CBN revokes licenses of Aso, Union Homes Savings and Loans

…as NDIC commences full liquidation, begins payment of insured deposits

Nigeria’s banking regulators have moved to shut down two mortgage lenders after prolonged financial distress, as authorities intensify efforts to enforce capital discipline and restore confidence in the country’s housing finance system.

The Central Bank of Nigeria (CBN) on Monday, withdrew the operating licenses of Aso Savings and Loans Plc and Union Homes Savings and Loans Plc, setting in motion a liquidation process that will see insured depositors paid by the Nigeria Deposit Insurance Corporation (NDIC).

The revocation marks a decisive intervention by the central bank, which said the lenders repeatedly failed to meet regulatory standards despite supervisory actions.

In a statement signed by Hakama Sidi Ali, acting director of corporate communications, the CBN said the decision was taken under the Banks and Other Financial Institutions Act, BOFIA 2020, and the revised guidelines for mortgage banks, as it seeks to re-position the sub-sector and entrench compliance.

“As part of its efforts to re-position the mortgage sub-sector and promote a culture of compliance with relevant laws and regulations, the Central Bank of Nigeria has revoked the licenses of Aso Savings and Loans Plc and Union Homes Savings and Loans Plc,” the statement said.

The central bank said the two institutions breached several provisions of BOFIA 2020 and regulatory guidelines, citing weak capital, balance-sheet strain and persistent non-compliance.

According to the CBN, the lenders failed to meet the minimum paid-up share capital requirement for their licence category and did not have sufficient assets to meet their liabilities.

The lenders were also “critically undercapitalised with a capital adequacy ratio below the prudential minimum ratio as prescribed by the CBN,” the regulator said, adding that both institutions failed to comply with several directives imposed by the central bank over time.

The action highlights the CBN’s broader push to tighten oversight of Nigeria’s financial system after years of regulatory forbearance, particularly in niche segments such as mortgage banking that have been weighed down by funding constraints, rising credit risk and weak profitability. While the sector accounts for a small share of total banking assets, it is viewed as key to expanding access to long-term housing finance in Africa’s most populous economy.

The CBN said it remains focused on safeguarding systemic stability. “The CBN remains committed to its core mandate of ensuring financial system stability,” the statement said.

Following the withdrawal of the licenses, the NDIC was appointed liquidator of the two lenders and has begun the process of winding them up, including reimbursing eligible depositors.

In a separate statement on Tuesday, the Corporation said it had commenced liquidation in line with the NDIC Act 2023 and started verification and payment of insured deposits to customers of the defunct banks.

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Depositors are entitled to receive up to ₦2 million per depositor, with payments to be made using Bank Verification Numbers (BVN) to identify alternate bank accounts for automatic credit.

Customers with balances above the insured limit will receive the initial ₦2 million, while the remaining sums will be paid as liquidation dividends after the realisation of assets and recovery of outstanding loans, the NDIC said. The corporation added that it would begin selling the banks’ assets and intensify debt recovery efforts to accelerate payments of uninsured balances.

The NDIC advised depositors to submit claims either online or physically at branches of the closed banks during the verification period, with valid identification and proof of account ownership. Creditors were also asked to file claims, with payments to follow after all depositors have been fully settled, in line with statutory provisions.

Staff and shareholders of the defunct banks will only be paid after depositors and creditors, from proceeds realised during liquidation, the NDIC said, while urging borrowers to repay outstanding loans and assuring the public that other licensed banks remain safe and sound.