Shareholders blame forex crisis for MTN MoMo purchase

MTN Nigeria Communications Plc has acquired the 7.17 per cent minority shareholding in MoMo Payment Service Bank Limited previously held by Acxani Capital Limited, attributing it to foreign exchange loss.

This was disclosed in a corporate notice filed with the Nigerian Exchange Limited on Monday. Some shareholders have noted that MTN Nigeria’s decision to acquire the remaining stake in MoMo PSB was a move to consolidate its financial services arm and mitigate risks associated with FX volatility, adding that the acquisition comes amid significant FX challenges facing the company, which have negatively impacted its bottom line.

A shareholder, Ariyo Olugbosun, remarked, “It is a good development, and they will give it all it takes to turn the development of the company around. The issue of forex loss is a big deal, and it affected their results. I think it is a way of diversifying, and it will be a good development in the future, if not now.”

He added that the FX losses have been a considerable concern for MTN Nigeria, with fluctuations in the naira affecting profitability.

Another shareholder, Oderinde Taiwo, commented, “The foreign exchange loss impacted negatively on the bottom line of the company. They are in a serious loss. Due to what is happening presently, I think there is a huge problem, even for our economy.”

Taiwo also suggested that there might be a need for a new investor to manage MoMo banking services, stating, “I think there is a need for another investor to take over the MoMo banking service. The naira has been depleted, so I think there should be a focus on their core business because of the foreign exchange crisis they are facing,” he added.

The management of MTN Nigeria believes that by taking full ownership of MoMo PSB, they can simplify and strengthen the operations of the payment service bank, which is crucial for achieving its growth ambitions, noting that this move is aimed at enhancing MoMo PSB’s capabilities to better serve its customers and expand its market presence.

MTN Nigeria’s management has expressed confidence that this acquisition will bolster MoMo PSB’s growth trajectory.

“Following the completion of the transaction, MoMo PSB is now a wholly-owned subsidiary of MTN Nigeria. Management believes this transaction will simplify and strengthen MoMo PSB’s operations, which is crucial for achieving its growth ambitions,” the statement added.

According had reported that MTN Nigeria has set a target to build the largest fintech platform in the country, aiming to reach 30 to 40 million active MTN MoMo wallets by 2025.