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L-R: Lucy Njanja, Branch Manager - Gikomba, Loise Mwangi, Head -Branches and Chege Thumbi, CEO, at the Gikomba Branch opening in January/Sidian Bank

Finance

Sidian Bank reports strong performance in 2020 annual financial results

NAIROBI, Kenya, Mar 25 – Sidian Bank, a mid-tier bank focusing on SMEs published its 2020 financial performance for the year ended 31st December 2020, indicating a strong performance across key indicators notwithstanding the setback arising from the COVID 19 pandemic that affected most businesses last year.

The Bank made a profit before tax of Sh72 million despite the challenging COVID 19 environment, being a 28 per cent drop from the previous year’s profitability of Sh99 million.

The profitability is attributed to growth in the loan book by 31 per cent while customer deposits grew by 32 per cent. As a result, the Bank’s balance sheet increased by 27 per cent from Sh26.5 billion to Sh33.5 billion.

The impressive balance sheet growth is a testament of the Bank’s foray into the SME market, by providing solutions that work for businesses and entrepreneurs.

The increased lending in the period resulted in higher loans interest income which grew by 13 per cent as well as increased lending fees which boosted overall performance.

Loan impairment provisions were lower at Sh187 million as at 31 Dec 2020 compared to Sh403 million as at 31 December 2019. This is due to the improved quality of the Bank’s loan book with gross NPLs reducing by 28 per cent from Sh3.3 billion in 2019 to Sh2.3 billion in 2020 as a result of focused credit management and collections.

The Bank has sustained its profitability despite the pandemic through diversification of the Bank’s revenue streams to support SME’s through a variety of solutions that resonate with the target market.

Trade finance has remained the flagship product for the Bank supporting clients in energy, water, infrastructure and transport. F

urther, 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 USD 1 million disbursed to SMEs across 17 counties in the country. In the year, the Bank also drew down the 2nd tranche USD 10 million FMO facility, which it used to on-lend to SMEs.

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The Bank has substantially upgraded its digital platforms to allow end to end access by customers at their convenience.

As a result, over 80 per cent of the Bank’s transactions were through alternative delivery channels. At the centre of innovation, 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 42nd Gikomba Branch in order to support the growing economy of small-scale traders within the Gikomba area.

Commenting on the financial performance, the CEO Mr Chege Thumbi, indicated that the Bank will continue to pursue innovations to deliver to the market, solutions that will allow banks clients to access services more conveniently and efficiently.

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