UBA in Talks With Dangote for Pan-African Alliance

United Bank Africa
UBA's head office in Lagos, Nigeria

United Bank for Africa is in talks with billionaire industrialist Aliko Dangote, for a partnership to provide banking services to his Dangote cement empire in 13 countries, its chief executive said.

Phillips Oduoza told the Reuters Africa Investment Summit in Lagos, Thursday, the move would leverage their overlapping presence across the continent.

UBA is in all of the 14 countries in which Dangote is building cement plants, except for South Africa.


Oduoza said: “We are thinking of a strategic partnership between UBA and Dangote (Cement). We are still at the discussion stage. Thankfully in all countries where he has presence, except one, we also have a presence. We can standardise services.”

Services would include payment collection and short-term financing of cement distributors working with Dangote. Oduoza also said the bank was aiming to grow its loan book across the continent by 15 percent to 100 billion naira ($636 million) in 2012.

Non-Nigerian countries make up 18 percent of UBA’s portfolio, and the aim would be to grow that to 25 percent in the next few years, he said.

He declined to comment on further plans for acquisitions in Africa, saying UBA was in a “consolidation phase” of its assets across the continent.

UBA, like many other Nigerian banks, had a rough time in 2011 with a pre-tax loss of N28.49 billion, driven largely by write downs of bad debts incurred during a banking crisis in 2008/09.

Results published, Wednesday, showed a profit of N10.3 billion, a sign the bank may be bouncing back. UBA was forced to shelve a share sale.

Oduoza said: “The market conditions were not quite favourable, so we decided to put it on hold. We will resume it when conditions are right.”

He said a planned $500 million Eurobond would only happen long after the share sale.