The year 2006 was the final landmark for
the inclusion of Mercantil do Brasil in the International
Market, and the beginning of a new operational dimension for
the Institution.
Mercantil do Brasil liability structure has always been focused
on a long-term strategic view, which gives shape to the soundness
and security concept enjoyed by the Institution in the market,
which requires a tireless analysis and search for alternatives
in the domestic and international market, which also meet
a proper cost matrix.
Inserted in such concept is that the funds from the acceptance
and issuance of securities and total deposits become distinguished,
which were raised to R$ 3.1 billions.
In a perfect combination of strategic factors as the prospecting
of funds and the inclusion in the international money market,
Mercantil do Brasil raised money through successive funding
in the foreign market from the second semester of 2004, and
already inaugurated, in 2006, a capital-feature funding, which
represents the most elevated level of the international investor's
confidence in the Institution soundness.
The funding through the Subordinated Debt occurred in September,
2006, with the issue of US$ 125 million "Callable Subordinated
Fixed Rate Step-Up Notes", within the scope of its program
of US$ 300 million "Medium Term Notes" approved
in June this year.
Such issue and placement of the Subordinated Debt was made
in accordance with the CMN Resolution number 2837/2001 and
complementary legislation, to be matured in 2016, and it is
being analyzed by the Central Bank of Brazil, and which after
approved, shall provide to the Bank a comfortable level of
capitalization, expressed by a Basle index over 18%, with
the consequent tranquility for leveraging the lending operations.
Time Deposits reached R$ 2.1 billion, with a 13.3% growth
in relation to the precedent year, and are particularly featured
by the pulverization that is being raised each year, providing
a better funding cost performance, further to a greater stability
and perpetuation of the funding to the active operations,
also in the event of a stress in the Financial System.
From the applications side, the total assets reached R$ 5.0
billions and evidenced an evolution of 18.1% in comparison
to the year 2005, with a 20.0% expansion in Lending Operations,
which reached R$ 2.5 billions, and the growth of 27.0% in
Interbank Investments to be highlighted.
The Interbank Investments, Securities, and Derivative Financial
Instruments recorded a balance of R$ 1.5 billion, which is
20.1% over that of the precedent year.
Net Income, Dividends and Shareholders' Equity
Mercantil do Brasil recorded a Net Income of R$ 19.9 millions
in year 2006, corresponding to R$ 33.50 per lot of shares,
and Dividends were declared to stockholders as interests on
capital in the amount of R$ 7.8 million for the second half
of 2006, corresponding to a net income tax of R$ 6.6 million,
with Common Shares at R$ 10.80 and Preferred Shares at R$
11.88 per lot of thousand shares, reaching, in the year, Interests
on Capital, free from income tax, of R$ 21.60 for Common Shares,
and R$ 23.76 for Preferred Shares, likewise per lot of thousand
shares.
The Net Income corresponds to an annual profitability of
4.1% on the Stockholders' Equity of R$ 483.7 millions, and
arises out of the income structure discussed below.
The Gross Profit on Financial Operations of R$ 303.4 millions
corresponds to a gross margin of 30.0%, which is higher than
that of 28.8% recorded in 2005, mainly reflecting on the continued
refining of risk rating processes and credit recovery.
Income from Securities, deducted from the Income from Derivative
Financial Instruments, evolved from 17.4% to 20.7% on the
Financial Income, thus increasing its share in the formation
of the Gross Profit.
Still in the formation of the operational income, the contribution
to the Equity Accounting must be highlighted, which recorded
an evolution of 44.6%, and the Income from Services Rendered,
which grew 1.4% in the year and turned from the 52.4% in 2005
to 60.1% in 2006 on the Personnel Expenses, which were reduced
in 11.5% in the last year.
The Stockholders' Equity reached the amount of R$ 483.7 millions
(Administered from R$ 567.1 millions), with a 2.3% growth
in relation to December of the precedent year, corresponding
to the equity value of R$ 812.27 per lot of thousand shares.
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