By John Dike, Osogbo
Concerns are mounting over the corporate governance structure at LivingTrust Mortgage Bank Plc following a recent special examination conducted by the Central Bank of Nigeria (CBN) in February 2026.
Although the exact trigger for the regulatory intervention remains unclear, industry observers believe the move may have been prompted by an internal whistleblower report that raised concerns about the bank’s management practices and the effectiveness of its board oversight.
Sources familiar with the development disclosed that officials of the apex bank, during the visit, reportedly directed the Managing Director of LivingTrust Mortgage Bank to proceed on compulsory leave pending the conclusion of the investigation.
The development has sparked debate among financial analysts and corporate governance experts, who say the situation highlights deeper concerns about the operational independence of the bank’s board.
Board Oversight Concerns
Investigations suggest that the management of LivingTrust Mortgage Bank had repeatedly resisted efforts to strengthen the board with experienced professionals nominated by the Osun State Government.
Within the past year, two nominees reportedly put forward by the state government for the position of board chairman were not processed. The first nominee, Wale Bolorunduro, a former KPMG professional and financial expert, was reportedly declined during regulatory screening.
Sources said a second nominee with a similar professional background was also stalled, although the identity of the individual has not been publicly disclosed.
Analysts argue that both nominees possessed strong auditing and banking credentials that could have strengthened the board’s oversight capacity.
Preliminary Findings
Preliminary feedback from regulators reportedly suggests that the bank’s board had become largely subservient to management, raising concerns about compliance with established corporate governance standards.
The report indicated that certain benefits including vehicle purchases, allowances and other executive perquisites — were allegedly used to influence board members, a practice considered inconsistent with sound corporate governance principles.
In response, the CBN has reportedly imposed several regulatory measures on the bank. These include:
Suspension of executive and board benefits
Restrictions on insider lending and loans to related parties
Limitations on transactions involving associates of board members and obligors with classified loans as of January 30, 2026
The apex bank also directed the bank to implement segregation of duties and organisational realignment, an internal control mechanism aimed at strengthening operational accountability.
Financial sector observers note that such directives are typically imposed when regulators detect governance weaknesses within a financial institution.
Despite these measures, some industry commentators believe the CBN should have taken stricter action against the bank’s management rather than allowing a compliance window.
They argue that implementing the required governance reforms may involve significant structural adjustments and institutional capacity, which the bank may struggle to achieve within the stipulated timeframe.
State Government Review
Meanwhile, the Osun State Government has reportedly commenced its own review of the conduct of its representatives on the board of LivingTrust Mortgage Bank.
Sources within the government indicated that any representative found to have compromised corporate governance standards could face removal or disciplinary action.
Officials are particularly scrutinising cases involving alleged inducements, asset acquisitions or loan approvals that may conflict with existing shareholder agreements between the bank’s major investors.
Investigators are also examining three shareholder agreements between the bank’s core investors CitiTrust Holdings Plc and the Osun State Government.
One of the agreements was executed during a previous administration in the state, while two others were signed under the current government of Ademola Adeleke.
Sources said the agreements clearly define the roles of the chairman and other board members. However, officials claim that the current structure being operated by the bank including the remuneration and allowances attached to the chairman’s position — may not align with those agreements.
Analysts believe this could partly explain why the state government recently relieved some of its representatives of their duties at the bank.
Governance Questions Persist
As the regulatory review continues, stakeholders in the financial sector say the situation underscores the importance of strong corporate governance in financial institutions, particularly those with public sector shareholding.
The outcome of the CBN investigation is expected to determine whether further regulatory sanctions or structural reforms will be required at LivingTrust Mortgage Bank.
