Mauritius’s SBM Holdings injected an additional Sh819 million into its subsidiary SBM Bank Kenya in the financial year that ended December 2024, disclosures show, marking the latest support to the local subsidiary amid a Sh1.07 billion net loss.,
The latest capital injection is in addition to the Sh471 million that SBM Bank Kenya received in the prior year and preceded Kenya’s move to amend banking laws to incrementally raise the minimum core capital from the current Sh1 billion to Sh10 billion within five years.
SBM Bank Kenya, which is owned by SBM Holdings, says in its latest annual report that the amount was received as additional shareholder capital.
“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.
However, a Sh1.07 billion net loss, which marked a deterioration from Sh150.78 million net profit in the preceding similar year, wiped out the fresh capital, taking the total capital to Sh8.72 billion from Sh8.8 billion.
The lender’s total capital to total risk-weighted assets ratio closed last year at 16 percent, 1.5 percentage points above the required minimum of 14.5 percent. The ratio, which indicates how well a bank can meet its obligations, improved from 15.5 percent, pointing to the impact of the fresh capital.
SBM Holdings entered Kenya in May 2017 by acquisition of Fidelity Commercial Bank for a $1 (Sh129) consideration and renamed it SBM Bank Kenya, before making a $20 million (Sh2.59 billion) capital injection.
The Mauritian-headquartered lender in August 2018 also acquired certain assets and liabilities of Chase Bank Kenya, which was then under receivership, for 162,158 Mauritian rupees (Sh465,000) and added to SBM Bank Kenya. The group committed to inject $60 million (Sh7.77 billion).
The latest loss has taken SBM’s accumulated loss to Sh2.22 billion from Sh1.34 billion a year earlier. Last year’s loss was mainly driven by a decrease in net interest income to Sh2.15 billion from Sh3.81 billion due to the rise in interest expenses rising by 48 percent to outpace an 11 percent rise in interest income.
The lender has run into several legal disputes about the FCB and Chase deals. SBM is fighting off a Sh737 million tax penalty claim from the Kenya Revenue Authority about an agency contract the taxman had with FCB.
SBM has also been in a legal tussle with a Mauritius-based lender, Afrasia Bank, which is demanding $7.5 million (Sh971.5 million) of deposits, it says, went down with Chase Bank.
The lender has argued in court that the amount was not part of the liabilities it assumed from Chase.
