The proposed merger between Providus Bank and Unity Bank has reached its final stage, with an official announcement expected in the coming weeks, BANKIBUSINESS reports.
The consolidation is one of the major banking mergers expected in early 2026 as tier-two lenders intensify efforts to meet the recapitalisation deadline set by the Central Bank of Nigeria.
Sources familiar with the development, both within and outside the two banks, confirmed that the merger process is now more than 90 percent completed, with only a few regulatory approvals outstanding.
In March 2024, the Central Bank of Nigeria announced a major increase in the minimum capital requirement for banks operating in the country, giving institutions until March 2026 to comply. Under the directive, commercial banks with international licences are required to raise their capital base to N500 billion, while national and regional banks must meet thresholds of N200 billion and N50 billion respectively. Merchant banks with national licences are also required to maintain a minimum capital base of N50 billion.
Since the announcement, Nigerian banks have adopted different strategies to raise capital, including rights issues, private placements, and strategic mergers and acquisitions. In November 2025, the Central Bank disclosed that 16 banks had fully met the new capital requirements, although industry sources say the number has now exceeded 20.
Unity Bank currently operates with a national banking licence, while Providus Bank holds a regional licence and has already met its recapitalisation requirement. The merger talks between both institutions began before the Central Bank formally approved the transaction in August 2024, several months after announcing the recapitalisation policy.
The deal also received shareholder approval at separate extraordinary general meetings held by both banks, following a court order that authorised the business combination process.
According to industry insiders, integration efforts are already well advanced. Teams from Providus and Unity banks have been set up to harmonise operations, platforms, products and internal processes ahead of the final announcement.
“What is left is just to conclude the remaining approvals,” a source familiar with the process said. “We are counting days, and it is not expected to go beyond one month before the full merger is announced.”
Sources within Providus Bank disclosed that the institution is currently awaiting a final court sanction after successfully holding a court-ordered annual general meeting.
“When a court orders an annual general meeting, the company must return to the court to confirm compliance,” one source explained. “The court then issues a sanction that allows the transaction to proceed fully. That process is currently ongoing.”
For Unity Bank, the merger represents a critical lifeline after years of financial challenges. The bank has struggled with weak capitalisation and operational difficulties, making the consolidation a strategic move to avoid collapse.
Speaking at Unity Bank’s extraordinary general meeting in September 2025, the bank’s chairman, Hafiz Mohammed Bashir, said the merger would create a stronger, more competitive and resilient financial institution capable of supporting Nigeria’s economy.
Upon completion, the merged entity is expected to have a balance sheet of up to N3 trillion and operate under a new name, Providus-Unity Bank, also known as PUB.
Under the agreed scheme of consideration, Unity Bank shareholders will receive either N3.18 per share or 18 ordinary shares of 50 kobo each in Providus Bank for every 17 ordinary shares held in Unity Bank.
The scheme document further states that Unity Bank’s entire share capital will be cancelled upon completion, after which the bank will be dissolved without winding up. Providus Bank Limited will retain its certificate of incorporation and continue operations as the enlarged institution.
Analysts say the merger highlights the growing wave of consolidation in Nigeria’s banking sector triggered by regulatory pressure. In a recent report on Nigeria’s banking sector prospects, financial analytics firm DataPro noted that the recapitalisation policy has created an active mergers and acquisitions environment, but warned of potential risks.
According to the firm, post-merger integration challenges such as information technology alignment, cultural integration, and the absorption of non-performing loans could place strain on newly merged banks, especially smaller institutions.
Despite these concerns, market watchers believe the Providus and Unity merger could strengthen confidence in the banking sector if successfully executed, particularly as Nigeria’s financial system adjusts to stricter regulatory standards ahead of the 2026 deadline.