The Nigerian government has officially taken full control of Keystone Bank after a court ordered the former shareholders, Sigma Golf Nigeria Limited and Alhaji Umaru Modibbo, to forfeit their holdings. The ruling marks the end of a year-long investigation into the bank’s ownership and alleged governance violations.
Court-Ordered Forfeiture and Federal Ownership
On February 11, 2025, the court directed that all shares previously held by private shareholders be transferred to the Federal Government of Nigeria. In a statement, Keystone Bank confirmed that it is now fully government-owned.
“This judgment implies that Keystone Bank Limited is now fully owned by the Federal Government of Nigeria,” the bank stated.
Background: The CBN’s Investigation into Keystone Bank and Other Lenders
The Central Bank of Nigeria (CBN) launched an investigation in January 2024 into Keystone Bank, Polaris Bank, and Union Bank, citing regulatory non-compliance. The probe led to the dissolution of the banks’ boards, followed by the appointment of special investigator Jim Obazee to examine their financial dealings.
Obazee’s findings implicated former CBN Governor Godwin Emefiele, alleging that he used proxies to acquire Union Bank, Keystone Bank, and Polaris Bank without proper financial documentation. Specifically, the report revealed that:
- Keystone Bank’s acquisition involved a special-purpose vehicle (SPV) linked to Isa Funtua and Emefiele, financed through a ₦25 billion loan from Heritage Bank.
- The ownership of Keystone and Polaris Bank lacked documented proof of payment, raising concerns about the transparency of these transactions.
Keystone Bank’s Future: Recapitalization and Stability
With the government now in full control, Keystone Bank has assured customers and stakeholders that it remains financially strong and that the transition will be seamless.
“Keystone Bank remains safe, healthy, strong, and resilient,” the statement read.
The bank also hinted at plans to:
- Strengthen its balance sheet
- Pursue sustained growth
- Expand partnerships and improve profitability
Unclear Future for Government-Owned Keystone Bank
The government has not yet announced its long-term strategy for managing Keystone Bank. Industry analysts speculate that it may sell the bank to new private investors, similar to past bank recapitalization efforts. However, given the controversy surrounding the bank’s previous sale, any future transaction will likely face increased scrutiny.
This court ruling marks a significant shift in Nigeria’s banking landscape, raising questions about the government’s role in the financial sector and the future of other banks under investigation.