KEY POINTS

• The Central Bank of Nigeria has granted JP Morgan approval-in-principle to establish a merchant bank in the country.
• The proposed bank, JPMorgan Merchant Bank Nigeria Limited, must obtain a final licence before it can begin operations.
• The CBN approved Adedapo Adedayo Olagunju as managing director, alongside six directors.
• The approval comes after Nigeria completed its banking sector recapitalisation exercise.
• JP Morgan’s proposed entry could expand the range of financial services available to Nigerian businesses and investors.

MAIN STORY

The Central Bank of Nigeria (CBN) has granted JP Morgan approval-in-principle to establish a merchant bank in Nigeria, marking a step towards expanding the international financial institution’s presence in the country.

In a statement on Friday, the CBN said the proposed lender, to be known as JPMorgan Merchant Bank Nigeria Limited, must obtain a final banking licence before it can begin operations.

The apex bank explained that the initial approval is only the first stage of the licensing process. The proposed bank must meet the regulator’s requirements, including registration with the Corporate Affairs Commission and completion of the necessary arrangements for its operations, before it can open for business.

According to Michael Akuka, director of the CBN’s corporate communications and investor relations department, the approval reflects growing interest from international financial institutions in Nigeria’s financial markets and economic prospects.

The regulator said the development comes amid reforms intended to strengthen the banking system, improve confidence in the financial sector and increase Nigeria’s connections with international financial markets.

The approval also follows the completion of the banking sector recapitalisation exercise, which the CBN said had strengthened banks’ capacity to withstand financial pressures and support economic activity.

The regulator also approved the appointment of Adedapo Adedayo Olagunju as managing director of the proposed bank.

Kevin George, Nzelu Chinedum Izunwanne and Syed Gabriel Murtaza were approved as non-executive directors, while Alade Omotunde, Ajayi Olukonyinsola and Adetu Seni were approved as independent non-executive directors.

CBN Governor Olayemi Cardoso said the regulator’s broader objective is to build a stable and competitive financial system that can support investment and economic growth while attracting participation from Nigerian and international institutions.

In 2025, reports indicated that JP Morgan was considering turning its Lagos representative office into a fully operational banking branch as part of its wider plan to expand its presence across Africa.

The latest approval-in-principle is a step towards establishing the proposed Nigerian merchant bank, but it does not mean that the institution has begun banking operations.

THE ISSUES

A merchant bank generally provides financial services to businesses, large investors and institutions. These can include helping companies raise money, advising on major transactions and supporting investment activities.

If the proposed bank receives its final licence and begins operating, its presence could give Nigerian businesses and investors another option for accessing financial advice and services connected to international markets. However, the actual benefits will depend on the services it offers and the customers it chooses to serve.

The development also comes after Nigeria’s banking recapitalisation exercise, which required banks to strengthen their capital base. The CBN says the exercise has improved the banking system’s ability to withstand financial pressures and support economic activity.

However, the initial approval should not be confused with the launch of a new bank. JP Morgan must still satisfy the regulator’s conditions before it can commence operations in Nigeria.

WHAT’S BEING 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,” – CBN Governor Olayemi Cardoso.

“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.” – CBN Governor Olayemi Cardoso.

WHAT’S NEXT

The next major step is for JPMorgan Merchant Bank Nigeria Limited to meet the CBN’s outstanding requirements and secure its final banking licence.

Investors and businesses will be watching for further announcements on the licensing process, the bank’s planned services and when it intends to begin operations.

BOTTOM LINE

The CBN’s approval-in-principle brings JP Morgan closer to establishing a merchant bank in Nigeria, but the proposed lender cannot begin operations until it obtains a final licence. Its eventual contribution will depend on the financial services it provides and how it serves Nigerian businesses and investors.