Hi guys, my name is Bao Ngoc and this is my presentation.

Before my
presentation I have a quick question for you: How many types of banks are there
and what are they? So who can give me the answer?
So absolutely this is a correct answer. In my presentation today, I will
discuss about two types of banking: commercial bank and investment bank
Commercial bank is a financial institution that accepts deposits, offers
checking account services, make various loans, and offers basic financial products
like certificates of deposits and savings accounts to individuals and small
businesses.
In contrast, Investment bank is a financial services company that acts as an
intermediary in large and complex financial transaction. It also has a role as a
broker or financial adviser for large institutional clients such as pension funds.
I will show you some of the main differences between 2 types of bank to
help you better understand. The first main difference is customers they serve. Let’s
start with the one you might be more familiar with, commercial bank. As I have
said, they deal with individual like me and you and small and medium sized
companies like your local coffee shop, for example. They also deal with some
larger companies, but they are not their biggest focus. Some examples of this type
of bank are Capital Bank in the US and Natwest in the UK.
On the other hand, we have investment banks. These typically don’t work
with normal people like me and you. Instead, they only work with large players
like big companies, institutional investors, governments and high network
individuals. Some examples of investment banks might include Evercore and
Morgan Stanley they seem to have offices all over the main financial cities like
London, New York or Hongkong
Now let’s look at some of the differences in the services they offer. looking into
how they actually make money. Commercial banks make money by lending to
borrowers with an interest rates above what they pay to depositors. Let’s look at an
example. Suppose this depositor has been paid 1000 dollars this month. She’s
putting the money in the bank. In turn, the bank pays her 3% for trusting them with
the money. So what does the do with that 1000 USD? They decide to lend it out to
somebody that needs it. In this case, this person wants to borrow 1000 usd.. In turn,
he has to pay the bank a 5% interest rate. So the difference between what the bank
pays in interest and it gets in interest gives them 2% spread. And this is how the
commercial banks make money
On the other hand, we have investment banks. Investment banks mainly earn
money by charging fees and other commissions. For example, suppose company A
wants to sell its shares to the public market because it is short in cash. Let’s say
that’s 10M shares. The investment bank will underwrite all the shares. That means
that they pledge to buy all the unsold shares.. So the bank takes these shares and
asks for a price to all the investors in the market. After that, they agree to a 25$ per
share. for company A, that’s 250 million dollars. As for investment banks, let’s say
they charge a 3% fee, so they’ve made 7.5 million dollars through this transaction.
And that’s one of the main ways they make money. They may also get money for
selling bonds, derivatives and other financial instruments. And they might have
advisory fees