Sierra Leone Shuts Down Only Privately Owned Indigenous Bank After Years of Failed Recovery

West Africa WeeklyJune 18, 20262 Mins read20

Sierra Leone’s central bank on Wednesday ordered the permanent closure of Union Trust Bank, the West African nation’s only privately owned indigenous commercial bank, declaring it insolvent after years of failed recovery efforts. The decision brings an end to the 31-year-old institution, which had long described itself as the country’s sole private indigenous bank.

Bank of Sierra Leone Governor Ibrahim Stevens told reporters that the regulator determined Union Trust Bank no longer met the statutory requirements to operate as a licensed commercial bank following extensive supervisory measures over the past five years. According to the Governor, the bank’s paid-up capital stood at only NLe33.82 million as of December 2025, significantly below the required NLe122 million under the first phase of the banking sector capital framework. The bank had also accumulated retained losses of NLe328.52 million, resulting in a severely negative capital position.

The central bank had engaged extensively with Union Trust Bank over several years to help restore its financial health. In September 2020, the institution was placed under Enhanced Supervision, with a Resident Examiner deployed to closely monitor its operations. Despite repeated directives requiring shareholders and management to inject additional capital, strengthen governance, improve asset quality, and restore profitability, the bank was unable to recover. An independent diagnostic and forensic review conducted by Ernst and Young Ghana in September 2024 confirmed that the bank’s financial condition had deteriorated significantly, with negative Tier 1 capital, worsening asset quality, failure of previous restoration plans, and no realistic prospects for recapitalisation under the existing ownership structure.

Rokel Commercial Bank, which is majority-owned by the state with a 51 percent government stake, has acquired Union Trust Bank under a purchase and assumption arrangement. The transfer process was successfully completed on June 16, 2026. Under the arrangement, the bank’s performing assets and customer deposits have been transferred to Rokel Commercial Bank, while non-performing and impaired assets were excluded and remain under management for recovery and orderly wind-down. The central bank has assured customers that their deposits remain fully protected and that banking services will continue without interruption during and after the transition. All Union Trust Bank staff will be transferred to Rokel Commercial Bank, and the Government of Sierra Leone has agreed to fund End of Service Benefits for all affected employees.

Governor Stevens emphasised that the resolution was not a conventional corporate takeover but a regulatory action carried out under the provisions of the Banking Act, 2019, and aligned with international best practices for bank resolution. He concluded that the successful completion of the transfer marks an important milestone in strengthening the resilience, stability, and credibility of Sierra Leone’s banking sector while ensuring the protection of depositors and the broader financial system.

The closure has drawn swift criticism from shareholders, who described the decision as premature and unnecessarily harsh and called for the bank to be returned to its owners. Shareholders disputed the central bank’s assessment, saying they had secured the capital required to recapitalise the lender through a Sierra Leonean investor and had submitted the relevant documentation to regulators informing them that the capital requirement had been met. They have sought legal redress through the courts to challenge the regulator’s actions, but they said the proceedings had yet to make progress.