Investment banks and retail banks perform different functions, offer different services, and serve different clients. An investment bank arranges capital raising for and provides advisory services to institutional clients that invest in capital markets and companies that seek capital, while 澳洲幸运5官方开奖结果体彩网:retail banks provide banking services and loans to ind🐎ividuals and small 🐻businesses.

How Investment Banks and Retail Banks Work

An investment bank's income comes from selling securities of companies and of the government to institutional investors. Investment banks also earn revenues by providing advice to corporations concerning mergers, buyouts, and initial public off﷽erings (IPOs). A retail bank serves individual consumers by providing checking accounts, loan services, and other personal financial services.

Retail Banks

Retail banks primarily focus on banking services for individuals. For example, providing checking account services, accepting deposits, and providing loans to individual customers. Retail banks also provide ancillary services such as safe deposit boxes and automatic ♕payment services. This is often referred to as personal♋, consumer banking, or retail banking.

Customers are typically served in the local market via a branch or automated teller, and typical customers are individuals, families, and small businesses. Depository activities include checking accounts, savings accounts, and 澳洲幸运5官方开奖结果体彩网:certificates of deposit (CDs). Lending focuses on personal credit (such as credit cards and personal 澳洲幸运5官方开奖结果体彩网:lines of credit), home mo൩rtgages, vehic💟le loans, and other financing for large consumer purchases.

Retail banks make money by charging fees (for checking accounts, credit and debit cards, and other services) and the interest income from client loans. For retail banks, the key 澳洲幸运5官方开奖结果体彩网:performance drivers typically include deposit growth and the extent of geographic ꦓcoverage. Banks leverage technology to grow the customer base.

Investment Banks

Investment banking is a subset of commercial or corporate banking that focuses on institutional clients instead of individuals. Investment banks serve corporate and institutional entities' capital market needs and they also provide advisory services.

When a company needs to attract additional capital via debt or equity issuance, investment banks 澳洲幸运5官方开奖结果体彩网:underwrite the security issued on behalf of the institution seeking capital. Investment banks also provide advisory services to clients regarding capital market conditions and trends, mergers and acquisitions (M&As), and corporate finance.

Investment banks make money primarily through 澳洲幸运5官方开奖结果体彩网:fee income negotiated as part of a capital markets transaction. Key performance drivers for investment banks are market competition for fee income, presence and reputation in the 澳洲幸运5官方开奖结果体彩网:capital markets, and transaction frequency, size, and scale.