STABILITY

SBM Bank reports Sh66 million Q1 profit before tax

The lender entered the Kenyan market in May 2017.

In Summary

•SBM Bank (Kenya) Limited is owned by SBM Holdings Ltd based in Mauritius.

•It has a network of 52 branches spread across the country.

State Bank of Mauritius (SBM) which entered the Kenyan market through acquisition in May 2017./COURTESY
State Bank of Mauritius (SBM) which entered the Kenyan market through acquisition in May 2017./COURTESY

SBM Bank (Kenya) Limited has reported a Sh66 million profit before tax for the first quarter of 2020 amid  a 7.7 per cent increase in operating income year-on-year. 

The growth in business has largely been achieved through growth in loans and advances and customer deposits, the lender has said.

Net loans and advances have increased from Sh13.04 billion to Sh20.87 billion year-on-year, a growth of 60 per cent.

 

Customer deposits increased to Sh55.7 billion from Sh51.3 billion , reflecting a growth of nine per cent, as the lender affirms steady business three years into its operations in Kenya.

The bank, which entered the Kenyan market in May 2017, is owned by SBM Holdings Ltd based in Mauritius (SBM Group-majority owned by the government of Mauritius and associated entities).

In the past year, the Kenyan subsidiary’s growth has seen it increase its total assets by 11 per cent from Sh70.2 billion in March 2019 to Sh 78.1 billion.

The bank’s liquidity is strong at 68.9 per cent, providing the capacity to lend to customers to support growth as well as invest in other profitable opportunities.

The high liquidity is evident from the Sh42.1 billion invested in government securities.

Commenting on the steady growth, the bank’s CEO Moezz Mir said:“We have embarked on a calculated strategy towards ensuring that we provide relevant solutions to our client segments in the Consumer, SME and Corporate arenas."

"We provide this through our network of 52 branches spread across the country, and through our digital offerings. We are also able to tap into specialist resources and provide cross-border banking solutions through our global network, with operations in Mauritius, India, Madagascar and Seychelles, thereby effectively serving trade and growth across the “Indian Ocean Rim”," he added.

 

The bank also prudently increased its loan loss provisions by Sh280 million year on year, against the backdrop of monitoring legacy loans acquired.

Commenting on the business environment going forward,  Mir said:“The advent of the Covid-19 pandemic in March 2020 has disrupted business operations globally and this will undeniably affect how we will all do business going forward."

He said the bank has put in place various measures to support  clients and staff.

"In an effort to support our clients through these turbulent times, we have proceeded to provide loan restructures and moratoriums from three months to twelve months, to allow our clients to effectively manage their cash flows over this period," Mir said.

In addition, the bank is granting temporary facilities to customers to support short-term cash flow needs during "these difficult times."

"We are also proactively supporting industries that are in the frontline of pandemic management,” said Mir.

A majority of the bank's transactions have moved onto its digital channels, Mfukoni Mobile Banking, and online banking solution, in line with efforts to enhance contactless transactions and maintain social distancing.

 “We are on a steady growth trajectory and anticipate continued growth by supporting our clients and finding opportunities within the current environment," said Mir.

He affirmed the bank's strong capital and liquidity base to support growth of business.

The bank has also joined other financial institutions in contributing to measures to alleviate the impact of the pandemic on the vulnerable members of the community.