CBN Fires Union Bank, Keystone Bank, and Polaris Bank Boards: Insights

The Nigerian banking sector faced a significant shake-up on January 10, 2024, when the Central Bank of Nigeria (CBN) announced the dissolution of the boards and management of three prominent banks, Union Bank, Keystone Bank, and Polaris Bank. This bold move by the CBN underscores its commitment to maintaining a robust and compliant banking sector.

According to the press release by the CBN, the action was necessitated by the banks’ persistent non-compliance with critical regulatory provisions outlined in Section 12(c), (f), (g), (h) of the Banks and Other Financial Institutions Act, 2020. These provisions are pivotal to the governance and regulatory framework of banks in Nigeria, covering essential aspects of corporate governance and financial stability.

Mrs. Sidi Ali Hakama, the Acting Director of Corporate Communications at the CBN, elaborated that the banks were involved in regulatory non-compliance, failures in corporate governance, and activities that posed threats to financial stability. Such infractions cannot be overlooked in a sector as crucial as banking, where the stakes involve public trust and the economic well-being of the nation.

CBN is committed to security and stability

In line with its mandate to ensure a safe, sound, and resilient banking environment, the CBN reassured the public of its unwavering commitment to protect depositors’ funds and uphold the integrity of the financial system. 

This decision reflects the CBN’s proactive approach to safeguarding the interests of stakeholders and preserving the overall health of the Nigerian banking sector.

What led to the investigative proceedings and responses

December of the previous year saw the CBN’s Special Investigator, Jim Obazee, delve into Titan Trust Bank’s (TTB) acquisition of Union Bank, following allegations of impropriety involving a former CBN Governor, Godwin Emefiele. Despite Titan Trust Bank’s denial of any wrongdoing, the allegations cast a shadow over the acquisition process.

Polaris Bank, too, was embroiled in controversy over its sale, with claims of preferential treatment during its divestment process. However, the CBN, along with AMCON, maintained that the process was transparent and well-supervised.

Under the leadership of Yemi Cardoso, the CBN has been vigilant in investigating alleged wrongdoings in the apex bank during Emefiele’s tenure. A leaked report by the Special Investigation Unit further underscored potential financial and legal irregularities within the CBN itself.

CBN dissolute the boards and appointed new ones

The CBN’s decisive action led to the dissolution of the boards and management of Union Bank, Keystone Bank, and Polaris Bank. In their place, new executives have been appointed to steer these banks towards compliance and stability.

For Union Bank, Yetunde Oni takes over as Managing Director/CEO with Mannir Ubali Ringim as the Executive Director. Keystone Bank sees Hassan Imam as its new Managing Director/CEO and Chioma A. Mang as the Executive Director. Polaris Bank welcomes Lawal Mudathir Omokayode Akintola as its Managing Director/CEO and Chris Onyeka Ofikulu as the Executive Director.

Conclusion

The CBN’s decision to dissolve the boards of Union Bank, Keystone Bank, and Polaris Bank serves as a stern reminder of the importance of regulatory compliance and corporate governance in Nigeria’s banking sector. By appointing new executives, the CBN demonstrates its resolve to rectify the governance issues within these institutions and restore confidence in the Nigerian banking system. This move not only ensures the stability and security of the financial sector but also reaffirms the CBN’s commitment to upholding high standards in banking practices.