On December 16, the Central Bank of Nigeria announced the revocation of the operational licenses of Aso Savings and Loans as well as Union Homes Savings and Loans.
According to the circular announcing the revocation, both mortgage banks failed to meet the minimum paid-up share capital required for their license. The CBN also noted that the banks were “critically undercapitalised” with their capital adequacy ratio well below the minimum it prescribed.
The timing of Aso Savings’ collapse, however, startled many investors. Just weeks earlier, the stock had staged one of the strongest rallies on the Nigerian Exchange this year. Between October 21 and November 3, the share price surged by 114 percent, rising from 50 kobo to N1.07. By year-to-date performance, Aso Savings ranked among the market’s rare triple-digit gainers.
That rally has now evaporated. With the licence revoked, trading halts permanently, and the bank’s roughly N15.8 billion market capitalisation has effectively been wiped out.
In a breakdown of the bank’s financial performance from 9M 2025, it shows that the bank had been insolvent for a while, and the winding-up was inevitable.
In the first nine months of 2025, Aso Savings posted a net loss of N400 million, reversing a N230.5 million profit recorded in the same period of 2024. However, the income statement only tells part of the story. The deeper problem lies in the balance sheet.
By September 2025, customer deposits stood at N23.9 billion, almost matching the bank’s gross loan book of N23.6 billion. Worse still, the quality of those loans had deteriorated sharply. The bank had provisioned N13.9 billion for credit losses, an extraordinary figure that underscores how much of the loan portfolio had become impaired.
Cash levels offered no comfort. Aso Savings reported cash at hand of only N3.3 million. And net cash and bank balances were negative due to overdrafts and obligations to other banks. In practical terms, the institution had no liquidity buffer.
Although management succeeded in trimming negative net assets from N62.8 billion at the start of the year to N51.6 billion by September, the improvement was cosmetic. Losses had already hollowed out shareholders’ funds, which stood deeply in the red at N51.6 billion.
Essentially, the move by the CBN raises the question. What happens to the 8,500 shareholders of Aso Savings and Loans?
In a bank failure, the rule is unforgiving. Depositors rank first, followed by other creditors. Shareholders come last and are only entitled to residual value if assets exceed liabilities.
At Aso Savings, there is no residual value to share.
As of September 30, 2025, the mortgage bank’s total assets stood at N26.6 billion, while total liabilities ballooned to N78.2 billion, leaving a negative net asset position of N51.6 billion. In simple terms, even if every asset were sold at book value, the proceeds would still fall tens of billions of naira short of what the bank owed.
That reality means shareholders will receive nothing. Equity has been completely eroded. There is also the possibility of further scrutiny for large shareholders. BOFIA and NDIC Acts allow regulators to pursue controlling shareholders if their actions contributed to the bank’s failure.
Aso Savings’ largest shareholder, Olatunde Ayeni, holds about 24.8 percent of the bank and could face claims linked to unresolved obligations, depending on regulatory findings.
For depositors, protection is limited but clearer. The Nigeria Deposit Insurance Corporation (NDIC) will step in to pay insured deposits, capped at N2 million per depositor. Beyond that threshold, recovery depends on how much can be realised from the liquidation of assets.
Given that total depositor claims amount to nearly N24 billion, and assets fall far short of liabilities, full recovery is highly unlikely. Many depositors should expect significant losses above the insured limit.