Mauritius’ SBM Holdings last year made a Sh471 million capital injection in SBM Bank Kenya, marking the latest support to the local subsidiary.
SBM Bank Kenya, which is fully owned by SBM Holdings, says in its latest annual report that the amount was received during the financial year ended December 2023 as additional shareholder capital.
“This is share capital contribution by the shareholders to the bank pending allotment of the bank’s shares. The allotment will be completed once the requisite documents have been filed with the registrar of companies and share certificate issued to the shareholder,” said SBM Bank Kenya.
The injection contributed to the rise in SBM Bank Kenya’s total capital to Sh8.8 billion at the end of last year from Sh7.98 billion a year earlier, translating to a 10.4 percent rise.
The lender’s total capital to total risk weighted assets ratio had thinned to 14.7 percent at the end of 2022, being 0.2 percentage points above the required minimum of 14.5 percent. The ratio, which indicates how well a bank can meet its obligations, improved to 15.5 percent at the end of last year, pointing to the impact of the fresh capital.
SBM Holdings entered Kenya in May 2017 through the acquisition of Fidelity Commercial Bank for a token $1 (Sh131) consideration and renamed it SBM Bank Kenya, before making a $20 million (Sh2.61 billion) capital injection.
The Mauritian-headquartered lender in August 2018 also acquired certain assets and liabilities of the then under receivership Chase Bank Kenya for 162,158 Mauritian rupees (Sh469,788) and added them to the SBM Bank Kenya operation. The group at the time made a commitment to inject $60 million (Sh7.8 billion) in the merged business.
SBM Bank Kenya last year posted a 15.6 percent growth in net profit to Sh150.78 million from Sh130.45 million reported a year earlier. The lender carries in its books an accumulated loss of Sh1.35 billion.
The lender has run into several legal disputes in relation to the Fidelity and Chase deals. SBM is currently fighting off a Sh737 million tax penalty claim from the Kenya Revenue Authority (KRA). The claim relates to an agency contract the taxman had with FCB.
KRA in 2019 hit SBM with a Sh400 million demand relating to a Sh9.6 billion liquidity support loan the bank had tapped from the Central Bank of Kenya after the Chase deal. The taxman gave up on the claim in 2022 after a series of legal battles with SBM.
SBM has also been in a legal tussle with a Mauritius-based lender, Afrasia Bank, which is demanding $7.5 million (Sh997.5 million) deposits it says went down with Chase Bank. The lender has argued in court that the amount was not part of the liabilities it assumed from Chase.
