Supreme Court Approves Merger of Providus Bank and Unity Bank
On Monday, the Supreme Court dismissed a lawsuit contesting the merger between Providus Bank Limited and Unity Bank PLC, effectively concluding a lengthy legal dispute surrounding the consolidation of these two financial institutions.
In a unanimous verdict, the five-member court panel rejected the appeal that sought to overturn a prior decision by the Court of Appeal.
Judge Tijani Abubakar, in delivering the Court of Appeal’s ruling, deemed the appeal without merit and directed the appellants to pay costs of NOK 10 million to each defendant. The Supreme Court not only dismissed the appeal but also sanctioned the merger by invoking Section 22 of the Supreme Court Act, thereby clearing the legal pathways for the transaction to move forward unimpeded.
The court mandated that all assets, liabilities, and operations of Unity Bank, including its real estate, be transferred to Providus Bank under the approved merger scheme, to be completed within a 10-day timeframe.
Additionally, the court established the share consideration for Unity Bank shareholders, valuing it at 3.18 Naira per share, or offering 18 Providus Bank shares at 50 kobo for every 17 Unity Bank shares held. This share arrangement is a critical aspect of the merger agreement.
As part of the merger, the court ruled that the current board of Unity Bank will be dissolved, although the bank will not undergo liquidation. The newly merged entity will officially adopt the name Providus Unity Bank Limited.
The appellants, Suleiman Abubakar and Mohamed Modu, both customers and shareholders of the banks, initially raised their concerns in the Federal High Court. After losing at that level and in the Court of Appeal, they escalated the matter to the Supreme Court, seeking to halt the merger.
Background of the Merger
The merger process began in August 2024, following the Central Bank of Nigeria’s (CBN) approval of the proposed consolidation between Unity Bank and Providus Bank. The CBN emphasized that the merger, backed by a financial support agreement, aimed to fortify the banking system and mitigate systemic risks.
The central bank’s rationale for endorsing the merger was to provide Unity Bank with the resources necessary to meet its financial obligations while ensuring the stability of the new financial institution. This initiative aligns with Section 42(2) of the CBN Act 2007, reflecting broader measures to bolster confidence in the banking sector amid ongoing recapitalization reforms.
Regulatory approval was granted for the transaction in August 2025, coinciding with heightened banking reforms, including stricter minimum capital requirements for commercial banks. This policy encouraged banks to explore mergers and acquisitions ahead of the compliance deadline set for 2026.
Shareholders ratified the deal in an Extraordinary General Meeting (EGM) in September 2025. This approval followed a Federal High Court order issued in July 2025 and allowed for the transfer of assets, liabilities, and businesses, including real estate and intellectual property, in accordance with pre-agreed terms. Furthermore, the resolution stipulated that the certificate of incorporation of Banco Providus would serve as the incorporation certificate for the newly enlarged entity post-merger.
Regulators and industry stakeholders have hailed the merger as a significant step toward reinforcing Nigeria’s banking sector and enhancing the resilience of financial institutions.
Reactions to the Supreme Court’s Judgment
Following the Supreme Court ruling, Unity Bank’s legal representatives, including Senior Advocate of Nigeria (SAN) Mr. Damian Dodo, expressed their satisfaction, stating that the ruling has settled all disputes regarding the merger. Dodo noted the importance of the court’s invocation of Section 22 of the Supreme Court Act, which grants the court authority to issue final orders about such transactions.
He emphasized that the ruling underscores the significance of mergers in the financial sector, especially in terms of protecting depositors and fortifying banks. Dodo highlighted that the court’s decision impacts the broader economy, safeguards depositor funds, and supports initiatives aimed at building robust banking institutions capable of sustaining commercial operations without disruption.
This judgment also strengthens the CBN’s ongoing efforts toward recapitalization and consolidation in the banking industry. Dodo concluded by stating that the Supreme Court has fully exercised its authority on this matter and has reached a conclusive judgment.
Respondents to the appeal included Providus Bank Limited, Unity Bank PLC, and several financial entities such as PAC Capital Limited, Vetiva Advisory Services Limited, and the Corporate Affairs Commission, along with regulatory bodies like the Federal Competition and Consumer Protection Commission (FCCPC) and the Securities and Exchange Commission (SEC).
