By Nupur Anand, Duncan Miriri
NEW YORK/NAIROBI (Reuters) -JPMorgan Chase, the biggest U.S. lender, plans to enter Kenya and Ivory Coast this yr and develop its footprint in Africa, CEO Jamie Dimon informed Reuters.
Worldwide markets are a progress space for JPMorgan, which has greater than $4.2 trillion in property 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 want to add a country or two (enter or deepen presence) in Africa, every 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 can be dominated by native and regional lenders, mentioned Francis Mwangi, chief government of Nairobi-based brokerage Kestrel Capital.
“To start off a commercial bank from scratch will have to take a bit of time and effort, especially in a market that is already overbanked,” he mentioned, 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 mentioned, citing markets that have been beforehand topic to U.S. authorities sanctions, reminiscent of Burundi.
Dimon will maintain conferences in Kenya, Nigeria and South Africa on the tour, Reuters reported final month.
“This will allow us to be on the ground in these countries which gives you a lot more local knowledge and relationships,” Dimon mentioned.
“And when you do it, you basically will cover the government, maybe some big government enterprises and the multinationals that are going in there with traditional banking services,” he added.
In Kenya and Ivory Coast, the financial institution will concentrate on business and funding banking, treasury providers, and probably some lending, Dimon mentioned. 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 are not doing AWM now but that doesn’t mean it wouldn’t happen in the next few years,” Dimon mentioned.
JPMorgan’s earlier aspirations to enter Ghana and Kenya within the final a number of yr have been thwarted by regulators, in response to media studies.
On Monday, the Central Financial institution of Kenya mentioned it approved JPMorgan to ascertain a consultant workplace there.
Prior to now, “the U.S. government was not very keen on banks expanding into different geographies, as this was just after the financial crisis,” Dimon mentioned noting the U.S. is now extra supportive.
It’s a constructive transfer if U.S. monetary establishments develop 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 searching for to tell apart themselves from native and regional rivals.
As an example, Normal Chartered (OTC:) has targeted on Kenya. Its property beneath administration within the East African nation grew by 1 / 4 final yr to 185.5 billion Kenyan shillings ($1.4 billion), it mentioned.
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 might not have a fabric affect on JPMorgan’s enterprise within the close to time period, however it is going to be useful for the corporate and future leaders in the long term, Dimon mentioned.
JPMorgan is among the many prime 5 worldwide non-public banks by property beneath supervision.
Within the final 5 years, about 700 bankers have been concerned in increasing into 27 new areas worldwide, producing $2 billion in income for its business and funding financial institution, executives informed traders in Could.
JPMorgan’s revenue beat expectations within the third quarter, fueled by positive aspects in funding banking and rising curiosity funds, it reported on Friday.
