semester report • first half 2006 -...

SEMESTER REPORT • FIRST HALF 2006

SEMESTER REPORT FIRST HALF 2006

We are again establishing contact with all our public throughthis summary of our financial behavior during year 2006.

The publication of this report will allow rendering a clearaccount of the commitment assumed before our clients,vendors, related, workers, social partners, and community ingeneral.

We are moving forward determined to build a coherententerprise model based on a larger understanding of reality,leading to producing ever more efficient responses andresulting in a step forward for future generations.

During the first six months of the year, we held the firstposition within the national financial system over third partiesmanaged resources, after an increase of Bs. 7.8 trillions(68.51%) over the last twelve months, i.e., in regards toclosure of first half 2005.

At closure for June 2006, we totalized over this concept Bs.19.15 trillions, which evidences an inter-semi-annual variationof 20.31% (Bs. 3.2 trillions). All of this translated into amarket participation of 15.6%.

The resources administered by the Mandatory Savings Fundincreased in June up to Bs. 1.03 trillions, which representsa market quota of 26.43%, on account of the significantgrowth of Bs. 108 billions throughout the year, and of Bs.217 billions over the same time lapse for the previous year.

The bank also consolidated the first place on placedinvestments, which increased up to Bs. 7.6 trillions, after anincrease in order of 26.25% (Bs. 1.6 trillion) during year 2006.

As far as attraction of traditional deposits is concerned, weheld the public preference with a first place in non-remuneratedcheck accounts and term deposits, which increased up toBs. 3.1 trillions and Bs. 1.5 trillions respectively, reachingmarket quotas very close to 12% in both modalities.

The behavior of assets was very favorable, for we registeron this concept Bs. 12.5 trillions, equivalent to a participationof 12.0%, which supposes a growth of 19.85% (Bs. 2.08trillions) during the year half that ended in June 2006.

This push was mainly sustained on the important expansionof credit portfolios, which balance rose to Bs. 6.3 trillions,a 23.87% above the amount registered on December 2005,concentrating at present 14.17% of loans granted throughcommercial and universal bank markets.

Our strong tradition in the business allowed placing theportfolio at Bs. 4.9 trillions over the month of June, whichimplies an increase of Bs. 475 millions versus closure of thesecond yearly half 2005, which is equivalent to a variation of11.9%.

During 2006, we were able to move forward to broadenconsultation and dialogue skills. Dialogue with all publicswas very productive, and results on these pages are quantifiable.We keep on moving forward and fulfilling the goals that wehave set to ourselves.

We want to express our deepest thanks to all our clients,related, social partners, and employees for their valuablecontribution to the results achievement we hereby present.

Juan Carlos Escotet RodríguezChairman of the Board of Directors

TO OUR STOCKHOLDERS, CLIENTS, AND SOCIAL PARTNERS

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FINANCIAL HIGHLIGHTS

FirstHalf2004

5,353.9869.1

2,472.91,212.5

4,270.22,107.9

885.01,112.6

164.6

820.5

3,100.9

598.8

342.9106.5236.3515.3228.7

2.5234.8

1,797.0

159.71,102.4

37.8

778.0343.1

3.5339.691.4

1,692,031

685,4931,005,375

1,163

1,342,279

320.55%2.81%9.63%

64.04%42.32%

SecondHalf

2004

7,661.81,182.13,612.02,005.9

6,439.63,056.91,337.11,944.0

101.7

957.5

4,092.9

700.2

420.7135.3285.4480.9247.2

2.7203.6

2,183.1

224.31,927.3

55.2

1,488.9447.8

0.9446.969.2

2,255,180

875,8021,378,102

1,276

1,488,221

383.77%1.15%7.87%

53.90%51.68%

FirstHalf2005

9,443.61,530.04,472.32,507.8

8,075.03,255.01,489.93,064.0

266.1

1,073.3

4,387.1

821.0

512.2219.6292.6475.3301.7

0.6152.7

2,471.9

347.72,851.6

105.7

1,872.2583.1

1.7581.452.5

2,522,499

912,4981,608,957

1,044

1,633,612

317.83%1.08%3.58%

30.22%53.98%

SecondHalf2005

10,475.41,784.42,621.15,080.8

8,914.14,917.91,957.71,805.2

233.2

1,201.9

4,433.9

930.5

585.3227.4358.0574.3376.2

0.6166.9

6,077.0

448.21,657.8

153.6

3,380.0906.9

10.2896.7292.2

2,899,6011,131,6131,766,968

1,020

1,747,685

444.87%0.43%3.5%

29.83%34.15%

FirstHalf2006

12,555.12,598.62,652.86,293.6

10,445.76,196.12,401.71,450.9

397.0

1,244.6

4,909.0

1,038.3

630.9199.2431.7631.0439.9

0.6161.5

7,672.1

835.31,873.4

230.7

3,587.71,259.4

50.61,208.8

503.7

3,286,1251,274,0192,011,152

954

1,958,840

407.15%0.47%2.80%

25.82%36.65%

I Half 2006II Half 2005

Absolute2,080

81432

1,213

1,5321,278

444-354164

43

475

108

46

-287457640

-5

1,59538721677

20835340

312211

386,524142,406244,184

-66

211,155

%19.9%45.6%1.2%

23.9%

17.2%26.0%22.7%

-19.6%70.3%

3.5%

10.7%

11.6%

7.8%

-12.4%20.6%9.9%

16.9%0.0%

-3.2%

26.2%86.4%13.0%50.2%

6.1%

38.9%396.7%34.8%72.3%

13.3%12.6%13.8%-6.5%

12.1%

I Half 2006I Half 2005

Absolute3,1111,069

-1,8203,786

2,3712,941

912-1,613

131

171

522

217

119-20139156138

09

5,200488

-978125

1,715

67649

627451

763,626361,521402,195

-90

325,228

%32.9%69.8%

-40.7%151.0%

29.4%90.4%61.2%

-52.6%49.2%

16.0%

11.9%

26.5%

23.2%-9.3%47.6%32.8%45.8%0.0%5.8%

210.4%140.3%-34.3%118.2%

91.6%

116.0%2831.1%107.9%859.6%

30.3%39.6%25.0%-8.6%

19.9%

FINANCIAL HIGHLIGHTSSTATED IN BILLION VEB

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Total AssetsCash and Due from BanksSecurity InvestmentsCredit Portfolio Depositis from ClientsDeposits in current accountsSavings depositsTime depositsOther Deposits Total stockholders' equity Trust Assets Debtor Accounts Due To Trust Assignments (FMH) Financial RevenuesFinancial ExpensesGross Financial MarginFinancial Intermediation MarginTransformation ExpensesIncome TaxesAnnual Net Income Yielded InvestmentsAccumulate Agriculture PortfolioOfficial Institutions DepositsMicro Loans Commercial LoansCredits to ConsumerVehiclesCredit CardsMortgage Loans Number of DepositorsIn Current AccountsIn Savings AccountsIn Time Accounts Credit Cards RatiosLoan Portfolio Provisions/Non Accrual LoansNon Accrual Loans/ Gross Loan PortfolioNet Results / Average AssetsNet Results / Average EquityLiquidity

STOCKHOLDERS MEETING NOTICE

BANESCO UNIVERSAL BANK, C.A.Stock Capital Bs. 554.372.983.000,00

By order of the Board of Directors, and in conformity toArticles 10 and 12 of bylaws, the stockholders of BANESCOUNIVERSAL BANK, C.A. are hereby invited to astockholders ordinary board meeting on Monday, September25, 2006, at 8:00 a.m., in Hall Fernando Crespo Suñ'96erlocated in the third floor of building Ciudad Banesco (BanescoCity), located in the Avenida Principal de Bello Monte,between streets Lincoln and Sorbona at Caracas city, for thepurposes of discussion of the following matters:

One: Consider and resolve, in view of the statutory auditorsreport, the approval of both the financial statements, asdictated by independent public accountants, correspondingto the half-year exercise ended on June 30, 2006, and thereport from the board of directors.

Two: Review and resolve on the allocation of dividends basedon net income for the first half of year 2006, in conformityto obligation stipulated in Article 115 of the Stock MarketLaw for the protection of minority shareholders, and incompliance to Resolution N° 329.99 dated December 28,1999 issued by the Superintendence of Banks and otherFinancial Institutions.

On behalf of the Board of DirectorsJUAN CARLOS ESCOTET RODRÍGUEZChairman

Note: Let it be known to all shareholders on the financialstatements audited, the board of director’s report, and thestatutory auditors report, which will be available fifteen (15)days prior to the board meeting at the offices located in thebuilding Ciudad Banesco, third floor, legal department, locatedat Avenida Principal de Bello Monte, between streets Lincolnand Sorbona, Urbanización Bello Monte, Caracas City.

Caracas, September 08, 2006

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STOCKHOLDERS MEETING NOTICE

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Chairman of the Board of DirectorsJuan Carlos Escotet Rodríguez

Executive ChairmanLuis Xavier Luján Puigbó

Senior DirectorsJorge Caraballo Rodríguez

María Josefina Fernández MaroñoNelson Becerra Méndez

Gonzalo Clemente RincónFernando Crespo Suñer

Salvador Cores GonzálezCarlos Acosta López

Oswaldo Padrón Amaré

ECONOMY 2006

THE ECONOMY DURING FIRST HALF 2006

Gross Domestic Product GDP (PIB in Spanish)By the first half of 2006 economical growth reached 9.6%, drivenby favorable behavior of non-oil activities. These reached agrowth of 10.6%. On the other hand, oil-related activitiesincreased up to 0.8%, as a result of lesser dynamism ofprivate oil activities, affected by maintenance processescarried out in the crude Upgrader plants at the FajaPetrolífera del Orinoco.

All non-oil related activities registered growth, beingfinancial and insurance institutions, constructionand communications those of highest expansion.Financial and Insurance institutions grew up to42.3%, a behavior closely related to the increase creditshad gone through in view of general growth of theeconomy. The construction grew 27.4%, holding variation ratesabove 20% since 2004, being the reasons for such recovery bothlow interest rates and public sector growing demand.

The sector of communications experienced a growth of 23.9%,evolution this that with the exception of 2003 has been producedyear after year upon its opening to the market on 1991.

The growth of the industrial activity attained 8.6%. As indicatedon the report from the Banco Central de Venezuela (BCV), theabove expansion was verified in most activities from this sector,especially metal manufactured products, food and beverages.

