CBN approves Unity Bank, Providus Bank merger to boost financial system resilience

Business a.m.

The Central Bank of Nigeria (CBN) has granted approval for the merger of Providus Bank and Unity Bank, a move set to further consolidate the Nigerian banking sector. 

The apex bank disclosed the development in a statement issued on Tuesday and signed by Hakama Sidi, its acting director of corporate communications. The CBN explained that the decision to permit the merger was made in accordance with the provisions of Section 42(2) of the CBN Act, 2007.

Furthering its efforts to maintain a stable financial system, the CBN also disclosed that it has approved a significant financial facility to facilitate the proposed merger between Unity Bank Plc and Providus Bank Limited. The decision to provide financial support for the merger, it stated, is aimed at enhancing the resilience of the Nigerian financial system, by averting any potential systemic risks that might arise as a result of the merger between the two banks.

The CBN’s statement read:“The Central Bank of Nigeria has granted approval for a pivotal financial accommodation to support the proposed merger between Unity Bank Plc and Providus Bank Limited. 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. The fund 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.”