585
By Daniel Adaji
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 violations of regulatory requirements governing Nigeria’s mortgage banking sub-sector.
In a statement issued on Tuesday, the apex bank said the decision was taken as part of its efforts to reposition the mortgage sub-sector and promote a culture of compliance with relevant laws and regulations.
The CBN said it exercised its powers 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 to withdraw the licences of the two institutions.
According to the regulator, the affected mortgage banks breached several provisions of BOFIA 2020 and the Revised Guidelines for Mortgage Banks in Nigeria, raising concerns about their financial health and regulatory compliance.
The CBN listed failure to meet the minimum paid-up share capital requirement for the category of banking licence granted to them as a major infraction. It also noted that both institutions had insufficient assets to meet their liabilities, a condition that undermines depositor confidence and poses risks to the stability of the financial system.
In addition, the apex bank said the lenders were critically undercapitalised, with capital adequacy ratios falling below the prudential minimum ratio prescribed by the CBN. This, the bank explained, left them unable to effectively absorb losses or support sustainable mortgage financing activities.
The statement further disclosed that Aso Savings and Loans Plc and Union Homes Savings and Loans Plc failed to comply with several directives and obligations imposed on them by the CBN, despite regulatory oversight and interventions aimed at correcting the deficiencies.
The CBN said the revocation underscores its resolve to enforce compliance across the financial system, particularly in sectors considered vital to economic development, such as housing and mortgage finance.
“The CBN remains committed to its core mandate of ensuring financial system stability,” the statement said, stressing that decisive regulatory actions are necessary to safeguard depositors, strengthen confidence in the financial system, and ensure that only sound and well-capitalised institutions operate in the banking sector.
The mortgage sub-sector has faced mounting pressure in recent years, with weak capital buffers, rising non-performing assets, and governance challenges affecting several operators. Regulators have repeatedly warned that non-compliant institutions risk sanctions, including licence withdrawal.