Unity Bank Shareholders to Decide Fate of Bank at Sept. 26 Merger Meeting Amid CBN Recapitalisation Drive

In a development that could reshape Nigeria’s banking landscape, a Federal High Court sitting in Lagos has ordered Unity Bank Plc to convene a meeting of its shareholders to decide on a proposed merger with Providus Bank Limited. If approved, the deal will dissolve Unity Bank as a legal entity, folding its operations into Providus Bank in what is being described as one of the most significant consolidation moves in recent years.

The order, issued by Justice D.I. Dipeolu on July 17, 2025, directs that the meeting of Unity Bank’s fully paid-up ordinary shareholders be held on September 26, 2025, at the OOPL Hotel, Abeokuta, Ogun State. The notice specifies that the scheme of merger is detailed in a document circulated to shareholders, who must now decide on the future of their bank.

What the Merger Entails

The scheme outlines a full absorption of Unity Bank’s assets, liabilities, intellectual property rights, and ongoing legal proceedings into Providus Bank. Once completed, Unity Bank’s share capital will be cancelled, and the bank will cease to exist. Providus Bank will become the surviving entity, with its certificate of incorporation serving as the legal foundation of the enlarged institution.

Key resolutions to be voted on include:

• Approval of the scheme of merger as detailed in the official document dated June 25, 2025.
• Authorization for directors to accept modifications required by regulators such as the Securities and Exchange Commission (SEC), Central Bank of Nigeria (CBN), and the Court.
• Continuation of all legal claims and obligations involving Unity Bank under the name of Providus Bank.
• Cancellation of Unity Bank’s shareholding structure, effectively dissolving the bank.

What Shareholders Stand to Gain

The scheme provides Unity Bank shareholders with two compensation options:

• Cash Option: ₦3.18 for every Unity Bank share held.
• Share Swap Option: 18 ordinary shares of Providus Bank (₦0.50 each) for every 17 Unity Bank shares held.

This exchange ratio is designed to give Unity Bank shareholders the choice between immediate liquidity or continued participation in the enlarged Providus Bank entity.

Governance and Voting Mechanism

The court appointed Unity Bank’s Chairman, Hafiz Mohammed Bashir, or in his absence, Managing Director Ebenezer A. Kolawole, to preside over the court-ordered meeting.

Voting will be conducted by poll, either in person or via proxy. Approval requires a statutory majority—representing not less than three-quarters of the shares present and voting.

The register of shareholders will close on September 19, 2025, to determine eligibility to participate in the vote. Shareholders with questions are required to submit them to the Company Secretary by September 23, 2025.

Industry Implications

Analysts say this merger could signal a new phase of consolidation within Nigeria’s banking sector, echoing the landmark reforms of the mid-2000s that reduced the number of banks and strengthened the sector.

According to Dr. Chika Mordi, a financial analyst and CEO of Agusto & Co., “The Unity–Providus merger is not just about survival. It positions Providus Bank to expand its capital base, attract larger corporate clients, and deepen its retail banking reach. For Unity Bank shareholders, the deal provides a clear exit option while also offering those who want to stay invested a pathway into a stronger entity.”

Another banking consultant, Funke Adeoye, noted that “Providus Bank has been building a reputation in digital and corporate banking. By absorbing Unity Bank, it gets access to a wider customer base and branch network, while Unity shareholders benefit from being part of a growth-focused institution.”

Why This Matters

The merger is coming at a time when Nigerian banks face increased regulatory capital requirements, evolving fintech competition, and macroeconomic pressures. For Unity Bank, long viewed as one of the industry’s smaller and weaker institutions, this merger represents both a rescue and an opportunity to give shareholders value.

If shareholders approve the scheme and it is sanctioned by the court, Unity Bank will be dissolved without winding up, and Providus Bank will emerge as an enlarged, more competitive player in Nigeria’s financial services market.

Next Steps

Solicitors for Unity Bank, Adepetun Caxton-Martins-Agbor & Segun, confirmed they have been directed to seek court approval to sanction the scheme and all related resolutions. Directors of Unity Bank have also been empowered to take final steps to ensure a smooth transition if the deal is approved.

All eyes will now turn to September 26, when Unity Bank shareholders cast their votes in a decision that could redefine the trajectory of both banks and add new momentum to Nigeria’s broader financial sector consolidation.