Sections
Poll: UK military offer
Do you support UK's military assistance as a way of fighting militancy and smuggling in Niger Delta?
JP Morgan’s return to Nigeria slowed by accommodation problem
Font size:
Babatunde Raji Fashola (l), Lagos State Governor, with Sarah Bisi Sosan, deputy governor, and Marvel E. Akpoyibo (r), acting commissioner of police, Lagos State, during the launch of the states’ emergency response centre and free 767 distress call system
A major move by JP Morgan Chase, a significant player in the world’s financial market, to establish official presence in Lagos is slowed down by the inability to find a suitable property in the city to accommodate a proposed team of staff.
The bank has been doing business in Nigeria for more than 25 years and once operated wholesale banking business in the country as Chase Merchant Bank.
The bank’s Africa office is currently based in London. A Nigerian, Yvonne Ike, is leading a dedicated team handling Nigerian transactions.
Lagos, Nigeria’s commercial capital with a population the state government put at about 17 million, is seen as potentially a financial hub for the African continent in future, and international financial institutions are keen to position themselves to take advantage.
Business Day has learnt that JP Morgan is planning to establish a 40-man strong office in Lagos to enable it have a significant foothold in Nigeria, where it now sees substantial opportunities, which it intends to get its teeth into.
Such planned strong presence would represent a significant approval for the Nigerian economy and a desire by the bank to seize opportunities in the Nigerian market. It would come as no surprise to many.
Nigeria, with huge external reserves put at around $60 billion, and with the Central Bank of Nigeria (CBN) adopting a policy to farm out management of these reserves to local and international financial institutions, banks such as JP Morgan, CommerzBank will see establising local presence as crucial to being taken seriously by both the authorities and its other clients.
JP Morgan already has key banking relationships with some of the country’s major financial institutions, including Zenith International Bank, with which it is managing $1 billion in reserves.
It has been involved in a number of high-profile, Nigerian deals in the last 18 months. In January 2007 it acted as exclusive financial advisors to Wilbros on the $155million sale of the company's business in Nigeria. It then served as the international financial advisor to Dangote Industries Ltd on the Initial Public Offering (IPO) of Dangote's sugar refining business.
Last April, JP Morgan, alongside Renaissance Capital, acted as placement agent for United Bank for Africa in the very first international equity offering by a Nigerian issuer, raising $300 million. It then acted in July with Morgan Stanley as joint book runner and joint global co-ordinator for Guarantee Trust Bank's (GTBank) $750 million international capital-raising exercise on the London Stock Exchange.
It was also involved in Access Bank's $300 million international equity offering.
Late last year, the CommerzBank, the German financial power house, also took the bold step to set up an office in Lagos. Its officials say the move was to maximise the bank’s potentials in the Nigerian market.
Citibank remains the oldest international big player operating full-fledged banking business in the country. There are also Standard Chartered Bank, which prides itself as the emerging market bank, and Standard Bank of South Africa, whose presence is represented in the recently fused Stanbic IBTC Bank.
A source says JP Morgan has had on its drawing board a strong desire to establish physical presence in Nigeria with an office in Lagos for two years. It has lately become keener to see this become a reality.
It has had its agents and officials scour for the right property and right space in or around the Lagos Central Business District, Victoria Island and Ikoyi, but it has been unsuccessful for a number of reasons.
Business Day source said: “With JP Morgan you will always expect that there would be some major considerations for its offices wherever they decide to locate one. Not only will they be looking at the ambience of the building and location, but also the exclusivity it offers.”
But there is another side to the issue. Accommodation space for offices are increasingly becoming scarce and expensive in Lagos, particularly in choice areas on Lagos Island, Victoria Island and Ikoyi, where there are a semblance of established financial districts.
In these areas, accommodation spaces are now priced in foreign currencies with some going for as high as $750 per square metre.
These high costs tend to make access difficult for many organisations. But experts say pricing is the direct result of the fact that accommodation is scarce in these business districts where most organisations want to locate their offices.
With JP Morgan keen to have a presence in the state, the Lagos State Government may well see an opportunity in this as is done in other parts of the world, where siting an organisation like JP Morgan could lead others to move in as well.
The bank’s Africa office is currently based in London. A Nigerian, Yvonne Ike, is leading a dedicated team handling Nigerian transactions.
Lagos, Nigeria’s commercial capital with a population the state government put at about 17 million, is seen as potentially a financial hub for the African continent in future, and international financial institutions are keen to position themselves to take advantage.
Business Day has learnt that JP Morgan is planning to establish a 40-man strong office in Lagos to enable it have a significant foothold in Nigeria, where it now sees substantial opportunities, which it intends to get its teeth into.
Such planned strong presence would represent a significant approval for the Nigerian economy and a desire by the bank to seize opportunities in the Nigerian market. It would come as no surprise to many.
Nigeria, with huge external reserves put at around $60 billion, and with the Central Bank of Nigeria (CBN) adopting a policy to farm out management of these reserves to local and international financial institutions, banks such as JP Morgan, CommerzBank will see establising local presence as crucial to being taken seriously by both the authorities and its other clients.
JP Morgan already has key banking relationships with some of the country’s major financial institutions, including Zenith International Bank, with which it is managing $1 billion in reserves.
It has been involved in a number of high-profile, Nigerian deals in the last 18 months. In January 2007 it acted as exclusive financial advisors to Wilbros on the $155million sale of the company's business in Nigeria. It then served as the international financial advisor to Dangote Industries Ltd on the Initial Public Offering (IPO) of Dangote's sugar refining business.
Last April, JP Morgan, alongside Renaissance Capital, acted as placement agent for United Bank for Africa in the very first international equity offering by a Nigerian issuer, raising $300 million. It then acted in July with Morgan Stanley as joint book runner and joint global co-ordinator for Guarantee Trust Bank's (GTBank) $750 million international capital-raising exercise on the London Stock Exchange.
It was also involved in Access Bank's $300 million international equity offering.
Late last year, the CommerzBank, the German financial power house, also took the bold step to set up an office in Lagos. Its officials say the move was to maximise the bank’s potentials in the Nigerian market.
Citibank remains the oldest international big player operating full-fledged banking business in the country. There are also Standard Chartered Bank, which prides itself as the emerging market bank, and Standard Bank of South Africa, whose presence is represented in the recently fused Stanbic IBTC Bank.
A source says JP Morgan has had on its drawing board a strong desire to establish physical presence in Nigeria with an office in Lagos for two years. It has lately become keener to see this become a reality.
It has had its agents and officials scour for the right property and right space in or around the Lagos Central Business District, Victoria Island and Ikoyi, but it has been unsuccessful for a number of reasons.
Business Day source said: “With JP Morgan you will always expect that there would be some major considerations for its offices wherever they decide to locate one. Not only will they be looking at the ambience of the building and location, but also the exclusivity it offers.”
But there is another side to the issue. Accommodation space for offices are increasingly becoming scarce and expensive in Lagos, particularly in choice areas on Lagos Island, Victoria Island and Ikoyi, where there are a semblance of established financial districts.
In these areas, accommodation spaces are now priced in foreign currencies with some going for as high as $750 per square metre.
These high costs tend to make access difficult for many organisations. But experts say pricing is the direct result of the fact that accommodation is scarce in these business districts where most organisations want to locate their offices.
With JP Morgan keen to have a presence in the state, the Lagos State Government may well see an opportunity in this as is done in other parts of the world, where siting an organisation like JP Morgan could lead others to move in as well.
Add to:
del.icio.us |
Digg
del.icio.us |
Digg
Email to a friend
Print version
Plain textRate this article
Comments ( posted):
Post your comment