By Nupur Anand, Duncan Miriri
NEW YORK/NAIROBI (Reuters) -JPMorgan Chase, the biggest U.S. lender, plans to enter Kenya and Ivory Coast this 12 months and develop its footprint in Africa, CEO Jamie Dimon advised 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 virtually 180 international locations and has the biggest international footprint amongst U.S. banking giants.
“We need to add a rustic or two (enter or deepen presence) in Africa, each couple of years or so,” Dimon stated 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 can be dominated by native and regional lenders, stated Francis Mwangi, chief govt of Nairobi-based brokerage Kestrel Capital.
“To begin off a business financial institution from scratch must take a little bit of effort and time, particularly in a market that’s already overbanked,” he stated, citing Kenya, which has 40 business banks serving a inhabitants of fifty million.
Massive U.S. companies have historically struggled to compete on the continent due to geopolitical dangers, Mwangi stated, 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.
“It will permit us to be on the bottom in these international locations which supplies you a lot extra native information and relationships,” Dimon stated.
“And whenever you do it, you principally will cowl the federal government, possibly some large authorities enterprises and the multinationals which can be getting in there with conventional banking providers,” he added.
In Kenya and Ivory Coast, the financial institution will deal with business and funding banking, treasury providers, and presumably some lending, Dimon stated. In these two international locations, it has no speedy plans to supply asset and wealth administration (AWM) providers, that are already obtainable 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 stated.
JPMorgan’s earlier aspirations to enter Ghana and Kenya within the final a number of 12 months had been thwarted by regulators, in line with media stories.
On Monday, the Central Financial institution of Kenya stated it licensed JPMorgan to determine 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 stated noting the U.S. is now extra supportive.
It’s a constructive transfer if U.S. monetary establishments increase overseas, and the federal government ought to help such endeavors to compete abroad, he stated, citing the broad footprint of Chinese language corporations and saying that U.S. corporations must also 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.
As an 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 stated.
In the meantime, Societe Generale (OTC:), France’s third-biggest listed financial institution, has agreed to promote two African subsidiaries in Burkina Faso and Mozambique to pan-African banking group Vista Group.
SocGen’s transfer to exit Mozambique and Burkina Faso comes on prime of the already introduced sale of 4 different African companies in Congo Brazzaville, Equatorial Guinea, Mauritania and Chad.
The growth could not have a cloth influence on JPMorgan’s enterprise within the close to time period, however it is going to be helpful for the corporate and future leaders in the long term, Dimon stated.
JPMorgan is among the many prime 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 business and funding financial institution, executives advised buyers in Might.
JPMorgan’s revenue beat expectations within the third quarter, fueled by positive aspects in funding banking and rising curiosity funds, it reported on Friday.