CBN grants JPMorgan approval-in-principle to set up merchant bank in Nigeria

The Central Bank of Nigeria has granted Approval-in-Principle to JPMorgan to establish JPMorgan Merchant Bank Nigeria Limited, the regulator announced on Thursday, October 23, 2026, advancing the United States bank's plan to convert its Lagos representative office into a fully operational merchant banking business, according to Nairametrics reporting of the CBN announcement.

The approval was announced by Michael Akuka, director of the central bank's corporate communications and investor relations department, who said the licence progressed after the successful implementation of Nigeria's banking sector recapitalisation exercise. Approval-in-Principle is an initial licensing stage: the proposed bank must still complete incorporation with the Corporate Affairs Commission and other operational requirements before the CBN will consider a final banking licence, and it cannot commence business under the current approval.

The appointments approved with it

Alongside the structure approval, the central bank cleared the proposed bank's leadership slate, including the nomination of Adedapo Adedayo Olagunju as managing director, since announced non-executive directors Latter Kevin George, Nzelu Chinedum Izunwanne and Syed Gabriel Murtaza, and independent non-executive directors Alade Sarah Omotunde, Ajayi Olukonyinsola and Adetu Seni. That governance formation puts the merchant bank on track toward final licensing rather than leaving it at the exploratory stage.

The approval follows the disclosure, reported on October 20, that JPMorgan had deposited N50 billion with the CBN as part of the merchant-banking application, and comes after the bank spent 2025 signalling its intention to expand in Africa. Under Governor Olayemi Cardoso, the central bank has emphasised financial stability, deeper markets and renewed international confidence, and the CBN statement quoted the governor's framing of the objective as a financial system that is stable, competitive and internationally connected.

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What a merchant bank does, and why it matters

Merchant banking differs from commercial banking in ways that matter for Nigeria's corporate sector. A merchant bank serves wholesale clients, multinationals, large corporates and financial institutions, providing advisory services, capital-raising, corporate finance and sophisticated treasury capabilities rather than retail deposits and branch banking. JPMorgan's entry would bring world-scale execution capability into a market where much of the investment-banking pipeline, from M&A to debt issuance, has historically been executed offshore.

The timing is not incidental. Nigeria's recapitalised banking sector is bursting with liquidity and regulatory capital, equity markets are riding a 58.87 per cent year-to-date advance, and a wave of proposed offerings, from OPay's New York listing to Dangote Refinery's planned $1.6 billion offering, is swelling the domestic investment-banking workload. International banks positioning for that pipeline typically arrive before the fees turn up.

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The competition wave it joins

JPMorgan is not alone. Absa is considering converting its Nigerian representative office into a merchant bank, a plan disclosed in the presidential aide's investment summary published on October 24, and Standard Bank Group has already signed an agreement to invest up to $200 million in OPay through a concurrent private placement tied to the fintech's IPO. The direction of travel is unmistakable: global institutions are rebuilding Nigeria exposure after years of retreat.

For domestic banks, the arrival of merchant-banking competitors is double-sided. It validates the reforms that made Nigeria investible again and increases pressure on fees in the wholesale space where tier-one lenders, including Firms such as Zenith, Access and GTCo, have earned record profits. It also deepens the talent market for corporate finance professionals, a procurement consequence for local investment houses.

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What to expect next

The licensing clock now depends on the CBN's verification steps and the proposed bank's operational setup. On past practice, final licensing for a foreign bank's subsidiary structure is a matter of months rather than years once approval-in-principle is granted, and the early-2027 launch horizon the bank has cited in reporting remains realistic.

For corporates and institutional investors, the near-term significance is access: dollar-linked advisory, ring-fenced treasury services and international distribution of Nigerian fixed income are among the capabilities a global merchant bank would bring onshore. For the CBN's broader reform story, the approval is one of the strongest external votes of confidence the Nigerian financial system has received in this cycle.

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