The Central Bank of Nigeria (CBN) has approved the merger of Providus Bank and Unity Bank, following Section 42 (2) of the CBN Act, 2007.
The approval was announced in a statement by Hakama Sidi, the acting Director of Corporate Communications.
The merger was prompted by a directive from the CBN to increase the banks’ minimum capital base.
To support the merger, the CBN has also granted financial assistance to ensure the stability of Nigeria’s financial system and to prevent potential systemic risks.
The statement highlighted, “The Central Bank of Nigeria has approved financial support for the proposed merger between Unity Bank Plc and Providus Bank Limited.
This move aims to stabilize Nigeria’s financial system and mitigate systemic risks.
The financial support from the CBN will address Unity Bank’s total obligations to the Central Bank and other stakeholders, in line with Section 42 (2) of the CBN Act, 2007. This arrangement is crucial for the financial health and operational stability of the post-merger entity.”
For over a year, Providus Bank Limited has shown interest in acquiring a majority stake in Unity Bank Plc as part of its expansion plan and to strengthen its capital base amidst current recapitalization challenges.
Unity Bank began operations in January 2006, following the merger of nine banks specializing in investment, corporate, and retail banking.
