Sidian Bank, an SME focused bank, has recorded a consolidated net profit of Ksh114 million in the first quarter of 2021 compared to a net loss of Ksh7 million recorded in a similar period in 2020.
The profit for the three months ended March 31, 2021 is more than the Ksh72 million profit before tax recorded in the full year ended December 31, 2020.
The improved profitability was attributed to increased lending in the period which grew interest income on loans as well as lending fees. Transactional and channels business also increased in the period enhancing the profitability.
Further, loan impairment provisions booked in the quarter were lower by 58 percent attributed to the improved loan book quality and loan collections. The impact of the increased incomes was however countered by higher interest expense on customer deposits from customer deposits growth and increased money market borrowings.
The Bank’s balance sheet has largely remained the same at Ksh33.4 billion in the period under review compared to Ksh33.5 billion as at December 31, 2020 with the Bank optimizing the balance sheet to earn higher incomes than last year with the same size of balance sheet.
In the quarter, net loans and advances increased by eight percent supported by the high liquidity and in line with the Bank’s strategy to support SMEs growth. Customer deposits increased by one percent attributed to continued deposits mobilization and customer acquisition across the Bank’s 42 branches as well as increased transactional business from the bank’s customers.
Further, Bancassurance income grew in the period attributed to higher insurance transaction volumes.
“As a Bank, we are pleased with this performance as it confirms that our growth is on an upward trajectory. We are especially grateful to our customers for supporting us as we continue offering them custom made solutions to better their tomorrow. We are committed to supporting SMEs in the country to maximize their potential,” noted Chege Thumbi, the Bank’s CEO.
The lender says that Trade Finance continues to be the flagship product of the Bank, with more SME customers using the Bank’s online bid bond platform, Sidian Credible.