As recommended by the Jim Obazee team of investigators probing activities of the Central Bank of Nigeria (CBN) under the Godwin Emefiele-led board of Governors, the apex bank, on Wednesday announced the sacking of the Board and Management of Union Bank of Nigeria Plc, Keystone Bank Limited, and Polaris Bank Limited.

The action, the CBN said in a statement by Mrs. Hakama Sidi Ali, Acting Director, Corporate Communications, “became necessary due to the non-compliance of these banks and their respective boards with the provisions of Section 12(c), (f), (g), (h) of Banks  and Other Financial Institutions Act, 2020.”

The Banks and Other Financial Institutions Act of November 12, 2020, Section Section 12(1)(c) states that “notwithstanding the provision of this Act or any other law, the Governor may, with the approval of the Board and notice published in the Federal Government Gazette, or print and electronic media, revoke any licence granted under this Act if a bank- (c) fails to fulfil or comply with any condition subject to which the licence was granted… (f) is involved in a situation, circumstance, action or inaction which constitutes a threat to financial stability; (g) fails to comply with any obligation imposed upon it by or under this Act, or the Central Bank of Nigeria Act or any other rule, regulation, guideline or directive made hereunder; (h) is, in the opinion of the bank critically undercapitalised with a capital adequacy ratio below the prudential minimum or such other ratio as the bank may prescribe.”

The infractions by the three banks, the CBN explained, “vary from regulatory non-compliance, corporate governance failure, disregarding the conditions under which their licenses were granted, and involvement in activities that pose a threat to financial stability, among others.”

In a commentary, analysts at KPMG wrote in a 2021 report that “Section 12 of BOFIA 2020 introduces additional circumstances under which banking licences may be revoked, and significantly expands the CBN’s discretion in exercising such powers. Also, the Act prohibits the Federal High Court (FHC) from restoring any bank’s licence where the CBN has revoked such licence.30 Apr 2021.”

The CBN statement, however, assured the public of the safety and security of depositors’ funds, stressing that it “remains resolute in fulfilling its mandate to uphold a safe, sound, and robust financial system in Nigeria. Our Banking system remains strong and resilient.”

Investdata News recalls that the newly licenced Titan Trust Bank Limited in December 2021 raised its stake in Union Bank of Nigeria Limited to 93.4%, after initially acquiring 89.4% from a pool of stakes belonging to major investors, when it executed a Share Sale and Purchase Agreement (SSPA) between its majority shareholders – Union Global Partners Limited, and Atlas Mara Limited, among others, and TTB.

This was followed by an approval by the shareholders  at an Extra-ordinary General Meeting for 11am on June 13, 2023 in Lagos to, among other resolutions, approve the proposed delisting of UBN’s entire the fully paid-up ordinary shares from the Nigerian Exchange Limited (NGX).

According to a notice to the NGX jointly signed by Somuyiwa Sonubi and Abubakar G. Anafi, Company Secretary of UBN and Partner in the law firm of G. Elias, TTB sought the shareholders approval of the scheme of merger dated May 10, 2023, including that the shares of UBN be transferred to it at N7.00 each.

Union Bank said it received the ‘No Objection’ of both the Central Bank of Nigeria and Securities & Exchange Commission.

The planned delisting, if approved, will be happening 52 years since UBN, then Barclays Bank BDO (Barclays Bank of Nigeria Limited) was first listed on the NGX in 1971.

The divestments also came with the complete divestment of the UBN’s entire shareholding interest (direct and indirect) in its subsidiary, Union Bank (UK) Plc, to all the shareholders in the bank’s records as of March 4, 2022, pro rata to their existing shareholding interests in the bank, following which Union Bank UK “is not included in the transaction with Titan Trust Bank.