MTN Nigeria Communications Plc has completed the acquisition of the 7.17% minority shareholding in MoMo Payment Service Bank Limited that was previously owned by Acxani Capital Limited. The company attributed this move to foreign exchange losses encountered.
Shareholders have indicated that MTN Nigeria’s decision to acquire the remaining stake in MoMo PSB was aimed at consolidating its financial services wing and managing risks related to foreign exchange rate volatility. They noted that this acquisition comes at a time when the company has been challenged by significant foreign exchange issues, impacting its financial performance.
One shareholder, Ariyo Olugbosun, stated, “This development is positive, and they are dedicated to transforming the company’s fortunes. The foreign exchange losses have had a substantial impact on their financials. Diversifying in this manner could be beneficial in the long run.”
Olugbosun highlighted the significant concern posed by foreign exchange losses for MTN Nigeria, with fluctuations in the naira affecting its profitability.
Another shareholder, Oderinde Taiwo, commented, “The negative impact of foreign exchange losses on the company’s bottom line is substantial. They are facing significant challenges. Considering the current situation, there appears to be a serious problem, even for our economy.”
Taiwo also suggested the possibility of bringing in a new investor to manage MoMo banking services, stating, “Perhaps a new investor should take charge of the MoMo banking service. Given the devaluation of the naira, the company should refocus on its core business due to the foreign exchange crisis they are navigating.”
MTN Nigeria’s management believes that by acquiring full ownership of MoMo PSB, they can streamline and fortify the operations of the payment service bank. This move is seen as essential for achieving the company’s growth aspirations, with the aim of enhancing MoMo PSB’s capabilities to better serve its clients and expand its market reach.
The management of MTN Nigeria has expressed optimism that this acquisition will bolster the growth trajectory of MoMo PSB.
“With the completion of this transaction, MoMo PSB is now wholly owned by MTN Nigeria. Management is confident that this move will simplify and fortify the operations of MoMo PSB, which is fundamental for achieving its growth targets,” the statement mentioned.
A report by PUNCH revealed that MTN Nigeria aims to establish the largest fintech platform in the country, with a target to reach 30 to 40 million active MTN MoMo wallets by 2025.