The merger of Unity Bank Plc and Providus Bank Limited has been approved by the Central Bank of Nigeria (CBN). According to CBN, financial assistance will be provided for the merger.
The apex bank stated that the merger is reliant on CBN’s financial backing in a statement issued on Tuesday by Hakama Sidi Ali, acting director of corporate communications.
The investment will be crucial in meeting Unity Bank’s whole debt to the CBN and other stakeholders, according to the apex bank.
According to the financial regulator: “The Central Bank of Nigeria (CBN) has granted approval for a pivotal financial accommodation to support the proposed merger between Unity Bank Plc and Providus Bank Limited.”
Going further: “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 following 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,” the financial regulator added.
It was also highlighted by CBN that no Nigerian bank is in a similar dangerous situation to Heritage Bank, which was recently liquidated, as reported by BrandSpur banking and finance news desk.
The apex bank stated that: “The CBN remains committed to safeguarding depositors’ interests and ensuring the smooth functioning of the banking sector through proactive measures and strategic interventions.”
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“The CBN’s decision underscores its dedication to maintaining financial stability and promoting confidence in the banking system during this transformative period,” it added.
Utilising their respective advantages, both banks will provide an unparalleled experience.
Providus Bank and Unity Bank said in a joint statement signed by their management that the proposed merger represents a strategic and complementary union that will capitalise on both banks’ strengths to establish a dominant financial institution in the market with presences in retail, corporate, commercial, and digital banking.
The statement holds: “The combination is driven by a shared vision to provide an unparalleled banking experience to our customers. By combining Unity Bank’s extensive branch network and deep-rooted customer relationships with Providus’s digital prowess and innovative spirit, we aim to deliver a seamless blend of traditional and modern banking services.
“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 personalized banking experience,” it added.
Continuing, the banks restated their commitment to upholding the strictest guidelines for financial stability, corporate governance, and client satisfaction.
The banking regulator declared on June 3 that Heritage Bank’s licence had been revoked effective immediately.
According to CBN, the bank’s incapacity to enhance its financial performance was the reason behind the decision, and as a form of support, it is dropping N700 billion for the merger.
Online reports stated that CBN would cancel Unity, Polaris, and Keystone banks’ licenses after the revocation.
On June 4, however, CBN denied the stories’ veracity and stated that it had no intention of cancelling the three banks’ licenses.
