The Central Bank of Nigeria (CBN) has announced it has finally approved the proposed takeover of Unity Bank by Providus Bank Limited with an asset ownership 80-20 percent (80 percent Providus, 20 percent Unity Bank).
The approval was contained in a statement by the CBN’s Acting Director of Corporate Communications, Hakama Sidi, on Tuesday, who said the intervention aims to strengthen Nigeria’s financial system and prevent potential systemic risks.
The country’s apex bank said the merger is dependent on the financial support provided by the CBN and the funding is expected to play a vital role in addressing Unity Bank’s total obligations to the Central Bank and other stakeholders. Reports say the financial accommodation included ₦700 billion to the new entity, structured as a 20-year term loan.
The loan will reportedly be priced at an interest rate of Monetary Policy Rate (MPR) minus 11 per cent, subject to a minimum of six per cent.
The CBN says its decision aligns with the provisions of Section 42 (2) of the CBN Act, 2007.
“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 organization,” the statement read.
Reacting to the news in a joint statement, Providus Bank and Unity Bank declared that they were pleased that the CBN approved the framework for their merger, “marking a significant milestone in the evolution of our respective institutions.”
The statement said, “This proposed merger represents a strategic and complementary union that will leverage the strengths of both banks to create a leading financial institution in the industry with footprints in retail, corporate, commercial, and digital banking.”
Unity Bank, with its rich legacy of over 18 years, had established a robust retail banking network, comprising more than 220 branches nationwide.
“With a strategic niche in the agricultural business, our commitment to delivering exceptional customer service and a comprehensive range of financial products has earned us the trust and loyalty of millions of customers,” the bank said.
Providus Bank, on the other hand, is renowned for its innovative approach to banking, boasting a strong digital footprint, innovative products, high quality service culture and strong focus on helping customers grow.
It said, “As a fast-growing new-generation bank, Providus Bank has consistently pushed the boundaries of technology to deliver cutting-edge financial solutions that cater to the evolving needs of modern consumers.
“The combination is driven by a shared vision to provide an unparalleled banking experience to our customers.”
The statement added, “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 further stated, “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.
“Completion of the proposed merger is subject to the final approvals of the respective boards, shareholders, and relevant regulatory approvals.”