Central Bank of Nigeria (CBN), on Tuesday, announced that it has granted approval for a pivotal financial accommodation to support the proposed merger between Unity Bank Plc and Providus Bank Limited.

Key Points of the CBN’s Approval for Unity Bank and Providus Bank Merger

Approval Granted: The Central Bank of Nigeria (CBN) has granted approval for a pivotal financial accommodation to support the proposed merger between Unity Bank Plc and Providus Bank Limited

Strategic Move: This approval is a strategic move designed to bolster the stability of Nigeria’s financial system and avert potential systemic risks

Financial Support: The merger is contingent upon the financial support from the CBN, which will be instrumental in addressing Unity Bank’s total obligations to the Central Bank and other stakeholders

Financial Health: This arrangement is crucial for the financial health and operational stability of the post-merger organization

No Precarious Situation: The CBN emphasized that no Nigerian bank currently faces a precarious situation comparable to that of Heritage Bank, which was recently liquidated

Dedication to Financial Stability:  The CBN remains committed to safeguarding depositors’ interests and ensuring the smooth functioning of the banking sector through proactive measures and strategic interventions.

Bailout Amount: The CBN approved a financial package worth N700 billion to support the proposed merger

Loan Terms: The bailout is a 20-year term loan designed to ensure the operational stability of the merged entity, with a principal moratorium of five years and a minimum interest rate of 6%