Nigeria’s banking industry has entered a new era with the merger between Unity Bank and Providus Bank, a consolidation that promises to reshape competition and strengthen financial stability.

The deal, recently ratified by Unity Bank shareholders at a court-ordered meeting in Abeokuta, Ogun State, marks the resolution of Unity Bank’s decade-long struggle with capital inadequacy.

Bigger footprint, stronger competition

Ahead of the meeting, the Nigerian Exchange lifted the suspension on Unity Bank’s shares, paving the way for the Asset Management Corporation of Nigeria (AMCON) to sell its 34% stake in the lender.

The merger is widely seen as a lifeline for Unity Bank and a springboard for Providus Bank’s national ambitions.

Analysts have hailed the merger as a game-changer for both banks and the industry at large.

According to Ayotunde Olubunmi, Head of Financial Institutions at Agusto & Co, the deal “finally resolves Unity’s negative capital issue” while giving Providus access to Unity’s extensive branch network, particularly in northern Nigeria, where Providus previously had little presence.

“With this merger, Providus now has a national footprint,” Olubunmi noted.

“It positions them to compete more effectively with the industry giants like Access, Zenith, and UBA.”

The Central Bank of Nigeria (CBN) is also expected to provide regulatory support, including possible waivers on meeting the new N200bn capital threshold for national banks.

CBN’s role in strengthening the Sector

The CBN had earlier approved a N700bn, 20-year term loan to the merged entity, repayable after a five-year moratorium at six per cent interest. This support underscores the regulator’s broader recapitalisation mandate aimed at building stronger, more resilient banks capable of withstanding domestic and global shocks.

According to a Punch report, financial market experts agree that the merger aligns with the CBN’s goal of eliminating weak links in the system.

“If Unity had failed, it would have been another Skye Bank situation,” said David Adonri, Vice Chairman of Highcap Securities. “This merger preserves shareholder value, protects depositors, and strengthens the sector.”

Relief for shareholders, opportunities for SMEs

Minority shareholders of Unity Bank have welcomed the merger, calling it a better outcome than outright liquidation.

“Unlike Heritage Bank’s collapse, this deal preserves some value for investors,” said Ayoola Gilbert, General Secretary of the Ibadan Zone Shareholders Association.

Gilbert also stressed the importance of transparent integration and consistent communication with shareholders. “Mergers of this scale are complex. Execution is everything,” he warned.

Experts believe the merger could also expand access to credit, particularly for small and medium-sized enterprises (SMEs), which form the backbone of Nigeria’s economy.

By combining Unity’s grassroots presence with Providus’ digital banking expertise, the new entity is positioned to improve lending capacity and financial inclusion.

A defining moment for Nigerian banking

For industry watchers, the Unity–Providus deal is more than just a corporate transaction; it is a signal of Nigeria’s banking future—fewer but stronger institutions with the scale to compete domestically and regionally.

The merger reflects a shift toward stability, consolidation, and innovation in a sector under pressure from fintech disruption and macroeconomic headwinds.

Whether Providus will eventually list on the Nigerian Exchange remains to be seen, but one thing is clear: the new entity is set to become a formidable rival to Nigeria’s biggest banks.