The Central Bank of Nigeria (CBN) has approved the proposed merger between Unity Bank and Providus Bank, despite a lengthy fraud investigation that followed multiple substantiated allegations of severe compliance failures, extreme financial irregularities and ₦280 billion negative share capital at Unity Bank.
The apex bank has also incredibly gifted the new entity a massive bailout in the form of a ₦700 billion soft loan with a 20 year term at an interest rate starting at 6 percent, which is approximately 4 times less than the current interbank interest rate of 25.77 percent.
This was exclusively revealed to West Africa Weekly by a confidential source with knowledge of the matter who passed across a CBN memo dated 22 July 2024 and signed by Adetona Adedeji, Acting Director of the Banking Supervision Department.
According to the document, the new entity does not need to start paying back the loan until 5 years have elapsed, after which it is expected to repay the loan in 15 equal parts over the remaining years.
The document reads in part:
“We write to inform you that the Central Bank of Nigeria has approved your request as follows:
“A financial accommodation totaling ₦700 billion to the new entity, structured as a 20-year term loan. The loan will be priced at an interest rate of MPR minus 11%, subject to a minimum of 6%. Payments are to be made semi-annually, with a principal moratorium of five years. Beginning in the sixth year, the new entity will commence repayment in 15 (fifteen) equal installments until maturity.”
Document Showing CBN’s Approval of a Merger of Unity Bank and Providus Bank
At the center of Unity Bank’s fraud case is Thomas Akoh Etuh who became Chairman of the bank’s board in 2015. Under his leadership, the bank issued a suspiciously high number of “liars’ loans”, which are loans given with minimal due diligence.
This reckless lending increased the bank’s total non-performing loan (NPL) exposure to ₦400 billion by the time he retired in 2018. Entities directly linked to Etuh alone were responsible for ₦29 billion of these NPLs, which were later wiped off through a hideous 2016 deal with Frontier Capital Alternative Assets Limited (FCAAL), where the bank sold its entire NPL portfolio, worth ₦242 billion, to FCAAL for just ₦6.43 billion. By offloading these bad loans, Etuh and FCAAL were able to remove the toxic assets from Unity Bank’s books while retaining the collateral associated with those loans. Thus, Etuh profited from the very loans that had put Unity Bank at risk.
Despite the clear criminality of these activities, no significant actions were taken against Etuh or Unity Bank’s treasurer, Sunny Bakwunye, who was implicated in a separate fraud case involving the disappearance of ₦13 billion.
According to the source, Unity Bank’s quarter-trillion-naira portfolio of non-performing loans was effectively “laundered” by being converted into shares in companies like Notore Chemicals and 9Mobile where Thomas Etuh holds significant stakes. He is Chairman of Notore Chemicals where Femi Edun of Frontier Capital also sits on the board, and he was recently named Chairman of 9Mobile where he sits on a board that also includes Femi Edun and longtime business associate Nahim Abe Ibraheem, who happens to hold a significant amount of non-performing loans at Unity Bank.
CBN, Allies To Unity Bank’s Fraud?
According to the source, the request for a merger between Unity Bank and Providus is part of Etuh’s plan to cover up a fairly obvious trail of financial crimes. Notably, the CBN’s Banking Supervision Department acknowledged the concerns about Unity Bank in December 2023 and initiated an investigation, which the source claimed, corroborated all of the allegations raised in the initial West Africa Weekly exposé.
CBN Unity Bank Investigation
Despite this, according to the source, Thomas Etuh and his associates have been able to successfully lobby and bribe multiple CBN executives, up to and including CBN Governor Yemi Cardoso, to look the other way and effectively provide cover for Etuh via the Providus Bank merger.
Apart from the regulatory failure involved in this merger approval, the source pointed out, the unprecedented sweetheart bailout promises to increase the amount of naira in circulation by ₦700 billion without any commensurate increase in production.
This means that the naira exchange rate and inflation will continue to worsen, as the CBN continues to print money without any corresponding increase in local production or international demand for the naira. It will be recalled that on 31 July, 2024 – 7 days after the controversial merger/bailout was approved, it was reported that Nigeria’s total money supply has risen to ₦99.24 trillion.
Confidence UbaniAugust 5, 20243 Mins read1.8k 
