Sidian Bank earned KSh 607.03 million in profit after tax for the quarter ended 31 March 2026, a 9.0% increase from KSh 556.94 million in the same period a year earlier.
The result extends a profit recovery that has repositioned the lender as a credible mid-tier player in Kenya’s banking sector over the past two years.
Income: Government Securities Drive the Gains
Net interest income more than doubled to KSh 1.61 billion from KSh 736.58 million in Q1 2025. The jump traced back to a 61.9% surge in total interest income to KSh 2.88 billion, as the bank collected increasingly strong returns from a government securities portfolio that now anchors its balance sheet.
Interest expense grew at a far slower pace, rising 21.8% to KSh 1.27 billion. That gap between income growth and cost growth kept the net interest margin expanding even as the deposit base swelled.
| Income Metric | Q1 2026 | Q1 2025 | Change |
|---|---|---|---|
| Profit after tax | KSh 607.03 Mn | KSh 556.94 Mn | +9.0% |
| Net interest income | KSh 1.61 Bn | KSh 736.58 Mn | +118.6% |
| Total interest income | KSh 2.88 Bn | KSh 1.78 Bn | +61.9% |
| Interest expense | KSh 1.27 Bn | KSh 1.04 Bn | +21.8% |
| Non-interest income | KSh 557.34 Mn | KSh 1.03 Bn | -45.9% |
Non-interest income contracted 45.9% to KSh 557.34 million from KSh 1.03 billion, with “other income” collapsing from KSh 662.37 million to KSh 48.28 million. Every other non-interest line grew, pointing to a one-off gain recorded in Q1 2025 that did not repeat, rather than any deterioration in the bank’s fee-earning capacity.
Balance Sheet: Fourfold Deposit Growth in Seven Years
Total assets grew 38.1% to KSh 94.08 billion from KSh 68.12 billion. Customer deposits rose 47.6% to KSh 74.16 billion from KSh 50.25 billion, a trajectory that tells the story of the bank’s transformation in stark terms.
| Balance Sheet Item | March 2026 | March 2025 | Change |
|---|---|---|---|
| Total assets | KSh 94.08 Bn | KSh 68.12 Bn | +38.1% |
| Customer deposits | KSh 74.16 Bn | KSh 50.25 Bn | +47.6% |
| Net loans and advances | KSh 29.38 Bn | KSh 26.25 Bn | +11.9% |
| Investment securities | KSh 9.94 Bn | — | — |
In March 2019, customer deposits stood at KSh 16.52 billion. By March 2026, that figure reached KSh 74.16 billion, a fourfold increase in seven years. The sharpest acceleration came in the 24 months to March 2026, driven by a series of public sector banking mandates.
Public Sector Mandates: The Engine Behind the Numbers
Nairobi County Government designated Sidian as its principal banker in October 2025, moving health facility revenues, donor fund management, and the Facility Improvement Fund away from Co-operative Bank and Equity Bank. That mandate alone reshaped the deposit base.
The bank also handles receipts for the Social Health Authority and the housing levy, and holds primary banking relationships with Kenya Railways and KEMSA. In March 2026, Nairobi Members of County Assembly approved a KSh 1.7 billion monthly payroll overdraft facility with Sidian, deepening City Hall’s financial dependence on the lender.
Most of that deposit inflow went into Treasury bills and bonds rather than loans. Net loans and advances edged up 11.9% to KSh 29.38 billion — a modest expansion relative to the overall balance sheet growth, reflecting management’s preference for the lower-risk, higher-liquidity government securities portfolio at this stage of the bank’s growth.
Asset Quality: Impairments Ease
Gross non-performing loans declined to KSh 8.25 billion from KSh 8.65 billion in March 2025. Net NPL exposure fell sharply to KSh 77.75 million from KSh 137.57 million, suggesting improved provisioning coverage and better recovery on legacy problem loans.
| Asset Quality | March 2026 | March 2025 |
|---|---|---|
| Gross NPLs | KSh 8.25 Bn | KSh 8.65 Bn |
| Net NPL exposure | KSh 77.75 Mn | KSh 137.57 Mn |
Capital and Liquidity: Ratios Well Above Minimums
Capital strength improved markedly following the KSh 3 billion rights issue completed in two tranches in January and February 2026. Core capital climbed to KSh 11.77 billion, pushing the core capital adequacy ratio to 19.6% from 12.2% a year earlier. The liquidity ratio reached 76.9%, nearly four times the 20.0% statutory minimum.
| Capital Metric | March 2026 | March 2025 | Regulatory Minimum |
|---|---|---|---|
| Core capital | KSh 11.77 Bn | — | — |
| Core capital adequacy ratio | 19.6% | 12.2% | 10.5% |
| Liquidity ratio | 76.9% | — | 20.0% |
Leadership: A New CEO Inherits a Transformed Institution
These results mark the first quarterly filing under incoming Chief Executive John Okulo, who joined from KCB Bank Kenya on 1 May 2026. Okulo succeeds Chege Thumbi, who retires on 30 June 2026 after nine years at the helm. During Thumbi’s tenure, Sidian grew from a subscale Tier 3 lender into a mid-tier institution with KSh 94 billion in assets.
Okulo inherits a bank flush with public sector deposits, a strengthened capital base, and a balance sheet tilted toward government paper. The question his leadership must answer is whether Sidian can convert that funding advantage into loan growth and diversified income streams without compromising the asset quality gains it has worked hard to achieve.
