CBN Withdraws Operating Licences Of Two Mortgage Banks

The Central Bank of Nigeria (CBN) has withdrawn the operating licences of two mortgage banks.

The apex bank explained that the move is part of renewed efforts to clean up the mortgage sub-sector and ensure strict adherence to banking laws and regulatory standards.

The two banks affected are Aso Savings and Loans Plc and Union Homes Savings and Loans Plc.

According to the CBN, the action was taken under the powers granted by 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 released on Tuesday, the Acting Director of the Corporate Communications Department of the CBN, Hakama Sidi Ali (Mrs.), said the decision followed repeated regulatory violations by the affected institutions, which weakened their stability and ability to meet obligations to depositors and other stakeholders.

The CBN disclosed that both mortgage banks failed to meet the minimum paid-up share capital required for their licence categories.

The regulator also found that the institutions lacked sufficient assets to cover their liabilities, raising serious concerns about their solvency.

The statement further revealed that the banks were critically undercapitalised, with capital adequacy ratios below the prudential minimum set by the CBN.

In addition, the institutions were found to have disregarded several regulatory directives and obligations issued by the apex bank over time.

“The affected institutions violated various provisions of BOFIA 2020 and the Revised Guidelines for Mortgage Banks in Nigeria,” Sidi Ali said. “These include failure to meet the minimum paid-up share capital requirement, having insufficient assets to meet liabilities, being critically undercapitalised with capital adequacy ratios below the prescribed prudential minimum, and non-compliance with several regulatory directives.”

The CBN stated that the licence revocations form part of a broader strategy to reposition the mortgage banking segment, boost confidence in the sector and ensure that only institutions capable of operating safely and soundly remain in the system.

Sidi Ali said the apex bank remains firm in enforcing regulatory standards across all areas of the financial system in line with its statutory responsibilities. “The Central Bank of Nigeria remains committed to its core mandate of ensuring financial system stability,” she stated.

In recent years, the CBN has repeatedly cautioned operators in the mortgage sub-sector to strengthen their capital base, enhance governance and fully comply with regulatory requirements, warning that failure to do so would result in decisive supervisory action.