A complete guide to investment banking

by Anthony Lanson Banking & Finance Advisor

Investment banking is a particular section of banking that is concerned with the creation of capital for governments, other companies, as well as other entities. Some of the core functions of Investment banks are; underwriting new debt and equity securities for almost all kinds of corporations, assist in the sale of securities, and help in facilitating mergers and acquisitions (M&A), broker trades and reorganizations for both private investors and institutions.

In common words, investing banking is that division of a financial institution or bank that is related with underwriting and advisory services. An investment bank mainly serves government, institutions, and corporations. Investment banks actually function as mediators between the person who have money to invest and the person who needs capital to run their business or to increase the growth of the business.

Investment banks

An investment bank is a financial intermediary that buys huge holdings of freshly issued shares and resells them to the investors (who have good money to invest). An investment bank is a lot more different from a commercial bank. As a commercial bank functions in deposits, commercial loans, and saving and an investment banks functions in selling of securities and underwriting the issuance of fresh equity shares in order to raise capital.

Investment banks vs. investment banking division (IBD)

There is a lot of confusion between the investment banking division (IBD) and an investment bank. If you too are confused about the same thing; then this article is helpful for you.

The only thing that separates investment banks from the investment banking division is the services. An investment bank offers a wide variety of services that incorporates sales and trading, M&A, equity research, underwriting, and asset management. But an investment banking division (IBD) provides only M&A advisory and underwriting services.

Investment banking services

Some of the major investment banking services is as follows:

Capital raising

An IBD helps a firm in raising capital in order to achieve number of objectives like reducing debt load, expanding operations, specific project financing and many more.
Mergers and Acquisitions

Investment banks most frequently characterize firms in acquisitions, mergers, and divestitures. IBD must provide a clear of the entity sold or bought along with the recommended structure and a valuation range.
Sales and trading

These services are mainly concerned with the publicly traded firms and the firms that are planning to be public in near future. These services are all about new offerings, posting research reports, and creating a market in a stock.
General Advisory services

General advisory services provided by an IBD incorporate some assignments like financial restructurings, business valuations, strategic planning, and assisting in transactions.

Business finance

Business finance is all the about money and credit that is utilized in the business. Business finance incorporates utilization or procurement of fund in a better way in order to run business operation effectively and efficiently. Business finance consists of all kinds of funds involved in a business and it is needed in almost all types of organizations.

Business banking services

Business banking services are concerned with a company’s financial dealings with banks or any other financial institution in order to avail business loans, credits, savings and much more. These services are generally for companies not for individuals. Commercial banking is another name for business banking. It takes place whenever any division of a bank or a bank deals in businesses.

Relius International bank

Relius international bank is a leading bank offering superlative finance services. The bank is having expertise in trade finance, investment banking, business finance services, trading and execution and many more.