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Investment Banking Vs Retail Banking


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Know more about the difference between Investment Banking Retail Banking

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Investment Banking Vs Retail Banking

  1. 1. What is The Difference Between an Investment Bank and a Retail Bank?
  2. 2. 2 Agenda In this presentation, you will learn about: • Objective of Banks • Difference b/w Investment Bank & Retail Bank
  3. 3. 3 What is the difference Between an Investment Bank and a Retail Bank?
  4. 4. 4 IB vs Retail Bank Investment Banking and Retail Banking • This could easily be asked as an interview question and one that seemingly causes a lot of confusion for aspirants in the Finance domain. To help you understand investment banking, it’s best to differentiate it from the type of banking that you have experience with: commercial or retail banking – the banks that you see on the street.
  5. 5. 5 • The banking sector is split into two fundamental divisions: Investment banking and retail banking. • Let’s understand what Investment banking is. Investment banks are huge financial institutions that assist their clients – mostly corporates and government agencies – in raising capital by underwriting and acting as the agent or an underwriter in the issuance of securities. • An investment bank assists these organizations with complex financial solutions such as Mergers and Acquisitions, Equity Underwriting, Private Placement, Valuation and Fairness Opinion, Corporate Restructuring, Structured Refinance, Management Buyouts, among others. • In a way, Investment Banks serve as a bridge between large corporations and investors. IB vs Retail Bank
  6. 6. 6 IB vs Retail Bank
  7. 7. 7 • Investment banking is split into the front office, middle office, and back office activities. Think you want to be an investment banker? Chances are the role you are imagining is a front office role. • On the other hand, The bank where you maintain your current (UK), checking (USA) or savings account is a commercial or retail bank. You cannot go into an investment bank and deposit your money, get your ATM card, or ask for a student loan. • This is what commercial or retail banks do. – The value of transactions that happen in a retail bank is very low in nature but the number of transactions is significantly higher than those of investment banks Some retail banks have an investment banking unit, others do not. IB vs Retail Bank
  8. 8. 8 • For example, SBI Bank is primarily a Retail Bank and has established a subsidiary company SBI Cap Securities, which carries on investment banking operations. • Retail Banking encompasses a wide variety of products and services like Savings Accounts, Bank Guarantees, Certificate of Deposits, Mortgages, Personal Loans, Letter of credits, Foreign Exchange services for retails clients, Insurance business, Wealth Management Services, Personal Banking, Stock Brokerage Services, Locker Facilities etc. which are not provided by Investment Banks. IB vs Retail Bank
  9. 9. 9 IB vs Retail Bank
  10. 10. 10 • Some of the well-known Investment Banks include: • JP Morgan and Chase • Bank of America • Wells Fargo • Morgan Stanley • Some of the well-known Retail Banks include: • HDFC Bank • ICICI Bank • Bank of Baroda • SBI Bank IB vs Retail Bank
  11. 11. 11 • To sum up, here are the key differences between investment and retail banks: • Think New Age Banking Career option for you? Interested in learning more? • Join Our Retail Banking Training for more detailed information and further career counseling. IB vs Retail Bank
  12. 12. Thank you Mumbai | Bangalore | Pune | Chennai | Thane | Hyderabad ACCREDITED TRAINING PARTNER: