Dr. Uju Ogunbunka, president of the Bank Customers' Association of Nigeria, has weighed in on Sunday's merger announcement between Providus and Unity Banks.
The two lenders unveiled their combined entity as ProvidusUnity Bank in a joint statement over the weekend.
Speaking to reporters on Monday, Ogunbunka said the deal protected depositors from catastrophic losses. He noted that without the merger, one or both institutions faced imminent collapse.
"It's a healthy development," he told DAILY POST in an exclusive chat. "If they hadn't merged, we'd be discussing the failure of one or both banks."
According to him, the combination will shield Nigeria from another banking crisis. It'll also protect customer confidence and prevent a drain on portfolio investment, he added.
Such outcomes would've hammered the entire financial system, Ogunbunka warned. Lost deposits and eroded trust in local banks carry severe consequences.
His remarks come just three months after the Central Bank wrapped up the recapitalization exercise. During that period, 33 banks mobilized N4.65 trillion in fresh capital.
Nigeria's banking sector has faced turbulence recently. Within two years, major institutions like Aso Savings and Loan and Heritage have collapsed.
