J.P. Morgan Poised To Set Up Its First Merchant Bank In West Africa, Pays N50bn CBN Deposit
J.P. Morgan Chase & Co. has reportedly deposited N50 billion, about $38 million, with the Central Bank of Nigeria (CBN) as it seeks a licence for what is described as its first merchant bank in West Africa.
The deposit was reported recently by an anonymous source who asked not to be named because the process is private. However, the deposit does not guarantee approval of the merchant banking licence, and neither J.P. Morgan nor the CBN have confirmed the payment.
The stated amount is one of the capital requirements applicants for a merchant banking licence in Nigeria must fulfill. Under rules the CBN set in March 2024, N50 billion is the minimum for a merchant bank with national authorisation, while a commercial bank with international authorisation needs N500 billion.
Sources say J.P. Morgan expects to get the licence by the end of 2026 or in early 2027.
J.P. Morgan made its plan public on October 8. Dapo Olagunju, its managing director for West Africa, told a financial dialogue in Singapore that the bank expects to start merchant banking operations in Nigeria before the end of 2026, subject to regulatory approval.
A merchant bank mainly serves large companies, governments and investors. A licence would let J.P. Morgan widen its Nigerian business into trade finance, corporate lending, payments and investment banking. One report hints it would also allow the bank to give dollar loans to large companies.
The bank has operated a representative office in Lagos since the 1980s, where it serves corporate and institutional clients and advises the government and companies on deals such as Eurobond sales. It plans to upgrade the office to a full-service branch.
J.P. Morgan already has an authorised branch in South Africa. This year, it also appointed an investment banking head for sub-Saharan Africa and opened offices in Nairobi and Abidjan.
South Africa’s Absa Group is also considering a merchant banking licence in Nigeria, another report added.
