SNV and SUDEBAN
Quarter
Ended on
December
2015
Net income
Long term interest bearing loans, investments in securities adjusted for amortization, and other
consolidation effects
Net income SNV
Inter-company eliminations
Contribution to Mercantil's Results
1
2
12 Months
Ended on
December
2014
December
2015
December
2014
3,568
3,492
12,162
9,431
(110)
3,458
(19)
3,439
(36)
3,456
(106)
3,350
(201)
11,961
259
12,220
411
9,842
(476)
9,366
These financial statements are presented in accordance with SNV standards and adjusted for inflation up to December 31, 1999 (See accounting principles used). They reflect Mercantil
Banco Universal’s contribution to Mercantil´s results. These Standards of the SNV are described in Appendix I.
Historic figures in accordance with the standards of the Superintendency of Banking SUDEBAN in Venezuela.
32
APPENDIX VI
MERCANTIL C.A. BANCO UNIVERSAL
1
According to rules issued by SUDEBAN
December
2015
September
2015
December
2014
∆
∆
Dec. 15 vs. Sep. 15
Bolivars
%
Dec. 15 vs. Dec. 14
Bolivars
%
ASSETS
Loan Portfolio
154,145
69,387
307,412
20,112
107,207
63,677
256,359
15,842
74,867
44,623
162,619
5,784
46,938
5,709
51,053
4,270
43.8
9.0
19.9
27.0
79,218
24,764
144,793
14,328
105.9
55.5
89.0
247.7
TOTAL ASSETS
551,055
443,086
287,893
107,969
24.4
263,162
91.4
LIABILITIES AND SHAREHOLDERS'EQUITY
Deposits
Financial Liabilities and Other Liabilities
497,093
16,623
398,667
13,366
258,084
5,554
98,426
3,258
24.7
24.4
239,009
11,070
92.6
199.3
TOTAL LIABILITIES
513,716
412,033
263,637
101,684
24.7
250,079
94.4
37,339
31,053
24,256
6,286
20.2
13,083
53.9
551,055
443,086
287,893
107,969
24.4
263,162
91.4
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
Quarter
12 Months
∆
Ended on
December
2015
Interest Income
Interest Expense
Net Interest Income
Operating Income
Operating Expenses
Income before taxes
Taxes
NET INCOME
December
2014
Bolivars
∆
Ended on
December
2015
%
December
2014
Bolivars
%
18,866
5,765
13,101
1,692
11,409
4,811
16,219
10,196
6,024
2,455
9,232
2,966
6,266
1,202
5,064
2,471
7,535
4,118
3,417
(75)
9,634
2,800
6,834
490
6,344
2,340
8,684
6,077
2,607
2,531
104.4
94.4
109.1
40.7
125.3
94.7
115.2
147.6
76.3
3,357.0
56,151
16,623
39,528
4,836
34,692
13,240
47,932
29,390
18,542
6,381
28,191
9,058
19,134
2,796
16,338
7,407
23,745
14,192
9,553
122
27,960
7565
20,394
2,040
18,354
5,833
24,187
15,197
8,990
6,259
99.2
83.5
106.6
73.0
112.3
78.7
101.9
107.1
94.1
5,133.3
3,568
3,492
76
2.2
12,162
9,431
2,731
29.0
Indicators1 from Consolidated Financial Statements
Net Interest Income / Average assets
Return on average assets (ROA) 2
Return on average equity (ROE) 2
Non-performing loans / Gross loans
Allowance for loan losses / Past-Due and Non-performing loans
Operating expenses / average total assets
Equity / Assets
Equity / Assets minus Venezuelan Government Investments
Equity / Risk-weighted Assets
1
2
System
Average2
10.0%
4.2%
57.2%
0.3%
922.2%
2.6%
4.9%
7.0%
10.8%
N.A.
December
2015
10.0%
3.1%
42.0%
0.2%
1,466.9%
3.1%
5.6%
6.8%
10.0%
12.7%
December
2014
9.4%
4.1%
50.1%
0.3%
1,352.7%
3.5%
3.2%
8.4%
9.7%
16.5%
Consolidated.
Based on annualized figures.
