[ad_1]
Companies
Sidian Bank posts Sh22 million profit on income jump
Monday, May 20, 2019 21:24
By PATRICK ALUSHULA
Sidian Bank has posted a Sh22.2 million net profit in the first quarter ended March, reversing a loss of Sh79.7 million recorded a year earlier.
The improved performance was supported by a rise in both interest and no-interest income while operating expenses went down.
The lender, in which Centum Investment #ticker:ICDC holds a 72.93 percent stake, had been in losses since 2017.
Sidian’s interest income in the review period grew 14.7 percent to Sh482.2 million as the loan book expanded 13.3 percent to Sh13.4 billion.
Non-interest income, mainly from fees and commissions, grew 34 percent to Sh539.7 million, boosting the bottom-line.
Operating expenses reduced by Sh14.9 million or 2.7 percent to Sh539.7 million.
This was supported by a 27 percent cut in loan loss provisioning to Sh61 million and 26 percent drop in depreciation charges to Sh20.5 million.
The return to profitability comes after the lender received a series of new debt and equity funding.
The bank in March received $12 million (Sh1.2 billion) tier II capital from a Danish development finance institution Investment Fund for Developing Countries (IFU), to firm up its capital.
IFU has the option to convert the outstanding principal loan into equity within the first three years, which will translate to shareholding of approximately 20 per cent of the bank.
This could see IFU displace K-Rep Group Limited to become the second highest shareholder in Sidian after Centum.
Sidian’s past losses have been linked to the capping of interest rates which squeezed lending margins, hurting small banks the most.
[ad_2]
Source link
Kenyan Business Feed is the top Kenyan Business Blog. We share news from Kenya and across the region. To contact us with any alert, please email us to [email protected]