The Ghanaian Journal

The Managing Director of the ARB Apex Bank Limited, Mr Eric Osei-Bonsu, has asked rural and community banks to consider co-operative mergers to enable them to withstand the intense competition in the banking industry which threatens their survival.

He made the call at the 20th Annual General Meeting and 25th anniversary of the Lower Pra Rural Bank Limited at Shama.

Mr Osei-Bonsu said the emerging competition in the banking sector was a “war that we must all fight together, since no one rural bank can withstand the bullets of the big banks”.

He said the Bank of Ghana was now more interested in the provision of financial services by accredited financial services providers and had, as such, removed any barriers to those who held universal banking licences.

Mr Osei-Bonsu said one key challenge that would militate against mergers was the issue of the loss of identity by some rural and community banks.

He said it was better for the banks to merge, lose their identities and stay in business than to maintain the status quo and collapse.

He said one key area rural and community banks needed to intensify efforts was the provision of quality services for their customers.

He said the banks needed to go the extra mile to ensure that customers were satisfied with their services and also promoted those services to prospective customers.

He said all rural and community banks should have internal audit units as part of their management structure to help oversee the implementation of their systems and control and report directly to the boards or board sub-committees.

Mr Osei-Bonsu urged the banks to institute risk management policies to identify, assess, monitor and control risk.

The Chairman of the Board of Directors of the Lower Pra Rural Bank Limited, Mr Nathaniel Arthur, said the bank made a net profit before tax of GH¢634,141,00 for 2007.

He said that outstanding performance had been achieved through the collaborative effort of customers, the board, management, staff and shareholders.

Mr Arthur said during the period under review, the bank’s total deposits increased from GH¢5.9 million in 2006 to GH¢8.9 million in 2007, representing an increase of 50 per cent.

He said that was an indication of the bank’s vigorous deposit mobilisation drive and the extent of patronage by communities in the bank’s catchment area.

He said the total advance disbursed under the bank’s lending programme in 2007 was GH¢8.75 million, as against GH¢6.8 million in 2006, an increase of 28 per cent.

Mr Arthur said in terms of loan portfolio for the first half of 2008, the bank was first in the region and the third in the country.

He said the bank, in partnership with Freedom from Hunger (FFH), a non-governmental organization (NGO), established the Women in Development (WID) project in 1992.

He said the bank granted loans of GH¢2,131,000 to the women’s groups in the year under review, while total savings stood at GH¢107,000.

He said the board of directors had recommended a dividend of 50Gp per share for 2007 and the total amount to be paid to shareholders as dividend was GH¢183,850.

Seventeen junior high schools in the bank’s catchment area which participated in the bank’s anniversary quiz were each presented with table-top refrigerators and other items such as jerseys and footballs.

Valued and loyal customers, shareholders, as well as dedicated directors, were also presented with awards. — GNA