Afreximbank commits $40 million to support Fidelity Bank’s acquisition of Union Bank UK – The Sun Nigeria

African Export-Import Bank (Afreximbank) has announced the disbursement of a $40 million intra-Africa investment facility to Fidelity Bank Nigeria Plc (“Fidelity”) to support Fidelity Bank’s acquisition and recapitalization of Union Bank UK as part of its international expansion program.

The first tranche of the loan, granted in two tranches of USD 20 million each, enabled Fidelity to partially refinance the acquisition of 100% of Union Bank UK, while the second tranche was used to support the recapitalization of the company by injecting additional equity capital into the acquired bank, as approved by the UK authority regulatory.

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.

Commenting on the transaction, Kanayo Awani, Executive Vice President of the Intra-African Trade Bank and Afreximbank Export Development Bank, noted that 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 significant milestone for both institutions, strengthening African ownership and control in the global financial landscape,” Ms. Awani said. “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. This initiative is a testament to our commitment to strengthening intra-African trade, promoting economic stability and realizing the goals of Agenda 2063 for a prosperous and self-reliant Africa.” She added.

Ms. Awani stated that Afreximbank’s bank 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 aims to promote and finance the integration of the African diaspora with the rest of the continent.

She noted that through this facility, Fidelity is expanding its services to the UK, in particular to Africans and African-owned businesses in the UK, including products to support diaspora investment.

As stated by the Chief Executive Officer/CEO of Fidelity Bank, Dr. (Mrs.) Nneka Onyeali-Ikpe: “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 resulted in 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.”

The 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, supporting the integration of the African diaspora into regional and continental supply chains, and enabling small and medium-sized enterprises across continent to improve their export competitiveness and light manufacturing capabilities for export.