A Federal High Court in Lagos recently delivered a significant ruling, nullifying the Central Bank of Nigeria’s (CBN) decision to dissolve the board and management of Union Bank of Nigeria. Justice Chukwujekwu Aneke, presiding over the case on Wednesday, ruled that the apex bank had exceeded its legal powers when it removed the bank’s leadership in January 2024. This judgment mandates the immediate reinstatement of the bank’s former board and management, thereby reversing all actions previously undertaken by the CBN-appointed leadership. Furthermore, the court has restrained the CBN, along with its agents and appointees, from taking any further actions concerning Union Bank, including those related to its proposed recapitalisation.

The CBN had initially moved to dissolve Union Bank’s board and management in January 2024, subsequently appointing new executives, including Yetunde Oni as Managing Director/Chief Executive Officer and Mannir Ringim as Executive Director. However, this decision was promptly challenged in court by several core shareholders of the bank, specifically Titan Trust Bank, Luxis International, and Magna International. These shareholders argued that the removal of the board and subsequent actions were executed without adherence to due process. They had previously secured interim reliefs in December 2025, pending the final determination of the substantive suit. With this latest ruling, all decisions made by the CBN-appointed board have been set aside, signaling a substantial change in the bank's governance structure.

In light of these developments, ARISE business analyst Chika Mbonu has issued a warning regarding the potential ramifications of the court ruling on Union Bank’s leadership. Speaking on ARISE News, Mbonu emphasized that while the legal dispute between the CBN and the shareholders is ongoing, the primary concern lies in its broader impact on depositor confidence and the stability of the banking system. He highlighted that banking fundamentally relies on trust, making any uncertainty surrounding governance a considerable risk. Mbonu stated, “Banking is almost essentially a confidence game… the depositors want to make sure their money is safe.”

Mbonu further elaborated that the court’s decision, which directly challenges the CBN’s previous intervention in the bank’s management, could lead to significant operational confusion, particularly at the decision-making level within the board. He cautioned, “There may be confusion of who can approve at the board level, who can approve transactions because of the judgment now.” He stressed that if such uncertainty persists for an extended period, it could impede critical decisions within the bank and disrupt its day-to-day operations. Mbonu warned that an unresolved situation “can become a war of attrition.”

He underscored that depositors are the most vulnerable stakeholders in this scenario, as their funds form the foundation of banking operations, asserting, “It’s not CBN money… it’s not the shareholders’ money, it’s the depositors’ money that runs the bank.” Despite the concerns, Mbonu acknowledged the Central Bank’s reassurances regarding Union Bank’s stability and its capacity to meet its financial obligations, noting, “The Central Bank has assured that Union Bank is safe… and meets its ordinary day-to-day obligations.” Nevertheless, he cautioned that prolonged disputes could erode public confidence and potentially trigger panic withdrawals if not managed meticulously. He added, “If depositors feel uncomfortable… they may have a run on the bank, and that’s what we’re all trying to avoid.”

Finally, Mbonu characterized the ruling as a significant setback for the CBN, urging the regulator to reinforce its legal processes for future interventions. He advised, “For the CBN, I think it’s a major setback… they have to make sure they dot all the ‘i’s and cross all the ‘t’s.” He concluded by advocating for a swift resolution to the dispute, whether through clear legal clarification or a mutual settlement, to safeguard depositor trust and ensure the continued stability of the banking system.