The plans of Fidelity Bank Plc to acquire and recapitalize Union Bank, United Kingdom has gotten the backing of Afrexim Bank as the multilateral financial institution has disclosed that it has disbursed a $40 million intra-African investment facility for the process.
This development was announced in a statement issued by Vincent Musumba, manager, communications and events, Afeximbank, on Monday.
He disclosed that the acquisition was part of Fidelity Bank’s international expansion.
Mr Musumba said the facility was provided in two tranches of $20 million each.
He said the first tranche of the facility enabled Fidelity Bank to part-refinance the acquisition of a 100 per cent equity stake in Union Bank UK.
Mr Musumba said the second tranche was used to support its recapitalization via the injection of additional equity into the acquired bank, as approved by the United Kingdom’s regulator.
“With this acquisition, Fidelity Bank can 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.
“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.
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“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 export manufacturing capabilities.”
Mr Musumba quoted Kanayo Awani, executive vice president, Intra-African Trade Bank and Export Development Bank, Afreximbank, as saying 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 the 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 the diaspora.”
Ms Awani said the initiative was a testament to Afreximbank’s commitment to enhancing intra-African trade, promoting economic stability and driving forward the objectives of Agenda 2063 for a prosperous and self-reliant Africa.
She said 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.”
Ms Awani said 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.
Mr Musumba quoted Nneka Onyeali-Ikpe, managing director/CEO, as saying, “We are very thankful to Afreximbank for supporting our expansionary initiatives for international growth”.
By: Babajide Okeowo
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