CBN revokes licences of Aso, Union Homes Mortgage banks

The Central Bank of Nigeria (CBN) has revoked the operating licences of Aso Savings and Loans Plc and Union Homes Savings and Loans Plc

The CBN noted that this is part of renewed efforts to sanitise the mortgage sub-sector and enforce strict compliance with banking laws and regulatory standards.

According to the apex bank, the action was taken in exercise of 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 by the Acting Director of the Corporate Communications Department of the CBN, Hakama Sidi Ali (Mrs.), 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, the two mortgage banks failed to meet the minimum paid-up share capital requirement applicable to the category of licence granted to them. The regulator also found that both institutions had insufficient assets to cover their liabilities, raising serious concerns about their solvency position.

The statement further revealed that the banks were critically undercapitalised, with capital adequacy ratios falling below the prudential minimum prescribed by the CBN. In addition, they failed to comply with several regulatory directives and obligations issued by the apex bank over time.

“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 apex bank also stated that the revocation of the licences was part of a broader effort to reposition the mortgage banking segment of the financial system, strengthen confidence in the sector and ensure that only institutions with the capacity to operate in a safe and sound manner are allowed to do so.

Sidi Ali said that CBN remains resolute in enforcing regulatory standards across all segments of the financial system in line with its statutory mandate. “The Central Bank of Nigeria remains committed to its core mandate of ensuring financial system stability,” she stated.

The apex bank in recent years had repeatedly sounded warnings to operators in the mortgage sub-sector to strengthen their capital positions, improve governance and comply fully with regulatory requirements, stressing that failure to do so would attract decisive supervisory action.