Rural Banks told to strengthen internal control systems

By Godfred A. Polkuu, GNA   

Bongo (U/E), Jan. 20, GNA – The ARB Apex
Bank Limited has advised boards and managements of Rural and Community Banks
(RCBs) to strengthen their internal control systems and adhere strictly to
sound governance standards to guarantee their survival.

The Apex Bank said it was critical RCBs
ensured compliance of statutory and regulatory requirements; “because that is
the only way to ensure that our banks survive the ever changing banking
landscape in Ghana for the benefit of our esteemed stakeholders.”

It pointed out that the 2017 banking
clean-up by the Central Bank should serve as a wakeup call for boards and
managements to fortify their corporate governance structures.

Mr Kojo Mattah, the Managing Director of the
ARB Apex Bank Limited, made the call in in a speech read for him by Mr Pascal
Nkulenu Zinzendorf, the Manager of Upper East Regional branch of ARB Apex Bank,
at the Seventh Annual General Meeting (AGM) of Maltaaba Community Bank Limited
at Bongo.

He described the Bank of Ghana’s reforms as
a comprehensive agenda aimed at cleaning the banking industry and strengthening
the regulatory and supervisory framework for a more resilient banking sector.

He noted that although the reforms had a
significant impact on the banking sector as statistics showed increase in
profitability for most universal banks, the case was quite different for rural

“The story, however, is different for the
rural banking sector as the locked-up funds of almost all rural banks in
various investment houses that have been affected by the clean-up exercise has
led to lower profit margins for most of them.”

He expressed optimism that government’s
intervention would lead to recovery of some, if not all, of the funds to boost
operations of rural banks.

Mr Mattah appealed to government to urge the
Securities and Exchange Commission and the Receiver for the liquidated finance
houses to quicken steps to ensure that locked-up funds of all RCBs were
released as soon as possible.

Mr Francis Atintono, the Board Chairman of
Maltaaba Community Bank Limited, in his report to shareholders, said the
banking sector reforms, which resulted in the consolidation of five banks
impacted negatively on the Bank’s performance as confidence in the financial
sector dipped.

However, he said the Bank’s financial
position continued to show consistent growth annually in most of the key
financial indicators in 2018.

During the period 2018, the Bank recorded GH¢346,463.00
profit before tax, representing an increase of about 16 per cent year-on-year

The Bank’s gross earnings increased by 26
per cent from GH¢1.099 million in 2017 to GH¢1.44 million at the end of 2018.

“We assure members that we would continue to
improve our profit performance to deliver value to our shareholders,” Mr
Atintono said.

The total assets of the Bank at the end of
2018 was GH¢7.47 million, an increase of about 24 per cent, compared to the
total assets of GH¢5.74 million in 2017.

Growth on loans and advances was up by 24
per cent in 2018 from GH¢1.56 million in 2017 to about GH¢2.05 million in 2018.

The Bank’s investments portfolio grew by 13
per cent from GH¢2.99 million in 2017 to about GH¢3.45 million at the end of
2018, while customer deposits also soared by 15 per cent from GH¢4.84 million
in 2017 to GH¢5.70 million in 2018.

Mr Atintono said: “A breakdown of customers’
deposits in 2018 indicates that about 72 per cent of savings accounts continue
to be the main source of deposit mobilization, current accounts were 18 per
cent and time deposits, nine per cent.”