Management Report on Financial Statements

Transcription

1 Management Report on Financial Statements December 2012

2 Contents History 03 Ratios 04 Ownership Structure 05 Management Structure 06 Branch Network 07 Business 08 Risk Management 09 Mismatch of Assets and Liabilities 09 Internal Audit 10 Audit Committee 10 Compensation Committee 10 Ombudsman 10 Lending Operations 11 a) By Type and Industry 11 b) By Products 11 c) By Average Ticket 12 d) By Region 12 e) By Average Maturity and Duration 12 f) By Risk Concentration of the Credit Portfolio 13 Funding 13 Time Deposits Breakdown 14 a) By Currency 14 b) By Average Maturity 14 c) By Investor 14 Client Base 14 Management Report 15 Balance Sheet 21 Financial Income Statements 25 Statement of Cash Flow Indirect Method 26 Statements of Changes in Shareholders Equity 27 Statements of Added Value 28 Notes To The Financial Statements 29 Corporate Information Advisory 2

3 History Picture of inauguration Curvelo MG Brazil The Bank originated in February 2, 1943, in the centralnorthern region of the state of Minas Gerais, in the city of Curvelo, where it was founded by local businessmen. In 1953, under the name Banco Mercantil de Minas Gerais S.A., the Bank was acquired by Mr. Oswaldo de Araújo and Mr. Vicente de Araújo. Its headquarters were relocated to Belo Horizonte, MG, starting thereafter the Bank s tradition of safety and solidity based on a philosophy of ongoing growth. Over the following years, new shareholders joined management including the current Chairman of the Board of Directors and the Executive Committee, Mr. Milton de Araújo. In November 21, 1955, Banco Mercantil de Minas Gerais S.A., as it was called at that time, acquired Banco Industrial Minas Gerais S.A., thus growing from 4 to 52 branches. On November 21, 1966, it acquired Banco Santa Cruz S.A. and Banco da Metrópole do Rio de Janeiro S.A.. On November 11, 1968, Banco Mercantil de Minas Gerais S.A. opened its new head office at Rua Rio de Janeiro, 654/680, Belo Horizonte, MG, where it has remained ever since. On November 9, 1972, it absorbed Banco Industrial de Campina Grande S.A., deemed as one of the largest banks in Brazil, as it had branches throughout in 13 Brazilian states: Alagoas, Bahia, Ceará, Guanabara (Rio de Janeiro), Minas Gerais, Pará, Paraíba, Pernambuco, Rio Grande do Norte, Rio Grande do Sul, São Paulo, Sergipe and Paraná. On November 4, 1974, it acquired Banco Mercantil do Brasil S.A. and started to use the latter s name as of November 18, These changes allowed the Bank to start the 1980s with approximately 100 branches. Since 1999, the Bank has revitalized its brand and branches to consolidate a modern image for its customers and the market. The appreciation and strengthening of the Mercantil do Brasil brand, together with solutions adequate to the clients profile, are the purposes guiding the bank s focus. On November 9, 2004, the Bank obtained its first foreign funding with an issue of US$35 million in debt securities. On September 26, 2006, Mercantil do Brasil placed its first foreign issue of subordinated debt for a total of US$125 million. On July 9 and 21, 2010, the Bank's issues of more subordinated debt securities maturing in 2020 placed U$200 million and US$50 million respectively. On December 2012, Mercantil do Brasil had a network of 177 branches, 4 banking service stations, 24 electronic service stations, and 1 foreign branch on Grand Cayman. Its branches cover Brazil's major geoeconomic centers with the highest concentration in the Southeast, particularly the state of Minas Gerais and interior of the state of São Paulo, and it has a staff of 3,010. Reception at head office Belo Horizonte MG Corporate Information Advisory 3

4 Ratios (in millions of R$) Total Assets CAGR % 28% 13,516 10,523 9,473 7, Other Liquid Assets Lending Funding CAGR General : 15% CAGR Credit Portfolio : 26% 6, Credit Portfolio and Recourses 25% 7, Credit Portfolio 22% 8,058 16% 32% 9,328 Assigned w/ Recourse Shareholder s Equity CAGR % 7,703 21% 6, % % 25% 9, % 16% 10, CAGR % 16% Time Deposits Other Deposits Interbank Funding Securities Issued Abroad Net Profit 8% 22% 1 ROAE 13% 2 8% Bank Minority Basel Index 13.3% 13.4% 12.6% 12.4% 11.0% ROAE = Return on Average Equity 1) The Income for 2010 was impacted by the recovery of COFINS (tax for social security financing). 2) The Income for 2011 was impacted by the incorporation of Fundo Imobiliário Mercantil do Brasil. Corporate Information Advisory 4

5 Ownership Structure Controlling Group ON : 57.3% PN: 20.6% Free Float ON: 42.7% PN: 79.4% % % % % 99.99% % 76.41% 78.77% Financial Segment Activity Dec 2012 Mercantil do Brasil Distribuidora S.A. Títulos e Valores Mobiliários Securities Dealer % Mercantil do Brasil Leasing S.A. Arrendamento Mercantil Leasing Operations % Banco Mercantil de Investimentos S.A. Investment Bank 78.77% Mercantil do Brasil Financeira S.A. Crédito, Financiamento e Investimentos Mercantil do Brasil Corretora S.A. Corretora de Câmbio, Títulos e Valores Mobiliários Finance 76.41% Foreign Exchange & Securities Brokerage 99.99% Other Segment Activity Dec 2012 Mercantil do Brasil Administradora e Corretora de Seguros e Previdência Privada S.A.. Insurance Management, Brokerage in General & Private Pension % Mercantil do Brasil Imobiliária S.A. Real Estate Broker % Mercantil do Brasil Empreendimentos Imobiliários S.A. Real Estate Developments % Corporate Information Advisory 5

