Titan Trust Bank has been accused of using Union Bank of Nigeria Assets to secure $300m takeover loan.
NewsOnline Nigeria reports that fresh revelations have cast a shadow over the 2022 acquisition of Union Bank of Nigeria by Titan Trust Bank, raising serious concerns about the structure and financing of the deal.
The takeover, initially presented as a landmark transaction involving a rising bank acquiring a century-old institution, is now under scrutiny following claims that Titan Trust Bank secured a $300 million facility from African Export-Import Bank (Afreximbank) using assets linked to Union Bank as collateral.
According to reports, the loan taken in Titan Trust Bank’s name was allegedly backed by financial instruments and assets belonging to Union Bank itself, effectively making the acquired institution part of the security used to fund its own purchase.
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The development has triggered widespread concern within Nigeria’s financial sector, particularly over claims that the loan structure could place repayment obligations on Union Bank, potentially impacting depositors’ funds.
Industry observers have also raised questions about regulatory oversight during the transaction, particularly under the leadership of former Central Bank Governor, Godwin Emefiele. Allegations suggest that the deal may have contravened established banking regulations, including restrictions on using borrowed funds to acquire financial institutions.
Further reports indicate that the financial exposure tied to the deal may have risen significantly due to exchange rate volatility and interest costs, with estimates suggesting it could exceed ₦500 billion by late 2025.
An internal audit is also said to have flagged the transaction, reportedly describing elements of the arrangement as questionable and raising concerns about financial reporting practices and the handling of customer funds.
The controversy has deepened following regulatory actions in early 2024, when the board and management of Union Bank were dissolved; moves that are now being challenged in court.
With growing attention on ownership structures and financing mechanisms behind the acquisition, stakeholders say the case could become a defining moment for transparency and accountability in Nigeria’s banking industry.
As investigations and legal disputes continue, the central question remains: who ultimately bears the cost of the acquisition, and what are the implications for depositors and the wider financial system?
