A Key Note on Investment Banking

A Key Note on Investment Banking

Investment banking is a branch of a bank or financial institutions which act a mediator between an investor who has money to invest and corporations who need money to run and expand their business. Its main function is to provide government, corporations and institutions underwriting i.e. capital raising and advisory services.

Services of Investment banking

  • Underwriting – These groups of investment banking work between investors and company that wants to raise money or raise IPO via a public It is also the process of raising money by selling stocks and bonds to investors. They also help in marketing the company to potential investors

 

  • Mergers and Acquisitions (M&A) – It is the process of helping corporations and institutions to find, evaluate and complete the acquisition of businesses. Banks use their wide relationships and networks to find opportunities and help to negotiate on behalf of their client.

 

  • Sales and Trading–Sales and trading group helps their clients by matching up buyers and sellers of securities in the secondary They also help in trading firms own capital

 

  • Equity Research – These groups help investors to make investment decisions and supports in trading of stock by conducting extensive research in securities and market.

 

  • Asset Management–They also help in managing a wide range of investment options such as land, buildings, art, commodities for various institutions and individuals.

 

Major Clients of Investment Banking

  • Governments – Investment banks help governments to raise money by trading securities, buying or selling public listed companies.

 

  • Corporations – Investment banks help both public and private corporations in activities such as going public (IPO), grow their business by raising additional capital, make acquisitions and sell business units, and other general corporate advice.

 

  • Institutions –It also works with institutions who manage other people’s money by helping them with research and trading securities.

 

 

Other Types of Banking

  • Retail Banking – These are a most common type of banking most of us are associated with. They include savings and current accounts, credit cards, different types of loan etc. They are intended for everyday customers.

 

  • Private Banking – They are similar to retail banking but its services are provided to limited high net worth individuals. Financial and wealth management services are provided on a much more personal level than traditional banks.

 

  • Commercial Banking – These refer to financial services provided to the corporate These include foreign trade services, treasury management services, merchant service etc. They also provide functions of retail banking such as saving and current accounts.

 

Top 5 Investment Banks

  • P Morgan & CO
  • Goldman Sachs
  • Bank of America Merril Lynch
  • Morgan Stanley
  • Citigroup