JP Morgan’s decision to expand its operations in Nigeria shows its confidence in recent economic reforms and the quality of banking regulation, the lender’s West Africa managing director, Dapo Olagunju, says.

Mr Olagunju said the U.S. bank saw opportunities in Nigeria despite reports of multinational companies leaving the country, arguing that those departures did not reflect the full investment environment.

He spoke during a panel discussion at the 32nd Nigerian Economic Summit in Abuja on Tuesday.

His comments followed the Central Bank of Nigeria’s recent approval-in-principle for the establishment of JPMorgan Merchant Bank Nigeria Limited. 

The preliminary approval advances the lender’s expansion plans but does not authorise it to begin banking operations. 

Mr Olagunju said the bank could have retained its representative office without seeking a banking licence, but its assessment of the reforms and regulatory environment encouraged a deeper commitment.

“We think that the central bank is very well professionally run at this time,” he said.

The proposed merchant bank must still satisfy outstanding regulatory conditions and obtain a final licence before commencing business. 

These include incorporation with the Corporate Affairs Commission and completion of operational and regulatory arrangements, according to the CBN’s announcement.

Mr Olagunju said JP Morgan’s relationship with Nigeria stretched back to 1960, while its representative office had maintained a continuous presence since 1982.

The bank’s published history confirms that Chase Manhattan Bank, one of its predecessor institutions, opened a Nigerian representative office in 1982. It also records earlier involvement by predecessor banks in merchant banking and financing Nigerian industry and infrastructure.

Mr Olagunju argued that Nigeria remained important to financial institutions seeking a global presence.

“You cannot aim to be an international bank or a global bank and not be present in Nigeria,” he said.

He said the continued presence of major international companies deserved attention alongside reports of businesses withdrawing from the market.

Recalling a visit to Nigeria two years earlier with JP Morgan Chase chairman and chief executive Jamie Dimon, Mr Olagunju said the discussions and the energy of young Nigerians had left a strong impression on the bank’s leadership.

He described the reforms implemented over the past three to four years as significant to the bank’s assessment of the country and its expansion plans.

Nigeria’s financial reforms have included changes to foreign exchange trading. In June, 2023, the CBN introduced a willing-buyer, willing-seller framework and moved to unify previously separate foreign exchange market segments.

The CBN  said the changes were intended to improve transparency, price discovery and confidence in the market.