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CBN approves merger of Unity, Providus banks

The Central Bank of Nigeria has released a strong affirmation of the security of cash within Nigerian banks, highlighting the country's banking sector's soundness. Amid widespread unconfirmed rumours, not originating with the CBN, raising concerns about the health of Nigerian banks, the central bank of Nigeria asked the people not to panic and to continue with their usual banking activity. To ease people's anxieties and comfort them, the CBN emphasized its readiness and capability to carry out its stated role of maintaining a stable financial system in Nigeria. This statement by the CBN responds to the concern caused by unverified information and seeks to reassure the public about the safety and stability of the country's banking industry. "The Central Bank of Nigeria has noticed reports, in certain media outlets, about a recommendation for the Federal Government to take over some CBN-supervised financial institutions," said the apex bank's acting Director, Corporate Communications, Hakama Sidi-Ali, in a statement issued on Wednesday. "To avoid any doubt, Nigerian banks are still safe and sound. The CBN advises the public to go about their daily lives without getting disturbed by reports regarding the health of Nigerian banks that have not come from the CBN. "The CBN is fully equipped to carry out its statutory duty of ensuring the stability of Nigeria's financial system. "We assure the general public and depositors that their funds are safe in Nigerian financial institutions. "Bank customers are therefore advised to proceed with their banking transactions as usual, as there is no cause for concern." This statement follows a report by the CBN's special investigator, Jim Obazee, alleging that Godwin Emefiele, the former governor of the federal bank, used proxies to establish two financial institutions. According to the report, Emefiele utilised proxies to acquire Union Bank of Nigeria for Titan Trust Bank Limited and Keystone Bank without providing any proof of payment. As a result, it recommended that the Federal Government reverse the sale and take over the banks.

The Central Bank of Nigeria (CBN) has approved a pivotal financial accommodation to support the proposed merger between Unity Bank and Providus Bank.

CBN’s acting Director of Corporate Communications, Hakama Sidi Ali, disclosed this in a statement on Tuesday.

According to the apex bank, the action is in accordance with the provisions of Section 42 (2) of the CBN Act, 2007.

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It said the approval is designed to bolster the stability of Nigeria’s financial system and avert potential systemic risks.

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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.”

The development comes after the CBN raised capitalisation of banks.

 

 

 

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