On 16 December, the Central Bank of Nigeria announced the cancellation of the operating 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 licenses. The CBN also noted that the banks were “severely undercapitalized” and that their capital adequacy ratio was well below the prescribed minimum.
However, the timing of Esso Savings' collapse surprised many investors. Just a few weeks ago, the stock staged one of the strongest rallies on the Nigerian exchange this year. Between October 21 and November 3, the share price increased by 114 per cent, from 50 kobo to N1.07. Based on year-to-date performance, Esso Savings ranked among the market's rare triple-digit gainers.
That rally has now vanished. With the license cancelled, trading has come to a permanent halt, and the bank's approximately N15.8 billion market capitalization has been effectively wiped out.
financial breakdown
Analysis of the bank's financial performance from 9M 2025 shows that the bank had been insolvent for some time, and closure was inevitable.
In the first nine months of 2025, Aso Savings recorded a net loss of N400 million, reversing a profit of N230.5 million recorded in the same period of 2024. However, the income statement only tells part of the story. The deepest problem lies in the balance sheet.
As of September 2025, customer deposits stood at N23.9 billion, almost equivalent to the bank's gross loan book of N23.6 billion. What's worse, the quality of those loans has declined rapidly. The bank had made a provision of N13.9 billion for loan losses, an extraordinary figure that underlines how much of the loan portfolio had become impaired.
There was no relief from cash levels. Aso Savings reported cash of only N3.3 million. And net cash and bank balances were negative due to overdrafts and liabilities of other banks. In practice, the institution had no liquidity buffer.
Although management succeeded in reducing negative net assets from N62.8 billion at the beginning of the year to N51.6 billion by September, the improvement was cosmetic. The losses had already drained the shareholders' fund, which stood in the deep red at N51.6 billion.
What happens to shareholders?
Essentially, the CBN's move raises questions. What will happen to the 8,500 shareholders of Esso Savings and Loans?
In a bank failure, the rule is inexcusable. Depositors are in the first place, followed by other creditors. Shareholders come last and are entitled to the residual value only if assets exceed liabilities.
In Esso Savings, there is no residual value to share.
As at September 30, 2025, the mortgage bank had total assets of N26.6 billion, while total liabilities increased to N78.2 billion, leaving a negative net asset position of N51.6 billion. In simple terms, even if each asset was sold at book value, the proceeds would still be tens of billions of Naira less than what the bank owed.
That reality means shareholders will get nothing. Equity is completely gone. There is also the possibility of further scrutiny for large shareholders. The BofIA and NDIC Acts allow regulators to restrain controlling shareholders if their actions may have contributed to a bank's failure.
Aso Savings' largest shareholder, Olatunde Ayeni, owns about 24.8 percent of the bank and depending on the regulatory findings, he may face claims linked to unresolved obligations.
What does this mean for depositors
For depositors, protection is limited but clear. The Nigeria Deposit Insurance Corporation (NDIC) will step in to pay out insured deposits, capped at N2 million per depositor. Beyond that limit, recovery depends on how much can be realized from liquidation of assets.
Given that total depositor claims are about N24 billion, and assets are much less than liabilities, full recovery is highly unlikely. Many depositors should expect significant losses in excess of the insurance limits.
