An Introduction to Investment Banking

Investment Bank is a special type of financial institution that helps companies to raise money from Capital Markets and Bond Markets. If a company wants to raise Rs.1000 from Bond Market in India to establish a new manufacturing plant, an investment bank would help it find buyers for the bonds and handle the paperwork along with a team of lawyers and accountants.

Activities

1. Helping Corporates in raising equity capital(IPO, Preference Shares, etc) and debt capital(Bonds, Commercial Papers, etc)

2. Engage in Proprietary trading (Investing or trading the company’s own money)

Functions of Investment Bank

Investment Banks are divided into three categories

Front Office Investment Bank Services

Front Office services consist of Investment Banking such as helping companies in mergers and acquisitions, corporate finances, professional investment management services for companies and high net-worth individuals.

Middle office Investment Bank Services

It works on Compliance with government terms and regulations

Back Office Investment Bank Services

Primary work is Trade Confirmation and Transaction Settlement

Leave a Reply