Mr Duke Osam-duodu, Acting Managing Director of ARB Apex Bank, has appealed to Rural and Community Banks (RCBs) to consider merging their operations to withstand the emerging competition in the mainstream banking sector.

He said: "The emerging competition in the banking sector is a challenge that we must all brace for since no one rural bank can withstand the might of the big commercial banks."

Mr Osam-duodu stressed that the time has come for RCBs operating as unitary banks in protected catchment areas to merge with others to leverage on all the economies of scale and provide financial services in the rural communities.

The Acting Managing Director, made the call in a speech read on his behalf at the 12th Annual General Meeting of the shareholders of Bangmarigu Community Bank Limited, at Walewale in the West Mamprusi District of the Northern Region, at the weekend.

The meeting discussed and approved resolutions and financial report of the bank for the year ended 31st December, 2011, as well as elect Directors to the Board amongst others.

Mr Osam-duodu said cooperative mergers were the surest way for RCBs to withstand the competition from the big commercial banks, and to stay in business.

He said the ARB Apex Bank with assistance from the Danish International Development Agency had instituted a merger fund to assist RCBs intending to merge and encouraged all such banks to take advantage of the fund.

Mr Osam-duodu announced that ARB Apex Bank would soon establish a unit to manage share issues for the RCBs, including the payment of dividends and other related services to boost investors' confidence in them.

He advised RCBs to deepen their microfinance business, formulate risk management policy to identify, assess, monitor and control operational and credit risks, and provide quality customer service, which were essential to keep them (RCBs) competitive.

Mr John Asabigi, Board Chairman of Bangmarigu Community Bank Ltd, who presented the financial statement of the bank, said its performance was satisfactory though profit was not as good as that of 2010.

He said total assets of the bank increased from GHc2, 454,896.00 in 2010 to GHc3, 110,716.00 in 2011, representing a rise of 27 per cent.

The bank also recorded a modest profit of GHc34, 633.00 in 2011 as compared to the 2010 figure of GHc37, 497.00, which was a drop of 7.6 per cent, Mr Asabigi said.

He attributed the drop in profit to the bank's implementation of the Ghana Rural Bank Computerization and Interconnectivity Project under the Millennium Challenge Account.

Mr Asabigi said customers deposits recorded an increase of 34.6 per cent over the period, jumping from GHc1, 684,835.00 in 2010 to GHc2, 267,986.00 in 2011.

He complained about poor recovery of loans and warned that the bank would continue to employ legal means to retrieve loans from defaulting customers.

Mr Asabigi assured that the bank would continue to invest in staff training to preserve and improve on its human capital for improved and efficient service delivery.