The Central Bank of Nigeria (CBN) has cancelled the operating licences of Aso Savings and Loans Plc and Union Homes Savings and Loans Plc, citing breaches of banking regulations and a lack of sufficient capital.
This announcement, made on Tuesday, is part of the central bank’s continuous efforts to enhance the mortgage sector and ensure adherence to applicable laws.
The CBN stated that the institutions in question fell short of the minimum paid-up capital requirements for their designated banking licence categories, possessed assets inadequate to meet liabilities, and were significantly under-capitalised with capital adequacy ratios that were below the required prudential minimum.
Additionally, they did not comply with several directives from the regulator. “The involved institutions breached multiple Sections of BOFIA 2020 and the Revised Guidelines for Mortgage Banks in Nigeria, including their failure to meet the minimum paid-up share capital requirement for their bank licence category as granted by the CBN.
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“They had inadequate assets to satisfy their liabilities; they were critically under-capitalised with a capital adequacy ratio that fell below the prudential minimum ratio established by the CBN; and they failed to adhere to several directives and obligations imposed by the CBN,” the statement signed by the bank’s Spokesperson, Hakama Ali, stated.
This action occurs alongside a broader initiative by the CBN to ensure stability and resilience in Nigeria’s mortgage and housing finance industry.
In recent years, the central bank has required recapitalisation efforts for mortgage banks to enhance liquidity and lending capability, as well as to protect depositors.
This revocation underscores the necessity for other institutions in the sector to uphold proper governance, possess adequate capital, and comply with regulatory standards.
The CBN reiterated its dedication to fostering a robust financial system and safeguarding depositor interests, emphasizing that adherence to capital and operational standards is essential for all financial institutions.
