Nairobi-based Sidian Bank raises $23 million after profit jumps sharply

Nairobi-based Sidian Bank has raised $23 million in fresh capital through a rights issue, adding to recent fundraising efforts as the lender strengthens its balance sheet and prepares for further expansion. The capital was raised in two tranches in January and February, following approval by the bank’s board. The move comes at a time when banks across East Africa are tightening capital buffers to manage higher interest rates and cautious lending conditions.

Sidian Bank’s profit surges, deposits climb

The capital raise follows strong financial results under CEO Chege Thumbi, a veteran banker with more than three decades of experience. Sidian Bank reported a sharp rise in profitability for the third quarter of 2025, with net profit climbing to Ksh1.47 billion ($11.4 million) from Ksh257.6 million ($2 million) a year earlier. The performance reflects a shift in strategy, with the lender increasing exposure to government securities while keeping credit growth measured.

Total operating income rose 92.6 percent to Ksh5.63 billion ($43.6 million), supported largely by treasury income. Investments in government securities increased 157 percent to Ksh40.06 billion ($310 million), as the bank opted for lower-risk assets amid tighter private-sector credit conditions. Loans to customers remained broadly unchanged at Ksh25.1 billion, underscoring the cautious approach to lending. Customer deposits, however, grew 43 percent to Ksh77.96 billion, giving the lender additional liquidity to support investment in government paper.

Centum ends two-decade Sidian stake

Sidian Bank’s roots trace back to 1984, when it was established as K-Rep Bank with support from World Education Inc. and funding from USAID. The institution focused on financing small businesses in Kenya’s informal sector. In 2016, the lender rebranded to Sidian Bank after Centum Investment Company acquired a controlling stake the previous year. The change reflected new ownership and a broader commercial banking strategy, even as the bank continued to serve small and medium-sized enterprises.

Centum has since reduced its exposure to Sidian Bank. In 2022, the Nairobi-listed investment firm agreed to sell its 83.4 percent stake to Access Bank, but the deal did not close after conditions were not met. Earlier this year, Centum completed the sale of its interest in Bakki Limited, ending its indirect shareholding in the lender after more than 20 years. Bakki had served as the holding company for Centum’s stake, with Centum owning 50 percent of Bakki. Bakki, in turn, held 27.27 percent of Sidian Bank, making it the largest shareholder.

Sidian Bank’s ownership structure

The bank’s ownership remains concentrated among a small group of investors. Bakki holds 27.27 percent, while Wizpro Enterprises controls 24.95 percent and Afram Limited owns 24.36 percent, according to the latest shareholding structure. The composition highlights the dominance of institutional and private investment firms in the lender’s capital base, positioning Sidian Bank to continue strengthening its funding as it navigates a difficult environment.