The world of banking can be a complicated path to tread, especially when it comes to the differences between investment and corporate banking. The variations between the two can be a source of confusion. Corporate finance has rapidly involved in the recent past, which leads to many options and types of financial groups that deal with slightly varied roles.
The goal of investment banking is to increase the capital in the portfolios of their clients. Investment bankers are also involved when two companies merge or a company makes big decisions about different financial issues, such as equity securities. Investment bankers are brokers and do not provide their client with an account where they can deposit and withdraw money from at will, as a traditional bank does.
Investment banks serve two main functions: selling or buying in order to enhance a client’s portfolio. Companies often opt to be advised by their investment bankers when they are looking into investment options and services. This area of banking consists of two main sectors: the public and private. The two sectors are separate and never intersect with one another to avoid sensitive and private information from their business and clients being compromised.
Corporate banking, or corporate financing, caters to large corporations and usually handles all of their finances. Corporate bankers will work with businesses from all over the world, regardless of what industry the business is in. Governments and international corporations completely rely on corporate banks to handle all of their financial demands. A few of the responsibilities of corporate banks include managing portfolios and loans, investing in assets overseas, and ensuring that clients receive the most value for their money across country borders when exchange rates are involved.
A corporate bank’s goal is to help their clients increase the value of their portfolios. These banks are responsible for handling all the finances of a specific business and to work toward increasing that company’s worth. Corporate banks often help clients with loans and raise money for the company through those, while also making sure the company has the lowest level of financial risk as possible.
Careers in Each
To work in either of these fields, it’s vital that a prospective employee acquires an MBA from a business school and then begins working in investment banking. It’s important to develop great organizational skills, communication skills, and a deep understanding of corporate finance, along with multiple other talents.
There are various job opportunities in each field, depending what is preferred, but there are also stark differences. The job field of investment banking is intensely competitive and an employee will work long hours, but will also receive a fairly high salary. In corporate banking, less competition exists and the hours are infinitely more flexible, but the salary isn’t as high. Deciding between the two fields is entirely up to the individual and hinges on what they prefer in a career.