Sidian Bank’s minority investors to provide Sh400m capitalMonday April 04 2016
Sidian Bank (formerly known as K-Rep Bank) says it expects to receive a fresh capital injection of Sh400 million from its minority shareholders next month in what will support its growth plans.
The new capital comes after the majority shareholder, Centum Investment, injected its share of Sh1.2 billion last year after raising its stake in the lender to 67.54 per cent.
Sidian chief executive officer Titus Karanja said the additional capital will support the lender’s ongoing reorganisation programme which is marked by the refurbishment of its branch network and upgrade of its core banking system.
“They (minority shareholders) are right now on target for the deadline,” Mr Karanja told the Business Daily Monday after announcing the bank’s new corporate identity.
“They gave us their commitments and we are expecting the money by end of May.”
Providing the cash will see the minority shareholders avoid a potential dilution by Centum.
Mr Karanja said the bank has enhanced its offerings as part of its rebranding as it seeks to drop the image of a microfinance institution.
These include new SME focused products, refurbishment of all the bank’s branches, IT systems upgrade and a planned rollout of agency banking outlets.
READ: Centum acquires majority stake in K-Rep Bank
The bank is targeting to put in place 3,000 agency outlets in two years’ time –a move Mr Karanja said will increase convenience and functionality for its 300,000 customers.
“With our rebranding now on course and enhanced capital, Sidian Bank is strongly positioned to deliver robust and innovative financial services to current and future customers, through execution of our growth strategy,” Mr Karanja said.
Centum says it plans to grow the lender into a tier-two bank by 2021. The lender recorded a 27.5 per cent net profit drop in the year ended December on the back of higher interest expenses.
It said its net profit in the period stood at Sh372.3 million compared to Sh514 million the year before.
Centum Group chief executive officer James Mworia who also doubles as Sidian Chairman said the 32-year old lender will capitalise on its reorganisation to deliver its ambitious growth ambitions which started last year.
“Our revamped bank has a unique business model as we are not only championing a bank for entrepreneurs but also an institution that is managed by entrepreneurs,” said Mr Mworia.
Mr Mworia said the bank settled on the name Sidian inspired by the Obsidian rock which is formed from volcanic activity.