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 regulatory breaches and financial weaknesses.
In a press statement issued on Tuesday by Mrs Hakama Sidi Ali, Acting Director of the Corporate Communications Department, the apex bank said the action was taken under the powers conferred on it by Section 12 of the Banks and Other Financial Institutions Act (BOFIA) 2020, as well as Section 7.3 of the Revised Guidelines for Mortgage Banks in Nigeria.
According to the CBN, the decision forms part of its ongoing efforts to strengthen the mortgage sub-sector and enforce strict compliance with applicable laws and prudential standards.
The regulator disclosed that both institutions failed to meet key operational and financial requirements. These include their inability to satisfy the minimum paid-up share capital prescribed for their licence category, as well as insufficient asset levels to cover existing liabilities.
“The affected institutions had violated various Sections of BOFIA 2020 and the Revised Guidelines for Mortgage Banks in Nigeria, including:
(a) Failure to meet the minimum paid-up share capital requirement for the category of the bank licence granted to them by the CBN.
“(b) Having insufficient assets to meet their liabilities;
“(c) Being critically undercapitalised with a capital adequacy ratio below the prudential minimum ratio as prescribed by the CBN; and
“(d) Failure to comply with several directives and obligations imposed upon them by the CBN.”
The CBN further noted that the affected mortgage banks were critically undercapitalised, with capital adequacy ratios falling below the minimum threshold set by the regulator. In addition, the institutions were found to have repeatedly ignored regulatory directives and obligations issued by the apex bank.
The apex bank reaffirmed its commitment to safeguarding the stability of Nigeria’s financial system, stressing that it would continue to take decisive action against institutions that undermine public confidence or pose risks to the sector.
