La Community Bank Reaffirms Financial Stability Amidst Collapse Rumors

Management of the La Community Bank (LCB) has dismissed public perceptions that the bank is struggling and reaffirmed its financial vialbity and stability. The management said contrary to rumours that the bank was on the verge of collapse, it had developed strategic measures to strengthen customer retention, loan recovery, digital banking and community development. In an interview with the Ghana News Agency (GNA), Mr. Peter Vanderpuije, the Managing Director (MD), of the bank, said while the bank faced some challenges during the Domestic Debt Exchange Programme (DDEP), and also dealing with issues of Non-Performing Loans (NPL), it was far fetched to conclude that the bank is not doing so well, and on the verge of collapse. He said challenge with the DDEP contributed to some of the challenges the bank faced, and for which reasons it recorded some losses of about GHC2.7 million in the past and could not pay dividends to its shareholders. He however indicated that the bank recovered and made a profit over one million cedis the following year and paid a Four Pesewa dividend per share in 2024. “While I agree that the dividends paid might be small, it is important to know that we were recovering from a bad place,” he said. He said despite the challenges confronting the bank, it is currently ranked 40th out of 124 rural and community banks nationwide and had been rated “strong” by its regulator, the ARB Apex Bank. The performance, he said, reflected sound governance and prudent financial management. Addressing the issue of non-performing loans, Mr. Vanderpuije said while there were challenges with the recovery of some of its loans, the bank’s loan portfolio remained largely healthy, and marginally above the industry benchmark ratio of five per cent. He said the bank prioritised early engagement with customers facing repayment difficulties, adding that management worked directly with borrowers to restructure and recover the loans. “Once a customer informs us of a challenge, management becomes actively involved in finding solutions,” he said. He said several loans supported community-based initiatives, including cultural and heritage projects, which sometimes faced delays but were being steadily recovered. Addressing shareholder concerns, Mr. Vanderpuije assured investors that the bank remained strong, urging them to maintain confidence despite expectations of higher short-term returns. He said even though the bank was focused on immediate dividend payouts, it prioritised long-term sustainability and social responsibility, noting that profits were being reinvested to strengthen the institution. “Our shareholders should remain calm and confident. The bank is solid and has stood the test of time,” he said. The Managing Director indicated that management used the beginning of each year, particularly January, as a benchmark period to assess performance, identify weaknesses and drive innovation. He explained that retaining existing customers remained a core priority of the bank, noting that sustainable growth depended largely on maintaining public confidence and deposit mobilisation. “Maintaining what you already have is the most important thing. On deposits, we have performed well, and we intend to build on that,” he said. On branch expansion and assets, Mr. Vanderpuije said the bank’s three branches at Teshie, Madina, and its head office at La were performing assets, noting that the bank had invested in modern technology, including its own mobile banking platform to improve service delivery. He said the La Community Bank had recorded consistent growth over the past two years and would continue to prioritise efficiency over rapid expansion that could undermine performance. “In today’s banking environment, it is not about the number of branches but efficiency,” he said “All our branches are working, and our performance has been improving year after year,” he added. On Corporate Social Responsibility (CSR), he said the bank had invested in scholarships for students in second-cycle institutions, conducted educational outreach programmes, and donated teaching and learning materials to schools within the community. He added that the bank was in discussions with the La Traditional Council on a major cultural project aimed at preserving and showcasing local heritage. “Although negotiations are ongoing due to cost and technical considerations, we are optimistic that the project would be executed for the benefit of the La community,” he said. Reaffirming the bank’s commitment to transparency and community-centred banking, Mr. Vanderpuije who thanked customers, shareholders and the wider community for their continued support, said the bank which was established by the community to serve the community would continue to be relevant and build trust, which was essential to its operations.