The Event
On August 6, 2024, the Central Bank of Nigeria (CBN) approved a ₦700 billion loan to facilitate the proposed merger between Unity Bank PLC and Providus Bank Limited, in line with Section 42 (2) of the CBN Act, 2007. According to the CBN, this decision aims to bolster Nigeria’s financial system stability and mitigate potential systemic risks. The CBN also noted that no Nigerian bank currently faces a precarious financial situation comparable to Heritage Bank, whose licence was revoked on June 3, 2024.
In a letter to Unity Bank dated July 22, 2024, the CBN detailed the support: a ₦700 billion, 20-year term loan with an interest rate set at the Monetary Policy Rate minus 11%, but not lower than 6%.
The merger between both banks is contingent on the CBN loan, as the financial support is critical to address Unity Bank PLC’s total obligations to the CBN and other
