MTN Nigeria Acquires Full Ownership of MoMo PSB with ₦6.95 Billion Investment

MTN Nigeria has finalised the acquisition of a 7.17% minority interest in MoMo Payment Service Bank (MoMo PSB) from Acxani Capital, investing ₦6.95 billion, or approximately $4.36 million. This strategic acquisition aims to streamline and strengthen the operations of the fintech entity.

With this transaction, MoMo PSB is now a wholly-owned subsidiary of MTN Nigeria. Previously, MTN Nigeria held an 80% stake in MoMo PSB, while Acxani Capital owned the remaining 20%. In May 2024, Acxani Capital decided to sell its entire stake, which had been reduced to 7.17%.

The purchase price for the 7.17% stake was agreed at ₦6.95 billion. Consequently, MTN Nigeria's "Other Reserves" decreased by ₦12.97 billion.

The total expenditure for MTN Nigeria on this acquisition was ₦16.35 billion. This includes the ₦6.95 billion paid to Acxani Capital and an additional ₦9.4 billion invested in MoMo PSB. The deal also involved acquiring assets from Acxani Capital, valued at ₦3.38 billion.

MoMo PSB, which was granted its operational license by the Central Bank of Nigeria (CBN) in 2022, has shown promising growth in its financial performance. For the half-year period concluding on June 30, 2024, the fintech reported a revenue of ₦48.6 billion. This represents an 11% increase compared to the revenue of ₦43.6 billion recorded during the corresponding period in the previous year, 2023.

The notable growth of MoMo Payment Service Bank (MoMo PSB) during the first half of 2024 can be attributed primarily to the success of its airtime lending product, Xtratime, and the increased adoption of its mobile money services.

The fintech experienced a significant surge in the number of active MoMo PSB wallets, which increased by 73.9%, reaching a total of 5.5 million by the end of the second quarter of 2024. This marked an addition of 701,000 wallets from the count at the end of the first quarter.

Additionally, the network of MoMo PSB agents expanded considerably, with an increase of approximately 498,000 agents, bringing the total to 239,000. This expansion contributed to a 33.4% year-on-year increase in the volume of transactions processed by the service.

Despite these positive trends, there was a substantial decrease in the cash held on behalf of MoMo PSB customers, which plummeted by 72%, falling to ₦2.15 billion from the previous ₦7.6 billion recorded at the end of 2023. Furthermore, by the end of the first half of 2024, MoMo PSB reported a liability of approximately ₦26.6 billion to its parent company, MTN Nigeria. During the same period, MoMo PSB made payments totalling ₦11.2 billion to MTN Nigeria.

In other related developments, February 2024 saw Mastercard making a significant investment in the MTN Group’s fintech division. Mastercard invested $200 million, which is equivalent to ₦3.8 billion, thereby acquiring a 3.8% minority stake in the company. This investment by Mastercard underscores the growing interest and confidence in the potential of MTN’s fintech operations.

The investment of $200 million (₦3.8 billion) by Mastercard into MTN Group’s fintech arm was a follow-through on an earlier announcement made six months prior, where Mastercard had expressed its intention to acquire a minority stake in MTN’s mobile money service, MTN MoMo. This move by Mastercard was a strategic investment, signalling its commitment to the growing mobile money market and its confidence in MTN MoMo’s potential and performance.