The Ankobra West Rural Bank Limited recorded profit before tax of GH¢333,233 in 2013 as against GH¢171, 711 in 2012, Mr. Mike Ezan, Chairman of the Bank, announced on Saturday.

The profit before tax in 2013 represented a growth of GH¢151,522 or 88.2 per cent over the performance in 2012, he stated in his annual report at the 22nd Annual General Meeting of the bank at Esiama.

Mr. Ezan said the bank will work hard in the short term to improve on financial indicators to sustain itself, in view of the stiff competition in the banking environment in the area.

He 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.

Mr. Ezan said this increase was as a result of substantial growth in deposits, loans and advances portfolio, as well as a substantial drop of GH¢700,000 in Government securities to fund loans and advances portfolio.

He said, “We are, however, seeing a decline in our assets base and indeed as of May 2014, our total assets stood at GHC¢7,553,712, due to a sharp reduction in our deposits with static loan and advances portfolio”.

Mr. Ezan 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.

He said this modest increase was achieved on the backdrop of fierce competition from Micro Finance Companies, Susu operators and banks.

Mr. Ezan said the competition has begun to hurt the bank and between January and May this year, the bank recorded a sharp drop in its deposit liabilities and the country’s harsh economic situation is posing a big threat to the survival of businesses including rural banks.

He appealed to customers to continue doing business with the bank and remain loyal and focused “To assist the bank to ward off this aggressive and unwarranted invasion of its territory”

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¢C700,000.

He said the high level credit risk taken by the bank in lending continue to pose a challenge and the bank made a provision of GH¢212,757 for loan and overdraft impairment this year, to ensure the bank’s capital or net worth base does not experience adverse diminution in future.

Mr. Ezan said a sizeable number of borrowers, who benefited from the bank’s loan scheme are unable to service their loan and overdraft obligations and the bank has, therefore, intensified its loan and overdraft recovery efforts, including resort to the courts and seizure of movable and immovable assets.

In an address read on his behalf, Mr. Kwadwo Aye Kusi, Managing Director of the Association of Rural Banks (ARB) Apex Bank Limited, said Rural and Community Banks (RCBs) need to do more by way of organizational and operational transformation ,especially in the areas of information and communication technology, effective deposit mobilization, cost control and customer satisfaction.

He said the 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 rural banks and must be strengthened and empowered to assist in the risk management process.

Mr.Kusi said unscrupulous fraudsters would want to defraud the banks by capitalizing 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 excellenc 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 mobilization 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 destabilized 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.Ezan and Mr.P.K.K. Quarm were re-elected as directors of the Ankobra West Rural Bank at the function.