Cheap deposits helped Sidian Bank cement its place as the fastest growing bank in the country by expanding its net profit for the year ended December 2025 six-fold to Sh1.72 billion from Sh287 million posted a year earlier.
The bank, upgraded to a mid-sized lender after doubling its market share in two years, grew its deposit base by 62.9 percent or Sh28 billion to Sh72.3 billion while its interest expenses rose at a slower pace of 23.1 percent to Sh4 billion.
Sidian has benefitted from recent partnership agreements with government agencies who have offered deposits that it has invested in Treasury bills and bonds. Some of the government related agencies that have moved to Sidian include Nairobi County Government, which started by appointing Sidian the principal banker for its health facilities before recently deepening the relationship by transferring more operations to it.
The bank has also been appointed as one of the receiving agents of the Social Health Authority (SHA) and the Affordable Housing Levy.
Sidian has however been slow to convert the deposits to higher yielding loans with its loan book expanding by only Sh2.6 billion to Sh27 billion as the bulk of new deposits were invested in Treasury bills and bonds.
The bank’s stock of the government debt securities 83.1 percent to Sh49.2 billion from Sh26.8 billion a year earlier.
This saw the bank’s earnings from the fixed income instruments more than double to Sh4.5 billion from Sh2 billion while its other income –relating to gains booked from trading Treasury bills and bonds – rose ten-fold to Sh2 billion.
Sidian’s gross non-performing loans remained high at 29.9 percent of its loan book which is higher than the industry average of 15.4 percent. The high default rate saw it increase its loan loss provisions to Sh2.4 billion from Sh1.3 billion previously.
Excluding the loan loss provision, the bank’s operating expenses grew by 26.5 percent Sh3.5 billion indicating a relatively lower organic expansion compared to the deposit growth.
The bank last year increased its branch network by four branches bringing its total outlets to 50.
The lender, which has gone through several ownership transitions in the past three years, recently appointed ex-Cabinet Secretary and former managing director of NIC Bank (now NCBA Group) James Macharia as the chairman of its board in a move that signaled intent to grow its loan book.
Additional capital
Mr Macharia has been credited with growing NIC Bank’s loan portfolio and also that of ABC Bank Zambia where he previously served.
Centum, which owned 81.2 percent of Sidian three years ago, early this month completed its exit from the lender with the sale of its remaining 14.63 percent stake which it held through investment vehicle Bakki Holdings.
Sidian’s shareholders have been forced to inject additional capital in the bank to fund its growth. Last year they pumped in an additional Sh6 billion as the bank’s capital adequacy ratios had grown thin following growth of deposit base.
Owners of the bank include insurance firm Pioneer, construction company Wizpro Enterprises Limited, Afram Limited and Telesec Africa. Former Ugandan attorney general William Byaruhanga also has ownership in the bank through his 50 percent shareholding in Bakki Holdings.
