Mauritius-based SBM Holdings has pumped an additional Sh819 million into its Kenyan subsidiary, SBM Bank Kenya, as part of continued efforts to stabilise operations amid mounting financial losses.
The fresh injection of capital was made during the financial year ended December 2024 and follows a Sh471 million boost extended the previous year. It comes at a time when Kenya is implementing legal reforms aimed at increasing the minimum core capital requirement for banks from the current Sh1 billion to Sh10 billion over a five-year period.
In its latest annual report, SBM Bank Kenya disclosed that the funds were received as part of additional shareholder contributions.
“This is share capital contribution by the shareholders to the bank pending allotment of the bank’s shares. The allotment will be completed once the requisite documents have been filed with the Registrar of Companies and the share certificate issued to the shareholder,” said the lender.
Despite the capital support, the bank slid into a net loss of Sh1.07 billion in 2024, reversing a net profit of Sh150.78 million reported the previous year. The loss wiped out most of the new capital, leaving the lender’s total capital at Sh8.72 billion—slightly down from Sh8.8 billion.
Still, the bank’s total capital to total risk-weighted assets ratio rose to 16 percent, up from 15.5 percent a year earlier. The ratio remained above the statutory minimum of 14.5 percent, indicating improved capital adequacy due to the shareholder injection.
SBM entered the Kenyan market in 2017 through the acquisition of Fidelity Commercial Bank for a symbolic $1 (Sh129), later rebranding it as SBM Bank Kenya. The group followed up with a $20 million (Sh2.59 billion) capital boost. In 2018, it also acquired selected assets and liabilities of the collapsed Chase Bank Kenya for 162,158 Mauritian rupees (Sh465,000), committing a total capital infusion of $60 million (Sh7.77 billion).
The bank’s cumulative losses have now climbed to Sh2.22 billion, up from Sh1.34 billion the previous year. The 2024 performance was mainly impacted by a decline in net interest income, which dropped to Sh2.15 billion from Sh3.81 billion. The fall was attributed to a sharp 48 percent surge in interest expenses, which outpaced an 11 percent growth in income.
SBM Bank Kenya has also faced legal battles stemming from its acquisitions. It is contesting a Sh737 million tax penalty by the Kenya Revenue Authority related to an agency contract involving the former Fidelity Commercial Bank.
Additionally, the bank is entangled in a court dispute with Mauritius-based Afrasia Bank, which is seeking repayment of $7.5 million (Sh971.5 million) in deposits allegedly lost in the Chase Bank collapse. SBM maintains that the funds were not part of the liabilities it agreed to take over during the acquisition.
