Providus-Unity Bank Merger Approaches Completion as CBN Recapitalisation Deadline Nears
The Nigerian banking sector is witnessing a significant consolidation as the long-awaited merger between Providus Bank and Unity Bank enters its final phase. With the Central Bank of Nigeria's (CBN) recapitalisation deadline of March 2026 fast approaching, industry sources confirm that the proposed consolidation is now more than 90 percent complete, positioning it among the major mergers expected to conclude in early 2026.
Race Against Regulatory Requirements
In March 2024, the CBN, under the leadership of Governor Olayemi Cardoso, introduced stricter minimum capital thresholds for Nigerian banks, setting a clear deadline for compliance. Commercial banks with international licences must now maintain at least N500 billion in capital, while national and regional banks are required to hold N200 billion and N50 billion, respectively. Merchant banks with national licences were also directed to raise their minimum capital base to N50 billion.
This regulatory push has triggered an aggressive wave of capital-raising strategies across the banking industry, including rights issues, public offers, private placements, and strategic mergers. By November 2025, the CBN reported that 16 banks had already met the new requirements, with that number reportedly growing beyond 20 in recent months.
Merger Process Gains Momentum
While merger talks between Providus Bank and Unity Bank predate the CBN's recapitalisation directive, the process gained substantial momentum after regulatory approval was granted in August 2024. Shareholders of both institutions endorsed the deal at separate extraordinary general meetings held under court orders, demonstrating strong support for the consolidation.
Unity Bank operates with a national banking licence, while Providus Bank, already compliant with its capital requirement, holds a regional banking licence. The merger represents a crucial lifeline for Unity Bank, which has faced years of financial strain, and is expected to create a combined entity with a balance sheet approaching N3 trillion.
Final Steps and Integration Efforts
Sources familiar with the merger process indicate that only a handful of regulatory consents remain outstanding, with the deal now awaiting court sanction following successful court-ordered annual general meetings. "What is left now is to conclude the final approvals," a source explained. "We are counting days. It is unlikely to stretch beyond one month before a full announcement is made."
Integration teams from both banks have already begun aligning platforms, products, and operational workflows to ensure a smooth transition once the deal is formally completed. Upon finalisation, the enlarged institution is expected to operate under the name Providus-Unity Bank (PUB).
Shareholder Arrangements and Industry Caution
Under the approved scheme, Unity Bank shareholders will receive N3.18 per share or 18 ordinary shares of N0.50 each in Providus for every 17 Unity Bank shares held. Unity Bank's share capital will be cancelled, and the bank dissolved without winding up, while Providus Bank retains its banking licence.
Despite the potential benefits of creating a stronger, more resilient institution, analysts caution about post-merger integration challenges. DataPro's Banking Sector Prospects in Nigeria report highlights potential risks such as:
- IT system harmonisation difficulties
- Cultural alignment between the two institutions
- Migration of non-performing loans
- Operational strain on newly merged entities
Workforce Implications and Union Response
The merger process has already impacted Unity Bank's workforce, with reports indicating that over 100 employees received termination letters on January 1, 2026. The Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI) has issued an ultimatum to Unity Bank's management, demanding the recall of terminated staff and alleging that the directive came from the bank's managing director, Ebenezer Kolawole.
As the March 2026 recapitalisation deadline looms, the Providus-Unity Bank merger stands as one of the most consequential deals reshaping Nigeria's banking landscape. The successful completion of this consolidation will not only help both institutions meet regulatory requirements but could potentially create a more competitive player in Nigeria's evolving financial sector.
