The Central Bank of Nigeria (CBN) has revoked the operational licences of Aso Savings and Loans Plc and Union Homes Savings and Loans Plc, citing persistent capital deficiencies and multiple breaches of regulatory requirements, in a decisive move to sanitise Nigeria’s mortgage banking sub-sector.
The action, taken 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, forms part of the apex bank’s broader strategy to reposition the mortgage industry and enforce strict compliance with prudential standards.
In a statement issued on Monday, Mrs. Hakama Sidi Ali, Acting Director, Corporate Communications at the CBN, said the affected institutions failed to meet the minimum paid-up share capital required for their licence categories, had insufficient assets to cover liabilities, and were critically undercapitalised, with capital adequacy ratios below regulatory thresholds. The banks also reportedly failed to comply with several regulatory directives despite repeated supervisory interventions.
According to the CBN, these weaknesses posed risks to depositors and undermined confidence in the financial system, making the revocation unavoidable.
Reacting to the development, Celestine Ukpong, an economist and financial analyst, described the move as a “long-expected regulatory correction” in a sector that has struggled with weak balance sheets and governance challenges.
Ukpong noted that the mortgage sub-sector plays a critical role in Nigeria’s housing and economic development, warning that undercapitalised institutions cannot sustainably fund long-term housing finance. He added that the CBN’s action sends a strong signal to other operators that regulatory forbearance has limits and that only well-capitalised institutions will survive ongoing reforms.
On his part, Peter Adebayo, FCA, said the licence revocation reflects the growing emphasis by regulators on capital adequacy, risk management, and compliance across Nigeria’s financial system.
According to Adebayo, the decision aligns with global best practices, where regulators prioritise depositor protection over institutional survival. He stressed that mortgage banks must either recapitalise, merge, or adopt stronger governance frameworks to remain viable in an increasingly stringent regulatory environment.
Adebayo also advised customers of affected institutions to stay calm, noting that regulatory processes typically involve the Nigeria Deposit Insurance Corporation (NDIC) to protect depositors within insured limits.
The CBN reiterated its commitment to its core mandate of ensuring financial system stability, adding that it will continue to take firm supervisory and enforcement actions against institutions that fail to operate in line with applicable laws and prudential guidelines.
Analysts say the latest development could accelerate consolidation in the mortgage banking space, while ultimately strengthening confidence in Nigeria’s financial system if followed by transparent resolution processes.
CBN revokes the licences of Aso Savings and Loans Plc and Union Homes Savings and Loans Plc over capital and regulatory breaches, as economists Celestine Ukpong and Peter Adebayo FCA weigh in on the implications for Nigeria’s mortgage banking sector and financial stability.
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