When people hear the words “corporate banking”, the one thing they might immediately think about is a loan. And although this financial department does give advice on loans, there is so much more that they do.
This division usually serves a wide range of clients, including small and medium businesses that have a revenue of a few million dollars.
If you are wondering what this funding department is, as well as what services it offers, this article might be helpful for you. The text below will feature all that you should know about corporate banking, including what services they offer and with whom do they partner with. Let’s take a closer look at the article:
What Are These Financial Institutions Exactly?
As previously mentioned, corporate banking includes serving clients that own small or medium companies that have annual revenue of a few million dollars, as well as some of the biggest enterprises that have billions of dollars in sales across several offices in the country or world. These businesses offer various services including:
1. Loans And Credit Services
These institutions offer loans and credit services to their business customers, which are also one of the most common services they provide to their customers.
Of course, the interest price is usually higher since there is more risk when lending money to their clients.
2. Cash Management And Treasury Services
Cash Management or treasury services are most commonly used by businesses in order to manage their working capital needs and requirements. These services are most important for companies that are multinational since they need to implement a currency conversion.
3. Requirement Financing For Fixed Assets Services
These services are incredibly important for people involved in industries that are capital-intensive such as IT, heavy machinery manufacturing, as well as transportation.
These organizations will implement and create specific loans and leases for buying machinery, equipment, and the tools necessary for a company to run well.
4. Business Owner Services
These financial institutions can often provide services including various retirement and healthcare plans. So, if someone is a business owner, they can choose a plan and implement it for their employees. Among services that are offered are also payroll facilities or a healthcare insurance package.
5. Other Services
They can also provide services like analyzing portfolios, analyzing leverages, debt reconstructions, analyzing real estate, and so on. Other packages and services that might be useful and important for their clients are asset management packages for initial public offerings or IPOs for short.
What Are The Attributes of These Institutions?
There are several attributes that are closely connected to this field. These characteristics include:
1. The Clients – these facilities commonly serve smaller or medium-sized companies, as well as large enterprises.
2. The Authority – if a business wants to have this account type can only be created after the board of directors approves it. This means that they need to authorize the account by voting or resolution. The person who is in charge of opening this specific account type is usually the company’s treasurer.
3. The Liability – these organizations are usually thought to be specific legal entities, hence, all content of the opened accounts are the property of the business who opened it, and not individual owners or board members.
4. The Credit Ratings – the opened account creates a part of the credit history of the business. It can, of course, affect the share prices and valuation, and the interest charge that is applied to loans given to the organization.
5. The People Employed There – to be employed in this financial field, people need to have a degree in the industry. Hence, the financiers working there have high salaries and are well-respected in the industry.
What Does Being Employed in This Field Include?
According to the expert Bruc Bond, there are three specific fields of business in corporate banking. The first one is, of course, building a relationship with customers. This field requires people to communicate with clients daily in order for the employees to familiarize themselves with the client’s corporation.
The second field is working in origination. This is basically the marketing department of the financial institution where financiers research various markets in order to attract more clients. Liaising with other departments and people is incredibly important in this field.
The third field revolves around structured and corporate financing. When the team starts working with a new client, they need to work together to make sure that the package the customer chooses fits their business requirements and needs.
What Qualifications Does Someone Need to Work in This Field?
People with a 2.1 degree or a higher one can apply and be accepted to work in a corporate bank. Of course, individuals will receive formal training when they start working, however, one of the most important skills is being able to analyze numbers.
Naturally, these bankers will be working with people, hence, they need to be communicative, enthusiastic, and motivated. Working as an intern or working with a senior staff member can help you learn everything there is about working in the corporate banking field.
What Are Some of The Largest Corporate Banks?
As you might already know, the number of deposits help by one financial facility is used for measuring the size of the entire operation.
So, when you combine that with consolidated assets, some of the largest corporate banks in the US include JPMorgan Chase, The Bank of America, Citigroup, as well as Goldman Sachs.
You should know that these financial institutions are the most important thing for having a functioning and smooth business economy. Naturally, most banks do have specific departments for dealing with corporate banking, and these departments are amongst the largest revenue centers for all banks.
So, as you can see, corporate banking is quite different from other banking departments, however, for small, medium, and large companies, one of the most important things to have is a corporate bank account. Hence, if you are a business owner, do not waste any more time, head to a corporate bank, and see how they can help your business thrive!