The Central Bank of Nigeria has granted the merger of Providus Bank and Unity Bank.
This was disclosed in a statement signed by the acting Director, Corporate Communications, Hakama Sidi, on Tuesday, adding that the action is in line with the provisions of Section 42 (2) of the CBN Act, 2007.
This is the first merger authorised following the increase of capital base requirements of banks.
The CBN also approved the crucial financial accommodation to support the proposed merger between Unity Bank and Providus Bank.
This aims to reduce potential systemic risks and strengthen the stability of Nigeria’s financial system.
The 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.”
There have been reports indicating a potential takeover of Unity Bank by Providus for over a year.
This development was a bold attempt to fortify ProvidusBank’s capital base in the face of the ongoing recapitalization problem.
The CBN recently revoked the banking licence of Heritage Bank Plc with immediate effect, citing the bank’s persistent financial instability and regulatory violations