N.A.: Not Available
33
APPENDIX VII
MERCANTIL COMMERCEBANK FLORIDA BANCORP
(In millions of US$, except percentages)
December
2015
September
2015
December
2014
∆
∆
Dec. 15 vs. Sep. 15
US$
%
Dec. 15 vs. Dec. 14
US$
%
ASSETS
Investments Securities
Loan Portfolio
TOTAL ASSETS
137
2,198
5,559
236
8,130
157
2,168
5,453
227
8,004
187
2,231
5,250
210
7,878
(20)
31
106
9
126
(12.7)
1.4
1.9
4.1
1.6
(50)
(32)
309
26
252
(26.8)
(1.5)
5.9
12.3
3.2
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
Financial Liabilities, Other Liabilities and Subordinated Debt
TOTAL LIABILITIES
6,508
968
7,475
6,361
980
7,342
6,295
933
7,228
146
(12)
134
2.3
(1,3)
1.8
213
35
247
3.4
3,7
3.4
655
663
650
(8)
(1.2)
4
0.7
8,130
8,004
7,878
126
1.6
252
3.2
TOTAL LIABILITIES AND SHAREHOLDERS´
EQUITY
Quarter
12 Months
∆
Ended
December
2015
Interest Income
Interest Expense
Net Interest Income
Operating Income
Operating Expenses
Income before taxes
Taxes
NET INCOME
54
10
45
3
42
14
55
52
3
2
1
December
2014
50
8
42
3
39
16
55
44
11
5
6
Dólares
5
2
3
0
3
(2)
0
7
(7)
(2)
(5)
∆
Ended
December
2015
%
9.3
23.0
6.7
11.2
6.4
(15.2)
0.1
16.7
(67.7)
(51.4)
(81.0)
December
2014
208
36
173
11
161
58
220
194
26
9
17
Dólares
182
29
152
8
144
44
199
168
31
12
19
26
6
20
3
17
3
20
25
(5)
(3)
(2)
%
14.5
21.2
13.2
40.2
11.7
6.2
10.2
15.1
(16.0)
(24.0)
(11.1)
Conciliation of Net Income SNV and USGAAP
(In millions of US$)
Quarter
Ended on
December
2015
Mercantil Commercebank N.A. Consolidated - Net Income
Results for the Holding and other Affiliates
Mercantil Commercebank Florida Bancorp - Net Income
Deferred Income Tax
Provision for available for sale assets
Others
Contribution to Mercantil's Results1
1
12 Months
Ended on
December
2014
December
2015
December
2014
4
(2)
8
(1)
21
(6)
28
(6)
2
(1)
0
0
1
7
(1)
1
(1)
6
15
0
3
(1)
17
22
1
(2)
(2)
19
These financial statements are presented in accordance with rules of the SNV (see accounting principles used) to reflect the contribution of Mercantil Commercebank Florida Bancorp to the
results of Mercantile. These Standards of the SNV are described in Appendix I.
34
APPENDIX VII
MERCANTIL COMMERCEBANK N.A.
