By Adedapo Adesanya
Several reports suggest that the Central Bank of Nigeria (CBN) may support the merger between Unity Bank Plc and Providus Bank Limited with about N700 billion.
On Tuesday, Business Post reported that the apex bank approved a facility to support the merger between the two financial institutions.
While the CBN never disclosed how much it provided in support, the amount was purported to be N700 billion, as per Tech Cabal.
In July, Unity Bank approached the banking sector regulator for merger approval and financial support at an interest rate of MPR minus 11 per cent, subject to a minimum of 6 per cent.
The payment will begin by 2030 and will happen in 15 equal instalments until maturity.
On Wednesday (today), Unity Bank Plc notified the Nigerian Exchange (NGX) Limited, shareholders, and other stakeholders of the merger approval.
This is according to Rule 17.3 Information Disclosure in the Nigerian Exchange Limited (NGX) Rulebook 2015.
The formal regulatory approval will take further action towards the merger’s completion. This will help Unity Bank Plc meet the CBN’s new recapitalisation framework for banks in Nigeria.
According to the release signed by company secretary, Mr Alaba Williams, the bank would continue to update NGX, shareholders, and other stakeholders on the progress.
The merger is contingent upon the N700 billion 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 CBN said yesterday.
The CBN also eased worries about the health of Nigerian banks after Heritage Bank liquidated some months ago.
