Mercantil, C.A. Banco Universal (Subsidiary of Mercantil Servicios Financieros, C.A.)
Total Page:16
File Type:pdf, Size:1020Kb
Mercantil, C.A. Banco Universal (Subsidiary of Mercantil Servicios Financieros, C.A.) Independent Auditor’s Report and Financial Statements June 30, 2018 Mercantil, C.A. Banco Universal Index to the financial statements June 30, 2018 and December 31, 2017 Pages I - Independent auditor’s report 1 - 2 II - Financial statements 1 - 5 III - Notes to the financial statements 1 - Operations and regulatory environment 6 - 8 2 - Basis of preparation 8 - 16 3 - Cash and due from banks 16 4 - Investment securities 16 - 23 5 - Loan portfolio 23 - 25 6 - Interest and commissions receivable 25 7 - Investments in subsidiaries and affiliates 26 - 28 8 - Available-for-sale assets 29 9 - Property and equipment 29 - 30 10 - Other assets 30 - 31 11 - Deposits 32 12 - Deposits and liabilities with Banco Nacional de Vivienda y Hábitat (BANAVIH) 33 13 - Borrowings 33 14 - Other liabilities from financial intermediation 33 15 - Interest and commissions payable 34 16 - Accruals and other liabilities 34 17 - Taxes 35 - 36 18 - Employee benefits and employee benefit plan 36 - 39 19 - General and administrative expenses 40 20 - Other operating income 40 21 - Other operating expenses 41 22 - Extraordinary expenses 41 23 - Equity 41 - 43 24 - Financial assets and liabilities in foreign currency 44 - 45 25 - Memorandum accounts 45 - 51 26 - Credit-related commitments 51 - 52 27 - Balances and transactions with related companies 52 - 55 28 - Fundación Mercantil 56 29 - Maturity of financial assets and liabilities 56 30 - Fair value of financial instruments 57 - 58 31 - Risk management 58 - 59 32 - Liabilities and contingencies 59 - 60 33 - Money laundering prevention and terrorism financing 60 34 - Investments and loans granted in excess of legal limits 60 35 - Legal contributions 61 Mercantil, C.A. Banco Universal (Subsidiary of Mercantil Servicios Financieros, C.A.) Balance sheet June 30, 2018 and December 31, 2017 June 30, December 31, 2018 2017 (In bolivars) Assets Cash and due from banks (Note 3) 81,964,703,027,958 8,194,442,652,787 Cash 450,176,764,233 43,968,440,214 Central Bank of Venezuela 73,374,720,546,491 7,937,322,571,560 Venezuelan banks and other financial institutions 1,279,777 150,000 Foreign and correspondent banks 4,881,953,778,517 497,944,310 Pending cash items 3,257,850,658,940 212,653,546,703 Investment securities (Note 4) 5,397,732,811,436 370,078,518,915 Deposits with the Central Bank of Venezuela and overnight deposits 11,998,347,000 21,876,608,000 Investments in trading securities 114,869,656,125 - Investments in available-for-sale securities 2,515,532,285,116 48,503,994,952 Investments in held-to-maturity securities 31,679,598,117 33,006,990,269 Restricted investments 2,031,368,375,078 154,668,638 Investments in other securities 692,284,550,000 266,536,257,056 Loan portfolio (Note 5) 143,348,374,813,407 3,456,163,745,189 Current 146,800,797,467,570 3,552,770,248,421 Rescheduled 1,888,917,131 497,128,392 Overdue 55,662,600,791 1,709,337,101 In litigation 453,462,075 757,220,482 (Allowance for losses on loan portfolio) (3,510,427,634,160) (99,570,189,207) Interest and commissions receivable (Note 6) 798,610,138,252 26,174,823,792 Interest receivable on investment securities 32,566,252,405 8,140,133,339 Interest receivable on loan portfolio 754,488,503,903 17,483,117,566 Commissions receivable 12,059,261,712 627,043,778 (Provision for interest receivable and other) (503,879,768) (75,470,891) Investments in subsidiaries and affiliates (Note 7) 76,835,931,365 4,588,321,622 Available-for-sale assets (Note 8) 6,301,533 16,966,654 Property and equipment (Note 9) 170,441,694,048 110,235,891,389 Other assets (Note 10) 9,613,378,907,408 267,365,218,650 Total assets 241,370,083,625,407 12,429,066,138,998 Memorandum accounts (Note 25) Contingent debtor accounts 10,407,795,574,544 188,939,949,558 Assets received in trust 4,317,527,431,812 168,695,157,224 Other special trust services 6,070,623 6,311,768 Other debtor memorandum accounts 304,835,076,274,409 8,040,777,517,194 Other debtor control accounts 3,678,722 3,678,722 319,560,409,030,110 8,398,422,614,466 The accompanying notes are an integral part of the financial statements 1 Mercantil, C.A. Banco Universal (Subsidiary of Mercantil Servicios Financieros, C.A.) Balance sheet June 30, 2018 and December 31, 2017 June 30, December 31, 2018 