Even though in relative terms its variation percentage was belowthe expansion of the economy in general, it continued being theactivity with higher specific weight within the Gross NationalProduct (17.1%).

Internal Aggregate DemandIt went through a variation of 16.2% above the PIB (9.6%),since imports at constant prizes from 1997 have been accelerating(22.7%), while non-oil related exports have decreased (-0.9%).

It can be appreciated that the private final consumption, thehighest weight component (59.1%), grew to 17.9%. The BCVattributes this to domestic income recovery as a result of theminimum salary raises, less unemployment, effect of socialprograms carried out by the government, and higher access to

credits.

Another driving factor for aggregated demand wasthe growth to 24.7% of gross fixed assets increase,associated both to highest imports of vehicles andmachinery for national industry, thus allowingincreasing the in-use industrial capacity in the sector,

and to higher activity of the construction sector.

The rate for gross investment (26.1%) was held above 20% ofthe PIB for over the fourth consecutive half year, showing amoderate growing tendency.

Balance of PaymentsThe balance of payments at the closure of the half-year showeda negative balance of US$ 187 millions, versus the same timeperiod in 2005, which registered a surplus of US$ 5,457 millions.Said deterioration was the result of the deficit in capital account,which increased to US$ 14,422 millions, compensated by thesurplus in check account with a record figure for a half year ofUS$ 15,053 millions. However, mistakes and omissions registereda negative balance of US$ 818 millions.

The surplus in check account was 38.3% higher than the firsthalf of 2005, due to oil high prices, which pushed oil exports

Bythe first half of

2006 economicalgrowth reached 9.6%,

driven by favorable behaviorof non-oil activities. These

reached a growth of10.6%.

It can beappreciated thatthe private final

consumption, grewto 17.9%.

THE ECONOMY DURING FIRST HALF 2006

ECONOMY 2006

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in spite of the fact change rate overvaluation has encouragedimports growth (US$ 14,072 millions) and non-oil related exportsdecrease (-7.9%).

On the side of capital account, the investment on portfolioshowed a negative balance of US$ 8,104 millions, due to foreigncurrency outflow from the country caused by governmentinvestment on emerging market stock and Brady bonds expectedpurchase. Direct investment registered a negative balance forUS$ 4,073 millions, mainly related to the financing offered byPDVSA pending collection, and repatriation of dividends toforeign companies to their own parent companies.

InflationThe Consumer Price Index for the Metropolitan Area of Caracas(IPC in Spanish) at the closure of June showed an accumulatedvariation of 5.5%, which is 2.4 points lower than the one registeredin June 2005 (8.0%). With these results, the IPC annual variationwas at 11.8%, inferior al 15.9% reflected for the same periodlast year.

Such decrease is related with price controlheld over the majority of products andservices that comprehend the IPC,observing that the core of inflation,an indicator that excludes categorieswith controlled prices and thoseresponding to season factors grew6.1% and the Wholesale Price Indexes(IPM in Spanish), behaved likewise at8.5% over the same time lapse.

Other factors that contributed to prices stability were theinalterability of foreign exchange rate during the first half of theyear and maintenance of on-going government social programsfocused on the distribution of food benefits at low cost.

Monetary MarketIn the first half of the year, the monetary base increased in 15.7%versus December, and in 50.5% in comparison to June 2005,influenced by the growth of international reserves in Bs. 3.7trillions to totalize in June, 2006 Bs. 66.7 trillions.

This effect was counteracted by an increase of merger operationsupon growth of credit instruments issued by the BCV in Bs. 6.6trillions, placing balance for those liabilities in Bs. 37.0 trillions.However, the equity loss of the BCV was of Bs. 5.9 trillions,crucial for monetary base growth.

Said loss was mainly caused to draws from international reservesin compliance to partial reform of BCV Law published in OfficialGazette Nº 38.232 dated June 20, 2005.

Flow availability grew 20.6%, reaching Bs. 85.4 trillions uponclosure for the first half of the year, due mostly to increase inpublic expenditures, given the high budget execution and thedecrease of treasure reserves.

The record figure for imports and active participation of theBCV through merger operations in open market

has prevented this variable from being higher.

Interest ratesThe highest flow availability keeps onpushing down interest rates. However,ceilings and minimum imposed by theBCV since May 1st, 2005 has not left too

much maneuver space for considerablevariations in some sense.

The active rates cannot overcome the operation rates for creditassistance of the BCV, reduced in 0.5 points and held at 28.5%,reason by which the maximum active rate is at 28.0%.

Likewise, it was established that the interest rate for term investmentscould not be lower to the mergers rate of the BCV at 28 days,minus 1.5 points, and the interest rate for saving deposits couldnot be lower to that same merger rate, minus 5 points.

Until January 31, 2006 the BCV had held the merger rate to 28days in 5%. From that moment, it was decided to decrease it to10.0%, which would have affected minimum rates to remuneratesaving and term deposits held at 6.5% and 10%, respectively.However, it was decided to hold said rates, and for these purposes,a new resolution was issued modifying the differential betweenthe merger rate to 28 days and passive rates.

The active rate for six of main commercial and universal banksclosed by the end of the first year half in 13.83%, meaning adecrease of 0.57 points versus closure 2005 at 14.4%. Term andsaving deposit yields decreased over the same period 1.13 and5.51 points, from 11.17% to 10.04%, and from 7.32% to 6.81%,respectively.

TheConsumer Price

Index at the closure ofJune showed an accumulatedvariation of 5.5%, which is2.4 points lower than the

one registered in June2005 (8.0%).

Flowavailability grew20.6%, reaching

Bs. 85.4 trillions uponclosure for the first

half of the year

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THE ECONOMY DURINGFIRST HALF 2006

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ECONOMY 2006

International ReservesThe Venezuelan oil basket registered an average price of 57.04US$/b for the first half of 2006, 11.65 US$/b higher to 2005average (45.39 US$/b). This behavior allowed an increase in netinternational reserves from US$ 30,368 millions at 2005 closureto US$ 31,917 millions in June 2006, equivalent to an accumulationof US$ 1,549 millions. Nevertheless, this increase would havebeen much higher had there no been draws in reserves for US$4,264 millions for concept of excess foreign currency reserves,once calculated the adequate level of international reservesbased on stipulations of partial reform of the BCV Law.

Currency Exchange MarketThe type of foreign exchange had no variationsduring this half of the year, holding at Bs./US$2,144.6 for purchase Bs./US$ 2,150.0 for sale.The last adjustment was carried out in February2005 when there was an increase of 12.0%, fromBs./US$ 1,920 to Bs./US$ 2,150 for sale.

Upon closure for the first half 2006 the ForeignExchange Administration Commission (CADIVI inSpanish) had authorized foreign exchange for US$ 11,777millions, which implies an authorization pace of US$ 95.8 millionsper office day.

The imports were the 64.4% (US$ 7,580 millions) of approvalsfor the period, covenants undersigned within the Latin-AmericanAssociation for Integration (ALADI in Spanish) were 19.1%(US$ 2,245 millions), while credit cards consumption overseaswere approved up to US$ 517.2 millions, equivalent to 4.4%.

Financial SystemUpon conclusion of first half 2006 the system is comprised by55 financial institutions, 45 private capital and 10 from theGovernment, with 3,051 offices and 59,713 employees in total,corresponding to the commercial and universal bank 36institutions, equivalent to 65.5% of the market, 2,938 agencies,and 97.8% of the workers.

The morphology of the market likewise reveals a highconcentration, both of actives and passives, gathering 5 more

universal banks from 50% of funds. The economygrowth and the important expansion in flowavailability have contributed to the continuousgrowth of the financial system.

Upon closure for the first half, the total of activesof the system reached Bs. 106,886 billions due to

the increase registered in assets for commercial anduniversal banks, 48.8% versus the same period last year,

reaching Bs. 104,887 billions in June 2006, concentrating 98%of assets in this segment.

Said increase is related with the drive shown by the creditportfolio of the banking system, which totalized in June 2006Bs. 45,188 billions, after an increase of Bs. 7,205 billions (19.0%)in comparison to second half last year, granting the commercialand universal bank 98% of loans, with a portfolio of Bs. 44,424billions.

The system’s portfolio composition reveals that 46.5% of creditsgranted and qualified as current were honored in a short term,attaining on a days in receivables scale less than 30 days (2,093,977credits), which contributes to ameliorate the misbalance betweenassets and liabilities since faster collection is expected.

Likewise, the relatively higher importance of credit portfoliosover the last 12 months, representing 42.4% of total actives wasevidenced, whereas investments on values increased in lesserproportion, reducing instead their participation upon reaching34.7% in June 2005 to 30.75% in June 2006.

TheVenezuelan oil

basket registered anaverage price of 57.04 US$/b,11.65 US$/b higher to 2005average (45.39 US$/b). Thisbehavior allowed an increase

in net international reservesfrom US$ 30,368

millions.

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THE ECONOMY DURINGFIRST HALF 2006

ECONOMY 2006

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This behavior translated into anindicator increase in credit operations,attaining 52.4% for the commercialand universal bank, almost 5 points

above obtained ratio on the same timelapse in year 2005, all this stimulated by

sector credit allocations and rate ceilings,the highest monetary levels in the economy, as well as a strongercompetition in the market.

The Bank Superintendence Bulletin of June 2006 reveals thehigher importance consumption credits in comparison to previousperiods, since they represent at present 17.9% of credit portfolio,after an increase of 2.8 points versus December 2005, whenthey represented 15.1% of said total, on account of the significantgrowth registered during the first half, 40.8% variation, equivalentto Bs. 2,348 billions, attaining consumption credits the figureof Bs. 8,100 billions within the national banking system.

The interesting evolution of this category is basically related tothe establishment of preferential rates for vehicles acquisition(Venezuela Móvil Program) and on active rate ceilings for creditcards financing.

If the behavior of both categories is observed, they globallyshowed more increase than other type of credits that comprisethe portfolio, such as the case of commercials, which onlyincreased in 8.4% (Bs. 2,141 billions) during the same lapse,reducing all the same its contribution to the portfolio formationin 6 points, to finish the yearly half at a level of Bs. 27,776billions, which represents the 61.5% of loans.

