In an effort to expand in the African continent, JPMorgan Chase & Co. (JPM) is contemplating to establish an office in Kenya “in time”, per a release by Bloomberg. The Wall Street banking giant has a presence in the continent for over 100 years.
In a recent interview with the news agency, Marc Hussey, joint senior country officer for sub-Saharan Africa, stated that JPMorgan envisions promising opportunities in Nigeria, Ghana and Kenya. He also mentioned that any expansion in East Africa would depend on the overall regulatory environment in the region.
We believe JPMorgan intends to capitalize on the economic growth in Kenya. The International Monetary Fund (IMF) projects that the Kenyan economy will grow 5.3% and 6.2% in 2014 and 2015, respectively.
JPMorgan’s operations in Africa provide varied services including asset management, private banking and corporate and investment banking to local and global clients. The company has over 150 employees in South Africa. The company also has a presence in Nigeria.
Notably, JPMorgan was the lead advisor in Kenya’s $2 billion sovereign bond sale in Jun 2014. Also, the company along with another banking giant Citigroup Inc. (C) is financing planes for Kenya Airways Ltd.
As JPMorgan remains on track to streamline its operations through job cuts and divestiture of non-core businesses, we believe any possible expansion move can only mean it is strategically important for the company.
Currently, JPMorgan carries a Zacks Rank #3 (Hold). Some better-ranked financial stocks include Piper Jaffray Companies (PJC) and Western Alliance Bancorporation (WAL). Both these stocks hold a Zacks Rank #2 (Buy).
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