JPMorgan Chase (NYSE:JPM) is trying to crack the African market with transaction banking, and has plans to add 50 new positions in Nigeria over the next five years as it responds to increasing demand for trade finance by African companies.
JPMorgan also plans to open a full branch in Nigeria with local currency capabilities by the end of next year, according to John Coulter, JPMorgan’s senior country officer for sub-Saharan Africa, who spoke at the Reuters Africa Investment Summit. Coulter said that although some international lenders have been pushing investment banking, demand for those services is limited since local capital markets are still in the early stages of development.
“A strategy that focuses on Africa from a pure investment banking perspective, for JPMorgan, is not the approach to follow. We have got the capital and the capability as a bank to extract more from an African wallet,” Coulter said. “A company in Kenya or a bank in Ghana needs trade finance lines, credit lines to help them grow their business, project finance, infrastructure support and the corresponding banking lines.”
The U.S. bank plans to increase its staff in Nigeria to 60 people over the next five years, and is in discussions with central banks in both Kenya and Ghana to open offices in those countries as well, according to Coulter.
International banks are becoming more and more interested in Africa’s healthy GDP growth and its expanding trade with Asia. However, competition is stiff — particularly from regional firms such as South Africa’s Standard Bank. Standard Chartered announced at the Summit that it wants to double its African revenues to $2.5 billion in the next five years.