INVESTMENT

BANKING
- P R I T I PA R M A R
 INTRODUCTION TO • Any corporation, be it large or small needs some advice before making any kind of investment since they are
putting their hard earned money as well as reputation on the table. Therefore, to ensure that the investment they
make is fruitful, they need some advice and guidance from someone who is an expert in such type of investments
INVESTMENT BANKING and who will guide them through the risks and benefits of the concerned plan.

• Operations in the financial field are very tricky and they can become even trickier when it comes to large
companies & organizations. This is why the investment banking service has been brought into picture to make
investments a little more convenient for such large entities because investment bankers are experts who have their
fingers tips on the pulse of the current investment climate.

• Investment banking may seem like just a service provided by banks but in reality this term is way deeper and
today there are full-fledged investment banks present to help HNI’s, MNC’s, organizations and even governments
in their various investment planning and providing broad range of financial services like Underwriting, raising of
capital, expertise in Mergers and Acquisition, Structuring, Securities lending, Risk management, Research and
analytics, etc.

• In simple terms, you can say that investment banks act as financial advisors to large companies, organizations and
governments.
 DIFFERENT DIVISIONS IN INVESTMENT
BANKING

Front Office Middle Office Back Office

It is the face of the organization and involves direct
interaction with the client and customer etc. It
conducts revenue generation and incorporates
various segments like corporate finances, sales and
trading and financial research. Research is where
these banks review companies and write reports
about future earnings prospects.
This area of the bank includes treasury management,
internal controls (such as Risk), and internal
corporate strategy. It also coordinates with front and
back office. Ultimately, the goal of the middle office
is to ensure that the investment bank doesn’t engage
in certain activities that could be detrimental to the
bank’s overall health as a firm.
It operates behind the scene but the cost is very high
so this division is usually outsourced to a third party.
It involves day to day roles and responsibilities like,
accounting, IT and HR. Basically, this division helps
in the smooth functioning of the business and it is a
critical part of the bank.

Major Functions – Major Functions –

Major Functions –
• Sales & Trading • Risk management
• Accounting
• Research • Monitoring and Compliance
• Settlements
• Products & Client Services • Financial Control & strategies
• Reconciliation
 DIFFERENT FINANCIAL MARKETS

Stock Market Forex Market

In this kind of Market, an organization makes a listing of its It is the global marketplace for the trading of one
shares which traders and investors buy and sell through IPO nation's currency in return of another. The forex market
or Stock Exchanges. is the largest & most liquid market in the world.

Over-the-Counter Markets Derivatives Market

It is a kind of decentralized Market, without fixed Financial It is the financial market for derivatives like Futures,
geographical locations. Here, the trade is directly done
between two parties instead of an agent/broker. Markets Options, Swaps and Forwards which are derived from
other forms of assets.

Commodities Market Bond Market

It is where traders and investors trade in the primary Bonds are issued by corporations, states, municipalities
economic sector, buying or selling commodities such as etc. to finance projects and operations. It is also called
crops, livestock, cocoa, oil, meat, gold, etc, the debt, credit, or “fixed-income” market.
 LATEST UPDATES FROM THE INVESTMENT BANKING
WORLD
1. Global Investment banks cut jobs
Source - https://www.reuters.com/business/finance/global-banks-cut-jobs-cost-pressures-mount-2023-01-11/
Date – 12th Jan 2023

2. Investment banks see fees drop to 4-year low

Source - https://timesofindia.indiatimes.com/business/india-business/investment-banks-see-fees-drop-to-4-year-low/articleshow/96804616.cms
Date – 7th Jan 2023

3. Big Banks predict recession

Source - https://www.livemint.com/economy/big-banks-predict-recession-fed-pivot-in-2023-11672658455000.html
Date – 2nd Jan 2023

4. Henrik Rosvall, CEO and Co-Founder at Dreams Technology, gives us his prediction for the banking trends to watch out for.
Source - https://fintechmagazine.com/articles/top-banking-trends-to-watch-out-for-in-2023
Date – 8th Jan 2023

5. The three big projections for 2023 from major global investment banks
Source - https://www.cnbctv18.com/economy/projections-for-2023-us-recession-fed-rate-peak-nifty-50-target-goldman-nomura-citi-jpmorgan-15534781.htm
Date – 29th December 2022
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