Global investment and research firm - JP Morgan Chase and Company has disclosed plans to roll out a full-fledged financial services branch in Nigeria before the end of 2013.
The firm also said intended to increase the size of its staff in Nigeria by 50 in the next five years, saying that it took the decision due to growing demand for trade finance from African firms.
JP Morgan's Senior Country Officer for Sub-Saharan Africa, John Coulter, also told the Reuters Africa Investment Summit yesterday that the branch to be established in Nigeria would have "local currency capabilities."
While some international banks had attempted to crack the African market by pushing investment banking, Coulter said there was still limited demand for such services, given the emerging state of local capital markets.
The summit also said that African investment banking had been hit by a dearth of deals so far this year, with fees totalling $71.9 million in the first quarter, down a whopping 60 per cent from the same period last year.
"A strategy that focuses on Africa from a pure investment banking perspective, for JP Morgan, is not the approach to follow. We have got the capital and the capability as a bank to extract more from an African wallet," he said in an interview in Johannesburg.
"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.
"As part of that focus, JP Morgan plans to expand its presence in Nigeria to 60 people over the next five years from 10 now," he said.
The bank, according to him, is also in discussions with the central banks in both Kenya and Ghana to open representative offices in those countries, he said.
Coulter had told Reuters last year that JP Morgan was eyeing expansion in Nigeria, Ghana and Kenya. Global banks are increasingly looking to tap into Africa's strong Gross Domestic Product (GDP) growth and its growing trade corridor with Asia. But there is plenty of competition, especially from regional players such as South Africa's Standard Bank.
JP Morgan did not feature in the top ten for sub-Saharan investment banking fees for the first quarter of 2012, according to Thomson Reuters' league tables. It emerged fourth in the first quarter of last year.
"Many African corporations still don't require the investment banking services demanded by multinational counterparts. On a regular basis, they probably do not require mergers and acquisitions advice and access to the international capital markets to raise equity. Their needs are much more fundamental," Coulter added.