December 18, 2025/CSL Update
The Central Bank of Nigeria (CBN) has revoked the operating licences of Aso Savings and Loans Plc and Union Homes Savings and Loans Plc, citing persistent regulatory breaches and weak financial conditions that rendered both institutions unviable. The revocations took effect on 15 December 2025 and were carried out in accordance with the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020 and the regulatory framework governing primary mortgage banks. According to the apex bank, the action reflects its determination to strengthen financial system stability and enforce compliance within the specialised banking segment.
The CBN explained that both institutions failed to meet key prudential requirements, particularly the minimum paid-up share capital prescribed for their respective licence categories. They were also found to be critically undercapitalised, with capital adequacy ratios below regulatory thresholds, and unable to adequately cover their liabilities with available assets. These deficiencies prompted the withdrawal of their licences in the interest of depositor protection and systemic stability.
Following the licence revocations, the Nigeria Deposit Insurance Corporation (NDIC) was appointed as liquidator for both institutions. The NDIC has commenced liquidation proceedings, including the verification and payment of insured deposits to affected customers. Depositors are entitled to receive insured sums of up to ₦2 million per depositor, which will be paid directly into alternative bank accounts using depositors’ Bank Verification Numbers for identification. Any balances above the insured limit will be paid as liquidation dividends, subject to the recovery of outstanding loans and the realisation of the institutions’ assets.
The NDIC has also established structured channels for depositors to submit claims and complete verification, ensuring an orderly and transparent process. The closures underscore broader structural challenges within Nigeria’s mortgage banking sector, including chronic undercapitalisation, weak corporate governance, limited access to long-term funding, high credit risk, and low public confidence. Together, these issues have constrained the sector’s ability to provide affordable housing finance and to contribute meaningfully to addressing Nigeria’s significant housing deficit.
Addressing these challenges will require coordinated efforts by regulators and industry participants. Stronger enforcement of capital and governance standards is essential to building sector resilience. In addition, regulators can support the development of sustainable long-term funding sources such as mortgage-backed securities and partnerships with pension funds and development finance institutions to better align funding structures with the long-term nature of housing finance.
In summary, while the revocation of the two licences reflects serious regulatory shortcomings, the swift intervention by the CBN and NDIC is intended to protect depositors and reinforce confidence in the financial system. Sustained regulatory reforms, innovation, and capital deepening will be critical to strengthening Nigeria’s mortgage banking sector and advancing the country’s long-term housing objectives.
Click here to download full report: CSL Nigeria Daily – 18 December 2025 – Financial Services.pdf
