1.

DEFINATION

Investment banking is the division of financial services that works to raise money for
individual investors, large corporations, and governments. Investment banks provide
underwriting services to help clients raise capital and complete mergers and acquisitions
(M&As). Essentially, an investment bank is a middle-man for big, complex financial
transactions, and investment banking facilitates these transactions. Large investment banking
companies, middle market, and boutique investment banks provide investment banking services,
such as:

 Assisting in mergers and acquisitions (M&As) between companies

 Underwriting or raising money for their clients through the sale of debt or other
tradable assets, like stocks or bonds
 Providing investment management and advice to clients ranging from individuals to
government institutions
 Facilitating initial public offerings (IPOs), wherein a privately owned company wants to
become publicly traded
 Market research and analysis to inform investing decisions for the bank and its clients
 Risk assessment and management to ensure the bank is making safe financial decisions
and to help clients understand the risks they may face in certain economic decisions.

Investment banks are typically split into two main functions: a buy side and a sell side. The
buy side is mainly concerned with offering investment advice, like helping a company buy
another company or helping an institution decide where and how to invest its funds. The sell side
facilitates selling securities, or tradable assets, like stocks, bonds, and options.

2. TYPES OF INVESTMENT BANKS

Investment banks are commonly classified into three categories: boutique banks, middle-
market banks, and bulge bracket banks. Boutique banksare often further divided into regional
boutiques and elite boutique banks. Investment banks serve corporations and governments by
facilitating complex financial transactions, such as mergers and acquisitions (M&As). The
classification of investment banks is primarily based on size. However, "size" can be a relative
term; it may refere to the size of the bank in terms of the number of employees or offices, or to
the average size of M&A deals handled by the bank.

2.1 Boutique Banks

 Boutique investment banks can be divided into regional boutiques and elite boutiques.
Elite boutique banks sometimes have more in common with bulge bracket banks than they do
with regional boutiques.

Regional Boutique Banks

The smallest of the investment banks, both in terms of firm size and typical deal size, are
the banks referred to as regional boutique banks. Regional boutiques usually have no more than
a handful to a few dozen employees. Because of the small size of most regional boutiques, they
do not typically offer all the services provided by bulge bracket investment banks, which are the
largest investment banks. Regional boutiques may simply specialize in a single area, such as
handling mergers and acquisitions in a particular market sector.

Regional boutique investment banks generally handle smaller M&A deals, ranging from
$100 million down to $50 million or less.
As the classification implies, regional boutique banks have offices or operations that are
restricted to, or at least concentrated in, a specific region of the country. The bank's offices may
even be limited to a single city. Regional boutiques may have clients that include major
corporations headquartered in their operation area but they more commonly serve smaller firms
and organizations. These banks are unlikely to be involved in working with governments other
than on a local or state basis.

Elite Boutique Banks

Elite boutique investment banks are usually altogether different from regional boutiques.
Elite boutiques more closely resemble bulge bracket banks in regard to the dollar value of the
deals they manage, which can be over $1 billion, although they may handle some smaller deals
as well.

They are also similar to bulge bracket banks in that they commonly have a sizable
nationwide and international presence, operating dozens of offices in multiple countries.
However, they typically lack the kind of global presence of a major investment bank.

Elite boutiques are like regional boutiques in that they usually do not provide a complete
range of investment banking services and may limit their operations to handling M&A-related
issues. They are more likely than regionals to offer restructuring or asset management services.
Most elite boutique banks begin as regional boutiques and then gradually work up to elite status
through handling a succession of larger and larger deals for more prestigious clients. Examples
of well-known elite boutique investment banks are Lazard LLC, Evercore Group LLC, and
Moelis & Company.
2.2 Middle-Market Banks

Occupying the middle ground between smaller regional investment banking firms and the
massive bulge bracket investment banks are middle-market investment banks. Middle-market
banks usually work on deals that begin at the regional level and rise near the bulge bracket
level, typically ranging from about $50 million up to around $500 million or more.

Middle-markets are usually also in the middle ground as far as geographic reach, having a
substantially larger presence than regional boutiques but falling short of the multinational scope
of bulge bracket banks. However, unlike boutique banks, middle-market firms usually provide
the same full range of investment banking services as bulge bracket banks, including equity
capital market and debt capital marketservices, a full complement of financing and asset
management services, M&A, and restructuring deals.

