Afreximbank disburses US$40M Investment Facility to Fidelity Bank Nigeria

Afreximbank's Bank Acquisition Strategy aims to empower African entities to acquire financial assets divested by foreign entities in Africa and the diaspora.

The African Export-Import Bank (Afreximbank) has announced the disbursement of a US$40-million Intra-African Investment Facility to Fidelity Bank Nigeria Plc ("Fidelity") to facilitate its acquisition and recapitalization of Union Bank UK. This move marks a significant step in Fidelity Bank’s international expansion strategy.

Investment Details:

Facility Amount: US$40 million, disbursed in two tranches of US$20 million each.

First Tranche: Used to part-refinance the acquisition of a 100% equity stake in Union Bank UK.

Second Tranche: Injected as additional equity into the acquired bank, following approval from the United Kingdom’s regulator.

With the acquisition, Fidelity Bank aims to establish a new pan-African financial institution. This institution will provide correspondent banking and offshore banking services to African banks and cater to the banking needs of Africans in the diaspora.

Significance of the Transaction: Kanayo Awani, Executive Vice President of the Intra-African Trade Bank and Export Development Bank at Afreximbank, emphasized the importance of this transaction in promoting African ownership and control within the global financial landscape. She noted that this move aligns with Afreximbank's strategy to bolster African control of capital and enhance intra-African trade and investment.

"This acquisition supports Nigeria's banking sector and fosters greater financial integration between Africa and its diaspora, furthering the objectives of Agenda 2063 for a prosperous and self-reliant Africa," said Mrs. Awani.

Strategic Goals: Afreximbank's Bank Acquisition Strategy aims to empower African entities to acquire financial assets divested by foreign entities in Africa and the diaspora. This strategy aligns with Afreximbank's Diaspora Strategy, which seeks to integrate the African Diaspora with the continent. Fidelity Bank’s expansion into the UK market will offer banking services to Africans and African-owned businesses, supporting diaspora investments and strengthening trade ties.

Remarks from Fidelity Bank: Dr. (Mrs.) Nneka Onyeali-Ikpe, MD/CEO of Fidelity Bank, expressed gratitude for Afreximbank’s support. She highlighted that this partnership has resulted in a scalable service franchise that will enhance trade businesses in Africa and support diaspora banking.

Economic Impact: The acquisition is expected to stimulate Africa’s economic growth by:

Increasing trade finance and trade flows between Nigeria and the UK.

Integrating the African Diaspora into regional and continental supply chains.

Enabling small and medium-sized enterprises (SMEs) across Africa to improve their export competitiveness and light manufacturing capabilities.

In summary, Afreximbank's investment in Fidelity Bank's acquisition of Union Bank UK underscores a commitment to enhancing intra-African trade, promoting economic stability, and advancing the continent’s self-reliance and prosperity.