Sidian Bank has registered a Ksh. 43.5 million profit in the first six months of the year up from a loss of Ksh. 123.6 million it registered in a similar period last year.
The lender, which is owned by investment firm Centum, has attributed the jump to profitability to the growth of its loan book in the period under review which saw the lender increase loans disbursement by Ksh. 12.2 billion to Ksh. 13.8 billion augmenting interest income earnings by approximately Ksh.44 million.
During the period under review, the bank concentrated on taking up customer deposits which grew by Ksh. 3.6 billion to Ksh. 17.7 billion. The bank similarly reduced uptake of deposits from other lenders to finish the period with the lenders’ deposits standing at Ksh. 608 million down from Ksh. 2.6 billion garnered in a similar period last year. This grew the bank’s higher interest expense to Ksh. 516 million from Ksh. 499 million registered in the first six months of the year. The bank’s liquidity similarly increased to 41 percent from 26 percent in the first half of 2018 while loan loss provisioning stood at Ksh.144 million down from Ksh.175 million registered in the first six months of 2018.
In March the bank received a Ksh. 1.2 billion capital injection by Danish private equity firm Investment Fund for Developing Countries (IFU). The capital according to Sidian Bank board chairman and Centum CEO James Mworia will be used to grow the lender’s small and Medium-sized enterprises (SME) loan book, trade finance portfolio and mobile lending.
“As part of the financing agreement, IFU will have the option within the first three years, to convert the outstanding principal loan into equity which will translate to shareholding of approximately 20 percent of the bank,” said Sidian Bank board chairman and Centum CEO James Mworia in a statement then.