CBN Challenges Court Ruling Nullifying Union Bank Intervention

The Central Bank of Nigeria has lodged an appeal against a judgment of the Federal High Court, Lagos Division, which nullified its intervention in Union Bank of Nigeria Plc and ordered the reinstatement of the bank’s former board of directors.

According to Ireporter Online, the ruling delivered on March 25, 2026, by Chukwujekwu Aneke held that the apex bank exceeded its statutory authority when it dissolved the bank’s board and management. In response, the CBN swiftly assembled a high-powered legal team comprising several Senior Advocates of Nigeria to challenge the decision at the appellate court.

The legal team is led by Yusuf Ali, alongside notable SANs including Kemi Pinheiro, Tunde Fagbohunlu, Uche Val Obi, and Chukwudi Enebeli. The appeal, filed on March 26, 2026, outlines 11 grounds challenging the lower court’s verdict.

In its submission, the CBN maintained that its intervention was carried out within the framework of its statutory powers under relevant banking laws, particularly the Central Bank of Nigeria Act and the Banks and Other Financial Institutions Act (BOFIA) 2020. The regulator argued that evidence presented before the trial court demonstrated that Union Bank was grappling with severe financial distress at the time, including a negative capital adequacy ratio, a capital deficit exceeding ₦224 billion, and a significant volume of non-performing loans.

The apex bank further asserted that provisions of BOFIA empower the CBN Governor to remove directors and officers of financially troubled institutions, while also granting legal protection for actions taken in good faith. It contended that the trial court misinterpreted these provisions, resulting in what it described as a miscarriage of justice and an erroneous declaration that its actions were unlawful and unconstitutional.

In addition to the appeal, the CBN filed a motion seeking a stay of execution of the judgment pending the outcome of the appeal. The bank urged the court to restrain the reinstated directors and other respondents from assuming control of Union Bank’s operations, convening board meetings, or making governance changes that could destabilise the institution. It also called for all parties to maintain the status quo until the appellate process is concluded.

Respondents in the matter include Titan Trust Bank Limited, Luxis International DMCC, Magna International DMCC, as well as former Union Bank directors such as Bayo Adeleke and Yetunde Oni, who had initially approached the court as shareholders challenging the CBN’s intervention.

According to the apex bank, enforcing the judgment at this stage could disrupt the bank’s governance structure, weaken public confidence in the financial system, and pose broader systemic risks. It stressed that the appeal raises critical legal questions regarding the extent of its regulatory authority and insisted that preserving stability in the banking sector remains paramount while the appellate court reviews the case.