Afreximbank supports Fidelity Bank’s acquisition of Union Bank with USD 40 million

Afreximbank has disbursed $40 million under the Intra-African Investment Facility to Fidelity Bank Nigeria Plc to support Fidelity Bank’s acquisition and recapitalization of Union Bank United Kingdom.

A statement on Monday by Vincent Musumba, communications and events manager at Afeximbank, said the acquisition was part of Fidelity Bank’s international expansion.

Musumba said the facility was made available in two tranches of $20 million each.

He said the first tranche of the loan enabled Fidelity to partially refinance its acquisition of a 100% stake in Union Bank UK.

Musumba said the second tranche was used to support the recapitalization of the bank through the infusion of additional capital into the acquired bank, as approved by the UK regulator.

“With this acquisition, Fidelity Bank can create a new pan-African financial institution capable of providing correspondent banking and offshore banking services to banks in Africa and serving the banking needs of Africans in the diaspora.

“This acquisition is expected to contribute to Africa’s economic growth and development by increasing intra- and extra-Africa trade finance and trade flows between Nigeria and the UK.

“It will also 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 manufacturing capabilities for export.”

Musumba quoted Kanayo Awani, executive vice president of the Intra-African Trade Bank and Export Development Bank at Afreximbank, who said the loan disbursement was part of Afreximbank’s efforts to promote African capital control and ownership while improving intra-African trade and investment.

“The acquisition of Union Bank UK by Fidelity Bank was consistent with Afreximbank’s intra-Africa investment facility. This was a milestone for the institution, strengthening African ownership and control in the global financial landscape.

“By supporting this strategic transaction, we are not only strengthening Nigeria’s banking sector, but also supporting greater financial integration between Africa and its diaspora.”

Awani said the initiative is a testament to Afreximbank’s commitment to strengthening intra-African trade, promoting economic stability and realizing the goals of Agenda 2063 for a prosperous and self-reliant Africa.

She said Afreximbank’s bank acquisition strategy enabled African entities to acquire financial assets divested by foreign entities in Africa and the diaspora.

“It is also in line with the bank’s diaspora strategy, which aims to promote and finance the integration of the African diaspora with the rest of the continent.”

Awani said that through this facility, Fidelity is expanding its services to the UK, in particular to Africans and African businesses in the UK, including products that support diaspora investments.

Musumba quoted Dr. Nneka Onyeali-Ikpe, Managing Director/CEO, who said we are very grateful to Afreximbank for supporting our expansive international growth initiatives.

“It is indeed the result of the strong partnership between the two institutions over the years that has delivered such a good result.

“Afreximbank’s refinancing of Union Bank (UK)’s acquisition will unlock additional value and help create a scalable and more sustainable service franchise that will support African trading businesses and diaspora banking.”