Many companies, large corporations, corporate clients, agencies, governments, financial institutions, etc. require a number of investment and banking services.
Corporate banking is a type of ‘business bank’ which provides all the necessary and required services such as giving business loans, accepting deposits and any other investment products to such entities.
Besides the general banking facilities that are offered such as lending, e banking and deposit taking, these banks may also deal with tailor made operations which are specific to a particular company’s needs. Some other services offered include issuing of stocks, bonds, cash management, financing, underwriting, etc. Many of these are conducted by retail as well as investment banks. They most often are large national as well as international companies.
While many of the specifics may differ, the fundamental features and principles remain the same. Some of these include:
1) Project Financing: Project financing is one of the main activities by these financial institutes. They offer funds for large-scale infrastructure projects. Usually these loans are repaid based on the revenue that is generated at the end of the project.
2) International transactions: International transactions are of key importance to large corporations. By providing all the necessary funds for any foreign exchange transaction, these entities also work towards mitigating the constantly fluctuating currency rates.
3) Advisory services: Many of these banks specialise in offering specialised financial advice for any corporate or financial activity. Some of these include mergers and acquisitions, asset management, taxation issues, etc.
4) Corporate Brokerage Services: These banks perform a number of corporate brokerage services related to the corporations. Some of these include negotiating financial transactions, selling off all/part of the business, raising the funds which are necessary to make certain transactions possible, acquire the business or parts of the business, etc.
5) Shareholding: By financially assisting distressed companies, one of the key activities includes managing and owning the shares of the client’s companies. Thus, by buying shares for the company it can also help in the liquidity which in turn will help the corporation.
6) Asset Custody: Asset Custody is one of the highlights to protect the client’s corporate assets. By creating regular audits, issuing reports which assess the corporation’s status on an annual basis, setting up accounts, etc. these banks play a pivotal role in providing asset custody.
7) Insurance: Insurance is an added bonus from corporate banking. By providing a two-fold benefit, insurance is provided to all corporate related activity as well as towards large-scale clients.