SBM Bank posts Sh591m profit on 33pc income growth

Bhartesh Shah, Chief Executive Officer of SBM Bank Kenya. [File, Standard]

SBM Bank Kenya profit after tax rose to Sh591 million in the nine months to September 30, 2026, driven by higher income from loans and transactions, a sharp drop in bad loans and slower cost growth.

The Kenyan subsidiary of Mauritius-based SBM Group said its total income jumped by more than a third (33 per cent) to Sh5.444 billion.

This came as its net interest income, the core earnings from lending, grew by 29 per cent to Sh3.443 billion, while non-funded income rose 39 per cent to Sh2.001 billion.

Transactional income surged by 95 per cent and trade finance commissions climbed by 98 per cent, reflecting what the bank termed progress in deepening everyday banking and business relationships.

A sharp improvement in credit quality was another driver of the profit surge. The non-performing loan (NPL) ratio fell to 16.9 per cent at September 30, 2026, from 32.3 per cent a year earlier and 17.3 per cent as at June 30, 2026, a 15.4 percentage point year-on-year reduction.

The bank booked a net impairment charge of Sh418 million for the period as it continued provisioning and write-downs on legacy loans.

Loans underwritten since May 2024, when CEO Bhartesh Shah took office, carry an NPL ratio of just 1 per cent, a separate measure the bank highlighted as evidence of tighter underwriting.

“We are working on the legacy loan book while building a healthier portfolio for the future,” Shah said. “The one per cent NPL ratio on loans underwritten since May 2024 is encouraging. Our responsibility is to sustain that discipline as the portfolio matures and lending grows.”

Cost discipline also supported the bottom line. Operating costs increased 12 per cent, well below the 33 per cent rate of income growth, helping widen the margin.

Customer deposits rose 29 per cent year-on-year to Sh97.3 billion, while net loans and advances grew 23 per cent to Sh56.5 billion, signalling stronger customer confidence and a growing loan book.

Attention now turns to larger tier-one lenders to see whether the sector's stellar run extends into the third quarter.

Banks have been outliers in Kenya's economy, posting strong earnings at a time when other sectors, including manufacturing, retail and agriculture, have been slowing under pressure from weak demand, high borrowing costs and subdued private-sector credit growth.

The divergence has raised questions about how long the sector can sustain its momentum.

SBM's results offer an early signal. Focus now shifts to tier-one lenders including KCB, Equity, Co-operative Bank of Kenya (Co-op Bank) and Absa Kenya, whose third-quarter earnings will show whether the sector's outperformance is broad-based or concentrated in smaller, turnaround stories like SBM.

The bank completed a new core banking upgrade and a loan-origination platform, investments it says will support consistent credit decisions and faster turnaround times.

SBM Bank Kenya, which entered the Kenyan market in 2017 and now operates 34 branches, serves retail, SME and corporate clients.