What is Corporate banking? Whats are the Products and Services of Corporate Banking?
Posted by Ripon Abu Hasnat on Wednesday, May 27, 2015 | 0 comments
Corporate banking
Corporate banking, also known as
business banking, refers to the aspect of banking that deals with corporate
customers. The term was originally used in the U.S. to distinguish it from
investment banking, after the Glass-Steagall Act of 1933 separated the two
activities. While the Act was repealed in the 1990s, corporate banking and
investment banking services have been offered for many years under the same
umbrella by most banks in the U.S. and elsewhere. Corporate banking is a key
profit center for most banks; however, as the biggest originator of customer
loans, it is also the source of regular write-downs for loans that have soured.
The corporate banking segment of banks typically
serves a diverse range of clients, ranging from small to mid-sized local
businesses with a few millions in revenues to large conglomerates with billions
in sales and offices across the country.
Products and Services of Corporate Banking
- Loans and other credit products –
this is typically the biggest area of business within corporate banking,
and as noted earlier, one of the biggest sources of profit and risk for a
bank.
- Treasury and cash management
services – used by companies for managing their working capital and
currency conversion requirements.
- Equipment lending – commercial
banks structure customized loans and leases for a range of equipment used
by companies in diverse sectors such as manufacturing, transportation and
information technology.
- Commercial real estate – services
offered by banks in this area include real asset analysis, portfolio
evaluation, debt and equity structuring.
- Trade finance – involves letters
of credit, bill collection, and factoring.
- Employer services – services such
as payroll and group retirement plans are typically offered by specialized
affiliates of a bank.
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