Despite court setback, CBN reassures public on Union Bank stability

THE Central Bank of Nigeria (CBN) has reaffirmed its regulatory oversight of Union Bank of Nigeria Plc following a recent judgment by the Federal High Court in Lagos concerning its intervention in the lender.

In a statement issued on Wednesday, the apex bank said it has taken note of the court’s decision delivered on March 25, 2026, and is in the process of obtaining the Certified True Copy of the judgment for a detailed review. The CBN stressed that its actions will remain guided by due process and adherence to the rule of law.

The regulator reiterated commitment to carrying out its statutory mandate within established legal frameworks, noting that any intervention in the banking sector is aimed at safeguarding financial stability.

Addressing concerns over the lender’s condition, the CBN assured customers and stakeholders that Union Bank’s operational status remains unchanged. It emphasised that the bank is fully capable of meeting its obligations to depositors and other counterparties.

The apex bank added that it will continue to provide the necessary oversight to ensure Union Bank operates in a safe and sound manner, while sustaining public confidence in Nigeria’s financial system.

READ ALSO: Polaris, Keystone acquired for free, Emefiele used proxies to buy Union Bank – Investigator

Court ruling against CBN

A Federal High Court in Lagos on Tuesday overturned the CBN’s 2024 takeover of Union Bank of Nigeria, ruling that regulators went beyond their legal powers when they dissolved the lender’s board and management, Premium Times reported.

Delivering judgement in a suit marked FHC/L/MISC/1377/2025, the judge, Chukwujekwu Aneke, held that CBN’s actions were ultra vires and not in compliance with the provisions of the Banks and Other Financial Institutions Act 2020 (BOFIA).

In his ruling, the judge nullified the entire regulatory intervention and granted other prayers in favour of the applicants, setting aside the CBN’s public announcement dissolving the board and threw out all actions taken by the regulator-appointed management.

The court also ordered the immediate reinstatement of the former board and management led by Farouk Gumel.

The judge further restrained the CBN and other respondents from exercising any powers over the bank’s governance, including restructuring its share capital or altering its ownership structure.

Mr Aneke also stopped the ongoing recapitalisation process and investor selection programme initiated under the CBN-appointed board.

The judge also held that the applicants’ fundamental rights were breached, stressing that they were sanctioned without being given an opportunity to respond to allegations of regulatory infractions arising from a purported special examination of the bank.

Mr Aneke affirmed that the applicants’ shareholding was reduced from 100 percent to 40 percent and that they were excluded from participating in the recapitalisation exercise without legal justification, describing the actions as done in bad faith.

Although the CBN had defended its intervention as part of its prudential oversight, citing severe financial distress at the bank, including a negative capital adequacy ratio, a capital shortfall exceeding N224 billion, and a high non-performing loan ratio.

But the court held that such regulatory powers must be exercised strictly within the confines of the law. On jurisdiction, the court ruled that Section 51 of BOFIA does not shield the CBN from judicial review where it acts outside its statutory powers.

It also held that the actions of the CBN-appointed board were subject to review, describing them as agents of the apex bank. The court dismissed procedural objections raised by the respondents, holding that the applicable rules of court were merely directory and not sufficient to defeat the suit.

Mr Aneke also found that the applicants suffered a ‘continuing injury,’ noting that they were excluded from the bank’s management and decision-making processes between January 2024 and December 2025, during which significant corporate actions were taken.

READ ALSO: CBN revokes licenses of Aso Savings, Union Homes for non-complaince with BOFIA

The dispute stemmed from the CBN’s January 2024 intervention, when it dissolved the boards and management of Union Bank, Keystone Bank and Polaris Bank over alleged regulatory breaches and corporate governance failures.

At the time, the apex bank cited provisions of BOFIA, referencing the bank’s non-compliance with licensing conditions, threats to its financial stability, its failure to adhere to regulatory directives, and its undercapitalisation, as justification for the intervention.

It subsequently appointed interim management to take over the affected institutions and initiated corrective measures, including recapitalisation and restructuring programmes.

Special investigator’s report

A December 2023 report by the CBN special investigator, Mr Jim Obazee, claimed that former apex bank governor, Mr Godwin Emefiele, used proxies to acquire Union Bank.

The investigator stated in one of his reports to the president that he “discovered that some persons were used as proxies by Mr Godwin Emefiele to set up Titan Trust Bank (TTB) and acquire Union Bank, all from ill-gotten wealth.” The special investigator said, “We were able to secure some documents, and investigation reports will lead to the forfeiture of the two banks by the federal government.”

The report noted that Mr Obazee held meetings with relevant parties involved in the deal, except for one Mr Cornelius Vink, who was hospitalised in Switzerland.