The implementation of preferential rates also widely favorscredits granting for housing acquisition, observing an expansionduring the first half of the year 2006 in the order of 70.3%(Bs. 1,272 billions), for a total in June of Bs. 3,081 billions, withwhich the concentration on this category attains 6.8% of thebanking system net portfolio.

Credits oriented to agro activity and micro-enterprise showedlikewise very favorable behaviors, raising up to Bs. 5,637 billionsand Bs. 1,805 billions respectively, which represents increases

of Bs. 1,199 billions, and Bs. 398 billions, in comparison to thesecond half of year 2005.

In regards to portfolio quality, it is observed that the highestamount of outstanding doubtful credits is registered on activitiesof wholesale and retail businesses, restaurants and hotels, andconsumption credits, representing the troublesome portfolio(outstanding doubtful) the 27.6% and 19.1%, respectively. Thelesser amounts of non-performing portfolios are reflected inmines and hydrocarbons, followed by transport, storage andcommunications, on account likewise that the latter comprisethe smallest portfolios within the whole financial universe.

The system consolidated balancesufficiently reflects the close existinginterrelation between the operationand the behavior of mainmacroeconomic aggregates, whichis the case of significant expansionof flow availability over the last yearsand its effect on the composition forpublic investment attractions, with a strongtendency to maintenance on the part of depositors for higherbalances in checking accounts, which for the last four halfyears elapsed represent 56.7% of attracted funds throughtraditional instruments, thus deteriorating saving habittendencies, which importance has been diminished in almost8 points during the same time period, at present concentrating– between saving and term investments - barely 38.5%. Theremaining 4.8% corresponds to the category of other investmentattractions, which mainly explains the direction of other typeof products, such as liquid asset funds (FAL in Spanish) andparticipations.

The higher growth during the half year that ended was reflectedby checking accounts (35.2%), equivalent to an increase ofBs. 12,782 billions, raising its balance in June 2006 to Bs. 49,106billions, whereas saving and term deposits raised to Bs. 20,245billions and Bs. 13,145 billions, respectively, the latter showinggrowths of 17.7% and 5.4%. Upon conclusion for the firsthalf of the year, the total of public deposits was of Bs. 86,671billions, from which Bs. 84,734 billions were attracted throughcommercial and universal banking after an inter-annual variationof 54.7%.

From the distribution of public attracted deposits, a higherrepresentation of funds from governments organizations isshown in its composition (24.1% of the system resources),whereas those for natural and legal persons comprise 75.9%,after reducing participation in 3.6 points in comparison toDecember 2005 closure.

Uponclosure for the first

half, the total of activesof the system reached

Bs. 106,886 billions due tothe increase registered inassets for commercial and

universal banksThe

implementationof preferential rates

also widely favors creditsgranting for housing

acquisition

FINANCIAL SYSTEM

FINANCIAL SYSTEM DURING FIRST HALF 2006

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The Trusts actives for the banking system rose to Bs. 67,670 billions, outof which commercial and universal banks managed Bs. 64,187 billions,amount this that reflected a variation of 135.1% versus value for June2005. The main reason for this increase was the deposit of Fondenresources in Treasure Bank of draws from international reserves.

On the other hand, indicators showed a good performance for thefirst half of the year. In the specific case of commercial and universalbanks, long-term operations represented 0.91% of the gross portfolio,lower than registers for same period year 2005.

At present, it is fully endowed in 261%. The minimum capital index as per Sudeban wentover from 10.0% to 8.0%, whereas the capitalization level for the commercial and universalbank is in 12.0%, which shows its solidity level.

Yields on actives attained 3.17%, being the lowest in the last four months, as well as areturn over equity, which decreased down to 28.14%. The impact over the latter wascompensated by a higher financial leverage.

The profit spread from commercial and universal banking operations expresses the leastreal return on credit operations, which was progressively reduced in the last exercise duepartly to lesser yields in stock investments, since credit portfolio profits showed anotherwise half-yearly variation of Bs. 600 billions and of Bs. 1,148 billions in versus thesame time period last year, even considering that rates charged for loans have also decreasedas an average, which was compensated by the important expansion of credit portfolios.

On the other hand, restructuring expenses attained the figure of Bs. 3,074 billionsover the first half 2006, equivalent to a raise of Bs. 329 billions (12.0%) versus closureof second half 2005, whereas if compared to June 2005, the increase of 37.8%(Bs. 844 billions) overcomes annual inflation, which together with lower rate levelsinfluences in less profitability of the financial system.

In detail, at closure of June 2006 operational expenses represented 56.6%of financial profits, the highest amount in the last four half-years.Thus, the increase in financial profits of Bs. 1,111 billions (28.7%)versus the first half of year 2005 drove the net financial spread in26.9%. The other operational profits – most of them from serviceand commission fees – partially contributed to compensate the increase

of restructuring expenses, allowing the half year net result end atBs. 1,486 billions, 19.6% above obtained amount in June 2005.

The highergrowth during the halfyear that ended wasreflected by checking

accounts (35.2%), raisingits balance in June 2006

to Bs. 49,106billions

The increasein financial profits

drove the netfinancial spread

in 26.9%

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FINANCIAL SYSTEMDURING FIRST HALF 2006

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BANESCO UNIVERSAL BANK




The performance of the bank during the first half of the yearmay be considered as fruitful, both from the organizational andfinancial point of view, of course, always aiming at offering ourcustomers and related the service quality that has alwaysdistinguished us as the best bank in the country, with all thetechnological progress necessary to differentiate ourselves in acompetitive market such as the Venezuelan banking market.

Banesco Universal Bank held the first position in resourcesmanaged after an increase of Bs. 7,788 billions (68.51%) duringthe last twelve months elapsed, totalizing in June 2006 Bs. 19,156billions, equivalent to an inter-semester variation of 20.31%(Bs. 3,234 billions), which it all translated into a market participationof 15.6%, concentrating our institution an important proportionof the funds volume coming from the highest level of flowavailability in the economy.

During this period Banesco held leadership in different productsand services, among them the Mandatory Savings Fund, whichraised in June 2006 to 1,038 billions, representing a market quotaof 26.4%, on account of the significant growth of Bs. 108 billionsduring this year and of Bs. 217 billions versus the same timeperiod last year.

We also consolidated the first place in the category of placedinvestments, which rose to Bs. 7,672 billions after an increaseof 26.25% (Bs. 1,595 billions) during year 2006. Additionally,it administers a portfolio of Bs. 4,909 billions in Trusts actives.

On the side of traditional investment attractions, we held publicpreference with the first place in non-remunerated checkingaccounts and term deposits, which raised to Bs. 3,100 billionsand Bs. 1,451 billions, respectively attaining market quotas veryclose to 12% in both categories.

The behavior of our actives was very favorable, for the bankheld the second place within national banking market with anactive total of Bs. 12,555 billions, equivalent to a participationof 12.0%, registering a growth of 19.85% (Bs. 2,080 billions)during the half year that ended in June 2006 and of 32.9% versusJune 2005.

This drive was fundamentally sustained on the importantexpansion of our credit portfolios, which balance increased toBs. 6,294 billions, overcoming in 23.87% the amount registeredin December 2005, at present concentrating the 14.17% ofgranted loans by commercial and universal bank markets, holdingat the same time, the excellent quality of our portfolio, highlyspread and with long term operations of 0.47%, one of thelowest in the Venezuelan bank market.

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Said growth reflected too the index that measures credit operations,60.3%, which is very superior to 31.1% exhibited in June lastyear, supporting Banesco the highest credit demand, as a resultof more attractive rates and proactively complying with legaldispositions in regards to this point.

As per the Bank Superintendence Bulletin corresponding toJune 2006, Banesco concentrated the 13.3% (Bs. 3,588 billions)of commercial credits granted through the segment of commercialand universal banks, 26.4% (Bs. 1,209 billions) of consumptioncredits with credit cards and 17.4% (Bs. 504 billions) of mortgageloans.

The distribution of our portfolio per economical activity showslikewise the importance of orienting available resources towardscredit operations, thus supporting the growth in differentproductive segments of the country, Banesco Universal Bankstressing areas such as agro, fishing, and forest, which by closureof June 2006 had a portfolio of 835 billions (15.0% of the marketand 2º place); in the construction activity, we concentrated the19.4% (Bs. 688 billions), while orienting towards the industrysegment Bs. 703 billions, equivalent to 13.4% of the countrycommercial and universal bank markets.

The micro enterprise had in Banesco a wide support in itsactivities, registering a portfolio of Bs. 231 billions upon closureof last June, after a half yearly variation of Bs. 77 billions, whichrepresented a growth of 50.2%.

The increase of our actives was leveraged on the significantincrease registered by public investment attractions, in the orderof 29.4% (Bs. 2,371 billions) between June 2005 and June 2006,to attain Bs. 10,446 billions, stressing the fact that deposits inchecking accounts showed a higher pace of variation (90.4%).

In fact, Banesco Universal Bank is by closure of the first half2006 the indisputable leader in checking accounts, with adepositors total of 1,274,019, which represents 27.4% of clientsfor checking accounts in the whole banking system at nationallevel.

We are also leaders on savings, for which the bank has morethan to million depositors, equivalent to 16% of banking universe.

For term investments, even though we do not hold the firstplace in regard to the number of clients, we have leadership inattracted funds, with a figure at closure of June of Bs. 1,451billions (11% of the market).

At the end of the period, Banesco was positioned first place ofthe financial system in traditional attraction of investment

instruments, since it holds the preference of 3,286,125 depositors,i.e., the 18.6% of the total, with a volume in deposits above 10billion bolivars.

The new blend for public investment attractions allowed thedecrease of funds cost, which along with the new compositionof active translated into an increase of the net financial margin,which increased in Bs. 111 billions (36.7%) versus the oneobtained in June 2005. However, the growth on restructuringexpenses (45.8%) diminished the increase of the net result thatraised in 5.8% over the last twelve months elapsed, to total Bs.161.5 billions at closure for the first half 2006.

We ended on June 2006 with indicators in accordance to anexcellent management during this period, among which thereare those that measure the return of assets and average equityof the institution, attaining levels of 2.8% and 25.8%, respectively.

The indicator for cash and equivalents attained a level of 24.9%,in accordance with the level of public investment attractionsmanaged by Banesco Universal Bank y, similar to the averageof commercial and universal banks (24.0%).

The minimum equity index at period closure was 11.04%, afterthe end in June 2006 with an equity of Bs. 1,245 billions, onaccount of the equity strengthening of 16.0% (Bs. 171 billions)experienced by Banesco versus the second half year 2005.