6 Management Structure BOARD OF DIRECTORS President Milton de Araújo Vice President Maurício de Faria Araújo Councillors Clarissa Nogueira de Araújo Daniela de Araújo Coelho Glaydson Ferreira Cardoso José Carneiro de Araújo José Ribeiro Vianna Neto Luiz Henrique Andrade de Araújo Marco Antônio Marques Cardoso MANAGEMENT President Milton de Araújo Vice Presidents Hélio de Araújo Luiz Henrique Andrade de Araújo Marco Antônio Andrade de Araújo Maurício de Faria Araújo Paulo Henrique Brant de Araújo Renato Augusto de Araújo Organization Chart Executive Vice President André Luiz Figueiredo Brasil Executive Directors Fernando Antônio Machado Carvalho Lauro Wilson da Silva Luiz Carlos de Araújo Luiz Henrique Mungo Nicácio Paulo Afonso Guimarães Roberto Godoy Assumpção Taíse Christine da Cruz Valci Braga Rezende Directors Aluízio Francisco Paiva Humberto Pereira de Almeida João Rufino da Silva José Maurício Carvalho de Barros Valfredo Monteiro Filho FISCAL COUNCIL Afrânio Eustáquio Ribeiro Euler Luiz de Oliveira Penido José Régis da Silva Pontes Luiz Alberto Bertucci Milton de Castro Silva Júnior CONTROLLER Luiz Carlos de Araújo Controller CRC MG No /O4 Board of Directors Directive Committee Executive Vice President André Brasil Executive Committee Executive Directors Customer Service and Management Luiz H. Nicácio Commercial Valci Rezende Controllership, Compliance, PLD and Risks Luiz Carlos Araújo Credit Fernando Carvalho Finance and Investor Relations Roberto Assumpção Managing Credit Paulo Afonso Products Taíse Cruz Technology, Infrastructure and Client Intel Lauro Wilson Corporate Information Advisory 6

7 Branch Network By December 2012, Mercantil do Brasil had a network of 177 branches, 4 banking services stations, 24 electronic services stations, and a foreign branch on Grand Cayman. Of the branches in Brazil, 43 (24%) are located in state capitals and 138 (76%) in other regions of the states. The Bank focuses its business activities in the states of Minas Gerais, the interior of São Paulo, Rio de Janeiro, Espírito Santo, Goiás and the Federal District (Brasília), with 160 branches (88%). The southeast region of the country has 153 branches, accounting for 85% of the total. Botucatu Branch Botucatu SP Geographic Focus RN 01 PB 01 PE 01 MT 01 DF 01 BA 02 SE 01 MS 01 PR 06 GO 06 SP 70 MG 72 RJ 09 ES 02 SC 04 RS 03 Corporate Information Advisory 7

8 Business Apart from Retail banking, Mercantil do Brasil complements its product portfolio with specific segments such as Vehicle Finance, Leasing, Securities, Insurance, Pension Plans, Automatic Payroll Deductible Loans ( Crédito Consignado ), Credit Cards and Real Estate. In the retail segment, its attention is focused on Individuals and Companies with annual revenues of up to R$15 million. The corporate segment provides unique services to companies with annual revenues above R$15 million. In addition to the Business Platforms located in the state capitals of Minas Gerais, São Paulo and Rio de Janeiro, MB disposes of branches with unique infrastructure to serve customers with similar profiles in the cities of Anápolis, Brasília, Campinas, Curitiba, Florianópolis, Goiânia, Porto Alegre, Recife, Salvador and Vitória. The Bank's branches are able to offer all financial products and services to customers, and which are classified as follows: INDIVIDUALS Checking Accounts, Savings, Time Deposits and Funds; Personal Credit, Revolving Overdraft Facilities Individuals, Vehicle Finance and Credit Card; Pension Plans, Insurance and Securities; Special Services (collection, tax payments, etc.). COMPANIES Checking Accounts, Savings, Time Deposits and Funds; Working Capital, Discount of Receivables, Revolving Overdraft Facilities SME's, Vehicle Finance and Leasing; Bid and Performance Bonds, Trade Finance, Real Estate and Insurance; Special Services (collection, collection of taxes and fees, etc.). Corporate Information Advisory 8

9 Risk Management Mercantil do Brasil has an independent risk management department whose duties include planning, controlling and mitigating liquidity, credit, market and operational risks. The department uses models and tools to ensure efficient management together with a highly trained and constantly evolving team. Monitoring is done through daily reports, associated with stress scenario simulation tools, allowing the Bank to protect itself against adverse macroeconomic situations. For more information, access the Mercantil do Brasil site ( where you will be able to link at the Investor Relations area (Investor Relations Area) and to find the complete risk management information for each type of risk of the Institution. MISMATCH OF ASSETS AND LIABILITIES R$ Thousand MISMATCH Maturity Maturities 1 Assets Liabilities Balance Up to 30 days 2 2,705, ,444 2,200,614 From 31 to 60 days 810, , ,859 From 61 to 90 days 707, , ,863 From 91 to 180 days 1,005, , ,163 From 181 to 360 days 1,354,577 1,034, ,842 More than 360 days 4,032,802 7,791,889 (3,759,087) TOTAL 3 10,615,877 10,738,624 (122,747) MISMATCH Currency Currency Assets Liabilities Balance PRE 6,704,188 1,690,082 5,014,106 IGPM 218,315 12, ,521 TR 89, ,015 (175,474) TJLP 2,098 2,110 (12) CDI 2,573,010 7,269,143 (4,696,133) SELIC 334,852 63, ,616 IGPDI US$ 691, ,521 8,253 EURO 1, IPCA 0 752,577 (752,577) Shares TOTAL 3 10,615,877 10,738,624 (122,747) 1 Subsequent days 2 Including savings deposits of R$245,330 thousand. 3 MoneyMarket Funding Third Parties, for the amount of R$1,345,022 thousand, is not taken into account in the mismatch tables. Corporate Information Advisory 9

