Central Bank Approves Providus Bank’s Takeover of Unity Bank with N700bn Loan Boost

The Central Bank of Nigeria (CBN) on Tuesday announced it had granted approval for a pivotal financial takeover of Unity Bank Plc by Providus Bank Limited with an asset ownership of 80-20 percent (80 percent Providus, 20 percent Unity Bank).\r\n\r\nTHISDAY gathered that the financial accommodation included N700 billion to the new entity, structured as a 20-year term loan.\r\n\r\nThe loan will be priced at an interest rate of Monetary Policy Rate (MPR) minus 11 per cent, subject to a minimum of six per cent.\r\n\r\nAccording to a CBN letter titled, “Request for Merger Approval and Financial Support, “addressed to Managing Director, Unity Bank Plc, dated July 22, 2024, and signed by CBN acting Director, Banking Supervision, Dr. Adetona Adedeji, payments of the loan are to be made semi-annually, with a principal moratorium of five years.\r\n\r\nBeginning in the sixth year, the new entity will commence repayment in 15 equal instalments until maturity.\r\n\r\nThe central bank specified that the total obligation of Unity Bank amounting to N303.

7 billion (comprising N92.

00 billion of First Bank of Nigeria exposure on clearing obligation, N51.

70 billion financial accommodations of the CBN, N25.

00 billion Anchor Borrowers Programme obligation, and N135.

00 billion NIRSAL obligation) will be deducted from the N700 billion financial accommodation.