Sidian Bank Records Tiny But Crucial Profit In a Tight Year

Financial Results: Sidian Bank, the mid-tier bank focusing on SMEs, has recorded a profit before tax of Ksh72 million for the year ended 31^st December, 2020. The bank recorded strong performance across key indicators notwithstanding the setback arising from the Covid-19 pandemic that affected most businesses last year.

The Ksh72 million profit is a 28% drop from the previous year’s profitability of Ksh99 million. The loan book grew by 31% while customer deposits grew by 32%. As a result, the bank’s balance sheet increased by 27% from Ksh26.5 billion to Ksh33.5 billion.

Increased lending resulted in higher interest income which grew 13% as well as more lending fees that boosted overall performance. Loan impairment provisions were lower at Ksh187 million compared to Ksh403 million as at 31^st December, 2019.

“This is due to the improved quality of the bank’s loan book with gross NPLs (non-performing loans) reducing by 28% from Ksh3.3 billion in 2019 to Ksh2.3 billion in 2020 as a result of focused credit management and collections,” the bank said in a statement.

Through the WASH Fund, the bank supported affordable credit to SMEs and privately-owned business enterprises to finance Covid-19 WASH loans to entrepreneurs in the Water, Health & Sanitation sectors with an approximate of $1 million (Ksh100 million) disbursed to SMEs across 17 counties in the country. In the year, Sidian Bank also drew down the 2^nd tranche $10 million FMO facility, which it used to on-lend to SMEs.

“The bank has substantially upgraded its digital platforms to allow end-to-end access by customers at their convenience. As a result, over 80% of the bank’s transactions were through alternative delivery channels,” the bank’s management says.

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The bank in 2020 launched Sidian Credible, a digital solution that allows customers and non-customers to access bid bonds in less than five minutes, cutting off the need for physical bank visits and queues at bank branches.”

In January 2021, Sidian Bank opened its 42^nd Gikomba Branch to support the growing economy of small-scale traders within the area.