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 efforts to reposition the mortgage sub-sector and strengthen compliance with regulatory standards.
The apex bank announced the decision in a statement issued on Tuesday and signed by its Acting Director, Corporate Communications Department, Hakama Sidi Ali.
According to the CBN, the revocation was carried out in exercise of the powers conferred on it under 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.
The regulator explained that the affected institutions were found to have violated several provisions of BOFIA 2020 and the Revised Guidelines for Mortgage Banks. These violations included failure to meet the minimum paid-up share capital requirement applicable to the category of licence granted to them by the CBN.
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The statement further noted that both institutions had insufficient assets to meet their liabilities, raising concerns about their financial soundness and ability to protect depositors' funds.
In addition, the CBN said the two mortgage banks were critically undercapitalised, with capital adequacy ratios falling below the prudential minimum prescribed by the regulator. This situation, the bank said, undermined their capacity to operate safely and sustainably within the financial system.
The apex bank also cited the failure of the institutions to comply with several regulatory directives and obligations imposed on them as part of ongoing supervisory oversight.
The CBN stressed that the action was taken in line with its mandate to promote a sound, stable and efficient financial system, particularly within the mortgage banking sub-sector, which plays a key role in housing finance and economic development.
"The CBN remains committed to its core mandate of ensuring financial system stability," the statement said, adding that it would continue to take appropriate regulatory actions to safeguard the integrity of the banking system and protect the interests of depositors and other stakeholders.
