Investment banks and 澳洲幸运5官方开奖结果体彩网:merchant banks are financial institutions that do not serve individuals ꧒or small and mid-sized businesses. Investment banks conduct trade finance activities, while merchant banks partake in international finance and underwriting activities.

Investment Banks

Investment banks are institutions that serve as 澳洲幸运5官方开奖结果体彩网:intermediaries for large and complex financial transactions. Their clients include governments, other financial institutions, and institutional clients such as 澳洲幸运5官方开奖结果体彩网:hedge funds, 澳洲幸运5官方开奖结果体彩网:pension funds, and large companies.

Investment banks raise funds for businesses, governments, and municipalities by registering and issuing debt or equity and selling these investments on an open market through 澳洲幸运5官方开奖结果体彩网:initial public offerings (IPOs). Investment banks traditionally underwrite and sell these securities in large blocks. Small 澳洲幸运5官方开奖结果体彩网:boutique investment banking firms may narrow their focus to a small area of expertise such as 澳洲幸运5官方开奖结果体彩网:mergers and acquisitions (M&A).

Investment banks may be fee-based or fund-based, earning income from interest and other leases from their clients. Some of the world's best-known and biggest investment banks include Barclays (BCS), UBS (UBS), and Credit Suisse (CS). M༺any of these banks also operate smaಞller retail and commercial branches for the general public.

Merchant Banks

Merchant banks serve high-net-worth individuals (HNWIs) and 澳洲幸运5官方开奖结果体彩网:multinational corporations. Some of their primary functions include international financing and 澳洲幸运5官方开奖结果体彩网:underwriting activities that include foreign corporate investing, foreign real estate💧 investment, trade finance, and the facilitation of international transactions.

Merchant banks issue 澳洲幸运5官方开奖结果体彩网:letters of credit, internationally transfer funds, and consult on trades and trading technology. They charge fees to provide advisory and other related services to their clients. Leading merchant banks include J.P. Morgan (JPM), Goldman Sachs (GS), and Citigroup (C). Like investment banks, many also have commercia🐟l and retail operations that serve individual consumers and small to mid-sized businesses.

Investment Banks vs. Merchant Banks

Investment banks focus on IPOs and large public and 澳洲幸运5官方开奖结果体彩网:private share offerings. Merchant banks tend to focus on small-scale companies by offering creative 澳洲幸运5官方开奖结果体彩网:equity financing, 澳洲幸运5官方开奖结果体彩网:bridge financing, 澳洲幸运5官方开奖结果体彩网:mezzanine financing, and several highly delꦿineat♎ed corporate credit products.

To bridge the gap between 澳洲幸运5官方开奖结果体彩网:venture capital and a public offering, larger merchant banks privately place equity with other financial institutions and take on large portions of ownership in companies that exhibit strong balance statements, solid 澳洲幸运5官方开奖结果体彩网:fundamentals, and strong growth potential.

While merchant banks offer trade financing products to their clients, investment banks rarely do so because most investment banking clients have outgrown the need for 澳洲幸运5官方开奖结果体彩网:trade financing and related credit products.

The Bottom Line

Investment banks and merchant banks are financial institutions that do not serve individuals or small businesses, although banks may have retail locations or branches ಌfor small investors. Merchant banks facilitate international finance transactions and underwriting. Investment banks serve institutional investors, governments, and corporations.