10 Internal Audit In order to better fulfill its role, MB s Internal Audit adopts practices consistent with the good corporate governance practices. It is an activity independent from other functions in the hierarchy and reports to the Board of Directors. It carries out a strict assessment of internal controls, with adequacy and adherence to internal and external standards and procedures set forth by Management. It adopts a work system that uses process mapping for better understanding, assessing and testing: internal controls, in conformity with the principle of segregation of duties; recording, authorization and grants of authority systems, and possible inherent risks; and the risk management itself. These surveys, assessments and tests encompass the main areas and processes comprising the operating cycles, always in line with the Institutional strategic planning. It has a team specialized in developing reviews in the facilities of the branch network and the units centralized in Management, which carry out corporate, including IT activities. It has an ongoing audit routine that uses indicators for followup of activities, in order to proactively act in monitoring those controls deemed as critical. It uses cuttingedge automated systems for extracting and analyzing data, carrying out, managing and documenting engagements, in order to provide adequacy to its own activities and have elements and evidence that will enable the effectiveness measurement. Audit Committee To ensure good corporate governance practices, the bank constituted its Audit Committee in the third quarter of 2011 to comply with CMN Resolution No. 3198/04, assist the Board of Directors with their duties and control the quality of financial statements and internal controls, thus helping to improve quality and reliability for Mercantil do Brasil's accounting data, control systems and risk management. Compensation Committee Our Compensation Committee was set up in September 2011 to ensure compliance with the CMN Resolution No. 3921/10 and assist the Board of Directors in defining and managing short and longterm corporate compensation policies. Ombudsman Mercantil do Brasil's Ombudsman acts directly by responding to any complaints received to identify and correct causes of dissatisfaction and indirectly too, by detecting activities or procedures during which there may be dissatisfaction of this type, also acting as a final appellate body for clients who do not feel satisfied with the way their complaints have been handled by normal customer service channels. All actions are based on Ethics, Transparency, Independency, Impartiality and Guaranteed Response. All communications carried out through a number of regulatory bodies and consumer defense bodies and ombudsman of other Institutions are reported to the Ombudsman. Additionally all complaints which have been forwarded in the first place to the SAC (Customer Service Centre) and which for some reason have not been answered within five business days or did not receive a satisfactory reply in the opinion of the customer are also sent to the Ombudsman. Twiceyearly (at the end of each semester), the Ombudsman Department puts into circulation an Activities Report, which lists positive aspects and those aspects that can be improved by the Mercantil do Brasil departments in relation to services offered to customers. Telephone: Fax: (31) Mail: Caixa Postal, 654 CEP: Belo Horizonte, MG, Brasil Internet: mercantildobrasil.com.br / canais de atendimento / ouvidoria Corporate Information Advisory 10

11 CREDIT PORTFOLIO BREAKDOWN a) By Type and Industry Lending Operations (In R$ thousand, unless stated otherwise) Type / Industry Dec / 2012 Dec / 2011 Dec / 2010 % % Balance Balance 12 Months 24 Months Individual 49% 4,203,439 2,489,746 1,619,073 69% 160% Companies 51% 4,304,053 3,933,971 3,656,554 9% 18% Civil Construction 10% 826, , ,146 3% 26% Financial Activities 3% 280, , ,546 (19%) 1% Services 3% 265, , ,194 27% 62% Wholesale Business 3% 247, , ,279 8% 26% Retail Business 3% 233, , ,855 4% 18% Passenger Transport 2% 198, , ,058 28% 46% Steel 2% 190, , ,539 21% 41% Logistics and Freight 2% 178, , ,617 11% (2%) Biofuel and sugar 2% 151,116 93,745 91,076 61% 66% Other 21% 1,730,522 1,554,392 1,616,244 11% 7% Total 100% 8,507,492 6,423,717 5,275,627 32% 61% Total Risk * 9,328,131 8,057,588 7,274,247 16% 28% * MB has operations assigned with recourse up to December 31, 2011, that is, before the enactment of CMN Resolution No. 3533/08, in the amount of R$820,639 thousand in December 2012 (R$1,633,871 thousand in December 2011 and R$1,998,620 thousand in December 2010). b) By Products By Products Dec / 2012 Dec / 2011 Dec / 2010 % % Balance Balance 12 Months 24 Months Payroll Deductibles INSS 32% 2,748,886 1,420, ,904 94% 266% Working Capital 27% 2,306,456 2,253,243 2,144,540 2% 8% Personal Credit 6% 549, , ,262 67% 335% Rev. Overdraft Facilities SME's 6% 530, , ,434 3% 20% Payroll Deductibles Public 6% 518, , ,252 25% 20% Rev. Checking Account SME's 6% 516, , ,176 64% 81% Rural Lending 3% 275, , ,993 1% 21% Renegotiated Credits 3% 257, ,418 84, % 207% Discounted of Receivables 3% 245, , ,549 8% 14% Vehicle Finance CDC 3% 220, , ,373 6% 0% Rev. Overdraft Facilities 25% 45% Individuals 1% 112,999 90,628 78,155 Real Estate 1% 87,968 57,890 46,999 52% 87% Installment Loans 1% 59,253 57,631 55,504 3% 7% Trade Finance 1% 51,067 68,939 29,020 (26%) 76% Purchased Credits 0% 6,956 39,417 90,042 (82%) (92%) Vehicles Leasing 0% 6,003 13,254 16,225 (55%) (63%) Payroll Deductibles Private 0% 3,230 2,099 3,658 54% (12%) BNDES Loans 0% 2,341 7,053 15,933 (67%) (85%) Other 0% 7,186 7,163 7,508 0% (4%) Total 100% 8,507,492 6,423,717 5,275,627 32% 61% Total Risk * 9,328,131 8,057,588 7,274,247 16% 28% * MB has operations assigned with recourse up to December 31, 2011, that is, before the enactment of CMN Resolution No. 3533/08, in the amount of R$820,639 thousand in December 2012 (R$1,633,871 thousand in December 2011 and R$1,998,620 thousand in December 2010). Corporate Information Advisory 11

12 c) Average Ticket (in Brazilian reais) d) By Region By Products By Average Ticket Dec / 2012 Dec / 2011 Dec / 2010 Rural Lending 2,133,924 1,950,105 1,616,971 Real Estate 1,332, , ,217 Trade Finance 1,276,676 1,094, ,748 Rev. Overdraft Facilities SME's 485, , ,519 Working Capital 348, , ,049 BNDES Loans 78,045 90,420 89,014 Vehicles Leasing 56,677 74,462 74,769 Rev. Checking Account SME's 44,142 30,461 25,595 Installment Loans 34,585 8,866 11,395 Discounted of Receivables 34,172 30,916 18,833 Renegotiated Credits 26,131 12,225 7,760 Vehicle Finance CDC 7,690 23,825 17,686 Payroll Deductibles Public 4,267 3,783 3,574 Payroll Deductibles INSS 3,690 2,074 2,149 Personal Credit 2,938 2,423 1,994 Payroll Deductibles Private 2,447 3,204 1,731 Rev. Overdraft Facilities Individuals 1,121 1,132 1,237 Other 2,406 2,408 1,867 Region Dec / 2012 Dec / 2011 Dec / 2010 % Balance Balance Balance Minas Gerais 62% 5,240,108 3,804,011 2,974,757 São Paulo 18% 1,539,868 1,092, ,681 Goiás 3% 292, , ,978 Rio de Janeiro 3% 263, , ,990 Federal District 1% 119, , ,811 Espírito Santo 1% 46,647 53,197 68,327 Other 12% 1,005, , ,083 Total 100% 8,507,492 6,423,717 5,275,627 Total Risk * 9,328,131 8,057,588 7,274,247 * MB has operations assigned with recourse up to December 31, 2011, that is, before the enactment of CMN Resolution No. 3533/08, in the amount of R$820,639 thousand in December 2012 (R$1,633,871 thousand in December 2011 and R$1,998,620 thousand in December 2010). e) By Average Maturity and Duration The credit portfolio recorded an average period of 12.9 months in December 2012 (10.8 months in December 2011 and 10.5 months in December 2010). Credit Portfolio Dec / 2012 Dec / 2011 Dec / 2010 Up to 1 year 61% 69% 70% More than 1 year 39% 31% 30% Corporate Information Advisory 12

