The Central Bank of Nigeria (CBN) has given its stamp of approval for the merger of Providus Bank Limited and Unity Bank Plc. This historic union marks the first merger to be approved following the CBN’s recent mandate to increase minimum capital bases for banks in the country.
The announcement came on Tuesday through a statement signed by Hakama Sidi, the acting director of Corporate Communications at the CBN. The apex bank cited Section 42 (2) of the CBN Act, 2007 as the legal basis for this significant move.
In a show of support for the merger, the CBN has also approved a crucial financial accommodation package.
According to the statement, “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.”
In a joint statement, the management of both banks expressed their commitment to maintaining high standards of corporate governance, financial stability and customer satisfaction throughout the transition process.
“Our customers will benefit from an expanded suite of products and services, greater convenience, and improved access to banking solutions across various channels. The integration of our digital platforms will offer enhanced security, faster transactions, and a more personalised banking experience.
“As we embark on this journey together, we remain committed to maintaining the highest standards of corporate governance, financial stability, and customer satisfaction. Our united team of dedicated professionals will work tirelessly to ensure a smooth transition and continued tradition of excellence in all our operations.
“This combination signifies the beginning of a new chapter in our shared history, one that is filled with promise and potential. We are confident that the combined strength of both entities will create a formidable force in the banking sector, driving innovation, growth, and prosperity for our customers, employees, and stakeholders.
“We extend our heartfelt gratitude to the Central Bank of Nigeria for their consideration and approval and to our customers, employees, and partners for their unwavering support.
“Together, we are poised to achieve greater heights and redefine the future of banking in Nigeria”.
Industry analysts view this merger as a strategic alignment of strengths. Unity Bank, with its extensive network of over 220 branches nationwide and a strong foothold in agricultural business banking, brings to the table a rich legacy of retail banking experience. Providus Bank, known for its innovative approach and strong digital footprint, complements this with cutting-edge financial solutions catering to modern consumers.
The combined entity is expected to create a powerhouse in the banking sector, offering an expanded suite of products and services that blend traditional and modern banking solutions. Customers can anticipate greater convenience, improved access to banking solutions and a more personalised banking experience.