The Central Bank of Nigeria (CBN), on Friday, said it has granted the American banking giant, JPMorgan approval-in-principle to establish a merchant bank in the country.
A merchant bank is a financial institution that helps businesses, large companies and governments raise money, manage major financial transactions and secure funding for expansion.
Unlike ordinary commercial banks, which focus heavily on everyday banking services for individuals and businesses, merchant banks specialise in corporate finance and investment-related services.
The new bank could deepen Nigeria’s access to international financial markets.
The proposed bank, JPMorgan Merchant Bank Nigeria Limited, will be required to meet all regulatory conditions before it can obtain a final licence and begin operations.
CBN’s Director of Corporate Communications and Investor Relations, Michael Akuka, announced the approval in a statement, describing it as a development coming amid reforms to strengthen the financial system and attract international investment.
The approval, he noted, follows the banking sector recapitalisation exercise, which the CBN said had strengthened the capacity and resilience of Nigerian banks.
The development also forms part of the wider reforms under CBN Governor, Olayemi Cardoso, aimed at improving financial stability, deepening financial markets and restoring international confidence in the country’s financial system.
Speaking on the reforms, Cardoso said: “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.
“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 in which both domestic and international institutions can participate and thrive.”
Akuka explained that the approval-in-principle was only the first stage of the regulatory process and did not amount to a final banking licence.
He said JPMorgan Merchant Bank Nigeria Limited must fulfil all applicable regulatory requirements, including registration with the Corporate Affairs Commission and completion of the necessary operational and regulatory arrangements, before it can receive authorisation to commence business.
The CBN has approved the nomination of Adedapo Adedayo Olagunju as managing director of the proposed bank.
It also approved Latter Kevin George, Nzelu Chinedum Izunwanne and Syed Gabriel Murtaza as non-executive directors.
Alade Sarah Omotunde, Ajayi Olukonyinsola and Adetu Seni were approved as independent non-executive directors.
The apex bank said the proposed merchant bank could begin operations only after it had issued a final licence.
It reiterated its commitment to maintaining a sound and competitive financial system that supports sustainable economic growth and strengthens Nigeria’s participation in global financial markets.
Daily Sun reported that JPMorgan Chase, as of Thursday, still awaited final approval from the CBN to establish a merchant bank in the country after reportedly depositing N50 billion (about $38 million) to meet a key regulatory capital requirement.
The deposit marked a major step in the American banking giant’s bid to secure a licence and establish a formal banking presence in Nigeria.
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