By Nupur Anand
NEW YORK (Reuters) -JPMorgan Chase, the most important U.S. lender, plans to enter Kenya and Ivory Coast this 12 months and develop its footprint in Africa, CEO Jamie Dimon informed Reuters.
Worldwide markets are a development space for JPMorgan, which has greater than $4.2 trillion in belongings and operates in over 100 international locations. That compares with Citigroup, which does enterprise in nearly 180 international locations and has the most important international footprint amongst U.S. banking giants.
“We wish to add a rustic or two (enter or deepen presence) in Africa, each couple of years or so,” Dimon mentioned by telephone from New York on Friday earlier than departing on a visit to Africa. The international locations and tempo of growth haven’t beforehand been reported.
JPMorgan faces the problem of differentiating its providing in disparate markets which are dominated by native and regional lenders, mentioned Francis Mwangi, chief govt of Nairobi-based brokerage Kestrel Capital.
“To start out off a industrial financial institution from scratch must take a little bit of effort and time, particularly in a market that’s already overbanked,” he mentioned, citing Kenya, which has 40 industrial banks serving a inhabitants of fifty million.
Giant U.S. companies have historically struggled to compete on the continent due to geopolitical dangers, Mwangi mentioned, citing markets that had been beforehand topic to U.S. authorities sanctions, corresponding to Burundi.
Dimon will maintain conferences in Kenya, Nigeria and South Africa on the tour, Reuters reported final month.
“This can enable us to be on the bottom in these international locations which supplies you a lot extra native data and relationships,” Dimon mentioned.
“And while you do it, you mainly will cowl the federal government, possibly some huge authorities enterprises and the multinationals which are getting in there with conventional banking providers,” he added.
In Kenya and Ivory Coast, the financial institution will concentrate on industrial and funding banking, treasury providers, and presumably some lending, Dimon mentioned. In these two international locations, it has no rapid plans to supply asset and wealth administration (AWM) providers, that are already out there in South Africa and Nigeria.
“We’re not doing AWM now however that does not imply it wouldn’t occur within the subsequent few years,” Dimon mentioned.
JPMorgan’s earlier aspirations to enter Ghana and Kenya within the final a number of 12 months had been thwarted by regulators, based on media studies.
On Monday, the Central Financial institution of Kenya mentioned it approved JPMorgan to ascertain a consultant workplace there.
Up to now, “the U.S. authorities was not very eager on banks increasing into totally different geographies, as this was simply after the monetary disaster,” Dimon mentioned noting the U.S. is now extra supportive.
It’s a optimistic transfer if U.S. monetary establishments increase overseas, and the federal government ought to assist such endeavors to compete abroad, he mentioned, citing the broad footprint of Chinese language corporations and saying that U.S. corporations also needs to be in these locations.
Main international lenders have adopted differing methods for particular person sub-Saharan markets, concentrating on the fastest-growing areas whereas in search of to differentiate themselves from native and regional rivals.
For example, Customary Chartered (OTC:) has targeted on Kenya. Its belongings beneath administration within the East African nation grew by 1 / 4 final 12 months to 185.5 billion Kenyan shillings ($1.4 billion), it mentioned.
The growth might not have a fabric impression on JPMorgan’s enterprise within the close to time period, however it will likely be useful for the corporate and future leaders in the long term, Dimon mentioned.
JPMorgan is among the many high 5 worldwide non-public banks by belongings beneath supervision.
Within the final 5 years, about 700 bankers have been concerned in increasing into 27 new places worldwide, producing $2 billion in income for its industrial and funding financial institution, executives informed traders in Might.
JPMorgan’s revenue beat expectations within the third quarter, fueled by features in funding banking and rising curiosity funds, it reported on Friday.
