Sidian Bank recoded a net profit of Ksh114 million in the first quarter ending 31 March 2021, a major turnaround from a net loss of Ksh7 million in a similar period last year. The improved profitability was attributed to increased lending in the period, which had a growth in 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% 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 due to growth in customer deposits growth and increased money market borrowings.
Sidian Bank balance sheet largely remained the same at Ksh33.4 billion as at 31 March 2021 compared to Ksh33.5 billion as at 31 December 2020, with the management optimizing the balance sheet to earn higher incomes. In the quarter, net loans and advances increased by 8%, supported by the high liquidity and in line with the bank’s strategy to support growth of SMEs.
Customer deposits increased by 1% due to continued deposits mobilization and customer acquisition across its 42 branches as well as increased transactional business from existing customers.
Trade finance continues to be the bank’s flagship product, with more SME customers using the online bid-bond platform, Sidian Credible. Equally, the bank has innovated robust digital solutions to provide its customers with alternative banking channels which has contributed to the growth of non-funded income. Further, Bancassurance income grew in the period due to higher insurance transaction volumes.
