IB ppt of MOS

8/8/2019 IB ppt of MOS

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Wednesday, January 19, 2011 1


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INDUSTRY PROFILEy An investment bank is a specialized organization that

takes in your money and after analyzing the possible

risks and economic conditions gives you advice toconvert it into more money.

y Investment Banks profit from companies and

governments by raising money through issuing andselling securities in the capital markets (both equityand bond), as well as providing advice on transactionssuch as mergers and acquisitions.



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OBJECTIVESy Past ,present, & future of Investment Banking .

y Study the reasons for moving towards from Banking to

Investment Banking.y Steps for improvement in Investment Banking.



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MAJOR FUNCTIONS FOR CUSTOMERS

y Serve as trading intermediaries for clients.

y Lend and invest banks assets

y Provide advice on mergers, acquisitions, and otherfinancial transactions

y Research and develop opinions on securities, markets,and economies

y Issue, buy, sell, and trade stocks and bonds

y Manage investment portfolios.



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WHO A I V M BA K

y Any firm contemplating a significant transaction canbenefit from the advice of an investment bank.

y Most small to medium sized companies do not have alarge in house staff and in a financial transaction maybe at a disadvantage versus larger competitors.

y Aquality investment banking firm can provide the

services required to initiate and execute a majortransaction, thereby empowering small to mediumsized companies with financial and transactionexperience.



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ORGANIZATIONAL STRUCTURE OF AN

INVESTMENT BANK

FRONT OFFICE

y Investment banking- subscribing investors to a security insurance.1. Industry coverage group

2. Product coverage groupy Investment management- professional management of various

securities.y Structuring- recent divisions as derivatives.y Merchant banking-private equity activity of investment banking.

Eg- Goldman Sachs capital partner, JP Morgans one equity

partnersy Investment Research- reviews co. & writes reports about their

prospects.



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Conti..MIDDLE OFFICE

y Risk management-analyzing the market & credit risk

y

Finance- responsible for an investment banks capitalmanagement& risk monitoring.

y Compliance- investment banks daily operationscompliance with govt. & internal regulations.

BACK OFFICE

y Operations- involve data checking traders which ensuringtransfers.

y Technology- refers to IT department.



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CHALLENGES

y Investment banking is one of the most globalindustries and is hence continuously challenged torespond to new developments and innovation in theglobal financial markets.

y New products with higher margins are constantlyinvented and manufactured by bankers in hopes of

winning over clients and developing trading know-

how in new markets.y The fastest growing segments of the investment

banking industry are private investments into publiccompanies



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FINDINGS

y From the project main finding is the amount of

revenue is getting from investment banking servicesare equal to commercial banking revenues.

y Investment bankers have more competition fromforeign banks.

y Foreign banks are playing more roles in mergers andacquisition deals.



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IB ppt of MOS