The Central Bank of Nigeria (CBN) has approved a significant financial accommodation to facilitate the proposed merger between Unity Bank Plc and Providus Bank Limited.
The move, announced on Tuesday, is aimed at enhancing the stability of Nigeria’s financial system and mitigating potential systemic risks.
In a statement issued by Hakama Sidi-Ali, acting Director of Corporate Communications at the CBN, it was noted that the merger is dependent on the financial backing from the CBN.
“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,” the statement read.
The CBN emphasized that this action is in line with Section 42 (2) of the CBN Act, 2007, and is essential for the financial health and operational stability of the new entity formed by the merger.
“It is unequivocal to state that the CBN’s action is under 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,” the statement explained.
The CBN also assured the public that no Nigerian bank is currently in a precarious situation akin to the recently liquidated Heritage Bank.
“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 statement added.
The central bank reaffirmed its commitment to protecting depositors’ interests and ensuring the smooth operation of the banking sector through proactive measures and strategic interventions.