Business

Sidian CEO tipped to head new bank

Thursday, June 9th, 2022 05:32 | By
Sidian Bank CEO Chege Thumbi. PHOTO/Courtesy

Sidian Bank Chief Executive Officer Chege Thumbi is set to occupy the corner office at the Access Bank pending the approval of the acquisition by regulators. This is after Access Bank announced the move to acquire a majority stake in Sidian Bank from Centum Investments for Sh4.3 billion.

Kenya’s Centum Investment said on Tuesday it had agreed to take the amount for 83 per cent of its stake in Sidian Bank subject to regulatory approval in Kenya and Nigeria.

The Nigerian lender, which has been on the prowl in the Kenyan market, bought the Transnational Bank from the Moi family as consolidations increase on tougher supervision by the Central Bank of Kenya (CBK).

Access Bank which has assets worth $25.5 billion and focuses on corporate retail banking is expected to spur the growth of Sidian Bank particularly by deepening the small and medium enterprises (SMEs) offering in the country.

Sidian Bank, which is a mid-tier bank recorded an increase in its consolidated net profit to Sh486 million for the year to December 31, 2021 from Sh19 million in the prior year 2020, putting Thumbi on the spot.

The CEO says he is excited about the opportunities the new development brings, especially in terms of larger capital base the deal portends and does not expect many changes in management. “The shareholders will maintain the model of trade finance for SMEs and they made it clear that they want to maintain leadership without changing much, subject to approval,” Thumbi told Business Hub on phone.

Thumbi who has been voted number three as the CEO of the year after KCB chief executive Paul Russo and Co-op Bank CEO Gideon Muriuki gets an opportunity to steer the lender further.

Trade finance

Sidian Bank Group, which focuses on lending to small and medium-sized businesses and trade finance, had total assets of Sh43.2 billion as at the end of March.

Access is targeting to build its brand by having a large number of branches across the country labeled Access Bank even as it targets to push the bank from tier one to tier two and gain the economies scale enjoyed by top lenders in the land.

The Nigerian lender seeks to boost the bank’s liquidity through capital injection to propel it to a tier two bank in the market. Tier two and one banks enjoy more liquidity as customers prefer large banks when it comes to keeping their deposits.

The move underlines Access Bank’s strategy to consolidate its position in the Kenyan market. “This transaction stands as one of the largest private equity transactions in East Africa and reflects a strong commitment by Access Bank to the future of the Kenyan economy,” James Mworia, Centum’s chief executive officer, said.

Access Bank Group CEO Roosevelt Ogbonna said the acquisition and intended subsequent merger will create a strong and competitive balance sheet for the bank in Kenya.

“It positions us to be well-placed to promote trade finance in Kenya and other cross border banking services in the East African Community and broader Comesa region,” he added.

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