CBN Approves Merger of Two Nigerian Banks, Offers Financial Support

• The Central Bank of Nigeria is ready to support the merger of two commercial banks, Providus Bank and Unity Bank
• The move is part of the apex bank's efforts to enhance financial stability and efficiency in the banking sector
• Report shows that the CBN will be offering over N700 billion to ensure the transaction is successful

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends

The Central Bank of Nigeria (CBN) has approved the merger between Providus Bank and Unity Bank.

This was disclosed in a statement signed by the apex bank's acting director of corporate communications, Hakama Sidi, on Tuesday, August 6, 2024.

The CBN said its action is in accordance with the provisions of Section 42 (2) of the CBN Act, 2007.

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Why is CBN providing financial support?

Punch reports that Providus Bank Limited has sought to acquire a majority stake in Unity Bank Plc for some time.

While the deal had not materialized previously, with CBN support, it is now set to go through, helping the bank work towards meeting the new capital base requirements.

The statement reads:

“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 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

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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.”

5 Nigerian banks earn N67bn in FX

Legit.ng earlier reported that five Nigerian banks recorded about N67.89 billion in foreign exchange gains in the first half of 2024.

The banks' interim financial results filed with the Nigerian Exchange Limited showed that forex gains recorded by the financial institutions in the first half of the year were 67.89% lower than the N211.42 billion in the same period in 2023.

The financial institutions include the FCMB Group, Ecobank Transnational Incorporated, Wema Bank, Sterling Financial Holding Company and Jaiz Bank.

Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.

Source: Legit.ng