Universal banks fail to shine as rural banks,non-bank institutions dominate Club 100 rankings
Non-bank financial institutions (NBFIs) and rural and community banks (RCBs) have outnumbered universal banks in this year’s Ghana Club 100 rankings released on August 19.
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Some of the NBFIs and RCBs also occupied higher positions than the universal banks, which are generally considered more profitable, prestigious and financially sound to do business with or work in.
The likes of HFC, Bank of Baroda, Sahel Sahara and Prudential Bank were ranked below some RCBs and NBFIs that included the Amenfi Rural Bank, which took the number 21 spot.
Also, unlike the universal banks, of which only 14 entered this year’s rankings, 18 NBFIs made it to the Club of Ghana’s 100 most prestigious companies. Similarly, 22 RCBs, majority of which operate in the hinterlands, were enlisted into the group.
While the development is a sweet surprise to the RCBs and NBFIs, it is not the first time that they have overtaken universal banks in Club 100 rankings, which has been in existence since 1998. In the previous two years, some RCBs and NBFIs had outshined the universal banks in the listings that was organised by the Ghana Investment Promotion Council (GIPC), prompting concerns over the criteria used in admitting members.
Culture of saving
While explaining that enlistments into the Club was based on voluntary application to the event statisticians, EY Ghana Limited, the Chief Executive Officer of the GIPC, Mrs Mawuena Trebarh, said the increment of the RCBs and NBFIs in the list showed that such institutions were gradually becoming competitive.
“It also shows that our RCBs and NBFIs are getting competitive and are probably running their businesses efficiently and effectively.”
“It also probably shows that the culture of savings and loans is really taking root in our communities and so the residents are using the services of these RCBs and because of that they are profitable,” she said.
In recent years, RCBs and NBFIs have grown in size and numbers in a manner that raises questions about their impact on the universal banks.
As of December, last year, the assets of RCBs and NBFIs rose to GH¢12.8 billion, representing 13.2 per cent.
Mrs Trebarh, who said the Club 100 rankings was a plus to the reputation of members, added that the continuations entry of more RCBs and NBFIs in the list could be due to the increasing profitability of the institutions.
“Their size may not match that of the traditional banks but they are also offering products and services that suit those communities,” she said, admitting that the non-mandatory nature of the exercise meant that some banks might opt out of the rankings.
Commercial benefits
She also mentioned that the prominent nature of RCBs and the NBFIs in rankings meant that those businesses were making meaningful contributions to the growth of the economy hence their ability to stand up with celebrated brands in the country.
Going forward, Mrs Trebarh said, the GIPC would be using its latest creation, the Club 100 of the Future, to celebrate young but promising companies. That list, she said, was targeted only at small and medium- scale enterprises that show strong signs of success in the near future.
She also called on corporate Ghana to submit themselves for rankings under the Club 100 listings.
“There are commercial benefits to being a member. It is not just about the plaque or getting the opportunity to take a picture with the President; there are really commercial benefits and we have developed a database and when we meet the international community, we can use that to speak for the Ghanaian companies,” she said.