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Dividends, Shareholders’ Equity and profit or loss

 


In 2016, dividends to shareholders were declared as Interest on Capital, in the amount of R$ 21.1 million, corresponding to a net value of income tax of R$ 17.9 million, common shares entitling to R$ 0.256402 and preferred shares of R$ 0.564086 per share, net of income tax.

Shareholders’ equity was R$ 700.3 million. The Managed Shareholders’ Equity totals R$ 895.2 million and the Reference Shareholders’ Equity is R$ 1.0 billion. Mercantil do Brasil recorded Net Income of R$ 18.3 million.

Income from Financial Intermediation reached R$ 3.2 billion, a decrease by 12.6%. The Income from Loan Operations stood out, which includes revenue from Sales Transactions or Transfer of Financial Assets, totaling R$ 2.9 billion, an 5.0% retraction.

Financial Intermediation Expenses amounted to R$ 2.0 billion, drop of 18.8%. Account for 62.5% of the Income from Financial Intermediation, against 67.2% in the same period of 2015. Funding Expenses, including Selling Expenses or Transfer of Financial Assets, amounted to R$ 1.2 billion, retraction of 25.9%.

Expenses with Allowance for Loan Losses Expenses amounted to R$ 802.1 million, growth of 2.3%. Account for 24.9% of the Income from Financial Intermediation, against 21.3% in the same period of the prior year.


Gross Income from Financial Intermediation amounted to R$ 1.2 billion, remaining stable in the last 12 months. Accounts for 37.5% of the Income from Financial Intermediation, against 32.8% in the same period of 2015.

Service income reached R$ 244.0 million, against R$ 198.8 million in 2015, accounting for a significant growth by R$ 45.2 million, resulting from the efforts for repricing the services.

Personnel Expenses were R$ 404.1 million, in view of R$ 372.5 million in 2015, a growth of 8.5%. We point out two major items, payroll and related charges totaling R$ 2777 million, against R$ 261.3 million in the prior year, had nominal growth of 6.3%, the same as inflation in the period and below the adjustment rate of the category, which evidences the effective gain of productivity obtained in the year.

Administrative Expenses amounted to R$ 560.9 million, compared to R$ 631.2 million in 2015, a decrease by 11.1%. Excluding expenses from paycheck-deductible loan of R$ 98.9 million (R$ 185.9 million on December de 2015), the nominal growth was 3.7%. However, there was a reduction in most of administrative expenses, including water, power and gas; rents; amortization and depreciation; lease of assets; communications; data processing, publications and financial system services, totaling a cost reduction of R$ 5.0 million. Indeed, the huge set of measures adopted to rationalize expenses became a rationale in the Institution and has presented favorable results, as can be seen from inflation of 6.3% in 2016. More detailed information can be obtained in Note 18.3.

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