CBN Approves Financial Support for Unity and Providus Banks Merger

The Central Bank of Nigeria (CBN) has granted financial support to facilitate the proposed merger between Unity Bank Plc and Providus Bank Limited. This crucial endorsement aims to enhance the stability of Nigeria’s financial sector and mitigate potential systemic risks.

In a statement released on Tuesday, Hakama Sidi Ali, the CBN’s acting Director of Corporate Communications, emphasized the significance of the financial accommodation. The support will specifically address Unity Bank’s total obligations to the CBN and other stakeholders, ensuring the smooth integration and operational stability of the new entity post-merger.

“The merger is contingent upon the financial support from the CBN,” the statement read. “This action is in accordance with Section 42 (2) of the CBN Act, 2007. The arrangement is essential for maintaining the financial health of the merged organization.”

The CBN clarified that this measure is a proactive step to safeguard the interests of depositors and maintain confidence in the banking system. The central bank assured the public that no other Nigerian bank is currently facing a situation as critical as Heritage Bank, which was recently liquidated.

This development follows the CBN’s increase in the minimum capital requirements for Nigerian banks, announced in March 2024, highlighting the central bank’s ongoing commitment to strengthening the financial sector.