Oil price drive away UBA to Angola, South Africa

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From Benjamin a ameh, Lagos

UBA set to abandon Nigeria to save haven Angola, South Africa due to oil price failing

The United Bank for Africa Plc (UBA) plans to expand to Angola and South Africa as Nigeria, its largest market, is pummeled by falling crude oil prices.

The lender will move to the southern African nations as part of its next “phase of expansion,” it’s Chief Executive Officer, Phillips Oduoza said in an interview on with Bloomberg TV Africa in Davos as he didn’t expect oil prices or the naira currency to continue their decline.

However, Nigerian companies and the Lagos-based bank are “adequately protected” against a drop in the value of the naira and the price of oil, Oduoza said. The currency of Africa’s largest economy and crude producer probably won’t be devalued further and loan defaults are unlikely to increase, he said. Angola is the continent’s second-biggest oil producer.

Nigeria is struggling to cope with crude prices that plunged down to more than half in the past six months. The central bank governor along with Policy makers responded by devaluing the currency in November, increasing interest rates to a record 13 per cent and proposing spending cuts.

“We have done quite a lot of hedging and we have applied various financial products to make sure that the bank is adequately protected,” Oduoza said.

“The naira is finding its realistic value,” he said. “I do not think you are going to see any major devaluation, if at all it is going to happen.”

 


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