By Kayode Ogunwale

The Central Bank of Nigeria (CBN) has granted approval for Unity Bank Plc and Providus Bank Limited merger.

The merger approval is a significant step towards enhancing the stability and resilience of the financial sector in Nigeria.

This strategic move, highlighted in a statement by the CBN’s acting Director of Corporate Communications, Mrs. Hakama Sidi Ali, underscores the regulatory support provided to facilitate the successful consolidation of these two financial institutions.

The CBN’s decision to provide financial accommodation for the merger is in line with its mandate to promote a sound and robust financial system that can effectively manage risks and safeguard stakeholders’ interests. By extending this support, the CBN aims to mitigate potential systemic risks and ensure the post-merger organization’s operational stability and financial health.

This development underscores the regulatory commitment to fostering a conducive environment for sustainable growth and development within the banking sector. It also underscores the importance of regulatory oversight in facilitating industry consolidation and enhancing the overall resilience of the financial system in Nigeria.

It Is pertinent to recall that in March of this year, the CBN introduced updated guidelines pertaining to its recapitalisation policy for banks operating within the Nigerian financial framework.

Notably, commercial banks holding international permits were mandated to elevate their capital base to N500 billion, while national banks were required to attain a minimum capital threshold of N200 billion. Furthermore, regional banks were instructed to aim for a capital floor of N50 billion.

In alignment with this directive, non-interest banks holding national and regional authorisations have also been tasked with bolstering their capital to N20 billion and N10 billion, respectively. These measures are essential for enhancing the resilience and competitiveness of the banking sector in Nigeria.