Two International Banks Set To Enter Nigerian Banking Market
- US banking giant JP Morgan plans to launch merchant banking operations in Nigeria before the end of 2026, pending regulatory approval
- South Africa's Absa Group is deciding whether to upgrade its Nigerian representative office to a licensed merchant bank
- Nigeria's foreign exchange reserves hit a 18-year high of $55 billion in October 2026, drawing renewed attention from global lenders
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Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
Two international banks are making moves to deepen their footprint in Nigeria, drawn by improving economic indicators and fresh opportunities in the country's corporate and investment banking sector.
JP Morgan, the world's largest bank by market capitalisation with over $4.1 trillion in assets, has announced plans to begin merchant banking operations in Nigeria before the end of 2026.
Source: Getty Images
Dapo Olagunji, the bank's managing director for West Africa, revealed the plan last week at the Nigeria-Asia Financial Connectivity Dialogue, held in Singapore.
The move is subject to regulatory approval and would build on JP Morgan's existing client relationships in the country.
South Africa's Absa Group is separately weighing whether to convert its Nigerian representative office into a fully licenced merchant bank.
Chief executive Kenny Fihla confirmed the deliberations in August, saying the group was:
"Evaluating whether we should stay with a representative office or whether we should be exploring other alternatives, including a merchant banking licence."
He said a decision would be communicated when the time was right.
Why foreign banks are looking at Nigeria
South Africa, Kenya and Ghana together accounted for more than 80% of Absa's profit in the first half of 2026, a concentration Fihla acknowledged posed risks.
He said diversifying across more markets, business lines and customer segments was a priority, and Nigeria's scale makes it a natural candidate.
Source: Getty Images
Several data points are reinforcing Nigeria's appeal.
The Central Bank of Nigeria reported that foreign exchange reserves reached $55 billion on October 8, 2026, their highest level in 18 years.
The Nigerian stock market posted a 74.7% year-to-date return in US dollar terms as of October 6, according to African Markets data, making it the best-performing bourse on the continent.
Credit rating agencies have also taken note. Moody's revised Nigeria's outlook to positive from stable in August 2026, while affirming its B3 rating.
Fitch followed on October 9 with a similar positive revision, maintaining its B rating.
S&P Global Ratings had earlier upgraded Nigeria's sovereign credit to B from B- in May, though it kept a stable outlook.
Another bank begins operation in Nigeria
Earlier, Legit.ng reported that Bank78 MFB has officially commenced operations as a private digital lender in Nigeria.
The bank stated that although it is inspired by private-banking culture and mindset, it is deliberately designed for the mass-affluent everyday Nigerian, offering a secure and premium digital banking experience.
The bank said it aims to bridge the gap between fast-growing fintech firms and traditional legacy banks.
Source: Legit.ng
