The Central Bank of Nigeria (CBN) has revoked the operating licences of Aso Savings and Loans Plc and Union Homes Savings and Loans Plc as part of renewed efforts to sanitise the mortgage sub-sector and enforce strict compliance with banking laws and regulatory standards.
The apex bank said the action was taken pursuant to the powers conferred on it under 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.
In a statement issued on Tuesday, the Acting Director of the CBN’s Corporate Communications Department, Hakama Sidi Ali (Mrs.), said the decision followed persistent regulatory breaches by the affected institutions, which undermined their safety, soundness and ability to meet obligations to depositors and other stakeholders.
According to the CBN, both mortgage banks failed to meet the minimum paid-up share capital requirement applicable to their licence category and were found to have insufficient assets to cover their liabilities, raising serious concerns about their solvency.
The statement further disclosed that the institutions were critically undercapitalised, with capital adequacy ratios below the prudential minimum prescribed by the regulator, and had repeatedly failed to comply with several regulatory directives.
“The affected institutions violated various provisions of BOFIA 2020 and the Revised Guidelines for Mortgage Banks in Nigeria,” Sidi Ali said. “These include failure to meet the minimum paid-up share capital requirement, having insufficient assets to meet liabilities, being critically undercapitalised with capital adequacy ratios below the prescribed prudential minimum, and non-compliance with several regulatory directives.”
The CBN noted that the licence revocations form part of a broader strategy to reposition the mortgage banking segment, strengthen confidence in the financial system and ensure that only institutions capable of operating in a safe and sound manner are allowed to do so.
Sidi Ali reaffirmed the apex bank’s resolve to enforce regulatory standards across all segments of the financial system. “The Central Bank of Nigeria remains committed to its core mandate of ensuring financial system stability,” she said.
The CBN has repeatedly warned operators in the mortgage sub-sector to strengthen their capital base, improve governance and comply fully with regulatory requirements, stressing that failure to do so would attract decisive supervisory action.
