The Central Bank of Nigeria (CBN) has officially revoked the operating licences of Aso Savings and Loans Plc and Union Homes Savings and Loans Plc, citing ongoing regulatory violations and declining financial health. The move underscores the regulator’s commitment to maintaining stability in Nigeria’s financial system and protecting depositors.
According to the CBN, both mortgage banks failed to meet critical regulatory requirements, including the minimum paid-up share capital for their licence categories. The banks were found to be critically undercapitalised, with assets insufficient to cover liabilities and capital adequacy ratios falling below prudential thresholds. Persistent non-compliance with statutory obligations further triggered the revocation decision.
With the revocation, Aso Savings and Union Homes are no longer allowed to conduct banking or mortgage activities in Nigeria. Depositors and other stakeholders are expected to follow further directives from the CBN and the Nigeria Deposit Insurance Corporation (NDIC), which will determine the appropriate resolution process, including potential liquidation and the protection of customer deposits.
Both institutions have faced prolonged financial and operational challenges. Aso Savings recently underwent regulatory intervention due to liquidity issues and NGX compliance concerns, while Union Homes was delisted by the Nigerian Exchange (NGX) in 2024 for failing to submit six years of audited results. Previous restructuring attempts and capital-raising efforts struggled to gain traction, leaving the institutions vulnerable.
Investors and depositors should monitor official communications from the CBN and NDIC for guidance on deposit recovery and liquidation procedures. The revocation serves as a cautionary tale for mortgage banks in Nigeria, highlighting the importance of compliance, capital adequacy, and regulatory transparency in sustaining long-term financial operations.
source: nairametrics