Sidian Bank, a mid-tier bank focusing on SMEs, says it recorded a strong performance across key indicators in the financial year 2020 ended December.
The Bank made a profit before tax of Ksh 72 million despite the challenging COVID 19 environment, a 28% drop from the previous year’s profitability of Ksh 99 million.
The profitability is attributed to growth in the loan book by 31% while customer deposits grew by 32%. As a result, the Bank’s balance sheet increased by 27% from Ksh.26.5 billion to Ksh.33.5 billion.
The increased lending in the period resulted in higher loans interest income which grew by 13% as well as increased lending fees which boosted overall performance.
Loan impairment provisions were lower at Ksh.187 million as at December 31, 2020, compared to Ksh.403 million as of 31 Dec 2019. This is due to the improved quality of the Bank’s loan book with gross NPLs reducing by 28% from Ksh.3.3 billion in 2019 to Ksh.2.3 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 the 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 approximate 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 is 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.
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.