Providus-Unity Bank Merger Enters Final Stage Amid CBN Recapitalisation Drive
The long-awaited consolidation between Providus Bank and Unity Bank has progressed to its concluding phase, with industry sources indicating that an official announcement could be made within weeks. This development comes as Nigeria's banking sector intensifies efforts to comply with the Central Bank of Nigeria's stringent recapitalisation deadline set for March 2026.
Race Against Regulatory Requirements
In March 2024, the Central Bank of Nigeria implemented revised minimum capital thresholds for financial institutions across the country. According to the new regulations, commercial banks operating with international licences must 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 similarly directed to raise their minimum capital base to N50 billion.
Since this regulatory announcement, Nigerian banks have pursued various strategies to meet these enhanced requirements, including rights issues, public offers, private placements, and strategic mergers. By November 2025, the CBN reported that sixteen banks had successfully complied with the new standards, with recent estimates suggesting this number has since exceeded twenty institutions.
Merger Progress and Operational Alignment
Although discussions between Providus Bank and Unity Bank commenced before the CBN's recapitalisation directive, the process gained significant momentum following regulatory approval in August 2024. Shareholders from both institutions subsequently endorsed the proposed consolidation during separate extraordinary general meetings conducted under court supervision.
Industry insiders familiar with the transaction reveal that only a limited number of regulatory consents remain outstanding. Integration teams from both banks have already initiated the alignment of technological platforms, product offerings, and operational workflows to facilitate a seamless transition once the merger receives final approval.
"What remains now is concluding the final approvals," disclosed a source close to the negotiations. "We are counting days rather than weeks. It is highly improbable that the process will extend beyond one month before a comprehensive announcement is made public."
Awaiting Judicial Sanction and Strategic Implications
Officials at Providus Bank have confirmed that the merger process currently awaits court sanction following the successful completion of court-ordered annual general meetings. "When a court mandates an AGM, the company must return to the judicial authority to confirm compliance before receiving final approval," explained a knowledgeable source. "This procedural requirement is currently underway, with official announcements expected in due course."
For Unity Bank, this merger represents a vital strategic lifeline following years of financial challenges. The combined entity is projected to command a balance sheet approaching N3 trillion, creating a substantially stronger and more resilient financial institution within Nigeria's competitive banking landscape.
During Unity Bank's extraordinary general meeting in September 2025, Chairman Hafiz Mohammed Bashir characterized the merger as a strategic initiative designed to enhance competitive positioning and ensure long-term stability. Upon finalization, the enlarged institution is expected to operate under the name Providus-Unity Bank (PUB).
Industry Perspectives and Integration Considerations
While the CBN's recapitalisation initiative has stimulated an active mergers and acquisitions environment within Nigeria's financial sector, industry analysts continue to highlight potential post-merger challenges. Research organizations including DataPro have cautioned in their Banking Sector Prospects reports that integration complexities such as information technology harmonization, organizational cultural alignment, and non-performing loan migration could present significant obstacles for newly consolidated banks, particularly smaller institutions.
Nevertheless, as the March 2026 recapitalisation deadline draws nearer, the Providus-Unity Bank merger is emerging as one of the most consequential transactions within Nigeria's evolving banking ecosystem. The successful completion of this consolidation will not only enable compliance with regulatory requirements but potentially reshape competitive dynamics within the nation's financial services industry.
Background Note: Unity Bank currently operates with a national banking licence, while Providus Bank maintains a regional banking licence and has already achieved compliance with its specific capital requirements. Under the approved merger scheme, Unity Bank shareholders will receive N3.18 per share or eighteen ordinary shares of N0.50 each in Providus Bank for every seventeen Unity Bank shares held. Unity Bank's share capital will be cancelled and the institution dissolved without winding up procedures, while Providus Bank retains its operational licence.
