SBM Bank Kenya has posted a 171% jump in first-half profit due to lower credit losses, stronger deposit growth and rising transaction income which boosted earnings.
The lender reported that cutting bad loans, growing customer deposits and expanding lending, in the six months ended June 30 saw its profit before tax hit $4.2 million, from $1.6 million a year earlier. The Bank’s operating profit climbed 279% to $6.6 million in this period.
SBM Bank Kenya saw customer deposits increase 24% to $723 million due to its recovery strategies, signaling a quick turnaround since its purchase of Chase Bank Kenya. Thw bank added that its net loans and advances rose 18% to $416 million while its total assets stood at $845 million at the end of June.
“The continued growth in customer deposits is particularly encouraging because it reflects trust,” Chief Executive Officer Bhartesh Shah said in a statement seen by TechMoran. “Customers choose banks they believe are financially strong, well governed and committed to supporting them over the long term.”
SBM reduced its gross non-performing loan ratio to 17.3% from 32.4% a year earlier, lowering credit losses and improving profitability as the bank continued to clean up its balance sheet. The shareholders’ equity reached $85 million while its net interest income rose to $16.9 million and non-interest income increased 54% to $10.7 million due to higher transaction volumes.
Total operating income grew 35%, comfortably outpacing a 12% increase in operating expenses despite continued investment in technology and digital banking, which include enhanced Mastercard offerings, roll out of additional features on its mobile banking platforms such as the M-Fukoni app.
SBM Bank Kenya, part of Mauritius-listed SBM Holdings Ltd., is rebuilding its banking business through tighter risk management, stronger capital and greater investment in digital services. The lender said it plans to use its stronger financial position to expand lending to households, small businesses and corporates, while increasing financing for sustainable and climate-related projects as competition in Kenya’s banking sector intensifies.