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How UBA wants to redefine African flow of investment with UK launch

L-R: Paul Gutmann, CEO, UBA UK; Aliko Dangote, president, Dangote Group; Tony Elumelu, chairman, UBA Group; Kennedy Uzoka, GMD/CEO, UBA Group; Victor Osadolor, CEO, UBA Africa.
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Three weeks after the UBA group launched its operations in Mali, the bank repeated the feat in London, the global financial centre where UBA UK was formally launched in the United Kingdom. This was sequel to the authorization of the Prudential Regulation Authority (PRA) and the Financial Conduct Authority(FCA) for UBA UK Limited to carry out full scale wholesale banking across the United Kingdom.

At an event in London where UBA UK was formally introduced to business leaders across Europe and Africa, emphasis was on how the new subsidiary could galvanise trade and commerce between Europe and Africa.

The value of European trade with Africa is quite significant, and has been opened up as a viable market to be explored by UBA. The European Commission reported in 2017, EU imports of goods from Africa (which is mostly driven by primary goods) stood at EUR 131 billion, although they had been as high as EUR 187 billion in 2012. On the other hand, European exports to Africa as at 2017 stood at EUR 149 billion, with 72 per cent of these goods exported from the EU to Africa being manufactured goods.

Even the UK on its own was the 7th highest European exporter of Goods to Africa, with a value of EUR 9.77 billion, and was the 5th European importer of goods from Africa with EUR 14.68 billion, having a trade deficit of EUR 4.9 billion with the continent. The British Office for National Statistics (ONS), in its 2016 report on trade and investment relationship with Africa, also noted that UK’s trade balance with Africa returned to deficit in 2012 following an increase in imports.

Brexit of course, remains topical particularly when considered from the economic perspective of potential transactions between Europe and Africa. However, for UBA, Patrick Gutmann, CEO, UBA UK explained “whether Brexit happens or not, the impact is minimal, and the reason is because we are not a bank that deals across European borders as such.”

“We are a bank that deals with the emerging markets and in our case, the African continent, and those flows are not necessarily going to be interrupted by either of brexit or no-brexit,” he said.

With this launch, the UBA Group described it as further consolidation of its unique positioning as the first and only Sub-Saharan African financial institution with banking operations in both the United Kingdom and the United States, thus reinforcing its strong franchise as Africa’s Global Bank, facilitating trade and capital flows between Africa and the world.

Tony Elumelu, chairman, UBA Group, said in an interview, it is the first time UBA is operating in UK as a full fledged bank. “One thing that is important to us is helping to link our customers to the financial centres of the world. We are the only African bank that operates in the US that is regulated in the US,” Elumelu said.

For him, opening the UK subsidiary is important, because London, traditionally is the financial centre of the world. “To us, we are not just another Nigerian bank operating in the UK, we are Africa’s global bank. I say this because we operate in 20 African countries, and in the US, as it is important to support customers in New York, another financial centre.

According to Elumelu, at UBA’s customer service, most things are done to align with customers’ aspirations and their need to grow. “SMEs need to do well, they want to succeed, they want to do their business and pass it in the right direction, and we are here to support. In the same vein, when the big businesses come, we are coming to support them.”

 

“I feel extremely fulfilled, that UBA is living up to its mantra of Africa’s global bank, that UBA is positioning itself in financial centres to be able to support investors,” he said.

“If you want to be Africa’s global bank, you need to have presence in key financial hubs, and London is one of such,” said Gutmann, the CEO of UBA UK, corroborating the narrative on becoming Africa’s global bank. But, is there space for UBA in the saturated financial market, Gutmann was asked during an interview. Responding in the affirmative, he explained that this would be facilitated on the back of the strength of the UBA group; the client base, flows that the group is involved in, and how the group is supporting its clients.

As Gutmann explained, many of the investment decisions and flows have an angle in London because of the size of the financial centre there. From that perspective, Gutmann said in order to become Africa’s global bank, that supports both investment and trade flows into and out of Africa, then London is a hub UBA needs to be present, and it needs to be strong in it.

According to him, the pan-african footprints UBA already has, clearly sets it apart, from some of the other banks that are already present in London but don’t have the footprints of 20 African countries to leverage on.

Similarly, Kennedy Uzoka, GMD/CEO of UBA group, noted that since Africa is largely import dependent and because there are many Anglophone countries, the trade link between these countries and the United Kingdom is still very strong and will remain like this for quite some time. As Uzoka explained, before UBA got to the UK, and with the kind of license, it had before, it meant that if a business in any of the Anglophone countries is transacting with a partner in England, they had to deal with another bank.

“Today, with our wholesale license, that is now a thing of the past. UBA is interconnecting businesses in Africa with not just United Kingdom but across the world,” he said.

As Uzoka explained, what has been done is to create a UBA one-stop-shop that whether a business is in Ghana, Nairobi, or elsewhere in Africa, by talking to any UBA in their countries, transactions will be consummated without going through any third parties.

“We are taking away that boundary, that barrier that used to exist for Africans, to make their business easy. Truly, we are letting them know it is not just by saying it, but we are making it happen,” he said.

Reiterating the view earlier expressed by Gutmann, Uzoka also explained that, regardless of Brexit or No-Brexit, businesses will always be linked between Africa and Europe, and UBA is positioning to service the flow of cash and investments.

 

CALEB OJEWALE

1 Comment
  1. […] How UBA wants to redefine African flow of investment with UK launch Fri, 15 Mar 2019 Three weeks after the UBA group launched its operations in Mali, the bank repeated the feat in London, the global financial centre where UBA UK was formally launched in the United Kingdom. This was sequel to the authorization of the Prudential Regulation Authority (PRA) and the Financial Conduct Authority(FCA) for UBA UK Limited to carry [] read more… […]

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