CBN Approves JP Morgan’s Proposed Merchant Bank in Nigeria

The Central Bank of Nigeria (CBN) has granted global financial services firm JP Morgan approval-in-principle to establish a merchant bank in Nigeria.

The proposed institution, JPMorgan Merchant Bank Nigeria Limited, must obtain a final banking licence from the apex bank before commencing operations.

The CBN announced the development in a statement on Friday, marking progress in JP Morgan’s plans to expand its presence in Nigeria’s financial services sector.

The approval follows the bank’s announcement in October of plans to establish a merchant banking subsidiary in the country.

Dapo Olagunju, JP Morgan’s Managing Director for West Africa, disclosed the plan on Oct. 8 at the Nigeria-Asia Financial Connectivity Dialogue in Singapore.

The event was convened by the CBN in collaboration with JP Morgan, the Nigerian Exchange Group and FMDQ Group.

The proposed bank is expected to enhance JP Morgan’s capacity to serve Nigerian businesses, financial institutions and corporate clients, particularly those seeking access to international capital markets.

JP Morgan currently maintains a representative office in Lagos, through which it engages with Nigeria’s financial market.

The establishment of a licensed merchant bank would enable the lender to expand its operations beyond its existing representative-office activities, subject to regulatory approval.

Over the years, the financial institution has advised Nigerian governments and companies on international financial transactions, including Eurobond issuances.

Earlier in the week, reports indicated that JP Morgan had deposited N50 billion with the CBN as part of the requirements for obtaining a merchant banking licence.

The reported deposit corresponds to the minimum paid-up capital requirement for nationally licensed merchant banks under the CBN’s banking recapitalisation framework.

Bloomberg and Nigerian financial news outlets reported that the deposit formed part of the regulatory requirements associated with the bank’s application.

The approval-in-principle represents a significant stage in the establishment of the proposed subsidiary, although JP Morgan must still meet the CBN’s outstanding requirements to secure a final licence and begin operations.