Strategies pursued by investment banks

Question 1

What are the <b>FOUR</b> banking strategies?

Answer 1

1️⃣ Global investment banks
2️⃣ Banks that focus on financial market services
3️⃣ Wholesale banking
4️⃣ Boutique advisory firms

Question 2

Do all the investment banks engage in all of four areas of activities?

Answer 2

No. It depends on the <b>size, competences and strategy</b>.

Question 3

1️⃣ Global Investment Banks

Answer 3

✅ Have expertise in the 4 main areas of investment banking activities.

✅ Have the size to underwrite equity and debt offerings.

✅ The network to place these securities.

✅ The competencies to provide advisory services for M&A and restructuring.

Question 4

2️⃣ Banks that focus on <b>financial market services</b>. What are those financial market services?

Answer 4

1️⃣ Be a <b>corporate lending</b>

2️⃣ <b>Stock brokerage</b>

Not that active as advisors.

Question 5

What is 3️⃣ Wholesale banking?

Answer 5

Wholesale services are intended <b>for large institutional entities</b>.

Wholesale banking would include <b>cash management, large loans, and interbank lending</b>.

<b>Capital availability</b> is a significant <b>barrier to entry</b> for organisations to provide wholesale services.

Question 6

What is 4️⃣ Boutique advisory firms?

Answer 6

Usually formed by an established banker or a group of bankers.

There is a significant number of boutique advisory firms for advisory services like M&A, restructuring and corporate consulting.

It is a relatively <b>easier and less capital to set up</b>.