Fresh details have emerged regarding the circumstances that led to the regulatory intervention in Union Bank of Nigeria (UBN), with a forensic audit report alleging wide-ranging financial irregularities under the bank’s former owners and directors.
The Central Bank of Nigeria (CBN) had in January 2024 dissolved the bank’s board and management, citing the need to safeguard financial stability, reports Vanguard.
While the apex bank has not publicly released the full forensic audit, sources familiar with the investigation say the intervention followed concerns over transactions that allegedly posed risks to the bank’s solvency.
According to excerpts of the report reviewed by investigators, the former owners and directors were alleged to have engaged in financial reporting practices and transactions that raised regulatory concerns, including the handling of foreign loans and internal fund movements. The report also questioned certain restructuring arrangements described as “unorthodox financial engineering,” which it said may have had significant financial implications for the bank.
A key issue highlighted in the report relates to a $300 million facility obtained from the African Export-Import Bank (Afreximbank) by Titan Trust Bank, which later merged with Union Bank. Investigators allege that the facility, which was reportedly unhedged, was transferred onto Union Bank’s balance sheet without full disclosure, potentially exposing the bank to foreign exchange risks.
The report further claims that proceeds from the facility may have been linked to the acquisition of shares in Union Bank, raising questions about whether the structure effectively placed repayment obligations on the bank itself. Analysts say such arrangements, if established, could amount to a breach of standard corporate governance and banking regulations.
In addition, the forensic audit is said to have identified transactions involving foreign loans obtained from offshore institutions, which investigators allege were diverted into other financial arrangements, including swap transactions. The report claims that some of these transactions may not have been fully disclosed to relevant stakeholders, including regulators and lenders.
There were also allegations of withdrawals from the bank’s funds to meet obligations to the disputed foreign loan. According to the report, these transactions may have contributed to foreign currency liquidity pressures within the bank during the review period.
However, none of these allegations has been publicly tested in court, and no criminal conviction has been announced in connection with the matter. Efforts to obtain comments from the former directors and owners, as well as Titan Trust Bank, were unsuccessful as of press time. Afreximbank has also not issued any public statement regarding the claims referenced in the report.
A source familiar with the investigation, who declined to be named due to the sensitivity of the matter, said the CBN’s intervention was aimed at preventing potential systemic risks to the banking sector.
The resultant corrective measures have seen Union Bank bouncing back, regaining more market share and redeeming maturing obligations.
By third quarter 2025, the bank was already on its path to recovery following actions by the new management, with many analysts expecting it to be able to meet the N200 billion new capital requirement to retain its standalone national banking licence.
In a formal statement on 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 (CTC) of the judgment, the status of Union Bank has not changed, implying that the lender remains under the 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 a reference to Union Bank and other CBN-intervention banks, the apex bank in a formal statement confirming the successful recapitalisation of 33 banks yesterday, 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 banks however, assured that “all banks remain fully operational, ensuring continued access to banking services for customers”, allaying any fears over the operations of the intervention banks, which still face legal issues.