13 f) By Risk Concentration of the Credit Portfolio Concentration Dec / 2012 Dec / 2011 Dec / 2010 Balance % Balance % Balance % Largest Debtor 59,147 1% 88,909 1% 50,099 1% 10 Largest Debtors 401,954 5% 392,718 6% 301,073 6% 20 Largest Debtors 651,419 8% 630,746 10% 450,398 9% 50 Largest Debtors 1,080,912 13% 1,042,813 16% 800,955 15% 100 Largest Debtors 1,442,306 17% 1,410,306 22% 1,109,443 21% Deposits Funding Dec / 2012 Dec / 2011 Dec / 2010 % % Balance Balance 12 Months 24 Months Demand Deposits 7% 544, , ,930 (1%) 7% Savings Deposits 3% 245, , ,926 8% 31% Time Deposits CDBs 87% 7,003,488 6,051,702 4,832,812 16% 45% Subordinated Time Deposits 1% 55,772 50,861 44,859 10% 24% Interbank Deposits 2% 179,293 58,446 37, % 381% TOTAL 100% 8,028,056 6,937,543 5,612,811 16% 43% MoneyMarket Funding Dec / 2012 Dec / 2011 Dec / 2010 % % Balance Balance 12 Months 24 Months Own Portfolio 0% 35,036 Third Parties 100% 1,345,022 1,034, ,115 30% 48% TOTAL 100% 1,345,022 1,034, ,151 30% 43% External Issues Dec / 2012 Dec / 2011 Dec / 2010 % % Balance Balance 12 Months 24 Months Securities Issued Abroad 16% 44,972 98, ,976 (54%) (75%) Securities Issued Abroad Subordinated Debt 78% 565, , ,815 19% (10%) TOTAL 94% 610, , ,791 7% (25%) Local Issues Dec / 2012 Dec / 2011 Dec / 2010 % % Balance Balance 12 Months 24 Months Agribusiness Credit Notes (locally LCAs) 68% 192, , ,022 40% (1%) Financial Bills LF 32% 92,551 TOTAL 100% 284, , , % 47% Borrowings and Onlendings Dec / 2012 Dec / 2011 Dec / 2010 % % Balance Balance 12 Months 24 Months Domestic Borrowings * 72% 153, ,531 16,019 (50%) 859% Foreign Borrowings 27% 58,684 87,768 94,152 (33%) (38%) Domestic Onlendings 1% 2,292 7,154 19,460 (68%) (88%) Foreign Onlendings 0% 11,038 (100%) TOTAL 100% 214, , ,669 (46%) 53% Total Funding Dec / 2012 Dec / 2011 Dec / 2010 % % Balance Balance 12 Months 24 Months TOTAL 100% 10,483,459 9,082,748 7,703,444 15% 36% * The impacts shown in Domestic Borrowings reflected receivables fund (FDIC) transactions, net of investments in Subordinated Quotas. Corporate Information Advisory 13

14 Time Deposits Breakdown a) By Currency Currency Dec / 2012 % CDI 6,093,236 87% PRE 61,105 1% SELIC 63,236 1% IPCA 752,577 11% IGPM 12,793 0% OTHER 20,541 0% TOTAL 7,003, % b) By Average Maturity By Average Maturity Dec / 2012 Dec / 2011 Dec / 2010 Months Up to 1 year 20% 22% 27% More than 1 year 80% 78% 73% c) By Investor Client Dec / 2012 Dec / 2011 Dec / 2010 Balance % Balance % Balance % Companies 2,607,797 37% 2,715,445 45% 2,351,618 49% Individual 1,982,020 28% 1,926,500 32% 1,596,933 33% Investment Funds 2,038,267 29% 1,135,839 19% 692,696 14% Institutional Investors 375,404 6% 273,918 4% 191,565 4% TOTAL 7,003, % 6,051, % 4,832, % Client Base MB Clients Dec / 2012 Dec / 2011 Dec / 2010 % % Balance Balance 12 Months 24 Months Individual 98% 1,681,508 1,362,719 1,040,968 23% 62% Companies 2% 30,926 30,463 30,413 2% 2% TOTAL 100% 1,712,434 1,393,182 1,071,381 23% 60% INSS Beneficiaries Dec / 2012 Dec / 2011 Dec / 2010 % % Balance Balance 12 Months 24 Months Clients * 60% 355, , ,007 30% 95% Collecting benefit only 40% 241, , ,651 19% 28% TOTAL 100% 597, , ,658 25% 61% * INSS beneficiary clients are included in "total MB clients" Corporate Information Advisory 14

