End of an era as Kirubi family exits Sidian Bank in multi-billion deal

The estate of the late tycoon and industrialist Chris Kirubi has exited the remaining family interest in Sidian Bank.

The move concludes a complex, multi-stage divestiture that marks the end of an era for the Kirubi-backed Centum Investment Company Plc, which now holds no further banking assets.

Centum announced on Thursday that it had completed the sale of its entire equity stake in Bakki Holdco Ltd, the licensed non-operating holding company through which it held its interest in the mid-tier lender. 

 In a formal notice to shareholders and the investing public, signed by Group Chief Executive James Mworia, the company confirmed the transaction had been finalised following the receipt of necessary approvals from the Central Bank of Kenya (CBK) and the Competition Authority of Kenya.

"Centum Investment Company PLC ('Centum') hereby notifies its shareholders and the investing public of the successful completion of the sale of its entire equity stake in Bakki Holdco Ltd ('Bakki'), a licenced non-operating holding company that served as the holding vehicle for Centum's interest in Sidian Bank Limited," the notice read in part.

Centum held 50 per cent of the issued shares of Bakki, which in turn owned 27.2 per cent of Sidian Bank Limited. "Consequently, and upon finalisation of post-completion filings, Bakki Holdco Limited will cease to be a subsidiary of Centum," the statement added.

The transaction severs the last formal link between the investment firm and the banking sector, closing a chapter for a bank with deep roots in Kenya's financial services evolution. 

Founded in 1984 as K-Rep Bank, the institution began as a microfinance project supported by USAID and World Education Inc, focusing on developing small-scale businesses in the informal sector.

It was licensed as a full commercial bank in 1999 before undergoing a significant transformation in the mid-2010s.

Centum's relationship with the bank, then known as K-Rep Microfinance Bank, began modestly in 2004 with the acquisition of a 1.66 per cent minority stake. 

The real pivot came in November 2014, when Centum seized majority control, absorbed K-Rep as a subsidiary, and lifted its stake to approximately 74 per cent. 

Two years later, K-Rep was rebranded as Sidian Bank on 4 April 2016 for Sh500 million, a process aimed at shedding its microfinance image and reflecting its new corporate ownership structure. 

The Kirubi family's direct association with the lender ran deep. His daughter, Mary-Ann Musangi, served on Sidian's board for eight years, stepping down in 2023 to avoid a potential conflict of interest following her husband's nomination as CBK chair.

Mworia framed the disposal in forward-looking terms, describing the exit as "an important milestone in Centum's portfolio management strategy, aimed at strengthening the group's liquidity position and reallocating capital toward new growth investment opportunities".

Sidian has grown significantly under its evolving ownership.

According to its latest annual report, the bank had expanded its customer base to hold Sh44.4 billion in deposits as of December 31, 2024, up from Sh27.6 billion a year earlier, supported by a network of 47 branches.

Total assets stood at Sh60.1 billion at the end of 2024. By September 2025, the Central Bank had formally reclassified Sidian as a medium-sized bank, with assets reaching Sh94.8 billion and nine-month profit after tax hitting Sh1.4 billion.

The path to Centum's complete exit has been protracted. An initial attempt to sell its entire 83.43 per cent stake to Nigeria's Access Bank for Sh4.3 billion collapsed in January 2023 after conditions precedent were not met.

That failure forced Centum into a series of piecemeal transactions and carried a direct cost: Sidian was forced to pay Sh444 million to Danish development financier IFU to settle a conversion right triggered by the attempted sale, a charge that pushed the bank into losses.

In October 2023, a consortium of local firms—Pioneer General Insurance, Wizpro Enterprises, and Afram Ltd acquired a 38.91 per cent stake, reducing Centum's holding to 44.52 per cent and ending Sidian's status as a subsidiary.

Further sales followed. In May 2024, Centum sold 50 per cent of Bakki Holdco to Kenbe Investments, a vehicle owned by former Ugandan attorney-general William Byaruhanga, for Sh1.032 billion.

A Sh1.9 billion rights issue completed by Sidian in December 2024 diluted Bakki's position further after Centum and Byaruhanga both declined to participate.

The most recent filings show Sidian's shareholder register has been reshaped entirely, with Afram's James Maina Muthoni emerging as a significant shareholder with a 21.4 per cent stake.

The final financial details remain undisclosed. Centum expects "the financial effects of the transaction will be reflected in Centum's next financial reporting cycle for the financial year ending 31 March 2026," with the company anticipating "the sale to result in a modest financial gain relative to the previously reported carrying value of Bakki Holdco Ltd in Centum's books".

Market estimates suggest total recoveries from the multi-year divestiture could be about Sh5.2 billion, against a total investment of around Sh4.7 billion across 22 years.

For Centum and the Kirubi family, the exit brings a definitive closure to a two-decade involvement in the Kenyan banking sector.