The Central Bank of Nigeria (CBN) announced on Tuesday the approval of a significant financial accommodation to facilitate the proposed merger between Unity Bank Plc and Providus Bank Limited.
In a statement released by its acting Director of Corporate Communications, Hakama Sidi-Ali, the apex bank explained that this initiative aims to enhance the stability of the country’s financial system and prevent potential systemic risks.
“The merger is contingent upon financial support from the CBN. This funding will be crucial in addressing Unity Bank’s total obligations to the Central Bank and other stakeholders,” the statement read.
The CBN clarified that this action is in accordance with Section 42 (2) of the CBN Act, 2007, emphasizing that the arrangement is vital for the financial health and operational stability of the resulting entity after the merger.
The statement also noted, “It is important to clarify that no Nigerian bank is currently in a precarious situation similar to that of Heritage Bank, which was recently liquidated.”
The CBN reiterated its commitment to protecting depositors’ interests and ensuring the smooth functioning of the banking sector through proactive measures and strategic interventions.