15 Dear shareholders: BANCO MERCANTIL DO BRASIL S.A. MANAGEMENT REPORT FISCAL YEAR 2012 We are hereby submitting Banco Mercantil do Brasil S.A.'s Financial Statements for your appreciation, including consolidated financial statements covering the conglomerate's companies. ECONOMIC SCENARIO AND FINANCIAL SYSTEM The world economy has been characterized by low growth in the major developed economies with contraction in Eurozone countries. Among the emerging economies, the outlook for China's GDP growth remains around 8%, thus continuing to act as a driver for the world economy. In Brazil, the prevailing scenario has been gradual economic slowdown in 2012 with GDP growth (around 1%) less than expected by economic agents in general. Industrial performance indicators showed a slowdown in key sectors, including vehicle manufacturing in general. In contrast to the slowdown, there was favorable growth in retail sales, with consumption driven by government transfers, higher lending, and rising employment and income. In relation to economic fundamentals, monetary, fiscal and exchangerate polices denote persistent pursuit of economic growth while keeping inflation under control. Brazil's Selic base rate at 7.25% was at its lowest level since the series started in Real aggregate wages continue to rise and employment remains above the historical average. In the financial market, lending was up 16.3% in 2012 against 19.0% in Privatesector banks' lending rose 7.0%, against 14.3% in 2011 with their loan loss allowances at 7.3% in 2012 against 7.1% in In relation to creditworthiness, loans rated "lowest risk" ranging from "AA" to "C" accounted for 90.4% of transactions and was unchanged from Turning to the outlook, initial projections point to GDP growth of around 3.5% in 2013 with the financial system's lending rising by around 14% and a gradual reduction in delinquency. CORPORATE AND MARKET CONTEXT Mercantil do Brasil is a midsized multiple bank, that makes use of a segmented business structure, with a focus in retail baking, with 177 strategically distributed branches in the main economic regions and centers in the Country. It is active in financial segments, such as investment, consumer credit, foreign exchange, leasing, securities brokerage and intermediating trades in securities. The Bank has an international branch in Grand Cayman, in the Caribbean, used to maximize the realization of business opportunities in the international market. There are platforms for the business segment in the states of Minas Gerais, São Paulo, Rio de Janeiro, Espírito Santo, Bahia, Distrito Federal, Pernambuco, Paraná, Rio Grande do Sul, and Santa Catarina. These are segmented service units focusing in investors and large companies, and directed to the search of efficient and customized solutions to the specific demands of the large and medium sized corporate segments. The main commercial portfolios may be divided into payrolldeduct agreements, working capital, revolving credit and personal loans. Mercantil do Brasil has good reason to celebrate its 70th anniversary in 2013, having consolidated a successful trajectory marked by integrity, simplicity, and above all commitment to doing business ethically and professionally while ensuring quality. Earnings are growing and its short, medium and longterm strategic vision ensures robust pillars for sustainability. Indeed, the strong performance posted in 2012 once again shows the correctness of its strategy, investments, and endeavors undertaken. Highlights were the significant 23% growth of the customer base, 32.4% increase in lending, 15.7% more time deposits, and new branches being opened, all in perfect harmony with the Institution's strategic planning and market stance. Corporate Information Advisory 15

16 Mercantil do Brasil continues to grow by seizing qualified business opportunities on the market. At the beginning of 2013, our equity structure featured R$13.5 billion consolidated assets, showing 28.4% growth in the year and annual average growth of 18.9% over the past four years. Featured Events Capital Increase In 2012, there was a capital increase in the amount of R$85,200,000 through subscription to new preferred shares, enabling continued expansion of business while maintaining solvency levels within regulatory requirements. Expansion of branch network In 2012, Mercantil do Brasil continued its investment program to extend the network to a total of 177 branches, 4 banking service stations and 24 electronic service stations. In all, Mercantil do Brasil invested approximately R$30 million to open new branches and upgrade service capability. Electronics and technology channels Mercantil do Brasil has been upgrading its electronic channels every year and constantly striving for excellent relations with customers by ensuring superior service while offering competitive products and efficient services. New projects and improvements contributed significantly to continuing high levels of service with significant growth of volume of transactions on electronic channels, which account for approximately 80% of all the Institution's transactions. Our ATM network now accounts for 55% of transactions on electronic channels. Units were refurbished overall with new visual interfaces for more interactivity, convenience, and agility. Touch screen technology was another important development that yielded significant gains in terms of usability and interactivity. The Internet Banking channel accounts for 18% of the operations carried out in online channels and is fully aligned with other channels in terms of its offering of products and services and its use of edge technology. Note our investment to enable access by users of browsers other than Internet Explorer, such as Google Chrome, Firefox, and Safari. Our call center has been rated among the best in the industry for its high quality service responding to customers and users. To ensure and improve quality relationships with the public, the Institution is investing in a new platform to facilitate usage, streamline transactions, and respond to queries. Our mobile service continues to work on informative and salesbased relationships using text messaging to interacting with users and report their financial transactions or advertise products and services that add value to clients. SMS is an uncomplicated and efficient way for customers to track their account transactions conveniently and securely. Another aspect that deserves special attention is the evolution of security on electronic channels. New technologies have been added for generating and obtaining access passwords, recognizing and validating cards with chips, and a biometry device for access and use of ATMs is in progress. Our internet banking is safer too, with registration for access to the channel ensuring security for the customer's device of choice personal computer, tablet, smartphone etc. Capital management and operating limits Mercantil do Brasil's capital management structure involves an ongoing process for monitoring and controlling capital while assessing the need for capital to cover risks inherent in the business, planning for capital requirements and targets in light of the strategic objectives in accordance with CMN Resolution No. 3988/11. The bank's operational limits are calculated on a consolidated basis and its equity to risk assets ratio (as per Basel II Agreement) stood at 12.38% against 12.58% in December 2011, against the minimum requirement of 11.0%. More detailed information may be found in note 13. Corporate Information Advisory 16

17 Human Capital Mercantil do Brasil has welldefined human resources policies that ensure that people management is in line with the Institution s strategic and growth purposes. It has also improved the Organizational Climate Management, by way of a biannual survey and work groups that seek to promote an improved climate within the Organization. This year the Organizational Climate survey showed a favorability rate of 78.3%, as compared to 77.1% in With this result, Mercantil do Brasil remained as a company deemed with the Best Organizational Climate Practices, according to the ranking prepared by an acknowledged international advisory company. In 2012, Mercantil do Brasil implemented the 360 degrees competencies assessment process, which is considered the most efficient way of analyzing professionals' performance levels and one of the best personnel management practices used by Institutions. In the course of the year, we made new investments in training to ensure that our professionals are well qualified technically. Employees were encouraged to take distancelearning courses, particularly on subjects pertaining to their position and job description. Our distance training sessions drew 37,555 participations with a total of 53,020 hours of training. Training in physical presence sessions drew 2,061 participations between internal and external activities totaling 25,257 training hours. There were presence courses for staff opening new branches, IT staff and trainees, integrating new employees, trainees and managers, and coaching activities for IT managers. Risk Management Credit, Operational, Liquidity and Market The corporate enterprise involves Risks and Credit, Operational, Market and Liquidity Risk Management at Mercantil do Brasil is part of the company s corporate culture. More detailed information may be found in note 19. Integrated Marketing Initiatives Initiatives aligning staff with corporate strategy Given the importance attributed to aligning employees with the Institution's strategic guidelines, Mercantil do Brasil's corporate portal named MB is the main reference for employees to find details of the Institution's strategic guidelines, targets to be met, and corporate benefits. This portal hosts all the Institution's communication vehicles. All our internal initiatives sought to engage staff and reinvigorate their team spirit and commitment as key factors for the bank's performance. Customer relations Mercantil do Brasil continued its work on relationships with major customers, watching profiles and segmenting for closer ties and integration. We invested R$1,427 thousand to develop campaigns that involved staff with the relationship cycle and commercial initiatives. Advertising campaigns Media campaigns publicized new branches and an institutional campaign at the end of the year highlighted Mercantil do Brasil's key differential: top quality service. Corporate image and quality service Systematic surveys and market research are part of the Organization's strategic planning to assess and track corporate image, quality of service, customer relationships, processes, products, services, operations and environmental performance as well as the activities of key competitors. Personal service is one of the Institution's hallmarks and overall satisfaction in 2012 was rated above 92% in all segments surveyed: individual, business, corporate, and social security (INSS) or pension beneficiaries. Corporate Information Advisory 17