The management of the half-year was enriched by a series ofhigh impact improvements from which we are already obtainingbenefits, not only our clients and employees, but also all entitiesinterrelated to financial institutions through their normaloperations.

Juan Carlos Escotet RodríguezChairman of the Board of Directors

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HUMAN CAPITAL

QUALITY OF LIFE FOR OUR HUMAN CAPITAL

The human resources management per competences is anadministrative model that allows the alignment of intellectualcapital of an organization with its business strategy, simultaneouslyfacilitating the professional development of people.

QUALITY OF LIFE FOR OUR HUMAN CAPITAL

HUMAN CAPITAL

Consolidating Banesco Corporate Volunteers…

…with Fe y Alegría (Faith & Joy)Our workers participated by offering “learning experiences”through complementary formation workshops offered to studentsof the Instituto Universitario Jesús Obrero de Catia at Caracasand at the Instituto San Francisco at Maracaibo. Likewise,volunteer work started at the IUJO in Barquisimeto, open in2006.

…with the Venezuelan Red CrossA new group of volunteers joined in the project “AtenciónPrimaria en Salud y Preparación para Desastres” (“PrimaryAttention in Health and Preparation for Disasters”), in order toimprove health conditions, mitigate risks, and provide supportto the community development at Las Lapas, Miranda state.

…with FundanaOur volunteer workers actively participate in activities at Villasde Los Chiquiticos, in order to reinforce family values and offerspaces to facilitate psycho-affective relations among our “Small-Ones”.

Sport Activities in the Metropolitan AreaThrough continuous sport tournaments in the disciplines ofHall Soccer, Volleyball, Softball, Basketball, and Kicking-ball,these activities incorporate more than 1.200 employees, in orderto foster a healthy life style, good use of free time, and strengthencommunication, teamwork and stress management.

Within the Program for Preventive MedicineA Vaccination Program for Measles and Rubellawas carried out, for which 2,556 workers werevaccinated, thus minimizing risks factors andoptimizing the life quality of the employee.

Upgrading HousingConditions of Our Employees

To strengthen the housing policy addressed toBanesco employees and contribute to the upgrade of theirhousing conditions, the Board of Directors approvedthe allocation of an additional amount up to 5 millionbolivars for each one of the new credits for employees.In the first half-year, 295 mortgage loans were grantedamong our employees for a total of Bs. 1,475 millions.

Competence Corporate ModelIn order to implement a competence corporate modeladapted to our present demands, the consulting companyMartha Alles Human Capital was selected to be part ofthe formal initiation of these practices.

The humanresources management per

competences is anadministrative model that allows

the alignment of intellectual capitalof an organization with its business

strategy, simultaneouslyfacilitating the professional

development of people.

Inthe first half-

year, 295 mortgageloans were granted

among our employees fora total of Bs. 1,475

millions.

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Social Responsibility Hand toHand with Our Social Partners

During the first six months of the year we consolidated initiativesstarted on previous years and incorporated others to our Programfor Company Social Responsibility.

FesnojivCommitted since 2005 with a contribution of 3 billion bolivarstotal, with the program “Social Action for Music”, we handedout one billion bolivars, attaining to this datethe amount of Bs. 2 billions for theconstruction of the Centro de AcciónSocial por la Música (Social ActionCenter for Music). This center isarchitectonically conceived as a workof intense social scope, which will shedeffect directly over 2,500 people byproviding shelter to them and theperformance of different activities inside

said center, besides supporting the 300 thousandsmembers of the Sistema Nacional de

Orquestas Juveniles Infantiles (NationalSystem of Youth Orchestras).

Fe y AlegríaWe handed out Bs. 265 millions to Fey Alegría for the project Desarrollo del

Pensamiento (Thought Development)carried out in Caracas and the east part of

the country, including the formation of teachersthat will spread this initiative all over the national territory. Wealso granted Bs. 1 billion to continue contributions for superioreducation institutes in Caracas, Maracaibo, and Barquisimeto,where some 4,500 students are being trained.

Catholic Schools Venezuelan Association (AVEC)To attend various academic, cultural, and sports needs of CatholicSchools Venezuelan Association members, we granted Bs. 714.92millions.

School Canaima de La VegaWe granted Bs. 370.37 millions to the School Canaima de LaVega for the construction of the headquarters for their schoolsecondary instruction level of this studies center that belongs tothe AVEC. This contribution continues with the commitmentacquired in 2004 for Bs. 1.4 billions for this project. To this date,we have handed out Bs. 856.33 millions, thus contributing withthe education of more than 600 children and adolescents.

Additionally, we undersigned a contract of technical and professionalassistance for academic personnel, parents, representatives, students,and the community of the Foundation for a total amount ofBs. 88.95 millions, out of which 50% has already been handed in.

Fundana AuctionBanesco City was headquarter for the II Auction in pro of Fundana,which allowed collecting Bs. 446.5 millions. On this occasion,one piece of carved wood, representing the home dream of allthe “Small Ones” at Fundana was auctioned by a group ofimportant Venezuelan artists. In total, an amount of 124 uniqueart pieces were in such auction.

Damas Salesianas AssociationWe renewed our commitment to the Damas SalesianasAssociational and granted them Bs. 164.18 millions for thestrengthening and consolidation of the Program Training forWork, carried out in the Don Bosco Center 88 of the MetropolitanDistrict.

UCABWe granted Bs. 240 millions to the Guayana center for theconstruction of the Library of this studies house.

Because for El Nacional and BanescoEducation is important.We filled up with meaning the first half year 2006 upon supportto education and knowledge thanks to the alliance between ElNacional and Banesco for the production and distribution of thecollection “El Gran Diccionario Larousse” (Great LarousseDictionary), for the Venezuelan family.

Sociedad Anticancerosa (Fight Against Cancer Society)This institution received Bs. 100 millions to provide equipmentfor the Procedures Hall for the Prevention of Cancer in Caracasand reactivate its operation.

SOCIAL RESPONSIBILITY HAND TO HAND WITH OUR SOCIAL PARTNERS

Wealso granted Bs. 1billion to continue

contributions for superioreducation institutes in

Caracas, Maracaibo, andBarquisimeto, where some

4,500 students arebeing trained.

We handedout one billionbolivars for the

construction of theSocial Action Center

for Music

SOCIAL RESPONSIBILITY

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Communication: Ever Closer to Our Clients

Me Importas Tú y Tú y Tú(I care for you, and you, and you)…The image campaign 2006 took the conceptof having our clients as protagonists throughimages reflecting their achievements, withthe additional support of the musical theme“Me importas tú”…”I care for you...”because for Banesco, ¡the best products areour clients achievements!.

Fast Credits for EverythingAt the request of the public: MultiCredits 48 hoursThanks to the success of MultiCredit 48 hours and its flexibility,we designed a strategy that molds and stresses opportunities thisnew product offers to satisfy our clients’ needs.

Plans with Credit for EverythingLikewise, our Taylor-cut Plans as a whole concept of relationswith our clients: Your Own Plan, Growth Plan, and GoldenYears Plan were now the holders for Credits for Everythingoffers, an strategy that has allowed us consolidating our positionin check account attractions.

Product of the Month in Agencies: A successful formulato promote and speed up our options for credits.Upon offering our clients personalized advise and having attheir reach detailed information on conditions and requirementsto request Micro credits, MultiCredits 48 Hours, extra credit,and Mortgage Credit with resources from the Mandatory SavingsFund (FAO), more than 2700 people assisted to conferences atPuerto La Cruz, Maracaibo, San Cristóbal, Maracay, Valencia,Porlamar, Puerto Ordaz, and Caracas.

¡Raise your own salary!Through this original promotion, we fostered the demand anduse both of Banesco’s credit cards and Banesco Plans accounts,upon raffling Bs. 1,000,000 a month for a year to 50 clientwinners.

Promotion $1,000 in Prepaid CardsA total of 200 winners was the result for the promotion of$1,000. Just by using credit cards, our clients participated forprepaid Credit Cards to be used abroad, or effective to theofficial rate exchange in Venezuela.

Depends upon two…We initiated a consciousness campaign to reinforce leadershipin safe transactions through the slogan “Security depends upontwo: our technology and your precaution”... The first effort is

focused on our automatic cashiers, and the second half-year wewill cover all channels or contact points.

We go where you are

Physical Presence of the Brand in MallsIn the first half-year 2006, Banesco consolidates its presence inthe 26 main malls of the country. Focal leisure points forVenezuelans.

Through innovative high impact presence, we supportpromotions and campaigns that reaffirm the brand image andfoster the use of Banesco debit and credit cards, and the mostnovel electronic channels to offer more comfort and life qualityto our clients.

Theme Park “Want-To-Be” in Mall TolónWe are present in the beautiful project carried out in the TolónMall: Theme Park “Want-To-Be”. Banesco is the bank withexclusive presence, which represents a great responsibility, forwe show ourselves before our children as a model bank throughthe formation of our values, service mission, our human side,and social responsibility.

Opening Channels for Attention at a Distance...

Electronic Exchange of Data• We attained an increase of 6.24% in transactions for

payroll services, payment to suppliers, direct debt through

COMMUNICATION

COMMUNICATION: EVER CLOSER TO OUR CLIENTS

“Me importastú”…”I care for

you...” because forBanesco, ¡the best

products are our clientsachievements!.

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the platform for data electronic exchange, as well as agrowth of 14.26% in clients members of these services.

• Upon closure of half-year, the data electronic exchangeservices have 4,255 client members, processing an averageof 3.8 millions in transactions and 916,407 millions ofbolivars in managed amounts.

BanescOnline: We are not so Virtual• We attained increase of 34% and 14% in average

transactional volume and in the base for client membersrespectively, if we compare ourselves to December 2005.

• Upon closure for the half-year, the channel counts withmore than 680,000 client members, and managed amonthly average of 7.6 millions of transactions and789,257 millions bolivars in amounts.

• The scope of products and services was broadenedthrough this channel with the incorporation of themodality Movilnet Post-Payment in optionCANTV Payment.

Center for Telephone Attention (CAT in Spanish)• In the first half 2006, the Center for Telephone Attention

managed an average of more than 2.5 millions calls and1.57 millions transactions a month, being 90% receivedby system IVR, commonly called “Robot”

• In authorizations, the general level of acceptance attained85.46% average, whereas national acceptance attained 90.01%

More Bank at a DistanceUpon closure of first half 2006, Banesco has828 Automatic Cashiers, 152 Self-serviceequipment, and the largest net of checkdispensers (244) and sale points (24,520).

