The bank has remained the most profitable in Bolivia for the fourth year in a row. In order to achieve these profits, the bank cut costs significantly, therefore being able to counteract the significant decrease in interest rates that affected the financial system. The bank continued its growth strategy both in deposits, loans and investments. The bank opted to reinforce the sale of products and services that aim to retain customers, and sell them complementary products, therefore making the relationships more profitable and advantageous for both the bank and the customers.

The liquidity indicators were improved considerably during the past year. The bank decided to keep more liquid investments outside the country in order to diversify its risk, but also to seek larger returns.

Among the most important actions done in the past year are:

1 The bank continued its commercial strategy, and its growth continued, especially in the retail banking division, therefore diversifying its risk and owning a less concentrated loan portfolio.

2 The bank branch network reached 69 offices, the largest for any bank in Bolivia. The bank opened four offices in the past twelve months in two different cities. The expansion aims to have our customers spend less time in our offices, and keep serving non customers of the bank in all sort of services.

3 The bank purchased and installed its own ATM switch, therefore the bank has been able to obtain a higher and better control of its network, and has released new and innovative services that are unique in the country in this channel, such as the payment of loans, and credit cards, transfer to third party accounts, and providing a consolidated position of the customer. The bank currently has 215 ATMs, remaining as the largest network in the country, and is going to install 36 more until August.

4 The bank’s home page (www.bmsc.com.bo) was rereleased during the past year. This new design aimed at making the page more accessible to our clients, release an image more according to the image released in 2008, but most importantly it includes a new version of digital certification by Verisign, therefore being the only bank in Bolivia to have a visual authentication feature for its home page and it also has a new application firewall to prevent hacker attacks.

5 The bank launched for the second year its campaign for its Super Makro Cuenta product. This saving account offers $5,000 prizes every week, and on May 2009 it offered a large prize of $142,000. The campaign was successful once again, and the product continues to position itself as the most important savings account product in the country. In order to expand this benefit to our base of customers the bank decided that all savings account opened through an agreement to pay salaries for companies, will now be part of this product.

6 The bank continued its release of insurance products. The Debit Card Insurance released in 2008 achieved a high success and now almost 30 percent of retail division debit cards have the insurance. Among the new insurances released are one to protect the contents of customers homes, and perhaps the most innovative service in the financial market, is the Purse Insurance, which protects female customers against purse snatching.

7 At the end of 2009 the bank improved its internal loan  process and was able to launch a campaign to approve its vehicle and personal loans in 24 hours. Beginning in February 2010 the bank has included its mortgages products in its 24 hour approval process.

8 Banco Mercantil Santa Cruz also worked to improve the quality of its service, and automatised its most important business processes, including work flows for the loan process, for the pricing processes and others. The bank changed, in the past year, significantly 65 processes that will relieve the front office personnel work load, and aims at having a higher quality of service in our branches.

9 The bank released its new fidelity programme, “Puntos por Todo”, which rewards customers with points for every type of transaction that they execute in certain channels or with certain products. For example the bank rewards internet transactions, credit and debit card purchases, the timely payment of loan charges, the increase of deposits, among others.

The loan portfolio increased significantly in the retail division, and the corporate division deposits grew at a very large rate and the bank has as of March 31st 2010 was still the largest bank in terms of loans and deposits.

The bank has a loan portfolio of approximately $796,000,000 and deposits for almost $1,638,000,000. Those figures account for a 19.5 percent of the loans market share and 23.5 percent of the deposits market share, and although keeping both shares is quite difficult in any country or market, the bank aims every year at maintaining its market position.

However, the bank is not the leader only because of its size or its origins and tradition, but also because of its solvency, growth, and specially commitment with all of its stakeholders. The bank has consistently grown in its profits, grown in assets and deposits; this sustainable growth reflects a serious strategy and the help of the human resources available at the bank. The reputation and the conservative and solvency image that customers have of the bank is also a very important intangible, which no other bank in Bolivia has.