CBN Explains Revocation of Aso Savings, Union Homes’ Licences

The Central Bank of Nigeria (CBN) has explained the reasons behind the revocation of the operational licences of Aso Savings and Loans Plc and Union Homes Savings and Loans Plc.

The apex Bank said the decision forms part of ongoing efforts to strengthen the mortgage sub-sector and enforce strict compliance with relevant laws and regulatory standards.

CBN in a statement signed by Ag. Director, Corporate Communications Department, Hakama Sidi Ali, cited persistent breaches of regulatory requirements, weak capital positions and failure to comply with supervisory directives.

The apex bank said the decision, taken under the powers conferred 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, followed findings that both institutions failed to meet the minimum paid-up share capital requirement for their licence categories, had insufficient assets to cover liabilities and were critically undercapitalised, with capital adequacy ratios below prudential thresholds.

It states: “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, in exercise of the powers conferred on it under Section 12 of BOFIA 2020, and Section 7.3 of the Revised Guidelines for Mortgage Banks in Nigeria has revoked the licenses of Aso Savings and Loans Plc and Union Homes Savings and Loans Plc.

“The affected institutions had violated various Sections of BOFIA 2020 and the Revised Guidelines for Mortgage Banks in Nigeria, including failure to meet the minimum paid-up share capital requirement for the category of the bank licence granted to them by the CBN. Having insufficient assets to meet their liabilities, being critically undercapitalised with a capital adequacy ratio below the prudential minimum ratio as prescribed by the CBN and failure to comply with several directives and obligations imposed upon them by the CBN.”

The Nigerian Exchange Limited (NGX) had earlier suspended trading in the shares of Aso Savings and Loans Plc with effect from Wednesday, November 19, 2025, to allow for the seamless execution of its share reconstruction exercise.

The suspension, announced by the Exchange, is expected to facilitate the reconciliation of records between the company’s registrars and the Central Securities Clearing System Plc (CSCS).

The company has been going through turbulent moments in recent times. In 2024, it reported a N38.6 billion loss in its shareholders’ funds, driven by accumulated losses as of December 31, 2022.

Why the share reconstruction matters

Share reconstruction, often referred to as share consolidation, is typically undertaken by companies to reduce the number of outstanding shares and increase their nominal value. This is usually implemented to correct a weak capital structure, improve perception, or restore regulatory compliance.

Aso Savings has struggled in recent years with financial challenges, including capital adequacy concerns and operational instability.

Industry analysts suggest the reconstruction may be part of wider recapitalisation or restructuring efforts to reposition the mortgage bank.

Although the current notice does not detail the exact ratio of reconstruction, similar exercises usually result in condensed shareholdings. Existing shareholders are expected to receive the transformed shares proportional to their pre-reconstruction holdings.

Meanwhile, the Nigeria Deposit Insurance Corporation (NDIC) has commenced the payment of insured deposits to customers of Aso Savings and Loans Plc and Union Homes Savings and Loans Plc, following the revocation of their licenses by the Central Bank of Nigeria (CBN) on December 15, 2025.

The NDIC, appointed as the official liquidator of the defunct banks, confirmed that depositors will receive insured amounts of up to N2m per account.

Deposits above this threshold will be paid later as liquidation dividends following the recovery of the banks’ assets and outstanding loans.

The NDIC urged depositors to submit claims between December 16 and December 30, 2025.

It added that verification requires proof of account ownership, valid identification (Driver’s License, Permanent Voter’s Card, or National Identity Card), and details of an alternate bank account linked to the depositor’s BVN.

The NDIC also urged depositors to activate transaction alerts on their alternate accounts to ensure timely notifications of payments.

Those without active alerts have been urged to check balances using their bank’s USSD codes or by visiting bank branches.

Creditors, bank staff, and shareholders will be paid in stages after depositors have been fully compensated, with liquidation proceeds from asset sales and debt recoveries forming the basis of these payments.

Debtors of the defunct banks are also required to settle outstanding loans with the NDIC’s Asset Management Department to facilitate the liquidation process.

The NDIC reassured the public of the safety of insured deposits in all licensed banks, encouraging Nigerians to continue their banking activities without fear.