The Central Bank of Nigeria (CBN) has withdrawn the operating licences of Aso Savings and Loans Plc and Union Homes Savings and Loans Plc as part of renewed efforts to strengthen regulation and restore confidence in the mortgage banking sub-sector.

The apex bank said the decision was taken in line with its statutory 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.

In a statement issued on Tuesday, the Acting Director of the CBN’s Corporate Communications Department, Mrs. Hakama Sidi Ali, explained that the action followed persistent regulatory infractions by the affected institutions. She noted that the breaches posed serious risks to the banks’ safety, soundness and ability to meet obligations to depositors and other stakeholders.

According to the CBN, both mortgage banks failed to meet the minimum paid-up share capital required for their licence category. The regulator also found that the institutions had inadequate asset bases to cover their liabilities, raising significant concerns about their solvency.

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

“These institutions violated multiple provisions of BOFIA 2020 and the Revised Guidelines for Mortgage Banks in Nigeria,” Sidi Ali said, citing inadequate capitalisation, weak balance sheets and persistent non-compliance with regulatory requirements.

The CBN explained that the licence revocation forms part of a broader strategy to reposition the mortgage banking segment, safeguard depositors’ funds and ensure that only financially sound institutions are permitted to operate within the financial system.

Reaffirming the bank’s stance, Sidi Ali said the CBN remains committed to enforcing regulatory standards across all sectors of the financial system in line with its mandate to maintain financial stability.

The apex bank has repeatedly warned mortgage banks in recent years to strengthen their capital base, improve governance structures and adhere strictly to regulatory guidelines, stressing that failure to do so would attract decisive supervisory action.