The Central Bank of Nigeria (CBN) on Tuesday gave a nod to what it called a pivotal financial accommodation to support the proposed merger between Unity Bank and Providus Bank.
It was gathered that two former military heads of states and an ex-president threw their influence behind the two ailing commercial banks. Although yet to be confirmed, our sources claimed that the apex bank took the action to respect the interventions of the ex-heads of state, also touted to ‘own’ the banks.
The development comes after the CBN raised capitalisation of banks.
The Acting Director of Corporate Communications, Hakama Sidi Ali, disclosed this in a statement she shared with media organisations.
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The explained that its action is in accordance with the provisions of Section 42 (2) of the CBN Act, 2007.
The apex bank emphasized the approval is designed to bolster the stability of Nigeria’s financial system and avert potential systemic risks.
The statement reads: “The merger is contingent upon the financial support from the CBN. The fund will be instrumental in addressing Unity Bank’s total obligations to the Central Bank and other stakeholders. It is unequivocal to state that the CBN’s action is by the provisions of Section 42 (2) of the CBN Act, 2007. This arrangement is crucial for the financial health and operational stability of the post-merger organization.
“Furthermore, it is important to emphasise that no Nigerian bank currently faces a precarious situation comparable to that of Heritage Bank, which was recently liquidated.
“The CBN remains committed to safeguarding depositors’ interests and ensuring the smooth functioning of the banking sector through proactive measures and strategic interventions.
“The CBN’s decision underscores its dedication to maintaining financial stability and promoting confidence in the banking system during this transformative period.”
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