Sidian is a trade finance bank that has grown its balance sheet by more than 70% from KES19bn in December 2012 to KES43bn as of March 2022 following Centum’s investment
Kenya-based Centum Investment Company has agreed to divest its entire 83.4% stake in Sidian Bank to Nigerian lender Access Bank for KES4.3bn ($36.7m).
Centum has 83.4% of the issued shares of Sidian, directly in its own name and indirectly through its wholly-owned subsidiary, Bakki Holdco.
Sidian is a trade finance bank that has grown its balance sheet by more than 70% from KES19bn in December 2012 to KES43bn as of March 2022 following Centum’s investment.
Furthermore, Sidian’s profits were improved since 2019, with a profit of over KES486m reported in 2021 while NPL Ratio improved from 20.6% in 2017 to 11.7% as of March 2022, compared to Kenya’s current national average of 14%.
Under the agreement, Sidian will be combined with Access Bank’s subsidiary in Kenya to establish a stronger banking entity to serve the Kenyan market.
The closing of the deal is subject to receipt of customary regulatory approvals in Kenya and Nigeria.
Centum CEO Dr James Mworia said: “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.
“It advances Centum’s vision to be Africa’s foremost investment channel and bolsters our track record of attracting foreign investors into Kenya and the region to invest in extraordinary enterprises.
“The proceeds from the sale will enable Centum to continue investing across strategic sectors in Kenya and the East African region.
“We are particularly pleased to be exiting Sidian at a price which represents a 59% premium to the book value and confirms the deep discount embedded in the valuation of the assets in our book.”
Access Bank CEO Roosevelt Ogbonna said: “The transaction builds on our earlier acquisition of former Transnational Bank Plc (now Access Bank Kenya) and underscores our drive to strengthen our presence in Kenya which is a key African market that fits into our core strategic focus for geographic earnings, growth and diversification.
“Through this transaction and the subsequent merger with Access Bank Kenya, we will be well placed to promote regional trade finance and other cross border banking services, by leveraging our presence in key global trade corridors and the broader East African Community and COMESA regions.
“The proposed combination with Access Bank Kenya would undoubtedly catapult us to a strong Tier 2 bank contender in the Kenyan market with enhanced capacity to play a more impactful role in the growth of the Kenyan economy and deliver increased profitability to our shareholders.”