SBM Bank Kenya is eyeing new capital to sustain growth after doubling its net profit for the nine month period ended September 2026, riding on increased lending and higher transactional income.
The lender reported a net profit of Sh591.2 million for the first nine months of the year compared to Sh283.4 million posted in the corresponding period last year.
SBM’s loan book grew by 23.3 percent to Sh56.5 billion up from Sh45.8 billion in September last year. This saw the lender’s fees and commissions from loans and advances triple to Sh235 million.
The bank’s non-interest income, including transaction fees, increased by Sh484 million to Sh2.02 billion which management attributed to increased customer transactions.
‘What we did over the last two years is fix the fundamentals such as changing our old systems, introducing a lot more functionality on our mobile banking apps and new products. We also introduced attractive interest rates and all of that resulted in getting more customers who transacted more with us,’ said SBM’s Chief Executive Officer, Bhartesh Shah, in an interview with Business Daily.
Customer savings with the bank expanded 28.6 percent to Sh97.2 billion but its cost of deposits grew at a slower pace of 14.8 percent, to Sh4.2 billion, underlining the drop in interest rates in the Kenyan market.
SBM will have to inject additional capital in the lender to sustain the business growth following a thinning of its capital adequacy ratios.
The bank’s total capital to total risk weighted assets declined to 15.4 percent being 0.9 percentage points above the statutory minimum of 14.5 percent.
‘We’re actively looking at ways of increasing our capital … we’re looking at various options for tier two capital, as we’re hoping we can go into the next year with a much bigger capital base,’ said Mr Shah.
SBM Holdings, the Mauritius based parent company of the bank, has made several capital injections in the local subsidiary to support the growth with its paid up capital increasing by Sh1.2 billion in the last 12 months.
The bank, which entered the Kenyan market through the acquisition of Chase Bank and Fidelity Bank, reported a 40 percent drop in its non-performing loans to Sh9.9 billion which management attributed to closure of bad loans inherited from previous owners. The bank’s bad loans to total loan book ratio (NPL ratio) declined sharply to 16.9 percent from 32.3 percent 12 months ago.
‘A large part of that (32.3 percent) were loans we inherited from the previous Chase Bank and from Fidelity Bank as well… we took the approach of sitting down with the clients and negotiating for a settlement with them,’ said Mr Shah.
Management expects the NPL ratio to continue dropping as it books new quality loans.
Bad loans in the banking sector dropped to a 44 month low 13.9 percent in September mirroring improved loan repayments and credit affordability.
SBM becomes the first lender to publish its nine months financials with its performance giving indications of another season of huge profits for the banking sector.