18 Environmental responsibility In 2012, Mercantil do Brasil's ongoing environmental campaigns included both programs and sponsorships based on its own resources and initiatives geared towards incentives for local communities, thus showing its social commitment. Among the major initiatives, some of the highlights were: a) Environmental Awareness there have now been four years of environmental education activities for employees, including issues such as waste management and minimizing environmental impacts arising from the Bank's business; b) Mercantil do Brasil Educational benefited some 650 educators in 10 cities in the state of Minas Gerais over a period of three years; c) Mercantil do Brasil Sports Festival reached around 2,000 children and young people with activities fostering sport; d) Favela Art Project held for the fifth consecutive year to educate young people from disadvantaged communities in Belo Horizonte through art and graffiti workshops; e) Sponsorship of Minas Tennis Club raining program developing athletes with a threeyear partnership assisting 1,000 each year. Other information on the programs, projects and actions in the social and environmental area, carried out and sponsored by Mercantil do Brasil, may be accessed on the website CONSOLIDATED FINANCIAL AND ECONOMIC PERFORMANCE Mercantil do Brasil's consolidated assets reached R$13.5 billion in the period, with the loan portfolio and time deposits showing significant advances. Assets and Liabilities Total Assets and Lending Operations 7,861, Total Ativo Assets Total ,522, ,472, ,515,831 R$ Thousand Total Assets consolidated showed 28.4% growth in 2012 (71.9% in the last three years). Current assets amounted to R$8.9 billion and were 84.7% higher than shortterm liabilities. Interbank liquid investments in securities totaled R$3.7 billion and are equivalent to 27.5% of total assets. Dez/09 Dec/09 Dez/10 Dec/10 Dez/11 Dec/11 Dez/12 Dec/12 Also posted in assets are securities classified as held to maturity in the amount of R$124.7 million in Mercantil do Brasil (consolidated R$8.6 million), which the Bank intends to hold to maturity and is able to do so as per Central Bank Circular No. 3068/01. Corporate Information Advisory 18

19 ,205,138 R$ Thousand Lending Operações Operations de Crédito ,275, ,423,717 8,507, Lending rose 32.4% in 2012 (102.3% in the last three years), to reach 62.9% of total assets against 61.0% for the same period of Lending operations classified in the lowrisk range from AA to C accounted for 91.7% of the total credit portfolio. Dez/09 Dec/09 Dez/10 Dec/10 Dez/11 Dec/11 Dez/12 Dec/12 Allowance for loan losses was 4.7% against 4.6% in December Funding ,297,690 Depósitos Total Deposits Totais ,937,543 5,612, R$ Thousand R$ Thousand Depósitos Time Deposits a Prazo ,028, ,059, ,102, ,877,672 3,646, Dez/09 Dec/09 Dez/10 Dec/10 Dez/11 Dec/11 Dez/12 Dec/12 Dez/09 Dec/09 Dez/10 Dec/10 Dez/11 Dec/11 Dez/12 Dec/12 The Total Deposits and Time Deposits amounts include the amounts related to subordinated CDBs recorded under Subordinated Debt in liabilities in the amount of R$55.8 million, R$50.9 million in December The available funding was raised both in the national and international markets, totaling R$12.0 billion, 31.5% higher than December A breakdown of these funds shows R$7.0 billion in time deposits, R$1.3 billion in moneymarket funding and R$544.2 million from demand deposits. Additionally, R$669.6 million were raised from foreign funding and borrowings. The Time Deposits, Mercantil do Brasil s main source of funding, recorded growth of 15.7% in 2012 (93.6% in the last three years). It is worth highlighting, the total funds derived from abroad, i.e., R$565.9 million are recorded in Subordinate Debt, with maturity in 2020, in other words, the status of the capital for the purposes of capitalization levels in compliance with CMN Resolution No. 3444/07. Corporate Information Advisory 19

20 Dividends, income and shareholders equity Mercantil do Brasil posted net income of R$55.0 million (R$63.3 million consolidated) in the period, corresponding to R$ per share, equivalent to a 7.1% yield on average shareholders' equity of R$770.0 million. Shareholders dividends were declared in the form of interest on own capital of R$28.4 million for the period of 2012, corresponding to net income tax of R$24.1 million, from which they were paid R$ per common share and R$ per preferred share, also net of income tax. Shareholders' Patrimônio Líquido Equity , , ,042 R$ Thousand ,875 Shareholders' equity totaled R$825.9 million (consolidated R$823.9 million). Assets managed grew 15.7% in 2012 to reach R$872.1 million (50.9% in the last three years) corresponding to R$19.43 per share. Dez/09 Dec/09 Dez/10 Dec/10 Dez/11 Dec/11 Dez/12 Dec/12 In Financial Income, the highlights were Lending Operations and Leasing Revenues of R$2.0 billion, showing a 20.0% growth. Financial Expenses amounted to R$1.5 billion and accounted for 64.8% of the Financial Income, against 66.8% in the same period in Provision for Doubtful Accounts against Credit Risk at R$471.4 million accounted for 19.7% of Financial Income against 16.3% in the same period of the previous year. Gross Income from Financial Intermediation stood at R$842.4 million, against R$690.1 million for the same period in 2011, an increase of 22.1% and improvement in the gross margin of 2 percentage points. Revenue from Services rose to R$137.8 million, against R$122.9 million in 2011, an increase of 12.2%. Personnel expenses rose 5.8% to R$346.8 million against R$327.8 million in Administrative expenses stood at R$442.5 million against R$393.7 million in The main variations were in outsourced services R$17.6 million; rents R$12.0 million and data processing R$9.6 million. Reference Shareholders Equity of R$1.1 billion includes the Consolidated Shareholders Equity from financial companies of Mercantil do Brasil and the Subordinated Debt up to the amount of R$419.3 million, pursuant to CMN Resolution No. 3444/07. Financial Statements under International Accounting Standards (IFRS) As of the dates required by the regulator, the Bank s Institution's web site will disclose consolidated financial statements under IFRS for the year ended December 31, 2012, together with comparative data for 2011, as per CMN Resolution No. 3786/09 and supplementary rules. Adjustments are being measured and IFRS consolidated financial statements are being prepared. More information may be found in note 18. Corporate Information Advisory 20

