Once a struggling bank, Unity Bank is now merging with Providus Bank in a deal that could mark a new chapter.
In the heart of Nigeria’s financial sector, a dramatic rescue mission is unfolding.
Unity Bank Plc, burdened by billions in losses and shrinking public confidence, has found a lifeline in Providus Bank Limited.
The Central Bank of Nigeria (CBN) and shareholders from both banks have given their blessing to the merger.
And for Unity Bank’s weary shareholders, there’s something to smile about.
They can either take ₦3.18 in cash for each share or swap 18 Providus shares for every 17 Unity shares.
That’s more than double the ₦1.51 price Unity last traded at.
Revealing Unity Bank’s Secret
The answer lies in the Bank’s deep financial troubles.
In 2023, the bank posted a net loss of ₦62.6 billion.
Its liabilities overshadowed its assets by a staggering ₦326.9 billion.
With a capital adequacy ratio of -76.14% far below the required 10%, Unity Bank was on the edge.
Even its auditors, KPMG, expressed doubts about its survival.
The CBN had approved the merger the previous year, but now, the Federal High Court has stepped in, directing Unity Bank to gather its shareholders this month to seal the deal.
There’s also big money on the table.
A payout of N37.14 billion is planned, and five major investors including government-linked AMCON and politically connected firms are set to collect around 67% of it.
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The Break Down
– AMCON: ₦12.72 billion
– Pan African Capital Nominee: ₦4.7 billion
– Lighthouse Capital: ₦3.35 billion
– Ibad Limited (linked to Iyabo Obasanjo): ₦2.95 billion
– El-Amin (linked to Halima Babangida): ₦121.5 million
Together, they control most of the Bank’s shares.
If they choose cash over equity in Providus, they’ll walk away with around N25 billion.
Now, all eyes are on that final shareholder meeting.
Will this be the turnaround Unity Bank desperately needs or just the end of an era?