2017 (In bolivars) Liabilities and Equity Liabilities Deposits (Note 11) 211,846,435,166,000 11,455,242,792,607 Demand deposits 185,567,281,793,937 9,221,871,493,143 Non-interest-bearing checking accounts 138,387,438,339,587 7,894,260,702,984 Interest-bearing checking accounts 34,335,422,211,754 1,301,812,327,561 Checking accounts under Exchange Agreement No. 20 1,140,801,016,882 96,502,972 Demand deposits and certificates 11,703,620,225,714 25,701,959,626 Other demand deposits 1,281,826,895,774 178,906,936,937 Savings deposits 24,994,197,667,182 2,053,217,769,466 Time deposits 89,125,188 122,658,859 Restricted deposits 3,039,683,919 1,123,934,202 Deposits and liabilities with Banco Nacional de Vivienda y Hábitat (Note 12) 12,267,589 7,976,680 Borrowings (Note 13) 3,797,810,310 412,830,423 Venezuelan financial institutions, up to one year 3,641,015,226 256,617,450 Foreign financial institutions, up to one year 156,795,084 156,212,973 Other liabilities from financial intermediation (Note 14) 424,562,193 40,556,995 Interest and commissions payable (Note 15) 11,394,451,979 7,829,448 Expenses payable on deposits 11,394,451,979 7,829,448 Accruals and other liabilities (Note 16) 15,680,581,837,857 605,618,742,338 Total liabilities 227,542,646,095,928 12,061,330,728,491 Equity (Note 23) Capital stock 292,415,038 292,415,038 Contributions pending capitalization 63,308,425,509 63,307,441,923 Capital reserves 314,346,166 312,884,091 Equity adjustments 10,409,111,289,334 104,439,480,454 Retained earnings 3,337,607,753,484 199,401,047,861 Unrealized gain (loss) on investment securities (Note 4) 16,803,299,948 (17,858,860) Total equity 13,827,437,529,479 367,735,410,507 Total liabilities and equity 241,370,083,625,407 12,429,066,138,998 The accompanying notes are an integral part of the financial statements 2 Mercantil, C.A. Banco Universal Income statement Six-month periods ended June 30, 2018 and December 31, 2017 June 30, December 31, 2018 2017 (In bolivars) Interest income 11,489,345,022,925 451,336,393,985 Income from cash and due from banks 2,549,106,667 834,817 Income from investment securities 45,024,616,652 10,536,965,661 Income from loan portfolio 7,428,077,353,033 345,075,109,677 Income from other accounts receivable 4,013,598,089,786 94,855,933,690 Other interest income 95,856,787 867,550,140 Interest expense (487,929,215,252) (60,105,071,904) Expenses from deposits (484,655,270,720) (59,111,545,244) Expenses from other liabilities from financial intermediation (90,107,291) (459,428,684) Other interest expense (3,183,837,241) (534,097,976) Gross financial margin 11,001,415,807,673 391,231,322,081 Income from financial assets recovered (Note 5) 1,803,426,431 1,438,811,421 Expenses from uncollectible accounts and write-down of financial assets (Notes 2 and 5) (3,376,010,394,748) (64,592,408,309) Uncollectible loans and other accounts receivable (3,376,010,394,748) (64,592,408,309) Net financial margin 7,627,208,839,356 328,077,725,193 Other operating income (Note 20) 3,544,917,755,894 175,528,269,908 Other operating expenses (Note 21) (1,191,069,952,250) (69,771,873,861) Financial intermediation margin 9,981,056,643,000 433,834,121,240 Operating expenses (4,927,054,547,521) (193,294,148,189) Salaries and employee benefits (871,131,142,190) (68,820,169,117) General and administrative expenses (Note 19) (3,964,641,590,558) (106,032,468,250) Fees paid to the Social Bank Deposit Protection Fund (Note 35) (82,762,063,827) (16,575,324,924) Fees paid to the Superintendency of Banking Sector Institutions (Note 35) (8,519,750,946) (1,866,185,898) Gross operating margin 5,054,002,095,479 240,539,973,051 Income from available-for-sale assets (Note 8) 49,299,985,207 10,953,257,787 Sundry operating income 40,574,994,305 6,918,823,771 Expenses from available-for-sale assets (Note 8) (10,483,286) (10,747,315) Sundry operating expenses (387,428,353,577) (37,017,261,739) Net operating margin 4,756,438,238,128 221,384,045,555 Extraordinary income - 31,280,614 Extraordinary expenses (Note 22) (16,478,437,400) (439,643,192) Gross income before tax 4,739,959,800,728 220,975,682,977 Income tax (Note 17) (1,601,751,633,030) (90,700,525,388) Net income 3,138,208,167,698 130,275,157,589 Appropriation of net income Retained earnings 3,138,208,167,698 130,275,157,589 Provision for the Antidrug Law (Notes 16 and 33) 48,042,815,004 2,236,202,480 The accompanying notes are an integral part of the financial statements 3 Mercantil, C.A.