The Central Bank of Nigeria (CBN) has revoked the operating licences of two primary mortgage banks, Aso Savings and Loans Plc and Union Homes Savings and Loans Plc, over what it described as persistent regulatory violations and severe financial distress.
In a press release issued on Tuesday, the apex bank said the action was taken in line with Section 12 of the Banks and Other Financial Institutions Act (BOFIA) 2020 and Section 7.3 of the Revised Guidelines for Mortgage Banks in Nigeria.
According to the CBN, the decision forms part of ongoing efforts to sanitise and reposition the mortgage banking sub-sector, as well as enforce strict compliance with applicable laws and regulatory requirements.
The regulator disclosed that both institutions failed to meet critical prudential standards, including the minimum paid-up share capital required for their licence category.
The CBN also found that the banks had insufficient assets to cover their liabilities and were critically undercapitalised, with capital adequacy ratios falling below the regulatory minimum.
In addition, the affected mortgage banks were said to have repeatedly failed to comply with several supervisory directives and regulatory obligations issued by the apex bank.
“The CBN remains committed to its core mandate of ensuring financial system stability,” the statement said.
Aso Savings and Loans Plc and Union Homes Savings and Loans Plc have been grappling with deep-rooted challenges for years, including complaints from depositors, allegations of poor corporate governance and prolonged financial opacity.
Both institutions were delisted from the Nigerian Exchange (NGX) in 2024 after failing to submit audited financial statements for more than six years, a development that further raised concerns about their financial health and transparency.
With the revocation of their licences, the two mortgage banks are no longer permitted to operate as licensed financial institutions in Nigeria.
The CBN advised depositors and other stakeholders to watch out for further directives from the Nigeria Deposit Insurance Corporation (NDIC), which is expected to announce steps regarding liquidation or other resolution processes
