JPMorgan Chase & Co. has reportedly deposited N50 billion ($38 million) with the Central Bank of Nigeria (CBN) as it seeks approval to establish a merchant bank, a move that could strengthen competition in Nigeria’s corporate lending, trade finance and investment banking markets.
According to Bloomberg, JPMorgan has met the N50 billion minimum capital requirement for a national merchant banking licence but is still awaiting regulatory approval.
The amount matches the CBN’s minimum paid-up capital requirement of N50 billion for merchant banks with national authorisation.
However, the deposit does not constitute a banking licence, and JPMorgan must obtain final regulatory approval before commencing operations under the proposed arrangement.
The US banking group is reportedly targeting approval before the end of 2026 or in early 2027, depending on the outcome of the CBN’s licensing process.
JPMorgan already maintains a representative office in Lagos, through which it has supported Nigerian corporate and government clients with financial advisory and international capital market services.
A merchant banking licence would allow the institution to establish a broader domestic operation, potentially expanding its involvement in corporate financing, treasury services, trade transactions and investment banking activities.
For Nigerian businesses, the proposed expansion could create additional financing opportunities, particularly for large companies seeking structured credit facilities and access to international investors.
It could also increase competition among existing merchant and commercial banks for major corporate transactions, including debt issuance, acquisition financing and cross-border investment mandates.
The development comes as Nigerian financial institutions adjust to higher capital requirements introduced under the CBN’s banking recapitalisation programme.
While commercial banks with international authorisation are required to maintain N500 billion in minimum capital, the threshold for nationally authorised merchant banks is N50 billion.
JPMorgan’s proposed entry would therefore involve a different banking category from a conventional commercial bank offering retail services to the general public.
The bank’s expansion plans were disclosed earlier in October by Dapo Olagunju, its managing director for West Africa, during a financial connectivity event in Singapore.
Beyond Nigeria, JPMorgan has been pursuing opportunities to strengthen its African corporate and investment banking operations.
For the domestic financial market, the significance of its application lies in the potential introduction of additional international banking capacity at a time when businesses are seeking alternative sources of long-term funding.
Nevertheless, the scale of JPMorgan’s eventual participation will depend on the licence granted, the capital committed to its Nigerian operation and the services approved by regulators.
The CBN’s final decision will determine whether the proposed expansion proceeds and when the institution can begin operating as a licensed merchant bank in Nigeria.
