The 2022 takeover of Union Bank of Nigeria was presented as a simple business deal. A smaller, newer bank called Titan Trust Bank bought about 94% of Union Bank, a 109-year-old institution that holds money for nearly 8 million Nigerians. But look closer at how the purchase was funded and what happened after, and the story changes. This wasn’t just a takeover. It became a test of whether the rules meant to protect people’s savings actually work.
The first problem was how the deal was paid for. Titan Trust used two companies registered in Dubai to buy Union Bank. The money, about 300 million dollars, came mostly from a loan provided by Afreximbank. Nigeria’s Central Bank has a clear rule: you cannot use borrowed money to buy a bank. The reason is straightforward. When you buy a house with a mortgage, the debt sits with you. But in this case, the loan ended up on Union Bank’s own books. So instead of new money strengthening the bank, the bank itself was saddled with the debt used to buy it.
That debt also had another danger built in. It was in dollars, but Union Bank earns in naira. When the naira lost value, the size of that dollar loan ballooned in naira terms. There was no insurance or financial cover to protect against that. The losses grew, the bank’s safety cushion of capital disappeared, and bad loans increased. A later review confirmed the bank was in deep trouble. The Central Bank even sat down with Union Bank’s former bosses and board to show them the findings. So when people later said the Central Bank acted without proof, the bank’s own legal papers show that wasn’t true.
This raises a basic question anyone can understand: how did a small, three-year-old bank with limited resources get approval to take over a giant like Union Bank using money it borrowed from abroad? The checks that are supposed to ensure only capable and responsible owners run banks are called “fit and proper” tests. Here, those checks either failed or were ignored. The result was a mismatch that put millions of depositors at risk.
After the damage showed, the Central Bank stepped in and removed Union Bank’s board. It used powers under Nigerian banking laws that let it act quickly when a bank is in danger. That decision is now being challenged in court. Union Bank’s current board has also filed its own appeal. The legal arguments are technical, about who had the right to sue and whether the case was filed too late. But those court fights shouldn’t distract from what started it all. A deal was structured in a way that took a healthy bank and left it needing life support from the Central Bank just to survive.
Some have argued that the Central Bank’s action scares off investors. The numbers tell a different story. By April 2026, Nigerian banks had raised over 4.6 trillion naira from investors to strengthen themselves. The stock market was up sharply in early 2026. That suggests investors can tell the difference between a regulator cleaning up a mess and a regulator causing chaos. They seem to see firm action as a sign of stability.
Still, investor calm doesn’t make the original deal okay. The real lesson is about who bears risk. In this takeover, the people who arranged the deal got control of a major bank. The downside — the debt, the currency losses, the hole in the bank’s finances — was left with Union Bank itself, and by extension, its depositors, staff, and the wider public. That’s not how banking is supposed to work. Banks hold people’s money. The rules say you can’t gamble with it using borrowed cash.
In the end, the Central Bank did what regulators are expected to do when a big bank is bleeding: step in to protect it. Union Bank is still open, deposits are safe, and the bank is being stabilised. But the bigger issue is prevention. If the system allows a small player to use foreign debt to buy a huge bank against the rules, then fix it after the damage is done, the system is backwards. Stewardship means stopping bad deals before they close. What happened here was the opposite. The courts will decide if the Central Bank followed the right legal steps. The more important verdict for ordinary Nigerians is whether we’ve learned enough to stop the next risky takeover before it starts.
