Investment banking

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InvestmentBanking

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 Help companies and governments to raise money by issuing
and selling securities in the primary market
 Assist public and private corporations in raising funds in the
capital markets (both equity and debt)
 Pproviding strategic advisory services for mergers, acquisitions
and other types of financial transactions

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 Arrange finances for corporations and government
1. Equity
2. Debt
3. Convertibles
 Advises on mergers and acquisitions
 Asset Management Business
1. Offers equity, fixed income, alternative investments, and
money market investment products and services to
individual and institutional clients
2. For alternative investment products, the firm co-invests
with clients in hedge fund, private equity and real estate
funds

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 Client Trading
 Sells and trades securities and other financial assets as
intermediary on behalf of investing clients
Proprietary Trading Investment activity by the firm that affects
the firms accounts, but does not involve investing clients

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Commercial Bank
 Individual or small to mid
sized companies
 Loan to buy a house or
future education
 Earns money based on the
interest charged on loans
 Bank- creditor or general
Public- debtor
Investment Bank
 Companies and start up
 Borrows to finance the growth of
a company
 Earns money through the fees
charged on providing the services
 Investors- creditor
Companies- debtor

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 SBI , First Indian public sector set up in 1972
 SBI Caps and IDBI Caps two prime examples of Investment Bank
in India
 300 banks registered with SEBI till date
 Certificate of registration granted by SEBI is important for a bank to
be called as Investment Bank

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Sales desks communicate their clients orders to the
appropriate trading desks, who can price and execute trades,
or structure new products that fit a specific need. In the
process of market making, traders will buy and sell financial
products with the goal of making an incremental amount of
money on each trade.
Front Office
 Pitching to various clients and institutions
 Setting the terms and conditions for any form of deal
 Trading of securities on behalf of clients

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Middle office usually consists of traders, analysts, and
managers who are knowledgeable of trading activities but
usually don’t engage in market activities themselves (
Chinese Wall Policy)
Risk Management involves
 Analyzing the market and credit risk that traders are taking
onto the balance sheet in conducting their daily trades
 Setting limits on the amount of capital that they are able to
trade in order to prevent bad trades having a detrimental
effect to a desk overall
 To ensure that the above mentioned risk are captured
accurately and on time

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 Operations involves data-checking trades that have been
conducted, ensuring that they are not erroneous, and
transacting the required transfers
 Every major investment bank has considerable amounts of
in-house software, created by the Technology team, who are
also responsible for Computer and Telecommunications-based
support

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