Union Bank: How controversial transactions led to CBN takeover

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Fresh details have emerged regarding the regulatory intervention in Union Bank of Nigeria, with a forensic audit reportedly uncovering wide-ranging financial irregularities under the bank’s former owners and directors.

The Central Bank of Nigeria (CBN) had in January 2024 dissolved Union Bank’s board and management, citing the need to safeguard financial stability. While the apex bank has not publicly released the full forensic audit, sources familiar with the investigation indicate that concerns arose over transactions potentially jeopardising the bank’s solvency.

Excerpts of the report reviewed by investigators allege that former owners and directors engaged in questionable financial reporting practices, including the handling of foreign loans, internal fund movements, and certain restructuring arrangements described as “unorthodox financial engineering.”

A key issue highlighted relates to a $300 million facility obtained from African Export-Import Bank by Titan Trust Bank, which later merged with Union Bank. Investigators allege that the unhedged facility was transferred to Union Bank’s balance sheet without full disclosure, potentially exposing the bank to foreign exchange risks. The report also claims that proceeds may have been linked to Union Bank share acquisitions, raising governance concerns.

Further allegations include diversion of foreign loans into swap transactions and undisclosed fund withdrawals to meet obligations on disputed loans, which may have contributed to foreign currency liquidity pressures.

No criminal convictions have been announced, and efforts to reach former directors, Titan Trust Bank, or Afreximbank for comment were unsuccessful. A source familiar with the investigation stated that the CBN’s intervention aimed to prevent systemic risks to Nigeria’s banking sector.

Since the intervention, Union Bank has reportedly regained market share and improved financial stability. By Q3 2025, the bank was on track to meet the N200 billion new capital requirement to retain its national banking licence.

In a March 25, 2026 statement following a Federal High Court judgment in Lagos, the CBN affirmed that Union Bank’s operational status remains under regulatory oversight but fully capable of meeting obligations to customers and stakeholders.

The apex bank also noted that while most banks have been recapitalised, “a limited number of institutions remain subject to ongoing regulatory and judicial processes, which are being addressed through established supervisory and legal frameworks,” assuring that banking services continue uninterrupted.