CBN Speaks on Union Bank, Providus, 3 Others After Failing to Meet Recapitalisation Target
- The Central Bank of Nigeria reassured customers on bank stability amid recapitalisation anxiety
- Union Bank's ongoing legal battles raised concerns about governance and operational continuity
- CBN said the recapitalisation initiative successfully boosted confidence in Nigeria's banking sector
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
The Central Bank of Nigeria (CBN) has moved to calm rising anxiety among bank customers following the conclusion of the banking sector recapitalisation exercise, insisting that affected institutions remain stable despite ongoing regulatory and legal challenges.
In a fresh clarification, the apex bank said lenders entangled in court cases or supervisory processes are still adequately capitalised and fully capable of meeting their obligations to depositors.
Source: Twitter
This reassurance comes amid growing public concern over the status of banks that failed to meet the March 31, 2026, recapitalisation deadline.
Union Bank legal battle raises questions
One of the most closely watched cases involves Union Bank of Nigeria, whose leadership crisis has triggered uncertainty.
A ruling by the Federal High Court in Lagos reinstated the bank’s board and declared the CBN’s earlier dissolution of its management unlawful, stating that the regulator exceeded its statutory powers.
However, the apex bank has challenged the decision at the appellate level, maintaining that its intervention was necessary to prevent systemic risk within the financial system.
The legal tussle has left the bank’s governance structure in limbo, though operations continue uninterrupted.
Providus–Unity merger yet to be finalised
Attention is also on Providus Bank and Unity Bank Plc, whose proposed merger remains incomplete despite receiving regulatory approvals.
The merger, widely seen as a strategic move to meet recapitalisation requirements, is yet to receive final legal sign-off. Until then, both institutions remain under scrutiny as stakeholders await the process's closure.
Polaris and Keystone are still under watch
Meanwhile, Polaris Bank and Keystone Bank Limited are still under regulatory oversight.
Although they were not among the banks that met the minimum capital threshold before the deadline, the CBN insists they have the capacity to comply once the ongoing issues are resolved.
According to a report by Leadership, the CBN governor, Olayemi Cardoso, explained that some of the challenges faced by these banks emerged after the recapitalisation programme was announced, making it impractical to hold them to the same timeline as others.
“Business as usual”: Cardoso assures Nigerians
Speaking on the sidelines of the World Bank and IMF meetings, Cardoso stressed that there is no cause for alarm.
According to him, normal banking operations continue across the affected institutions, and customers’ deposits remain secure.
He noted that once regulatory and legal encumbrances are resolved, the banks are expected to meet the capital requirements without difficulty.
Recapitalisation seen as a major success
Despite the lingering issues with a few lenders, the CBN described the broader recapitalisation exercise as a resounding success.
Cardoso highlighted that the programme attracted a strong mix of both domestic and foreign investments, reflecting renewed confidence in Nigeria’s banking sector.
He revealed that approximately 73% of the capital raised came from local investors, while 27% was sourced internationally — a development he described as a significant milestone.
Nigeria’s banking sector is “turning a corner”
The CBN governor said the successful execution of the recapitalisation policy has effectively silenced early scepticism about its feasibility.
According to him, the outcome has validated the central bank’s long-term strategy for strengthening financial institutions and ensuring systemic stability.
Source: Twitter
With most banks already meeting the required thresholds and others on track to comply, Nigeria’s banking sector appears to be entering a more resilient phase — even as a handful of institutions navigate the final stretch of legal and regulatory hurdles.
Nigerian banks face another test after recapitalisation
Legit.ng earlier reported that Nigeria’s banking sector faced tighter regulatory scrutiny as the CBN set an April 30 deadline for lenders to submit Board-approved Risk-Based Capital (RBC) stress test reports.
The directive, issued on March 6, 2026, required banks to evaluate how their capital positions would perform under adverse credit conditions, signalling a shift from focusing on capital size to assessing its resilience.
In a joint statement signed by Olubukola Akinwunmi and Hakama Sidi Ali, the apex bank said the policy was designed to safeguard gains from the recent recapitalisation exercise.
Proofreading by Funmilayo Aremu, copy editor at Legit.ng.
Source: Legit.ng
