The Central Bank of Nigeria (CBN) has revoked the operating licences of Aso Savings and Loans Plc and Union Homes Savings and Loans Plc.
It cited persistent regulatory infractions and deteriorating financial conditions at the two primary mortgage banks.
The CBN in a statement issued on Tuesday, said the decision was taken in line with 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.
Aso Savings & Loans Plc Challenges
Aso Savings & Loans Plc currently suffers from issues around capital adequacy, asset quality, and earnings sustainability. The institution has faced pressure from rising non-performing loans. This includes impairment charges and slow loan recoveries, driven in part by weak borrower cash flows. Additionally, there are difficulties associated with enforcing mortgage collateral in Nigeria’s legal and property-title framework.
Union Homes Savings & Loans Plc, on the other hand, has been particularly affected by governance and ownership-related challenges. These issues followed its acquisition by Aso Savings. Prolonged disputes with minority shareholders over post-acquisition governance, capital structure, and control have created reputational risk. Furthermore, regulatory scrutiny has diverted management attention from core business execution.
In addition, Union Homes continues to struggle with thin capital buffers, low business volumes, and weak profitability. Its strategic dependence on its controlling shareholder limits operational flexibility and the speed of turnaround initiatives.
These issues have weighed on profitability, limited retained earnings, and constrained its capacity to scale operations or aggressively expand its mortgage portfolio, thereby affecting market confidence and growth prospects.
