CBN approves merger of Unity Bank, Providus Bank
By Seun Ibiyemi
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.
In a statement made available to NewsDirect by the acting Director of Corporate Communications, Hakama Sidi Ali read that the 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.
“Furthermore, it is important to emphasise that no Nigerian bank currently faces a precarious situation comparable to 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.
“The CBN’s decision underscores its dedication to maintaining financial stability and promoting confidence in the banking system during this transformative period,” the statement read.
Recall that the Central Bank of Nigeria (CBN) recently revoked the banking licence of Heritage Bank Plc with immediate effect, citing the bank’s persistent financial instability and breach of regulatory requirements.
The decision is part of the CBN’s mandate to maintain a sound financial system in Nigeria, as outlined under Section 12 of the Banks and Other Financial Institutions Act (BOFIA) 2020.
In a statement, the CBN disclosed that Heritage Bank had failed to adhere to Section 12 (1) of BOFIA 2020, which necessitated regulatory intervention.
Despite multiple supervisory measures prescribed by the CBN to mitigate the bank’s declining financial performance, Heritage Bank has been unable to improve its financial health.
The bank’s continuous underperformance poses a significant threat to financial stability, compelling the CBN to revoke its licence.
The CBN also emphasised that the action is crucial to reinforce public confidence in the Nigerian banking sector and to ensure the integrity and soundness of the financial system.