• We implemented the securityscheme in automatic cashierswith “Challenge Questions”,which offer our clients themost advanced technology ymatters of security. Even with thesechanges, transactions grew, and wehold leadership in acquiring an average share of 17.77%.

• Likewise, we attained growth for 32.16%, 12.25%, and19.42% in the monthly average for Self-service, Dispensers,and POS transactions respectively.

• The service Flow-in Exchange andConsultation of Green Pointswas initiated in the POS net ofBanesco.

Forever Leaders inCredit and Debit CardsBanesco registered an increase of 67% insales through credit Cards, compared with lastyear, which translates into an increase of 2.07 share percentagepoints, holding the first place with a participation of 23.44%.

• In the search for exclusive and attractive benefits for ourclients upon using credit cards, we hold strategic allianceswith renown companies, such as Mail Boxes Etc,Multiphone, Valle Arriba, and Cinex, to offer marketdifferentiating promotions.

• As leader in the market of credit cards, we reinforced theattraction strategies in the Legal Segment throughCompany Credit Cards and Centralized Account, offeringour clients upgrades in flow, less risk upon flow handling,besides obtaining financing whenever the client requestsit for representation and travel expenses.

Banesco held leadership in credit cards with a participation of19.43%, and an increase in POS sales of 74%.This leadership is based on innovative andattractive strategies, such as promotionsand commercial alliances, attractionof large payrolls and incentives toagencies net.

• Strengthening relations withthe government segment,through products to allowsatisfaction of their demands,Banesco increased its portfolioattaining an important positioning inpayroll attractions. Likewise, we held leadership in thePlan Estrella (Star Plan), addressed to the payment of thefood contractual payment of PDVSA employees.

On Credits, Closer to the First PlaceDuring the first half 2006, cash availability continued expanding,with which the financial system registered growths above thosereported in previous periods. This, along to a mass-usage policyof the credit portfolio driven by Banesco, resulted in a growthof 23.87% in relation to closure 2005, thus approaching the goal

OPENING CHANNELS FOR ATTENTION AT A DISTANCE...

In the first half2006, the Center

forTelephone Attentionmanaged an average of morethan 2.5 millions calls and1.57 millions transactions amonth, being 90% received

by system IVR, commonlycalled “Robot”

Uponclosure of first half

2006, Banesco has 828Automatic Cashiers, 152

Self-service equipment, andthe largest net of check

dispensers (244) and salepoints (24,520).

Banescoregistered an increase

of 67% in sales throughcredit Cards, compared with

last year, which translates intoan increase of 2.07 share

percentage points, holding thefirst place with aparticipation of

23.44%.

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to hold, at a short term, the first placein credit portfolio, consolidatingourselves as the largest bank in the

country.

Banesco is in second place on banking for creditportfolios, upon wining half a point share and attain 14.17%.

This evidences the firm purpose to actively participate in activitiesassociated to the real economy sector and contributes withemployment creation and welfare for Venezuelans.

We widely fulfilled mandatory portfolios: Agro, MicroCredits,Construction, and we are determined - in matters of Tourismcredits – to be considered as the financial system reference inregards to versatility of our products and services addressed toproviders of tourist services. To that effect, we granted on June2006 closure the amount of Bs. 77 billions.

MultiCredits 48 hours…MicroCredits tostart your business …the one adaptedto your needsOur star product in the massive marketMultiCredit 48 hours, generated a recordplacement of Bs. 536 billions, figure weproject to double for the second half 2006.

In regards to segment of MicroCredits, thebank still goes on with its protagonist role inthe financing of the small industry, administering a portfolio ofBs. 231 billions, which widely fulfills with the minimum of 3%legally required.

More than 7,000 families have now their own houseWe held leadership in Mortgage Credits, both with resourcesfrom the Mandatory Savings Fund, in this case with more than4 points share over our closest competitor, as well as with ownresources, processing a total of 7,226 requests by closure of June2006. With this, we facilitate a better quality of life for morethan 21,000 people, therefore fulfilling our role as responsiblecompany that sets a commitment to improve our scope, time,and service quality, condition this that has made from Banescoan unique reference in matters of mortgage in the country.

Record for Vehicle CreditsDuring the first half of the year, 3,907 credit requests wereapproved for vehicle credits, which evidences a record growthfor Banesco on this portfolio, raising 5 positions in the ranking.However, given the lack of existing vehicles in the market, only50% of these requests have been paid off.

We undersigned a financial covenant under the ProgramVenezuela Móvil, having approved to this date a total of 2,450requests, granting 44%, given the demand for family vehicles,which is above to the existing offer.

Seeing the Agro GrowThe Agro Bank continues with its yield pace, attaining 86%increase in credit portfolios to the agro sector, reaching Bs. 835billions, above the goal assigned by the Government on a 101%.

During the half-year, 577 credits were honored for a grand totalof Bs. 626 billions. On the other hand, the bank continuesdeveloping its strategy oriented to the attraction of new clientsto distribute its portfolio. Within this line, important clients havebeen attracted in the poultry and pig-farming sectors.

Likewise, the Board of Directors reiterates its commitment withthis economic sector of the country through opportune credits,visits to our clients from executives of the highest levels in orderto detect needs and look after them in the most efficient manner.

¿Our priority? ¡Our clients!

¡We keep on growing on points for attention!Broadening our presence in the main cities of the country, duringthe first half of 2006, 11 new branches opened to the public inthe states of Miranda, Carabobo, Lara, Aragua, Mérida,Anzoátegui, and Sucre attaining a total of 401 sale points atnational level, and the largest geographical coverage with qualityservice.

FOREVER LEADERSIN CREDIT AND DEBIT CARDS

FOREVER LEADERS

Banesco heldleadership in credit

cards with aparticipation of 19.43%,

and an increase inPOS sales of

74%.

Banesco is insecond place on

banking for creditportfolios, upon wininghalf a point share and

attain 14.17%.

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¿OUR PRIORITY?¡OUR CLIENTS!

Continuous Upgrade of OurServices of Deductions andPreferential Exchange RatesAutomatic I.V.S.S (Social Security

Venezuelan Institute) in all Banescobranches

On March 1, the program Project for Self-Deposits for I.V.S.S. Deductions started in all

Banesco agencies nation wide.

Banesco was one of the five banks selected to start this initialphase. As an immediate result, our collection increased in 259%over the total amount collected in the first half 2005.

With the project of automated collection, Banesco increased itsmonthly average participation from 6% to 20%.

Income Tax (ISLR) and CaracasPower Company (Electricidad de Caracas)The collection of income taxes on March 2006, correspondingto the business year ended on December 31, 2005, showed anincrease of approximately 108% as compared to year 2005.

The collection system for theCaracas Power Company wasoptimized and attained asubstantial increase upon offeringclients better options for theirpayments.

Back Office - CADIVI.Under a scheme of decentralization and as a contribution to theupgrade of this service for our clients before CADIVIrequirements, an executive for client assistance was appointedin Barquisimeto to support the management of specialized banksand agency nets of the region. Additionally, in the city of Valencia,where we initiated this scheme, presence was reinforced tobroaden the scope and service standards for this model. Thereis a survey in progress to take this attention scheme to otherimportant cities of the country.

Innovation for the Premium CategoryAlong with the general strategies for sales, the challenges forthis period were ambitiously brought forth and with high impacteffect on the segment.

We incorporated the figure of credit in all its modalities, establishedintermediation spread and real return rates over the wholeportfolio.

Simultaneously, we broadened coverage to our clients andpresence in the net of agencies with the incorporation of 37new advisors, and attained the important figure of 185 advisorsnationwide.

We launched the “Línea de Crédito Plan Premium” (Credit LinePremium Plan), placing a total of 1,877 lines.

Other figures of interest: the credit portfolio increased to 61%,products crossover index attained 5.15 per client and possessionof credit cards is at 61%.

The New Power BankIn view of the different forms of energy, which day by dayevidence important and growing opportunities, the scope of theprevious Oil Bank is broadened to become the New PowerBank, and thus manage in a specialized and professional mannerdifferent types of clients, such as: Hydrocarbons, Electricity,Steel Industry, Metalmechanic, and Mines.

From here stems the division of Electricity, Steel Industry, andMetallurgy, which in very little time has shown its great potential:

• Management and knowledge to enter into terms with themost outstanding companies in the electric, steel, and

11new branches

opened to the public inthe states of Miranda,

Carabobo, Lara, Aragua,Mérida, Anzoátegui, andSucre attaining a total of

401 sale points atnational level

The Agro Bankcontinues with its yieldpace, attaining 86%

increase in credit portfolios tothe agro sector, reaching

Bs. 835 billions, above thegoal assigned by theGovernment on a

101%.

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metallurgy segment, through consolidation of a teamspecially trained for this sector.

• Creation of Taylor-made products for the needs of thissector companies.

• Increase in clients allocations between banks an agencynets, as well as attraction of new clients through ourexecutives actions.

Bank of the GovernmentUpon closure of first half 2006 Banesco holds its leadershipbetween the private bank and the ranking for official organizationsattraction.

In this half-year, resources managed by the bank increased to135% in real terms. Due to this important increase of publicexpenditures during the period, flow availability has significantly

expanded, making funds from the public sector attractive forthe most part of financial organizations in the country,

even for those that for some time did not participatein this market.In view of the

different forms of energy,which day by day evidence

important and growingopportunities, the scope of the

previous Oil Bank isbroadened to become the

New Power Bank

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¿OUR PRIORITY?¡OUR CLIENTS!

CORPORATIVE MODELS

INITIATING THE MANAGEMENT MODEL PER INDICATORS

One of the organizational elements of the highest relevanceduring this period was the initial implementation of amanagement model based on balanced indicators, whichmain purpose is to upgrade bank capacity to execute andevaluate effectively and efficiently its business strategies.

The consolidated indicators comprise the most importantchallenges for the office of Strategic Management for thisand next year, as a first step to the simplification andintegration of the government corporate systems.

As part of the adapting process to better practices, we haveinitiated the incorporation of the approach Balance ScoreCard to the Strategic Planning Whole Process (PIPE inSpanish), taking input from existing banking experiencesoriented to models implementation of management perindicators.

