MTN Strengthens Foothold in Financial Services by Acquiring Full Control of MoMo Payment Service Bank
Detailed Breakdown of the News:
1. Acquisition Overview: MTN Nigeria has purchased the remaining 7.17% minority stake in MoMo Payment Service Bank (PSB) for a total of N6.95 billion. This move, disclosed in MTN’s recent financial statements, aims to solidify MTN’s hold on MoMo PSB, bringing MTN’s ownership closer to 100%.
2. Strategic Intent: This acquisition aligns with MTN’s broader goal to expand its financial services in Nigeria. By fully integrating MoMo PSB, MTN plans to leverage its infrastructure to enhance convenience for users and capitalize on the booming digital finance market in Nigeria, with MoMo PSB offering a variety of digital banking services.
3. Transaction Details: Initially, MoMo PSB’s minority shareholders had a 20% stake, which was diluted to 7.17%. In May 2024, these shareholders proposed selling their stake, which MTN agreed to acquire for N6.95 billion. This transaction resulted in a N12.97 billion adjustment to MTN’s retained earnings, reflecting the valuation difference in compliance with International Financial Reporting Standards 10.
4. Background on MoMo PSB: MoMo PSB was officially launched in Nigeria on May 19, 2022, following approval from the Central Bank of Nigeria. MTN initiated a pilot program just prior, which coincided with the anniversary of MTN’s GSM operations, demonstrating MTN’s ongoing commitment to expanding its financial inclusion efforts through digital finance solutions.
Through this acquisition, MTN is positioned to increase customer reach, streamline operations, and create additional revenue channels within Nigeria’s financial services sector.
Detailed Breakdown of the News:
1. Acquisition Overview: MTN Nigeria has purchased the remaining 7.17% minority stake in MoMo Payment Service Bank (PSB) for a total of N6.95 billion. This move, disclosed in MTN’s recent financial statements, aims to solidify MTN’s hold on MoMo PSB, bringing MTN’s ownership closer to 100%.
2. Strategic Intent: This acquisition aligns with MTN’s broader goal to expand its financial services in Nigeria. By fully integrating MoMo PSB, MTN plans to leverage its infrastructure to enhance convenience for users and capitalize on the booming digital finance market in Nigeria, with MoMo PSB offering a variety of digital banking services.
3. Transaction Details: Initially, MoMo PSB’s minority shareholders had a 20% stake, which was diluted to 7.17%. In May 2024, these shareholders proposed selling their stake, which MTN agreed to acquire for N6.95 billion. This transaction resulted in a N12.97 billion adjustment to MTN’s retained earnings, reflecting the valuation difference in compliance with International Financial Reporting Standards 10.
4. Background on MoMo PSB: MoMo PSB was officially launched in Nigeria on May 19, 2022, following approval from the Central Bank of Nigeria. MTN initiated a pilot program just prior, which coincided with the anniversary of MTN’s GSM operations, demonstrating MTN’s ongoing commitment to expanding its financial inclusion efforts through digital finance solutions.
Through this acquisition, MTN is positioned to increase customer reach, streamline operations, and create additional revenue channels within Nigeria’s financial services sector.