21 HOLDINGS IN SUBSIDIARIES Holdings in subsidiaries are detailed in the pertinent section of the financial statements. CVM INSTRUCTION No. 381/03 In compliance with the provisions of CVM Instruction No. 381/03, Mercantil do Brasil and its subsidiaries hereby report that PricewaterhouseCoopers Auditores Independentes provided exclusive outside audit services. FINAL COMMENTS Mercantil do Brasil continues to focus on growing its business, enhancing quality and operational efficiency. The Bank is grateful to customers and shareholders for the trust and support they have shown, and to our staff who have shown unconditional commitment to our strategic goals and objectives. Belo Horizonte, February The Management Corporate Information Advisory 21

22 BALANCE SHEET (R$ Thousands) MB Bank ASSETS Note Dec / 12 Dec / 11 Dec / 12 Dec / 11 CURRENT 9,001,764 6,696,650 8,954,334 6,953,202 Cash 172, , , ,500 Interbank Investments (4) 3,745,751 2,682,523 3,246,827 2,540,609 MoneyMarket Investments 3,033,646 1,923,420 3,033,646 1,923,420 Interbank Deposits 712, , , ,189 Securities and Derivative Financial Instruments (5) 172, , , ,196 Own Portfolio 169, , , ,240 Derivative Financial Instruments (5.2) 1,860 1,432 1,860 1,432 Linked to Granted Guarantees 2,015 20,687 11,904 24,524 Interbank Accounts 218, , , ,376 Payments and Receipts Pending Settlement Credits linked: Central Bank Deposits 216, , , ,494 Credits linked: Brazilian Housing System (SFH) Correspondents 2,481 2,680 2,481 2,680 Interbranch Accounts 5,082 5,815 5,082 5,815 Internal Transfers of Funds 5,082 5,815 5,082 5,815 Lending Operations (6.1) 4,228,259 3,181,167 4,608,700 3,505,970 Public Sector 63 3, ,008 Private Sector 4,051,965 3,354,955 4,437,279 3,684,951 Lending Operations linked to Assignment (6.4) 431, ,341 (Allowance for Loan Losses) (6.2) (255,110) (176,796) (259,983) (181,989) Leasing Operations (6.1) 50 (464) Lease Operations Private Sector 3,940 7,555 (Leasing Income to be Appropriated) (3,881) (7,319) (Allowance for Doubtful Leasing Receivables) (6.2) (9) (700) Other Credits 372, , , ,320 Foreign Exchange Portfolio: Pending Settlement Purchased Foreign Exchange 44,511 67,637 44,511 67,637 Rights to Foreign Exchange Sold (Advances in Local Currency) (472) (398) (472) (398) Income Receivable from Advances Granted (6.1) 960 1, ,126 Income Receivable 18,973 4,283 14,545 2,140 Trading Operations 52 5,658 3,036 Sundry: Tax credits (7.1) 128,696 97, , ,486 Debtors for Purchase of Assets (6.1) 2,876 1,397 2,876 1,397 Recoverable Taxes (7.3) 8,800 8,081 11,832 16,809 Reimbursable Payments (7.4) 3, , Bonds and Credit Receivables (7.5) 120,547 96, ,960 98,421 Receivables from Subsidiaries 1, Net Loss from Rescheduling Loan Receivables (6.4) 10,530 10,530 Sundry Debtors 29,079 17,855 29,079 17,984 Other 2,885 3,413 8,412 3,534 (Allowance for Other Loan Losses) (6.2) (1,189) (731) (1,189) (731) Other Assets 86,699 67, ,401 83,880 Other Assets 17,305 17,205 37,525 21,677 (Allowance for Devaluation) (6,561) (4,138) (8,282) (4,169) Prepaid Expenses (8) 75,955 54,907 99,158 66,372 Corporate Information Advisory 22

23 BALANCE SHEET (R$ Thousands) MB Bank ASSETS Note Dec / 12 Dec / 11 Dec / 12 Dec / 11 NONCURRENT 4,339,503 3,474,682 4,561,497 3,569,707 LONGTERM ASSETS 3,912,804 3,078,669 4,446,742 3,458,699 Interbank Investments (4) 105, , , ,946 Interbank Deposits 105, , , ,946 Securities and Derivative Financial Instruments (5) 303, , , ,499 Own Portfolio 250, , , ,781 Derivative Financial Instruments (5.2) 29,076 12,718 29,076 12,718 Linked to Granted Guarantees 23,210 23,210 Lending Operations (6.1) 2,896,964 2,132,934 3,367,849 2,484,618 Public Sector 2,159 2,159 Private Sector 2,308,847 2,237,775 2,784,864 2,595,010 Lending Operations linked to Assignment (6.4) 719, ,770 (Allowance for Loan Losses) (6.2) (131,653) (107,000) (136,785) (112,551) Leasing Operations (6.1) (3) (504) Lease Operations Private Sector 1,269 5,435 (Leasing Income to be Appropriated) (1,269) (5,435) (Allowance for Doubtful Leasing Receivables) (6.2) (3) (504) Other Credits 449, , , ,694 Sundry: Tax credits (7.1) 167, , , ,024 Debtors for Purchase of Assets (6.1) 1,576 2,474 1,576 2,474 Debtors for Deposits in Guarantee (7.2) 186, , , ,461 Recoverable Taxes (7.3) 5,016 4,370 9,871 14,623 Reimbursable Payments (7.4) 7,258 8,602 26,945 28,059 Bonds and Credit Receivables (7.5) 62,612 41,239 69,927 45,059 Net Loss from Rescheduling Loan Receivables (6.4) 19,203 19,203 (Allowance for Other Loan Losses) (6.2) (3) (6) (3) (6) Other Assets 157, , , ,446 Prepaid Expenses (8) 157, , , ,446 PERMANENT ASSETS 426, , , ,008 Investments 329, , ,432 Interest in Subsidiaries and Affiliates Domestic: Subsidiaries (9.1) 351, ,861 Other Investments 1,149 1,485 2,007 3,024 (Allowance for Losses) (22,658) (303) (1,402) (1,592) Property and Equipment in Use (9.2) 54,801 42,468 62,352 47,942 Property in Use 7,580 5,336 Other fixed assets in use 102,812 88, ,345 90,238 (Accumulated Depreciation) (48,011) (46,288) (49,573) (47,632) Leased Property (9.3) 9,435 19,949 Leased Assets 15,807 26,474 (Accumulated Depreciation) (6,372) (6,525) Intangible (9.4) 41,992 39,755 42,109 39,938 Intangible Assets 70,547 63,221 71,007 63,660 (Accumulated Amortisation) (28,555) (23,466) (28,898) (23,722) Deferred (9.5) 254 1, ,747 Organisation and Expansion Costs , ,995 (Accumulated Amortisation) (463) (9,233) (478) (9,248) TOTAL ASSETS 13,341,267 10,171,332 13,515,831 10,522,909 Corporate Information Advisory 23

