Sidian Bank has defied the odds and the turbulent economic climate to post a staggering 470% jump in net profit for the third quarter of 2025. The lender raked in KSh 1.47 billion, up from a modest KSh 257.6 million the previous year, signaling a dramatic turnaround fueled by a tactical retreat to government securities.

This is not a story of luck; it is a masterclass in risk aversion. While other tier-3 lenders struggled with non-performing loans in a high-inflation economy, Sidian’s management pivoted aggressively. The bank’s financials reveal a deliberate move away from risky customer lending toward the safety of state paper.

The Numbers Don’t Lie

The bank’s balance sheet transformation is radical. Total operating income nearly doubled, surging 92.6% to hit KSh 5.63 billion. This war chest was built not on the backs of small traders, but on smart treasury management.

• Government Securities Surge: Holdings in government paper skyrocketed by 157% to KSh 40.06 billion. The bank effectively became a major creditor to the state, shielding itself from the default risks plaguing the private sector.
• Stagnant Loan Book: In a telling move, loans to customers remained virtually flat at KSh 25.10 billion. The message is clear: in this economy, lending to the government is the only safe bet.
• Deposit Growth: Customer confidence remains high, with deposits growing by 43% to KSh 77.96 billion, providing the liquidity needed to fund these massive bond purchases.

A Cautionary Tale for Borrowers?

While shareholders will be popping champagne, the strategy raises uncomfortable questions for the credit-starved private sector. "When banks become bond traders, small businesses starve," notes financial analyst Harry Njuguna. Sidian’s shift mirrors a sector-wide trend where the "crowding out" effect is becoming tangible.

However, for a bank that was once struggling to find its footing, this "safe haven" strategy has delivered undeniable results. The challenge for 2026 will be sustainability: can they maintain this momentum if interest rates on government paper start to cool? For now, Sidian is laughing all the way to the bank—literally.