Strategic Quality

Programs to Secure Our Quality ServiceWe hold proper follow up that secures our differentiating qualityin different actions and segments:

Service AuditsIn order to measure and hold quality standards establishedin our agencies, during the first half 2006 the first phaseof this program was carried out, attaining an averageresult of agencies in optimum service quality level.

Surveys on Commercial ClientsUIT coverage at Caracas, Valencia, Maracaibo, andPorlamar and a total of 537 businesses, we reiteratepreference for Banesco, with a presence of 60% totalcommercial clients, and an average satisfaction of 6.4points, in a scale of 7 points.

Expectations from Banesco Private Bank ClientsThis survey showed high levels of satisfaction in thesegment of Private Bank, obtaining a punctuation of 8points in a scale of 10 points, whereas the generalsatisfaction level with Banesco is in 8.94 on the same scale.

Among some aspects that differentiate Banesco, we have:technology, personalized attention, quality and solid service.

Service Quality in Telephone BankingUpon evaluation of 1,620 calls, the average

attention time registered was of 1 minuteand 46 seconds. In regards to satisfactionwith CAT, we find our clients value thequality of this service in 6.19 points on ascale of 7 points.

Satisfaction Survey Banesco ExpressUsers and clients were surveyed on

BanescoExpress Los Ruices and agencies ofthe circuit. 75% of those surveyed required only 5 minutesfor their attention and rated the service as very fast, beinghighly satisfied with it.

The survey showed that client distribution strategy tonew contact points decreased public volume in agencies,resulting in better attention timing.

Tracking CommunicationalEfficiency and Banesco AdvertisementBanesco obtains high levels of public memory levelsfrom campaigns projected during this half year, with

a multimedia memory of 65% and full understandingof the messages.

The creative strategies and production elements forcampaigns “MultiCredits” and “Ball” outstand amongall, obtaining high levels of impact and credibility.

Moving Forward on Our Risks StrategiesCredit RiskWe are joining the agencies net on training in matters ofcredit risk, both at promoters’ level and supervisors andmanagers as part of the credit program that the SalesArea is leading. Our participation serves the purpose tofoster a larger culture for credit risk through training andmove forward on incorporating practical upgrades onour investments.

We find ourclients value the

quality of the telephoneBanking in 6.19 points

on a scale of 7 points.

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Operational RiskMoving forward with the goal to implementing in mostcritical areas of the organization a management modelfor operational risks through representatives of operationalrisk, the execution of a strategic goal for implementationin agencies net was started. To this date we have carriedout several work committees, both at executive level andbase, so as experts in business process lead the identificationand management of risks that may affect strategic goals,as well as operational processes for products allocationand client service, all within the concept framework ofoperational risks self-management that Banesco hasdecided to implement.

Market and Liquidity RiskLined up with compliance of norms issued by the BanksSuperintendence and continuing with the strategyimplementation of risk models for markets and cashavailability risks, an upgrade was elaborated onmeasurement processes and risk follow up oriented toquality and opportunity of information generated, havingthe advise of an expert in the matter that validated resultsobtained on risk market through technological toolsdesigned for these purposes in order to secure appropriateand consistent measures to the bank activities.

Business ContinuityThe Security of Information and Business Continuity Vice-presidency consolidated its new organizational structure adaptedto changes and new vision conceived for the Organization.

In matters of business continuity, in accordance to BIA (BusinessImpact Analysis) results, implementation stages, tests, andupholding of defined strategy defined for critical processes werecarried out during year 2006.

Likewise, the Crisis Corporate Management Plan was continued,including the development of scenarios established as a resultof risk analysis. All these initiatives are within the framework ofincidents management, allowing the control of any situationbefore it happens, during and after the incident through thedevelopment of guidelines, policies, norms, and standards foran adequate continuity administration of the business.

On the other hand, excellent results were obtained on theapplication of the contingency plan before the collapse ofViaducto de La Guaira, securing at all times the efficient servicein agencies, external cashiers, and automatic cashiers in the zone.

Banesco: Pilot Bank in Project ROCAIn order to improve the delivery mechanism and informationreception, Banesco as pilot bank and the Sudeban, made up amultidisciplinary team, which analyzed the terms,norms, and implementation of the so calledProject Roca, which end is to reachinga whole information system thatsubstitutes information delivery inprinted and electronic formats throughthe incorporat ion of newTechnologies to facilitate the deliveryand reception of data.

Once in execution the pilot plan, theSudeban will initiate for the second half 2006,the massive plan to involve the rest of the financial institutionsto the Project Roca. Banesco then becomes the tutor of fourfinancial institutions belonging to the massive plan in order toadvice and communicate experiences in the development ofeach atom that comprise the project.

The four banks assigned to Banesco tutorship are: Fondo Común,Total Bank, Banco Nacional de Crédito y Banco HipotecarioActivo.

Technological Advance for Corporate Support• TOTAL90

Development and implementation of 398 managementindicators, for all vice-presidencies of the Organization,thus facilitating management control and performancemeasurement.

• Architecture Systems OfficeWith an original vision on the function future, theArchitecture Office is created, which will be in chargeof seeking line-up between Business and Infrastructure.To this date, an implementation plan has beendeveloped, as well as the collection of informationon process architecture, applications, infrastructures,and information.

Excellent resultswere obtained on the

application of thecontingency plan before thecollapse of Viaducto de La

Guaira, securing at alltimes the efficient

service

CORPORATIVE MODELS

CORPORATIVE MODELS

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• Telemarketing Premiums SalesImplementationPremium sales were initiated through telemarketing,with two new products, as well as the entireinfrastructure for telecommunications andtelephones.

• Trusts Management Information SystemFrom the Indicator Manager Trust System forOperational Management, a system of managementinformation was developed to promote an initialplatform to identify and develop those indicators ofimpact and added value for the business, measurable,increasing area analysis capacity.

• Courses of Information Technology forManagement of ServicesWe provided 6 sessions in Courses of InformationTechnology for Management of Services, training onthe best practices for information technology serviceswith quality to 12% of personnel from the Technologyand Processes Department. With this initiative forinternal training, we saved estimated savings for US$125.000 in training.

• Service DeskWe optimized the attention and solution of reportedevents through the Service Desk, with theimplementation of a new corporate process based onbest practices, a robust technological empowerment,measurement scheme, and a continuous upgrade ofmore than 100 solution groups.

• Banesco Insurance in CIMThe Banesco Insurance Service was incorporated tothe monitoring scheme at the Whole MonitoringCenter (CIM in Spanish), which allows detecting intime incidents that may affect its availability, bothpreventively and reactively, thus securing its resolutionin the least possible time and obtaining a set ofindicators to allow optimizing service availability.

• iSeriesWe completed the technological renovation of ourcentral computer iSeries, reaching a security forprocessing in accordance to the performance of ourbusiness, for at least the next 18 months.

Developmentand implementation

of 398 management indicators, for all

vice-presidencies of theOrganization

CORPORATIVE MODELS

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CORPORATIVE MODELS

BALANCE SHEETS

BALANCE Sheets As of JUNe 30, 2006 and DeC 31, 2005

BALANCE SHEETS

BANESCO BANCO UNIVERSAL, C.A.BALANCE Sheets As of JUNe 30, 2006 and DeC 31, 2005

Stated in MILLiON VEB

Operations inVenezuela

Jun-06

2,598,568198,162

2,029,42511,02449,769

310,1890

2,652,7612,672

01,227,2451,386,395

40,600549

-4,7006,293,5816,348,510

38,00529,715

542-123,190116,463

045,76565,10510,166-4,573

120,4304,373

116,0570

3,601450,278319,412

12,555,094

Consolidatedwith Foreign

Branches

Jun-06

2,634,345198,171

2,029,42511,02485,537

310,1890

2,944,3172,672

01,430,6001,472,619

42,578549

-4,7006,296,3866,350,655

49,47129,882

542-134,162123,189

76053,10265,12810,166-5,9664,3734,373

00

3,601450,680319,646

12,776,537


Dec-05

1,784,420246,930

1,256,66117,80828,054

235,051-83

2,621,138111,579389,417758,778

1,320,19735,6545,513

05,080,8325,113,079

45,06621,694

732-99,738134,011

079,76353,7149,102

-8,569111,084

3,992107,092

03,166

424,779315,979

10,475,409


Branches

Dec-05

1,821,309246,940

1,256,66117,80864,933

235,051-83

2,980,791111,579389,417

1,026,3621,410,335

37,5855,513

05,084,9145,115,399

57,79221,701

732-110,711140,654

15487,62153,7399,102

-9,96211,97811,978

00

3,166425,156316,059

10,784,025

ASSETSCASH AND DUE FROM BANKSCashCentral Bank of VenezuelaLocal banks and other financial institutionsForeign banksNotes receivableProvision for Bank AccountsSECURITY INVESTMENTSInvestments in Central BankSecurity investments for negotiationAvailable for sale security investmentsSecurity investments held until maturityLimited availability investmentsOther security investmentsProvision for Security InvestmentsCREDIT PORTFOLIOOutstanding creditsRestructured creditsPast due creditsCredits in litigationProvision for Credit PortfolioINTEREST AND COMMISSIONS RECEIVABLEInterest receivable from cash and cash equivalentsInterest receivable from security investmentsInterest receivable from credit portfolioCommissions receivableProvision for interest receivable and otherINVESTMENTS IN SUBSIDIARY COMPANIES, AFFILIATES, AND BRANCHES:Investments in subsidiary companies and affiliatesInvestments in branchesProvision for investments in subsidiary companies, affiliates and branchesPROPERTY RECEIVED IN LIEU OF PAYMENTPROPERTY IN USEOTHER ASSETSTOTAL ASSETS

