MTN Nigeria, the country’s largest telecommunications company, has recently finalized the acquisition of the remaining 7.17 percent minority interest in MoMo Payment Service Bank (MoMo PSB) for a total of N6.95 billion. This move aims to bolster MTN’s position within the financial services sector, reflecting its commitment to deepening its engagement in this booming market. The acquisition was detailed in MTN Nigeria’s unaudited financial statements for the nine months ending on September 30, 2024, which outlined their strategic efforts to enhance their portfolio of financial services and digital banking solutions.
Previously, in May 2024, MTN Nigeria reached an agreement with the minority shareholders of MoMo PSB to purchase their stake, which had been reduced from an initial 20 percent to 7.17 percent. This agreement marks a significant step towards MTN’s goal of achieving full control over the payment service bank, a subsidiary that is strategically important for the company’s plans to broaden its financial services offerings. By increasing its stake in MoMo PSB, MTN Nigeria is positioning itself to better leverage digital banking services that are critical in enhancing financial inclusion across Nigeria.
The acquisition is part of MTN’s broader strategy focusing on expanding its footprint in Nigeria’s financial landscape, which is characterized by rapid growth and increasing demand for digital financial services. MoMo PSB aims to provide a suite of banking services designed to offer convenience to customers while tapping into the expanding digital finance market. This strategy resonates with the overall trend of embracing technology in finance, driven by a growing smartphone user base and an increasing number of Nigerians seeking accessible banking options.
In the financial statements, the telco indicated that the acquisition would be recognized as an equity transaction, leading to an adjustment of N12.97 billion to MTN Nigeria’s retained earnings. This adjustment is a reflection of the difference between the valuation of the non-controlling interests in MoMo PSB and the purchase price paid by MTN Nigeria, as mandated by International Financial Reporting Standards (IFRS) 10. This financial maneuver signifies not only MTN’s commitment to developing its financial services but also its adherence to international accounting standards during the acquisition.
MoMo PSB officially commenced operations in Nigeria on May 19, 2022, following the approval it received from the Central Bank of Nigeria in April of the same year. This was a significant milestone, as it allowed the bank to begin serving customers and providing essential financial services that cater to the increasingly digital-oriented lifestyles of Nigerians. The launch was further complemented by a successful pilot program that had started just days prior to the official launch, celebrating the anniversary of MTN’s GSM operations, which underscored the company’s long-standing presence and commitment to Nigeria.
In conclusion, MTN Nigeria’s acquisition of the remaining interest in MoMo PSB represents an ambitious step towards securing a leading position in the country’s financial services market. The move is not only strategic in terms of control and operational capacity but also highlights MTN’s vision to invest in digital transformation within the banking sector. By leveraging the existing mobile banking infrastructure, MTN aims to enhance its service delivery, improve customer convenience, and tap into the lucrative digital finance market, ultimately contributing to greater financial inclusion in Nigeria. As the telecommunications and financial services sectors continue to intertwine, MTN’s proactive strategy positions it to play a pivotal role in shaping the future of digital banking in the region.
