ProvidusBank Limited, a commercial bank founded in 2016, has taken bold steps to acquire majority stake in Unity Bank Plc, as part of the former’s business expansion plan.
The arrangement which Unity Bank that had been struggling to beef up its minimum capital requirement since 2017, has termed a business combination, was being monitored by the Central Bank of Nigeria (CBN).
“This has been in the works since June this year and they have been updating the CBN on it. Part of the deal is that Providus must have asked for the isolation of Unity Bank’s bad loans. Unity Bank which is big in agriculture financing has been struggling for years,” the source who pleaded to remain anonymous said.
Unity Bank commenced operations in January 2006, following the merger of nine banks with competences in investment, corporate and retail banking. It is one of Nigeria’s leading retail banks with 213 business offices spread across the 36 States and Federal Capital Territory.
In 2018, there was a botched move by the Milost Global Inc., a New York-based private equity to invest $1billion in the bank and since then the bank has been seeking for a preferred suitor.
It recently posted negative results in its recently released financials for the 9-month (9M) period ended September 30, 2023.
Precisely, the bank’s financial results released on the Nigerian Exchange Limited (NGX) had shown loss after tax of N47.917billion, down by 2,461 per cent from profit after tax (PAT) of N2.029billion in same nine months period of 2022.
It had also reported Foreign Exchange (FX) revaluation loss of N38.162 billion, an increase by 70,565 percent from N54.005 million FX revaluation loss it recorded in nine months to September 2022.
Its gross income in the nine month period was also N38.183 billion, which was a decrease by 10 per cent, from N42.292 billion gross income recorded in the comparable period of 2022.
Commenting on the results, the Managing Director/CEO of Unity Bank Plc, Mrs. Tomi Somefun, had said the bank was focusing on its efforts to recapitalise the institution, aggressively drive asset creation and innovate with products to compete favourably in new markets.
“The bank enjoys market confidence which will enable the institution thrive better in the months ahead with increased business conversion, profitability and growth needed to achieve sustainable returns,” she had revealed.
On the other hand, ProvidusBank founded by Walter Akpani, was licenced by the CBN during the tenure of the immediate past Governor, Godwin Emefiele.
The financial institution has strong IT infrastructure and digital channels which it deploys to provide service to its customers.
ProvidusBank is an innovative financial institution that provides personal, private, corporate, commercial and digital banking products and solutions. Its tailored financial services delivery includes: Business Advisory, Portfolio Management, Personalised Relationship Management, Fast-tracked Service delivery and Self-service solutions.
