Apex bank cites capital shortfalls, regulatory breaches as it moves to strengthen mortgage sub-sector
The Central Bank of Nigeria (CBN) has revoked the operating licences of two mortgage banks, citing persistent regulatory violations and non-compliance with key prudential requirements.
In a circular issued on Tuesday and signed by the Acting Director of Corporate Communications, Hakama Ali, the apex bank said the decision forms part of broader efforts to reposition the mortgage banking sub-sector and enforce strict adherence to existing laws and regulations.
The CBN stated that its action 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, which empower the Bank to revoke licences where institutions fail to meet regulatory standards.
The affected institutions are Aso Savings and Loans Plc and Union Homes Savings and Loans Plc.
According to the circular, the banks were found to have breached several provisions of BOFIA 2020 and the revised mortgage banking guidelines. These include failure to meet the minimum paid-up share capital requirement applicable to their licence category and insufficient asset base to cover existing liabilities.
The CBN also noted that the institutions were critically undercapitalised, with capital adequacy ratios below the prudential minimum prescribed by the regulator. In addition, the banks reportedly failed to comply with multiple regulatory directives and obligations issued by the apex bank.
“The affected institutions violated various sections of BOFIA 2020 and the Revised Guidelines for Mortgage Banks in Nigeria,” the CBN said, listing capital inadequacy, weak balance sheets, and regulatory non-compliance among the key infractions.
Reaffirming its regulatory stance, the CBN said it remains fully committed to its core mandate of safeguarding financial system stability and ensuring that licensed institutions operate in a safe, sound, and compliant manner.
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