By Joy Baba-Yesufu
The Central Bank of Nigeria (CBN) has granted JPMorgan approval-in-principle to establish a merchant bank in Nigeria, paving the way for the American financial services giant to expand its institutional banking operations in the country.
The proposed subsidiary, JPMorgan Merchant Bank Nigeria Limited, must satisfy outstanding regulatory requirements and obtain a final banking licence from the apex bank before commencing operations.
The CBN announced the approval in a statement on Friday through its Director of Corporate Communications and Investor Relations, Michael Akuka.
“The Central Bank of Nigeria has granted Approval-in-Principle to JPMorgan to establish a merchant bank in Nigeria, to be known as JPMorgan Merchant Bank Nigeria Limited,” the statement said.
According to the apex bank, the development reflects growing international interest in Nigeria’s financial sector following reforms aimed at strengthening financial stability, improving investor confidence and deepening the country’s integration with global capital markets.
CBN Governor Olayemi Cardoso said the bank’s reform agenda was designed to build a financial system capable of attracting investment and supporting economic growth.
“Our objective is to build a financial system that is stable, competitive and internationally connected, one that commands confidence and can effectively support investment and economic growth,” Cardoso said.
He added that the growing interest of international financial institutions underscored the need to sustain reforms, strengthen market credibility and create an environment in which domestic and foreign institutions could operate effectively.
The CBN stressed that the approval-in-principle was only an initial stage of the licensing process. The proposed bank must complete its incorporation with the Corporate Affairs Commission and meet all applicable operational, governance and regulatory requirements before the apex bank can issue a final licence.
The regulator also approved Adedapo Olagunju as the proposed bank’s managing director.
Other approved appointments include Latter George, Nzelu Izunwanne and Syed Murtaza as non-executive directors, while Alade Sarah Omotunde, Ajayi Olukonyinsola and Adetu Seni were approved as independent non-executive directors.
The appointments form part of preparations to establish the institution, subject to the completion of the licensing process.
JPMorgan is among the world’s largest financial institutions, with operations spanning investment banking, commercial banking, asset management and other financial services.
A merchant banking licence would enable the proposed subsidiary to provide specialised services to corporate and institutional clients, potentially including corporate finance, capital raising, investment banking and financial advisory services.
The precise scope of its activities will depend on the final authorisation granted by the CBN.
Earlier reports by financial news organisations said JPMorgan Chase & Co had deposited N50bn, equivalent to about $38m, with the CBN as part of efforts to meet the capital requirement for its proposed merchant bank.
The reported deposit followed the CBN’s recapitalisation framework, which raised the minimum paid-up capital requirement for nationally licensed merchant banks to N50bn.
The deposit was reported before the announcement of the approval-in-principle.
The latest development marks a step forward in JPMorgan’s plans to expand its presence in Nigeria, where it has maintained a representative office and provided financial services to governments, companies and institutional clients.
However, the bank cannot commence merchant banking operations until it secures the CBN’s final approval.
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