JPMorgan Deposits 50 Billion Naira and Receives Preliminary Approval in Nigeria
Key Facts
The Central Bank of Nigeria has granted JPMorgan preliminary approval to establish JPMorgan Merchant Bank Nigeria, marking the first stage of the licensing process and giving the entity neither a final license nor permission to begin operations. Reuters said the proposed bank is intended to focus on wholesale banking, capital markets and advisory services. JPMorgan must complete the company’s incorporation procedures with the relevant authorities and obtain operational and regulatory approvals before beginning business. Separately, Nigeria’s Guardian newspaper reported, citing a Bloomberg report and people familiar with the matter, that the bank deposited 50 billion naira, equivalent to about $38 million, with the central bank as part of the license application requirements. The application therefore combines an announced preliminary approval with capital and procedural requirements that remain outstanding before operations can begin.
The central bank’s recapitalization framework sets the minimum paid-up capital for a national investment commercial bank at 50 billion naira, up from 15 billion before the new requirements. The Guardian said 50 billion naira is the prescribed minimum for this category of bank. The deposit cited by the newspaper from Bloomberg appeared in a news report citing people familiar with the matter, and was not included in the central bank’s announcement of preliminary approval. The increase in the minimum forms part of a broader program to recapitalize Nigeria’s banking sector. The central bank said the program aims to strengthen banks’ ability to withstand external and domestic shocks and improve financial system stability. The requirements make capital one of the licensing conditions that must be met, alongside incorporation and operational approvals.
The approval places the proposal within the realm of services aimed at companies and markets, including wholesale banking, capital markets and advisory services, according to Reuters’ account of the activities the bank is expected to focus on. The move comes as the central bank links financial reforms to efforts to restore investor confidence, deepen markets and attract foreign capital. The central bank said these efforts follow years of currency turmoil and policy uncertainty. If completed, the licensing process would enable JPMorgan to offer its services through a local banking entity dedicated to this activity. The current approval, however, does not allow it to begin offering these services before completing regulatory and operational requirements. Based on available information, the proposed scope of activity remains limited to the services Reuters said were expected, with no announcement that they have begun.
JPMorgan has older banking roots in Nigeria: the bank says on its website that Chase Manhattan Bank opened a branch in Lagos in 1961, providing commercial banking services to local businesses and individuals. In 1975, a Morgan Guaranty subsidiary joined with the Nigerian Industrial Development Bank to establish Icon, an investment commercial bank in Lagos. These milestones provide historical context for the group’s presence in the Nigerian market, while the current approval concerns the creation of a new entity under the JPMorgan name. The move follows an earlier EL7 report on October 12 that said the bank was planning to launch an investment commercial bank in Nigeria before the end of 2026. The central bank’s subsequent announcement was of preliminary approval, with the licensing, incorporation and operational stages still incomplete.
According to the Guardian’s report citing Bloomberg, JPMorgan expected to obtain the license by the end of 2026 or early 2027, if approvals are completed. That timing reflects an expectation attributed to people familiar with the matter, not a final date announced by the central bank. Before beginning operations, the bank must complete the entity’s incorporation and obtain the required operational and regulatory approvals. JPMorgan shares closed at $331.58 on October 23, compared with $336.54 on October 22. EL7 data thus show a decline in the closing price between the two days, without directly linking the move to the approval news. The next step in Nigeria remains tied to completing the licensing procedures set by regulators.