MTN Nigeria’s planned sale of its fintech businesses to parent company MTN Group has come under scrutiny following new financial disclosures suggesting that the ₦95.5bn deal valuation falls significantly below the amount invested in the businesses.
The telecommunications company had described the proposed sale of 60 per cent of MoMo Payment Service Bank (MoMo PSB) and Y’ello Digital Financial Services to MTN Group as a transaction representing a 2.1-fold premium over their carrying value as of December 2025.
However, an analysis of MTN Nigeria’s nine-month financial statements for the period ended September 30, 2026, suggests that the valuation is based on the businesses’ written-down accounting value rather than the total amount invested in them.
According to the disclosures, MTN Nigeria had invested ₦92.95bn in MoMo PSB and ₦15bn in Y’ello Digital as of December 2025, bringing its combined investment in the two businesses to ₦107.95bn.
The company had also invested ₦500m in XS Broadband, bringing its total investment in the three subsidiaries to ₦108.45bn.
However, MTN recorded impairment charges of ₦63.06bn against its subsidiary investments, reducing their net carrying value to ₦45.39bn.
When the proposed ₦95.5bn valuation is compared with this reduced figure, it produces a multiple of approximately 2.1 times, matching the premium highlighted by the company.
But compared with the original ₦107.95bn invested in MoMo PSB and Y’ello Digital, the proposed valuation represents a shortfall of about 12 per cent.
The gap widens when the additional investments made in 2026 are considered.
MTN Nigeria’s cash flow statement shows that the company invested another ₦30bn in a subsidiary during the first nine months of 2026, with its investment in MoMo PSB rising from ₦92.95bn to ₦122.95bn.
This brought the combined investment in MoMo PSB and Y’ello Digital to ₦137.95bn by September 2026, against the proposed ₦95.5bn valuation.
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On that basis, the sale valuation is approximately 31 per cent below the total amount invested in the two businesses.
The financial statements also show that MTN recorded an additional impairment charge of ₦14.73bn during the nine months to September 2026, taking cumulative impairment charges to ₦77.79bn.
The disclosures do not provide a breakdown of the impairment charges between the individual subsidiaries, making it difficult to determine the specific financial performance of each business.
The proposed transaction has also drawn attention to changes in customer deposits and wallet activity within MTN’s mobile money business.
Customer deposits in MoMo rose to ₦43.82bn as of September 30, 2026, from ₦9.84bn at the end of December 2025.
Of the September balance, ₦42.55bn was invested in treasury bills, representing approximately 97 per cent of customer deposits.
MTN’s half-year financial disclosures had put customer deposits at ₦14bn in June, indicating that approximately ₦29.8bn of the increase recorded by September came in the third quarter.
However, the growth in deposits coincided with a decline in active wallets.
The company reported five million active wallets at the end of June, but its third-quarter financial statements showed 3.2 million, representing a decline of about 36 per cent.
MTN attributed the reduction to the migration to a new platform and the deactivation of legacy wallets.
The company, however, linked the increase in customer deposits to greater wallet adoption, leaving questions about the relationship between the reported growth in deposits and the decline in active wallet numbers.
Revenue figures also indicate a change in the pace of growth. MTN reported 132 per cent growth in core mobile money revenue at the half-year and 102.2 per cent for the nine months ended September 30.
The financial statements do not provide a detailed breakdown of MoMo’s revenue and profit in naira, making it difficult to establish the precise contribution of the business to MTN Nigeria’s overall financial performance.
The proposed sale was approved by MTN Nigeria shareholders on April 30, following a fairness opinion from KPMG.
MTN had said the transaction would transfer 60 per cent of MoMo PSB and Y’ello Digital to MTN Group, with the valuation excluding intra-group debt and cash.
As of September 2026, the two fintech businesses owed their parent company ₦38.4bn.
The transaction had not been completed as of September 30 and remained subject to regulatory approval. MTN Nigeria said the accounting implications would be determined when it ceased to control the businesses.
The proposed sale has therefore raised questions about how the transaction’s headline valuation compares with the actual capital committed to building the fintech operations, particularly as the businesses are being transferred to MTN Group, the parent company.
About the Author
Cecilia Attah is a tech analyst with a degree from Benue State University. She covers tech news and startups at TechRegard with a focus on how technology is transforming Africa and shaping the global landscape.
