JPMorgan Gets CBN Nod for Nigerian Merchant Bank, Final Licence Pending

The Central Bank of Nigeria (CBN) has granted JPMorgan Chase approval-in-principle to establish a merchant bank in the country, marking a major step in the American financial giant’s plans to expand its banking operations in Nigeria. The proposed institution, JPMorgan Merchant Bank Nigeria Ltd, is expected to focus on wholesale banking, capital markets and advisory services, although it cannot begin business until it satisfies the remaining regulatory requirements.

The CBN announced the decision on Friday, October 23, saying the preliminary approval was the first stage of the licensing process and did not amount to a final banking licence. The regulator said the proposed bank must complete the necessary incorporation and operational arrangements and meet all applicable requirements before receiving authorization to commence business.

The central bank also approved the nomination of Dapo Olagunju as managing director of the proposed institution, alongside several non-executive and independent non-executive directors, according to its announcement. The appointments represent another step towards establishing the new entity, but the bank’s launch remains subject to final regulatory clearance.

The decision follows reports earlier in the week that JPMorgan had deposited ₦50 billion, equivalent to about $38 million, with the CBN as part of its application. Bloomberg, citing people familiar with the process, reported that the deposit addressed a key capital requirement for a nationally licensed merchant bank. The CBN’s approval-in-principle now advances the application, although it does not mean the bank has received permission to start operations.

JPMorgan’s plans became public earlier in October when Dapo Olagunju, the bank’s West Africa managing director, announced its intention to establish a merchant banking subsidiary in Nigeria during the Nigeria-Asia Financial Connectivity Dialogue in Singapore. The event was organized in partnership with the CBN, Nigerian Exchange Group and FMDQ Group as part of efforts to strengthen financial connections between Nigeria and international markets.

The bank already operates a representative office in Lagos and has advised Nigerian governments and companies on international financial transactions, including bond issuances. A locally licensed merchant bank would give JPMorgan a more direct platform to provide services within the scope of its licence, potentially expanding its role in corporate finance, capital-market transactions and wholesale banking. The exact products it will offer have not yet been fully detailed.

The proposed entry comes as JPMorgan seeks to expand its business across Africa, including in trade finance, lending, payments and corporate banking. For Nigerian companies, especially large businesses and firms with international operations, a new merchant bank could provide an additional source of financing and advice on complex transactions. It could also intensify competition among financial institutions seeking major corporate and institutional clients, though the practical effect will depend on the bank’s eventual licence and operating strategy.

The development also comes amid Nigerian efforts to strengthen the financial system, deepen domestic capital markets and attract foreign investment after years of currency instability and policy uncertainty. Nigeria remains a major African market by population and commercial activity, although it ranks third on the continent by projected nominal gross domestic product for 2026, behind South Africa and Egypt.

For the CBN, JPMorgan’s proposed establishment represents another international institution seeking a formal, locally licensed presence under Nigeria’s banking framework. The next milestone is the final licence: until the outstanding conditions are met and the regulator authorizes operations, the proposed merchant bank remains in the establishment stage rather than an active banking business