US largest bank JPMorgan secures initial approval for Nigerian merchant bank after $38 million capital deposit

The Central Bank of Nigeria has granted JPMorgan approval-in-principle to establish a merchant bank, moving the largest US bank closer to expanding its decades-old presence in Africa’s most populous country. The proposed institution will be called JPMorgan Merchant Bank Nigeria Limited and will be led by Adedapo Olagunju, the bank’s managing director for West Africa.

• The CBN has granted JPMorgan approval-in-principle to establish a merchant bank in Nigeria.
• The approval follows JPMorgan’s reported $38 million (N50 billion) deposit with the central bank.
• The bank must still complete incorporation and other regulatory requirements before receiving a final licence.
• JPMorgan West Africa managing director Adedapo Olagunju has been approved to lead the proposed bank.

The preliminary approval follows JPMorgan’s reported deposit of approximately $38 million (N50 billion) with the CBN, matching the minimum capital requirement for a nationally authorised merchant bank.

It also marks a significant change in JPMorgan’s Nigerian operations. The Wall Street group currently operates from a representative office in Lagos, through which it provides corporate and institutional clients with investment banking, markets, payments and asset-management services.

A merchant banking licence would give it a locally regulated platform from which it could provide corporate finance, trade finance, foreign-currency loans, capital raising and other services directly to large Nigerian companies.

The CBN announced the approval in a statement, saying it came amid reforms intended to strengthen financial stability and deepen Nigeria’s connection to international capital markets. However, the regulator stressed that approval-in-principle is only the first stage and does not permit the proposed bank to begin operations.

Final banking licence still required

JPMorgan Merchant Bank Nigeria must register with the Corporate Affairs Commission, establish the required operational systems and satisfy the CBN’s remaining regulatory conditions.

It can only begin business after the regulator completes its assessment and issues a final merchant banking licence.

The approval confirms progress first reported earlier this week when JPMorgan deposited $38 million with the CBN⁠ as part of the licensing process.

At the time, regulatory approval remained outstanding, with the US banking group expecting to secure a licence by the end of 2026 or early 2027.

JPMorgan announced its plan to establish the bank during the Nigeria–Asia Financial Connectivity Dialogue in Singapore earlier in October.

The event brought together the CBN, JPMorgan, the Nigerian Exchange Group and FMDQ Group as Nigerian authorities sought to strengthen connections between domestic markets and international investors.

Mr Olagunju said at the time that the proposed bank would expand JPMorgan’s relationship with Nigerian businesses and the country’s capital markets.

The group, which controls approximately $5 trillion in assets, is seeking a larger share of corporate lending, payments, trade finance and investment-banking activity across Africa.

More competition for Nigerian merchant banks

The proposed bank will compete with established Nigerian merchant banks and the corporate-finance divisions of the country’s largest commercial lenders.

Its arrival could increase access to dollar-denominated loans and international capital for major companies, particularly businesses operating in energy, telecommunications, infrastructure, manufacturing and financial services.

JPMorgan has previously arranged international financing for Nigeria, including serving among the banks that managed the federal government’s $2.2 billion Eurobond sale in 2024.

The CBN linked the new approval to its banking-sector recapitalisation programme, which increased the minimum paid-up capital for merchant banks to N50 billion.

Governor Olayemi Cardoso said the regulator wants to create a stable and internationally connected financial system capable of supporting investment and economic growth.

“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,” Mr Cardoso said.

The CBN also approved Kevin George Latter, Chinedum Nzelu Izunwanne and Gabriel Murtaza Syed as non-executive directors of the proposed bank.

Sarah Omotunde Alade, Olukonyinsola Ajayi and Seni Adetu were approved as independent non-executive directors.