With the new offspring of Unity and Providus banks expected to be named later this month, ISAAC CHIBUIFE writes that the planned merger is not merely a footnote in efforts to prevent failure but also highlights how the prospect of blending rich institutional memories with innovation could enhance corporate stability.

Mergers are inherently disruptive in nature and negatively so sometimes. But they also offer an opportunity to combine complementary strengths into a stronger whole. The Nigerian banking sector is replete with case studies of great institutions eked from business combinations of contrasting strengths.

The modern United Bank for Africa is a signpost of how complementary brand equities could create an enduring institution. The legacy UBA was notable for its conservative history, while Standard Trust Bank was an image of the audacity the offspring is known for. The blending of the two corporate traits makes the modern UBA that has gone ahead to conquer Africa in the most audacious manner, without throwing away the risk-consciousness that banking is known for.

Competitors have also watched how the combination of digital innovation of the default Diamond Bank and the brick-and-mortar vastness of Access Bank created a more successful global brand that Nigeria is proud of. Interestingly, Access Bank leaders shun the temptation of approaching the merger with the mindset of a conqueror and throw away anything Diamond in the new business. They acknowledge the niche the late Pascal Dozie built and created sufficient space for the unique position to thrive in the new Access Bank, which helped the bank absorb both the assets and complementary brand equity of the old Diamond.

Perhaps, at a smaller scale, though, another UBA or Access is in the making again with the concluding business combination process of Unity, a bank with rich and complex socio-cultural character with strong national appeal, and Providus, another financial institution that is creating its world with unique digital imprimaturs.

Besides, Unity Bank brings to the table a valuable mixture of distribution reach, SME expertise, deposit franchise, operational know-how, community reputation and pragmatic risk management. When fused with Providus Bank’s digital-forward approach and product innovation, the contributions can create a bank that is both deeper in its reach and superior in its product offerings.

The merger between Unity Bank and Providus Bank, midwived by the Central Bank of Nigeria (CBN), is a step towards strengthening the financial institutions in Nigeria and aimed at boosting customer confidence. The process scheduled for completion on September 26, 2025, marks the most significant banking sector consolidation in Nigeria since 2019, when Access Bank and Diamond Bank finalised their business combination.

The CBN approved the merger on August 6, 2024, marking what industry analysts describe as a watershed moment in Nigeria’s banking evolution. The intervention marked the first Nigerian banking merger in six years, a significant development amidst the CBN’s aggressive recapitalisation drive.

The merger’s financial architecture reveals the complexity of modern Nigerian banking consolidation. The CBN had approved a N700 billion loan to support the new banking entity, with the financial support deemed necessary to strengthen the stability of Nigeria’s financial system.

The loan is structured as a 20-year term at Monetary Policy Rate (MPR) minus 11 per cent, representing one of the most generous regulatory interventions in recent history. The move was taken to preserve one of the most cherished corporate entities in the country (Unity Bank). And Unity’s institutional strengths have proven crucial in securing the transformative deal.

The bank’s extensive nationwide infrastructure, comprising over 200 branches strategically positioned across Nigeria’s diverse economic terrain, will surely provide the merged entity with unparalleled reach. The physical footprint represents decades of calculated expansion that has penetrated both urban commercial centres and underserved rural communities where traditional banking remains the preferred channel for millions of Nigerians.

Unity Bank’s current ownership structure, with the Assets Management Corporation of Nigeria (AMCON) as the top shareholder, adds a layer of government backing that is considered by many as another layer of credibility.

In an increasingly fragmented regulatory environment, Unity Bank’s full national banking license holds immense significance. The operational limitation imposed by the regional outlook of Providus would be lifted by Unity Bank’s unrestricted national reach. With the right strategy, the new business may be able to leverage the wider coverage to compete directly with tier-one banks across the regions, especially in farming communities where Unity Bank is a leading financial interface with farmers.

The new business has a unique opportunity to position itself in the north, where brand loyalty surpasses conventional marketing. Dating back to the days of Bank of the North and New Nigeria Bank, two of the legacy institutions that merged with others to form Unity, this is one financial institution that grassroots, farming communities and northern depositors have taken ownership of. This made Unity, for instance, a natural integral of the CBN’s previous intervention in agriculture, including the Anchor Borrowers’ Programme (ABP). This northern dominance is a market edge of unique social relevance – a stronger Unity Bank that benefits from the aggressive, innovative marketing of Providus could be a game-changer in driving financial inclusion in the north, where banking is still considered an elite service.

Unity Bank’s deep penetration of the agrarian belt, spanning Northern and Middle Belt regions, has positioned it as a critical facilitator of agricultural value chain financing. This specialisation aligns seamlessly with federal government priorities around food security and rural economic development. What the new brand would do with this opportunity is a key part of the business to watch.

Certainly, with a combined asset of N2.5 trillion, the new bank would sit squarely within the mid-tier category, which will enable it to challenge established market hierarchies.

The proposed merger between the two presents one of the more interesting consolidation opportunities in the Nigerian banking sector: two distinct institutions, each with its own strengths and customer niches, combining to form a stronger, more competitive player. While much of the conversation around mergers focuses on scale, cost savings and market share, it is important to examine the concrete, positive contributions the parties bring to the union.

In a merger, the geographic diversification of one of the parties could become a multiplier – branch network and long-standing client relationships can be leveraged to expand the union’s service reach beyond its core niches, creating cross-selling opportunities, faster customer acquisition and more efficient liquidity distribution. The balance between physical accessibility and digital convenience could position the bank to serve a broader socio-economic slice of the market — a strategic advantage in an economy where cash and digital channels coexist.

How the merged enterprise would convert the long-standing relationship with small and medium businesses serviced by Unity Bank into a new marketing touchpoint in the highly competitive market will determine how swiftly it would navigate the landscape. In the merged bank, Unity’s SME playbook can be integrated with Providus’s product innovation and customer experience design to scale offerings like invoice financing, supply-chain lending and sector-specific value chains (agriculture, trade and services). And the Providus’ nimbleness will be handy in complementing the strength.

Of course, there are pitfalls. Long institutional memory comes with its own burden that could be averted with a clear integration roadmap that preserves customer-facing continuity, a retention programme that incorporates important resources required to preserve institutional assets and sustain clients’ trust.

If managed with discipline — mindful of staff retention and committed to integrating the best of both corporate cultures and systems — the Unity–Providus merger could produce a resilient institution positioned to serve the evolving needs of Nigeria’s businesses and households. In that future, Unity Bank’s positive contributions will not merely be historical footnotes: they will be the structural pillars on which a more inclusive, innovative and competitive bank would stand.