24 BALANCE SHEET (R$ Thousands) MB Bank LIABILITIES AND SHAREHOLDERS EQUITY Note Dec / 12 Dec / 11 Dec / 12 Dec / 11 CURRENT 4,909,029 3,992,682 4,848,144 3,826,038 Deposits (10.1) 2,410,929 2,224,904 2,314,210 1,970,442 Demand Deposits 545, , , ,405 Savings Deposits 245, , , ,129 Interbank Deposits 347, , ,321 52,015 Time Deposits 1,273, ,830 1,346,386 1,141,893 MoneyMarket Funding 1,407,778 1,072,637 1,345,022 1,034,709 Third Parties 1,407,778 1,072,637 1,345,022 1,034,709 Funds from Acceptance and Issuance of Securities (10.2) 191, , , ,173 Funds from Real Estate Notes 191, , , ,868 Securities Issued Abroad 15 57, ,305 Interbank Accounts Receipts and Payments Pending Settlement Interbranch Accounts 46,441 49,648 46,441 49,648 Third Party Funds in Transit 46,441 49,648 46,441 49,648 Borrowings 58,684 87, , ,100 Domestic Borrowings Other Institutions (2.2) 66, ,332 Foreign Borrowings (10.3) 58,684 87,768 58,684 87,768 Domestic Onlendings Official Institutions 2,101 4,870 2,101 4,870 Brazilian National Treasury Brazilian National Equipment Financing Authority (FINAME) 2,040 4,814 2,040 4,814 Derivative Financial Instruments (5.2) , ,409 Derivative Financial Instruments , ,409 Other Liabilities 791, , , ,652 Collected Taxes and Other (11.1) 3,540 5,543 3,838 5,700 Foreign Exchange Portfolio: Pending Settlement Sold Foreign Exchange Liabilities for Purchased Foreign Exchange 44,317 61,826 44,317 61,826 (Advances on Export Contracts) (6.1) (44,317) (61,622) (44,317) (61,622) Social and Statutory (11.2) 30,695 24,453 33,175 26,625 Taxes and Social Security (11.3) 20,568 22,613 29,391 21,537 Trading Operations 7,118 3,961 Sundry: Creditors for Prepaid Residual Value 1,561 2,931 Liabilities under Government Agreements 11,618 34,321 11,618 34,321 Liabilities for Purchase of Assets (6.1) 2,964 2,598 2,964 2,599 Allowance for Payables 30,482 26,440 31,413 27,181 Payables to Subsidiaries (11.5) Lendingrelated Obligations 469, ,088 Subordinated debt (10.4) 26,304 24,144 26,304 24,144 Sundry creditors Domestic (11.5) 192, , , ,812 Other 2,889 2,241 2,889 2,241 Corporate Information Advisory 24

25 BALANCE SHEET (R$ Thousands) MB Bank LIABILITIES AND SHAREHOLDERS EQUITY Note Dec / 12 Dec / 11 Dec / 12 Dec / 11 NONCURRENT 7,606,308 5,464,563 7,795,562 5,948,030 LONGTERM LIABILITIES 7,605,164 5,462,826 7,794,290 5,945,970 Deposits (10.1) 5,598,765 4,668,433 5,658,074 4,916,240 Interbank Deposits 972 9, ,431 Time Deposits 5,597,793 4,659,361 5,657,102 4,909,809 Funds from Acceptance and Issuance of Securities (10.2) 138,169 41, ,169 41,923 Funds from Real Estate Notes 93, , Securities Issued Abroad 44,957 41,267 44,957 41,267 Borrowings 87, ,199 Domestic Borrowings Other Institutions (2.2) 87, ,199 Domestic Onlendings Official Institutions 191 2, ,284 Brazilian National Treasury Brazilian National Equipment Financing Authority (FINAME) 70 2, ,115 Derivative Financial Instruments (5.2) 24 33, ,375 Derivative Financial Instruments 24 33, ,375 Other Liabilities 1,868, ,811 1,910, ,949 Taxes and Social Security (11.3) 94,760 86, , ,406 Sundry: Creditors for Prepaid Residual Value (6.1) 1,930 4,000 Allowance for other liabilities (11.4) 123, , , ,879 Lendingrelated Obligations (6.4) 1,054,199 1,054,199 Subordinated debt (10.4) 595, , , ,664 Deferred Income 1,144 1,737 1,272 2,060 Deferred Income 1,144 1,737 1,272 2,060 Shareholders' Equity Managed by the Bank 825, , , ,841 Minority Interest 48,250 45,108 Shareholder s Equity (12) 825, , , ,733 Capital (12.1) 399, , , ,760 Brazilian Residents 399, , , ,760 Capital Reserves (12.2) 35,903 17,443 35,903 17,443 Share Premium Reserve 35,903 17,443 35,903 17,443 Revaluation Reserves (12.3) Subsidiaries and Affiliates Profit Reserves (12.2) 390, , , ,237 Legal reserves 56,233 53,481 56,130 53,000 Statutory reserves 334, , , ,237 For Payments of Dividends 63,521 59,897 63,521 59,897 For capital increase 270, , , ,340 Adjustments Involving Valuation of Assets (2) 12 (2) 12 TOTAL LIABILITIES 13,341,267 10,171,332 13,515,831 10,522,909 Corporate Information Advisory 25