The Central Bank of Nigeria (CBN) has taken a decisive regulatory step by withdrawing the operating licences of two prominent mortgage banks, Aso Savings and Loans Plc and Union Homes Savings and Loans Plc. This action, announced on December 16, 2025, was executed due to the institutions' persistent failure to comply with critical banking regulations designed to ensure financial stability.
Regulatory Breaches and Capital Deficiencies
In an official statement released by the apex bank's Acting Director of Corporate Communications, Mrs. Hakama Sidi Ali, the CBN clarified that the revocation was necessary to uphold the integrity of mortgage banking guidelines and protect the broader financial system. The decision was made under the authority granted by Section 12 of the Banks and Other Financial Institutions Act (BOFIA) 2020 and the Revised Guidelines for Mortgage Banks in Nigeria.
Investigations by the regulator uncovered that both Aso Savings and Union Homes were in breach of multiple provisions. The core infractions centered on severe capital inadequacy. The banks failed to meet the minimum paid-up share capital requirement mandated for their specific licence category. Furthermore, they were found to be critically undercapitalised, with their capital adequacy ratios falling dangerously below the prudential minimum set by the CBN.
A critical finding was that the assets held by these institutions were insufficient to cover their liabilities, posing a significant risk. The CBN also noted a pattern of non-compliance, as the banks had repeatedly failed to adhere to various regulatory directives and obligations issued by the central bank over time.
CBN's Stance on Financial System Stability
The CBN reaffirmed its unwavering commitment to safeguarding the stability of Nigeria's financial landscape. The apex bank stressed that it would continue to take decisive and necessary actions against any institution that undermines established regulatory standards and threatens public confidence. This move is framed as part of a broader effort to reposition the mortgage sub-sector, encouraging stronger compliance and more robust operations among remaining players.
This regulatory crackdown occurs against the backdrop of a massive housing deficit in Nigeria and across Africa. Recently, the Minister of Housing and Urban Development, Alhaji Ahmed Dangiwa, highlighted the scale of the challenge, noting that Africa needs an estimated $1.4 trillion to close its housing gap by providing about 50 million units. He warned that without immediate solutions, the continent's deficit could balloon to roughly 130 million units by 2030.
Context: Nigeria's Housing Sector Initiatives
Minister Dangiwa pointed out that Nigeria's own housing deficit is conservatively over 17 million units. In response, the Federal Government has initiated projects for over 10,000 housing units across 14 states and the Federal Capital Territory in the last two years. Parallel to regulatory enforcement, efforts are being made to increase transparency in the sector.
In a related development, the Federal Ministry of Housing and Urban Development (FMHUD), in collaboration with the Economic and Financial Crimes Commission (EFCC), recently launched a digital platform. This initiative allows Nigerians to report fraud in housing estates, submit evidence, and track complaints, aiming to curb malpractices and improve project monitoring through the Contract Performance and Compliance Project Monitoring System (CPCPMS).
The revocation of the licences for Aso Savings and Union Homes sends a clear message about the CBN's resolve to enforce standards, even as the government seeks innovative ways to address the nation's profound housing needs.
