One year after Unity Bank, a struggling Nigerian lender, requested a merger with mid-tier Providus Bank, the deal could finally get shareholder approval on September 26. If approved, Unity Bank’s shares will be cancelled, and Providus Bank will take over the enlarged entity. Shareholders will get either ₦3.18 ($0.0021) per Unity Bank share in cash or an equity swap of 18 Providus Bank shares for every 17 Unity Bank shares.
The merger is part of a broader push by the Central Bank of Nigeria (CBN) to ensure banks meet the new capital requirements. Nigerian lenders must either raise capital, merge, or risk having their banking licences downgraded. Unity Bank, which reported a ₦62.6 billion ($41 million) loss in 2023 and a negative capital adequacy ratio (CAR) of 76.14%, clearly needed a lifeline. Providus, meanwhile, will gain scale, adding Unity’s assets, liabilities, and operations to its balance sheet, creating a stronger mid-tier player that could better compete in Nigeria’s banking sector.
Through the recapitalisation exercise, the regulator seeks to make banks well-capitalised with deep treasury reserves and better positioned to withstand currency swings and economic shocks. For customers, the merger provides reassurance. Deposits will continue to be insured by the Nigeria Deposit Insurance Corporation (NDIC), helping prevent panic withdrawals or bank runs.
Similar interventions have worked in the past, from Heritage Bank’s 2024 restructuring to the 2019 merger of Access Bank and Diamond Bank.
If approved, this merger marks another step in Nigeria’s banking consolidation trend, showing that regulatory oversight, strategic recapitalisation, and carefully structured mergers can keep the financial system resilient while giving mid-tier banks a stronger platform to grow.
