Afreximbank Gives Fidelity Bank $40m for Union Bank Acquisition

June 10, 2024
Nneka Onyeali-Ikpe Fidelity Bank MD

By Adedapo Adesanya

The African Export-Import Bank (Afreximbank) has transferred $40 million to Fidelity Bank Plc to support its acquisition and recapitalisation of Union Bank United Kingdom.

The purchase of the UK-based bank is part of Fidelity Bank’s international expansion programme to provide correspondent banking and offshore banking services to African banks and serve the banking needs of Africans in the diaspora.

Afreximbank provided the facility in two tranches of $20 million each, the first tranche of the facility enabled Fidelity to part-refinance the acquisition of a 100 per cent equity stake in Union Bank UK, while the second tranche was used to support its recapitalisation via the injection of additional equity into the acquired bank, as approved by the UK banking regulator.

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.

The parties also said it would support the integration of the African Diaspora into regional and continental supply chains and enable small and medium-sized enterprises across the continent to improve their export competitiveness and light export manufacturing capabilities.

Commenting on the transaction, Mrs Kanayo Awani, Executive Vice President, Intra-African Trade Bank and Export Development Bank, Afreximbank, 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.”

“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,” she added.

She noted that, “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.”

Mrs Awani also stated that Afreximbank’s Bank Acquisition Strategy empowers African entities to acquire financial assets divested by foreign entities in Africa and the diaspora.

She noted that, through the facility, Fidelity was extending its services to the UK, in particular, to African and African-owned businesses in the UK, including products to support Diaspora investments.

On her part, the MD/CEO of Fidelity Bank, Mrs Nneka Onyeali-Ikpe, said, “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.”

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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