Providus-Unity Merger Creates Nigeria’s 9th Largest Bank by Assets
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Nigeria’s banking sector has witnessed one of its most significant consolidations in recent years as Providus Bank Limited merged with Unity Bank Plc to form Providus-Unity Bank Limited. The court-approved deal creates a larger financial institution now ranked among the elite in the country’s financial system.
Following the merger, Providus-Unity Bank becomes the ninth largest bank in Nigeria by assets, holding ₦5.3 trillion as of June 30, 2025. Customer deposits have reached ₦3.2 trillion, placing the new entity 11th in the industry. The bank now operates 229 branches and serves 3.6 million customers nationwide, positioning it to compete directly with the country’s biggest lenders.
Unity Bank shareholders overwhelmingly approved the merger at a court-ordered Extraordinary General Meeting, with 293 out of 295 shareholders voting in favor. Under the agreement, Unity’s share capital will be cancelled and the bank dissolved without winding up. Shareholders can either receive a cash payout of ₦3.18 per share or opt for an equity swap of 18 Providus shares for every 17 Unity shares they hold.
The Central Bank of Nigeria played a key role in facilitating the deal. It granted approval in August 2024 and provided a ₦700 billion loan to support the transaction. Part of the loan will settle Unity Bank’s obligations, while the remainder will be invested in long-term government bonds treated as tier-2 capital. This financial support aligns with the CBN’s broader recapitalization agenda, which requires banks to meet higher capital thresholds by March 31, 2026.
Further momentum came when the Asset Management Corporation of Nigeria sold its 34 percent stake in Unity Bank to an existing investor in a block trade worth over 4 billion shares at ₦3.18 each. All assets, liabilities, legal proceedings, and intellectual property rights of Unity Bank will transfer seamlessly to Providus-Unity, which will operate under Providus’ certificate of incorporation.
The merger makes strategic sense on several fronts. Stricter capital requirements have pushed mid-tier banks to scale or combine, and the transaction helps both institutions meet regulatory demands. Unity’s nationwide branch network complements Providus’ innovative digital banking infrastructure, creating a stronger player in retail, corporate, and digital banking. With greater capital strength and a wider market presence, Providus-Unity is positioned to support large-scale infrastructure projects, trade, and national development goals while signaling investor confidence in Nigeria’s financial sector.
However, challenges remain. Some analysts question the revaluation of Unity’s assets and whether it fully aligns with international financial reporting standards. Reliance on a large CBN loan raises concerns about replicability and potential moral hazard. Integrating operations, harmonizing company cultures, and addressing legacy exposures will require careful management. Investors may also scrutinize the equity swap ratio and the long-term value it provides.
For stakeholders, the merger offers a range of outcomes. Unity Bank customers can expect a smooth transition of their accounts and improved product offerings. Shareholders must decide between cashing out or holding equity in a more robust institution. Employees may face some restructuring but could also benefit from the expanded branch network. For the wider Nigerian economy, a stronger, better-capitalized bank promises greater capacity to finance small businesses, trade, and infrastructure, supporting the country’s broader growth ambitions.
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