CBN appeals federal high court ruling on Union Bank takeover

The Central Bank of Nigeria has filed an appeal against the Lagos Federal High Court ruling that voided its takeover of Union Bank, arguing its actions were within statutory powers

The Central Bank of Nigeria has filed an appeal challenging the March 25, 2026 judgment of the Federal High Court in Lagos, which declared its takeover of Union Bank of Nigeria Plc unlawful and ordered the reinstatement of the bank’s former board of directors.

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Justice Chukwujekwu Aneke ruled that the apex bank acted beyond its statutory powers in dissolving the board and management of the bank.

In response, the CBN, through a legal team of Senior Advocates of Nigeria (SAN) led by Yusuf Ali (SAN) and including Kemi Pinheiro (SAN), Tunde Fagbohunlu (SAN), Uche Val Obi (SAN), and Chukwudi Enebeli (SAN), described the judgment as legally flawed and inconsistent with Nigerian banking regulations.

The notice of appeal, filed on March 26, 2026, raised 11 grounds, seeking to set aside the lower court’s decision in its entirety.

“The learned trial judge erred in law when he held that the appellant acted ultra vires its statutory powers,” the CBN stated in one of its grounds of appeal.

The apex bank argued that its intervention was necessary due to Union Bank’s precarious financial state, including a negative capital adequacy ratio, a capital shortfall exceeding N224 billion, and high levels of non-performing loans.

“Evidence before the trial court clearly showed that Union Bank was in severe financial distress.

It was imperative for the appellant, in the exercise of its statutory mandate, to act decisively to safeguard the stability of the banking system,” the CBN stated.

Citing provisions of the Central Bank of Nigeria Act and the Banks and Other Financial Institutions Act 2020 (BOFIA), the apex bank maintained that it acted within the law.

“Section 34 of BOFIA expressly empowers the Governor of the Central Bank to remove directors and officers of a bank in a critical condition, while Section 51 protects actions taken in good faith in the discharge of statutory duties,” it added.

The CBN also filed a motion seeking a stay of execution of the judgment pending the appeal, urging the court to restrain the reinstated directors from taking control of the bank or interfering in its operations.

“Unless this honourable court grants a stay, the respondents may take steps that could destabilise the governance structure and operations of Union Bank,” it warned.

Respondents in the appeal include Titan Trust Bank Limited, Luxis International DMCC, Magna International DMCC, and several former directors of Union Bank, including Bayo Adeleke and Yetunde Oni, who had challenged the CBN’s takeover as ultimate beneficiaries of Union Bank shares.

The Central Bank emphasised that the appeal raises critical legal questions regarding the scope of its regulatory authority under BOFIA and the need to maintain financial system stability.

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The appellate court has not yet fixed a date for the hearing of the appeal and the accompanying application for stay of execution.

Quadri Olaitan