CBN intervention linked to audit review at Union Bank

New details have emerged on the circumstances surrounding the appointment of a new board and management  for Union Bank of Nigeria by the Central Bank of Nigeria.

A forensic audit of the bank indicated that the January 2024 intervention in the first-generation commercial bank followed concerns over alleged financial practices that threatened the solvency of the institution.

Extracts from the forensic report pointed to issues relating to financial reporting, the management of foreign loans, and certain transactions within the bank’s operations.

The report indicated that Titan Trust Bank, the investment vehicle linked to the former owners and directors, which was merged with Union Bank, had a loan of $300m obtained from Africa Export-Import Bank.

According to the report, the loan was reflected in the books of Union Bank, with implications for the bank’s financial position and operations. It was also indicated that the loan formed part of the financing structure used in acquiring shares of Union Bank, with associated repayment obligations reflected in the bank’s records.

The report further alleged that there were no hedging arrangements against potential revaluation losses on the foreign currency loan, while interest and fees accumulated over time.

This resulted in significant revaluation impacts and additional financial obligations by the third quarter of 2025.

Forensic investigators also identified transactions involving foreign loans from offshore banks and their utilisation within the bank’s operations, including swap arrangements. In addition, the report referenced withdrawals linked to obligations associated with the foreign currency loan, which had implications for the bank’s liquidity position.

A forensic analyst, who craved anonymity because of the sensitivity of the report, believed that the banking watchdog’s intervention helped to stabilise the bank and limit potential wider impacts on the financial services industry.

The intervention provided the first-generation bank with a “soft window” to manage its operations while the new directors redirected the affairs of the bank. The resultant corrective measures have seen Union Bank improving its position, regaining market share, and meeting maturing obligations.

By the third quarter of 2025, the bank was on a recovery path following actions by the new management, with many analysts expecting it to meet the N200bn new capital requirement to retain its standalone national banking licence.

In a formal statement on a judgment delivered on March 25, 2026, by the Federal High Court in Lagos concerning its regulatory action on Union Bank, the CBN stated that while it was obtaining and carefully reviewing the Certified True Copy of the judgment, the status of Union Bank had not changed, implying that the lender remains under CBN intervention management.

“As the apex regulatory authority, the CBN remains committed to acting in accordance with its mandate and established legal processes,” the banking watchdog noted.

“The CBN assures the public that UBN’s status is unchanged and that it remains fully capable of meeting its obligations to customers, depositors, and all stakeholders. The CBN will continue to provide the necessary regulatory oversight to ensure Union Bank operates in a safe, sound, and stable manner, while maintaining public confidence in the financial system,” CBN stated.

In what appeared to reference Union Bank and other CBN-intervention banks, the apex bank, in a formal statement confirming the successful recapitalisation of 33 banks, stated that “a limited number of institutions remain subject to ongoing regulatory and judicial processes, which are being addressed through established supervisory and legal frameworks.”

The apex bank, however, assured that “all banks remain fully operational, ensuring continued access to banking services for customers,” allaying concerns over the operations of institutions under intervention.