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Distinction between commercial bank and investment bank

Distinction between commercial bank and investment bank. Job nature differences between i-bank and commercial bank. Commercial Bank is an institution which accepts deposits, makes loans and offer a range of services to its customers.

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Distinction between commercial bank and investment bank

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  1. Distinction between commercial bank and investment bank

  2. Job nature differences between i-bank and commercial bank • Commercial Bank is an institution which accepts deposits, makes loans and offer a range of services to its customers. • Investment bank does not accept deposits from retail investors

  3. Commercial Bank • personal banking • business banking • corporate banking

  4. Personal Banking • Account and deposit services • card services • personal credit services • mortgage services • insurance services • investment services • payment services

  5. Personal Banking • Account and deposit services • card services • personal credit services • personal installment loan • overdraft • mortgage services

  6. Personal Banking • insurance services • investment services • personal financial planning services • buying and selling of financial products • payment services • autopay • overseas payment

  7. Personal Banking • ATMs and self-service banking centres • money exchange

  8. Business Banking • Import and export services • documentary credit(for import and export) • import loans • export loans • Loan services • overdrafts • equipment leasing

  9. Business Banking • Insurance services • for staff • payroll services • autopay and MPF

  10. Corporate Banking • Custody and clearing • cash management • institutional fund services • securities lending and borrowing • issuer services

  11. Job Nature of i-Bank Main 4 Categories Investment banking Securities Institutional Investment Management Research

  12. Investment banking • Securities • Institutional Investment Management • Research

  13. Investment Banking • Securities Underwriting • Corporate Advisory Services-Mergers & Acquisitions • Securitized Products

  14. Investment banking • Securities • Institutional Investment Management • Research

  15. Securities • Clearance& Custody • Securities lending and Financing • Foreign exchange • Commodities Trading

  16. Securities • Investment banking • Securities • Institutional Investment Management • Research

  17. Institutional Investment Management • (Asset Management) Funds for retail and institutional investors • Equity Fund • Fixed income Fund • Hedge Fund

  18. Investment banking • Securities • Institutional Investment Management • Research

  19. Research • Conducting research of different industries by looking at economy, interest rates, industries and company data • Providing analysts rating of securities such as “add”, “hold”, or “reduce” to clients

  20. Recent Trend Is the distinction between i-Bank and commercial Bank clear?

  21. Case Study • Citigroup • Salomon Smith Barney ( ex-Investment banking division of Citigroup) • April 2003, Investment banking operation of was absorbed and is now under the name of Citigroup

  22. Case Study • Salomon Smith Barney no longer exists • Smith Barney, a new business unit will be solely responsible for private clients and independent research activities

  23. Private Banking (Wealth Management) • Mass affluent (US$ 100 thousands to $ 1 M) • High Net Worth (US $ I million or above) • Ultra High Net Worth Individuals (US $ 10 Million or above) • Brokerage, bank, custody, insurance, and Estate management) • Merrill Lynch, HSBC, Credit Suisse, Morgan Stanley, Goldman Sachs, and Citigroup, etc.

  24. Conclusion • Distinction between commercial bank and i-bank is becoming blurred

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