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The Central Bank of Nigeria (CBN) has granted Approval-in-Principle (AIP) to JPMorgan to establish a merchant banking subsidiary in Nigeria, marking a significant step for one of the world's largest financial institutions seeking to expand its presence in Africa's biggest market by population.

The proposed institution, to be known as JPMorgan Merchant Bank Nigeria Limited, received the preliminary regulatory approval as part of the CBN's efforts to deepen Nigeria's financial markets and attract greater international investment in the country.

Announcing the development, Michael Akuka, Director of the CBN's Corporate Communications and Investor Relations Department, said the move reflects growing confidence in Nigeria's financial system following a series of reforms aimed at strengthening financial stability and improving investor confidence.

According to the CBN, the approval comes after the successful implementation of the banking sector recapitalisation programme, which has enhanced the resilience and capacity of the country's banking industry.

The regulator said JPMorgan's entry aligns with its broader reform agenda under Governor Olayemi Cardoso, focused on strengthening financial stability, deepening capital markets and rebuilding international confidence in Nigeria's financial sector.

"Our objective is to build a financial system that is stable, competitive and internationally connected, one that commands confidence and can effectively support investment and economic growth," Cardoso said in a statement.

He added that the growing interest of international financial institutions in Nigeria is an encouraging sign of confidence in the country's economic prospects.

"We are encouraged by the growing interest of international financial institutions in Nigeria. Our focus remains on sustaining the reforms, strengthening the credibility of our markets and creating an environment in which both domestic and international institutions can participate and thrive," the governor said.

The CBN stressed that the Approval-in-Principle does not amount to a final banking licence. JPMorgan Merchant Bank Nigeria Limited must still meet all regulatory requirements, including incorporation with the Corporate Affairs Commission and completion of operational and regulatory arrangements before it can begin business operations.

As part of the approval process, the central bank cleared Adedapo Adedayo Olagunju as the proposed managing director of the new merchant bank.

It also approved Latter Kevin George, Nzelu Chinedum Izunwanne and Syed Gabriel Murtaza as non-executive directors, while Alade Sarah Omotunde, Ajayi Olukonyinsola and Adetu Seni were approved as independent non-executive directors.

The proposed lender will only be permitted to commence operations after obtaining a final licence from the CBN.

The development is expected to boost Nigeria's appeal to international investors and further integrate the country's financial sector with global capital markets, as authorities seek to position Nigeria as a more competitive destination for investment and financial services.