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Jun-06

10,445,6946,196,1333,100,3353,095,798

396,3892,401,6581,450,902

57140

165435,272424,982

8,3751,916

88,8747,2565,423

551,778

0333,279

11,310,540

487,996274,449532,929-15,930-34,890

1,244,55412,555,094

508,0894,908,961

61,7661,038,253

6,01325,339,945

65,561


Branches

Jun-06

10,664,5896,196,1333,100,3353,095,798

396,3892,505,0791,566,377

57140

165433,015422,724

8,3751,916

88,8747,3355,502

551,778

0338,005

11,531,983

487,996274,449532,929-15,930-34,890

1,244,55412,776,537

526,3144,908,961

61,7661,038,253

6,01325,346,233

65,561


Dec-05

8,914,0794,917,9472,423,1472,494,800

232,5051,957,7381,805,207

64140

1,12780,87073,5264,9292,415

40,6806,7326,598

55790

230,0269,273,514

487,996242,139494,98511,665

-34,8901,201,895

10,475,409464,108

4,433,852101,494930,528

7,04220,042,748

52,824


Branches

Dec-05

9,154,5704,917,9472,423,1472,494,800

232,5052,074,4581,928,979

64140

1,127144,42172,29769,7092,415

40,6807,0996,641

55403

0234,234

9,582,130

487,996242,139494,98511,665

-34,8901,201,895

10,784,025474,123

4,433,852101,494930,528

7,04220,046,678

52,824

LIABILITIESDEPOSITS FROM CLIENTSDeposits in current accountsNon-remunerated checking accountsRemunerated checking accountsOther demand liabilitiesSavings depositsTime depositsSecurities issued by the institutionRestricted deposits from clientsDEPOSITS FROM CLIENTS AND OBLIGATIONS WITH BANAPOTHER FINANCING OBTAINEDLiabilities with local financial institutions up to one yearLiabilities with foreign financial institutions over one yearLiabilities for other financing over than one yearOTHER FINANCIAL OBLIGATIONSINTEREST AND COMMISSIONS PAYABLEExpenses payable due to deposits from clientsExpenses payable due to deposits from clients and liabilities with BANAPExpenses payable due to other financing obtainedExpenses payable due to other financial obligationsACCRUALS AND OTHER LIABILITIESTOTAL LIABILITIESSTOCKHOLDERS' EQUITYCapital paid-inCapital reservesAccumulated incomeNon-realized gain or (loss) on available for sale security investmentsTreasury stock TOTAL STOCKHOLDERS' EQUITYTOTAL LIABILITIES AND STOCKHOLDERS' EQUITYCONTINGENT DEBTOR ACCOUNTSTRUST ASSETSOTHER TRUSTS ASSIGNMENTSDEBTOR ACCOUNTS DUE TO TRUST ASSIGNMENTS (FMH)OTHER DEBTOR ACCOUNTS FROM FMHOTHER DEBTOR MEMORANDUM ACCOUNTSOTHER DEBTOR BOOK ACCOUNTS

BALANCE SHEETS

BANESCO BANCO UNIVERSAL, C.A.BALANCE Sheets As of JUNe 30, 2006 and DeC 31, 2005


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Jun-06

630,948937

161,578448,51619,917

0199,199186,863

32911,218

28761

431,7499,676

27,403414,022258,01641,085

630,953439,938187,903212,06631,5728,397

191,0152,8541,5411,905

26,268167,237

05,091

162,147600

161,547

32,309565

127,0561,615


Branches

Jun-06

643,2141,734

172,377449,18619,917

0201,333188,900

32911,315

28761

441,8819,676

27,403424,154253,35044,847

632,657440,507188,138212,40031,5728,397

192,1502,8541,5561,905

27,415167,240

05,093

162,147600

161,547

32,309565

127,0561,615


Dec-05

585,326885

277,574288,41018,300

156227,366206,097

3298,034

2712,879

357,9608,922

20,302346,579255,04227,330

574,291376,188152,892193,32823,4856,484

198,1036,035

6812,268

31,570170,980

683,593

167,454600

166,854

33,371584

131,2311,669


Branches

Dec-05

600,7321,219

290,749290,30718,301

156229,416207,822

3298,359

2712,879

371,3168,922

20,302359,936251,44435,515

575,865376,867153,132193,76723,4856,484

198,9986,035

7592,268

32,543170,981

683,594

167,454600

166,854

33,371584

131,2311,669

BALANCE SHEETS

BANESCO BANCO UNIVERSAL, C.A.Statements of Earnings As of JUNe 30, 2006 and DeC 31, 2005


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FINANCIAL REVENUESRevenues from cash and cash equivalentsRevenues from security investmentsRevenues from credit portfolioRevenues from other accounts receivableOther financial revenuesFINANCIAL EXPENSESExpenses due to deposits from clientsExpenses due to deposits from clients and obligations with BANAPExpenses due to other financing obtainedExpenses due to other financial obligationsOther financial expensesGROSS FINANCIAL MARGINIncome form recovered financial assetsExpenses Due to Uncollectibility of Credits and Other Accounts ReceivableNET FINANCIAL MARGINOther operating incomeOther operating expensesFINANCIAL INTERMEDIATION MARGINTRANSFORMATION EXPENSESPersonnel expensesAdministrative and general expensesContributions to Deposit Guarantee and Bank Protection FundContributions to Superintendency of Banks and Other Financial InstitutionsGROSS OPERATING MARGINIncome from adjudicated goodsIncome from sundry accountsExpenses due to realizable propertyExpenses due to sundry accountsNET OPERATING MARGINExtraordinary incomeExtraordinary expensesGROSS INCOME BEFORE TAXESINCOME TAXESNET INCOMEAPPLICATION OF NET INCOMELegal reserveStatutory UtilitiesAccumulated incomeLOSEP Contribution

PRINCIPAL FINANCIAL INDICATORS

Jun-06

11.04236.64

1.920.47

8.9263.39

2.8025.82

24.8836.65

Jun-05

11.37180.15

3.421.08

8.2454.68

3.5830.22

18.9553.98

Principal Financial Indicators

Equity + Operative Management / Total AssetsNon-Productive Assets / Equity + Operative Management

Loan Portfolio Provisions / Gross Loan PortfolioNon Accrual Loans / Gross Loan Portfolio

Personnel Expenses + Operative Expenses/ Average Productive Assets *Personnel Expenses + Operative Expenses / Financial Income *

Net Results / Average Assets *Net Results / Average Equity *

Availability / Customer FundsAvailability + Investment in Securities / Customer Funds

* Annual Percentages

BALANCE SHEETS

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CORPORATE GOVERNMENT



BANESCO UNIVERSAL BANK, C.A. is a Venezuelan banking institution authorized to carry out all operations andbusinesses permitted by universal banks, in conformity to stipulations of the Bank General Law and other FinancialInstitutions, subject to control and supervision of the Banks Superintendence and other Financial Institutions.

Additionally, it is subject to all regulating norms of the stock market as it is a company which shares are registered at theNational Stock Register, and consequently, is also subject to control and supervision of the National Stock Committee.The domicile of the institution is the city of Caracas, and has branches and agencies in the whole national territory. Atpresent, it is the bank within the Venezuelan financial system with the highest stock capital, which as of this date reachesthe amount of Bs. 554,372,983,000.00, represented in 5,543,729,830 common and nominal shares with a value of Bs.100.00 each, distributed among a total of 4,915 stockholders.

BANESCO BANCO UNIVERSAL, C.A., holds a government structure that comprises the Shareholders Meeting,Institution Board of Directors, Board of Directors Chairman, Executive President of the Bank, Enforcement Officer,the Internal Supervisor (auditor), as well as Credit, Risks, and Audit Committees. The latter was created as per recommendationson Corporate Government dictated by the Stock National Committee.

Shareholders MeetingsRepresents the universality of shareholders, and has the supremedirection of the company, and all its acts and resolutions legallybind the company and all its shareholders. Among otherauthorities, the Shareholders Meeting has the authority theappointment of Board of Directors members, and fix theirremuneration, the designation of the Statutory Auditors andsubstitute; likewise, it appoints advisers with right to vote andassistance in Board of Directors meetings, discusses, approves,or modifies the Financial Statements presented before them,in view of the Statutory Auditors Report, decides on the decreeof dividends and their payment, its amount, frequency andopportunity they must be honored in conformity to the Lawand Bylaws, as well as also knows and decides over any othermatter for which it has been notified.

Board of DirectorsThe Board of Directors of Banesco Universal Bank, C.A. mainfunction is to directing and general administering of the bank’sbusinesses and operations, including company social responsibilitypolicies. The work of the Board of Directors is vital for thedefinition of corporate strategies, determination of businesspolicies, and the fixation and control of the institution strategy.The Board of Directors also controls the different operationaland functional areas of the bank, and at the same timecomparatively evaluates business forecasts and the result ofprevious years and each fiscal exercise. Normally, it meets oncea week, even though extraordinarily can meet at times and whennecessary, prior Meeting Notice and compliance of the formalitiesstipulated in Bylaws.

In conformity to recommendations dictated by the NationalStock Committee, and as per better practices on CorporateGovernment, the Shareholders General Board decided as of09-30-05 to increase the number of Board of Directors membersto 10, decision authorized by the Bank Superintendence andother Financial Institutions by official minutes SBIF-DSB-II-GGI-GI3- 00998 dated January 25, 2006 and finally registeredbefore the Fifth mercantile Register of the Federal District andMiranda State Judicial Circumscription on February 10, 2006.

Thus the Board of Directors is composed of 10 members, fromwhich no less that a fifth are Independent Directors, whobesides make up for the majority of the Audit Committee,organization in charge to assisting the Board of Directors forthe implementation of measures oriented to preserving theintegrity of the society financial information, as well as supervisinginternal and external audits of the institution.

Likewise, to secure the correct execution of corporate policiesestablished by the Board of Directors, the latter has deemednecessary the constitution of the following committees:

Audit Committee: In adherence to Recommendations thaton Good Corporate Government has issued the Stock NationalCommittee, the existing audit committee was modified andadjusted to the norms required before-mentioned.

Thus the committee is made up mostly by Independent Directors,and their work entails knowing financial statements to besubmitted for consideration before the Board of Directors andfor approval by Shareholders Meeting, assist the Board of


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Directors on the implementation of measures destined topreserve the integrity of financial information of the society,collaborate on the supervision of bank internal and externalaudit, and issue recommendations deemed necessary to theManagement Notification.

Risk Committee: Its primary function is to fixing the risklimits on each one of the bank activities, in order to fostera sound administration for operational risks and businessesin accordance with internal norms and best practicesinternational wide. Additionally, advises both the Board ofDirectors and different Credit Committees on credit decisionsmaking and fixes the guidelines and policies for complianceto preserve an adequate exposure to risk.

