Tuesday, January 5, 2016

What Exactly Is Investment Banking

By Margaret Green


Investment banks are not like typical banks in a sense that these are big institutions that would concentrate on special services meant for clients that are companies. When a company would like for these institutions, they are looking for a partner that can help them with finance related concerns with regard to their structure and their assets. So for those who are in charge of big companies and would need services like this, here is what investment banking is all about.

Now when a company would be needing some financial advice on certain corporate activities of theirs, it would be best if they would get help of the experts. This is done so that they can do strategic planning as well as different financial planning for the future. Here are just a few services that these kinds of banks would provide.

Now one of the primary services of these banks would be raising capital for securities and underwriting. These banks would actually provide aid to the companies who would want to issue securities to the people. They are the ones who would advise the company on how to go about with this venture so that the client company will be able to maximize profits.

Of course there would also be the case of corporate mergers as well as acquisitions wherein an investment bank may be able to help as well. Now whenever a company would merge with another or when a company will buy over another one, there are many things to take note of like the allocation of resources from the old to new and the shares. The advisor will handle this allocation and also help with the negotiations too.

Now another function that these banks would have would be to offer firms debts and some funding. Now this is often used by the firms when they would go through the acquisitions or mergers mentioned above and would need some cash on the other side. Of course these are very high yielding debts and would definitely be very helpful to firms who would need the boost.

Now aside from that, they can also help with the restructuring of a company so that the company will have more money. This means restructuring their assets, their liabilities and also their capital so that the company may be able to cut down on their costs and increase profit in the long term. These banks would also help in advising which departments should receive more funding and which ones should be eliminated.

Now in the early nineties and even before that, these institutions would only concentrate on special financial services. Of course nowadays would be different as they would also provide commercial banking services too. This is to be able to be more competitive in the market today.

For those who do not know what investment banks are and what their services are, here are some of the services that they offer. Of course these are only some of the services that they offer to the public. There are so many more things that these institutions would be able to offer to clients.




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