According to USGAAP
(In millions of US$, except percentages)
∆
December
2015
September
2015
December
2014
∆
Dec. 15 vs. Sep.. 15
US$
%
Dec. 15 vs. Dec. 14
US$
%
ASSETS
Investments Securities
Loan Portfolio
TOTAL ASSETS
38
2,206
5,556
352
8,153
49
2,278
5,451
247
8,025
39
2,379
5,233
252
7,903
(11)
(72)
105
105
127
(22.1)
(3.2)
1.9
42.5
1.6
(1)
(173)
323
100
249
(2.9)
(7.3)
6.2
28.8
3.2
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits
Financial Liabilities, Other Liabilities and Subordinated Debt
TOTAL LIABILITIES
6,563
842
7,405
6,397
874
7,271
6,318
839
7,157
167
(33)
134
2.6
(3,7)
1.8
245
3
248
3.9
0,3
3.5
748
755
746
(7)
(9.0)
2
0.2
8,153
8,025
7,903
127
1.6
249
3.2
TOTAL LIABILITIES AND SHAREHOLDERS´ EQUITY
Quarter
12 Months
∆
Ended on
December
2015
December
2014
US$
∆
Ended on
December
2015
%
December
2014
US$
%
Interest Income
Interest Expense
Net Interest Income
Operating Income
Operating Expenses
Income before taxes
Taxes
NET INCOME
55
8
46
3
44
13
57
51
6
2
4
50
6
43
3
41
15
56
43
12
4
8
5
2
3
0
3
(1)
1
8
(6)
(2)
(4)
9.9
27.9
7.3
11.7
7.0
(9.7)
2.5
17.4
(50.3)
(47.6)
(51.8)
208
29
179
11
168
55
223
190
32
12
21
182
23
159
8
151
53
204
161
44
16
28
27
6
20
3
17
1
18
30
(11)
(4)
(7)
14.6
27.1
12.8
40.3
11.4
2.4
9.1
18.6
(26.1)
(27.2)
(25.5)
Indicators1
Similar
Group1
Net Interest Income / Average Financial Assets
Return on average assets (ROA) 2
Return on average equity (ROE) 2
Non-Accrual / Gross loans
Operating expenses / average total assets
Equity / Assets
Equity / Risk-weighted Assets
1
2
December
2015
3.4%
1.0%
8.9%
0.7%
1.1%
2.6%
9.9%
N.A.
2.3%
0.3%
2.7%
1.2%
1.4%
2.4%
9.4%
12.3%
December
2014
2.2%
0.4%
3.8%
0.8%
1.2%
2.2%
9.3%
13.3%
Based on September, 2015.
Annualized
N.A.: Not Available
35
APPENDIX VIII
MERCANTIL SEGUROS
Unaudited Consolidated Figures
December
2015
ASSETS
Premiums receivable
Property and equipment
Other assets
TOTAL ASSETS
September
2015
December
2014
∆
∆
Dec. 15 vs. Sep. 15
Bolivars
%
Dec. 15 vs. Dec. 14
Bolivars
%
488
11,694
8,802
1,526
9,328
31,839
573
13,862
5,461
1,781
3,554
25,412
1,032
8,766
3,047
297
1,832
14,973
(86)
(2,168)
3,162
(255)
5,774
6,427
(14.9)
(15.6)
56.1
(14.3)
162.4
25.3
(544)
2,929
5,756
1,229
7,947
16,866
(52.7)
33.4
188.9
413.4
409.3
112.6
14,092
4,552
3,357
657
3,170
25,828
9,104
4,4441
2,830
1,402
2,245
20,022
6,029
2,355
0
941
1,207
10,532
4,987
111
527
(745)
925
5,806
54.8
2.5
18.6
(53.1)
41.2
29.0
8,063
2,197
3,357
(284)
1,963
15,296
133.7
93.3
100.0
(30.2)
162.6
145.2
6,011
5,390
4,441
621
11.5
1,570
35.3
31,839
25,412
14,973
6,427
25.3
16,866
112.6
LIABILITIES AND SHAREHOLDERS’ ÉQUITY
Uncollected Premium
Reserves
Financial Liabilities
Accounts Payable Reinsures
Other provisions and other liabilities
TOTAL LIABILITIES
SHAREHOLDERS’ ÉQUITY
TOTAL LIABILITIES AND SHAREHOLDERS’ ÉQUITY
Quarter
12 Months
∆
Ended on
December
2015
December
2014
Bolivars
∆
Ended on
%
December
2015
December
2014
Bolivars
%
Earned Premiums Received
Claims Incurred
Commissions and Acquisition Expenses
Management Expenses
Taxes and Contributions
Technical Result
Income from Investments
Foreign exchange gains
Taxes
Contracts of excess of lost
NET INCOME
8,684
(4,952)
(1,844)
(682)
(717)
490
446
16
(163)
(42)
4,349
(2,560)
(858)
(335)
(270)
327
336
(74)
(6)
(104)
4,336
(2,391)
(986)
(348)
(448)
163
80
90
(157)
62
99.7
93.4
114.9
103.8
166.1
50.0
21.8
(121.0)
2,613.3
(59.8)
27,652
(17,691)
(5,492)
(2,292)
(1,975)
202
1,979
67
(374)
(288)
13,696
(8,502)
(2,463)
(1,233)
(873)
624
981
82
(6)
(385)
13,957
(9,189)
(3,029)
(1,059)
(1,102)
(422)
997
(16)
(368)
97
101.9
108.1
123.0
85.9
126.3
(67.6)
101.6
(19.1)
6,125.0
(25.2)
746
508
238
46.9
1,586
1,297
289
22.3
Conciliation of Net Income SNV and SUDEASEG
Quarter
Ended on
December
2015
Mercantil Seguros (Consolidated) - Net Income
Earned premiums
Exchange Gains and Losses
Valuation of Investments and Others
Net income SNV
Inter-company eliminations
Contribution to Mercantil's Results
1
12 Months
Ended on
December
2014
December
2015
December
2014
843
745
2,200
1,614
1
0
(98)
746
(72)
674
10
(254)
7
508
(2)
506
2
(29)
(587)
1,586
(123)
1,463
12
(468)
(169)
989
139
1,128
These financial statements are presented in accordance with SNV standards and adjusted for inflation up to December 31, 1999 (See accounting principles used, Appendix I). They reflect Mercantil
Seguros contribution to Mercantil’s results. These Standards of the SNV are described in Appendix I.
