ASO Savings and Loans fell into severe insolvency before the Central Bank of Nigeria (CBN) revoked its licence. In fact, the mortgage bank’s debt was three times its assets, which means the bank had a large negative net worth. Hence, it could not have been able to settle its financial obligatiions without the apex bank’s intervention, Economy Post can confirm.

According to the bank’s third quarter (Q3) 2025 financial statement, assets stood at N26.634 billion, but liabilities were nearly 3 times the assets, standing at N78.212 billion within the period.

What this means is that creditors and depositors were at risk of losses before the CBN intervention. In fact, the bank could have collapsed on its own if the CBN had not intervened as it would not have been able to repay its depositors and creditors.

“If a company’s assets are worth more than its liabilities, the result is positive net equity. If liabilities are larger than total net assets, then shareholders’ equity will be negative,” Investopedia says.

READ ALSO: CBN revokes licenses of Aso Savings, Union Homes for non-complaince with BOFIA

In the first nine months of 2025, Aso Savings reported a net loss of N400 million from N230.5 million profit recorded in the corresponding period of 2024. There was cash totalling N3.3 million, but net cash and bank balances were negative due to overdrafts and obligations to other financial institutions.

Customer deposits stood at N23.9 billion as against the gross loan book of N23.6 billion. The bank had an interest income of N746.069 million, but its operating expenses stood scandalously at N1.948 billion.

CBN license revocation

The CBN revoked the licences of Aso Savings and Loans Plc and another bank, Union Homes Savings and Loans Plc, on Tuesday, for violating guidelines in the Banks and Other Financial Institutions Act (BOFIA).

In a statement sent to Economy Post on Tuesday, the nation’s apex bank said the two mortgage banks failed to meet the minimum paid-up share capital requirement for the category of the bank licence granted to them and also breached several directives and obligations imposed upon them by the CBN.

The CBN’s Acting Director, Corporate Communications Department, Ms Hakama Sidi Ali, said the apex bank acted in line with its mandate to promote compliance with relevant laws and regulations in the sub-sector.

“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:
(a) Failure to meet the minimum paid-up share capital requirement for the category of the bank licence granted to them by the CBN. (b) Having insufficient assets to meet their liabilities; (c) Being critically undercapitalised with a capital adequacy ratio below the prudential minimum ratio as prescribed by the CBN; and (d) Failure to comply with several directives and obligations imposed upon them by the CBN.”

READ ALSO: Obanikoro vs Access Bank: Lagos court orders arrest of Access Bank MD

The CBN said it remained committed to its core mandate of ensuring financial system stability.

According to the CBN Guidelines for Mortgage Banks, a minimum capital adequacy ratio of 10 percent against risk assets is required for banks in the industry. There must be also minimum of 50 percent of mortgage assets to total assets.

In June 2024, the CBN revoked the banking license of Heritage Bank, appointing the Nigerian Deposit Insurance Corporation (NDIC) as its liquidator.

In a statement sent to Economy Post, the CBN said the revocation was in accordance with its mandate to promote a sound financial system in Nigeria and in exercise of its powers under Section 12 of BOFIA 2020. The apex bank said the revocation of the bank’s licence of Heritage Bank Plc was with immediate effect.