- United Bank for Africa secured a license to expand operations in the UK
- UBA has operations in 21 countries, including the U.S. and UK
United Bank for Africa (UK) Limited (UBA:NL -0.85%) secured a wholesale banking license from the Prudential Regulation Authority in the United Kingdom. What impact will this license have on trade finance in the African countries where UBA operates?
Why This Matters: UBA’s expanded operations in the UK shows the growing strength of African capitalism. The bank has operations in the UK and U.S. for several years. The bank plans to use this expanded mandate to increase its facilitation of trade, investor and donor flows to Africa. As well as export flows to the developed markets.
The bank’s plans are opportunistic as the UK seeks to increase its trade relationships in the wake of Brexit. “As we leave the EU, we will build and strengthen ties between British and African businesses and help turn the UK into Africa’s trading partner of choice,” said UK Trade Minister Greg Hands to the Africa All Party Parliamentary Group.
Late last year, the UK’s Department for International Trade pre-approved Nigeria’s Naira currency, enabling the government to guarantee projects by Nigerian companies. Currently, the UK is Nigeria’s fourth largest trade partner with £2.1 billion ($2.95 billion) in imports and £1.4 billion ($1.97 billion) in exports to and from the UK.
What’s Next: The richest man in Africa, Aliko Dangote, chairman of Dangote Industries, announced last year that his company would be investing $25-$50 billion in the petrochemicals industry in the U.S. and Europe. Perhaps the company will use UBA for those transactions as UBA has courted Dangote’s international business since at least 2012.
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