Unity Bank, a publicly listed bank in Nigeria, is currently in discussions with Providus Bank regarding a potential business combination.
Sources with knowledge of the matter, have revealed that both parties have been engaged in talks for several weeks, and they are currently in the exploratory stages of the discussion.
However, there are differing opinions on the progress of these talks, with some suggesting that they are in the advanced stages, indicating a certain level of uncertainty.
A source within Providus Bank even goes as far as to describe it as an “acquisition” of Unity Bank, suggesting a more definitive direction for these negotiations.
It’s worth noting that while the discussions are ongoing, the formal endorsement from the central bank is still pending.
Both Unity Bank and Providus Bank believe that a business combination would be mutually beneficial, given their unique business models. Unity Bank, with its extensive bank spread and balance sheet, contrasts with Providus Bank, which is known for its modernity, agility, and financial stability.
Unity Bank’s share price has been experiencing significant fluctuations this year, as investors anticipate a potential takeover or purchase of the bank.’
This isn’t the first time the bank has been associated with such speculation, as it previously faced a failed acquisition bid by Miloist Global some years ago.
Recently, Unity Bank released its 2023 9-month results, reporting a loss before tax of N47.9 billion.
The bank also carries a negative equity of N190.2 billion, implying that it is facing insolvency.
This raises the possibility that in the event of a business combination, Unity Bank’s shareholders might find themselves in a less advantageous position in the new entity.
In contrast, Providus Bank reported a net asset of N45.2 billion, based on its 2022 audited financial statements, indicating a stronger financial position.
It’s important to note that as of now, the Nigerian Exchange Group (NGX) has not received official notification of any business combination.
Consequently, no press release has been published on the NGX, as is typically required for listed companies. Unity Bank, a publicly listed entity, closed trading at N1.07 per share.
