On December 16, the Central Bank of Nigeria (CBN) revoked the operating licences of Aso Savings and Loans Plc and Union Homes Savings and Loans Plc, bringing to an abrupt end the operations of two mortgage institutions it said had failed to meet minimum regulatory requirements.
In a circular announcing the decision, the apex bank stated that both lenders were critically undercapitalised and had fallen short of the minimum paid-up share capital required to retain their licenses. Their capital adequacy ratios, the CBN added, were far below the prescribed threshold.
In a report by BusinessDay, for Aso Savings, the timing of the collapse stunned many investors. Only weeks earlier, the bank’s stock had delivered one of the strongest rallies on the Nigerian Exchange this year. Between October 21 and November 3, the share price jumped by 114 per cent, rising from 50 kobo to N1.07, placing the lender among the few triple-digit gainers on a year-to-date basis.
That surge has now been completely erased. With the revocation of its licence, the bank’s shares have been permanently suspended from trading, effectively wiping out its estimated N15.8 billion market capitalisation.
A balance sheet already broken
A closer look at Aso Savings’ unaudited nine-month results for 2025 shows that the collapse had long been in the making.
In the first nine months of 2025, the bank reported a net loss of N400 million, reversing a profit of N230.5 million recorded in the same period of 2024. But the income statement masked a far deeper crisis evident on the balance sheet.
By September 2025, customer deposits stood at N23.9 billion, almost equal to the bank’s gross loan book of N23.6 billion. More alarming was the quality of those loans. The lender had set aside N13.9 billion as provisions for credit losses, a figure that points to widespread impairment across its loan portfolio.
Liquidity was virtually non-existent. Cash at hand amounted to just N3.3 million, while net cash and bank balances were negative, reflecting overdrafts and obligations to other financial institutions. In effect, the bank had no meaningful liquidity buffer.
Although management reduced negative net assets from N62.8 billion at the start of the year to N51.6 billion by September, the improvement offered little reassurance. Shareholders’ funds remained deeply in deficit at N51.6 billion, underscoring the extent to which accumulated losses had eroded equity.
The CBN’s action raises a stark question for Aso Savings’ roughly 8,500 shareholders.
In bank liquidations, the hierarchy of claims is clear and unforgiving. Depositors are prioritised, followed by other creditors. Shareholders rank last and only receive any value if assets exceed liabilities.
As of September 30, 2025, total assets stood at N26.6 billion, against total liabilities of N78.2 billion, leaving a negative net asset position of N51.6 billion. Even if all assets were sold at book value, proceeds would still fall tens of billions of naira short of what the bank owed.
In practical terms, shareholders will receive nothing. Equity has been completely wiped out.
There may also be further regulatory scrutiny of major investors. Under the BOFIA and NDIC Acts, regulators can pursue controlling shareholders if their actions are found to have contributed to a bank’s failure. Aso Savings’ largest shareholder, Olatunde Ayeni, who owns approximately 24.8 percent of the bank, could face claims depending on the outcome of regulatory investigations.
For depositors, protection is clearer but limited. The Nigeria Deposit Insurance Corporation (NDIC) is expected to step in to pay insured deposits of up to N2 million per depositor.
Amounts above that threshold will depend on recoveries from the liquidation of the bank’s assets. With depositor claims nearing N24 billion and assets far below liabilities, full recovery is unlikely. Many depositors should brace for significant losses on balances exceeding the insured limit.
The fall of Aso Savings is a sobering reminder that sharp stock market rallies can mask deep structural weaknesses—and that when a bank’s fundamentals finally give way, the destruction of value can be swift and total.
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