A combination of local business persons and UAE-based firms have bought a 38.91 percent stake in Sidian Bank, edging out Centum from majority control of the tier-III lender.
Filings from the Companies Registry list Abcon International LLC, Parkview Investments Limited and Medillon Trading FZE, all based in the United Arab Emirates, as shareholders of Pioneer General Insurance Limited which takes a 20 percent stake in the bank.
The firm registered in November 2015 also lists Pioneer Insurance Holdings Limited as a shareholder with Catherine Wamuyu Wachira, Michael Kenga, Bridget Cherono and Shirazali Abdulla as directors.
Wizpro Enterprises Limited which acquired a 15 percent stake in the lender meanwhile lists a single director and shareholder in Solomon Muriithi Maina and was registered in September 2017.
Afram Limited which signs up to a 3.91 percent stake in Sidian also names a single director and shareholder in James Maina Muthoni and was registered in July 2016.
The three entities are expected to part with an estimated Sh1.9 billion for the 38.9 percent stake in the bank based on Centum’s carrying value of the lender as of March 31 this year.
The carrying value of the bank was recorded at Sh4.27 billion at the end of the period.
“Consequently, and in accordance with the regulations, Centum hereby notifies the public that Sidian will cease to be a subsidiary of Centum. The price for this transaction is in line with Centum’s latest carrying value of Sidian in its books as at March 31, 2023,” Centum Investment Group CEO James Mworia noted in a statement this week.
“The carrying value was at an uplift based on the market value of Sidian’s shares. This transaction will therefore not have a material impact on the net asset value of Centum.”
Centum held an 83.43 percent stake in Sidian Bank through Bakki Holdco Limited, a holding company for the investment in Sidian Bank Limited.
Subsequent to the sale, Centum’s control of Sidian Bank will be diluted to just 44.52 percent after which no shareholder in the lender will have a controlling stake.
Previously, Centum had entered into an agreement to sell its stake in the bank but the completion period lapsed before both parties finalised conditions and other requirements under the transaction.
The investment firm subsequently opted to hold its stake in the bank before the disclosure of the stake sale last week.
“Centum’s current focus is to support the continued growth of the bank. Management has identified opportunities to grow profitably through optimal risk-based pricing following the lifting of the interest rate caps, leverage on digital channels to grow the customer base, and sustain growth of the non-funded income segment,” Centum noted in its latest annual report.
Sidian had been part of Centum’s private equity portfolio and had a compounded annual growth rate of 14 percent in the year ended March 2023.
In six months to June this year, Sidian posted a net profit of Sh209.8 million from Sh251.4 million previously on reduced non-interest income and higher operating expenses.
Sidian’s asset base was largely unchanged in the period at Sh43.3 billion and consisted of a Sh24.2 billion loan book.
The lender’s shareholder funds rose to Sh5.3 billion from Sh5 billion in June 2022.
As of June, Sidian was well capitalised with a core capital of Sh4.5 billion against a minimum statutory capital of Sh1 billion and a liquidity ratio of 50.1 percent against a minimum requirement of 20 percent.
Sidian is a full-service commercial bank providing a variety of financial services to individuals and enterprises. Formerly known as K-Rep Bank, it has its origins in K-Rep Group, an investment vehicle founded in 1984 as a project to support the development of small and micro-enterprises.
In November 2014, Centum Investment Company Limited acquired a majority shareholding of K-Rep, making it a subsidiary of Centum Investment Company Plc. K-Rep Bank rebranded to Sidian Bank in 2016.
Sidian operates 43 branches across the country with the bulk of its network in the Nairobi region.
The remainder of the bank’s 16.57 percent stake is held largely by individual shareholders, including Kimanthi Muta, Sarah Godana, Kabiru Kinyanjui, Mwenda Thiribi, Francis Kihiko, Aleke Dondo, Judith Bahemuka, Anthony Wainaina and Francis Munyao Kinyumu, according to the bank’s filings.
