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ARB Apex Bank to implement full-cost
recovery of services
Accra, Dec. 1, GNA- Mr Kwadwo Baah-Wiredu, Finance and
Economic Planning Minister on Saturday, challenged the ARB
Apex Bank to move into full cost recovery of its services
rendered to Rural and Community Banks (RCBs) in order to
sustain its operations in the ensuing years.
Citing reasons based on the dynamic nature of the financial
sector, he said all forms of government's support to the ARB
Apex Bank in terms of grant, staff cost and tax holidays
would soon be phased out.
Mr Baah-Wiredu said "The Rural Financial Services Project (RFSP)
would phase out this year. Furthermore, as from 2009 the tax
holiday facility granted your bank will expire," he added.
The Minister said these at the fifth Annual General Meeting
of the Bank, which is the umbrella body of all rural and
community banks in the country.
He noted that even though, ARB Apex Bank was a key process
in the evolutionary chain of rural banking in the country,
currently its business were limited because of limited
capital.
Mr Baah-Wiredu therefore announced that Government was
considering the bank's recent request of a 100 billion cedis
to help beef up its capitalisation to enable it to undertake
other lines of business.
He said the introduction of the Bank's Regulation L.I 1825
(December 2006), called for continuous strengthening of the
regulatory agencies to adapt to changes in the domestic
financial market.
The bank's net profit dipped from 67.072 billion cedis in
2005 to 55.589 billion cedis 2006 the year under review.
This with other reasons has made it impossible for the Board
of Directors of the Bank to declare dividend for 2006.
The Minister however noted that the year under review was a
challenging one for all banks in the country due to the
instability of the price of crude oil and the rising energy
prices.
He urged the Bank saying: "This and other challenges should
inspire you to position yourself to enable you continue to
remain in the market."
He said at present all indicators were showing improved
macroeconomic environment, but what was needed now was for
the economic agents to generate economic activities in the
rural financial sector.
Mr Baah-Wiredu said as the economy grew, understanding and
managing details of financial products and services also
become a daunting task for most Ghanaians.
Hence, he said financial literacy was crucial to deepening
financial intermediation in the country, because most people
lack the basic financial knowledge and skill to ensure
long-term stability for themselves and their families.
The Minister appealed to the Bank to assist the RCBs to
develop agriculture to achieve food security and improve
incomes as well as enhanced institutional coordination in
the country.
He said: "...Government has observed with concern the
decreasing flow of credit to the agriculture sector all
though it accounts for 35 percent of Gross Domestic Product
and 60 percent of employment, and that, only six percent of
the bank credit goes to the sector."
Presenting the 2006 operational results of the bank, Dr
Samuel Dufu, Board Chairman said the ARB Apex Bank since
January this year has injected a new sense of dynamism into
operations of the RCBs, bringing it into the mainstream
economy.
He said the bank's total assets rose from 2,260.83 billion
in 2005 cedis to 2,987.54 billion cedis for the year under
review showing a market share of 5.42 percent.
Total deposits also increased from 1,688.02 billion cedis in
2005 to 2,264.61 billion cedis in 2006 with a market share
of 7.56 per cent.
Total Loans rose substantially from 775.23 billion cedis to
1,151.00 billion cedis giving overall market share of 4.56
per cent.
Dr Dufu said generally, most of the indicators recorded a
fall in the market share compared to the year 2005, because
the Bank established three Universal Banks.
He said the year 2007 was therefore, prioritized to expand
the bank's market share base, improve growth and financial
performance as well as managing expenditure and accelerating
the recovery of ailing RCBs.
This Dr Dufu believed, would be achieved through
consolidation and increase in the money transfer business
that would offer RCBs to participate in foreign transfers to
grow their commission-based incomes.
He said the bank has also initiated strategies to grow its
loan portfolio by offering competitive loan packages to the
RCBs for onward lending to their customers.
In addition, Dr Dufu announced the establishment of a
support fund for RCBs in distress to serve as a pool from
which ailing RCBs would be resourced.
GNA
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