What is corporate & investment banking?
Corporate & Investment banking is a term used to describe a range of banking and investment products and services delivered to corporate clients, financial institutions, governments, agencies and, in some cases, to wealthy or ‘high-net-worth’ individuals and families.
Very broadly, the categories of investment banking and corporate banking can be described as follows:
Investment banking includes the development, marketing and trading of a large range of securities and other financial instruments on the world’s financial markets. These include equities, which are stocks or shares, commodities, fixed income or bonds, and currencies. All of these, which are known as ‘asset classes’, can be traded directly or by using derivative instruments such as futures, options and swaps. .These instruments can help clients manage their risks and also provide investment opportunities.
Contrary to common misconceptions, investment banking does not only encompass capital market activities. It also includes research into macro-economic trends and effects, and detailed analyses of the performance and factors affecting specific industry sectors and individual companies. In addition, investment banking traditionally includes the research and advisory services that banks offer to its clients for their major transactions such as mergers & acquisitions and initial or secondary offerings of their shares.
Corporate banking on the other hand is defined as those products and services that relate to the lending activities between a bank and its clients. This could be a simple secured or unsecured loan, or it could be a highly sophisticated structured finance transaction with many different banks or syndicates involved in the transaction. Cash management and trade finance also fall under the definition of corporate banking.
Alongside the ‘revenue-generating’ activities, there are also a wide range of business functions that support the client-facing business, the running of a bank and the practical delivery and support of its products and services. These include technology, compliance and control and operations, among others.
As every investment bank is structured differently, the precise names given to divisions vary widely. For more information on the businesses within Corporate & Investment Banking please visit the Business areas section of our website.