Kenya, Dec 1 – Sidian Bank has reported a Ksh274 million loss for the nine months to September 2017, occasioned by lower interest income on loans in the wake of the rate cap regime in the country.
The bank’s performance is a further drop from Ksh122.8 million losses reported in the first six months of the year, an indicator the lender is feeling the heat experienced by other banks in the country under the interest rate cap environment.
The losses at the bank, a subsidiary of Nairobi Securities Exchange listed investment firm–Centum, come after a net profit of Ksh220 million made in a similar period last year.
This year, the bank’s loan book shrunk to Ksh11.9 billion as of September, from Ksh12.4 billion recorded in quarter two of the year (June), a Ksh429 million squeeze..
Total non-interest income dropped by 3.6 per cent to Ksh471 million in the period under review.
Sidian Bank’s poor results impacted Centum Investment’s performance, which reported a 21 per cent drop in profit after tax in the nine months to September.
The firm on Monday reported a half year net profit of Ksh1.6 billion, compared to Ksh2.1 billion recorded in a similar period last year.
Centum CEO James Mworia attributed Sidian’s depressing performance to the negative impact of the interest rate capping regulations in the banking sector.
“Sidian Bank is adopting numerous strategies aimed at optimizing the bank’s performance in light of the challenging operating environment,” Mworia said at an investor briefing in Nairobi.
The bank’s total operating income dropped 36.3 per cent to Ksh1.29 billion while net interest income fell by 46.8 per cent to close at Ksh817.2 million.
Sidian, formerly K-Rep Bank, operates 40 branches in all major towns across Kenya with assets of over Ksh 13.2 billion.
By Martin Mwita