The president of the Bank Customers’ Association of Nigeria, Uju Ogunbunka, has said the merger of Providus Bank and Unity Bank will protect depositors and reduce the risk of further banking failures. The remarks follow the banks’ announcement that the combined institution will operate under a new brand, ProvidusUnity Bank.
In an interview on Monday, Ogunbunka argued that the deal helps customers avoid the disruption that can occur when banks fail or are placed under stress. She said the merger has “saved customers the nightmare of lost deposits,” while also reducing the broader knock-on effects that bank collapses can have on public confidence and capital flows.
Ogunbunka said the consolidation is a positive step because, without the merger, the country could have faced the collapse of one or both banks—an outcome that would carry consequences for depositors’ funds, trust in Nigeria’s financial system, and investor willingness to allocate capital. “It is healthy development because if the merger were not done, what we have been discussing is the collapse of one or both of them,” she said. “It will save the country from another collapsed bank and the implications of lost customers’ deposits, trust in the country’s banking system, and, of course, a decline in portfolio investment in the country.”
Context for the merger
- The banks said on Sunday that their consolidation would be reflected in a new name, ProvidusUnity Bank.
- Ogunbunka’s comments were delivered against a backdrop of recent regulatory pressure on the sector, with the Central Bank of Nigeria having completed a recapitalisation exercise just about three months earlier.
- That recapitalisation exercise saw 33 banks raise N4.65 trillion.
- She also pointed to the broader history of bank failures in recent years, noting that major institutions—such as Aso Savings and Loan and Heritage—have collapsed within the past two years.