36
APPENDIX VIII
MERCANTIL SEGUROS
According to rules issued by SUDEASEG
Unaudited Consolidated Figures
December
2015
ASSETS
Investments suitable for representing Technical Reserves
Investments no-suitable for representing Technical Reserves
Other assets
TOTAL ASSETS
September
2015
December
2014
∆
∆
Dec. 15 vs. Dec. 15
Bolivars
%
Dec. 15 vs. Dec. 14
Bolivars
%
28,586
6,795
10,327
45,708
18,768
4,700
5,399
28,867
9,854
3,509
2,870
16,233
9,818
2,095
4,929
16,841
52.3
44.6
91.3
58.3
18,732
3,286
7,458
29,476
190.1
93.7
259.8
181.6
Technical Reserves
Other provisions and other liabilities
TOTAL LIABILITIES
18,723
3,752
22,476
13,642
4,653
18,295
8,399
2,383
10,782
5,081
(900)
4,181
37.2
(19.3)
22.9
10,325
1,370
11,695
122.9
57.5
108.5
SHAREHOLDERS’ ÉQUITY
23,232
10,572
5,452
12,660
119.7
17,781
326.2
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
45,708
28,867
16,233
16,841
58.3
29,476
181.6
LIABILITIES AND SHAREHOLDERS’ ÉQUITY
Quarter
12 Months
∆
Ended on
December
2015
Earned Premiums Received
Claims Incurred
Commissions and Acquisition Expenses
Management Expenses
Taxes and Contributions
Technical Result
Income from Investments
Foreign exchange gains
Taxes
Contracts of excess of lost
December
2014
Bolivars
∆
Ended on
December
2015
%
December
2014
Bolivars
%
8,684
(4,952)
(1,844)
(682)
(717)
490
543
16
(163)
(42)
4,339
(2,560)
(858
(335)
(270)
317
359
180
(6)
(104)
4,345
(2,391)
(986)
(348)
(448)
173
184
(164)
(157)
62
100.2
93.4
114.9
103.8
166.1
54.6
51.2
(91.3)
2,613.3
(59.8)
27,653
(17,690)
(4,968)
(2,293)
(1,975)
727
2069
66
(374)
(288)
13,685
(8,502)
(2,472)
(1,233)
(873)
605
1,006
394
(69
(385)
13,968
(9,189)
(2,496)
(1,060)
(1,102)
121
1,063
(328)
(368)
97
102.1
108.1
101.0
85.9
126.2
20.0
105.7
(83.2)
6,133.2
(25.2)
843
745
98
13.2
2,200
1,614
586
36.3
NET INCOME
Mercantil Seguros
KEY FINANCIAL AND OPERATING INDICATORS
(In millions of Bolivars, except percentages and insured persons)
Quarter
Ended on
December
2015
Premiums Received Net
Incurred Claims / Earned Premiums (%)
Commissions and Acq. Expenses / Earned Premiums (%)
Administrative Expenses / Earned Premiums (%)
Combined Ratio (%) 1
Insured Persons 2
1
2
3
December
2014
14,966
6,183
3
50.8%
12.3%
33.6%
57.0%
21.2%
7.9%
94.3%
1,816,733
59.0%
19.8%
7.7%
92.7%
1,896,214
11.5%
Market Share
Equity / Total Assets
12 Months
Ended on
December
2015
December
2014
39,017
17,504
64.0%
18.0%
8.3%
97.4%
62.1%
18.1%
9.0%
95.6%
Combined ratio = (incurred claims + commissions + operating expenses) / earned premiums
In numbers
Market Share at 11/30/2015
37
APPENDIX IX
Key Macroeconomic Indicators
Years
2014
Gross Domestic Product. Var.%
Consolidated
Oil activities
Non-Oil activities
Other Net Taxes on Products
2015
I 14
II 14
III 14
Quarters
IV 14
I 15
II 15
III 15
IV 15
1
(4.0)
0.3
(3.8)
(9.7)
N.A.
