SBM Bank Kenya posted a 171.3 percent surge in profit before tax for the first half of 2026, reaching Sh548 million for the six months ended June 30, up from Sh202 million in the same period last year. The lender credited the growth to stronger lending, rising customer deposits, and a marked improvement in loan quality across its book.
Operating profit told an even sharper story, climbing 279 percent to Sh852 million. That kind of jump signals more than incremental improvement. It points to a bank that has spent the past two years deliberately restructuring how it operates, and is now seeing that work show up clearly in the numbers.
Where the Growth Came From
Net interest income rose to Sh2.2 billion during the half, while non-funded income grew 54 percent to Sh1.39 billion, driven by higher customer activity and transaction volumes. Operating income overall grew 35 percent, comfortably outpacing the 12 percent rise in operating expenses, a combination that generated strong positive operating leverage even as the bank continued investing in technology and infrastructure.
Customer deposits increased 23 percent year on year to Sh94 billion, translating into a 66 percent rise over two years. Net loans and advances grew 18 percent to Sh54.1 billion, which the bank attributed to expanded lending to both households and businesses across Kenya.
A Dramatic Improvement in Loan Quality</h2
One of the more striking figures in the results is the bank’s Gross Non-Performing Loan ratio, which improved to 17.3 percent from 32.4 percent a year earlier. That is close to a halving of bad debt exposure within twelve months, a scale of cleanup that reflects deliberate portfolio restructuring rather than a passive market shift.
Total assets grew to Sh109.9 billion and shareholders’ equity strengthened to Sh11.1 billion, with capital and liquidity levels remaining comfortably above Central Bank of Kenya regulatory requirements throughout the period.
A Global First on Core Banking Technology
Alongside the financial results, SBM Bank Kenya confirmed a significant technology milestone. The bank successfully upgraded its core banking platform to Oracle FLEXCUBE 14.8, making it the first bank globally to go live on that specific version.
Being first to deploy a major core banking upgrade carries both opportunity and risk. It signals confidence in the bank’s technical execution capacity, and typically brings efficiency gains in transaction processing, digital banking, and payments infrastructure that support exactly the kind of transaction-led growth SBM has been chasing under its current strategy.
What the CEO Said
SBM Bank Kenya Chief Executive Officer Bhartesh Shah framed the results as validation of a two-year turnaround effort. “These results are about far more than stronger profitability. They demonstrate the continued strengthening of our institution,” he said, adding that the bank has deliberately focused on building higher quality earnings, disciplined risk management, and a resilient balance sheet.
The H1 2026 numbers build directly on a strong first quarter, where the bank posted profit before tax of Sh246 million, up from just Sh12 million in Q1 2025. That quarter also saw the bank make PesaLink transfers free from May 1, 2026, part of a deliberate push to position itself as a payments-led bank built around everyday transaction volume rather than traditional lending margins alone.
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Why This Turnaround Matters
SBM Bank Kenya’s recovery is notable given its history. The bank took on the assets and liabilities of the defunct Chase Bank, an acquisition that initially presented significant operational challenges. Seeing profit before tax move from Sh12 million in Q1 2025 to Sh548 million for the full first half of 2026 represents a genuine turnaround rather than a one-off good quarter.
For a mid-tier lender competing against Kenya’s dominant “Big Five” banks, this kind of sustained improvement in earnings quality, deposit growth, and asset quality gives SBM Bank Kenya a stronger platform to compete for market share, particularly as the broader banking sector consolidates under new capital requirements pushing smaller lenders toward mergers or acquisition.