The African Export-Import Bank (Afreximbank) has announced a $40 million disbursement from its intra-African investment facility to Fidelity Bank Nigeria Plc. This funding will support Fidelity Bank’s acquisition and recapitalization of Union Bank UK, aligning with its international expansion strategy.
Provided in two tranches of $20 million each, the first tranche of the facility enabled Fidelity to part-refinance the acquisition of a 100 percent equity stake in Union Bank UK. The second tranche was used to support its recapitalization through the injection of additional equity into the acquired bank, as approved by the United Kingdom’s regulator.
With this acquisition, Fidelity Bank is set to establish 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, noted that the disbursement 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,’ Awani said. ‘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,’ she added.
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 seeks to promote and finance the integration of the African diaspora with the rest of the continent. Through the facility, Fidelity is extending its services to the UK, particularly to Africans and African-owned businesses, including products to support diaspora investments.
Nneka Onyeali-Ikpe, Managing Director and Chief Executive Officer of Fidelity Bank, expressed gratitude for Afreximbank’s support. ‘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 sustainable service franchise that will support trade businesses in Africa and diaspora banking.’
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. It supports the integration of the African diaspora into regional and continental supply chains and enables small and medium-sized enterprises across the continent to improve their export competitiveness and light export manufacturing capabilities.
