Sanlam Kenya has paid the outstanding Sh2.4 billion Stanbic Bank Kenya loan balance using funds from a recent rights issue to clear the debt that previously stood at Sh3.04 billion as of December 2024.
The loan had been restructured three times before. The insurer, which recently raised Sh2.5 billion through a rights issue, had paid Sh800 million to Stanbic in build-up to the rights issue.
Sanlam Kenya CEO Patrick Tumbo said the insurer settled the balance on May 23 this year.
“It [Stanbic loan] was fully settled on 23rd May 2025. In the short-term, we are adequately capitalised for growth without new debt,” said Mr Tumbo in a response to our queries.
Stanbic’s loan was set to mature on March 16, 2025 —a date that proved too early to tap the cash for rights issue to settle it.
Sanlam has disclosed in the latest annual report that it had to seek an extension —the third one since tapping the loan— taking the settlement date to June 17, 2025. However, the receipt of the rights issue cash enabled it to settle the debt with days left to the maturity.
The loan repayment extensions had burdened Sanlam with interest payments running into millions of shillings annually as interest to Stanbic. For instance, it paid out Sh649.71 million as interest to Stanbic loan last year compared with Sh529.1 million a year earlier.
The settling of the Stanbic loan ends a debt that was first introduced into Sanlam’s books in 2017. The insurer in December 2017 and December 2018 tapped $10 million and $17 million respectively from Sanlam Capital Markets Property Limited which is owned by its South Africa-based parent firm Sanlam Limited.
The Kenyan insurer used the two loans to, among other things, recapitalise the insurance businesses and finance completion of its office complex along Waiyaki Way. It planned to settle the loan within two years.
However, Sanlam extended the repayment to February 17, 2021 and refinanced the two loans with a Sh3 billion Kenya shilling-denominated loan from Stanbic.
Stanbic refinanced the two loans at an annual interest rate of 11.7 percent for a term of three years for the $10 million (Sh1.29 billion) loan and four years for the $17 million (Sh2.19 billion) one with two equal repayment amounts due in February 2023 and February 2024.
As Sanlam battled with capital squeeze, it restructured the Stanbic loan to a Sh4 billion facility for another two years to March 2025. This was followed by a two and half month extension to allow Sanlam utilise the rights issue cash to settle the loan.
Sanlam emerged from a four-year streak of losses to post a record Sh1.05 billion net profit in the financial year ended December 2024 from the previous year’s net loss of Sh126.6 million, boosted by increased investment income.
