The Central Bank of Nigeria (CBN) has officially approved the merger between Unity Bank Plc and Providus Bank Limited, marking a significant milestone in the evolution of both financial institutions.
This approval, announced on August 6th, 2024, is designed to bolster the stability of Nigeria’s financial system and avert potential systemic risks. The merger is contingent upon substantial financial support from the CBN, which includes a pivotal financial accommodation totaling ₦700 billion.
This support is structured as a 20-year term loan with a five-year moratorium and an interest rate of six percent.
Unity Bank, with its extensive retail banking network of over 220 branches nationwide and a strategic focus on the agricultural sector, will combine its strengths with Providus Bank's innovative approach to digital banking and high-quality service culture.
The merger aims to create a leading financial institution with a comprehensive suite of products and services, enhanced security, faster transactions, and a more personalized banking experience for customers.
The CBN's intervention is crucial for addressing Unity Bank’s total obligations, including significant debts to the Central Bank and other stakeholders.
The financial accommodation will also be invested in a 20-year Federal Government of Nigeria bond, qualifying as Tier 2 capital and enhancing the new entity's shareholders' fund.
Both banks are now awaiting the approval of the Securities and Exchange Commission (SEC) to finalize the merger.
The combined entity is expected to leverage the strengths of both banks to deliver a seamless blend of traditional and modern banking services, ensuring a smooth transition and continued excellence in all operations.
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