Rural and community banks have been urged to develop very solid strategic alliances to enable them to stay in business.
Mr Eric Osei-Bonsu, Managing Director of the ARB Apex Bank Limited, gave the advice in a speech read on his behalf, at the 21st Annual General Meeting of the Mumuadu Rural Bank at Akyem Osino, on Saturday.
He said due to the changing scenes of the banking terrain, coupled with competition from the commercial banks, there was the need for such mergers so that the weaker ones would be strengthened.
"With the mergers, your capital and deposits would be significantly boosted and your capacity to support worthy ventures would also be enhanced," he explained."
Mr Osei-Bonsu announced that following the collaboration between the ARB Apex Bank and the Western Union on foreign remittance business, which took effect in January 2008, at least one site of each rural bank, had been linked to the Western Union product, saying a total of 329 outlets had been connected.
"The product was rolled out to the Mumuadu Rural Bank on March 20 last year and as at July 31 this year, 455 transfers valued at GHC 119,638.08 had been processed."
He said the Bank of Ghana (BoG) had introduced an Electronic Financial Analysis and Surveillance System, which would make it possible for banks in the country to file their prudential returns on-line.
Mr Osei-Bonsu said that would enable the BoG to carry out most of its supervisory duties on-line in order to promote and maintain the integrity of the banking industry.
It was, therefore, mandatory for rural banks to computerize their operations, he said, adding that in that direction, banks desirous of opening new agencies were now required to first automate their processes.
Mr Osei-Bonsu said in that light the BoG had tasked all financial institutions to religiously implement the "Know Your Customer" rules.
He, therefore, urged the management of the bank to be vigilant in their operations in order to prevent unscrupulous persons from using their bank to engage in fraudulent activities.
Mr Seth Adom-Asomaning, Chairman of the Board of Directors of the bank, in his annual report, said the bank made a net profit of GHC 334,257.36 in 2008 as against GHC 275,433.36 the previous year.
He said the loan book grew by 14.4 per cent from GHC 3.588 million to GHC 4.105 million over the period adding, "Our asset quality remained high with the non-performing loan ration of 5.25 percent.
Mr Adom-Asomaning said total equity also grew by 16.4 per cent from GHC 886,472.00 to GHC 1,162,762.00 over the same period.
"Total loan disbursement for the year 2008 to 13,072 clients was GHC 5.3 million".
Mr Adom-Asomaning said total investments in Treasury Bills decreased from GHC 1,082,475 in 2007 to GHC 948,248.29 in 2008 explaining that the decrease was as a result of the bank's decision to commit more funds to loans.
He said the bank purchased a total of GHC 644,659.11 Akuafo cheques as compared to GHC 1.1 million purchased in 2007 due to poor harvest.
On social responsibility, Mr Adom- Asomaning said the bank donated an Olympus Binocular Microscope valued at GHC 2,100.00 to the local health centre, while roofing sheets were purchased for the Begoro Senior High School.
He said the bank spent a total of GHC 8,362.30 in 2008 as compared to GHC 11,646.30 in 2007 on all categories of staff training.