CBN Approves Unity Bank, Providus Bank Merger

By Adedapo Adesanya

The Central Bank of Nigeria (CBN) has approved the proposed merger between Unity Bank Plc and Providus Bank Limited.

According to the Acting Director of Corporate Communications at the apex bank, Mrs Sidi Ali Hakama, this strategic move is designed to bolster the stability of Nigeria’s financial system and avert potential systemic risks.

The merger is contingent upon the financial support from the CBN which will be instrumental in addressing Unity Bank’s total obligations to the central bank and other stakeholders.

“It is unequivocal to state that the CBN’s action is in accordance with the provisions of Section 42 (2) of the CBN Act, 2007.

“This arrangement is crucial for the financial health and operational stability of the post-merger organisation,” the statement added.

The CBN also eased worries about the health of Nigerian banks after Heritage Bank liquidated about two months ago.

In June, there were reports that the banking sector watchdog intends to withdraw the licences of the three financial institutions including Unity Bank, Keystone, and Providus Bank after it stopped Heritage Bank from carrying out financial services in the country.

The action of the CBN sparked speculations that Unity Bank, Keystone Bank, and Polaris Bank might be the next to get the sledgehammer because of their books.

But the CBN denied planning to take such an action of the trio, discrediting a notice purporting such.

“Furthermore, it is important to emphasise that no Nigerian bank currently faces a precarious situation comparable to that of Heritage Bank, which was recently liquidated.

“The CBN remains committed to safeguarding depositors’ interests and ensuring the smooth functioning of the banking sector through proactive measures and strategic interventions,” it added in Tuesday’s notice.

The CBN said its decision underscores its dedication to maintaining financial stability and promoting confidence in the banking system during the transformative period.

Reacting to the merger, Unity Bank in a statement to Business Post said, “Our customers will benefit from an expanded suite of products and services, greater convenience, and improved access to banking solutions across various channels. The integration of our digital platforms will offer enhanced security, faster transactions, and a more personalized banking experience.”