MTN reveals details of transaction after buying bank for N16.35 billion

• MTN acquired the remaining 7.17% minority ownership in MoMo Payment Service Bank for N6.95 billion
• This purchase is consistent with MTN Nigeria's overall strategy to improve its standing in the financial services sector
• MTN Nigeria intends to boost revenue streams from the growing digital finance market through the acquisition

Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

In an effort to improve its standing in the financial services industry, MTN, the largest telecom company in Nigeria, paid N6.95 billion to acquire the remaining 7.17% minority stake in MoMo Payment Service Bank.

MTN Nigeria hopes to increase revenue streams from the expanding digital finance market. Photo Credit: MTN
Source: Getty Images

MTN Nigeria's unaudited financial statements for the nine months ending September 30, 2024, included information on the acquisition.

MoMo PSB's minority shareholders agreed to sell their shareholding to MTN in May, putting MTN's ownership of the bank closer to complete control.

This acquisition is in line with MTN Nigeria's overarching plan to strengthen its position in the financial services industry in Nigeria by partnering with MoMo PSB, which provides a variety of digital banking services meant to promote financial inclusion.

Through the acquisition, MTN Nigeria hopes to increase revenue streams from the expanding digital finance market while utilising MoMo PSB's mobile banking infrastructure to provide consumers with more convenience.

“In May 2024, the non-controlling interest holders in MoMo Payment Service Bank (MoMo PSB) proposed the sale of their 20 per cent stake, which had been diluted to a 7.17 per cent minority interest, to MTN Nigeria Communications Plc (MTN Nigeria). MTN Nigeria accepted this proposal and paid N6.95bn as the agreed purchase consideration.”

The transaction came at a total cost of N16.35 billion. This includes the N9.4 billion invested in MoMo and the N6.95 billion paid directly to Acxani Capital. MTN Nigeria's retained earnings thus decreased by N12.97 billion.

Acxani Capital's N3.38 billion worth of assets were also acquired as part of the deal.

According to the operator, this adjustment reflects the discrepancy between the actual amount paid by MTN Nigeria and the valuation of the non-controlling interest in MoMo PSB in line with International Financial Reporting Standards 10.

Following final Central Bank of Nigeria approval in April 2022, MoMo formally started operations in Nigeria on May 19, 2022.

The introduction came after a fruitful test program that was started on May 16, 2022, the anniversary of MTN's GSM operations.

MTN buys bank, details of transaction emerge

Legit.ng reported that MTN Nigeria has successfully purchased a 7.17% minority stake in Mobile Money Payment Service Bank (MoMo PSB), which was formerly owned by Acxani Capital.

The telecom business announced on the Nigerian Stock Exchange that it had completed the transaction and that MTN Nigeria now owns MoMo PSB in its entirety.

Compared to conventional person-to-person mobile money transfers, MTN Nigeria's Payment Services Bank offers a wider range of mobile financial services, such as bill payment and loans.

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Source: Legit.ng