Some of the more well-known middle-market firms are Piper Sandler Companies, Cowen
Group, and Houlihan Lokey.

2.3 Bulge Bracket Banks

The bulge bracket banks are the major, international investment banking firms. The bulge
bracket firms are the largest in terms of numbers of offices and employees, and also in terms of
handling the largest deals and the largest corporate clients.

Bulge bracket investment banks regularly handle multibillion-dollar M&A deals,

although, depending on the overall state of the economy or the particular client, a bulge bracket
bank may sometimes handle deals valued in the low hundreds of millions. Each of the bulge
bracket banks operates internationally and has a large global, as well as domestic, presence. The
major investment banks provide their clients with the full range of investment banking services,
including trading, all types of financing, asset management services, equity research and
issuance, and the bread and butter of investment banking, M&A services.

3. MAIN INVESTMENT BANKS IN CAMEROON.

These banks range from boutique investment banks to middle market banks and bulge
bracket investment banks. Their branches are found all over the country. Some are even
established here in the North West Region in Bamenda like the National Financial Credit Bank
(NFC), AFRILAND Bank, BGFI Bank and Union Bank just to name a few all situated at the
Commercial Avenue.

Afriland First Bank

Atlantic Bank
Banque International du Cameroun pour l’Epargne et le Crédit
BGFI Bank
Citibank
Commercial Bank of Cameroon
Ecobank
National Financial Credit Bank
Oceanic Bank
SCB Credit Agricole
Societe Generale des Banques au Cameroun
Standard Chartered Bank
Union Bank of Cameroon
United Bank for Africa

4. PRODUCTS OF INVESTMENT BANKS

An investment bank's product groups have a focus on specific investment

banking financial products, such as IPOs, M&As, corporate restructurings, and various types of
financing. There may be separate product groups that specialize in asset financing, leasing,
leveraged financing, and public financing. The product groups may be further organized
according to their principal activities or products. Thus, an investment bank may have product
groups designated as equity capital markets, debt capital, M&As, sales and trading, asset
management, and equity research.

5. IMPORTANCE OF INVESTMENT BANKS TO THE GROWTH AND

DEVELOPMENT OF CAMEROON

There are two broadly recognized functions of investment banks: capital market
intermediation and trading. These are distinct and separate from the functions typically
associated with commercial banks, which accept deposits and make loans. Investment banks are
critical agents of capital formation and price setting. They also help to coordinate present and
future consumption.

Investment Banking and Capital Development

In contemporary mixed economies, both governments and large companies rely on

investment banks to raise funds. Traditionally, investment banks match those selling securities
with investors. This is known as "adding liquidity" to a market. For their role, investment
bankers are rewarded as intermediaries or middlemen. By matching producers with savers,
financial development becomes more efficient and businesses grow more quickly.

Coordinating Past and Future Consumption

Investment banks work with commercial banks to help determine prevailing

market interest rates. Even though there are different interest rates for commercial
and investment products, all interest rates influence each other. For example, if it were possible
to earn 2% interest on a two-year certificate of deposit or 4% interest on a two-year Treasury,
investors would drive up the price of Treasurys (reducing the yield) and move away from bonds
(driving up the rate that banks would have to offer). In this way, interest rates always tend to
move toward each other.

The market rates of interest also determine how profitable it is to save and how expensive
it is to borrow. This helps coordinate the use of resources across time. When interest rates are
high, more money is saved for future consumption. The opposite is true when rates are low. The
more efficiently investment banks establish market rates of interest, the more efficiently
resources can be coordinated between the present and future needs.

Other importance of investment banks to the growth and development in Cameroon include;

 Investment banks are large financial institutions that help global and local businesses with
capital financing, and also engage in trading.
 They help companies go public, underwrite bond offerings, and are involved in proprietary
trading and investment.
 Investment banks help the broader financial markets and the economy by matching sellers
and investors, therefore adding liquidity to markets.
 The actions of the banks also make financial development more efficient and promote
business growth, which in turn helps the economy.