A merger between Providus Bank and Unity Bank, once described as a “done deal” has now been stalled, with speculations that it might not see the light of the day.
Despite Unity Bank’s position that the deal is done, the latest negative circumstance has been linked to alleged huge insider credits owed by directors of Unity Bank.
Although there were no mention of specific figures, The Cable, quoted a well-informed management staff of Unity Bank saying ‘’it is not less than N4.8 billion’’.
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The directors of Unity Bank are pushing for the debts to be written off, but Providus management and directors are vehemently opposed to such a move, citing regulatory reasons and insisting that the debtors must pay off their obligations before the merger progresses.
The different position adopted by the banks on the insider credits has thus led to a standoff that is threatening the merger of the institutions.
Unity Bank’s executive directors are Ebenezer Kolawole, acting managing director/CEO and Usman Abdulqadir, executive director of enterprise risk management & compliance. Non-Executive directors are Hajiya Yabawa Lawan Wabi, Hajiya Halima Babangida and Prof. Iyabo Obasanjo, an Associate Professor, Faculty Affiliate, Africana Studies Program at the College of William and Mary, Williamsburg, Virginia, USA. Others include Sam N. Okagbue, an independent director and managing partner of the George Ikoli and Okagbue (GI&O) law firm, and Hafiz Mohammed Bashir, who is the chairman of the board, with vast experience in both the public and private sectors.
It is however not clear who among them are the delinquent debtors.
In August 2024, the CBN approved the merger between the banks to avert potential systemic risks. Then, the apex bank proposed a financial package of around 700 billion naira to facilitate the merger and settle Unity Bank’s obligations.
If the merger is successful, the proposed bank would be known as Providus-Unity Bank. Providus Bank will automatically become a national bank, upgrading from a regional operator.
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