JP Morgan cites reforms for Nigeria expansion

JPMorgan Chase & Co has linked its planned expansion in Nigeria to the impact of economic reforms and the quality of banking regulation, as the United States lender moves closer to securing a merchant banking licence from the Central Bank of Nigeria.

The bank has deposited N50bn, equivalent to about $38m, with the CBN as part of the requirements for its licence application, according to a Bloomberg report on Tuesday.

The Managing Director of JPMorgan West Africa, Dapo Olagunju, said the country’s reform programme and regulatory framework were key considerations behind the lender’s decision to deepen its presence in the market.

“The level of reforms and the impact of the reforms is why we are expanding in Nigeria. We are also very impressed with the quality of banking regulations at the central bank,” Olagunju said.

The bank is targeting approval by December 2026 or early 2027, although the final decision rests with the CBN.

People familiar with the application process told Bloomberg that the N50bn deposit was one of the final regulatory requirements for approval. They requested anonymity because the process is private.

The proposed licence would enable the lender to expand beyond its existing representative office in Lagos and offer a broader range of services to Nigerian businesses and institutions, subject to the terms of the approval.

JPMorgan has operated in Nigeria primarily through its representative office, advising governments and companies on Eurobond issuances and other financial transactions. A merchant banking licence would provide a platform for it to deepen its involvement in corporate finance, lending and trade-related services.

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The N50bn deposit represents a significant step towards establishing a licensed banking operation in the country. However, it does not guarantee approval, and the bank cannot commence the proposed operations solely on the basis of the payment.

The expansion plan comes as international financial institutions seek opportunities in African markets, where businesses and governments require financing, investment banking services and support for cross-border trade.

Nigeria’s large economy and corporate sector make it an important market for lenders seeking to expand their African operations. JPMorgan’s proposed entry would strengthen its capacity to serve local companies and institutions directly, depending on the scope of the licence granted.

The bank has also been strengthening its investment banking leadership across the continent. It appointed Edward Bell to lead investment banking in sub-Saharan Africa, while Sailepu Montet was named head of its Kenya office and Michael Ahonzo Avou was appointed to oversee operations in Ivory Coast.

The appointments form part of its broader efforts to build capacity in key African markets.