Investment Bank
Group 5
Mohammad Tareq Hossain 1610293
Shampi Saha 1720044
MK Abir 1720219
Anika Tahsin Binte Ahsan 1730198
MD. Mahafujur Rahaman Bipu 1720279
Introduction
Investment bank is one of the financial intermediaries which basically sell securities &
underwrite to issue the new equity share to spice up capital. It acts as bridge in large and
complex financial transactions. It specifies the act that investment banks play in monetary
market, & where financial institutions borrow and lend cash or securities in transactions.
Investment bank involves when a startup company prepares for its launch of an initial public
offering (IPO) and when a corporation merges with a competitor. It plays a task of broker for
large institutional clients like pension funds.
Background & Role in
economy
BACKGROUND ROLE OF INVESTMENT BANK IN ECONOMY
Investment bank gained popularity within the late Investment banks react as an advisor for the large enterprises
19th to early 20th century, and largely relevant to or individuals by suggesting them the way or plans through
which the enterprises or the individual can earn meet their
the US, investment banking services existed long expectations by regulating an enormous amount of capital.
before Wall Street. Maximum past investment The investment banks act as an excellent resource within the
banks started off as merchants trading in sales process of mutual funds by indicating the proper value,
commodities. Investment bank involves in its flexibility issues, risk issues and competitive factors of the funds
modern form, with banks underwriting and selling when the corporate or a personal is pursuing it.
government bonds. The investment bank is Investment banks are an establishment of the stock market
responsible for examining a company’s financial where they're highly involved within the buying and selling of
statements for accuracy and publishing a the shares and bonds by guaranteeing security and safety to the
businesses.
prospectus that describes the offering thoroughly to
The investment banks are always busy researching what quite
investors before the securities are available.
stocks are worth buying or selling and produce reports which
are a wonderful resource for the businesses or the individual.
Services of investment bank
Underwriting
3 types of underwriting (Firm commitment, Best efforts, All or none)
Rising Capital
Mergers and Acquisitions (M&A)
Sales and trading
General advisory services
Ratio Analysis
ROA: Return on asset (ROA) is an indicator of
how profitable a company’s assets are used.
ROE: Return on equity (ROE) is a metric that
compares a company's profitability to its
stockholders' equity.
Ratio Analysis
LOAN TO DEPOSIT RATIO: By comparing a
bank's total loans to its total deposits for the
same period, the loan-to-deposit ratio is used
to determine a bank's liquidity.
CAPITAL ADEQUACY RATIO: The capital
adequacy ratio is a calculation that compares a
bank's available capital to its risk-weighted
credit exposures.
Potential & challenge of
investment bank
There are few challenges of investment banking :
Regulation drives business behavior
Achieving cost reduction
Scarce capital sources
Technology disruption
Difficulty in cross-selling
Basically investment banking isn't in its primes any longer. The business need a change wherein
the accepted procedures from the past models are converged with the accepted procedures of
present day innovation.
Conclusion
Investment bankers play an important role in guiding the financial surplus of society on the path
of productive investment. So before selecting an investment banker, one must decide, the
services for which he is approached. Investment banks also play a key role in helping companies
and government entities obtain capital financing. As financial advisors to their clients, they help
to price capital, allocate resources, and manage investments. Although investment banks have
been scrutinized and criticized from many different angles in recent years, they are virtually an
indispensable element for the smooth, successful operation of a free market economy.
Investment banking activities also need emphasis and monitor closely by a regulatory body and
Bangladesh must use this sector to come up with more & more sustainable investment for
economic welfare of our country.
