Court Voids CBN’s Union Bank Intervention, Regulator Moves for Legal Review

The Central Bank of Nigeria (CBN) has reaffirmed its regulatory authority over Union Bank of Nigeria Plc, assuring customers and stakeholders that the bank remains stable despite a recent court judgment.

In a statement issued on Wednesday, the apex bank acknowledged the ruling delivered by the Federal High Court in Lagos on March 25, 2026, concerning its regulatory intervention in Union Bank in January 2024.
The CBN stated that it is currently obtaining the Certified True Copy (CTC) of the judgment and will carry out a detailed legal review. It emphasised that its next steps will strictly follow due process and uphold the rule of law.
Reiterating its statutory role as Nigeria’s primary financial regulator, the bank noted that its supervisory actions are based on established legal frameworks aimed at protecting the stability and integrity of the banking system.
Despite the court’s decision, the CBN maintained that Union Bank’s operations remain unaffected. It assured depositors, customers, and counterparties that the bank is financially sound and capable of meeting all its obligations.
“The CBN wishes to reassure the banking public that Union Bank continues to operate normally and remains a safe and reliable institution,” the statement indicated, reflecting confidence in the bank’s resilience.
The apex bank added that it would continue close regulatory monitoring of the lender to ensure compliance with prudential standards and sustain stability across the financial sector.
This reassurance follows heightened public interest in the judgment, with analysts stressing the importance of clear communication from regulators to maintain confidence in the banking industry.
The CBN reiterated its commitment to safeguarding trust in Nigeria’s financial system and pledged to take necessary steps to ensure a safe, sound, and resilient banking environment.
Meanwhile, the Federal High Court in Lagos nullified the CBN’s January 2024 intervention in Union Bank, declaring the dissolution of the bank’s board and management as unlawful and unconstitutional.
In a landmark ruling delivered on Wednesday, Justice Chukwujekwu Aneke held that the apex bank exceeded its statutory powers under the Banks and Other Financial Institutions Act (BOFIA) 2020 when it removed the bank’s leadership and appointed new management.
The case, filed by Titan Trust Bank Limited along with Luxis International DMCC and Magna International DMCC, challenged the CBN’s actions, including dissolving the board, appointing a new management team, and initiating a recapitalisation process that allegedly diluted shareholders’ equity and excluded them from critical decisions.
In the 152-page judgment, the court ruled in favour of the plaintiffs, declaring the intervention “ultra vires” and inconsistent with BOFIA provisions.
Justice Aneke consequently issued sweeping orders nullifying the entire exercise. These included setting aside the CBN’s announcement dissolving the board and invalidating all decisions taken by the regulator-appointed management.
The court also ordered the immediate reinstatement of the former board and management of Union Bank, led by its former Chairman, Farouk Mohammed Gumel, and restrained the CBN from further interference in the bank’s governance, ownership structure, or share capital.
Additionally, the court halted the recapitalisation programme initiated under the CBN-appointed management, including the investor selection process involving financial advisers, ruling that all actions arising from the intervention were invalid.
Beyond statutory issues, the court held that the apex bank violated the fundamental rights of shareholders by failing to provide a fair hearing before taking action.
Justice Aneke noted that although the CBN relied on findings from a special examination of the bank, shareholders were not given the opportunity to respond to the allegations or participate in subsequent decisions.
The court further observed that the plaintiffs’ shareholding was reduced to 40 percent and that they were excluded from the recapitalisation process without legal basis, describing the actions as evidence of bad faith.
While recognising the CBN’s responsibility to ensure financial stability and protect depositors, the court stressed that such powers must be exercised within the limits of the law.
It also ruled that statutory protections limiting actions against the CBN do not prevent judicial review where the regulator acts beyond its authority.
The court dismissed procedural objections raised by the respondents and held that the continued exclusion of the plaintiffs from the bank’s affairs constituted a “continuing injury,” allowing the suit to proceed despite time constraints.
On damages, the court declined to grant additional compensation beyond the acknowledged $190 million investment by the plaintiffs, citing lack of sufficient oral evidence to support further claims.
Reacting to the ruling, the CBN reiterated that it is reviewing the judgment and remains committed to due process and the rule of law.
The apex bank again reassured stakeholders that Union Bank’s operations remain stable and unaffected, affirming that the bank is capable of meeting its obligations while regulatory oversight will continue to ensure its safety and soundness.