SBM Bank denies sale of Kenyan unit

The State Bank of Mauritius (SBM) has denied the sale of its Kenyan unit represented by SBM Bank Kenya Limited.

This despite disclosures in court which have shown that the lender is ready to close shop in Kenya roughly six years after entry.

The revelation was revealed in a suit pitting the lender and former directors of Fidelity Bank - the bank acquired by SBM to mark the entry of the Mauritian outfit in the Kenyan market in 2017.

“The SBM Holdings Limited wishes to reassure its stakeholders in Kenya that it remains committed to the local banking market through its long-term investments in SBM Bank Kenya,” the lender stated on Friday.

At the same time, SBM argues that it followed laid down procedure with respect to its acquisition of Fidelity Bank, a matter now the subject of a court petition.

In 2018, SBM Bank Kenya grew in size after carving out 75 per cent of assets and liabilities in the Chase Bank Limited in Receivership (CBLIR).

Despite the significant acquisition, SBM has struggled to keep its head above water relying on support the Central Bank of Kenya (CBK) to maintain adequate liquidity and capital metrics for operations.

In six months of operations through to June 2022, SBM Bank Kenya had Ksh.11.4 billion in liabilities due to the CBK in the form of balances accruing to the lender of last resort.

SBM nevertheless stood above the prescribed capital and liquidity thresholds with a core capital of Ksh.7.5 billion and a 53 per cent liquidity ratio.

During the period, SBM Bank Kenya closed with an asset base of 84.3 billion to include Ksh.33.5 billion in net loans and advances to customers.

SBM closed the six-month period with a net profit of Ksh.186.9 million.

SBM has a network of 42 branches across the country and prioritizes retail, SME and corporate as its main clientele base.