Sidian Bank has been upgraded to a mid-sized lender after booking large corporate accounts mainly from government institutions.
The Central Bank of Kenya (CBK) in a letter seen by Business Daily disclosed that Sidian Bank attained the new status at the end of September after meeting set parameters.
Classification as a medium sized lender means a bank has at least a one percent market share based on five weighted parameters including assets, deposits, shareholder funds, number of deposit accounts and loan accounts.
Sidian Bank had a 0.7 percent market share as at end of December 2024 which was an improvement from 0.5 percent in 2023.
“As at September 30,2025, Sidian was classified in the medium (Tier 2) category, which consists of institutions with a market share of between 1 and 5 percent,” said CBK in the letter.
Mid-sized banks include Prime Bank, Bank of Baroda, Citibank, Family Bank, National Bank of Kenya. Bank of India, Ecobank, SBM Bank and Housing Finance. This is the first time that Sidian is rising above the status of a small bank since the CBK started classifying lenders.
The upgrade follows entry of new ambitious owners two years ago who set a goal of growing the bank to mid-tier status by 2028 and have not shied from injecting new capital in the lender to support its expansion.
The bank is currently raising Sh3 billion through a rights issue whose success will push the total new cash injected in the business to Sh6 billion in the last 18 months.
The bank's shareholding has changed in the last two years with previous majority shareholder Centum Investment Company selling down its 83.4 percent as other investors entered the lender's ownership list.
New investors include Pioneer General Insurance, which owns 16.89 percent and its sister company, Pioneer Life Investments (3.06 percent).
Other shareholders are Afram Limited with 24.3 percent stake, Wizpro Enterprises Limited (24.95 percent) and Telesec Africa (3.47 percent).
Classification of a bank plays a major role in attracting deposits especially from large corporations who perceive small banks as too risky.
Small banks are usually forced to pay higher interest rates for deposits, yet still be competitive in lending squeezing their profit margins compared to the large and medium sized lenders.
Sidian has been punching above its weight by booking some large clients especially in the public sector such as the Nairobi County Government, Social Health Authority and a receiving agent of the housing levy.
This new business saw the bank grow its customer deposits by 70.8 percent since the beginning of the year to Sh78.1 billion as at end of September 2025 up from Sh45.7 billion as at end of 2024.
The deposits held by the bank represented 1.83 percent of customer deposits held by all banks up from 0.7 percent at the beginning of the year. Sidian's asset base of Sh94.8 billion constituted 1.2 percent of the industry up from the 0.8 percent contribution it held in December with assets worth Sh60 billion.
Sidian’s after tax profit for the nine months to September 2025 grew more than five-fold to Sh1.4 billion from Sh257 million a year earlier. The bank has been slow to grow its loan book with the bulk of the new deposits being parked in Treasury bills and bonds.
It recently appointed James Macharia, who previously served as the chief executive of NIC Bank, now NCBA Group, as its chairperson. The appointment is seen by market players as a means to steer the bank in growing its loan book.
