Sidian Bank – K-Rep formally rebrands to Sidian Bank
K-Rep Bank has officially rebranded to Sidian Bank in a restructuring process that has cost the firm Sh500 million.
Sidian Bank Managing Director Titus Karanja says in the new restructure the bank has shifted its focus to entrepreneurs as it seeks to move to a top two tier bank in the next three years.
Karanja says the bank is already working on new products suited for entrepreneurs especially Small Medium Enterprises (SMEs) and is seeking to partner with financial technology firms to enhance their offering.
“The first thing we did was actual customer experience vigilance, to see if our staff manifest our new brand, we had to retrain our staff so as they think and act as entrepreneurs,” Karanja said in an Interview with Capital FM Business.
He says easy access to cash for entrepreneurs will be a top priority for the new brand.
“We understand that entrepreneurs need money fast, what we call pre approval loan limits to our customers that involves a thorough look into the income and expenses of the borrower, including a look at the borrower’s credit report and score so as to determine how much our customers maximum loan limit, this will reduce the amount of time entrepreneurs can get cash for their businesses,” he explained.
The firm was in December 2014 acquired by Centum Investments through buying a controlling stake, the firm injected Sh1.2 billion capital out of the required Sh1.6 billion to turn around the bank.
Karanja says the remaining Sh400 million will be put in by minority shareholders by May 2016.
Among the plans include refurbishment of the branch network and upgrade of the core banking system, also in focus will be revitalization of the channel offering through mobile, Internet and agency banking.
The firm is seeking to recruit over 3,000 agents and open five more branches throughout the country.
Sidian Bank is targeting to increase its customer base to 1.5 million in the next three years from the current 300,000.
Centum Investment acquired an additional 66 percent shareholding in K-Rep Bank Limited from several existing shareholders to bring its total stake in K-Rep to 67.54 percent in 2014.
Centum, which has been a minority shareholder in the bank since 2004, stated that the acquisition of the controlling interest in K-Rep is in line with its strategic objective of expanding presence in the financial services sector.
The bank recorded a drop in its full year 2015 net profit to 372 million from Sh514 million made in the year 2015 attributable to high investments.
According to Centum Investment Director Dr Chris Kirubi, the bank had stagnated for so long and Centum had plans to transform it
K-Rep Bank will on 4th April 2016 rebrand to Sidian Bank as its new majority shareholder Centum Investments seeks to boost its image as a fully-fledged bank and shed that of a microfinance institution.
The tier-three lender has received regulatory approval to change its name, actualising its long-held ambition to rebrand its operations to enhance customer confidence and grow its business.
K-Rep, which started as an non-governmental organisation before converting to a micro-financier in 1989 and later to a bank in 1999, mainly lends to small and medium enterprises (SMEs).
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“We advise that K-Rep will change its name to Sidian Bank effective April 4. They will rebrand to incorporate new designs for their customers cheques,” Habil Olaka, Kenya Bankers Association chief executive said in a letter to members.
K-Rep, which was taken over by Centum in November 2014, has 37 branches across the country and had Sh17.9 billion assets as at September 2015 while its profit stood at Sh281.3 million.
Sidian Bank – Rebranding
The rebranding is the last step in an operations overhaul which has included retraining of staff, enhancing customer relations and the core banking system, a process which has been ongoing since the bank was bought out.
“We conducted a brand audit and we found out that there is still a big perception out there is that we are simply a micro lender,” Titus Karanja, the bank’s CEO, told the Business Daily in an interview.
“Whereas we will still be serving the SMEs, the rebranding will align the bank with its new promise to serve an extended portfolio of clients as the fully fledged bank that we are,” he added.
Mr Karanja explained that the rebranding of its branches will take two months, but declined to state how much the exercise will cost the lender.
Sidian Bank ATM Cards
The bank will, at its cost, replace K-Rep-branded ATM cards for existing customers over three months while clients with the bank’s old cheque books will continue using them for another six months.
Centum in October injected Sh1.2 billion into K-Rep raising the bank’s core capital to Sh3.8 billion, giving it room to increase its loans to customers which as at September stood at Sh12.1 billion. K-Rep is expected to announce its results for the year ended December on Tuesday.
Sidian Bank – News Updates
K-Rep bank announces 28% drop in profit, changes name to Sidian Bank
K-Rep Bank has announced a 27.6 per cent drop in net profit to Sh372 million for the period ending December 31, 2015 ahead of its April 4 plan to change its name to Sidian Bank. The tier-4 lender had posted a Sh514 million profit in the previous financial year.
In the period under review, the bank’s profitability was weighed down by increased non-performing loans in the second quarter. During an investors’ briefing yesterday, the lender’s Managing Director, Titus Karanja, said non-performing loans and advances registered a 107 per cent jump from Sh776 million to Sh1.6 billion.
“This is following tighter loan classification to reflect the overall trends noted in the economy and stricter management of the loan book,” he noted. Interest income grew by 13 per cent to Sh2.7 billion from Sh2.41 billion in the previous financial year. The growth was supported by an increase in loan portfolio.
However, the bank’s operating expenses rose by 15 per cent to Sh1.5 billion. This was attributed to increased investment in automation and number of services.
Investment in IT took the lion’s share of the costs. The bank completed the first phase of a server and telecommunications upgrade at Sh150 million and expects to pump in Sh400 million this year.
The lender is now focusing on shaking off the micro-finance institution image and using a strategic business transformation plan to grow into a tier-II lender by 2019.
In December 2014, Centum Investments acquired a controlling stake in the institution and injected a further Sh1.2 billion in October last year. Having grown shareholder equity by 58 per cent to Sh12.5 billion, the company’s capital adequacy is at 24 per cent against the statutory minimum of 14.5 per cent.
According to Mr Karanja, the bank will spend Sh254 million on expansion. However, he did not disclose how much would be channeled to re-branding. “We are re-engineering the bank from ground up. Since Centum acquired us, we have spent a lot of time focusing on fixing the missing links. This will elevate the bank into a leading SME finance partner,” said Karanja.
The bank will embark on expanding agency networks to 10,000 within the next financial year. Other areas of focus will be to grow mobile banking and its ATM footprint. However, the MD said that the lender is not so keen on growing physical branches. Currently, it has 37 branches and hopes to add three. In three years, the bank hopes to grow customer deposits to Sh100 billion with a Sh6.6 billion net profit.