Providus Bank and Unity Bank Merger [Explained]

Hello guys! In this article, we'll walk you through the "Providus-Unity Bank Marger" and explain everything you need to know about the approval of proposed merger of Unity Bank and Providus Bank in Nigeria. On August 6, 2024, the Central Bank of Nigeria (CBN) approved the merger of Unity Bank and Providus Bank. The following day, the CBN granted a N700 billion bailout loan to support the recapitalization of the newly merged entity, aiming to strengthen the stability of Nigeria's financial system, address Unity Bank's financial challenges and prevent potential systemic risks.

This merger and bailout mark the second time Unity Bank has received financial support, the first being in 2009 after the CBN’s recapitalization mandate. It also represents the first bank bailout under the leadership of Yemi Cardoso at the CBN and the first since the 2018 Polaris Bank bailout. Despite previous fears of Unity Bank facing a similar fate as Heritage Bank, the CBN’s intervention demonstrates its commitment to stabilizing Nigeria’s banking sector.

The newly merged bank will have an estimated asset size of about N2.8 trillion. Providus Bank, with an asset size of N2 trillion as of May 31, 2024, combined with Unity Bank's N423 billion in assets, will initially result in a total of N2.4 trillion. However, factoring in the CBN's financial support, which boosts Unity Bank's assets to N815 billion, the new entity's assets will increase to approximately N2.8 trillion.