MTN Nigeria Communications Plc executed an additional equity investment of ₦30 billion into its fintech subsidiary, MoMo Payment Service Bank (MoMo PSB), in the second quarter (Q2) of 2026.
This stands in contrast to nil as at June 2025, reflecting a deliberate strategy to bolster MoMo PSB’s capital buffer prior to final legal and regulatory execution of the fintech structural separation.
The ₦30 billion capital commitment aligns directly with the Structural Separation Transaction approved by shareholders at the April 30, 2026 Annual General Meeting.
Under this framework, MTN Group (via MTN Group Fintech B.V.) will assume a 60% controlling stake in MoMo PSB and Y’ello Digital Financial Services (YDFS) in a deal valued at ₦152.06 billion, while MTN Nigeria retains a 40% equity stake under a Central Bank of Nigeria (CBN)-regulated Financial Holding Company.
Strategic Rationale & Balance Sheet Impact
-
Capitalization for High-Growth Phase: MoMo PSB remains in an aggressive customer and infrastructure acquisition phase, requiring cash flow to expand agent networks, technology infrastructure, and merchant acquisition across rural and urban markets.
-
Balance Sheet De-risking for Core Telecom Engine: Fully funding MoMo PSB in the interim allows MTN Nigeria to clean up working capital obligations before handing over 60% funding responsibility to parent company MTN Group. This shields MTN Nigeria’s telecom cash flows and supports stable dividend distributions.
-
Positioning for Deposit-Taking & Credit Expansion: The fresh liquidity strengthens MoMo PSB’s capital adequacy ratio (CAR), providing the regulatory and operational baseline necessary as MTN pursues deposit-taking and direct balance-sheet lending capabilities across its digital ecosystem.
Follow the MoneyCentral Nigeria channel on WhatsApp: Click here!
