The transaction is among three major consolidation deals anticipated ahead of the Central Bank of Nigeria’s (CBN) March 2026 recapitalisation deadline, as tier-2 lenders intensify efforts to comply with stricter capital requirements.
Sources familiar with the matter, both within and outside the two banks, confirmed that the merger process is now more than 90 percent complete, with only a few regulatory approvals outstanding. Integration activities are already underway, including the alignment of internal workstreams, technology platforms, products and brand structures.
In March 2024, the CBN raised the minimum capital base for commercial banks as part of a sweeping reform aimed at strengthening financial system stability. Under the new framework, banks with international licences are required to maintain a minimum capital of N500 billion, while national and regional banks must hold N200 billion and N50 billion respectively. Merchant banks with national licences are also expected to meet a revised N50 billion threshold.
Since the announcement, Nigerian banks have pursued various capital-raising strategies, including public offers, rights issues and private placements. In November 2025, the CBN disclosed that 16 banks had met the new requirements, a figure that has since climbed to over 20.
Unity Bank currently operates with a national banking licence, while Providus Bank, which has already met its capital requirement, holds a regional licence. Discussions around the merger predated the CBN’s formal approval in August 2024 and followed shareholder endorsements secured at separate extraordinary general meetings convened under court order.
Industry sources indicate that the remaining steps are largely procedural. “What is left is just to conclude the entire process,” one insider told TheCable. “We are counting days, and it is unlikely to go beyond one month before the full merger is announced.”
Awaiting Final Court Sanction
Officials at Providus Bank confirmed that the institution is awaiting final court sanction following the completion of a court-ordered annual general meeting. According to sources, once the court affirms that all directives have been satisfied, the merger can be formally consummated.
Implications for Unity Bank
The merger is widely seen as a lifeline for Unity Bank, which has struggled with capital adequacy and performance challenges over the years. Speaking at an extraordinary general meeting in September 2025, Unity Bank chairman Hafiz Mohammed Bashir said the combination with Providus would result in a more resilient and competitive financial institution.
Post-merger, the enlarged entity is expected to command a balance sheet of up to N3 trillion and operate under a new name, Providus-Unity Bank (PUB).
Under the agreed scheme of consideration, Unity Bank shareholders will receive N3.18 per share or 18 ordinary shares of N0.50 each in Providus Bank for every 17 Unity Bank shares held. Upon completion, Unity Bank’s entire share capital will be cancelled, and the bank will be dissolved without winding up, while Providus Bank Limited will retain its certificate of incorporation as the surviving entity.
Sector Outlook and Risks
In its report titled Banking Sector Prospects in Nigeria, DataPro Research noted that the CBN’s recapitalisation policy has triggered an active mergers and acquisitions environment, but not without risks. The firm highlighted concerns around post-merger integration, including IT system harmonisation, cultural alignment and the absorption of non-performing loans.
According to the report, while consolidation may strengthen balance sheets, poorly managed integration could place operational and financial strain on newly merged institutions, particularly smaller lenders navigating tight timelines.
As the recapitalisation deadline approaches, analysts expect further deal-making across the sector, with regulators closely monitoring execution and systemic risk.