Sidian Bank will be raising an additional Sh3 billion in capital to match its business growth, which saw its net profit rise more than fivefold in the nine months to September.
The small-tier lender, which has just concluded a Sh3 billion rights issue, is in discussions with its shareholders to inject an additional Sh3 billion to support its business growth.
The bank’s deposit base grew by 30.2 percent in the three months to September, resulting in its core capital to total deposits ratio falling to 8.8 percent, which is 0.8 percentage points above the statutory minimum of eight percent.
Sidian packed the bulk of its deposits in Treasury bills and bonds with interest earned from the government helping it post an after-tax profit of Sh1.4 billion in the nine-month period ended September 2025, up from Sh257 million a year earlier.
“We finalised the Sh3 billion rights issue with a final amount of Sh580 million already received awaiting allotment. This is shown as other reserves,” said Sidian Bank’s chief executive Chege Thumbi.
“We are in discussions with the shareholders on raising more capital in line with business demand. We plan another Sh3 billion in new capital on top of the retained funds,” he added.
The bank has deep-pocketed shareholders, including listed investment firm Centum, insurance firm Pioneer, and construction company Wizpro Enterprises Limited, who have supported it in previous capital raising rounds as it pushes to become a mid-sized bank by the end of 2028.
Customer savings with the bank rose to Sh78.1 billion in September, up from Sh59.9 billion in June and Sh43.5 billion in September 2024. Despite the deposit growth, the bank's loan book remained flat at Sh25.1 billion, a situation that management attributed to the sluggish economy.
“As the economy picks up, in line with our mission to empower the entrepreneurs, we expect the loan book to grow in months ahead,” said Mr Chege.
The bank’s stock of Treasury bills and bonds rose to Sh48.6 billion as at the end of September, up from Sh19.3 billion a year ago.
This saw the bank’s earnings from government jump 134.7 percent to Sh3 billion, from Sh1.3 billion, helping to offset a 9.2 percent drop in interest income from loans.
Sidian earned Sh2.9 billion from its loan book, a drop from Sh3.2 billion in September last year.
Despite being ranked among the small-sized banks in the country, Sidian has been punching above its weight by booking some large clients especially within government.
Earlier this month, Nairobi County Government appointed Sidian Bank as the principal banker for its health facilities, taking the business from Co-operative Bank of Kenya, the third-largest bank in the country.
The hospital business is bound to boost the bank’s deposit base and earn it transactional income, given the high number of transactions associated with such accounts.
“Opening, operating and closing of accounts are normal administrative matters provided by law. Accounts are opened and closed periodically,” said Charles Kerich, the county executive for finance and economic planning, regarding the change of banker.
The county has revenue accounts with Co-op Bank, Equity Bank and Sidian.
Besides Nairobi County, Sidian has also been appointed as one of the receiving agents of the Social Health Authority (SHA) and the housing levy.
This has enabled it to keep its cost of funds low at 3 billion Kenyan shillings, up from 2.2 billion a year earlier, despite the deposit base nearly doubling.