N.A.
N.A.
N.A.
(4.8)
0.2
(4.1)
(14.0)
(4.9)
0.4
(4.7)
(12.0)
(2.3)
0.3
(2.5)
(3.5)
(4.8)
0.3
(3.9)
(9.0)
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
64.7
6.4
N.A.
N.A.
41.5
8.4
77.5
7.2
61.7
6.9
81.2
6.0
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
64.0
101.3
76.6
70.9
63.24
64.02
64.18
83.85
100.22
101.30
19.2
14.5
14.1
21.0
21.7
15.1
15.6
15.0
14.5
16.6
14.1
14.6
17.8
14.1
14.6
19.2
14.1
14.5
18.9
14.1
14.6
19.7
12.8
14.5
20.9
12.7
14.8
21.0
21.7
15.1
Trade Balance 5
Oil Exports
Non-Oil Exports
Imports
28,344
58,332
2,165
32,153
N.A.
N.A.
N.A.
N.A.
11,290
19,899
761
9,370
10,243
19,989
791
10,537
6,811
18,444
613
12,246
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
Central Bank of Venezuela Intl. Res.
FEM
22,077
3
16,358
3
21,945
3
21,601
3
21,340
3
22,058
3
20,970
3
16,180
3
16,409
3
16,358
3
88.4
2,463
44.7
2,463
96.4
2,450
97.7
2,460
92.4
2,472
67.7
2,469
45.1
2,469
54.4
2,449
43.6
2,493
35.8
2,485
94,750 130,683
224,147 226,916
161,584
343,101
200,905
248,419
237,935
403,237
Consumer Price Index (% Change)2
Unemployment Rate (% Change)3
Wage Income Index (% Var.)1
Monetary Liquidity (% Change)1
Interest Rates (Period end) (%)
4
Six Main Commercial and Universal Banks
Period-end Loan Rate
Period-end Saving Deposit Rate
Period-end Time Deposit Rate
External Sector (millions of US$)
Oil Export Average Price (US$/b)
Average Oil Production (Thousands bpd)
Central Government (millions of Bs)
Non-Oil Income 6
Realized Expenses by the National Treasury 7
475,625
N.A. 88,608
955,915 1,907,323 161,750
313,989
N.A.
427,225 828,443
1
Year-on-year variation.
Annual Dec-Dec figures, Annualized quarterly figures.
Annual figures for the second semester.
4
Annual figures correspond to weighted averages.
5
Balance of payments figures.
6
Does not include public debt amortization.
7
Does not include public debt payments and it is subject to the availability of the respective payment orders.
2
3
N.A.: Not Available
FEM: Macroeconomic Stabilization Fund.
Source: Central Bank of Venezuela (BCV), Ministry of Finance (MF), National Statistics Institute (INE).
Ministry of Energy and Production (MEP), Bloomberg and own calculation.
Source: Venezuelan Central Bank (BCV). Ministry of Finance (MF). National Statistics Institute (INE).
Ministry of Energy and Production (MEP). Bloomberg, National Treasury
38

Fourth Quarter - Mercantil Servicios Financieros

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