Sidian Bank Records Strong Performance In Its 2020 Financial Results

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

Sidian Bank, a mid-tier bank focusing on SMEs published its 2020 financial performance for the year ended December 31, 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 Ksh72 million despite the challenging Covid-19 environment, being a 28 percent drop from the previous year’s profitability of Ksh99 million.

The profitability is attributed to growth in the loan book by 31 percent while customer deposits grew by 32 percent. As a result, the Bank’s balance sheet increased by 27 percent from Ksh26.5 billion to Ksh33.5 billion.

Read: Sidian Bank Turns Around From Loss-making, Registers Profits In Q3

The increased lending in the period resulted in higher loans interest income which grew by 13 percent as well as increased lending fees which boosted overall performance. Loan impairment provisions were lower at Ksh187 million compared to Ksh403 million as at December 31, 2019. 

“This is due to the improved quality of the Bank’s loan book with gross NPLs reducing by 28 percent from Ksh3.3 billion in 2019 to Ksh2.3 billion in 2020 as a result of focused credit management and collections,” said the lender in a statement.

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. Further, 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.

Read: Sidian Bank Launches An Online Virtual Bid Bond Platform

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. 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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