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JPMorgan Chase opens Kenya office after 12-year regulatory hitch
Jamie Dimon, Chairman and Chief Executive officer (CEO) of JPMorgan Chase & Co (JPM) speaks to the Economic Club of New York in Manhattan in New York City, US on April 23, 2024.
America’s biggest bank JPMorgan Chase has ended a 12-year wait for final approval to open an office in Kenya in the wake of a regulatory hitch that blocked its Nairobi operations and slowed the lender's expansion in Africa.
The Central Bank of Kenya (CBK), which on Monday granted the banking giant the final nod to set up a representative office in the country, had first issued the conglomerate with a permit at the tail-end of 2012.
The bank was not able to set up shop in Kenya after its home regulator in the United States delayed the approval, stalling JPMorgan Chase plan to use Nairobi as its launch pad into East Africa for over a decade.
The CBK nod comes ahead of an expected visit by the bank’s CEO Jamie Dimon, who is expected to visit Kenya in coming days as part of a trip to four African countries in efforts to advance the lender’s footprint on the continent.
This grows the number of international banks with representative offices in Kenya to 10 as they seek to gain a bigger share of sovereign debt and corporate transactions in Africa and serve the growing foreign firms with operations in East Africa.
“The JPMorgan Chase Bank representative office Kenya will contribute to the diversity of Kenya’s financial sector and catalyse trade and investments,” CBK said.
“Additionally, the authorisation of the Representative Office affirms Kenya’s standing as a premier financial services hub.”
A representative office helps foreign banks to market their products and services in the country and act as a liaison between their parent firm and local clients but are prohibited from undertaking primary banking business such as lending and deposit-taking.
In 2015, Mr Dimon said JPMorgan Chase was ready to open an office in Kenya, “but [we] were not able to because the regulator said we can’t.”
It’s not clear when the US authorities cleared JPMorgan Chase to set up shop in Kenya.
President William Ruto said in February 2023 after a meeting with a senior JPMorgan executive that the bank had committed to opening a new office in Nairobi.
Overseas markets have been a key focus area to generate growth for JPMorgan — which has assets of over $4.1 trillion (Sh529.7 trillion) and operations in more than 100 countries.
“In establishing a presence in Kenya, JPMorgan Chase Bank NA seeks to explore business opportunities in Kenya and the wider East African region,” said the CBK.
“The JPMorgan Chase Bank representative office Kenya will contribute to the diversity of Kenya’s financial sector and catalyse trade and investments. Additionally, the authorisation of the Representative Office affirms Kenya’s standing as a premier financial services hub.”
Foreign lenders with representative offices in Kenya are the Bank of China, Rwanda’s Bank of Kigali, and South Africa’s FirstRand Bank.
Others are India’s HDFC Bank, the Mauritius Commercial Bank, South Africa’s NedBank, Cooperatieve Rabobank of the Netherlands, France’s Societe Generale, Pakistan’s Bank Al Habib, and Egypt’s Banque Misr.
The Exim Bank of India also opened an office in the country last May, mostly to facilitate trade financing between Kenya and Indian companies.
Last year, the deals closed by foreign bank offices locally rose 13 percent to hit Sh413.3 billion, up from Sh365.6 billion in 2022.
These deals included corporate, trade, property, specialized financing, syndicated financing and project financing among others.
