CBN gives JP Morgan green light to start merchant bank

The Central Bank of Nigeria (CBN) has given JP Morgan approval-in-principle to set up a merchant bank in Nigeria.

This allows the largest bank in the US to grow its services like payments, lending, trade finance, and corporate banking in Nigeria. JP Morgan has had a representative office in the country for several years now.

JP Morgan Merchant Bank Nigeria Limited plans to offer wholesale banking, capital markets, and advisory services. Michael Akuka, the CBN’s director of corporate communications and investor relations, shared this information in a statement on Friday.

The approval-in-principle is just the first step in the licensing process. It does not mean JP Morgan has a full banking permit yet.

JP Morgan still needs to meet other regulatory requirements. This includes registering with the Corporate Affairs Commission and getting operational approvals before starting its business, according to the CBN.

This move comes as Nigeria's banking sector undergoes many reforms. These changes aim to strengthen the financial system, build market confidence, and improve resilience.

The CBN also announced it has approved the appointment of Adedapo Olagunju as the managing director of the new bank. Latter Kevin George, Nzelu Chinedum Izunwanne, and Syed Gabriel Murtaza will serve as non-executive directors.

CBN Governor Olayemi Cardoso said, "Our objective is to build a financial system that is stable, competitive, and internationally connected. We want a system that commands confidence and can support investment and economic growth effectively."

He added, "We are encouraged by the growing interest of international financial institutions in Nigeria. Our focus remains on sustaining the reforms, strengthening the credibility of our markets, and creating an environment where both local and international institutions can thrive."

On Tuesday, Bloomberg reported, citing sources familiar with the matter, that JP Morgan is on track to get a banking license in Nigeria. This follows the bank depositing N50 billion ($38 million) with the CBN.

The report stated that the bank aims to receive its license by the end of the year or early 2027, provided it gets all the necessary approvals.

JP Morgan has a long history in Nigeria, dating back to 1961. That was when Chase Manhattan Bank, which later became JP Morgan Chase & Co., opened a branch in Lagos. They provided many commercial banking services to local businesses and individuals.

Before that, in 1960, Chase International Investment Corporation, a part of Chase Manhattan Bank, was the lead partner in organizing Nigerian Textile Mills in Lagos. This was seen as the first major private industrial project with American investment in Nigeria.