Transform To Enhance Competitiveness… ARB Apex Bank tells rural and community banks

Apex BankThe Association of Rural Banks (ARB) Apex Bank Limited says Rural and Community Banks (RCBs) must do more in their transformation, especially in the areas of information and communication technology, effective deposit mobilisation, cost control and customer satisfaction, to strengthen their competitiveness in the banking industry.

Additionally, Board of Directors of rural banks should institute a process that will continuously identify, measure, monitor and control all forms of risks and internal audit units in the RCBs and must be strengthened and empowered to assist in the risk management process.

The directive was given by Kwadwo Aye Kusi, Managing Director of the ARB Apex Bank Limited, in an address read on his behalf, at the 22nd Annual General Meeting of Ankobra West Rural Bank Limited at Esiama in the Western Region.

Ankobra declared an impressive profit before tax of GH¢333,233 in 2013 as against GH¢171, 711 in 2012. The 2013 profit before tax represented a growth of GH¢151,522 or 88.2 per cent over the performance in 2012.

Mr. Kusi told the RCBs to be wary of fraudsters who would want to defraud the banks by capitalising on the lack of vigilance, poor risk management structures and weak internal control system.

He said one sure way to beat increasing competition is for them to improve customer service attitudes to attract new customers and maintain the existing ones, and urged that there should be a re-orientation of all staff to embrace excellence in customer service as a culture and not as a tool for doing business.

Mr. Kusi said staff members who excel in customer service must be adequately rewarded and excellence in customer service should also be built into the performance contracts of staff and tied to their periodic appraisal of staff and bonuses.

He said it is also imperative for rural banks to intensify deposits mobilisation efforts in order to continue to stay afloat.

Mr. Kusi said the new strategy of the Apex Bank is to improve the ICT platform to enable them to sustain their current businesses and attract new businesses through timely and cost effective delivery of products and services needed by their valued customers.

He said other strategies are to make them multi-channeled service providers, arrange long-term and short term funds for on-lending to their customers, enhance risk management practices and increase media exposure for ARB Apex Bank and RCB products and services.

Mr.Kusi said one area of grave concern to the Apex Bank has been the persistent overdrawing of the clearing accounts of some banks, adding that, the cumulative sum of these overdrawn accounts are so huge that the entire settlement system is often destabilised giving rise to liquidity challenges.

He said the bank has, therefore, given notice to all rural banks of its intention to withdraw credit line facilities to ensure that they meet their statutory primary reserves requirements and more importantly, to help them to improve on their liquidity management.

Mr. Mike Ezan, Chairman of Ankobra West Rural Bank Limited said the bank’s total assets base grew from GH¢7,476,429 in 2012 to GH¢8,550,438 in 2013, representing 14.36 per cent.

However, he said currently the bank is recording a decline in its assets base and “indeed as of May 2014, our total assets stood at GH¢7,553,712, due to a sharp reduction in our deposits with static loan and advances portfolio.”

He said there was a modest growth of 10.59 per cent in deposit liabilities, from GH¢5,816,962 in 2012 to GH¢ 6,433,421 in 2013, adding that, this was spread over 10,930 customers, compared with 9,810 customers in 2012.

Mr. Ezan said advances portfolio grew from GH¢2,258,508 in 2012 to GH¢3,055,822 in 2013, in support of the local economy and to individuals, and that, the increase was funded from government securities, which saw a substantial drop of GH¢700,000.

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