Unity, Providus Banks maintain merger pace amid banking sector recapitalization

Unity Bank Plc and Providus Bank Limited have reaffirmed that their proposed merger remains firmly on course, with integration processes already underway pending final court sanction.

The two lenders disclosed this in a joint statement issued on Wednesday, February 18, following the conclusion of a Court-Ordered Meeting convened to secure shareholder consent for the transaction.

According to the statement, the merger has received critical regulatory approvals, including the endorsement of the Central Bank of Nigeria (CBN), positioning the combined institution to meet the N200 billion minimum capital requirement for banks operating with a national licence.

The banks said shareholder approval was overwhelmingly secured at the meeting, while the Securities and Exchange Commission (SEC) has issued a “no objection” clearance, affirming compliance with capital market and corporate governance rules.

They dismissed media reports suggesting that the merger process had stalled, clarifying that the remaining steps are largely procedural and subject to court sanction.

Once the court grants final approval, the enlarged institution is expected to join the ranks of banks that have met the new capital threshold under the CBN’s ongoing recapitalisation framework.

The recapitalisation policy mandates that banks with international license maintain a minimum capital base of N500 billion, while those with national licences must hold at least N200 billion ahead of the March 2026 deadline.

The policy is aimed at reinforcing systemic stability, improving capital adequacy, and strengthening the resilience of Nigeria’s banking sector amid macroeconomic headwinds such as inflationary pressures, exchange rate volatility, and tighter liquidity conditions.

In the joint statement, the banks revealed that the CBN provided pivotal financial accommodation to support the merger process — a move seen as reinforcing regulatory confidence in the strategic combination.

Ebenezer Kolawole, Managing Director and Chief Executive Officer of Unity Bank, described the merger as transformative.

“The merger represents a defining milestone that enhances our capital strength, operational scale and competitive positioning. The complementary strengths of both institutions create a platform capable of delivering stronger value to customers and stakeholders,” he said.

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Industry analysts say the merger combines Providus Bank’s niche corporate banking expertise and digital capabilities with Unity Bank’s established retail footprint and strong presence in the SME segment.

Market watchers argue that scale and capital depth are becoming increasingly decisive in Nigeria’s evolving banking landscape, particularly as regulators tighten standards and customers demand more digital-driven services.

“With rising regulatory requirements and macroeconomic volatility, smaller banks are finding it increasingly difficult to compete independently,” a Lagos-based banking analyst noted. “Strategic combinations such as this improve balance sheet resilience, operational efficiency, and competitive positioning.”

If successfully concluded, the Unity–Providus combination is expected to produce a capital base exceeding the N200 billion benchmark, effectively securing their national banking status within the CBN’s stipulated timeline and reinforcing stability within the broader banking ecosystem.