CBN Intervention: Audit Reveals Controversial Deals Behind Union Bank Crisis

A forensic audit has shed new light on the circumstances that led to the Central Bank of Nigeria’s takeover of Union Bank, pointing to alleged questionable transactions under its former leadership.

The CBN dissolved the bank’s board and management in January 2024, citing financial stability concerns. While the full audit has not been made public, sources say the decision followed findings that certain transactions could have endangered the bank’s financial health.

According to investigators, the report highlighted issues with foreign loan management, internal fund transfers, and financial reporting practices. It also flagged restructuring strategies described as “unorthodox financial engineering,” which may have had significant financial implications.

Central to the findings was a $300 million loan secured from Afreximbank by Titan Trust Bank before its merger with Union Bank. The report alleged that the unhedged loan was transferred to Union Bank’s books without adequate disclosure, exposing it to foreign exchange risks.

Investigators also raised concerns that the loan proceeds may have been linked to the acquisition of Union Bank shares, potentially placing repayment obligations on the bank itself — a structure analysts say could violate regulatory standards.

The audit further alleged that some foreign loans were diverted into other financial instruments, including swap arrangements, without full transparency to regulators and lenders.

There were also claims that funds were withdrawn from the bank to service disputed foreign loans, contributing to pressure on its foreign currency liquidity.

Despite the allegations, none has been proven in court, and no criminal convictions have been announced. Requests for comments from the bank’s former leadership, Titan Trust Bank, and Afreximbank were not answered at the time of filing this report.

Sources said the CBN stepped in to prevent broader risks to the banking system.

Since the intervention, Union Bank has reportedly stabilised, with improved performance and progress toward meeting the N200 billion capital threshold required for its licence.

Reacting to a Federal High Court ruling delivered on March 25, 2026, the CBN maintained that the bank remains under its regulatory control.

“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 regulator said.

The apex bank reiterated its commitment to ensuring financial system stability, noting that while most banks have completed recapitalisation, a few remain under regulatory and judicial review but are still fully operational.

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