Afreximbank: We provided $40m to facilitate Fidelity Bank’s acquisition of Union Bank UK

The African Export-Import Bank (Afreximbank) says it disbursed a $40 million intra-African investment facility to Fidelity Bank Nigeria Plc.

According to a statement on June 10, the facility would support Fidelity’s acquisition and recapitalisation 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 percent 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 United Kingdom’s regulator,” the statement reads.

“With this acquisition, Fidelity Bank is able to birth 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, Kanayo Awani, executive vice-president of intra-African trade bank and export development bank at Afreximbank, said the disbursement was part of the company’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,”Awani.

“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.”

Awani also said Afreximbank’s acquisition strategy empowers 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 added.

She said through the facility, Fidelity was extending its services to the UK and to Africans and African-owned businesses in the UK, including products to support diaspora investments.

On her part, Nneka Onyeali-Ikpe, the chief executive officer (CEO) of Fidelity Bank, thanked Afreximbank for supporting “our expansionary initiatives for international growth”.

She said “this good outcome” was produced as a result of the strong partnership between the two institutions over the years.

“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 said.

Afreximbank also said 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.