Credit Committees: At Banesco Universal Bank, C.A., theBoard of Directors has decided to delegate on several creditcommittees – up to a certain amount – its authority forcredit granting. Always in compliance of different autonomiesand authority delegations, the Credit MetropolitanCommittees and several Credit Local Committees have beencreated. They are in charge – within the limit of theirauthorities – for the consideration and approval of differentcredit requests presented by our clients, and inform theBoard of Directors on its management results. Likewise,they must comply with different risk policies fixed by theRisk Committee of the Institution.

Board of Directors ChairmanThe Board of Directors Chairman is subordinated to theShareholders Meeting and the Board of Directors conductingtheir deliberations.

Additionally, it represents the institution and grants in its namecontracts, agreements, covenants, and in general, all classes of

documents of any nature, and in general all requirements assignedby the Board of Directors. Together with the ExecutivePresident and the Board of Directors, exercises the supremedirection of the Bank activities and represents it before anypolitical and administrative authority.

Bank Executive PresidentThe Executive President is in charge of conducting theadministration and general management of the bank. Submitsto consideration of the Board of Directors the policies, goals,strategies, and decisions transcendental for the organizationand at the same time, is also in charge to execute theresolutions decided upon by the Board of Directors.

Internal AuditorHe is in charge for the internal coordination analysis ofseveral operations of the institution, and acting jointly withthe Audit Committee informs the Board of Directors onthe results for different audits carried out in order to upgradeprocess and sort out any deficiency.

Enforcement OfficerIn conformity of applicable norms, Banesco Universal Bank,C.A., has appointed an Enforcement Officer in charge forthe supervision and control of the Bank Funds Preventionand Legitimacy, and informs the Board of Directors on theresults of their activities and investment of resources allocatedfor training and personnel formation of Banesco personnelon this matter. It also provides advice to the Audit Committeeand the Board of Directors in matters of their competenceand represents the institution before different regulatingorganisms in matters of Funds Prevention and Legitimacy.

Management

Analysis, Control andOperations

Salvador Cores

Loans, Cards,Channels and Services

Gonzalo Clemente

Finance, Products,International Banking

and TrustJorge Caraballo

Infrastructure, Propertiesand Insurance

Fernando Crespo

Technology andProcesses

Nelson Becerra

Sales

Josefina Fernández

Board of DirectorsPresident

Juan Carlos Escotet

Executive PresidentLuis Xavier Luján

Compliance OfficerDimas Arias

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EAch PIEce is IMPORTANTSOCIAL BALANCE

AS 1998 - JUNE 2006Stated in VEB

Banco Universal

ASSETSApplication of Resources: Third Parties and BanescoSolidarity (Capital y Regional)Social Undertaking Project with the IESAFUNDANAWords for VenezuelaFe y AlegríaInvestment in the Fe y Alegria TrustState Foundation for the National System of Juvenileand Children’s Orchestras of VenezuelaCivil Association Don Bosco Housing ProgramDamas Salesianas AssociationMaracaibo ArchdiocesesVenezuelan Foundation against Child ParalysisDonation of Christmas Toys to the CommunityCASARTESEditorial ProjectsDonation of Computer EquipmentOther ContributionsUniversidad Central de VenezuelaUniversidad Católica Andrés BelloUniversidad Simón BolívarUniversidad del ZuliaUniversidad de Los AndesUniversidad de OrienteInvestment in works in Colinas de Bello MonteBanesco Life-long ScholarshipsGovernorships, Governments and Other Organisms of the StateNon-Contractual Social BenefitsFor the Banesco EmployeesCorporate Volunteers ContributionAPPLICATION OF ARTICLE 96 OF THE LOCTICSEPVenezuelan Association of Catholic Education (AVEC)Children’s MuseumFUNDANAAlliance for a Drug-free VenezuelaABC PRODEIN (Ciudad Santamaría Petare-CISAMA School)Education (Anti-Drug Campaign)Educational Foundation School CanaimaPrevention and Control of Money LaunderingOperations and ActivitiesTOTAL ASSETS

LIABILITIESAccounts Payable Fe y Alegria

EQUITYContributions to the Banesco OrganizationContributions made by the PublicArticle 101 of the LOCTICSEP

TOTAL LIABILITIES & EQUITY

INTERNATIONAL AREA

INTERNATIONAL AREA

34

Verónica CubekGeneral Manager Affiliated Banks

Telf. (58212) 501.9940e-mail: [email protected]

Olga MifsutTreasury VicepresidentTelf. (58212) 501.8414

e-mail: [email protected]

Rafael Eduardo PadrónCorrespondent Banking Division, Manager


Rosa Mariela PadrinoInternational Treasury Manager


José Rafael LeónInternational Bussines Division, Manager


Mariana SerranoInternational Operations Division, Manager


Affiliated BanksBanesco International Bank Inc., Panamá

Banesco International Bank Corp., Puerto Rico

BranchesBanesco Banco Universal C.A., Sucursal Panamá

Representative OfficeBanesco Banco Universal C.A.,

Bogotá Representative Office

Mailing Address:Banesco, Banco Universal C.A.

8424 NW, 56 Street,Suite CCS00283,

Miami, Florida 33166, U.S.A.Main OfficesCiudad Banesco, Avenida Principal de Colinas de Bello Monte,entre calles Sorbona y Lincoln, Municipio Baruta.Caracas - VenezuelaTelephone Banking: 0500BANCO24 - 0500 226.26.24Master Phone: (0212) 501.71.11www.banesco.com

International Checking Account PlanNon-Active Commercial Account

Commercial Checking Account PlanActive Account

Personal Checking Account Plan

International Savings Account Plan• All accounts bear interest on daily balances.• Deposit Certificates.• Free Life Insurance.• Fund transfers to other banks in other countries.• Traveler Checks.• And many other services.

Letters of Credit for Imports anywhere in the world.

Confirmation of Letters of Credit for Exports.

Money Orders anywhere in the world.

International Financing Operations.

Documentary Collections.

International Banking Products Management

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CORRESPONDENT BANKS

CORRESPONDENT BANKS

CORRESPONDENT BANKS

CORRESPONDENT BANKS

ARGENTINA: Banco de la Provincia de Buenos Aires, Banco de la Nación Argentina, Banco Supervielle, Banco Credicoop,Grupo Macro, Banco Patagonia.

AUSTRALIA: ANZ Bank.AUSTRIA: Bank Austria Creditanstalt A.G.BELGIUM: Dexia Bank, Fortis Bank.BOLIVIA: Banco Económico, Banco Do Brasil.BRASIL: Banco Bradesco, BICBANCO, Banco Do Brasil, Banco Itau S.A., Unibanco., HSBC Bank, Banco Fibra, Banco

Banif Primus, Banco ABC Brasil, Banco Safra, Banco Santander, Banespa, Deutsche Bank.CANADA: Toronto Dominion Bank.CHILE: Banco Estado, Banco Santander, Bci Banco de Crédito e Inversiones, Banco do Brasil.CHINA: American Express Bank, Commerzbank A.G., Wachovia Bank, HSBC Bank, Deutsche Bank A.G.,

Citibank, N.A., HVB Ag.COLOMBIA: Banco de Bogotá, Bancolombia, Bancoldex, Banco de Occidente, Davivienda.COSTA RICA: Banco Nacional de Costa Rica, Banco de Costa Rica, Banco Banex, Banco Cuscatlan, Banco Interfin.CURAZAO: Maduro & Curiel’s Bank.DENMARK: Danske Bank.DOMINICAN REPUBLIC:Banco de Reservas, Banco BHD, Banco Popular.ECUADOR: Banco del Pichincha, Banco del Pacífico, PRODUBANCO, Banco de Guayaquil.EL SALVADOR: Banco Cuscatlán, Banco Agrícola, Banco Salvadoreño.ENGLAND: The Royal Bank of Scotland, HSBC Bank P.L.C., Wachovia Bank.FINLAND: Nordea Bank.FRANCE: Credit Industriel et Comercial, BNP Paribas Group, Societé Generale.GERMANY: Commerzbank A.G., American Express Bank Ghmb,HVB A.G., Deutsche Bank, Dredsner Bank A.G.GUATEMALA: Banco Industrial, Banco GT Continental, Banco Agromercantil.HOLAND: Commerzbank A.G.HONDURAS: Banco Atlántida, Grupo Financiero Ficohsa, Banpais, Banco Continental.HONG KONG: American Express Bank, Wachovia Bank, Deutsche Bank A.G., Citibank N.A., HVB Ag.INDIA: American Express Bank, Wachovia Bank.IRELAND: Bank of Ireland.ISRAEL: Bank Leumi Le Israel, Bank Hapoalim B.M.ITALY: Banca Nazionale del Lavoro, Unicredito Italiano, San Paolo IMI. S.p.aJAPAN: The Bank of Tokyo and Mitsubischi Bank, American Express Bank, Wachovia Bank, Citibank N.A., HVB Ag.KOREA: American Express Bank, Wachovia Bank,Citibank N.A., Deutsche Bank.MALAYSIA: Bumiputra Commerce Bank Berhad, American Express Bank.MEXICO: Banamex, S.A., HSBC Bank, Banco Santander Serfín, Banco del Bajio.NEW ZEALAND: ANZ Bank.NORWAY: Nordea Bank.NICARAGUA: Banpro, Bancentro.PANAMA: Banesco International Bank Inc., Banesco Banco Universal, BLADEX, Banco Uno, Banitsmo, HSBC Bank.PARAGUAY: Banco Do Brasil.PERU: Banco de Crédito del Perú, Banco Financiero, Interbank, Scotia Bank.PORTUGAL: Banco Espirito Santo S.A., Banco Banif, Millennium BCP.PUERTO RICO: Banesco International Bank Corp., Banco Popular de Puerto Rico.SINGAPORE: American Express Bank, HVB Ag.SPAIN: Banco Sabadell, Grupo Banco Popular, La Caixa.SWEDEN: Nordea Bank, Svenska Handelsbanken.SWITZERLAND: U.B.S. Credit Swiss First Boston, HSBC Private Bank, BNP Paribas, Banco Mercantil (Schweiz ) A.G.U.S.A.: American Express Bank, JP Morgan Chase Bank, Wachovia Bank, Regions Bank, Citibank N.A, HSBC Bank,

Deutsche Bank A.G., Banco Latinoamericano de Exportaciones (Bladex).URUGUAY: Banco de la Nación Argentina, Banco Credit Uruguay.

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SEMESTER REPORT • FIRST HALF 2006

semester report • first half 2006 -...

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