JPMorgan Chase & Co. has received Approval-in-Principle (AIP) from the Central Bank of Nigeria (CBN) to establish a merchant banking subsidiary in the country, marking a significant expansion of the American financial institution’s presence in West Africa.
The approval follows the banking giant’s reported $38 million (approximately ₦50 billion) statutory capital deposit with the apex bank, meeting the minimum capital requirement under the CBN’s updated regulatory framework for national merchant banking licences.
The proposed subsidiary, which will operate as JPMorgan Merchant Bank Nigeria Limited, represents a shift from the group’s longstanding presence in Nigeria through a representative office in Lagos. The office has primarily served institutional clients, providing advisory services and treasury support.
The new structure will allow JPMorgan to establish a locally incorporated and fully licensed merchant banking subsidiary, subject to the completion of the remaining regulatory requirements.
In an official statement released in Abuja, Michael Akuka, Director of Corporate Communications and Investor Relations at the CBN, emphasised that the approval was conditional and did not authorise the bank to commence operations.
“An Approval-in-Principle is a critical preliminary regulatory step, but it does not constitute a final operational banking license,” the statement read. “JPMorgan Merchant Bank Nigeria Limited must complete all outstanding regulatory prerequisites including statutory incorporation with the Corporate Affairs Commission (CAC) and the execution of essential operational arrangements before the CBN issues a final license permitting the commencement of banking operations.”
The bank must therefore complete the outstanding incorporation and operational requirements before receiving its final licence. The proposed timeline outlined in the announcement places the completion of the remaining licensing process between late 2026 and early 2027.
Alongside the preliminary approval, the CBN also cleared the proposed subsidiary’s board and executive leadership.
Adedapo Adedayo Olagunju, JPMorgan’s current Managing Director for West Africa, has been approved to lead the new merchant bank as managing director.
The proposed board of non-executive directors includes international banking executives Kevin George Latter, Chinedum Nzelu Izunwanne and Gabriel Murtaza Syed.
The independent non-executive directors are former CBN Deputy Governor Dr Sarah Omotunde Alade, legal counsel Prof. Olukonyinsola Ajayi and corporate executive Seni Adetu.
JPMorgan’s planned entry into Nigeria’s merchant banking sector comes as international financial institutions reassess their strategies across sub-Saharan Africa. Unlike retail commercial banks, merchant banks in Nigeria focus on specialised financial services, including corporate financing, wholesale banking, treasury management, foreign exchange transactions, underwriting and capital market operations.
The establishment of a locally licensed subsidiary could strengthen access to financing and international financial services for Nigerian businesses, particularly large corporations and companies engaged in cross-border trade.
JPMorgan’s global scale could also support syndicated lending, trade finance and other cross-border transactions, although the extent of its impact will depend on the services offered by the Nigerian subsidiary once it receives its final licence.
The move also comes amid renewed attention to Nigeria’s foreign exchange market, banking sector reforms and efforts to attract foreign investment. The establishment of a locally incorporated entity would give JPMorgan a more direct operating presence in the country’s financial system.
The bank’s proposed expansion follows its decision to reintegrate Nigerian local-currency sovereign bonds into its Government Bond Index-Emerging Markets (GBI-EM) Global Diversified index family, including the GBI-EM Global Diversified index, with a reported weighting of 7.4 per cent in the GBI-EM Edge Index. The development has been viewed as an indication of renewed international investor interest in Nigeria’s local debt market.
JPMorgan’s proposed merchant banking subsidiary is expected to increase competition in Nigeria’s wholesale banking sector, potentially widening access to international financial services and creating additional options for businesses seeking cross-border financing.
However, the bank must first satisfy the CBN’s outstanding regulatory conditions before commencing operations in Nigeria.
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