The Digest:
Fresh details have emerged regarding the Central Bank of Nigeria's (CBN) January 2024 takeover of Union Bank, with a forensic audit alleging financial irregularities under the bank's former owners and directors. Key issues include a $300 million Afreximbank facility allegedly transferred onto Union Bank's balance sheet without full disclosure, exposing the bank to foreign exchange risks. The report also claims proceeds from the facility may have been linked to share acquisitions. The CBN said its intervention aimed to prevent systemic risks, adding that Union Bank remains "strong and stable."
Key Points:
- The $300 million facility may have been unhedged, exposing Union Bank to FX risks.
- Proceeds may have been used to acquire shares, raising corporate governance concerns.
- Foreign loans allegedly diverted into swap transactions without full disclosure.
- No criminal convictions have been announced; allegations have not been tested in court.
- Union Bank is now on a recovery path and is expected to meet the N200bn capital requirement.
