Kintampo (B/A) Nov. 21, GNA - Mr. Emmanuel Kwapong, Managing Director of ARB Apex Bank Limited, said at the weekend the performance of most rural/community banks had been encouraging.

He commended the banks for consistently registering impressive deposit mobilization and increases in share capital, which he said, were indications of growing public confidence.

Mr. Kwapong said this in an address read for him at the 20th annual general meeting of shareholders of Kintampo Rural Bank at Kintampo. He, however, stated that notwithstanding the achievements, rural banks had a lot more to do by way of organizational restructuring and effective credit mobilization to be able to meet the challenges of the increasingly complex and sophisticated business environment. He advised management of the bank to make the institution financially sustainable to develop commission-based products to boost its income as interest rates were going down drastically with improvements in the national economy.

Mr. Kwapong urged shareholders, regulatory authorities, customers and the general public to continuously support the rural banks to continue to perform the critical function of rural financial intermediation that would lead to economic as well as social development and transformation.

Mr. Kwapong called on rural banks to improve their internal control systems to ensure that "basic rules and structures necessary for an effective house keeping are observed".

He said Apex Bank is encouraging all rural banks to have an internal audit unit as part of management structure. "The internal auditor should help to oversee the implementation of the bank's systems and controls and report directly to the Board or a Board sub-committee". Mr. Kwaku Poku, Board Chairman, announced that the bank recorded a total profit after tax of 726 million cedis in 2004 as against 931.2 million cedis made in 2003.

He attributed the decrease to Treasury bill rates, reduction of interest on loans and overdraft, and poor loan repayment by beneficiaries.

Mr Poku said the bank's total deposits increased from 8.4 billion cedis to 11.1 billion cedis, representing 32 percent.

The bank also recorded 72 percent increase in its investments from 4.3 billion cedis to 7.4 billion cedis at the end of 2004, Mr. Poku said, adding the bank's loan portfolio of 6.1 billion cedis in 2003 increased by 9.8 percent to 6.7 billion cedis.

He said the loans were granted to farmers, traders, transport operators and others, mostly salaried workers.