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Sidian sinks deeper into the red as revenue falls 36pc

Centum Group chief executive James Mworia. file photo | nmg
Centum Group chief executive James Mworia. file photo | nmg 

Sidian Bank sank deeper into a loss in the nine months through September weighed down by lower interest income as the rate cap regime narrowed the lender’s earnings from loans.

The Centum #ticker:ICDC -backed tier III bank, formerly known as K-Rep, posted a loss of Sh274 million as at September compared to a net profit of Sh220 million made in a similar period a year earlier.

The nine-month performance was a continuation of the loss that was recorded in the first six months of the year amounting to Sh122.8 million. In just one quarter the bank losses more than doubled.

During the third quarter, Sidian Bank’s loan book contracted by Sh429 million to close at Sh11.96 billion compared to Sh12.39 billion recorded in June, according to the lender’s financials published Wednesday.

Total non-interest income dropped by 3.6 per cent to Sh471 million in the period under review.

Sidian Bank’s poor results weighed down the performance of its parent company Centum Investments, which reported a 21 per cent drop in profit after tax in the nine months to the end of September.

Centum reported a Sh1.6 billion profit after tax, down from Sh2.1 billion during a similar period last year.

“Where we’ve had challenges is in financial services, that is, Sidian. My view is that those challenges are temporary,” Centum Group chief executive James Mworia said on Monday.

The bank’s total operating income was down by 36.3 per cent to Sh1.29 billion as net interest income fell by 46.8 per cent to stand at Sh817.2 million.

The bank is among the major casualties of the enactment of a law capping interest rates at four percentage points above the Central Bank Rate, which cut the wide spreads previously enjoyed by lenders.

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