Unity Bank, Providus Bank Join Forces: CBN Approves Merger

CBN Approves Historic Merger of Unity, Providus Banks

CBN clears path for unity, Providus Bank merger...

CBN approves Unity Bank and Providus Bank merger, provides financial support for stability, and reassures public of no similar financial difficulties in Nigerian banks.

The Central Bank of Nigeria (CBN) has given the green light to the proposed merger between Unity Bank Plc and Providus Bank Limited, paving the way for the creation of a stronger and more resilient financial institution.

In a statement released on Tuesday, the CBN confirmed its approval of the merger, with Mrs. Hakama Sidi Ali, Acting Director of Corporate Communications, signing off on the announcement. This development marks a significant milestone in the consolidation of the Nigerian banking sector.

“The Central Bank of Nigeria (CBN) has granted approval for a pivotal financial accommodation to support the proposed merger between Unity Bank Plc and Providus Bank Limited,” the statement said.

“This strategic move is designed to bolster the stability of Nigeria's finan system and avert potential systemic risks.”

The Central Bank of Nigeria (CBN) has made it clear that the approved merger between Unity Bank Plc and Providus Bank Limited is conditional upon receiving necessary financial support. This support is crucial for ensuring the financial stability and operational viability of the merged entity.

Although the CBN's statement did not specify the amount of financial support approved, it emphasized that this support is vital for settling Unity Bank's outstanding obligations to the CBN and other stakeholders. The financial assistance will play a key role in putting the merged bank on a solid footing.

The CBN's approval of the merger is in accordance with Section 42 (2) of the Central Bank of Nigeria Act, 2007, which empowers the apex bank to take such actions in the interest of financial stability and soundness.

“The merger is contingent upon the financial support from the CBN. The fund will be instrumental in addressing Unity Bank's total obligations to the Central Bank and other stakeholders,” the statement added.

“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 Central Bank of Nigeria (CBN) has reassured the public that no Nigerian bank is currently experiencing financial difficulties comparable to those that led to the liquidation of Heritage Bank. This statement aims to alleviate concerns and maintain confidence in the banking sector.

The CBN reaffirmed its commitment to protecting depositors' interests and ensuring the stability of the banking system through prompt interventions and strategic measures. This comes after the recent revocation of Heritage Bank Plc's banking license due to its prolonged financial instability and non-compliance with regulatory requirements, which necessitated swift action to prevent further risks to the financial system.

The CBN's action was taken in fulfillment of its statutory responsibility to ensure a stable and robust financial system in Nigeria, as enshrined in Section 12 of the Banks and Other Financial Institutions Act (BOFIA) 2020, which empowers the apex bank to take necessary measures to maintain financial stability and soundness.