CBN Grants JPMorgan Approval-in-Principle for Nigerian Merchant Bank

The Central Bank of Nigeria has granted approval-in-principle to JPMorgan to establish a merchant bank in Nigeria. The proposed entity, JPMorgan Merchant Bank Nigeria Limited, will operate only after meeting regulatory requirements and receiving a final banking licence.

The CBN announced the approval in a statement on Friday. Michael Akuka, Director of the Corporate Communications and Investor Relations Department, said the move reflects growing international interest in Nigeria’s financial sector.

What the approval covers

The statement said: “The Central Bank of Nigeria has granted Approval-in-Principle to JPMorgan to establish a merchant bank in Nigeria, to be known as JPMorgan Merchant Bank Nigeria Limited.”

The CBN linked the development to its banking sector recapitalisation programme and other reforms meant to strengthen financial stability, improve market confidence and deepen Nigeria’s integration with global capital markets.

JPMorgan is one of the world’s largest financial institutions, with operations across investment banking, commercial banking, asset management and financial services. Its proposed merchant banking subsidiary would expand its institutional presence in Nigeria. The approval does not yet authorise the bank to start banking operations.

Merchant banks provide specialised services such as corporate finance, investment banking, capital raising and advisory services. They do not run conventional retail banking services.

Final licence still required

The CBN said approval-in-principle is only the first stage of its regulatory authorisation process. Akuka explained that JPMorgan Merchant Bank Nigeria Limited must complete incorporation with the Corporate Affairs Commission and satisfy all applicable operational and regulatory requirements before receiving a final licence. The proposed institution can commence operations only after the CBN issues the necessary final authorisation.

CBN Governor Olayemi Cardoso said the bank’s reform agenda is aimed at building a financial system that attracts investment and supports 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,” Cardoso said. He added that interest from international financial institutions reflects the importance of sustaining reforms and strengthening confidence in Nigeria’s financial markets.

Leadership and deposit

The CBN also approved Adedapo Olagunju as the proposed bank’s Managing Director. Latter George, Nzelu Izunwanne and Syed Murtaza were approved as Non-Executive Directors. Alade Sarah Omotunde, Ajayi Olukonyinsola and Adetu Seni were approved as Independent Non-Executive Directors.

JPMorgan Chase & Co had deposited N50bn with the CBN as part of efforts to secure a merchant banking licence and expand its operations in Africa’s largest economy. The deposit, valued at about $38m, met a key requirement in the American lender’s application and signaled its readiness to establish a licensed banking operation in Nigeria.