The African Export-Import Bank (Afreximbank) has announced the disbursement of a US$40-million Intra-African Investment Facility to Fidelity Bank Nigeria Plc to support the latter’s acquisition and recapitalization of Union Bank UK as part of its international expansion programme.
Provided in two tranches of US$20 million each, the first tranche of the facility enabled Fidelity to part-refinance the acquisition of 100% equity stake in Union Bank UK, while the second tranche was used to support its recapitalization through the injection of additional equity into the acquired bank, as approved by the United Kingdom’s regulator.
A news report on the deal circulated on behalf of the continent’s export-import bank by African Press Organization (APO) Group, indicated that with this acquisition, Fidelity Bank was positioned to create a new pan-African financial institution capable of providing correspondent banking and offshore banking services to banks in Africa and servicing the banking needs of Africans in the diaspora.
Commenting on the transaction, Afreximbank’s Executive Vice President, Intra-African Trade Bank and Export Development Bank, Kanayo Awani, noted that the disbursement of the facility was part of Afreximbank’s effort to promote African control and ownership of capital while improving intra-African trade and investments.
She expatiated: “Fidelity Bank’s acquisition of Union Bank UK aligned with Afreximbank’s Intra-African Investment Facility. It was a significant milestone for both institutions, reinforcing African ownership and control within the global financial landscape.
“By supporting this strategic transaction, we are not only bolstering Nigeria’s banking sector but also fostering greater financial integration between Africa and its Diaspora. This initiative is a testament to our commitment to enhancing intra-African trade, promoting economic stability and driving forward the objectives of Agenda 2063 for a prosperous and self-reliant Africa”, the banker added.
Awani maintained that Afreximbank’s Bank Acquisition Strategy empowered African entities to acquire financial assets divested by foreign entities in Africa and the diaspora. This is also in line with the Bank’s Diaspora Strategy which seeks to promote and finance the integration of the African Diaspora with the rest of the continent.
She pointed out that through the facility Fidelity Bank was extending its services to the UK, in particular, to Africans and African-owned businesses in the UK, including products to support Diaspora investments.
In her remarks, the Managing Director/CEO of Fidelity Bank, Dr. (Mrs) Nneka Onyeali-Ikpe, enthused: ‘We are very thankful to Afreximbank for supporting our expansionary initiatives for international growth. It is, indeed, the result of a strong partnership between the two institutions over the years that has produced this good outcome.
“The refinancing of the Union Bank (UK) acquisition by Afreximbank will unlock additional value and help create a scalable and more sustaining service franchise that will support trade businesses in Africa and diaspora banking”, Onyeali-Ikpe added,
Experts believe that the acquisition is expected to contribute to Africa’s economic growth and development by increasing intra- and extra-African trade finance and trade flows between Nigeria and the UK, supporting the integration of the African Diaspora into regional and continental supply chains and enabling small and medium-sized enterprises across the continent to improve their export competitiveness and light export manufacturing capabilities.
