Onome Amuge
Unity Bank shareholders are set to receive N3.18 per share under the terms of a proposed merger with Providus Bank, a price that more than doubles the lender’s last traded value of N1.51. The transaction, if approved, would mark one of the most significant consolidations in Nigeria’s banking sector since the Central Bank of Nigeria (CBN) ordered a 10-fold increase in minimum capital requirements last year.
The Federal High Court sitting in Lagos, presided over by Justice D. I. Dipeolu, has directed that a meeting of Unity Bank’s shareholders be convened on September 26 at the OOPL Hotel in Abeokuta to consider and vote on the scheme.
Under the proposal, Unity Bank shareholders will be offered a choice between cash compensation of N3.18 for every ordinary share held, or 18 fully paid shares in Providus Bank for every 17 Unity Bank shares. The scheme also stipulates that Providus Bank’s certificate of incorporation will become that of the enlarged bank, underscoring the dominant role Providus will assume in the transaction.
The merger comes at a crucial time for Nigeria’s financial system. The CBN’s recapitalisation directive, aimed at strengthening banks against inflationary pressures, a fragile economy and the naira’s devaluation, has forced smaller lenders into strategic alliances. Larger institutions such as Access Holdings, Guaranty Trust Holding Company and Zenith Bank have already announced compliance with the new thresholds, leaving mid-tier and smaller players racing to consolidate.
For Unity Bank investors, the offer represents a substantial premium. The bank, which has long faced a weak balance sheet and rising non-performing loans, had seen its share price languish on the Nigerian Exchange. Analysts assert that Providus’s stronger capital position and niche focus in corporate and SME banking could help stabilise Unity’s operations and offer a path to long-term growth.
If approved, the deal will create a mid-sized lender better positioned to serve Nigeria’s increasingly competitive banking landscape. The enlarged entity is expected to focus on retail expansion, SME financing and digital banking, areas where Providus has been building momentum and Unity has an existing customer base.
