The long-anticipated merger between Providus Bank and Unity Bank has entered its final phase, with an official announcement expected within weeks.
Sources close to both institutions confirmed that the consolidation process is more than 90 per cent complete, placing the deal among three major bank mergers expected in early 2026 as tier-2 lenders race to meet the Central Bank of Nigeria’s (CBN) recapitalisation deadline.
In March 2024, the CBN raised minimum capital requirements for Nigerian banks, setting March 2026 as the deadline for compliance. Under the new rules, commercial banks with international licences must raise their capital base to N500 billion, while national and regional banks are required to hold N200 billion and N50 billion respectively. Merchant banks with national licences must now meet a N50 billion threshold.
The directive triggered an industry-wide scramble for capital, with banks turning to rights issues, private placements and share sales. By November 2025, the CBN confirmed that 16 banks had met the new requirements — a figure that has since climbed above 20.
Unity Bank operates with a national licence, while Providus Bank, already compliant with its capital requirement, is categorised as a regional lender. Merger discussions between the two banks predated the recapitalisation policy, but the process gained momentum after the CBN granted regulatory approval in August 2024. Shareholders of both banks subsequently endorsed the deal at separate court-ordered extraordinary general meetings.
With only a handful of regulatory approvals outstanding, integration work is already underway. Joint teams have been set up to harmonise platforms, products and branding, signalling confidence that completion is imminent.
“We are counting days,” a source familiar with the transaction said. “It is unlikely to take more than a month before the full merger is announced.”
Providus Bank is now awaiting final court sanction following its annual general meeting, a procedural step required before the merger can be formally concluded.
For Unity Bank, the deal represents a critical lifeline. The lender has battled prolonged financial difficulties, and the merger is expected to prevent a potential collapse while creating a stronger combined institution. The enlarged entity is projected to boast a balance sheet of up to N3 trillion.
Once completed, the new bank will reportedly be renamed Providus-Unity Bank (PUB). Under the agreed scheme, Unity Bank shareholders will receive N3.18 per share or 18 fully paid Providus shares of 50 kobo each for every 17 Unity shares held. Unity Bank will then be dissolved without winding up, while Providus Bank will retain its corporate identity as the surviving entity.
However, analysts warn that consolidation is not without risk. In its Banking Sector Prospects in Nigeria report, DataPro noted that while the CBN’s reforms have energised mergers and acquisitions, post-merger integration challenges — including IT alignment, cultural fit and the handling of non-performing loans — could strain smaller banks in the years ahead.
