There are indications that the Central Bank of Nigeria leadership plans to meet with the shareholders of Union Bank of Nigeria, Polaris Bank, and Keystone Bank in the upcoming weekend or early next week in connection with the recent dismissal of the boards of directors of the three banks.
On Wednesday, the CBN terminated the boards of the banks, citing reasons such as corporate governance failure and non-compliance with regulatory requirements. This marked a significant step in the execution of the report submitted to President Bola Tinubu on December 20, 2023, by the Special Investigator on the CBN and Related Entities, Mr Jim Obazee.
Shortly after the dismissal, it was revealed by PUNCH that the CBN leadership would engage with the shareholders of the affected banks, with the meeting potentially taking place over the coming weekend or early next week.
A source close to the special investigator, speaking with NewsNow, mentioned that a meeting will be arranged between the special investigator’s team and the CBN with the shareholders of the banks for further discussions.
The CBN had alleged that Union Bank, Polaris Bank, and Keystone Bank were guilty of issues that posed a threat to the financial stability of the banking sector, as stated in a Wednesday statement by Sidi Hakama, the acting CBN Director of Corporate Communications. Consequently, the CBN dissolved the boards and managements of the three banks, and announced interim managements for the banks in a subsequent statement issued on Thursday.
Furthermore, it was indicated by CBN officials that the appointment of additional board members for the three banks might be announced soon, as it is necessary for the constitution of a complete board and management team.
Additionally, there were comments from officials implying that instead of nationalization, the banks may be placed under the guidance of interim management teams to resolve issues within a specified timeframe before potential sale or merger.
Union Bank’s Response
Union Bank of Nigeria issued an email notice to assure its customers of the safety of their funds and the bank’s commitment to serving them amid the developments.
Visits to branches of Union Bank of Nigeria, Polaris Bank, and Keystone Bank in Lagos revealed that normal operations continued even after the board dissolution by the apex bank.
In an exclusive interview with NewsNow, Olusoji Oluwole, President of the Association of Senior Staff of Banks, Insurance and Financial Institutions, expressed confidence that the workforce of the affected banks would continue to focus on the growth and development of their institutions despite the boards’ removal.
Expert Opinions
Johnson Chukwu, Group Managing Director of Cowry Asset Management Limited, stated that the CBN’s action will not affect investors’ confidence and depositors’ funds, while David Adonri, Vice President of Highcap Securities, believes that the apex bank’s move will boost confidence among depositors and investors.
Moreover, Moses Igbrude, National Coordination of the Independent Shareholders Association of Nigeria, questioned the deductions made by Asset Management Corporation of Nigeria regarding capital adequacy concerns in some banks.
AMCON, which was established in 2011, imposes charges on banks, and Tony Omojola, National Co-coordinator of the Independent Progressive Shareholders Association of Nigeria, urged careful management of the situation to prevent further escalation.