The Central Bank of Nigeria (CBN) has approved a significant merger between Unity Bank Plc and Providus Bank Limited, aimed at bolstering the stability of Nigeria’s financial system and mitigating potential systemic risks. The announcement was made by Mr. Hakama Sidi Ali, a spokesperson for the CBN, in Abuja.
In an official statement, Mr. Sidi Ali detailed the strategic move: “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 conditional on financial support from the CBN, which will be crucial in addressing Unity Bank’s total obligations to the Central Bank and other stakeholders. The CBN’s intervention aligns with the provisions of Section 42 (2) of the CBN Act, 2007, ensuring the financial health and operational stability of the newly merged entity.
Mr. Sidi Ali emphasized that the CBN’s action is proactive and essential for maintaining the stability of the banking sector. He also clarified that no other Nigerian bank is currently in a situation as precarious as that of Heritage Bank, which was recently liquidated.
“The CBN remains committed to safeguarding depositors’ interests and ensuring the smooth functioning of the banking sector through proactive measures and strategic interventions,” he stated.
The CBN’s decision highlights its dedication to maintaining financial stability and promoting confidence in the banking system during this transformative period. This merger is seen as a critical step in reinforcing the resilience of Nigeria’s financial institutions.
